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LABOR II-FULL CASES


LAST BATCH

CASE NO. 1

SOLIDBANK CORPORATION (now known G.R. No. 159460


as FIRST METRO INVESTMENT
CORPORATION),
Petitioner,

- versus -

ERNESTO U. GAMIER, ELENA R.


CONDEVILLAMAR, JANICE L.
ARRIOLA and OPHELIA C. DE GUZMAN,
Respondents.

x- - - - - - - - - - - - - - - - - - - - - - - - - -x
SOLIDBANK CORPORATION and/or
its successor-in-interest, FIRST G.R. No. 159461
METRO INVESTMENT CORPORATION,
DEOGRACIAS Present:
N. VISTAN AND EDGARDO MENDOZA,
JR., CARPIO MORALES, J.,
Petitioners, Chairperson,
BRION,
BERSAMIN,
- versus - VILLARAMA, JR., and
SERENO, JJ.

SOLIDBANK UNION AND ITS DISMISSED


OFFICERS AND MEMBERS, namely:
EVANGELINE J. GABRIEL, TERESITA C. Promulgated:
LUALHATI, ISAGANI P. MAKISIG, REY S.
PASCUA, EVELYN A. SIA, MA. VICTORIA
M. VIDALLON, AUREY A. ALJIBE, REY November 15, 2010
ANTHONY M. AMPARADO, JOSE A.
ANTENOR, AUGUSTO
D. ARANDIA, JR., JANICE L. ARRIOLA,
RUTH SHEILA MA. BAGADIONG, STEVE
D. BERING, ALAN ROY I. BUYCO,
MANALO T. CABRERA, RACHE M.
CASTILLO, VICTOR O. CHUA, VIRGILIO
Y. CO, JR., LEOPOLDO S. DABAY,
ARMAND V. DAYANG-HIRANG, HUBERT
V. DIMAGIBA, MA. LOURDES CECILIA B.
EMPARADOR, FELIX D. ESTACIO, JR.,
JULIETA T. ESTRADA, MARICEL G.
EVALLA, JOSE G. GUISADIO, JOSE
RAINARIO C. LAOANG, ALEXANDER A.
MARTINEZ, JUAN ALEX C. NAMBONG,
JOSEPHINE M. ONG, ARMANDO B.
OROZCO, ARLENE R. RODRIGUEZ,
NICOMEDES P. RUIZO, JR., DON A.
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SANTANA, ERNESTO R. SANTOS, JR.,


EDNA M. SARONG, GREGORIO S.
SECRETARIO, ELLEN M. SORIANO,
ROSIE C. UY, ARVIN D. VALENCIA,
FERMIN JOSSEPH B. VENTURA,
JR., EMMANUEL C. YAPTANCO,
ERNESTO C. ZUNIGA, ARIEL S.
ABENDAN, EMMA R. ABENDAN, PAULA
AGNES A. ANGELES, JACQUILINE B.
BAQUIRAN, JENNIFER S. BARCENAS,
ALVIN E. BARICANOSA, GEORGE
MAXIMO P. BARQUEZ, MA. ELENA G.
BELLO, RODERICK M. BELLO, MICHAEL
MATTHEW B. BILLENA, LEOPE L.
CABENIAN, NEPTALI A. CADDARAO,
FERDINAND MEL S. CAPULING,
MARGARETTE B. CORDOVA,MA. EDNA
V. DATOR, RANIEL C. DAYAO, RAGCY L.
DE GUZMAN, LUIS E. DELOS SANTOS,
CARMINA
M. DEGALA, EPHRAIM RALPH A.
DELFIN, KAREN
M. DEOCERA, CAROLINA C. DIZON,
MARCHEL S. ESQUEJJO, JOCELYN
I.ESTROBO, MINERVA S. FALLARME,
HERNANE C.FERMOCIL, RACHEL B.
FETIZANAN, SAMUEL A. FLORENTINO,
MENCHIE R.FRANCISCO, ERNESTO U.
GAMIER, MACARIO RODOLFO N.
GARCIA, JOEL S. GARMINO, LESTER
MARK Z. GATCHALIAN, MA. JINKY
P. GELERA, MA. TERESA G. GONZALES,
GONZALO G. GUINIT, EMILY H. GUINO-
O, FERDINAND S. HABIJAN, JUN G.
HERNANDEZ, LOURDES D. IBEAS, MA.
ANGELA L. JALANDONI, JULIE T.
JORNACION, MANUEL C. LIM,
MA. LOURDES A. LIM, EMERSON V.
LUNA, NOLASCO
B. MACATANGAY, NORMAN C. MANACO,
CHERRY LOU B.
MANGROBANG, MARASIGAN G.
EDMUNDO, ALLEN M. MARTINEZ,
EMELITA C.MONTANO, ARLENE P.
NOBLE, SHIRLEY A. ONG, LOTIZ E.
ORTIZ LUIS, PABLITO M. PALO, MARY
JAINE D. PATINO, GEOFFREY T. PRADO,
OMEGA MELANIE M. QUINTANO, ANES
A. RAMIREZ, RICARDO D. RAMIREZ,
DANIEL O. RAQUEL, RAMON B.
REYES, SALVACION N. ROGADO, ELMOR
R. ROMANA, JR., LOURDES U.
SALVADOR, ELMER S. SAYLON,
BENHARD E. SIMBULAN, MA. TERESA S.
SOLIS, MA. LOURDESROCEL E. SOLIVEN,
EMILY C. SUY AT, EDGAR ALLAN P.
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TACSUAN, RAYMOND N. TANAY,


JOCELYN Y. TAN,
CANDIDO G.TISON, MA. THERESA O.
TISON, EVELYN T. UYLANGCO, CION E.
YAP, MA. OPHELIA C. DE GUZMAN, MA.
HIDELISA P. IRA, RAYMUND MARTIN
A.ANGELES, MERVIN S. BAUTISTA,
ELENA R. CONDEVILLAMAR, CHERRY T.
CO, LEOPOLDO V. DE LA ROSA,
DOROTEO S. FROILAN, EMMANUEL B.
GLORIA, JULIETEL JUBAC AND
ROSEMARIE L. TANG,
Respondents.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

DECISION

VILLARAMA, JR., J.:

The consolidated petitions before us seek to reverse and set aside the Decision [1] dated March
10, 2003 of the Court of Appeals (CA) in CA-G.R. SP Nos. 67730 and 70820 which denied the
petitions for certiorari filed by Solidbank Corporation (Solidbank) and ordered the
reinstatement of the above-named individual respondents to their former positions.

The Antecedents

Sometime in October 1999, petitioner Solidbank and respondent Solidbank


Employees Union (Union) were set to renegotiate the economic provisions of their 1997-2001
Collective Bargaining Agreement (CBA) to cover the remaining two years thereof. Negotiations
commenced on November 17, 1999 but seeing that an agreement was unlikely,
the Union declared a deadlock on December 22, 1999 and filed a Notice of Strike on December
29, 1999.[2] During the collective bargaining negotiations, some Union members staged a series
of mass actions. In view of the impending actual strike, then Secretary of Labor and
Employment Bienvenido E. Laguesma assumed jurisdiction over the labor dispute, pursuant to
Article 263 (g) of the Labor Code, as amended. The assumption order dated January 18,
2000 directed the parties to cease and desist from committing any and all acts that might
exacerbate the situation.[3]

In his Order[4] dated March 24, 2000, Secretary Laguesma resolved all economic and non-
economic issues submitted by the parties, as follows:

WHEREFORE, premises considered, judgment is hereby issued:

a. Directing Solidbank Corporation and Solidbank Union to conclude their


Collective Bargaining Agreement for the years 2000 and 2001,
incorporating the dispositions above set forth;

b. Dismissing the unfair labor practice charge against Solidbank


Corporation;

c. Directing Solidbank to deduct or check-off from the employees lump sum


payment an amount equivalent to seven percent (7%) of their
economic benefits for the first (1st) year, inclusive of signing bonuses,
Page 4

and to remit or turn over the said sum to the Unions authorized
representative, subject to the requirements of check-off;

d. Directing Solidbank to recall the show-cause memos issued to employees


who participated in the mass actions if such memos were in fact
issued.

SO ORDERED.[5]

Dissatisfied with the Secretarys ruling, the Union officers and members decided to protest the
same by holding a rally infront of the Office of the Secretary of Labor and Employment in
Intramuros, Manila, simultaneous with the filing of their motion for reconsideration of the
March 24, 2000 Order. Thus, on April 3, 2000, an overwhelming majority of employees,
including the individual respondents, joined the mass leave and protest action at the
Department of Labor and Employment (DOLE) office while the banks provincial branches
in Cebu, Iloilo, Bacolod and Naga followed suit and boycotted regular work.[6] The union
members also picketed the banks Head Office in Binondo on April 6, 2000, and Paseo de Roxas
branch on April 7, 2000.

As a result of the employees concerted actions, Solidbanks business operations were


paralyzed. On the same day, then President of Solidbank, Deogracias N. Vistan, issued a
memorandum[7] addressed to all employees calling their absence from work and
demonstration infront of the DOLE office as an illegal act, and reminding them that they have
put their jobs at risk as they will be asked to show cause why they should not be terminated
for participating in the union-instigated concerted action. The employees work
abandonment/boycott lasted for three days, from April 3 to 5, 2000.

On the third day of the concerted work boycott (April 5, 2000), Vistan issued another
memorandum,[8] this time declaring that the bank is prepared to take back employees who will
report for work starting April 6, 2000 provided these employees were/are not part of those
who led or instigated or coerced their co-employees into participating in this illegal act. Out of
the 712 employees who took part in the three-day work boycott, a total of 513 returned to
work and were accepted by the bank. The remaining 199 employees insisted on defying
Vistans directive, which included herein respondents Ernesto U. Gamier, Elena R.
Condevillamar, Janice L. Arriola and Ophelia C. De Guzman. For their failure to return to work,
the said 199 employees were each issued a show-cause memo directing them to submit a
written explanation within twenty-four (24) hours why they should not be dismissed for the
illegal strike x x x in defiance of x x x the Assumption Order of the Secretary of Labor x x x
resulting [to] grave and irreparable damage to the Bank, and placing them under preventive
suspension.[9]

The herein 129 individual respondents were among the 199 employees who were
terminated for their participation in the three-day work boycott and protest action. On various
dates in June 2000, twenty-one (21) of the individual respondents executed Release, Waiver
and Quitclaim in favor of Solidbank.[10]

On May 8, 2000, Secretary Laguesma denied the motions for reconsideration filed by
Solidbank and the Union.[11]

The Union filed on May 11, 2000 a Motion for Clarification of certain portions of the
Order dated March 24, 2000, and on May 19, 2000 it filed a Motion to Resolve the Supervening
Page 5

Issue of Termination of 129 Striking Employees. On May 26, 2000, Secretary Laguesma granted
the first motion by clarifying that the contract-signing bonus awarded in the new CBA should
likewise be based on the adjusted pay. However, the Unions second motion was denied,[12] as
follows:

This Office cannot give due course to the Unions second motion. The labor
dispute arising from the termination of the Bank employees is an issue that
ought to be entertained in a separate case. The assumption order of January 18,
2000 covered only the bargaining deadlock between the parties and the alleged
violation of the CBA provision on regularization. We have already resolved both
the deadlock and the CBA violation issues. The only motion pending before us is
the motion for clarification, which we have earlier disposed of in this
Order. Thus, the only option left is for the Union to file a separate case on the
matter.[13]

In the meantime, the Monetary Board on July 28, 2000 approved the request of
Metropolitan Bank and Trust Company (Metrobank) to acquire the existing non-real estate
assets of Solidbank in consideration of assumption by Metrobank of the liabilities of Solidbank,
and to integrate the banking operations of Solidbank with Metrobank.Subsequently, Solidbank
was merged with First Metro Investment Corporation, and Solidbank, the surviving
corporation, was renamed the First Metro Investment Corporation (FMIC). [14] By August 31,
2000, Solidbank ceased banking operations after surrendering its expanded banking license to
the Bangko Sentral ng Pilipinas. Petitioners duly filed a Termination Report with the DOLE and
granted separation benefits to the banks employees.[15]

Respondents Gamier, Condevillamar, Arriola and De Guzman filed separate complaints


for illegal dismissal, moral and exemplary damages and attorneys fees on April 28, May 15 and
May 29, 2000, respectively (NLRC NCR Case Nos. [S]30-04-01891-00, 30-05-03002-00 and 30-
05-02253-00). The cases were consolidated before Labor Arbiter Potenciano S. Caizares,
Jr. Respondent Union joined by the 129 dismissed employees filed a separate suit against
petitioners for illegal dismissal, unfair labor practice and damages (NLRC NCR Case No. 30-07-
02920-00 assigned to Labor Arbiter Luis D. Flores).

Labor Arbiters Rulings

In his Decision dated November 14, 2000, Labor Arbiter Potenciano S. Caizares, Jr.
dismissed the complaints of Gamier, Condevillamar, Arriola and De Guzman. It was held that
their participation in the illegal strike violated the Secretary of Labors return to work order
upon the latters assumption of the labor dispute and after directing the parties to execute their
new CBA.[16]

On March 16, 2001, Labor Arbiter Luis D. Flores rendered a decision [17] in favor of
respondents Union and employees, the dispositive portion of which reads:

WHEREFORE, premises considered, judgment is hereby rendered


declaring complainants dismissal as illegal and unjustified and ordering the
respondents Solidbank Corporation and/or its successor-in-interest First Metro
Investment Corporation and/or Metropolitan Bank and Trust Company and/or
Deogracias Vistan and/or Edgardo Mendoza to reinstate complainants to their
former positions. Concomitantly, said respondents are hereby ordered to jointly
and severally pay the complainants their full backwages and other employees
benefits from the time of their dismissal up to the date of their actual
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reinstatement; payment of ten (10%) percent attorneys fees; payment of ONE


HUNDRED FIFTY THOUSAND PESOS (P150,000.00) each as moral damages and
ONE HUNDRED THOUSAND PESOS (P100,000.00) each as exemplary damages
which are computed, at the date of this decision in the amount of THIRTY THREE
MILLION SEVEN HUNDRED NINETY FOUR THOUSAND TWO HUNDRED
TWENTY TWO PESOS and 80/100 (P33,794,222.80), by the Computation and
Examination Unit of this branch and becomes an integral part of this Decision.

SO ORDERED. [18]

Respondents Gamier, Condevillamar, Arriola and De Guzman appealed


the decision of Labor Arbiter Caizares, Jr. to the National Labor Relations
Commission (NLRC NCR CA No 027342-01). Petitioners likewise appealed from
the decision of Labor Arbiter Flores (NLRC NCR CA No. 028510-01).

Rulings of the NLRC

On July 23, 2001, the NLRCs Second Division rendered a Decision[19] reversing the decision of
Labor Arbiter Flores, as follows:

WHEREFORE, premises considered, the decision of the Labor Arbiter is


hereby VACATED and SET ASIDE and a new one entered dismissing the
complaint for illegal dismissal and unfair labor practice for lack of merit. As
equitable relief, respondents are hereby ordered to pay complainants separation
benefits as provided under the CBA at least one (1) month pay for every year of
service whichever is higher.

SO ORDERED.[20]

The Second Division ruled that the mass action held by the bank employees on April 3,
2000 infront of the Office of the Secretary of Labor was not a legitimate exercise of the
employees freedom of speech and assembly. Such was a strike as defined under Article 212 (o)
of the Labor Code, as amended, which does not distinguish as to whom the action of the
employees is directed against, nor the place/location where the concerted action of the
employees took place. Complainants Gamier, Condevillamar, Arriola and De Guzman did not
report for work and picketed the DOLE premises on April 3, 2000; they continuously refused
to report back to work until April 7, 2000 when they were issued a Notice of Termination. It
was stressed that the mass action of the bank employees was an incident of a labor dispute,
and hence the concerted work abandonment was a prohibited activity contemplated under
Article 264 (a) of the Labor Code, as amended, upon assumption of jurisdiction by the
Secretary of Labor. Citing this Courts ruling in the case of Telefunken Semiconductors
Employees Union-FFW v. Court of Appeals,[21] the Second Division found there was just and
valid cause for the dismissal of complainants.[22]

On the charge of forum shopping with respect to twenty-one (21) individual complainants who
have voluntarily settled their claims against Solidbank, the said cases not having been
dismissed by the Labor Arbiter despite proper motion,[23] the Second Division found that
complainants admitted in their Answer that the said employees preferred to pursue their own
independent action against the bank and their names were stricken out from the original
complaint; hence, the Labor Arbiter erred in granting relief to said employees. Nevertheless, it
held that the complaint will not be dismissed on this ground as the issue of forum shopping
should have been raised in the proceedings before the Labor Arbiter.[24]
Page 7

Respondents filed a motion for reconsideration while the petitioners filed a partial motion for
reconsideration. Both motions were denied under Resolution[25] dated September 28, 2001.

As to respondents appeal, the NLRCs Third Division by Decision[26] dated January 31, 2002,
reversed the decision of Labor Arbiter Caizares, Jr., as follows:

WHEREFORE, the decision appealed from is hereby SET ASIDE and a new
one entered finding the respondent Solidbank Corporation liable for the illegal
dismissal of complainants Ernesto U. Gamier, Elena P. Condevillamar, Janice L.
Arriola and Maria Ophelia C. de Guzman, and ordering the respondent bank to
reinstate the complainants to their former positions without loss of seniority
rights and to pay full backwages reckoned from the time of their illegal dismissal
up to the time of their actual/payroll reinstatement. Should reinstatement not be
feasible, respondent bank is further ordered to pay complainants their
separation pay in accordance with the provisions of the subsisting Collective
Bargaining Agreement.

All other claims are DISMISSED for lack of merit.

SO ORDERED.[27]

The Third Division held that the protest action staged by the banks employees before
the DOLE did not amount to a strike but rather an exercise of their right to express frustration
and dissatisfaction over the decision rendered by the Secretary of Labor. Hence, it cannot be
concluded that the activity is per se illegal or violative of the assumption order considering
that at the time, both parties had pending motions for reconsideration of the Secretarys
decision. Moreover, it was found that Gamier, Condevillamar, Arriola and De Guzman were not
fully investigated on the charge that they had instigated or actively participated in an illegal
activity; neither was it shown that the explanations submitted by them were considered by the
management. Since said employees had presented evidence of plausible and acceptable
reasons for their absence at the workplace at the time of the protest action, their termination
based on such alleged participation in the protest action was unjustified.[28]

Respondents filed a partial motion while the petitioners filed a motion for
reconsideration of the Decision dated January 31, 2002. Both motions were denied under
Resolution[29] dated March 8, 2002.

On November 20, 2001, petitioners filed a petition for certiorari before the CA assailing
the July 23, 2001 Decision and Resolution dated September 28, 2001 of the NLRCs Second
Division insofar as it ordered the payment of separation benefits to the 129 terminated
employees of Solidbank who participated in the mass action/strike (CA-G.R. SP No.
67730).[30]

On May 23, 2002, petitioners filed a separate petition in the CA (CA-G.R. SP No. 70820)
seeking the reversal of the January 31, 2002 Decision and Resolution dated March 8, 2002 of
the NLRCs Third Division and praying for the following reliefs: (1) immediate issuance of a
TRO and writ of preliminary injunction to restrain/enjoin the NLRC from issuing a writ of
execution in NLRC CA No. 027342-01; (2) the petition be consolidated with CA-G.R. SP No.
67730 before the Thirteenth Division and CA-G.R. SP No. 68054 before the Third Division, or if
consolidation is no longer possible, that the petition be resolved independently of the aforesaid
cases; and (3) granting the petition by annulling and setting aside the January 31, 2002
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Decision of the NLRC, and reinstating the November 14, 2000 Decision of Labor Arbiter
Caizares, Jr.[31]

On August 9, 2002, petitioners filed a Manifestation before the Fifteenth Division (CA-
G.R. SP No. 67730) attaching thereto a copy of the Decision[32] (dated July 26, 2002) rendered
by the CAs Special Third Division in CA-G.R. SP No. 68998, a petition for certiorari separately
filed by Metrobank which also sought to annul and set aside the July 23, 2001 Decision of the
NLRCs Second Division insofar as it ordered the payment of separation benefits to the
dismissed employees of Solidbank. In the said decision, the CAs Fourteenth Division gave due
course to the petition of Metrobank and affirmed the July 23, 2001 decision of the NLRC but
reversed and set aside the portion of the decision ordering the payment of separation
benefits.[33]

On September 11, 2002, respondents filed an Omnibus Motion and Counter-


Manifestation arguing that petitioners Manifestation constitutes a judicial admission that
Metrobank engaged in forum shopping; it was thus prayed that CA-G.R. SP No. 68998 be
consolidated with CA-G.R. SP No. 67730, the latter having a lower case number.Further,
respondents attached a copy of the Decision[34] dated August 29, 2002 rendered by the CAs
Second Division in CA-G.R. SP No. 68054, the petition separately filed by the Union and the 129
terminated employees of Solidbank from the July 23, 2001 Decision of the NLRCs Second
Division. The CAs Second Division granted the petition in CA-G.R. SP No. 68054 and reinstated
the March 16, 2001 Decision of Labor Arbiter Flores.

CA-G.R. SP Nos. 67730 and 70820 were consolidated before the Twelfth Division.

Court of Appeals Ruling

On March 10, 2003, the CA rendered its Decision[35] the dispositive portion of which reads:

WHEREFORE, the twin petitions are hereby DENIED. The dismissal of


private respondents are hereby declared to be illegal. Consequently, petitioner is
ordered to reinstate private respondents to their former position, consonant
with the Decision of this Court in CA-G.R. SP No. 68054.

SO ORDERED.[36]

First, on the issue of forum shopping, the CA found that while there were indeed two cases
filed respecting the same matter of illegality of the dismissal of certain employees of Solidbank,
it appears that the individual complainants have no hand in initiating the case before the Labor
Arbiter for which the Union filed the complaint in behalf of its members. Hence, the individual
complainants cannot be said to have deliberately or consciously sought two different fora for
the same issues and causes of action. Petitioners, moreover, failed to call the attention of the
Labor Arbiter as to the fact of filing of similar complaints by four employees.

As to the nature of the mass action resorted to by the employees of Solidbank, the CA
ruled that it was a legitimate exercise of their right to free expression, and not a strike
proscribed when the Secretary of Labor assumed jurisdiction over the impass between
Solidbank and the Union in the collective bargaining negotiations. The CA thus reasoned:

while conceding that the aggregated acts of the private respondents may
have resulted in a stoppage of work, such was the necessary result of the
Page 9

exercise of a Constitutional right. It is beyond cavil that the mass action was
done, not to exert any undue pressure on the petitioner with regard to
wages or other economic demands, but to express dissatisfaction over the
decision of the Labor Secretary subsequent to his assumption of
jurisdiction. Surely, this is one course of action that is not enjoined even
when a labor dispute is placed under the assumption of the said Labor
Secretary. To allow an act of the Labor Secretary one man in the Executive
Department to whittle down a freedom guaranteed by the Bill of Rights would be
to place upon that freedom a limitation never intended by the several framers of
our Constitution. In effect, it would make a right enshrined in the Fundamental
Law that was ratified by the Sovereign People, subordinate to a prerogative
granted by the Labor Code, a statutory enactment made by mere representatives
of the People. This anomaly We cannot allow.

xxxx

Was private respondents act of massing in front of


the DOLE Building calculated by them to cause work stoppage, or were they
merely airing their grievance over the ruling of the Labor Secretary in exercise of
their civil liberties? Who can divine the motives of their hearts? But when two
different interpretations are possible, the courts must lean towards that which
gives meaning and vitality to the Bill of Rights. x x x[37] (Emphasis supplied.)

On April 2, 2003, petitioners filed a motion for reconsideration but this was denied by the CA
in its Resolution[38] dated August 7, 2003.

The Petitions

G.R. No. 159460

Petitioners argued that the CA erred in holding that the mass action of April 3,
2000 infront of the Office of the Secretary of Labor was not a strike considering that it had all
the elements of a strike and the respondents judicially admitted that it was a strike. The CA
deemed the mass action as an exercise of the respondents freedom of expression but such
constitutional right is not absolute and subject to certain well-defined exceptions. Moreover, a
mass action of this nature is considered a strike and not an exercise of ones freedom of
expression, considering further that the Secretarys Order dated January 18, 2000 is a valid
exercise of police power.

Petitioners assail the CA in not considering the damage and prejudice caused to the
bank and its clients by respondents illegal acts. Respondents mass actions crippled banking
operations. Over-the-counter transactions were greatly undermined. Checks for clearing were
significantly delayed. On-line transactions were greatly hampered, causing inestimable
damage to the nationwide network of automated teller machines. Respondent Unions actions
clearly belie its allegation that its mass action was merely intended to protest and express
their dissatisfaction with the Secretarys Order dated March 24, 2000.

In view of the illegal strike conducted in violation of the Secretarys assumption order,
petitioners maintain that the dismissal of respondents was not illegal, as consistently ruled by
this Court in many cases. Even granting arguendo that their termination was illegal, the CA
erred in ordering the reinstatement of respondents and holding that Solidbank, FMIC and
Metrobank are solidarily liable to the respondents. Lastly, the CA erred in not finding that
Page 10

respondents were guilty of forum shopping as respondents claim that they did not know the
Union had filed a complaint was unbelievable under the circumstances.[39]

G.R. No. 159461

Petitioners contend that the CA erred in ruling that the dismissal of respondents Gamier,
Condevillamar, Arriola and De Guzman was illegal, considering that this was not an issue
raised in the petition for certiorari before the appellate court. What was raised by petitioners
was only the propriety of the award of separation pay by the NLRC which in fact declared their
dismissal to be valid and legal.

Petitioners maintain that respondents are not entitled to separation pay even if the
dismissal was valid because they committed serious misconduct and/or illegal act in defying
the Secretarys assumption order. Moreover, the CA also erred in disregarding the Release,
Waiver and Quitclaim executed by twenty-one (21) individual respondents who entered into a
compromise agreement with Solidbank.[40]

Issues

The fundamental issues to be resolved in this controversy are: (1) whether the protest rally
and concerted work abandonment/boycott staged by the respondents violated the Order
dated January 18, 2000 of the Secretary of Labor; (2) whether the respondents were validly
terminated; and (3) whether the respondents are entitled to separation pay or financial
assistance.

Our Ruling

Article 212 of the Labor Code, as amended, defines strike as any temporary stoppage of work
by the concerted action of employees as a result of an industrial or labor dispute. A labor
dispute includes any controversy or matter concerning terms and conditions of employment or
the association or representation of persons in negotiating, fixing, maintaining, changing or
arranging the terms and conditions of employment, regardless of whether or not the
disputants stand in the proximate relation of employers and employees. [41] The term strike
shall comprise not only concerted work stoppages, but also slowdowns, mass leaves, sitdowns,
attempts to damage, destroy or sabotage plant equipment and facilities and similar
activities.[42] Thus, the fact that the conventional term strike was not used by the striking
employees to describe their common course of action is inconsequential, since the substance of
the situation, and not its appearance, will be deemed to be controlling.[43]

After a thorough review of the records, we hold that the CA patently erred in concluding that
the concerted mass actions staged by respondents cannot be considered a strike but a
legitimate exercise of the respondents right to express their dissatisfaction with the Secretarys
resolution of the economic issues in the deadlocked CBA negotiations with petitioners. It must
be stressed that the concerted action of the respondents was not limited to the protest rally
infront of the DOLE Office on April 3, 2000. Respondent Union had also picketed the Head
Office and Paseo de Roxas Branch. About 712 employees, including those in the provincial
branches, boycotted and absented themselves from work in a concerted fashion for three
continuous days that virtually paralyzed the employers banking operations. Considering that
these mass actions stemmed from a bargaining deadlock and an order of assumption of
jurisdiction had already been issued by the Secretary of Labor to avert an impending strike,
Page 11

there is no doubt that the concerted work abandonment/boycott was the result of a labor
dispute.

In Toyota Motor Phils. Corp. Workers Association (TMPCWA) v. National Labor Relations
Commission,[44] petitioners union and members held similar protest rallies infront of the offices
of BLR and DOLE Secretary and at the company plants. We declared that said mass actions
constituted illegal strikes:

Petitioner Union contends that the protests or rallies conducted on


February 21 and 23, 2001 are not within the ambit of strikes as defined in the
Labor Code, since they were legitimate exercises of their right to peaceably
assemble and petition the government for redress of grievances. Mainly relying
on the doctrine laid down in the case of Philippine Blooming Mills Employees
Organization v. Philippine Blooming Mills Co., Inc., it argues that the protest was
not directed at Toyota but towards the Government (DOLE and BLR). It explains
that the protest is not a strike as contemplated in the Labor Code. The Union
points out that in Philippine Blooming Mills Employees Organization, the mass
action staged in Malacaang to petition the Chief Executive against the abusive
behavior of some police officers was a proper exercise of the employees right to
speak out and to peaceably gather and ask government for redress of their
grievances.

The Unions position fails to convince us.

While the facts in Philippine Blooming Mills Employees Organization are


similar in some respects to that of the present case, the Union fails to realize one
major difference: there was no labor dispute in Philippine Blooming Mills
Employees Organization. In the present case, there was an on-going labor
dispute arising from Toyotas refusal to recognize and negotiate with
the Union, which was the subject of the notice of strike filed by
the Union on January 16, 2001. Thus, the Unions reliance on Philippine
Blooming Mills Employees Organization is misplaced, as it cannot be considered a
precedent to the case at bar.

xxxx

Applying pertinent legal provisions and jurisprudence, we rule that the


protest actions undertaken by the Union officials and members on February 21
to 23, 2001 are not valid and proper exercises of their right to assemble and ask
government for redress of their complaints, but are illegal strikes in breach of
the Labor Code. The Unions position is weakened by the lack of permit from the
City of Manila to hold rallies. Shrouded as demonstrations, they were in
reality temporary stoppages of work perpetrated through the concerted
action of the employees who deliberately failed to report for work on the
convenient excuse that they will hold a rally at the BLR and DOLE offices in
Intramuros, Manila, on February 21 to 23, 2001. x x x (Emphasis supplied.)

Moreover, it is explicit from the directive of the Secretary in his January 18, 2000 Order that
the Union and its members shall refrain from committing any and all acts that might
exacerbate the situation,[45] which certainly includes concerted actions. For all intents and
purposes, therefore, the respondents staged a strike ultimately aimed at realizing their
economic demands. Whether such pressure was directed against the petitioners or the
Secretary of Labor, or both, is of no moment. All the elements of strike are evident in the
Union-instigated mass actions.
Page 12

The right to strike, while constitutionally recognized, is not without legal


constrictions.[46] Article 264 (a) of the Labor Code, as amended, provides:

Art. 264. Prohibited activities. (a) x x x

No strike or lockout shall be declared after assumption of jurisdiction


by the President or the Secretary or after certification or submission of the
dispute to compulsory or voluntary arbitrationor during the pendency of
cases involving the same grounds for the strike or lockout.

x x x x (Emphasis supplied.)

The Court has consistently ruled that once the Secretary of Labor assumes jurisdiction over a
labor dispute, such jurisdiction should not be interfered with by the application of the coercive
processes of a strike or lockout.[47] A strike that is undertaken despite the issuance by the
Secretary of Labor of an assumption order and/or certification is a prohibited activity and thus
illegal.[48]

Article 264 (a) of the Labor Code, as amended, also considers it a prohibited activity to
declare a strike during the pendency of cases involving the same grounds for the same
strike.[49] There is no dispute that when respondents conducted their mass actions on April 3
to 6, 2000, the proceedings before the Secretary of Labor were still pending as both parties
filed motions for reconsideration of the March 24, 2000 Order. Clearly, respondents knowingly
violated the aforesaid provision by holding a strike in the guise of mass demonstration
simultaneous with concerted work abandonment/boycott.

Notwithstanding the illegality of the strike, we cannot sanction petitioners act of


indiscriminately terminating the services of individual respondents who admitted joining the
mass actions and who have refused to comply with the offer of the management to report back
to work on April 6, 2000. The liabilities of individual respondents must be determined under
Article 264 (a) of the Labor Code, as amended:

Art. 264. Prohibited activities. x x x

xxxx

Any worker whose employment has been terminated as a consequence of


an unlawful lockout shall be entitled to reinstatement with full back wages. Any
union officer who knowingly participates in an illegal strike and any
worker or union officer who knowingly participates in the commission of
illegal acts during a strike may be declared to have lost his employment
status:Provided, That mere participation of a worker in a lawful strike shall
not constitute sufficient ground for termination of his employment, even if
a replacement had been hired by the employer during such lawful strike.

xxxx

The foregoing shows that the law makes a distinction between union officers and members.
For knowingly participating in an illegal strike or participating in the commission of illegal acts
during a strike, the law provides that a union officer may be terminated from employment. The
law grants the employer the option of declaring a union officer who participated in an illegal
strike as having lost his employment. It possesses the right and prerogative to terminate the
union officers from service.[50]
Page 13

However, a worker merely participating in an illegal strike may not be terminated from
employment. It is only when he commits illegal acts during a strike that he may be declared to
have lost employment
status. [51] We have held that the responsibility of union officers, as main players in an illegal
strike, is greater than that of the members and, therefore, limiting the penalty of dismissal only
for the former for participation in an illegal strike is in order.[52] Hence, with respect to
respondents who are union officers, the validity of their termination by petitioners cannot be
questioned. Being fully aware that the proceedings before the Secretary of Labor were still
pending as in fact they filed a motion for reconsideration of the March 24, 2000 Order, they
cannot invoke good faith as a defense.[53]

For the rest of the individual respondents who are union members, the rule is that an ordinary
striking worker cannot be terminated for mere participation in an illegal strike. There must be
proof that he or she committed illegal acts during a strike. In all cases, the striker 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. Liability for prohibited acts is to be determined on an individual
basis.[54]

Petitioners have not adduced evidence on such illegal acts committed by each of the individual
respondents who are union members. Instead, petitioners simply point to their admitted
participation in the mass actions which they knew to be illegal, being in violation of the
Secretarys assumption order. However, the acts which were held to be prohibited activities are
the following:

where the strikers shouted slanderous and scurrilous words against the
owners of the vessels; where the strikers used unnecessary and obscene
language or epithets to prevent other laborers to go to work, and circulated
libelous statements against the employer which show actual malice; where the
protestors used abusive and threatening language towards the patrons of a place
of business or against co-employees, going beyond the mere attempt to persuade
customers to withdraw their patronage; where the strikers formed a human
cordon and blocked all the ways and approaches to the launches and vessels of
the vicinity of the workplace and perpetrated acts of violence and coercion to
prevent work from being performed; and where the strikers shook their fists
and threatened non-striking employees with bodily harm if they persisted to
proceed to the workplace. x x x[55]

The dismissal of herein respondent-union members are therefore unjustified in the absence of
a clear showing that they committed specific illegal acts during the mass actions and concerted
work boycott.

Are these dismissed employees entitled to backwages and separation pay?

The award of backwages is a legal consequence of a finding of illegal dismissal. Assuming that
respondent-union members have indeed reported back to work at the end of the concerted
mass actions, but were soon terminated by petitioners who found their explanation
unsatisfactory, they are not entitled to backwages in view of the illegality of the said strike.
Thus, we held in G & S Transport Corporation v. Infante[56]--

It can now therefore be concluded that the acts of respondents do not


merit their dismissal from employment because it has not been substantially
Page 14

proven that they committed any illegal act while participating in the illegal
strike. x x x

xxxx

With respect to backwages, the principle of a fair days wage for a fair
days labor remains as the basic factor in determining the award thereof. If there
is no work performed by the employee there can be no wage or pay unless,
of course, the laborer was able, willing and ready to work but was
illegally locked out, suspended or dismissed or otherwise illegally prevented
from working.While it was found that respondents expressed their intention to
report back to work, the latter exception cannot apply in this case. In Philippine
Marine Officers Guild v. Compaia Maritima, as affirmed in Philippine Diamond
Hotel and Resort v. Manila Diamond Hotel Employees Union, the Court stressed
that for this exception to apply, it is required that the strike be legal, a
situation that does not obtain in the case at bar. (Emphasis supplied.)

Under the circumstances, respondents reinstatement without backwages suffices for the
appropriate relief. But since reinstatement is no longer possible, given the lapse of
considerable time from the occurrence of the strike, not to mention the fact that Solidbank had
long ceased its banking operations, the award of separation pay of one (1) month salary for
each year of service, in lieu of reinstatement, is in order.[57] For the twenty-one (21) individual
respondents who executed quitclaims in favor of the petitioners, whatever amount they have
already received from the employer shall be deducted from their respective separation pay.

Petitioners contended that in view of the blatant violation of the Secretarys assumption order
by the striking employees, the award of separation pay is unjust and unwarranted.That
respondent-members themselves knowingly participated in the illegal mass actions
constitutes serious misconduct which is a just cause under Article 282 for terminating an
employee.

We are not persuaded.

As we stated earlier, the Labor Code protects an ordinary, rank-and-file union member who
participated in such a strike from losing his job, provided that he did not commit an illegal
act during the strike.[58] Article 264 (e) of the Labor Code, as amended, provides for such acts
which are generally prohibited during concerted actions such as picketing:

No person engaged in picketing shall commit any act of violence,


coercion or intimidation or obstruct the free ingress to or egress from the
employers premises for lawful purposes, or obstruct public
thoroughfares. (Emphasis supplied.)

Petitioners have not adduced substantial proof that respondent-union members perpetrated
any act of violence, intimidation, coercion or obstruction of company premises and public
thoroughfares. It did not submit in evidence photographs, police reports, affidavits and other
available evidence.

As to the issue of solidary liability, we hold that Metrobank cannot be held solidarily
liable with Solidbank for the claims of the latters dismissed employees. There is no showing
that Metrobank is the successor-in-interest of Solidbank. Based on petitioners documentary
evidence, Solidbank was merged with FMIC, with Solidbank as the surviving corporation, and
Page 15

was later renamed as FMIC. While indeed Solidbanks banking operations had been integrated
with Metrobank, there is no showing that FMIC has ceased business operations. FMIC as
successor-in-interest of Solidbank remains solely liable for the sums herein adjudged against
Solidbank.

Neither should individual petitioners Vistan and Mendoza be held solidarily liable for
the claims adjudged against petitioner Solidbank. Article 212 (e)[59] does not state that
corporate officers are personally liable for the unpaid salaries or separation pay of employees
of the corporation. The liability of corporate officers for corporate debts remains governed by
Section 31[60] of the Corporation Code.

It is basic that a corporation is invested by law with a personality separate and distinct
from those of the persons composing it as well as from that of any other legal entity to which it
may be related. Mere ownership by a single stockholder or by another corporation of all or
nearly all of the capital stock of a corporation is not of itself sufficient ground for disregarding
the separate corporate personality.[61] In labor cases, in particular, the Court has held
corporate directors and officers solidarily liable with the corporation for the termination of
employment of corporate employees done with malice or in bad faith. [62] Bad faith is never
presumed.[63] Bad faith does not simply connote bad judgment or negligence -- it imports a
dishonest purpose or some moral obliquity and conscious doing of wrong. It means a breach of
a known duty through some motive or interest or ill-will that partakes of the nature of
fraud.[64]

Respondents have not satisfactorily proven that Vistan and Mendoza acted with malice,
ill-will or bad faith. Hence, said individual petitioners are not liable for the separation pay of
herein respondents-union members.

WHEREFORE, the petitions are PARTLY GRANTED. The Decision dated March 10,
2003 of the Court of Appeals in CA-G.R. SP Nos. 67730 and 70820 is hereby SET
ASIDE. Petitioner Solidbank Corporation (now FMIC) is hereby ORDERED to pay each of the
above-named individual respondents, except union officers who are hereby declared validly
dismissed, separation pay equivalent to one (1) month salary for every year of
service. Whatever sums already received from petitioners under any release, waiver or
quitclaim shall be deducted from the total separation pay due to each of them.

The NLRC is hereby directed to determine who among the individual respondents are
union members entitled to the separation pay herein awarded, and those union officers who
were validly dismissed and hence excluded from the said award.

SO ORDERED.

CASE NO. 2

A. SORIANO AVIATION, G.R. No. 166879


Petitioner,
Present:
CARPIO,* J.,
CORONA,**
- versus - CARPIO MORALES, J., Acting
Chairperson,
DEL CASTILLO, and
ABAD, JJ.
EMPLOYEES ASSOCIATION OF A.
Page 16

SORIANO AVIATION, JULIUS S.


VARGAS IN HIS CAPACITY
AS UNION PRESIDENT, REYNALDO
ESPERO, JOSEFINO ESPINO,
GALMIER BALISBIS, GERARDO
BUNGABONG, LAURENTE BAYLON,
JEFFREY NERI, ARTURO INES,
REYNALDO BERRY, RODOLFO
RAMOS, OSWALD ESPION, ALBERT
AGUILA, RAYMOND BARCO,
REYNANTE AMIMITA, SONNY
BAWASANTA, MAR NIMUAN AND
RAMIR LICUANAN,
Respondents. Promulgated:
August 14, 2009

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

CARPIO MORALES, J.:


On May 22, 1997, A. Soriano Aviation (petitioner or the company) which is engaged in
providing transportation of guests to and from Amanpulo and El Nido resorts in Palawan, and
respondent Employees Association of A. Soriano Aviation (the Union), the duly-certified
exclusive bargaining agent of the rank and file employees of petitioner, entered into a
Collective Bargaining Agreement (CBA) effective January 1, 1997 up to December 31,
1999. The CBA included a No-Strike, No-Lock-out clause.

On May 1 & 12, and June 12, 1997, which were legal holidays and peak season for the
company, eight mechanics-members of respondent Union, its herein co-respondents Albert
Aguila (Aguila), Reynante Amimita (Amimita), Galmier Balisbis (Balisbis), Raymond Barco
(Barco), Gerardo Bungabong (Bungabong), Josefino Espino (Espino), Jeffrey Neri (Neri) and
Rodolfo Ramos, Jr. (Ramos), refused to render overtime work.

Petitioner treated the refusal to work as a concerted action which is a violation of the
No-Strike, No-Lockout clause in the CBA. It thus meted the workers a 30-day suspension. It
also filed on July 31, 1997 a complaint for illegal strike against them, docketed as NLRC Case
No. 07-05409-97, which was later dismissed at its instance in order to give way to settlement,
without prejudice to its re-filing should settlement be unavailing.

The attempted settlement between the parties having been futile, the Union filed a
Notice of Strike with the National Conciliation and Mediation Board (NCMB) on October 3,
1997, attributing to petitioner the following acts: (1) union busting, (2) illegal dismissal of
union officer, (3) illegal suspension of eight mechanics, (4) violation of memorandum of
agreement, (5) coercion of employees and interrogation of newly-hired mechanics with regard
to union affiliation, (6) discrimination against the aircraft mechanics, (7) harassment through
systematic fault-finding, (8) contractual labor, and (9) constructive dismissal of the Union
President, Julius Vargas (Vargas).
Page 17

As despite conciliation no amicable settlement of the dispute was arrived at,


the Union went on strike on October 22, 1997.

Meanwhile, pursuant to its reservation in NLRC Case No. 07-05409-97, petitioner filed a
Motion to Re-Open the Case which was granted by Labor Arbiter Manuel P. Asuncion by Order
of October 21, 1997.

By Decision[1] dated September 28, 1998 rendered in petitioners complaint in NLRC


Case No. 07-05409-97, the Labor Arbiter declared that the newly implemented work-shift
schedule was a valid exercise of management prerogative and the refusal of herein individual
respondents to work on three consecutive holidays was a form of protest by the Union, hence,
deemed a concerted action. Noting that the Union failed to comply with the formal
requirements prescribed by the Labor Code in the holding of strike, the strike was declared
illegal.

The Union appealed to the NLRC which dismissed it in a per


curiam Decision[2] dated September 14, 1999, and the subsequent motion for reconsideration
was denied by Resolution dated November 11, 1999.

In the interim or on June 16, 1998, eight months into the second strike, petitioner filed a
complaint against respondents before the Labor Arbiter, praying for the declaration as illegal
of the strike on account of their alleged pervasive and widespread use of force and violence
and for the loss of their employment, citing the following acts committed by them: publicly
shouting of foul and vulgar words to company officers and non-striking employees;
threatening of officers and non-striking employees with bodily harm and dousing them with
water while passing by the strike area; destruction of or inflicting of damage to company
property, as well as private property of company officers; and putting up of placards and
streamers containing vulgar and insulting epithets including imputing crime on the company.

By Decision[3] of June 15, 2000, Labor Arbiter Ramon Valentin C. Reyes declared the second
strike illegal. Taking judicial notice of the September 28, 1998 Decision of Labor Arbiter
Asuncion, he noted that as the Union went on the first strike on a non-strikeable issue ─ the
questioned change of work schedule, it violated the No-Strike, No-Lockout clause in the CBA
and, in any event, the Union failed to comply with the requirements for a valid strike.

The Labor Arbiter went on to hold that the Union deliberately resorted to the use of
violent and unlawful acts in the course of the second strike, hence, the individual respondents
were deemed to have lost their employment.

On appeal, the National Labor Relations Commission (NLRC) affirmed in toto the Labor
Arbiters decision, by Resolution[4] dated October 31, 2001. It held that even if the strike were
legal at the onset, the commission of violent and unlawful acts by individual respondents in the
course thereof rendered it illegal.
Page 18

Its motion for reconsideration having been denied by Resolution[5] dated December 14,
2001, the Union appealed to the Court of Appeals.
By the assailed Decision of April 16, 2004,[6] the appellate court reversed and set aside
the NLRC ruling, holding that the acts of violence committed by the Union members in the
course of the strike were not, as compared to the acts complained of in Shell Oil Workers Union
v. Shell Company of the Philippines,[7] First City Interlink Transportation Co., Inc., v. Roldan-
Confesor[8] and Maria Cristina Fertilizer Plant Employees Association v. Tandaya, [9] (this case
was applied by the Labor Arbiter in his Decision of September 28, 2008) where the acts of
violence resulted in loss of employment, concluded that the acts in the present case were not
as serious or pervasive as in these immediately-cited cases to call for loss of employment of the
striking employees.

Specifically, the appellate court noted that at the time petitioner filed its complaint in
June 1998, almost eight months had already elapsed from the commencement of the strike
and, in the interim, the alleged acts of violence were committed only during nine non-
consecutive days, viz: one day in October, two days in November, four days in December, all in
1997, and two days in January 1998. To the appellate court, these incidents did not warrant
the conversion of an otherwise legal strike into an illegal one, and neither would it result in the
loss of employment of the strikers. For, so the appellate court held, the incidents consisted
merely of name-calling and using of banners imputing negligence and criminal acts to the
company and its officers, which do not indicate a degree of violence that could be categorized
as grave or serious to warrant the loss of employment of the individual strikers found to be
responsible.
By Resolution of January 25, 2005, the appellate court denied petitioners motion for
reconsideration, hence, the present petition.

Petitioner insists that, contrary to the appellate courts finding, the questioned acts of the
strikers were of a serious character, widespread and pervasive; and that the Unions
imputation of crime and negligence on its part, and the prolonged strike resulted in its loss of
goodwill and business, particularly the termination of its lease and air-service contract
with Amanpulo, the loss of its after-sales repair service agreement with Bell Helicopters, the
loss of its accreditation as the Beechcraft service facility, and the decision of El Nido to put up
its own aviation company.

Apart from the acts of violence committed by the strikers, petitioner bases its plea that the
strike should be declared illegal on the violation of the No-Strike-No-Lockout clause in the CBA,
the strike having arisen from non-strikeable issues. Petitioner proffers that what actually
prompted the holding of the strike was the implementation of the new shift schedule, a valid
exercise of management prerogative.

In issue then is whether the strike staged by respondents is illegal due to the alleged
commission of illegal acts and violation of the No Strike-No Lockout clause of the CBA and, if in
Page 19

the affirmative, whether individual respondents are deemed to have lost their employment
status on account thereof.

The Court rules in the affirmative.

The Court notes that, as found by the Labor Arbiter in NLRC Case No. 07-05409-97, the
first strike or the mechanics refusal to work on 3 consecutive holidays was prompted by their
disagreement with the management-imposed new work schedule. Having been grounded on a
non-strikeable issue and without complying with the procedural requirements, then the same
is a violation of the No Strike-No Lockout Policy in the existing CBA. Respecting the second
strike, where the Union complied with procedural requirements, the same was not a violation
of the No Strike- No Lockout provisions, as a No Strike-No Lockout provision in the Collective
Bargaining Agreement (CBA) is a valid stipulation but may be invoked only by employer when
the strike is economic in nature or one which is conducted to force wage or other concessions
from the employer that are not mandated to be granted by the law. It would be inapplicable to
prevent a strike which is grounded on unfair labor practice.[10] In the present case,
the Union believed in good faith that petitioner committed unfair labor practice when it went
on strike on account of the 30-day suspension meted to the striking mechanics, dismissal of a
union officer and perceived union-busting, among others. As held in Malayang Samahan ng
mga Manggaggawa sa M. Greenfield v. Ramos:[11]

On the submission that the strike was illegal for being grounded on a non-
strikeable issue, that is, the intra-union conflict between the federation and the
local union, it bears reiterating that when respondent company dismissed the
union officers, the issue was transformed into a termination dispute and
brought respondent company into the picture. Petitioners believed in good
faith that in dismissing them upon request by the federation, respondent
company was guilty of unfair labor practice in that it violated the petitioners
right to self-organization. The strike was staged to protest respondent companys
act of dismissing the union officers. Even if the allegations of unfair labor
practice are subsequently found out to be untrue, the presumption of
legality of the strike prevails. (Emphasis supplied)

Be that as it may, the Court holds that the second strike became invalid due to the
commission of illegal action in its course.

It is hornbook principle that the exercise of the right of private sector employees
to strike is not absolute. Thus Section 3 of Article XIII of the Constitution provides:

SECTION 3. x x x

It shall guarantee the rights of all workers to self-organization, collective


bargaining and negotiations and peaceful concerted activities, including
the right to strike in accordance with law. They shall be entitled to security of
tenure, humane conditions of work, and a living wage. They shall also participate
Page 20

in policy and decision-making processes affecting their rights and benefits as


may be provided by law. (Emphasis and underscoring supplied)

Indeed, even if the purpose of a strike is valid, the strike may still be held illegal where
the means employed are illegal. Thus, the employment of violence, intimidation, restraint or
coercion in carrying out concerted activities which are injurious to the right to property
renders a strike illegal. And so is picketing or the obstruction to the free use of property or the
comfortable enjoyment of life or property, when accompanied by intimidation, threats,
violence, and coercion as to constitute nuisance.[12]

Apropos is the following ruling in Sukhothai Cuisine v. Court of Appeals:[13]

Well-settled is the rule that even if the strike were to be declared valid
because its objective or purpose is lawful, the strike may still be declared invalid
where the means employed are illegal. 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.

The following acts have been held to be prohibited activities: where


the strikers shouted slanderous and scurrilous words against the owners of
the vessels; where the strikers used unnecessary and obscene language or
epithets to prevent other laborers to go to work, and circulated libelous
statements against the employer which show actual malice; where
the protestors used abusive and threatening language towards the patrons
of a place of business or against co-employees, going beyond the mere
attempt to persuade customers to withdraw their patronage; where the strikers
formed a human cordon and blocked all the ways and approaches to the
launches and vessels of the vicinity of the workplace and perpetrated acts of
violence and coercion to prevent work from being performed; and where
the strikers shook their fists and threatened non-striking employees with
bodily harm if they persisted to proceed to the workplace. Permissible
activities of the picketing workers do not include obstruction of access of
customers. (emphasis supplied)

The appellate court found in the present case, as in fact it is not disputed, that the acts
complained of were the following:[14]

1. On 29 October 1997, while Robertus M. Cohen, personnel manager of


the Company, was eating at the canteen, petitioner Rodolfo
Ramos shouted insults and other abusive, vulgar and foul-mouthed
word with the use of a megaphone, such as, sige, ubusin mo yung
pagkain, kapal ng mukha mo; that when he left the canteen to go back
to his office he was splashed with water from behind so that his
whole back was drenched; that when he confronted that strikers at the
Page 21

picket line accompanied by three (3) security guards, to find out who was
responsible, he was told by petitioner Oswald Espion who was then
holding a thick piece of wood approximately two (2) feet long to leave.

2. On the same day, 29 October 1997, petitioners Julius Vargas, Jeffrey


Neri, and Rodolfo Ramos, together with Jose Brin, shouted to Capt. Ben
Hur Gomez, the chief operating officer of the Company, in this
wise, Matanda ka na, balatuba ka pa rin. Mangungurakot ka sa
kompanya!

3. In the morning of 11 November 1997, petitioner Ramos was reported


to have shouted to Mr. Maximo Cruz, the Mechanical and Engineering
Manager of the Company, Max, mag-resign ka na, ang baho ng
bunganga mo!

4. In the afternoon of the same day, 11 November 1997, petitioner


Jeffrey Neri was said to have shouted these words Max, mag-resign ka
na, ang baho ng bunganga mo! to Mr. Maximo Cruz;
`
5. On 12 November 1997. petitioners Julius Vargas, Jeffrey Neri, Oswald
Espion, Raymond Barco, together with Jose Brin, were reported to have
shouted to Capt. Gomez and Mr. Maximo Cruz, Matanda ka na, balatuba
ka pa rin! Max, ang baho ng bunganga mo, kasing baho ng ugali mo!

6. On the same day, 12 November 1997, petitioner Oswald Espion was


said to have shouted to the non-striking employees and officers of the
Company, putang-ina ninyo!

7. Also, on 12 November 1997, petitioner Oswald Espion was reported


to have thrown gravel and sand to the car owned by Celso Villamor
Gomez, lead man of the Company, as the said car was traveling along
company premises near the picket line; (apart from the marks of mud,
gravel and sand found on the entire body of the car, no heavy damages,
however, appears to have been sustained by the car).

8. On 08 December 1997, petitioners Julius Vargas, Rey Espero, Rey


Barry, Galmier Balisbis, Rodolfo Ramos, Sonny Bawasanta and Arturo
Ines, together with Jose Brin, shouted, Max, ang sama mo talaga,
lumabas ka dito at pipitpitin ko ang mukha mo! Cohen, inutil ka
talaga. Nagpahaba ka pa ng balbas para kang tsonggo! Cohen,
lumabas ka dito at hahalikan kita.

9. On 10 December 1997, petitioners Vargas and Espion were reported


to have shouted to Mr. Maximino Cruz, Hoy, Max Cruz, wala kang alam
dyan, huwag kang poporma-porma dyan! and then flashed the dirty
finger at him;

10. On 15 December 1997, petitioner Neri was said to have shouted to


non-striking employees at the canteen, Hoy, mga iskerol, kain lang
ng kain, mga putangina ninyo!

11. Also on 15 December 1997, petitioners Vargas, Neri, Espion, Mar


Nimuan, Ramir Licuanan, Albert Aguila and Sonny Bawasanta, together
with Jose Brin, splashed water over Edmund C. Manibog, Jr., security
guard of the Company;
Page 22

12. On 20 December 1997, the strikers admittedly lit and threw


firecrackers purportedly outside the Company premises, as part of a
noise barrage, while the Company was having its Christmas party
inside the Company premises;

13. On 14 January 1998, when Chris A. Oballas, collector of the Company,


boarded a public utility jeepney where Jose Brin, a striker, was also
passenger, Jose Brin was said to have shouted to the other passengers
and driver of the jeepney, Mga pasahero, driver, itong tao ito sherol,
ang kapal ng mukha. Iyong pinagtrabahuhan namin kinakain nito,
ibenebent[a] kami nito, hudas ito! Mga pasahero, tingnan niyo, hindi
makatingin-tingin sa akin, hindi makapagsalita. Hoy, tingin ka sa
akin, napahiya ka sa mga ginagawa mo ano? and, that when Chris
Oballas was alighting from the jeepney, he was kicked on his leg by
Jose Brin; and,

14. On 15 January 1998, while Julio Tomas, Avionics Technician of the


Company, and his girlfriend, Elizabeth Gali, also an employee of the
Company, were waiting for their ride, several union members shouted to
Elizabeth Gali, Beth iwanan mo na yang taong yan, walang kwentang
tao yan! Beth, paano na yung pinagsamahan natin? irked, Julio Tomas
upon boarding the passenger jeepney with his girlfriend threw a P2.00
coin in the direction of the picketers, the coin hit the windshield of a
privately-owned jeepney belonging to petitioner Espion which was
parked alongside the premises of the strike area; The act of Tomas,
provoked the petitioners Espion and Amimita to follow Tomas, who when
left alone inside the tricycle after his girlfriend took a separate tricycle to
her home, was approached by petitioners Espion and Amimita; petitioner
Espion then threw a P2.00 coin at him, and while pointing a baseball bat
to his face shouted, Huwag mong uulitin yung ginawa mo kundi
tatamaan ka sa akin! (Emphasis and italics in the original)

The Court notes that the placards and banners put up by the striking workers in the
company premises read: ANDRES SORIANO AVIATION, INC. CAUGHT IN THE ACT,
ATTEMPTING TO BRIBE GOVERNMENT OFFICIALS BEWARE, NOW A NAME YOU CAN TRASH,
ASAI DETERIORATING SAFETY RECORD KILLS 2 DEAD + VARIOUS (IN PLANE CRASH) FLIGHT
MISHAPS BEWARE, FLY AT YOUR OWN RISK, ANDRES SORIANO AVIATION, INC.
DETERIORATING SAFETY RECORD KILLS INNOCENT PEOPLE IN PLANE CRASH, THE CAUSE:
UNTRAINED MECHANICS DOING AIRCRAFT RELEASE, THE RESULT: SLIPSHOD
MAINTENANCE AND SLOPPY PLANE INSPECTION, WANNA FLY BLIND?, BENHUR GOMEZ
DRAGS COMPANY TO DEBT AND SHAMEFUL EXPERIENCE (MAHIYA KA NAMAN, OY!), A.
SORIANO AVIATION, INC., DEAD PEOPLE IN PLANE CRASH, ELY BONIFACIO (MASAKIT ANG
TOTOO) MAGNANAKAW NG PIYESA, PALITAN NA RIN! TINGNAN NYO KUNG NAGNANAKAW,
MEKANIKO DE EROPLANO Y HUELGA UN VIAJE DE PELIGRO, AIRCRAFT MANAGEMENT
BULOK; A. SORIANO AVIATION KILLS PEOPLE FOR LAX OVERSIGHT OF SAFETY PROC. (ELY
BONIFACIO-PATALSIKIN NA RIN, MANDARAMBONG MUKHANG KWARTA, SAAN MO DINALA
ANG DORNIER SPECIAL TOOLS? IKAW HA!), ELY BONIFACIO KAWATAN BANTAY SALAKAY,
AMANPULO AND EL NIDO GUESTS, BEWARE OF ASAI FLIGHTS, AIRCRAFT MECHANICS STILL
ON STRIKE, GOING TO BORACAY AND EL NIDO IS GOOD BUT FLYING WITH A. SORIANO
Page 23

AVIATION? THINK TWICE! ACHTUNG: A SORIANO AVIATION DEAD PEOPLE IN PLANE CRASH
INSURANCE ENTITLEMENTS DENIED DUE TO CAR VIOLATIONS, UNDRESS SORIANO
AVIATION, INC. UNRELIABLE FIXED BASED OPERATOR KILLS PEOPLE FOR LAX OVERSIGHT
OF SAFETY PROCEDURES.

It cannot be gainsaid that by the above-enumerated undisputed acts,


the Union committed illegal acts during the strike. The Union members repeated name-calling,
harassment and threats of bodily harm directed against company officers and non-striking
employees and, more significantly, the putting up of placards, banners and streamers with
vulgar statements imputing criminal negligence to the company, which put to doubt reliability
of its operations, come within the purview of illegal acts under Art. 264 and jurisprudence.

That the alleged acts of violence were committed in nine non-consecutive days during
the almost eight months that the strike was on-going does not render the violence less
pervasive or widespread to be excusable. Nowhere in Art. 264 does it require that violence
must be continuous or that it should be for the entire duration of the strike.

The appellate court took against petitioner its filing of its complaint to have the strike
declared illegal almost eight months from the time it commenced. Art. 264 does not, however,
state for purposes of having a strike declared as illegal that the employer should immediately
report the same. It only lists what acts are prohibited. It is thus absurd to expect an employer
to file a complaint at the first instance that an act of violence is alleged to be committed,
especially, as in the present case, when an earlier complaint to have the refusal of the
individual respondents to work overtime declared as an illegal strike was still pending an issue
resolved in its favor only on September 25, 1998.

The records show that the Union went on strike on October 22, 1997, and the first
reported harassment incident occurred on October 29, 1997, while the last occurred in
January, 1998. Those instances may have been sporadic, but as found by the Labor Arbiter and
the NLRC, the display of placards, streamers and banners even up to the time the appeal was
being resolved by the NLRC works against the Unions favor.

The acts complained of including the display of placards and banners imputing criminal
negligence on the part of the company and its officers, apparently with the end in view of
intimidating the companys clientele, are, given the nature of its business, that serious as to
make the second strike illegal. Specifically with respect to the putting up of those banners and
placards, coupled with the name-calling and harassment, the same indicates that it was
resorted to to coerce the resolution of the dispute the very evil which Art. 264 seeks to
prevent.

While the strike is the most preeminent economic weapon of workers to force
management to agree to an equitable sharing of the joint product of labor and capital, it exerts
some disquieting effects not only on the relationship between labor and management, but also
on the general peace and progress of society and economic well-being of the State.[15] If such
Page 24

weapon has to be used at all, it must be used sparingly and within the bounds of law in the
interest of industrial peace and public welfare.

As to the issue of loss of employment of those who participated in the illegal


strike, Sukhothai[16] instructs:

In the determination of the liabilities of the individual respondents, the


applicable provision is Article 264(a) of the Labor Code:

Art. 264. Prohibited Activities (a) x x x

xxxx

x x x x Any union officer who knowingly participates in an illegal


strike and any worker or union officer who knowingly participates in the
commission of illegal acts during an illegal strike may be declared to have
lost his employment status: Provided, That mere participation of a worker
in a lawful strike shall not constitute sufficient ground for termination of
his employment, even if a replacement had been hired by the employer during
such lawful strike.

xxxx

In Samahang Manggagawa sa Sulpicio Lines, Inc.-NAFLU v. Sulpicio Lines,


Inc., this Court explained that the effects of such illegal strikes, outlined in
Article 264, make a distinction between workers and union officers who
participate therein: an ordinary striking worker cannot be terminated for mere
participation in an illegal. There must be proof that he or she
committed illegal acts during a strike. A union officer, on the other hand,
may be terminated from work when he knowingly participates in an illegal
strike, and like other workers, when he commits an illegal act during an
illegal strike. In all cases, the striker 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.[17] (Emphasis supplied)

The liability for prohibited acts has thus to be determined on an individual basis. A
perusal of the Labor Arbiters Decision, which was affirmed in toto by the NLRC, shows that on
account of the staging of the illegal strike, individual respondents were all deemed to have lost
their employment, without distinction as to their respective participation.

Of the participants in the illegal strike, whether they knowingly participated in the
illegal strike in the case of union officers or knowingly participated in the commission of violent
acts during the illegal strike in the case of union members, the records do not indicate. While
respondent Julius Vargas was identified to be a union officer, there is no indication if he
knowingly participated in the illegal strike. The Court not being a trier of facts, the remand of
Page 25

the case to the NLRC is in order only for the purpose of determining the status in the Union of
individual respondents and their respective liability, if any.

WHEREFORE, the petition is GRANTED. The Court of Appeals Decision and Resolution
dated April 16, 2004 and January 25, 2005, respectively, are REVERSEDand SET ASIDE.
The Resolutions dated October 31, 2001 and December 14, 2001 of the National Labor
Relations Commission affirming the Decision of the Labor Arbiter in NLRC-NCR Case No. 00-
06-04890-98 are AFFIRMED with the MODIFICATION in light of the foregoing discussions.

The case is accordingly REMANDED to the National Labor Relations Commission for
the purpose of determining the Union status and respective liabilities, if any, of the individual
respondents.

CASE NO. 3

Republic of the Philippines

Supreme Court
Manila
THIRD DIVISION

DANILO ESCARIO, G.R. No. 160302


PANFILO AGAO,
ARSENIO AMADOR,
ELMER COLICO,
ROMANO DELUMEN, DOMINADOR
AGUILO, OLYMPIO GOLOSINO, Present:
RICARDO LABAN,
LORETO MORATA,
ROBERTO TIGUE,
GILBERT VIBAR, CARPIO MORALES, Chairperson
THOMAS MANCILLA, JR., NESTOR PERALTA,*
LASTIMOSO, BERSAMIN,
JIMMY MIRABALLES, VILLARAMA, JR., and
JAILE OLISA, ISIDRO SANCHEZ, SERENO, JJ.
ANTONIO SARCIA, OSCAR
CONTRERAS, ROMEO ZAMORA,
MARIANO GAGAL, ROBERTO
MARTIZANO, DOMINGO Promulgated:
SANTILLICES, ARIEL ESCARIO, HEIRS
OF FELIX LUCIANO, AND MALAYANG
SAMAHAN NG MGA MANGGAGAWA
SA BALANCED FOODS, September 27, 2010
Petitioners,

-versus -

NATIONAL LABOR RELATIONS


COMMISSION (THIRD DIVISION),
PINAKAMASARAP CORPORATION,
DR. SY LIAN TIN, AND DOMINGO TAN,
Respondents.
Page 26

x-----------------------------------------------------------------------------------------x
DECISION

BERSAMIN, J.:

Conformably with the long honored principle of a fair days wage for a fair days labor,
employees dismissed for joining an illegal strike are not entitled to backwages for the period of
the strike even if they are reinstated by virtue of their being merely members of the striking
union who did not commit any illegal act during the strike.

We apply this principle in resolving this appeal via a petition for review on certiorari of
the decision dated August 18, 2003 of the Court of Appeals (CA),[1] affirming the decision dated
November 29, 2001 rendered by the National Labor Relations Commission (NLRC) directing
their reinstatement of the petitioners to their former positions without backwages, or, in lieu
of reinstatement, the payment of separation pay equivalent to one-half month per year of
service.[2]

Antecedents

The petitioners were among the regular employees of respondent Pinakamasarap Corporation
(PINA), a corporation engaged in manufacturing and selling food seasoning. They were
members of petitioner Malayang Samahan ng mga Manggagawa sa Balanced Foods (Union).

At 8:30 in the morning of March 13, 1993, all the officers and some 200 members of the
Union walked out of PINAs premises and proceeded to the barangay office to show support for
Juanito Caete, an officer of the Union charged with oral defamation by Aurora Manor, PINAs
personnel manager, and Yolanda Fabella, Manors secretary.[3] It appears that the proceedings
in the barangay resulted in a settlement, and the officers and members of the Union all
returned to work thereafter.

As a result of the walkout, PINA preventively suspended all officers of


the Union because of the March 13, 1993 incident. PINA terminated the officers of
the Union after a month.

On April 14, 1993, PINA filed a complaint for unfair labor practice (ULP) and damages.
The complaint was assigned to then Labor Arbiter Raul Aquino, who ruled in his decision
dated July 13, 1994 that the March 13, 1993 incident was an illegal walkout constituting ULP;
and that all the Unions officers, except Caete, had thereby lost their employment.[4]

On April 28, 1993, the Union filed a notice of strike, claiming that PINA was guilty of
union busting through the constructive dismissal of its officers.[5] On May 9, 1993,
Page 27

the Union held a strike vote, at which a majority of 190 members of the Union voted to
strike.[6] The strike was held in the afternoon of June 15, 1993.[7]

PINA retaliated by charging the petitioners with ULP and abandonment of work, stating
that they had violated provisions on strike of the collective bargaining agreement (CBA), such
as: (a) sabotage by the insertion of foreign matter in the bottling of company products; (b)
decreased production output by slowdown; (c) serious misconduct, and willful disobedience
and insubordination to the orders of the Management and its representatives; (d) disruption of
the work place by invading the premises and perpetrating commotion and disorder, and by
causing fear and apprehension; (e) abandonment of work since June 28, 1993 despite notices
to return to work individually sent to them; and (f) picketing within the company premises on
June 15, 1993 that effectively barred with the use of threat and intimidation the ingress and
egress of PINAs officials, employees, suppliers, and customers. [8]

On September 30, 1994, the Third Division of the National Labor Relations Commission
(NLRC) issued a temporary restraining order (TRO), enjoining the Unions officers and
members to cease and desist from barricading and obstructing the entrance to and exit from
PINAs premises, to refrain from committing any and all forms of violence, and to remove all
forms of obstructions such as streamers, placards, or human barricade.[9]

On November 29, 1994, the NLRC granted the writ of preliminary injunction.[10]

On August 18, 1998, Labor Arbiter Jose G. de Vera (LA) rendered a decision, to wit:

WHEREFORE, all the foregoing premises being considered, judgment is hereby


rendered declaring the subject strike to be illegal.

The complainants prayer for decertification of the respondent union being


outside of the jurisdiction of this Arbitration Branch may not be given due
course.
And finally, the claims for moral and exemplary damages for want of factual
basis are dismissed.
SO ORDERED.[11]
On appeal, the NLRC sustained the finding that the strike was illegal, but reversed the
LAs ruling that there was abandonment, viz:

However, we disagree with the conclusion that respondents union


members should be considered to have abandoned their employment.

Under Article 264 of the Labor Code, as amended, the union officers who
knowingly participate in the illegal strike may be declared to have lost their
employment status. However, mere participation of a union member in the
illegal strike does not mean loss of employment status unless he participates in
the commission of illegal acts during the strike. While it is true that complainant
thru individual memorandum directed the respondents to return to work (pp.
1031-1112, Records) there is no showing that respondents deliberately refused
to return to work. A worker who joins a strike does so precisely to assert or
improve the terms and conditions of his work. If his purpose is to abandon his
Page 28

work, he would not go to the trouble of joining a strike (BLTB v. NLRC, 212 SCRA
794).

WHEREFORE, premises considered, the Decision appealed from is hereby


MODIFIED in that complainant company is directed to reinstate respondents
named in the complaint to their former positions but without backwages. In the
event that reinstatement is not feasible complainant company is directed to pay
respondents separation pay at one (1/2) half month per year of service.

SO ORDERED.[12]

Following the denial of their motion for reconsideration, the petitioners assailed the
NLRCs decision through a petition for certiorari in the Court of Appeals (CA), claiming that the
NLRC gravely abused its discretion in not awarding backwages pursuant to Article 279 of
the Labor Code, and in not declaring their strike as a good faith strike.

On August 18, 2003, the CA affirmed the NLRC.[13] In denying the petitioners claim for
full backwages, the CA applied the third paragraph of Article 264(a) instead of Article 279 of
the Labor Code, explaining that the only instance under Article 264 when a dismissed
employee would be reinstated with full backwages was when he was dismissed by reason of an
illegal lockout; that Article 264 was silent on the award of backwages to employees
participating in a lawful strike; and that a reinstatement with full backwages would be granted
only when the dismissal of the petitioners was not done in accordance with Article 282
(dismissals with just causes) and Article 283 (dismissals with authorized causes) of the Labor
Code.

The CA disposed thus:[14]

WHEREFORE, premises considered, the Petition is DISMISSED for lack of


merit and the assailed 29 November 2001 Decision of respondent Commission in
NLRC NRC CA No. 009701-95 is hereby AFFIRMED in toto. No costs.

SO ORDERED.[15]

On October 13, 2003, the CA denied the petitioners motion for reconsideration.[16]

Hence, this appeal via petition for review on certiorari.

Issue

The petitioners posit that they are entitled to full backwages from the date of dismissal until
the date of actual reinstatement due to their not being found to have abandoned their jobs.
They insist that the CA decided the question in a manner contrary to law and jurisprudence.

Ruling
Page 29

We sustain the CA, but modify the decision on the amount of the backwages in order to
accord with equity and jurisprudence.

I
Third Paragraph of Article 264 (a),
Labor Code, is Applicable

The petitioners contend that they are entitled to full backwages by virtue of their
reinstatement, and submit that applicable to their situation is Article 279, not the third
paragraph of Article 264(a), both of the Labor Code.

We do not agree with the petitioners.

Article 279 provides:

Article 279. Security of Tenure. In cases of regular employment, the employer


shall not terminate the services of an employee except for a just cause or when
authorized by this Title. An employee who is unjustly dismissed from work
shall be entitled to reinstatement without loss of seniority rights and other
privileges and to his full backwages, inclusive of allowances, and to his other
benefits or their monetary equivalent computed from the time his compensation
was withheld from him up to the time of his actual reinstatement.

By its use of the phrase unjustly dismissed, Article 279 refers to a dismissal that is
unjustly done, that is, the employer dismisses the employee without observing due process,
either substantive or procedural. Substantive due process requires the attendance of any of the
just or authorized causes for terminating an employee as provided under Article 278
(termination by employer), or Article 283 (closure of establishment and reduction of
personnel), or Article 284 (disease as ground for termination), all of the Labor Code; while
procedural due process demands compliance with the twin-notice requirement.[17]

In contrast, the third paragraph of Article 264(a) states:

Art. 264. Prohibited activities. (a) xxx

Any worker whose employment has been terminated as a consequence of


an unlawful lockout shall be entitled to reinstatement with full backwages. Any
union officer who knowingly participates in an illegal strike and any worker or
union officer who knowingly participates in the commission of illegal acts during
a strike may be declared to have lost his employment status; Provided, That
mere participation of a worker in a lawful strike shall not constitute sufficient
ground for termination of his employment, even if a replacement had been hired
by the employer during such lawful strike.
xxx
Page 30

Contemplating two causes for the dismissal of an employee, that is: (a) unlawful
lockout; and (b) participation in an illegal strike, the third paragraph of Article 264(a)
authorizes the award of full backwages only when the termination of employment is a
consequence of an unlawful lockout. On the consequences of an illegal strike, the provision
distinguishes between a union officer and a union member participating in an illegal strike. A
union officer who knowingly participates in an illegal strike is deemed to have lost his
employment status, but a union member who is merely instigated or induced to participate in
the illegal strike is more benignly treated. Part of the explanation for the benign consideration
for the union member is the policy of reinstating rank-and-file workers who are misled into
supporting illegal strikes, absent any finding that such workers committed illegal acts during
the period of the illegal strikes.[18]

The petitioners were terminated for joining a strike that was later declared to be illegal.
The NLRC ordered their reinstatement or, in lieu of reinstatement, the payment of their
separation pay, because they were mere rank-and-file workers whom the Unions officers had
misled into joining the illegal strike. They were not unjustly dismissed from work. Based on the
text and intent of the two aforequoted provisions of the Labor Code, therefore, it is plain that
Article 264(a) is the applicable one.

II
Petitioners not entitled to backwages
despite their reinstatement:
A fair days wage for a fair days labor

The petitioners argue that the finding of no abandonment equated to a finding of illegal
dismissal in their favor. Hence, they were entitled to full backwages.

The petitioners argument cannot be sustained.

The petitioners participation in the illegal strike was precisely what prompted PINA to
file a complaint to declare them, as striking employees, to have lost their employment status.
However, the NLRC ultimately ordered their reinstatement after finding that they had not
abandoned their work by joining the illegal strike. They were thus entitled only to
reinstatement, regardless of whether or not the strike was the consequence of the employers
ULP,[19] considering that a strike was not a renunciation of the employment relation.[20]

As a general rule, backwages are granted to indemnify a dismissed employee for his loss
of earnings during the whole period that he is out of his job. Considering that an illegally
dismissed employee is not deemed to have left his employment, he is entitled to all the rights
and privileges that accrue to him from the employment.[21] The grant of backwages to him is in
furtherance and effectuation of the public objectives of the Labor Code, and is in the nature of a
command to the employer to make a public reparation for his illegal dismissal of the employee
in violation of the Labor Code.[22]
Page 31

That backwages are not granted to employees participating in an illegal strike simply
accords with the reality that they do not render work for the employer during the period of the
illegal strike.[23] According to G&S Transport Corporation v. Infante:[24]

With respect to backwages, the principle of a fair days wage for a fair days
labor remains as the basic factor in determining the award thereof. If there is no
work performed by the employee there can be no wage or pay unless, of
course, the laborer was able, willing and ready to work but was illegally
locked out, suspended or dismissed or otherwise illegally prevented from
working.xxx In Philippine Marine Officers Guild v. Compaia Maritima, as affirmed
in Philippine Diamond Hotel and Resort v. Manila Diamond Hotel Employees
Union, the Court stressed that for this exception to apply, it is required that
the strike be legal, a situation that does not obtain in the case at bar. (emphasis
supplied)

The petitioners herein do not deny their participation in the June 15, 1993 strike. As such, they
did not suffer any loss of earnings during their absence from work. Their
reinstatement sans backwages is in order, to conform to the policy of a fair days wage for a fair
days labor.

Under the principle of a fair days wage for a fair days labor, the petitioners were not
entitled to the wages during the period of the strike (even if the strike might be legal), because
they performed no work during the strike. Verily, it was neither fair nor just that the dismissed
employees should litigate against their employer on the latters time.[25] Thus, the Court deleted
the award of backwages and held that the striking workers were entitled only to reinstatement
in Philippine Diamond Hotel and Resort, Inc. (Manila Diamond Hotel) v. Manila Diamond Hotel
Employees Union,[26] considering that the striking employees did not render work for the
employer during the strike.

III
Appropriate Amount for Separation Pay
Is One Month per Year of Service

The petitioners were ordered reinstated because they were union members merely
instigated or induced to participate in the illegal strike. By joining the strike, they did not
renounce their employment relation with PINA but remained as its employees.

The absence from an order of reinstatement of an alternative relief should the employer
or a supervening event not within the control of the employee prevent reinstatement negates
the very purpose of the order. The judgment favorable to the employee is thereby reduced to a
mere paper victory, for it is all too easy for the employer to simply refuse to have the employee
back. To safeguard the spirit of social justice that the Court has advocated in favor of the
working man, therefore, the right to reinstatement is to be considered renounced or waived
only when the employee unjustifiably or unreasonably refuses to return to work upon being so
ordered or after the employer has offered to reinstate him.[27]
Page 32

However, separation pay is made an alternative relief in lieu of reinstatement in certain


circumstances, like: (a) when reinstatement can no longer be effected in view of the passage of
a long period of time or because of the realities of the situation; (b) reinstatement is inimical to
the employers interest; (c) reinstatement is no longer feasible; (d) reinstatement does not
serve the best interests of the parties involved; (e) the employer is prejudiced by the workers
continued employment; (f) facts that make execution unjust or inequitable have supervened;
or (g) strained relations between the employer and employee.[28]

Here, PINA manifested that the reinstatement of the petitioners would not be feasible
because: (a) it would inflict disruption and oppression upon the employer; (b) petitioners
[had] stayed away for more than 15 years; (c) its machines had depreciated and had been
replaced with newer, better ones; and (d) it now sold goods through independent distributors,
thereby abolishing the positions related to sales and distribution.[29]

Under the circumstances, the grant of separation pay in lieu of reinstatement of the
petitioners was proper. It is not disputable that the grant of separation pay or some other
financial assistance to an employee is based on equity, which has been defined as justice
outside law, or as being ethical rather than jural and as belonging to the sphere of morals than
of law.[30] This Court has granted separation pay as a measure of social justice even when an
employee has been validly dismissed, as long as the dismissal has not been due to serious
misconduct or reflective of personal integrity or morality.[31]

What is the appropriate amount for separation pay?

In G & S Transport,[32] the Court awarded separation pay equivalent to one month salary
per year of service considering that 17 years had passed from the time when the striking
employees were refused reinstatement. In Association of Independent Unions in the Philippines
v. NLRC,[33] the Court allowed separation pay equivalent to one month salary per year of
service considering that eight years had elapsed since the employees had staged their illegal
strike.

Here, we note that this case has dragged for almost 17 years from the time of the illegal
strike. Bearing in mind PINAs manifestation that the positions that the petitioners used to hold
had ceased to exist for various reasons, we hold that separation pay equivalent to one month
per year of service in lieu of reinstatement fully aligns with the aforecited rulings of the Court
on the matter.
WHEREFORE, we affirm the decision dated August 18, 2003 of the Court of Appeals,
subject to the modification to the effect that in lieu of reinstatement the petitioners are granted
backwages equivalent of one month for every year of service.

CASE NO. 4
Page 33

Republic of the Philippines


SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 163942 November 11, 2008

NATIONAL UNION OF WORKERS IN THE HOTEL RESTAURANT AND ALLIED INDUSTRIES


(NUWHRAIN-APL-IUF) DUSIT HOTEL NIKKO CHAPTER, petitioner,
vs.
THE HONORABLE COURT OF APPEALS (Former Eighth Division), THE NATIONAL LABOR
RELATIONS COMMISSION (NLRC), PHILIPPINE HOTELIERS INC., owner and operator of
DUSIT HOTEL NIKKO and/or CHIYUKI FUJIMOTO, and ESPERANZA V. ALVEZ, respondents.

x----------------------------------------x

G.R. No. 166295 November 11, 2008

NUWHRAIN-DUSIT HOTEL NIKKO CHAPTER, petitioner,


vs.
SECRETARY OF LABOR AND EMPLOYMENT and PHILIPPINE HOTELIERS,
INC., respondents.

DECISION

VELASCO, JR., J.:

In G.R. No. 163942, the Petition for Review on Certiorari under Rule 45 of the National Union
of Workers in the Hotel Restaurant and Allied Industries Dusit Hotel Nikko Chapter (Union)
seeks to set aside the January 19, 2004 Decision1 and June 1, 2004 Resolution2 of the Court of
Appeals (CA) in CA-G.R. SP No. 76568 which affirmed the October 9, 2002 Decision3 of the
National Labor Relations Commission (NLRC) in NLRC NCR CC No. 000215-02.

In G.R. No. 166295, the Petition for Certiorari under Rule 65 of the Union seeks to nullify the
May 6, 2004 Decision4 and November 25, 2004 Resolution5 of the CA in CA-G.R. SP No. 70778
which affirmed the January 31, 20026 and March 15, 20027 Orders of the Secretary of Labor
and Employment, Patricia A. Sto. Tomas (Secretary).

Evolution of the Present Petitions

The Union is the certified bargaining agent of the regular rank-and-file employees of Dusit
Hotel Nikko (Hotel), a five star service establishment owned and operated by Philippine
Hoteliers, Inc. located in Makati City. Chiyuki Fuijimoto and Esperanza V. Alvez are impleaded
in their official capacities as the Hotel's General Manager and Director of Human Resources,
respectively.

On October 24, 2000, the Union submitted its Collective Bargaining Agreement (CBA)
negotiation proposals to the Hotel. As negotiations ensued, the parties failed to arrive at
mutually acceptable terms and conditions. Due to the bargaining deadlock, the Union, on
December 20, 2001, filed a Notice of Strike on the ground of the bargaining deadlock with the
National Conciliation and Mediation Board (NCMB), which was docketed as NCMB-NCR-NS-12-
369-01. Thereafter, conciliation hearings were conducted which proved unsuccessful.
Consequently, a Strike Vote8 was conducted by the Union on January 14, 2002 on which it was
decided that the Union would wage a strike.
Page 34

Soon thereafter, in the afternoon of January 17, 2002, the Union held a general assembly at its
office located in the Hotel's basement, where some members sported closely cropped hair or
cleanly shaven heads. The next day, or on January 18, 2002, more male Union members came
to work sporting the same hair style. The Hotel prevented these workers from entering the
premises claiming that they violated the Hotel's Grooming Standards.

In view of the Hotel's action, the Union staged a picket outside the Hotel premises. Later, other
workers were also prevented from entering the Hotel causing them to join the picket. For this
reason the Hotel experienced a severe lack of manpower which forced them to temporarily
cease operations in three restaurants.

Subsequently, on January 20, 2002, the Hotel issued notices to Union members, preventively
suspending them and charging them with the following offenses: (1) violation of the duty to
bargain in good faith; (2) illegal picket; (3) unfair labor practice; (4) violation of the Hotel's
Grooming Standards; (5) illegal strike; and (6) commission of illegal acts during the illegal
strike. The next day, the Union filed with the NCMB a second Notice of Strike on the ground of
unfair labor practice and violation of Article 248(a) of the Labor Code on illegal lockout, which
was docketed as NCMB-NCR-NS-01-019-02. In the meantime, the Union officers and members
submitted their explanations to the charges alleged by the Hotel, while they continued to stage
a picket just inside the Hotel's compound.

On January 26, 2002, the Hotel terminated the services of twenty-nine (29) Union officers and
sixty-one (61) members; and suspended eighty-one (81) employees for 30 days, forty-eight
(48) employees for 15 days, four (4) employees for 10 days, and three (3) employees for five
days. On the same day, the Union declared a strike. Starting that day, the Union engaged in
picketing the premises of the Hotel. During the picket, the Union officials and members
unlawfully blocked the ingress and egress of the Hotel premises.

Consequently, on January 31, 2002, the Union filed its third Notice of Strike with the NCMB
which was docketed as NCMB-NCR-NS-01-050-02, this time on the ground of unfair labor
practice and union-busting.

On the same day, the Secretary, through her January 31, 2002 Order, assumed jurisdiction over
the labor dispute and certified the case to the NLRC for compulsory arbitration, which was
docketed as NLRC NCR CC No. 000215-02. The Secretary's Order partly reads:

WHEREFORE, in order to have a complete determination of the bargaining deadlock


and the other incidents of the dispute, this Office hereby consolidates the two Notices of
Strike - NCMB-NCR-NS-12-369-01 and NCMB-NCR-NS-01-019-02 - and CERTIFIES the
entire labor dispute covered by these Notices and the intervening events, to the
NATIONAL LABOR RELATIONS COMMISSION for compulsory arbitration pursuant to
Article 263 (g) of the Labor Code, as amended, under the following terms:

xxxx

d. the Hotel is given the option, in lieu of actual reinstatement, to merely reinstate the
dismissed or suspended workers in the payroll in light of the special circumstances
attendant to their reinstatement;

xxxx

SO ORDERED. (Emphasis added.)

Pursuant to the Secretary's Order, the Hotel, on February 1, 2002, issued an Inter-Office
Memorandum,9directing some of the employees to return to work, while advising others not to
do so, as they were placed under payroll reinstatement.
Page 35

Unhappy with the Secretary's January 31, 2002 Order, the Union moved for reconsideration,
but the same was denied per the Secretary's subsequent March 15, 2002 Order. Affronted by
the Secretary's January 31, 2002 and March 15, 2002 Orders, the Union filed a Petition for
Certiorari with the CA which was docketed as CA-G.R. SP No. 70778.

Meanwhile, after due proceedings, the NLRC issued its October 9, 2002 Decision in NLRC NCR
CC No. 000215-02, in which it ordered the Hotel and the Union to execute a CBA within 30
days from the receipt of the decision. The NLRC also held that the January 18, 2002 concerted
action was an illegal strike in which illegal acts were committed by the Union; and that the
strike violated the "No Strike, No Lockout" provision of the CBA, which thereby caused the
dismissal of 29 Union officers and 61 Union members. The NLRC ordered the Hotel to grant the
61 dismissed Union members financial assistance in the amount of ½ month's pay for every
year of service or their retirement benefits under their retirement plan whichever was higher.
The NLRC explained that the strike which occurred on January 18, 2002 was illegal because it
failed to comply with the mandatory 30-day cooling-off period10 and the seven-day strike
ban,11 as the strike occurred only 29 days after the submission of the notice of strike on
December 20, 2001 and only four days after the submission of the strike vote on January 14,
2002. The NLRC also ruled that even if the Union had complied with the temporal
requirements mandated by law, the strike would nonetheless be declared illegal because it was
attended by illegal acts committed by the Union officers and members.

The Union then filed a Motion for Reconsideration of the NLRC's Decision which was denied in
the February 7, 2003 NLRC Resolution. Unfazed, the Union filed a Petition for Certiorari under
Rule 65 with the CA, docketed as CA-G.R. SP No. 76568, and assailed both the October 9, 2002
Decision and the February 7, 2003 Resolution of the NLRC.

Soon thereafter, the CA promulgated its January 19, 2004 Decision in CA-G.R. SP No. 76568
which dismissed the Union's petition and affirmed the rulings of the NLRC. The CA ratiocinated
that the Union failed to demonstrate that the NLRC committed grave abuse of discretion and
capriciously exercised its judgment or exercised its power in an arbitrary and despotic
manner.

For this reason, the Union filed a Motion for Reconsideration which the CA, in its June 1, 2004
Resolution, denied for lack of merit.

In the meantime, the CA promulgated its May 6, 2004 Decision in CA-G.R. SP No. 70778 which
denied due course to and consequently dismissed the Union's petition. The Union moved to
reconsider the Decision, but the CA was unconvinced and denied the motion for
reconsideration in its November 25, 2004 Resolution.

Thus, the Union filed the present petitions.

The Union raises several interwoven issues in G.R. No. 163942, most eminent of which is
whether the Union conducted an illegal strike. The issues presented for resolution are:

-A-

WHETHER OR NOT THE UNION, THE 29 UNION OFFICERS AND 61 MEMBERS MAY BE
ADJUDGED GUILTY OF STAGING AN ILLEGAL STRIKE ON JANUARY 18, 2002 DESPITE
RESPONDENTS' ADMISSION THAT THEY PREVENTED SAID OFFICERS AND MEMBERS
FROM REPORTING FOR WORK FOR ALLEGED VIOLATION OF THE HOTEL'S GROOMING
STANDARDS

-B-
Page 36

WHETHER OR NOT THE 29 UNION OFFICERS AND 61 MEMBERS MAY VALIDLY BE


DISMISSED AND MORE THAN 200 MEMBERS BE VALIDLY SUSPENDED ON THE BASIS
OF FOUR (4) SELF-SERVING AFFIDAVITS OF RESPONDENTS

-C-

WHETHER OR NOT RESPONDENTS IN PREVENTING UNION OFFICERS AND MEMBERS


FROM REPORTING FOR WORK COMMITTED AN ILLEGAL LOCK-OUT12

In G.R. No. 166295, the Union solicits a riposte from this Court on whether the Secretary has
discretion to impose "payroll" reinstatement when he assumes jurisdiction over labor
disputes.

The Court's Ruling

The Court shall first dispose of G.R. No. 166295.

According to the Union, there is no legal basis for allowing payroll reinstatement in lieu of
actual or physical reinstatement. As argued, Art. 263(g) of the Labor Code is clear on this point.

The Hotel, on the other hand, claims that the issue is now moot and any decision would be
impossible to execute in view of the Decision of the NLRC which upheld the dismissal of the
Union officers and members.

The Union's position is untenable.

The Hotel correctly raises the argument that the issue was rendered moot when the NLRC
upheld the dismissal of the Union officers and members. In order, however, to settle this
relevant and novel issue involving the breadth of the power and jurisdiction of the Secretary in
assumption of jurisdiction cases, we now decide the issue on the merits instead of relying on
mere technicalities.

We held in University of Immaculate Concepcion, Inc. v. Secretary of Labor:

With respect to the Secretary's Order allowing payroll reinstatement instead of actual
reinstatement for the individual respondents herein, an amendment to the previous
Orders issued by her office, the same is usually not allowed. Article 263(g) of the Labor
Code aforementioned states that all workers must immediately return to work and all
employers must readmit all of them under the same terms and conditions prevailing
before the strike or lockout. The phrase "under the same terms and conditions" makes
it clear that the norm is actual reinstatement. This is consistent with the idea that any
work stoppage or slowdown in that particular industry can be detrimental to the
national interest.13

Thus, it was settled that in assumption of jurisdiction cases, the Secretary should impose actual
reinstatement in accordance with the intent and spirit of Art. 263(g) of the Labor Code. As with
most rules, however, this one is subject to exceptions. We held in Manila Diamond Hotel
Employees' Union v. Court of Appeals that payroll reinstatement is a departure from the rule,
and special circumstances which make actual reinstatement impracticable must be shown. 14 In
one case, payroll reinstatement was allowed where the employees previously occupied
confidential positions, because their actual reinstatement, the Court said, would be
impracticable and would only serve to exacerbate the situation.15In another case, this Court
held that the NLRC did not commit grave abuse of discretion when it allowed payroll
reinstatement as an option in lieu of actual reinstatement for teachers who were to be
reinstated in the middle of the first term.16 We held that the NLRC was merely trying its best to
work out a satisfactory ad hoc solution to a festering and serious problem.17
Page 37

The peculiar circumstances in the present case validate the Secretary's decision to order
payroll reinstatement instead of actual reinstatement. It is obviously impracticable for the
Hotel to actually reinstate the employees who shaved their heads or cropped their hair
because this was exactly the reason they were prevented from working in the first place.
Further, as with most labor disputes which have resulted in strikes, there is mutual
antagonism, enmity, and animosity between the union and the management. Payroll
reinstatement, most especially in this case, would have been the only avenue where further
incidents and damages could be avoided. Public officials entrusted with specific jurisdictions
enjoy great confidence from this Court. The Secretary surely meant only to ensure industrial
peace as she assumed jurisdiction over the labor dispute. In this case, we are not ready to
substitute our own findings in the absence of a clear showing of grave abuse of discretion on
her part.

The issues raised in G.R. No. 163942, being interrelated, shall be discussed concurrently.

To be determined whether legal or not are the following acts of the Union:

(1) Reporting for work with their bald or cropped hair style on January 18, 2002; and

(2) The picketing of the Hotel premises on January 26, 2002.

The Union maintains that the mass picket conducted by its officers and members did not
constitute a strike and was merely an expression of their grievance resulting from the lockout
effected by the Hotel management. On the other hand, the Hotel argues that the Union's
deliberate defiance of the company rules and regulations was a concerted effort to paralyze the
operations of the Hotel, as the Union officers and members knew pretty well that they would
not be allowed to work in their bald or cropped hair style. For this reason, the Hotel argues
that the Union committed an illegal strike on January 18, 2002 and on January 26, 2002.

We rule for the Hotel.

Art. 212(o) of the Labor Code defines a strike as "any temporary stoppage of work by the
concerted action of employees as a result of an industrial or labor dispute."

In Toyota Motor Phils. Corp. Workers Association (TMPCWA) v. National Labor Relations
Commission, we cited the various categories of an illegal strike, to wit:

Noted authority on labor law, Ludwig Teller, lists six (6) categories of an illegal
strike, viz.:

(1) [when it] is contrary to a specific prohibition of law, such as strike by employees
performing governmental functions; or

(2) [when it] violates a specific requirement of law[, such as Article 263 of the Labor
Code on the requisites of a valid strike]; or

(3) [when it] is declared for an unlawful purpose, such as inducing the employer to
commit an unfair labor practice against non-union employees; or

(4) [when it] employs unlawful means in the pursuit of its objective, such as a
widespread terrorism of non-strikers [for example, prohibited acts under Art. 264(e) of
the Labor Code]; or

(5) [when it] is declared in violation of an existing injunction[, such as injunction,


prohibition, or order issued by the DOLE Secretary and the NLRC under Art. 263 of the
Labor Code]; or
Page 38

(6) [when it] is contrary to an existing agreement, such as a no-strike clause or


conclusive arbitration clause.18

With the foregoing parameters as guide and the following grounds as basis, we hold that the
Union is liable for conducting an illegal strike for the following reasons:

First, the Union's violation of the Hotel's Grooming Standards was clearly a deliberate and
concerted action to undermine the authority of and to embarrass the Hotel and was, therefore,
not a protected action. The appearances of the Hotel employees directly reflect the character
and well-being of the Hotel, being a five-star hotel that provides service to top-notch clients.
Being bald or having cropped hair per se does not evoke negative or unpleasant feelings. The
reality that a substantial number of employees assigned to the food and beverage outlets of the
Hotel with full heads of hair suddenly decided to come to work bald-headed or with cropped
hair, however, suggests that something is amiss and insinuates a sense that something out of
the ordinary is afoot. Obviously, the Hotel does not need to advertise its labor problems with
its clients. It can be gleaned from the records before us that the Union officers and members
deliberately and in apparent concert shaved their heads or cropped their hair. This was shown
by the fact that after coming to work on January 18, 2002, some Union members even had their
heads shaved or their hair cropped at the Union office in the Hotel's basement. Clearly, the
decision to violate the company rule on grooming was designed and calculated to place the
Hotel management on its heels and to force it to agree to the Union's proposals.

In view of the Union's collaborative effort to violate the Hotel's Grooming Standards, it
succeeded in forcing the Hotel to choose between allowing its inappropriately hair styled
employees to continue working, to the detriment of its reputation, or to refuse them work,
even if it had to cease operations in affected departments or service units, which in either way
would disrupt the operations of the Hotel. This Court is of the opinion, therefore, that the act of
the Union was not merely an expression of their grievance or displeasure but, indeed, a
calibrated and calculated act designed to inflict serious damage to the Hotel's finances or its
reputation. Thus, we hold that the Union's concerted violation of the Hotel's Grooming
Standards which resulted in the temporary cessation and disruption of the Hotel's operations
is an unprotected act and should be considered as an illegal strike.

Second, the Union's concerted action which disrupted the Hotel's operations clearly violated
the CBA's "No Strike, No Lockout" provision, which reads:

ARTICLE XXII - NO STRIKE/WORK STOPPAGE AND LOCKOUT

SECTION 1. No Strikes

The Union agrees that there shall be no strikes, walkouts, stoppage or slow-
down of work, boycott, refusal to handle accounts, picketing, sit-down strikes,
sympathy strikes or any other form of interference and/or interruptions with
any of the normal operations of the HOTEL during the life of this Agreement.

The facts are clear that the strike arose out of a bargaining deadlock in the CBA negotiations
with the Hotel. The concerted action is an economic strike upon which the afore-quoted "no
strike/work stoppage and lockout" prohibition is squarely applicable and legally binding.19

Third, the Union officers and members' concerted action to shave their heads and crop their
hair not only violated the Hotel's Grooming Standards but also violated the Union's duty and
responsibility to bargain in good faith. By shaving their heads and cropping their hair, the
Union officers and members violated then Section 6, Rule XIII of the Implementing Rules of
Book V of the Labor Code.20 This rule prohibits the commission of any act which will disrupt or
impede the early settlement of the labor disputes that are under conciliation. Since the
bargaining deadlock is being conciliated by the NCMB, the Union's action to have their officers
Page 39

and members' heads shaved was manifestly calculated to antagonize and embarrass the Hotel
management and in doing so effectively disrupted the operations of the Hotel and violated
their duty to bargain collectively in good faith.

Fourth, the Union failed to observe the mandatory 30-day cooling-off period and the seven-
day strike ban before it conducted the strike on January 18, 2002. The NLRC correctly held
that the Union failed to observe the mandatory periods before conducting or holding a strike.
Records reveal that the Union filed its Notice of Strike on the ground of bargaining deadlock on
December 20, 2001. The 30-day cooling-off period should have been until January 19, 2002. On
top of that, the strike vote was held on January 14, 2002 and was submitted to the NCMB only
on January 18, 2002; therefore, the 7-day strike ban should have prevented them from holding
a strike until January 25, 2002. The concerted action committed by the Union on January 18,
2002 which resulted in the disruption of the Hotel's operations clearly violated the above-
stated mandatory periods.

Last, the Union committed illegal acts in the conduct of its strike. The NLRC ruled that the
strike was illegal since, as shown by the pictures21 presented by the Hotel, the Union officers
and members formed human barricades and obstructed the driveway of the Hotel. There is no
merit in the Union's argument that it was not its members but the Hotel's security guards and
the police officers who blocked the driveway, as it can be seen that the guards and/or police
officers were just trying to secure the entrance to the Hotel. The pictures clearly demonstrate
the tense and highly explosive situation brought about by the strikers' presence in the Hotel's
driveway.

Furthermore, this Court, not being a trier of facts, finds no reason to alter or disturb the NLRC
findings on this matter, these findings being based on substantial evidence and affirmed by the
CA.22 Factual findings of labor officials, who are deemed to have acquired expertise in matters
within their respective jurisdictions, are generally accorded not only respect but even finality,
and bind us when supported by substantial evidence.23 Likewise, we are not duty-bound to
delve into the accuracy of the factual findings of the NLRC in the absence of clear showing that
these were arrived at arbitrarily and/or bereft of any rational basis.24

What then are the consequent liabilities of the Union officers and members for their
participation in the illegal strike?

Regarding the Union officers and members' liabilities for their participation in the illegal picket
and strike, Art. 264(a), paragraph 3 of the Labor Code provides that "[a]ny union officer who
knowingly participates in an illegal strike and any worker or union officer who
knowingly participates in the commission of illegal acts during a strike may be declared
to have lost his employment status x x x." The law makes a distinction between union
officers and mere union members. Union officers may be validly terminated from employment
for their participation in an illegal strike, while union members have to participate in and
commit illegal acts for them to lose their employment status.25 Thus, it is necessary for the
company to adduce proof of the participation of the striking employees in the commission of
illegal acts during the strikes.26

Clearly, the 29 Union officers may be dismissed pursuant to Art. 264(a), par. 3 of the Labor
Code which imposes the penalty of dismissal on "any union officer who knowingly
participates in an illegal strike." We, however, are of the opinion that there is room for
leniency with respect to the Union members. It is pertinent to note that the Hotel was able to
prove before the NLRC that the strikers blocked the ingress to and egress from the Hotel. But it
is quite apparent that the Hotel failed to specifically point out the participation of each of the
Union members in the commission of illegal acts during the picket and the strike. For this lapse
in judgment or diligence, we are constrained to reinstate the 61 Union members.
Page 40

Further, we held in one case that union members who participated in an illegal strike but were
not identified to have committed illegal acts are entitled to be reinstated to their former
positions but without backwages.27 We then held in G & S Transport Corporation v. Infante:

With respect to backwages, the principle of a "fair day's wage for a fair day's labor"
remains as the basic factor in determining the award thereof. If there is no work
performed by the employee there can be no wage or pay unless, of course, the laborer
was able, willing and ready to work but was illegally locked out, suspended or
dismissed or otherwise illegally prevented from working. While it was found that
respondents expressed their intention to report back to work, the latter exception
cannot apply in this case. In Philippine Marine Officer's Guild v. Compañia Maritima, as
affirmed in Philippine Diamond Hotel and Resort v. Manila Diamond Hotel Employees
Union, the Court stressed that for this exception to apply, it is required that the strike be
legal, a situation that does not obtain in the case at bar.28

In this light, we stand by our recent rulings and reinstate the 61 Union members without
backwages.

WHEREFORE, premises considered, the CA's May 6, 2004 Decision in CA-G.R. SP No. 70778 is
hereby AFFIRMED.

The CA's January 19, 2004 Decision in CA-G.R. SP No. 76568 is hereby SET ASIDE. The October
9, 2002 Decision of the NLRC in NLRC NCR CC No. 000215-02 is
hereby AFFIRMED with MODIFICATIONS, as follows:

The 29 Union officials are hereby declared to have lost their employment status, to wit:

1. LEO ANTONIO ATUTUBO


2. EDWIN E. BALLESTEROS
3. LORETTA DIVINA DE LUNA
4. INISUSAN DE VELEZ
5. DENNIS HABER
6. MARITES HERNANDEZ
7. BERNARD HUGO
8. NORZAMIA INTAL
9. LAURO JAVIER
10. SHANE LAUZ
11. MAY BELEN LEANO
12. EDGAR LINGHON
13. MILAGROS LOPEZ
14. JOSE MUZONES
15. RAY NERVA
16. JESUS NONAN
17. MARLYN OLLERO
18. CATHY ORDUNA
19. REYNALDO RASING
20. JUSTO TABUNDA
21. BARTOLOME TALISAYON
22. JUN TESORO
23. LYNDON TESORO
24. SALVADOR TIPONES
25. SONNY UY
26. WILFREDO VALLES, JR.
27. MEL VILLAHUCO
28. EMMA Q. DANAO
29. JORDAN ALEJANDRO
Page 41

The 61 Union members are hereby REINSTATED to their former positions without
backwages:

1. DANILO AGUINALDO
2. CLARO ABRANTE
3. FELIX ARRIESGADO
4. DAN BAUTISTA
5. MA. THERESA BONIFACIO
6. JUAN BUSCANO
7. ELY CHUA
8. ALLAN DELAGON
9. FRUMENCIO DE LEON
10. ELLIE DEL MUNDO
11. EDWIN DELOS CIENTOS
12. SOLOMON DIZON
13. YLOTSKI DRAPER
14. ERLAND COLLANTES
15. JONAS COMPENIDO
16. RODELIO ESPINUEVA
17. ARMANDO ESTACIO
18. SHERWIN FALCES
19. JELA FRANZUELA
20. REY GEALOGO
21. ALONA GERNOMINO
22. VINCENT HEMBRADOR
23. ROSLYN IBARBIA
24. JAIME IDIOMA, JR.
25. OFELIA LLABAN
26. RENATON LUZONG
27. TEODULO MACALINO
28. JAKE MACASAET
29. HERNANIE PABILONIA
30. HONORIO PACIONE
31. ANDREA VILLAFUERTE
32. MARIO PACULAN
33. JULIO PAJINAG
34. JOSELITO PASION
35. VICENTE PASIOLAN
36. HAZEL PENA
37. PEDRO POLLANTE
38. EDUARDO RAMOS
39. IMELDA RASIN
40. DELFIN RAZALAN
41. EVANGELINE REYES
42. RODOLFO REYES
43. BRIGILDO RUBIO
44. RIO SALCEDO
45. JUANITO SANCHEZ
46. MA. THERESA SANCHEZ
47. DONATO SAN AGUSTIN
48. RICARDO SOCORRO
49. VALERIO SOLIS
50. DOMINADOR SUAREZ
51. ORLANDO TABUGOCA
52. HELEN TALEON
53. ROBERT TANEGRA
Page 42

54. LOURDES TAYAG


55. ROLANDO TOLENTINO
56. REYNALDO TRESNADO
57. RICHARD SABLADA
58. MAE YAP-DIANGCO
59. GILBERTO VEDASTO
60. DOMINGO VIDAROZAGA
61. DAN VILLANUEVA

In view of the possibility that the Hotel might have already hired regular replacements for the
afore-listed 61 employees, the Hotel may opt to pay SEPARATION PAY computed at one (1)
month's pay for every year of service in lieu of REINSTATEMENT, a fraction of six (6) months
being considered one year of service.

SO ORDERED.

CASE NO. 5

FIRST DIVISION

JACKBILT INDUSTRIES, INC., G.R. Nos. 171618-19


Petitioner,

Present:
YNARES-SANTIAGO, J.,*
CARPIO, Acting Chairperson,*
- v e r s u s - CORONA,
LEONARDO-DE CASTRO and
BRION, JJ.*
JACKBILT EMPLOYEES
WORKERS UNION-NAFLU-KMU,
Respondent. Promulgated:
March 20, 2009
x - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

DECISION

CORONA, J.:

This petition for review on certiorari[1] seeks to reverse and set aside the July 13, 2005

decision[2] and February 9, 2006 resolution[3] of the Court of Appeals in CA-G.R. SP No. 65208

and CA-G.R. SP No. 65425.

Due to the adverse effects of the Asian economic crisis on the construction industry

beginning 1997, petitioner Jackbilt Industries, Inc. decided to temporarily stop its business of

producing concrete hollow blocks, compelling most of its employees to go on leave for six
months. [4]
Page 43

Respondent Jackbilt Employees Workers Union-NAFLU-KMU immediately protested the

temporary shutdown. Because its collective bargaining agreement with petitioner was expiring

during the period of the shutdown, respondent claimed that petitioner halted production to

avoid its duty to bargain collectively. The shutdown was allegedly motivated by anti-union

sentiments.

Accordingly, on March 9, 1998, respondent went on strike. Its officers and members

picketed petitioners main gates and deliberately prevented persons and vehicles from going

into and out of the compound.

On March 19, 1998, petitioner filed a petition for injunction[5] with a prayer for the issuance of

a temporary restraining order (TRO) in the National Labor Relations Commission (NLRC). It

sought to enjoin respondent from obstructing free entry to and exit from its production

facility.[6]

On April 14, 1998, the NLRC issued a TRO directing the respondents to refrain from
preventing access to petitioners property.

The reports of both the implementing officer and the investigating labor arbiter

revealed, however, that respondent union violated the April 14, 1998 order. Union members,

on various occasions, stopped and inspected private vehicles entering and exiting petitioners

production facility. Thus, in a decision dated July 17, 1998, the NLRC ordered the issuance of a

writ of preliminary injunction.[7]

Meanwhile, petitioner sent individual memoranda to the officers and members of respondent

who participated in the strike[8] ordering them to explain why they should not be dismissed for

committing illegal acts in the course of a strike.[9] However, respondent repeatedly ignored

petitioners memoranda despite the extensions granted.[10] Thus, on May 30, 1998, petitioner

dismissed the concerned officers and members and barred them from entering its premises

effective June 1, 1998.

Aggrieved, respondent filed complaints for illegal lockout, runaway shop and

damages,[11] unfair labor practice, illegal dismissal and attorneys fees,[12] and refusal to

bargain[13]on behalf of its officers and members against petitioner and its corporate officers. It

argued that there was no basis for the temporary partial shutdown as it was undertaken by

petitioner to avoid its duty to bargain collectively.


Page 44

Petitioner, on the other hand, asserted that because respondent conducted a strike without

observing the procedural requirements provided in Article 263 of the Labor Code, [14]the March

9, 1998 strike was illegal. Furthermore, in view of the July 17, 1998 decision of the NLRC

(which found that respondent obstructed the free ingress to and egress from petitioners

premises), petitioner validly dismissed respondents officers and employees for committing

illegal acts in the course of a strike.

In a decision dated October 15, 1999, [15] the labor arbiter dismissed the complaints for illegal

lockout and unfair labor practice for lack of merit. However, because petitioner did not file a

petition to declare the strike illegal[16] before terminating respondents officers and employees,

it was found guilty of illegal dismissal. The dispositive portion of the decision read:

WHEREFORE, judgment is hereby rendered finding [petitioner and its corporate


officers] liable for the illegal dismissal of the 61 union officer and members of
[respondent] and concomitantly, [petitioner and its corporate officers] are
hereby jointly and severally ordered to pay [respondents officers and members]
limited backwages from June 1, 1998 to October 4, 1998.

[Petitioner and its corporate officers] are further ordered to pay [respondents
officers and members] separation pay based on salary for every year of credited
service, a fraction of at least 6 months to be considered as one whole year in lieu
of reinstatement.

The complaint for unfair labor practice, moral and exemplary damages and
runaway shop are hereby disallowed for lack of merit.

SO ORDERED.

On December 28, 2000, the NLRC, on appeal, modified the decision of the labor arbiter. It held

that only petitioner should be liable for monetary awards granted to respondents officers and

members.[17]

Both petitioner and respondent moved for reconsideration but they were denied for lack of

merit.[18]

Aggrieved, petitioner assailed the December 28, 2000 decision of the NLRC via a petition for

certiorari[19] in the CA. It asserted that the NLRC committed grave abuse of discretion in

disregarding its July 17, 1998 decision[20] wherein respondents officers and employees were

found to have committed illegal acts in the course of the March 9, 1998 strike. In view thereof
Page 45

and pursuant to Article 264(a)(3) of the Labor Code,[21] petitioner validly terminated

respondents officers and employees.

The CA dismissed the petition but modified the December 28, 2000 decision of the

NLRC.[22] Because most of affected employees were union members, the CA held that the

temporary shutdown was moved by anti-union sentiments. Petitioner was therefore guilty of

unfair labor practice and, consequently, was ordered to pay respondents officers and

employees backwages from March 9, 1998 (instead of June 1, 1998) to October 4, 1998 and

separation pay of one month salary for every year of credited service.

Petitioner moved for reconsideration but it was denied.[23] Thus, this recourse.

The primordial issue in this petition is whether or not the filing of a petition with the labor

arbiter to declare a strike illegal is a condition sine qua non for the valid termination of

employees who commit an illegal act in the course of such strike.

Petitioner asserts that the filing of a petition to declare the strike illegal was unnecessary since
the NLRC, in its July 17, 1998 decision, had already found that respondent committed illegal

acts in the course of the strike.

We grant the petition.

The principle of conclusiveness of judgment, embodied in Section 47(c), Rule 39 of the Rules of

Court,[24] holds that the parties to a case are bound by the findings in a previous judgment with

respect to matters actually raised and adjudged therein.[25]

Article 264(e) of the Labor Code prohibits any person engaged in picketing from obstructing

the free ingress to and egress from the employers premises. Since respondent was found in the

July 17, 1998 decision of the NLRC to have prevented the free entry into and exit of vehicles

from petitioners compound, respondents officers and employees clearly committed illegal acts

in the course of the March 9, 1998 strike.

The use of unlawful means in the course of a strike renders such strike illegal. [26] Therefore,

pursuant to the principle of conclusiveness of judgment, the March 9, 1998 strike was ipso

facto illegal. The filing of a petition to declare the strike illegal was thus unnecessary.
Page 46

Consequently, we uphold the legality of the dismissal of respondents officers and

employees. Article 264 of the Labor Code[27] further provides that an employer may terminate

employees found to have committed illegal acts in the course of a strike.[28] Petitioner clearly

had the legal right to terminate respondents officers and employees.[29]

WHEREFORE, the petition is hereby granted. The July 13, 2005 decision and February 9, 2006

resolution of the Court of Appeals in CA-G.R. SP No. 65208 and CA-G.R. SP No. 65425 are

hereby REVERSED and SET ASIDE.

The December 28, 2000 and March 6, 2001 resolutions of the National Labor Relations

Commission in NLRC-CA No. 022614-2000 are MODIFIED insofar as they affirmed the October

15, 1999 decision of the labor arbiter in NLRC-NCR-Case No. 00-06-05017-98 finding

petitioner Jackbilt Industries, Inc. guilty of illegal dismissal for terminating respondents

officers and employees. New judgment is hereby entered DISMISSING NLRC-NCR-Case No. 00-

06-05017-98 for lack of merit.


SO ORDERED.

CASE NO. 6

SECOND DIVISION

YOLITO FADRIQUELAN, ARTURO G.R. No. 178409


EGUNA, ARMANDO MALALUAN,
DANILO ALONSO, ROMULO
DIMAANO, ROEL MAYUGA,
WILFREDO RIZALDO, ROMEO
SUICO, DOMINGO ESCAMILLAS
and DOMINGO BAUTRO,
Petitioners, Present:
CARPIO, J., Chairperson,
- versus - NACHURA,
PERALTA,
ABAD, and
MENDOZA, JJ.
MONTEREY FOODS CORPORATION,
Respondent.

x ------------------------------------------------ x

MONTEREY FOODS CORPORATION, G.R. No. 178434


Petitioner,

- versus -
BUKLURAN NG MGA MANGGAGAWA
SA MONTEREY-ILAW AT BUKLOD NG
MANGGAGAWA, YOLITO FADRIQUELAN,
CARLITO ABACAN, ARTURO EGUNA,
Page 47

DANILO ROLLE, ALBERTO CASTILLO,


ARMANDO MALALUAN, DANILO
ALFONSO, RUBEN ALVAREZ, ROMULO
DIMAANO, ROEL MAYUGA, JUANITO
TENORIO, WILFREDO RIZALDO, JOHN
ASOTIGUE, NEMESIO AGTAY, ROMEO
SUICO, DOMINGO ESCAMILLAS Promulgated:
and DOMINGO BAUTRO,
Respondents. June 8, 2011
x --------------------------------------------------------------------------------------- x

DECISION

ABAD, J.:

These cases are about the need to clearly identify, for establishing liability, the union officers
who took part in the illegal slowdown strike after the Department of Labor and Employment
(DOLE) Secretary assumed jurisdiction over the labor dispute.

The Facts and the Case

On April 30, 2002 the three-year collective bargaining agreement or CBA between the union
Bukluran ng Manggagawa sa Monterey-Ilaw at Buklod ng Manggagawa (the union) and
Monterey Foods Corporation (the company) expired. On March 28, 2003 after the negotiation
for a new CBA reached a deadlock, the union filed a notice of strike with the National
Conciliation and Mediation Board (NCMB). To head off the strike, on April 30, 2003 the
company filed with the DOLE a petition for assumption of jurisdiction over the dispute in view
of its dire effects on the meat industry. In an Order dated May 12, 2003, the DOLE Secretary
assumed jurisdiction over the dispute and enjoined the union from holding any strike. It also
directed the union and the company to desist from taking any action that may aggravate the
situation.

On May 21, 2003 the union filed a second notice of strike before the NCMB on the
alleged ground that the company committed unfair labor practices. On June 10, 2003 the
company sent notices to the union officers, charging them with intentional acts of
slowdown. Six days later or on June 16 the company sent new notices to the union officers,
informing them of their termination from work for defying the DOLE Secretarys assumption
order.

On June 23, 2003, acting on motion of the company, the DOLE Secretary included the
unions second notice of strike in his earlier assumption order. But, on the same day, the union
filed a third notice of strike based on allegations that the company had engaged in union
busting and illegal dismissal of union officers. On July 7, 2003 the company filed a petition for
certification of the labor dispute to the National Labor Relations Commission (NLRC) for
compulsory arbitration but the DOLE Secretary denied the motion. He, however, subsumed the
third notice of strike under the first and second notices.
Page 48

On November 20, 2003 the DOLE rendered a decision that, among other things, upheld
the companys termination of the 17 union officers. The union and its officers appealed the
decision to the Court of Appeals (CA).

On May 29, 2006 the CA rendered a decision, upholding the validity of the companys
termination of 10 union officers but declaring illegal that of the other seven. Both parties
sought recourse to this Court, the union in G.R. 178409 and the company in G.R. 178434.

The Issues Presented

The issues these cases present are:

1. Whether or not the CA erred in holding that slowdowns actually transpired at the
companys farms; and

2. Whether or not the CA erred in holding that union officers committed illegal acts that
warranted their dismissal from work.

The Rulings of the Court

First. The law is explicit: no strike shall be declared after the Secretary of Labor has
assumed jurisdiction over a labor dispute. A strike conducted after such assumption is illegal
and any union officer who knowingly participates in the same may be declared as having lost
his employment.[1] Here, what is involved is a slowdown strike. Unlike other forms of strike,
the employees involved in a slowdown do not walk out of their jobs to hurt the company. They
need only to stop work or reduce the rate of their work while generally remaining in their
assigned post.

The Court finds that the union officers and members in this case held a slowdown strike
at the companys farms despite the fact that the DOLE Secretary had on May 12, 2003 already
assumed jurisdiction over their labor dispute. The evidence sufficiently shows that union
officers and members simultaneously stopped work at the companys Batangas and Cavite
farms at 7:00 a.m. on May 26, 2003.

The union of course argues that it merely held assemblies to inform members of the
developments in the CBA negotiation, not protest demonstrations over it. But as the CA
correctly observed, if the meetings had really been for the stated reason, why did the union
officers and members from separate company farms choose to start and end their meetings at
the same time and on the same day? And if they did not intend a slowdown, why did they not
hold their meetings after work. There is no allegation that the company prevented the union
from holding meetings after working hours.
Page 49

Second. A distinction exists, however, between the ordinary workers liability for illegal
strike and that of the union officers who participated in it. The ordinary worker cannot be
terminated for merely participating in the strike. There must be proof that he
committed illegal acts during its conduct. On the other hand, a union officer can be terminated
upon mere proof that he knowingly participated in the illegal strike.[2]

Still, the participating union officers have to be properly identified. [3] The CA held that
the company illegally terminated union officers Ruben Alvarez, John Asotigue, Alberto Castillo,
Nemesio Agtay, Carlito Abacan, Danilo Rolle, and Juanito Tenorio, there being no substantial
evidence that would connect them to the slowdowns. The CA said that their part in the same
could not be established with certainty.

But, although the witnesses did not say that Asotigue, Alvarez, and Rolle took part in the
work slowdown, these officers gave no credible excuse for being absent from their respective
working areas during the slowdown. Tenorio allegedly took a break and never went back to
work. He claimed that he had to attend to an emergency but did not elaborate on the nature of
such emergency. In Abacans case, however, he explained that he was not feeling well on May
26, 2003 and so he decided to take a two-hour rest from work. This claim of Abacan is
consistent with the report[4] that only one officer (Tenorio) was involved in the slowdown at
the Calamias farm.

At the Quilo farm, the farm supervisor did not include Castillo in the list of employees
who failed to report for work on May 26, 2003.[5] In Agtays case, the evidence is that he was on
his rest day. There is no proof that the unions president, Yolito Fadriquelan, did not show up
for work during the slowdowns. The CA upheld his dismissal, relying solely on a security
guards report that the company submitted as evidence. But, notably, that report actually
referred to a Rolly Fadrequellan, another employee who allegedly took part in the Lipa farm
slowdown. Besides, Yolito Fadriquelan was then assigned at the General Trias farm in Cavite,
not at the Lipa farm. In fact, as shown in the sworn statements[6] of the Cavite farm employees,
Fadriquelan even directed them not to do anything which might aggravate the situation. This
clearly shows that his dismissal was mainly based on his being the union president.

The Court sustains the validity of the termination of the rest of the union officers. The identity
and participations of Arturo Eguna,[7] Armando Malaluan,[8] Danilo Alonso,[9]Romulo
Dimaano,[10] Roel Mayuga,[11] Wilfredo Rizaldo,[12] Romeo Suico,[13] Domingo Escamillas,[14] and
Domingo Bautro[15] in the slowdowns were properly established.These officers simply refused
to work or they abandoned their work to join union assemblies.

In termination cases, the dismissed employee is not required to prove his innocence of
the charges against him. The burden of proof rests upon the employer to show that the
employees dismissal was for just cause. The employers failure to do so means that the
dismissal was not justified.[16] Here, the company failed to show that all 17 union officers
deserved to be dismissed.
Page 50

Ordinarily, the illegally dismissed employees are entitled to two reliefs: reinstatement
and backwages. Still, the Court has held that the grant of separation pay, instead of
reinstatement, may be proper especially when as in this case such reinstatement is no longer
practical or will be for the best interest of the parties.[17] But they shall likewise be entitled to
attorneys fees equivalent to 10% of the total monetary award for having been compelled to
litigate in order to protect their interests.[18]

WHEREFORE, the Court MODIFIES the decision of the Court of Appeals in CA-G.R. SP
82526, DECLARES Monterey Foods Corporations dismissal of Alberto Castillo, Nemesio Agtay,
Carlito Abacan, and Yolito Fadriquelan illegal, and ORDERS payment of their separation pay
equivalent to one month salary for every year of service up to the date of their
termination. The Court also ORDERS the company to pay 10% attorneys fees as well as
interest of 6% per annum on the due amounts from the time of their termination and 12% per
annum from the time this decision becomes final and executory until such monetary awards
are paid.
SO ORDERED.

Case no. 7

Republic of the Philippines


SUPREME COURT
Manila

THIRD DIVISION

MAGDALA MULTIPURPOSE & LIVELIHOOD G.R. Nos. 191138-39


COOPERATIVE and SANLOR MOTORS
CORP.,
Petitioners, Present:

- versus -
VELASCO, JR., J., Chairperson,
KILUSANG MANGGAGAWA NG LGS, PERALTA,
MAGDALA MULTIPURPOSE & LIVELIHOOD ABAD,
CORPERATIVE (KMLMS) and MENDOZA, and
UNION MEMBERS/ STRIKERS, namely: PERLAS-BERNABE, JJ.
THOMAS PADULLON, HERBERT
BAUTISTA, ARIEL DADIA, AVELINO
PARENAS, DENNIS MONTEALEGRE, SONNY
CONSTANTINO, SHANDY CONSTANTINO,
JOSEPH PERNIA, PETER ALCOY,
EDILBERTO CERILLE, FERNANDO LEONOR,
TEOTIMAR REGINIO, ALBERTO BAJETA,
ALLAN MENESES, RONEL FABUL, JESUS
Page 51

COMENDADOR, JERRY PERNIA, OSCAR


RIVERA, LEO MELGAR, ENRICO LAYGO,
RICKY PALMERO, ROWELL GARCIA,
LEOPITO MERANO, ALEJANDRO DE LARA,
JOEL GARCIA, BONIFACIO PEREDA,
REMEGIO CONSTANTINO, DICKSON
PILAPIL, RANDY CORDANO, DARIUS
PILAPIL, VENICE LUCERO, GREGORIO
REANZARES, EULOGIO REGINIO, MICHAEL
JAVIER, DENNIS MOSQUERA, FREDDIE
AZORES, ROGELIO CABRERA, AURELIO
TAGUINOD, OSCAR TAGUINOD, DEWELL
PILAPIL, JOEL MAS-ING, EDUARDO LOPEZ,
GLICERIO REANZAREZ, JOSEPH
FLORES,BUENATO CASAS, ROMEO
AZAGRA, ALFREDO ROSALES, ESTELITO
BAJETA, PEDY GEMINA, FERNANDO
VELASCO, ALBERTO CANEZA, ALEJANDRO
CERVANTES, ERICK CARVAJAL, RONALDO
BERNADEZ, JERRY COROSA, JAYSON
COROSA, JAYSON JUANSON, SHELLY
NAREZ, EDGARDO GARCIA, ARIEL
LLOSALA, ROMMEL ILAYA, RODRIGO
PAULETE, MERVIN PANGUINTO, MARVIN
SENATIN, JAYSON RILLORA, RAFAEL
SARMIENTO, FREDERICK PERMEJO,
NICOLAS BERNARDO, LEONCIO PAZ DE
LEON, EDWARD DENNIS MANAHAN,
ANTONIO BALDAGO, ALEXANDER BAJETA,
Respondents.

Promulgated:

October 19, 2011


x-----------------------------------------------------------------------------------------x

DECISION
VELASCO, JR., J.:

The Case
Page 52

Petitioners Magdala Multipurpose & Livelihood Cooperative and Sanlor Motors Corp.
assail and seek the modification of the June 30, 2009 Decision[1] and January 28, 2010
Resolution[2] of the Court of Appeals (CA) in CA-G.R. SP Nos. 88614 and 88645, which
affirmed in toto the October 15, 2004 Decision[3] of the National Labor Relations Commission
(NLRC) in NLRC CA No. 040560-04 (NLRC RAB IV-9-1265-02-R).

The Facts

Respondent Kilusang Manggagawa ng LGS, Magdala Multipurpose and Livelihood


Cooperative (KMLMS) is the union operating in Magdala Multipurpose & Livelihood
Cooperative and Sanlor Motors Corp.

KMLMS filed a notice of strike on March 5, 2002 and conducted its strike-vote on April
8, 2002. However, KMLMS only acquired legal personality when its registration as an
independent labor organization was granted on April 9, 2002 by the Department of Labor and
Employment under Registration No. RO-400-200204-UR-002.[4] On April 19, 2002, it became
officially affiliated as a local chapter of the Pambansang Kaisahan ng Manggagawang
Pilipino when its application was granted by the Bureau of Labor Relations.[5]

Thereafter, on May 6, 2002, KMLMSnow a legitimate labor organization (LLO)staged a


strike where several prohibited and illegal acts were committed by its participating members.

On the ground of lack of valid notice of strike, ineffective conduct of a strike-vote and
commission of prohibited and illegal acts, petitioners filed their Petition to Declare the Strike
of May 6, 2002 Illegal[6] before the NLRC Regional Arbitration Board (RAB) No. IV in Quezon
City, docketed as NLRC RAB IV-9-1265-02-R. In their petition, as well as their Position
Paper,[7] petitioners prayed, inter alia, that the officers and members of respondent KMLMS
who participated in the illegal strike and who knowingly committed prohibited and illegal
activities, respectively, be declared to have lost or forfeited their employment status.

The Ruling of the Labor Arbiter

In her March 26, 2004 Decision,[8] Executive Labor Arbiter Lita V. Aglibut (LA Aglibut)
found the May 6, 2002 strike illegal and declared 41 workers to have lost their employment,
the dispositive portion reading:

WHEREFORE, this Office finds the strike conducted by the Kilusang


Manggagawa ng LGS, Magdala / Sanlor Motors-KMLMS, now known and
registered as Kilusang [Manggagawa] Ng LGS/Magdala Sanlor Motors
Corporation PKMP, illegal and the employment status of the following workers
are hereby declared forfeited: x x x.

All other claims are dismissed for lack of merit.

SO ORDERED.[9]

On the ground of non-compliance with the strict and mandatory requirements for a
valid conduct of a strike under Article 263(c), (d) and (f) of the Labor Code and Rule XXII, Book
Page 53

V of the Omnibus Rules Implementing the Labor Code, LA Aglibut found the May 6, 2002 strike
illegal and accordingly dismissed all the 14 union officers of KMLMS. LA Aglibut likewise found
27 identified members of KMLMS to have committed prohibited and illegal acts proscribed
under Art. 264 of the Labor Code and accordingly declared them to have forfeited their
employment.

Both parties appealed the Decision of LA Aglibut before the NLRC.

The Ruling of the NLRC

On October 15, 2004, the NLRC rendered its Decision affirming with modification LA
Aglibuts Decision by declaring an additional seven (7) union members to have forfeited their
employment status. The decretal portion reads:

WHEREFORE, premises considered, the decision appealed from is


affirmed with modification in that [said seven union members] are also declared
to have lost their employment status for having committed prohibited acts.

SO ORDERED.[10]

Unsatisfied, both parties again filed their respective appeals before the CA.

The Ruling of the CA

The CA rendered the assailed Decision on June 30, 2009 affirming in toto the NLRC
Decision, the fallo reading:

WHEREFORE, in view of the following disquisition, the respective


petitions for certiorari in CA-G.R. SP. No. 88614 and CA-G.R. SP. No. 88645 are
hereby DISMISSED for lack of merit.Accordingly, the assailed Decision, dated 15
October 2004, of the National Labor Relations Commission (NLRC) in NLRC CA
No. 040560-04 (NLRC RAB IV-9-1265-02-R) is hereby AFFIRMED in toto.

SO ORDERED.[11]

Thus, petitioners have come to Us, praying for a partial modification of the assailed CA
Decision by declaring additional 73[12] similarly erring KMLMS members to have lost their
employment.

The Issues

THE COURT OF APPEALS ERRED IN REFUSING TO SIMILARLY DECLARE AS


HAVING LOST THEIR EMPLOYMENT STATUS THE REST OF THE UNION
STRIKERS WHO HAVE PARTICIPATED IN THE ILLEGAL STRIKE AND
COMMITTED PROHIBITED/ILLEGAL ACTS, TO THE PREJUDICE OF
PETITIONERS[] BUSINESS OPERATIONS.
Page 54

THE COURT OF APPEALS ERRED IN REFUSING TO AWARD DAMAGES AND


ATTORNEYS FEES AS A RESULT OF THE ILLEGAL STRIKE THAT NEARLY
CRIPPLED THE BUSINESS OPERATIONS OF PETITIONERS.[13]

The Courts Ruling

The petition is partly meritorious.

First Issue: The May 6, 2002 Strike Was Illegal

There is no question that the May 6, 2002 strike was illegal, first, because when KMLMS
filed the notice of strike on March 5 or 14, 2002, it had not yet acquired legal personality and,
thus, could not legally represent the eventual union and its members. And second, similarly
when KMLMS conducted the strike-vote on April 8, 2002, there was still no union to speak of,
since KMLMS only acquired legal personality as an independent LLO only on April 9, 2002 or
the day after it conducted the strike-vote. These factual findings are undisputed and borne out
by the records.

Consequently, the mandatory notice of strike and the conduct of the strike-vote report
were ineffective for having been filed and conducted before KMLMS acquired legal personality
as an LLO, violating Art. 263(c), (d) and (f) of the Labor Code and Rule XXII, Book V of the
Omnibus Rules Implementing the Labor Code. The Labor Code provisos pertinently provide:

ART. 263. Strikes, Picketing and Lockouts. (a) x x x

(c) In case of bargaining deadlocks, the duly certified or recognized


bargaining agent may file a notice of strike or the employer may file a notice of
lockout with the Ministry at least 30 days before the intended date thereof. In
case of unfair labor practice, the period of notice shall be 15 days and in
absence of a duly certified or recognized bargaining agent, the notice of
strike may be filed by any legitimate labor organization in behalf of its
members. However, in case of dismissal from employment of union officers duly
elected in accordance with the union constitution and by-laws, which may
constitute union busting, where the existence of the union is threatened, the 15-
day cooling-off period shall not apply and the union may take action
immediately. (As amended by Executive Order No. 111, December 24, 1986.)

(d) The notice must be in accordance with such implementing rules and
regulations as the Ministry of Labor and Employment may promulgate.

xxxx

(f) A decision to declare a strike must be approved by a majority of the


total union membership in the bargaining unit concerned, obtained by secret
ballot in meetings or referenda called for that purpose. A decision to declare a
lockout must be approved by a majority of the board of directors of the
corporation or association or of the partners in a partnership, obtained by secret
ballot in a meeting called for that purpose. The decision shall be valid for the
duration of the dispute based on substantially the same grounds considered
when the strike or lockout vote was taken. The Ministry may, at its own initiative
Page 55

or upon the request of any affected party, supervise the conduct of the secret
balloting. In every case, the union or the employer shall furnish the Ministry the
results of the voting at least seven days before the intended strike or lockout,
subject to the cooling-off period herein provided. (As amended by Batas
Pambansa Bilang 130, August 21, 1981 and further amended by Executive Order
No. 111, December 24, 1986.)

On the other hand, Rule XXII, Book V of the Omnibus Rules Implementing the Labor
Code likewise pertinently provides:

RULE XXII

CONCILIATION, STRIKES AND LOCKOUTS

xxxx

SEC. 6. Who may declare a strike or lockout. Any certified or duly


recognized bargaining representative may declare a strike in cases of bargaining
deadlocks and unfair labor practices. The employer may declare a lockout in the
same cases. In the absence of a certified or duly recognized bargaining
representative, any legitimate labor organization in the establishment may
declare a strike but only on grounds of unfair labor practice. (Emphasis
supplied.)

It is, thus, clear that the filing of the notice of strike and the conduct of the strike-vote by
KMLMS did not comply with the aforequoted mandatory requirements of law and its
implementing rules. Consequently, the May 6, 2002 strike is illegal. As the Court held in Hotel
Enterprises of the Philippines, Inc. (HEPI) v. Samahan ng mga Manggagawa sa Hyatt-National
Union of Workers in the Hotel and Restaurant and Allied Industries (SAMASAH-
NUWHRAIN),[14] these requirements are mandatory and failure of a union to comply renders
the strike illegal.

Striking KMLMS Members Committed Prohibited Acts

There is likewise no dispute that when the May 6, 2002 illegal strike was conducted, the
members of respondent KMLMS committed prohibited and illegal acts which doubly
constituted the strike illegal. This is the unanimous factual finding of the courts a quo which
the Court accords finality, as supported by evidence on record.

The proscribed acts during a strike are provided under Art. 264 of the Labor Code, thus:

ART. 264. Prohibited Activities. (a) No Labor organization or employer


shall declare a strike or lockout without first having bargained collectively in
accordance with Title VII of this Book or without first having filed the notice
required in the preceding Article or without the necessary strike or lockout vote
first having been obtained and reported to the Ministry.

No strike or lockout shall be declared after assumption of jurisdiction by


the President or the Minister or after certification or submission of the dispute
to compulsory or voluntary arbitration or during the pendency of case involving
the same grounds for the strike or lockout.
Page 56

Any worker whose employment has been terminated as a consequence of


any unlawful lockout shall be entitled to reinstatement with full backwages. Any
union officer who knowingly participates in an illegal strike and any
worker or union officer who knowingly participates in the commission of
illegal acts during a strike may be declared to have lost his employment
status: Provided, That mere participation of a worker in a lawful strike shall not
constitute sufficient ground for termination of his employment, even if a
replacement had been hired by the employer during such lawful strike.

xxxx

(e) No person engaged in picketing shall commit any act of violence,


coercion or intimidation or obstruct the free ingress to or egress from the
employers premises for lawful purposes, or obstruct public
thoroughfares. (As amended by Batas Pambansa Bilang 227, June 1, 1982).

Here, the striking workers committed acts of (1) interference by obstructing the free
ingress to or egress from petitioners compound and (2) coercion and intimidation. As aptly
pointed out by the appellate court:

This is clear from the Police Blotter Certifications, including a Complaint


for Grave Coercion, Affidavits from several workers, including one from a
proprietor, all of whom were prevented from entering the company premises
and doing their work or conducting their business, and the countless
photographs which show the striking workers blocking the gates of the company
premises which became the basis of the judgment of the Labor Arbiter and
NLRC.[15]

Thus, We agree with the CA that the arguments of respondent KMLMS are bereft of
merit as the May 6, 2002 strike was properly declared an illegal strike and the prohibited and
illegal acts committed by union members during said strike were duly proved by substantial
evidence on record. Substantial evidence is that amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion.[16]

Proper Sanctions for the Illegal Strike

We now come to the proper sanctions for the conduct of union officers in an illegal
strike and for union members who committed illegal acts during a strike. The above-cited Art.
264 of the Code presents a substantial distinction of the consequences of an illegal strike
between union officers and mere members of the union. For union officers, knowingly
participating in an illegal strike is a valid ground for termination of their employment. But for
union members who participated in a strike, their employment may be terminated only if they
committed prohibited and illegal acts during the strike and there is substantial evidence or
proof of their participation, i.e., that they are clearly identified to have committed such
prohibited and illegal acts.

As earlier explained, the May 6, 2002 strike is illegal for non-compliance with
provisions of law and its implementing rules. Consequently, the termination of employment of
the 14 union officers is proper.

In the case of union members who participated in the May 6, 2002 strike and
committed prohibited and illegal acts of interference by obstructing the free ingress to or
Page 57

egress from petitioners compound, coercion and intimidation, the forfeiture of their
employment is also proper.

LA Aglibut found 27 union members to have committed the illegal acts and properly
declared the forfeiture of their employment status. The NLRC found additional seven (7) union
members committing illegal acts and likewise declared the forfeiture of their employment
status. Thus, a total of 34 union members have been declared to have lost their employment
due to their commission of prohibited and illegal acts during the illegal strike of May 6,
2002. Petitioners, however, take umbrage for the non-declaration of the forfeiture of
employment of 72 other union members who were similarly situated as the 34 union members
whose employment was declared forfeited in committing prohibited and illegal acts during the
May 6, 2002 strike.

In affirming the NLRC Decision and refusing to declare the other strikers as dismissed,
the appellate court found that not all of the photographs in evidence sufficiently show the
strikers committing illegal acts and that the identification of said strikers is questionable
considering that some were still identified even when their faces were indiscernible from the
photographs.

We, however, cannot agree with the appellate courts view that there is no substantial
proof of the identity of the other 72 striking union members who committed prohibited and
illegal activities. The prohibited and illegal acts are undisputed. It is only the identity of the
striking union workers who committed said acts that is the crux of the partial modification
prayed for by petitioners.

In the instant case, We have pored over the attachments to the pleadings of the parties
and We find that petitioners have substantially proved the identity of 72 other union members
who committed prohibited and illegal acts during the May 6, 2002 illegal strike, thus:

First, the photographs[17] submitted by petitioners graphically depict and show the
identities of the union members who committed prohibited and illegal acts. Second, the
identities of these union members were substantially proved through the eyewitnesses [18] of
petitioners who personally knew and recognized them as those who committed the prohibited
and illegal acts. Thus, the identities of these 72 other union members who participated in the
strike and committed prohibited and illegal acts are not only shown through the photographs,
but are also sufficiently supported, as earlier cited, by police blotter certifications, [19] a criminal
complaint for grave coercion,[20] and affidavits of several workers[21] and a proprietor.[22] As
aptly pointed out by petitioners, while several union members were penalized, other union
members with them who are identifiable in the photographs and attested to by witnesses were
not so penalized. This must be corrected, for these other unpenalized union members were
similarly situated with those penalized in that they all committed the same prohibited and
illegal acts during the strike. Absent any exculpating circumstance, they must all suffer the
same fate with the statutorily provided consequence of termination of employment.

Thus, We find that there was patent misappreciation of evidence both by the LA and the
NLRC, but it was not corrected by the CA.

Second Issue: Damages and Attorneys Fees

Anent the issue of the award of damages and attorneys fees, We affirm the courts a quos
uniform findings and rulings that while petitioners prayed for damages and attorneys fees,
they failed to substantiate their claims.
Page 58

Indeed, the grant of damages and attorneys fees requires factual, legal and equitable
justification; its basis cannot be left to speculation or conjecture. [23] Petitioners simply bank
their claims on the Affidavit[24] of Julito Sioson. The claim for actual damages for losses of PhP
10,000 daily or PhP 260,000 a month, as averred by Sioson, cannot be sustained by a mere
affidavit of the owner without being buttressed by other documentary evidence or
unassailable substantiation. Even if attested to in an affidavit, the amount claimed for actual
damages is merely speculative at most. To be recoverable, actual damages must not only be
capable of proof, but must actually be proved with reasonable degree of certainty. The Court
cannot simply rely on speculation, conjecture, or guesswork in determining the amount of
damages.[25] Without any factual basis, it cannot be granted.

That petitioners had to litigate on the occasion of the illegal strike does not necessarily
mean that attorneys fees will automatically be granted. On one hand, in labor cases, attorneys
fees granted under Art. 111[26] of the Labor Code apply to unlawful withholding of wages,
which indubitably does not apply to the instant case. On the other hand, Art. 2208(2) of the
Civil Code does not ipso facto grant the award of damages in the form of attorneys fees to a
winning party, for the exercise of protection of ones right is not compensable.

Besides, jurisprudence instructs that for the award of attorneys fees to be granted,
there must be factual, legal and equitable justification.[27] As the Court held in Filipinas
Broadcasting Network, Inc. v. Ago Medical and Educational Center-Bicol Christian College of
Medicine (AMEC-BCCM):

It is an accepted doctrine that the award thereof as an item of damages is


the exception rather than the rule, and counsels fees are not to be awarded every
time a party wins a suit. The power of the court to award attorneys fees under
Article 2208 of the Civil Code demands factual, legal and equitable justification,
without which the award is a conclusion without a premise, its basis being
improperly left to speculation and conjecture. In all events, the court must
explicitly state in the text of the decision, and not only in the decretal portion
thereof, the legal reason for the award of attorneys fees.[28]

The fact that the courts a quo did not award attorneys fees to petitioners persuasively
shows that they found no factual, legal and equitable justification for it. Neither do We find any.

WHEREFORE, the instant petition is hereby PARTIALLY GRANTED. The assailed June
30, 2009 CA Decision in CA-G.R. SP Nos. 88614 and 88645
is AFFIRMEDwith MODIFICATION in that the following additional 72 union members who
committed prohibited and illegal acts during the May 6, 2002 strike are also declared to have
forfeited their employment: Thomas Padullon, Herbert Bautista, Ariel Dadia, Avelino Parenas,
Dennis Montealegre, Sonny Constantino, Shandy Constantino, Joseph Pernia, Peter Alcoy,
Edilberto Cerille, Fernando Leonor, Teotimar Reginio, Alberto Bajeta, Allan Meneses, Ronel
Fabul, Jesus Comendador, Jerry Pernia, Oscar Rivera, Leo Melgar, Enrico Laygo, Ricky Palmero,
Rowell Garcia, Leopito Merano, Alejandro de Lara, Joel Garcia, Bonifacio Pereda, Remegio
Constantino, Dickson Pilapil, Randy Cordano, Aurelio Taguinod, Oscar Taguinod, Dewell Pilapil,
Joel Mas-ing, Eduardo Lopez, Glicerio Reanzarez, Joseph Flores, Buenato Casas, Romeo Azagra,
Alfredo Rosales, Estelito Bajeta, Pedy Gemina, Fernando Velasco, Alberto Caneza, Alejandro
Cervantes, Erick Carvajal, Ronaldo Bernadez, Jerry Corosa, Jayson Corosa, Jayson Juanson,
Shelly Narez, Alexander Bajeta, Edgardo Garcia, Ariel Llosala, Rommel Ilaya, Rodrigo Paulete,
Mervin Paquinto, Marvin Senatin, Jayson Rillora, Darius Pilapil, Venice Lucero, Gregorio
Reanzares, Eulogio Reginio, Michael Javier, Dennis Mosquera, Freddie Azores, Rogelio Cabrera,
Page 59

Rafael Sarmiento, Frederick Permejo, Nicolas Bernardo, Leoncio Paz de Leon, Edward Dennis
Manahan and Antonio Baldago.

No pronouncement as to costs.

SO ORDERED.

CASE NO. 8

THIRD DIVISION

YSS EMPLOYEES UNIONPHILIPPINE G.R. No. 155125


TRANSPORT AND GENERAL WORKERS Present:
ORGANIZATION,
Petitioner, CORONA, J.,
Chairperson,
CHICO-NAZARIO,
VELASCO, JR.,
- versus - NACHURA, and
PERALTA, JJ.

Promulgated:
YSS LABORATORIES, INC.,
Respondent. December 4, 2009

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

CHICO-NAZARIO, J.:

Before this Court is a Petition for Review on Certiorari filed by petitioner YSS Employees Union
(YSSEU) Philippine Transport and General Workers Organization seeking to reverse and set
aside the Decision[1] dated 26 November 2001 and the Resolution dated 29 August 2002 of the
Court of Appeals in CA-G.R. SP No. 66095. The said Decision and Resolution nullified the
Orders of the Secretary of the Department of Labor and Employment (DOLE) dated 11 May
2001[2] and 9 June 2001[3] which enjoined the strike staged by petitioner, and ordered
respondent YSS Laboratories Inc. (YSS Laboratories) to accept the workers back to their work,
including those who were retrenched from employment due to serious business losses. The
inclusion of the employees who were previously terminated from service to the return-to-
work order is the hub of this controversy.
YSS Laboratories is a domestic corporation engaged in the pharmaceutical business. YSSEU is a
duly registered labor organization and the sole and exclusive bargaining representative of the
rank and file employees of YSS Laboratories.

In order to arrest escalating business losses, YSS Laboratories implemented a retrenchment


program which affected 11 employees[4] purportedly chosen in accordance with the
reasonable standards established by the company. Of the 11 employees sought to be
Page 60

retrenched, nine were officers and members of YSSEU.[5] Initially, these employees were given
the option to avail themselves of the early retirement program of the company. [6] When no one
opted to retire early, YSS Laboratories exercised its option to terminate the services of its
employees as allegedly authorized under Article 283[7] of the Labor Code. Thus, copies of the
Notices of Termination were filed with DOLE on 19 March 2001 and were served to concerned
employees on 20 March 2001.
Claiming that YSS Laboratories was guilty of discrimination and union-busting in carrying out
the said retrenchment program, YSSEU decided to hold a strike. After the necessary strike vote
was taken under the supervision of the National Conciliation Mediation Board National Capital
Region (NCMB-NCR), YSSEU staged a strike on 20 April 2001.[8]

In order to forge a compromise, a number of conciliation proceedings were conducted by the


NCMB-NCR, but these efforts proved futile since the parties stance was unbending.

This prompted the Secretary of Labor to finally intervene in order to put an end to a
prolonged labor dispute. Underscoring the governments policy of preserving economic gains
and employment levels, the Secretary of Labor deemed that the continuation of the labor
dispute was inimical to national interest. Thus, in an Order dated 11 May 2001, the Secretary
of Labor certified the labor dispute to the National Labor Relations Commission (NLRC) for
compulsory arbitration. Accordingly, all striking workers were thereby directed to return to
work within 24 hours from their receipt of the said Order, and YSS Laboratories to accept them
under the terms and conditions prevailing before the strike.The Order was worded in this
wise:

CONSIDERING THESE PREMISES, this Office hereby certifies the labor


dispute at [YSS Laboratories] to the [NLRC] for compulsory arbitration, pursuant
to Article 263(g) of the Labor [Code], as amended.

All striking workers are hereby directed to return to work within twenty
four (24) hours from receipt of this Order and for the Company to accept them
back under the same terms and conditions of employment prior to the strike.

The parties are further directed to cease and desist from committing any
act which might further worsen the situation.

Let the entire records of this case be forwarded to the NLRC for its
appropriate action.[9]

YSS Laboratories, however, refused to fully comply with the directive of the Secretary of
Labor. In its Urgent Motion for Reconsideration,[10] YSS Laboratories argued that nine union
officers and members who were previously terminated from service pursuant to a valid
retrenchment should be excluded from the operation of the return-to-work order. It also
asserted that the union officers[11] who participated in the purported illegal strike should
likewise not be allowed to be back to their employment for they were deemed to have already
lost their employment status.

YSSEU, for its part, moved that YSS Laboratories be cited for contempt for refusing to
admit the 18 workers back to work. In addition, YSSEU prayed for the award of backwages in
favor of these employees who were not permitted by YSS Laboratories to return to their
respective stations despite the Secretary of Labors directive. [12]
Page 61

Acting on the aforesaid motions, the Secretary of Labor, on 9 June 2001, granted the
motion of YSSEU and thus issued an Order[13] directing YSS Laboratories to immediately accept
back to work the nine retrenched employees and the nine union officers who initiated the
alleged illegal strike pending determination of the validity of the retrenchment and illegal
strike cases. Should actual physical reinstatement be no longer possible, YSS Laboratories was
ordered to reinstate the striking workers in the companys payroll. The decretal portion of the
Order reads:

WHEREFORE, [YSS Laboratories] is directed to immediately accept back


to work the nine (9) retrenched employees and the nine (9) union officers and
members against whom an illegal strike case has been filed, by the NLRC,
pending determination of the validity of the retrenchment and illegal strike
cases. In case the actual and physical reinstatement is not feasible, [YSS
Laboratories] is directed to effect payroll reinstatement with the workers
salaries payable every two (2) weeks effective from the [YSS Laboratories]
receipt of this Order.[14]

Unyielding, YSS Laboratories brought a Petition for Certiorari[15] under Rule 65 of the
Rules of Court before the Court of Appeals, seeking to annul the certification order and the
return-to-work order issued by the Secretary of Labor. While recognizing the wide latitude
afforded by law to the Secretary of Labor to issue Assumption of Jurisdiction and Certification
Orders, YSS Laboratories claimed that the issuance of the 11 May 2001 and 9 June 2001 Orders
was tainted with utter grave abuse of discretion and patent bias in favor of YSSEU. Again, YSS
Laboratories asseverated that the nine employees who were previously dismissed from
employment should be excluded from the coverage of the return-to-work order since they
were lawfully retrenched by the company.

On 26 November 2001, the Court of Appeals rendered a Decision granting the Petition
and reversing the assailed Orders dated 11 May 2001 and 9 June 2001, as they were made with
grave abuse of discretion amounting to lack or excess of jurisdiction. The appellate court found
that YSS Laboratories validly carried out its retrenchment program, which effectively severed
the concerned employees employment with the company. For lack of factual and legal basis,
the Court of Appeals struck down the strike staged by YSSEU for being illegal. The appellate
court thus disposed:

WHEREFORE, premises considered, the Petition is GRANTED; and the


two (2) assailed Orders of public respondent Secretary of Labor in NCMB-NCR-
NS-03-086-01/0S-AJ-0006-2001 are hereby SET ASIDE for
being NULL and VOID. [16]

Similarly ill-fated was YSSEUs motion for reconsideration which was denied through
the Court of Appeals Resolution issued on 29 August 2002.[17]

YSSEU is now before this Court assailing the aforementioned decision and resolution of
the Court of Appeals on the ground that the appellate court erred in reversing the Orders of the
Secretary of Labor.

For our resolution are the following issues:


I.
Page 62

WHETHER OR NOT THE SECRETARY OF LABOR GRAVELY ABUSED ITS


DISCRETION IN CERTIFYING THE LABOR DISPUTE TO THE NLRC FOR
COMPULSORY ARBITRATION.

II.

WHETHER OR NOT THE RETRENCHED EMPLOYEES SHOULD BE EXCLUDED


FROM THE OPERATION OF THE RETURN TO WORK ORDER.

While this Court prefers to rule on the issue of the validity of the retrenchment program
as well as on the questions on the legality or illegality of the strike, and on the individual
liabilities of the strikers, if any, we cannot put an end to this protracted labor dispute, however,
without preempting the NLRC in the disposition of these issues and thereby transgressing the
elementary doctrine of primary jurisdiction.[18] The pivotal issue in this petition centers on
whether or not the retrenched employees should be excluded from the coverage of the return-
to-work-order.
.
YSSEU maintains that once a labor dispute is certified to the NLRC for compulsory arbitration,
the employer should readily admit all striking employees under the status quo ante. It argues
that the primary reason why the strike was conducted in the first place was to protest the
implementation of the retrenchment program, which clearly discriminated against union
officers and members. It bears to stress that out of the 11 employees affected by retrenchment,
four are union officers and five are union members.

YSS Laboratories, on the other hand, insists that those employees who were already
separated from service due to a valid retrenchment should not be readmitted back to work
anymore. It avers that the retrenched employees were chosen after a thorough evaluation of
their work performance, including their frequencies of absence and tardiness, and their
respective lengths of service, rendering YSSEUs claims of discrimination and union busting,
preposterous.

The petition is impressed with merit.

The Orders dated 11 May 2001 and 9 June 2001 of the Secretary of Labor, certifying the
labor dispute involving the herein parties to the NLRC for compulsory arbitration, and
enjoining YSSEU to return to work and YSS Laboratories to admit them under the same terms
and conditions prevailing before the strike, were issued pursuant to Article 263(g) of the Labor
Code. Said provision reads:

Art. 263. Strikes, picketing, and lockouts.

xxxx

(g) When, in his opinion, there exists a labor dispute causing or likely to
cause a strike or lockout in an industry indispensable to the national interest, the
Secretary of Labor and Employment may assume jurisdiction over the dispute
and decide it or certify the same to the Commission for compulsory
arbitration. Such assumption or certification shall have the effect of
automatically enjoining the intended or impending strike or lockout as specified
in the assumption or certification order. If one has already taken place at the
time of assumption or certification, all striking or locked out employees shall
immediately return to work and the employer shall immediately resume
operations and readmit all workers under the same terms and conditions
Page 63

prevailing before the strike or lockout. The Secretary of Labor and


Employment or the Commission may seek the assistance of law enforcement
agencies to ensure compliance with this provision as well as with such orders as
he may issue to enforce the same. (Emphasis supplied.)

After martial law was lifted and democracy was restored, the assumption of jurisdiction
in Art. 263(g) has now been viewed as an exercise of the police power of the State with the aim
of promoting the common good[19]:

[I]t must be noted that Articles 263 (g) and 264 of the Labor Code have been
enacted pursuant to the police power of the State, which has been defined as the
power inherent in a government to enact laws, within constitutional limits, to
promote the order, safety, health, morals and general welfare of society. The
police power, together with the power of eminent domain and the power of
taxation, is an inherent power of government and does not need to be expressly
conferred by the Constitution. x x x.[20]

The grant of these plenary powers to the Secretary of Labor makes it incumbent upon
him to bring about soonest, a fair and just solution to the differences between the employer
and the employees, so that the damage such labor dispute might cause upon the national
interest may be minimized as much as possible, if not totally averted, by avoiding stoppage of
work or any lag in the activities of the industry or the possibility of those contingencies that
might cause detriment to the national interest.[21]

In order to effectively achieve such end, the assumption or certification order shall have
the effect of automatically enjoining the intended or impending strike or lockout.Moreover, if
one has already taken place, all striking workers shall immediately return to work, and the
employer shall immediately resume operations and readmit all workers under the same
terms and conditions prevailing before the strike or lockout.[22]

YSS Laboratories vigorous insistence on the exclusion of the retrenched employees


from the coverage of the return-to-work order seriously impairs the authority of the Secretary
of Labor to forestall a labor dispute that he deems inimical to the national economy. The
Secretary of Labor is afforded plenary and broad powers, and is granted great breadth of
discretion to adopt the most reasonable and expeditious way of writing finis to the labor
dispute.[23]

Accordingly, when the Secretary of Labor directed YSS Laboratories to accept all the
striking workers back to work, the Secretary did not exceed his jurisdiction, or gravely abuse
the same. It is significant at this point to point out that grave abuse of discretion implies a
capricious and whimsical exercise of judgment. Thus, an act may be considered as committed
in grave abuse of discretion when the same is performed in a capricious or whimsical exercise
of judgment, which is equivalent to lack of jurisdiction.The abuse of discretion must be so
patent and gross as to amount to an evasion of a positive duty or to a virtual refusal to perform
a duty enjoined by law, or to act at all in contemplation of law, as where the power is exercised
in an arbitrary and despotic manner by reason of passion or personal hostility.[24] In the case at
bar, there is no showing that the assailed orders were issued in an arbitrary or despotic
manner. The Orders dated 11 May 2001 and 9 June 2001 were issued by the Secretary of
Labor, with the end in view of preserving the status quo ante while the main issues of the
validity of the retrenchment and legality of the strike were being threshed out in the proper
forum. This was done for the promotion of the common good, considering that a lingering
Page 64

strike could be inimical to the interest of both employer and employee. The Secretary of Labor
acts to maintain industrial peace. Thus, his certification for compulsory arbitration is not
intended to interfere with the managements rights but to obtain a speedy settlement of the
dispute. This is well-articulated in International Pharmaceuticals, Inc. v. Secretary of
Labor,[25] as follows:

Plainly, Article 263 (g) of the Labor Code was meant to make both the Secretary
(or the various regional directors) and the labor arbiters share jurisdiction,
subject to certain conditions. Otherwise, the Secretary would not be able to
effectively and efficiently dispose of the primary dispute. To hold the contrary
may even lead to the absurd and undesirable result wherein the Secretary and
the labor arbiter concerned may have diametrically opposed rulings. As we have
said, (i)t is fundamental that a statute is to be read in a manner that would
breathe life into it, rather than defeat it.

By harping on the validity of the retrenchment and on the exclusion of the retrenched
employees from the coverage of the return-to-work order, YSS Laboratories undermines the
underlying principle embodied in Article 263(g) of the Labor Code on the settlement of labor
disputes -- that assumption and certification orders are executory in character and are to be
strictly complied with by the parties, even during the pendency of any petition questioning
their validity. Regardless therefore of its motives, or of the validity of its claims, YSS
Laboratories must readmit all striking employees and give them back their respective
jobs. Accepting back the workers in this case is not a matter of option, but of obligation
mandated by law for YSS Laboratories to faithfully comply with. Its compulsory character is
mandated, not to cater to a narrow segment of society, or to favor labor at the expense of
management, but to serve the greater interest of society by maintaining the economic
equilibrium.

Instructive is the ruling of this Court in Philippine Airlines Employees Association v.


Philippine Airlines, Inc.[26]:
The very nature of a return-to-work order issued in a certified case lends itself to
no other construction. The certification attests to the urgency of the matter,
affecting as it does an industry indispensable to the national interest. The order
is issued in the exercise of the courts compulsory power of arbitration, and
therefore must be obeyed until set aside. x x x.

Certainly, the determination of who among the strikers could be admitted back to work
cannot be made to depend upon the discretion of employer, lest we strip the certification or
assumption-of-jurisdiction orders of the coercive power that is necessary for attaining their
laudable objective. The return-to-work order does not interfere with the managements
prerogative, but merely regulates it when, in the exercise of such right, national interests will
be affected. The rights granted by the Constitution are not absolute.They are still subject to
control and limitation to ensure that they are not exercised arbitrarily. The interests of both
the employers and employees are intended to be protected and not one of them is given
undue preference.

WHEREFORE, premises considered, the instant Petition is GRANTED. The Decision


dated 26 November 2001 and Resolution dated 29 August 2002 of the Court of Appeals in CA-
G.R. SP No. 66095 are REVERSED and SET ASIDE. The Orders dated 11 May 2001 and 9 June
2001 of the Secretary of the Department of Labor and Employment in NCMB-NCR-NS-03-086-
01/08-AJ-0006-2001 are thereby REINSTATED. No costs.
Page 65

SO ORDERED.

CASE NO. 9

SPECIAL SECOND DIVISION

[G.R. No. 155109 : March 14, 2012]

C. ALCANTARA & SONS, INC., PETITIONER, VS. COURT OF APPEALS, LABOR ARBITER
ANTONIO M. VILLANUEVA, LABOR ARBITER ARTURO L. GAMOLO, SHERIFF OF NLRC
RAB-XI-DAVAO CITY, NAGKAHIUSANG MAMUMUO SA ALSONS-SPFL (NAMAAL-SPFL),
FELIXBERTO IRAG, JOSHUA BARREDO, ERNESTO CUARIO, EDGAR MONDAY, EDILBERTO
DEMETRIA, HERMINIO ROBILLO, ROMULO LUNGAY, MATROIL DELOS SANTOS, BONERME
MATURAN, RAUL CANTIGA, EDUARDO CAMPUSO, RUDY ANADON, GILBERTO
GABRONINO, BONIFACIO SALVADOR, CIRILO MINO, ROBERTO ABONADO, WARLITO
MONTE, PEDRO ESQUIERDO, ALFREDO TROPICO, DANILO MEJOS, HECTOR ESTUITA,
BARTOLOME CASTILLANES, EDUARDO CAPUYAN, SATURNINO CAGAS, ALEJANDRO
HARDER, EDUARDO LARENA, JAIME MONTEDERAMOS, ERMELANDO BASADRE,
REYNALDO LIMPAJAN, ELPIDIO LIBRANZA, TEDDY SUELO, JOSE AMOYLIN, TRANQUILINO
ORALLO, CARLOS BALDOS, MANOLITO SABELLANO, CARMELITO TOBIAS, PRIMITIVO
GARCIA, JUANITO ALDEPOLLA, LUDIVICO ABAD, WENCISLAO INGHUG, RICARDO ALTO,
EPIFANIO JARABAY, FELICIANO AMPER, ALEXANDER JUDILLA, ROBERTO ANDRADE,
ALFREDO LESULA, JULIO ANINO, BENITO MAGPUSAO, PEDRO AQUINO, EDDIE
MANSANADES, ROMEO ARANETA, ARGUILLAO MANTICA, CONSTANCIO ARNAIZ,
ERNESTO HOTOY, JUSTINO ASCANO, RICARDO MATURAN, EDILBERTO YAMBAO,
ANTONIO MELARGO, JESUS BERITAN, ARSENIO MELICOR, DIOSDADO BONGABONG,
LAURO MONTENEGRO, CARLITO BURILLO, LEO MORA, PABLO BUTIL, ARMANDO GUCILA,
JEREMIAH CAGARA, MARIO NAMOC, CARLITO CAL, GERWINO NATIVIDAD, ROLANDO
CAPUYAN, EDGARDO ORDIZ, LEONARDO CASURRA, PATROCINIO ORTEGA, FILEMON
CESAR, MARIO PATAN, ROMEO COMPRADO, JESUS PATOC, RAMON CONSTANTINO,
ALBERTO PIELAGO, SAMUEL DELA LLANA, NICASIO PLAZA, ROSALDO DAGONDON, TITO
GUADES, BONIFACIO DINAGUDOS, PROCOPIO RAMOS, JOSE EBORAN, ROSENDO SAJOL,
FRANCISCO EMPUERTO, PATRICIO SALOMON, NESTOR ENDAYA, MARIO SALVALEON,
ERNESTO ESTILO, BONIFACIO SIGUE, VICENTE FABROA, JAIME SUCUAHI, CELSO HUISO,
ALEX TAUTO-AN, SATURNINO YAGON, CLAUDIO TIROL, SULPECIO GAGNI, JOSE TOLERO,
FERVIE GALVEZ, ALFREDO TORALBA AND EDUARDO GENELSA, RESPONDENTS.

[G.R. NO. 155135]

NAGKAHIUSANG MAMUMUO SA ALSONS-SPFL (NAMAAL-SPFL), FELIXBERTO IRAG,


JOSHUA BARREDO, ERNESTO CUARIO, EDGAR MONDAY, EDILBERTO DEMETRIA,
HERMINIO ROBILLO, ROMULO LUNGAY, MATROIL DELOS SANTOS, BONERME MATURAN,
RAUL CANTIGA, EDUARDO CAMPUSO, RUDY ANADON, GILBERTO GABRONINO,
BONIFACIO SALVADOR, CIRILO MINO, ROBERTO ABONADO, WARLITO MONTE, PEDRO
ESQUIERDO, ALFREDO TROPICO, DANILO MEJOS, HECTOR ESTUITA, BARTOLOME
CASTILLANES, EDUARDO CAPUYAN, SATURNINO CAGAS, ALEJANDRO HARDER,
EDUARDO LARENA, JAIME MONTEDERAMOS, ERMELANDO BASADRE, REYNALDO
LIMPAJAN, ELPIDIO LIBRANZA, TEDDY SUELO, JOSE AMOYLIN, TRANQUILINO ORALLO,
CARLOS BALDOS, MANOLITO SABELLANO, CARMELITO TOBIAS, PRIMITIVO GARCIA,
JUANITO ALDEPOLLA, LUDIVICO ABAD, WENCISLAO INGHUG, RICARDO ALTO, EPIFANIO
JARABAY, FELICIANO AMPER, ALEXANDER JUDILLA, ROBERTO ANDRADE, ALFREDO
LESULA, JULIO ANINO, BENITO MAGPUSAO, PEDRO AQUINO, EDDIE MANSANADES,
Page 66

ROMEO ARANETA, ARGUILLAO MANTICA, CONSTANCIO ARNAIZ, ERNESTO HOTOY,


JUSTINO ASCANO, RICARDO MATURAN, EDILBERTO YAMBAO, ANTONIO MELARGO,
JESUS BERITAN, ARSENIO MELICOR, DIOSDADO BONGABONG, LAURO MONTENEGRO,
CARLITO BURILLO, LEO MORA, PABLO BUTIL, ARMANDO GUCILA, JEREMIAH CAGARA,
MARIO NAMOC, CARLITO CAL, GERWINO NATIVIDAD, ROLANDO CAPUYAN, JUANITO
NISNISAN, AURELIO CARIN, PRIMO OPLIMO, ANGELITO CASTANEDA, EDGARDO ORDIZ,
LEONARDO CASURRA, PATROCINIO ORTEGA, FILEMON CESAR, MARIO PATAN, ROMEO
COMPRADO, JESUS PATOC, RAMON CONSTANTINO, MANUEL PIAPE, ROY CONSTANTINO,
ALBERTO PIELAGO, SAMUEL DELA LLANA, NICASIO PLAZA, ROSALDO DAGONDON, TITO
GUADES, BONIFACIO DINAGUDOS, PROCOPIO RAMOS, JOSE EBORAN, ROSENDO SAJOL,
FRANCISCO EMPUERTO, PATRICIO SALOMON, NESTOR ENDAYA, MARIO SALVALEON,
ERNESTO ESTILO, BONIFACIO SIGUE, VICENTE FABROA, JAIME SUCUAHI, CELSO HUISO,
ALEX TAUTO-AN, SATURNINO YAGON, CLAUDIO TIROL, SULPECIO GAGNI, JOSE TOLERO,
FERVIE GALVEZ, ALFREDO TORALBA AND EDUARDO GENELSA, PETITIONERS, VS. C.
ALCANTARA & SONS, INC., EDITHA I. ALCANTARA, ATTY. NELIA A. CLAUDIO, CORNELIO E.
CAGUIAT, JESUS S. DELA CRUZ, ROLANDO Z. ANDRES AND JOSE MA. MANUEL YRASUEGUI,
RESPONDENTS.

[G.R. NO. 179220]

NAGKAHIUSANG MAMUMUO SA ALSONS-SPFL (NAMAAL-SPFL), AND ITS MEMBERS


WHOSE NAMES ARE LISTED BELOW, PETITIONERS, VS. C. ALCANTARA & SONS, INC.,
RESPONDENT.

RESOLUTION

PERALTA, J.:

For resolution are the (1) Motion for Partial Reconsideration[1] filed by C. Alcantara & Sons, Inc.
(CASI) and (2) Motion for Reconsideration[2] filed by Nagkahiusang Mamumuo sa Alsons-SPFL
(the Union) and the Union officers[3] and their striking members[4] of the Court’s
Decision[5] dated September 29, 2010. In a Resolution[6] dated December 13, 2010, the parties
were required to submit their respective Comments. After several motions for extension, the
parties submitted the required comments. Hence, this resolution.cralaw

For a proper perspective, we state briefly the facts of the case.

The negotiation between CASI and the Union on the economic provisions of the Collective
Bargaining Agreement (CBA) ended in a deadlock prompting the Union to stage a strike, [7] but
the strike was later declared by the Labor Arbiter (LA) to be illegal having been staged in
violation of the CBA’s no strike-no lockout provision.[8] Consequently, the Union officers were
deemed to have forfeited their employment with the company and made them liable for actual
damages plus interest and attorney’s fees, while the Union members were ordered to be
reinstated without backwages there being no proof that they actually committed illegal acts
during the strike.[9]

Notwithstanding the provision of the Labor Code mandating that the reinstatement aspect of
the decision be immediately executory, the LA refused to reinstate the dismissed Union
members. On November 8, 1999, the NLRC affirmed the LA decision insofar as it declared the
strike illegal and ordered the Union officers dismissed from employment and liable for
damages but modified the same by considering the Union members to have been validly
dismissed from employment for committing prohibited and illegal acts.[10]

On petition for certiorari, the Court of Appeals (CA) annulled the NLRC decision and reinstated
that of the LA. Aggrieved, CASI, the Union and the Union officers and members elevated the
matter to this Court. The cases were docketed as G.R. Nos. 155109 and 155135. [11]
Page 67

During the pendency of the cases, the affected Union members (who were ordered reinstated)
filed with the LA a motion for reinstatement pending appeal and the computation of their
backwages. Instead of reinstating the Union members, the LA awarded separation pay and
other benefits.[12] On appeal, the NLRC denied the Union members’ claim for separation pay,
accrued wages and other benefits.[13] When elevated to the CA, the appellate court held that
reinstatement pending appeal applies only to illegal dismissal cases under Article 223 of the
Labor Code and not to cases under Article 263.[14] Hence, the petition by the Union and its
officers and members in G.R. No. 179220.

G.R. Nos. 155109, 155135, and 179220 were consolidated. On September 29, 2010, the Court
rendered a decision the dispositive portion of which reads:

WHEREFORE, the Court DENIES the petition of the Nagkahiusang Mamumuo sa Alsons-SPFL
and its officers and members in G.R. No. 155135 for lack of merit, and REVERSESand SETS
ASIDE the decision of the Court of Appeals in CA-G.R. SP 59604 dated March 20, 2002. The
Court, on the other hand, GRANTS the petition of C. Alcantara & Sons, Inc. in G.R. 155109
and REINSTATES the decision of the National Labor Relations Commission in NLRC CA M-
004996-99 dated November 8, 1999.

Further, the Court PARTIALLY GRANTS the petition of the Nagkahiusang Mamumuo sa
Alsons-SPFL and their dismissed members in G.R. No. 179220 and ORDERS C. Alcantara &
Sons, Inc. to pay the terminated Union members backwages for four (4) months and nine (9)
days and separation pays equivalent to one-half month salary for every year of service to the
company up to the date of their termination, with interest of 12% per annum from the time
this decision becomes final and executory until such backwages and separation pays are paid.
The Court DENIES all other claims.

SO ORDERED.[15]

The Court agreed with the CA on the illegality of the strike as well as the termination of the
Union officers, but disagreed with the CA insofar as it affirmed the reinstatement of the Union
members. The Court, instead, sustained the dismissal not only of the Union officers but also the
Union members who, during the illegal strike, committed prohibited acts by threatening,
coercing, and intimidating non-striking employees, officers, suppliers and customers;
obstructing the free ingress to and egress from the company premises; and resisting and
defying the implementation of the writ of preliminary injunction issued against the strikers. [16]
The Court
further held that the terminated Union members, who were ordered reinstated by the LA,
should have been immediately reinstated due to the immediate executory nature of the
reinstatement aspect of the LA decision. In view, however, of CASI’s failure to reinstate the
dismissed employees, the Court ordered CASI to pay the terminated Union members their
accrued backwages from the date of the LA decision until the eventual reversal by the NLRC of
the order of reinstatement.[17] In addition to the accrued backwages, the Court awarded
separation pay as a form of financial assistance to the Union members equivalent to one-half
month salary for every year of service to the company up to the date of their termination.[18]

Not satisfied, CASI filed a Motion for Partial Reconsideration of the above decision based on the
following grounds:

I.

IT IS RESPECTFULLY SUBMITTED THAT A PRECEDENT SETTING RULING OF THIS


HONORABLE COURT IN ESCARIO V. NLRC [G.R. No. 160302, 27 SEPTEMBER 2010] –
PARTICULARLY ON THE PROPER APPLICATION OF ARTICLES 264 AND 279 OF THE LABOR
CODE – SUPPORTS THE AFFIRMATION AND NOT THE REVERSAL OF THE FINDINGS OF THE
Page 68

COURT OF APPEALS [“CA”], AND NEGATES THE ENTITLEMENT TO ACCRUED WAGES OF THE
UNION MEMBERS WHO COMMITTED ILLEGAL ACTS DURING THE ILLEGAL STRIKE,
NOTWITHSTANDING THAT THE LABOR ARBITER AWARDED THE SAME.

II.

IT IS RESPECTFULY SUBMITTED THAT THIS HONORABLE COURT ERRED WHEN IT


RESOLVED TO GRANT SEPARATION PAY TO THE UNION MEMBERS WHO COMMITTED
ILLEGAL ACTS DURING THE ILLEGAL STRIKE CONSIDERING THAT JURISPRUDENCE CITED
TO JUSTIFY THE GRANT OF SEPARATION PAY DO NOT APPLY TO THE PRESENT CASE AS IT
APPLIES ONLY TO DISMISSALS FOR A JUST CAUSE.[19]

The Union, its officers and members likewise filed their separate motion for reconsideration
assailing the Court’s conclusions that: (1) the strike is illegal; (2) that the officers of the Union
and its appointed shop stewards automatically forfeited their employment status when they
participated in the strike; (3) that the Union members committed illegal acts during the strike
and are deemed to have lost their employment status; and (4) that CASI is entitled to actual
damages and attorney’s fees.[20] They also fault the Court in not finding that: (1) CASI and its
officers are guilty of acts of unfair labor practice or violation of Article 248 of the Labor Code;
(2) the lockout declared by the company is illegal; (3) CASI and its officers committed acts of
discrimination; (4) CASI and its officers violated Article 254 of the Labor Code; and (5) CASI
and its officers are liable for actual, moral, and exemplary damages to the Union, its officers
and members.[21]

Simply stated, CASI only questions the propriety of the award of backwages and separation
pay, while the Union, its officers and members seek the reversal of the Court’s conclusions on
the illegality of the strike, the validity of the termination of the Union officers and members,
and the award of actual damages and attorney’s fees as well as the denial of their
counterclaims against CASI.

After a careful review of the records of the case, we find it necessary to reconsider the Court’s
September 29, 2010 decision, but only as to the award of separation pay.

The LA, the NLRC, the CA and the Court are one in saying that the strike staged by the Union,
participated in by the Union officers and members, is illegal being in violation of the no strike-
no lockout provision of the CBA which enjoined both the Union and the company from
resorting to the use of economic weapons available to them under the law and to instead take
recourse to voluntary arbitration in settling their disputes. [22] We, therefore, find no reason to
depart from such conclusion.

Article 264 (a) of the Labor Code lays down the liabilities of the Union officers and members
participating in illegal strikes and/or committing illegal acts, to wit:

ART. 264. PROHIBITED ACTIVITIES

(a) x x x

Any worker whose employment has been terminated as a consequence of an unlawful lockout
shall be entitled to reinstatement with full backwages. Any Union officer who knowingly
participates in an illegal strike and any worker or Union officer who knowingly participates in
the commission of illegal acts during a strike may be declared to have lost his employment
status: Provided, That mere participation of a worker in a lawful strike shall not constitute
sufficient ground for termination of his employment, even if a replacement had been hired by
the employer during such lawful strike.

Thus, the above-quoted provision sanctions the dismissal of a Union officer who knowingly
Page 69

participates in an illegal strike or who knowingly participates in the commission of illegal acts
during a lawful strike.[23] In this case, the Union officers were in clear breach of the above
provision of law when they knowingly participated in the illegal strike. [24]

As to the Union members, the same provision of law provides that a member is liable when he
knowingly participates in the commission of illegal acts during a strike. We find no reason to
reverse the conclusion of the Court that CASI presented substantial evidence to show that the
striking Union members committed the following prohibited acts:

a. They threatened, coerced, and intimidated non-striking employees, officers, suppliers


and customers;

b. They obstructed the free ingress to and egress from the company premises; and

c. They resisted and defied the implementation of the writ of preliminary injunction
issued against the strikers.[25]

The commission of the above prohibited acts by the striking Union members warrants their
dismissal from employment.

As clearly narrated earlier, the LA found the strike illegal and sustained the dismissal of the
Union officers, but ordered the reinstatement of the striking Union members for lack of
evidence showing that they committed illegal acts during the illegal strike. This decision,
however, was later reversed by the NLRC. Pursuant to Article 223[26] of the Labor Code and
well-established jurisprudence,[27] the decision of the LA reinstating a dismissed or separated
employee, insofar as the reinstatement aspect is concerned, shall immediately be executory,
pending appeal.[28] 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 employee,
merely reinstated in the payroll.[29] It is obligatory on the part of the employer to reinstate and
pay the wages of the dismissed employee during the period of appeal until reversal by the
higher court.[30] If the employer fails to exercise the option of re-admitting the employee to
work or to reinstate him in the payroll, the employer must pay the employee’s salaries during
the period between the LA’s order of reinstatement pending appeal and the resolution of the
higher court overturning that of the LA.[31] In this case, CASI is liable to pay the striking Union
members their accrued wages for four months and nine days, which is the period from the
notice of the LA’s order of reinstatement until the reversal thereof by the NLRC. [32]

Citing Escario v. National Labor Relations Commission (Third Division),[33] CASI claims that the
award of the four-month accrued salaries to the Union members is not sanctioned by
jurisprudence. In Escario, the Court categorically stated that the strikers were not entitled to
their wages during the period of the strike (even if the strike might be legal), because they
performed no work during the strike. The Court further held that it was neither fair nor just
that the dismissed employees should litigate against their employer on the latter’s time. [34] In
this case, however, the four-month accrued salaries awarded to the Union members are not the
backwages referred to in Escario. To be sure, the awards were not given as their salaries
during the period of the strike. Rather, they constitute the employer’s liability to the
employees for its failure to exercise the option of actual reinstatement or payroll
reinstatement following the LA’s decision to reinstate the Union members as mandated by
Article 223 of the Labor Code adequately discussed earlier. In other words, such monetary
award refers to the Union members’ accrued salaries by reason of the reinstatement order of
the LA which is self-executory pursuant to Article 223.[35] We, therefore, sustain the award of
the four-month accrued salaries.

Finally, as regards the separation pay as a form of financial assistance awarded by the Court,
we find it necessary to reconsider the same and delete the award pursuant to prevailing
Page 70

jurisprudence.

Separation pay may be given as a form of financial assistance when a worker is dismissed in
cases such as the installation of labor-saving devices, redundancy, retrenchment to prevent
losses, closing or cessation of operation of the establishment, or in case the employee was
found to have been suffering from a disease such that his continued employment is prohibited
by law.[36] It is a statutory right defined as the amount that an employee receives at the time of
his severance from the service and is designed to provide the employee with the wherewithal
during the period that he is looking for another employment.[37] It is oriented towards the
immediate future, the transitional period the dismissed employee must undergo before
locating a replacement job.[38] As a general rule, when just causes for terminating the services
of an employee exist, the employee is not entitled to separation pay because lawbreakers
should not benefit from their illegal acts.[39] The rule, however, is subject to exceptions.[40] The
Court, in Philippine Long Distance Telephone Co. v. NLRC,[41] laid down the guidelines when
separation pay in the form of financial assistance may be allowed, to wit:

We hold that henceforth separation pay shall be allowed as a measure of social justice only in
those instances where the employee is validly dismissed for causes other than serious
misconduct or those reflecting on his moral character. Where the reason for the valid dismissal
is, for example, habitual intoxication or an offense involving moral turpitude, like theft or illicit
sexual relations with a fellow worker, the employer may not be required to give the dismissed
employee separation pay, or financial assistance, or whatever other name it is called, on the
ground of social justice.

A contrary rule would, as the petitioner correctly argues, have the effect, of rewarding rather
than punishing the erring employee for his offense. And we do not agree that the punishment
is his dismissal only and that the separation pay has nothing to do with the wrong he has
committed x x x.[42]

We had the occasion to resolve the same issue in Toyota Motor Phils. Corp. Workers Association
(TMPCWA) v. National Labor Relations Commission.[43] Following the declaration that the strike
staged by the Union members is illegal, the Union officers and members were considered
validly dismissed from employment for committing illegal acts during the illegal strike. The
Court affirmed the CA’s conclusion that the commission of illegal acts during the illegal strike
constituted serious misconduct.[44] Hence, the award of separation pay to the Union officials
and members was not sustained.[45]

Indeed, we applied social justice and equity considerations in several cases to justify the award
of financial assistance. In Piñero v. National Labor Relations Commission,[46] the Court declared
the strike to be illegal for failure to comply with the procedural requirements. We, likewise,
sustained the dismissal of the Union president for participating in said illegal strike.
Considering, however, that his infraction is not so reprehensible and unscrupulous as to
warrant complete disregard of his long years of service, and considering further that he has no
previous derogatory records, we granted financial assistance to support him in the twilight of
his life after long years of service.[47] The same compassion was also applied in Aparente, Sr. v.
NLRC[48] where the employee was declared to have been validly terminated from service after
having been found guilty of driving without a valid driver’s license, which is a clear violation of
the company’s rules and regulations.[49] We, likewise, awarded financial assistance
in Salavarria v. Letran College[50] to the legally dismissed teacher for violation of school policy
because such infraction neither amounted to serious misconduct nor reflected that of a morally
depraved person.

However, in a number of cases cited in Toyota Motor Phils. Corp. Workers Association
(TMPCWA) v. National Labor Relations Commission,[51] we refrained from awarding separation
pay or financial assistance to Union officers and members who were separated from service
due to their participation in or commission of illegal acts during the strike.[52] In Pilipino
Page 71

Telephone Corporation v. Pilipino Telephone Employees Association (PILTEA),[53] the strike was
found to be illegal because of procedural infirmities and for defiance of the Secretary of Labor’s
assumption order. Hence, we upheld the Union officers’ dismissal without granting financial
assistance. In Sukhotai Cuisine and Restaurant v. Court of Appeals,[54] and Manila Diamond Hotel
and Resort, Inc. (Manila Diamond Hotel) v. Manila Diamond Hotel Employees Union,[55] the Union
officers and members who participated in and committed illegal acts during the illegal strike
were deemed to have lost their employment status and were not awarded financial assistance.

In Telefunken Semiconductors Employees Union v. Court of Appeals,[56] the Court held that the
strikers’ open and willful defiance of the assumption order of the Secretary of Labor constitute
serious misconduct and reflective of their moral character, hence, granting of financial
assistance to them cannot be justified. In Chua v. National Labor Relations Commission,[57] we
disallowed the award of financial assistance to the dismissed employees for their participation
in the unlawful and violent strike which resulted in multiple deaths and extensive property
damage because it constitutes serious misconduct on their part.

Here, not only did the Court declare the strike illegal, rather, it also found the Union officers to
have knowingly participated in the illegal strike. Worse, the Union members committed
prohibited acts during the strike. Thus, as we concluded in Toyota, Telefunken, Chua and the
other cases cited above, we delete the award of separation pay as a form of financial
assistance.cralaw

WHEREFORE, premises considered, the motion for reconsideration of the Union, its officers
and members are DENIED for lack of merit, while the motion for partial reconsideration filed
by C. Alcantara & Sons, Inc. is PARTLY GRANTED. The Decision of the Court dated September
29, 2010 is hereby PARTLY RECONSIDERED by deleting the award of separation pay.

SO ORDERED.

CASE NO. 10

Republic of the Philippines


Supreme Court
Manila

THIRD DIVISION

PHIMCO INDUSTRIES, INC., G.R. No. 170830


Petitioner,
Present:
- versus -
CARPIO MORALES, J., Chairperson
PHIMCO INDUSTRIES LABOR BRION,
ASSOCIATION (PILA), and BERSAMIN,
ERLINDA VAZQUEZ, RICARDO ABAD, and
SACRISTAN, LEONIDA CATALAN, VILLARAMA, JR., JJ.
MAXIMO PEDRO, NATHANIELA
DIMACULANGAN,* RODOLFO
MOJICO, ROMEO CARAMANZA, Promulgated:
REYNALDO GANITANO, ALBERTO
BASCONCILLO,** and RAMON August 11, 2010
FALCIS, in their capacity as officers
of PILA, and ANGELITA BALOSA,***
DANILO BANAAG, ABRAHAM
Page 72

CADAY, ALFONSO CLAUDIO,


FRANCISCO DALISAY,****
ANGELITO DEJAN,***** PHILIP
GARCES, NICANOR ILAGAN,
FLORENCIO LIBONGCOGON,******
NEMESIO MAMONONG, TEOFILO
MANALILI, ALFREDO PEARSON,*******
MARIO PEREA,******** RENATO
RAMOS, MARIANO ROSALES,
PABLO SARMIENTO, RODOLFO
TOLENTINO, FELIPE VILLAREAL,
ARSENIO ZAMORA, DANILO
BALTAZAR, ROGER CABER,*********
REYNALDO CAMARIN, BERNARDO
CUADRA,********** ANGELITO DE
GUZMAN, GERARDO FELICIANO,***********
ALEX IBAEZ, BENJAMIN JUAN, SR.,
RAMON MACAALAY, GONZALO
MANALILI, RAUL MICIANO,
HILARIO PEA, TERESA
PERMOCILLO,************ ERNESTO RIO,
RODOLFO SANIDAD, RAFAEL
STA. ANA, JULIAN TUGUIN and AMELIA
ZAMORA, as members of PILA,
Respondents.
x-----------------------------------------------------------------------------------------x

DECISION

BRION, J.:

Before us is the petition for review on certiorari[1] filed by petitioner Phimco Industries,
Inc. (PHIMCO), seeking to reverse and set aside the decision,[2] dated February 10, 2004, and
the resolution,[3] dated December 12, 2005, of the Court of Appeals (CA) in CA-G.R. SP No.
70336. The assailed CA decision dismissed PHIMCOs petition for certiorari that challenged the
resolution, dated December 29, 1998, and the decision, dated February 20, 2002, of the
National Labor Relations Commission (NLRC); the assailed CA resolution denied PHIMCOs
subsequent motion for reconsideration.

FACTUAL BACKGROUND

The facts of the case, gathered from the records, are briefly summarized below.

PHIMCO is a corporation engaged in the production of matches, with principal address


at Phimco Compound, Felix Manalo St., Sta. Ana, Manila. Respondent Phimco Industries Labor
Association (PILA) is the duly authorized bargaining representative of PHIMCOs daily-paid
workers. The 47 individually named respondents are PILA officers and members.
Page 73

When the last collective bargaining agreement was about to expire on December 31,
1994, PHIMCO and PILA negotiated for its renewal. The negotiation resulted in a deadlock on
economic issues, mainly due to disagreements on salary increases and benefits.

On March 9, 1995, PILA filed with the National Conciliation and Mediation Board
(NCMB) a Notice of Strike on the ground of the bargaining deadlock. Seven (7) days later, or on
March 16, 1995, the union conducted a strike vote; a majority of the union members voted for
a strike as its response to the bargaining impasse. On March 17, 1995, PILA filed the strike vote
results with the NCMB. Thirty-five (35) days later, or on April 21, 1995, PILA staged a strike.

On May 3, 1995, PHIMCO filed with the NLRC a petition for preliminary injunction and
temporary restraining order (TRO), to enjoin the strikers from preventing through force,
intimidation and coercion the ingress and egress of non-striking employees into and from the
company premises. On May 15, 1995, the NLRC issued an ex-parte TRO, effective for a period of
twenty (20) days, or until June 5, 1995.

On June 23, 1995, PHIMCO sent a letter to thirty-six (36) union members, directing
them to explain within twenty-four (24) hours why they should not be dismissed for the illegal
acts they committed during the strike. Three days later, or on June 26, 1995, the thirty-six (36)
union members were informed of their dismissal.

On July 6, 1995, PILA filed a complaint for unfair labor practice and illegal dismissal
(illegal dismissal case) with the NLRC. The case was docketed as NLRC NCR Case No. 00-07-
04705-95, and raffled to Labor Arbiter (LA) Pablo C. Espiritu, Jr.

On July 7, 1995, then Acting Labor Secretary Jose S. Brillantes assumed jurisdiction over
the labor dispute, and ordered all the striking employees (except those who were handed
termination papers on June 26, 1995) to return to work within twenty-four (24) hours from
receipt of the order. The Secretary ordered PHIMCO to accept the striking employees, under
the same terms and conditions prevailing prior to the strike.[4] On the same day, PILA ended its
strike.

On August 28, 1995, PHIMCO filed a Petition to Declare the Strike Illegal (illegal strike
case) with the NLRC, with a prayer for the dismissal of PILA officers and members who
knowingly participated in the illegal strike. PHIMCO claimed that the strikers prevented
ingress to and egress from the PHIMCO compound, thereby paralyzing PHIMCOs operations.
Page 74

The case was docketed as NLRC NCR Case No. 00-08-06031-95, and raffled to LA Jovencio Ll.
Mayor.

On March 14, 1996, the respondents filed their Position Paper in the illegal strike case.
They countered that they complied with all the legal requirements for the staging of the strike,
they put up no barricade, and conducted their strike peacefully, in an orderly and lawful
manner, without incident.

LA Mayor decided the case on February 4, 1998,[5] and found the strike illegal; the
respondents committed prohibited acts during the strike by blocking the ingress to and egress
from PHIMCOs premises and preventing the non-striking employees from reporting for work.
He observed that it was not enough that the picket of the strikers was a moving picket, since
the strikers should allow the free passage to the entrance and exit points of the company
premises. Thus, LA Mayor declared that the respondent employees, PILA officers and
members, have lost their employment status.

On March 5, 1998, PILA and its officers and members appealed LA Mayors decision to
the NLRC.

THE NLRC RULING

The NLRC decided the appeal on December 29, 1998, and set aside LA Mayors
decision.[6] The NLRC did not give weight to PHIMCOs evidence, and relied instead on the
respondents evidence showing that the union conducted a peaceful moving picket.

On January 28, 1999, PHIMCO filed a motion for reconsideration in the illegal strike
case.[7]

In a parallel development, LA Espiritu decided the unions illegal dismissal case on


March 2, 1999. He ruled the respondents dismissal as illegal, and ordered their reinstatement
with payment of backwages. PHIMCO appealed LA Espiritus decision to the NLRC.

Pending the resolution of PHIMCOs motion for reconsideration in the illegal strike case
and the appeal of the illegal dismissal case, PHIMCO moved for the consolidation of the two (2)
cases. The NLRC acted favorably on the motion and consolidated the two (2) cases in its Order
dated August 5, 1999.
Page 75

On February 20, 2002, the NLRC rendered its Decision in the consolidated cases, ruling
totally in the unions favor.[8] It dismissed the appeal of the illegal dismissal case, and denied
PHIMCOs motion for reconsideration in the illegal strike case. The NLRC found that the picket
conducted by the striking employees was not an illegal blockade and did not obstruct the
points of entry to and exit from the companys premises; the pictures submitted by the
respondents revealed that the picket was moving, not stationary. With respect to the illegal
dismissal charge, the NLRC observed that the striking employees were not given ample
opportunity to explain their side after receipt of the June 23, 1995 letter. Thus, the NLRC
affirmed the Decision of LA Espiritu with respect to the payment of backwages until the
promulgation of the decision, plus separation pay at one (1) month salary per year of service in
lieu of reinstatement, and 10% of the monetary award as attorneys fees. It ruled out
reinstatement because of the damages sustained by the company brought about by the strike.

On March 14, 2002, PHIMCO filed a motion for reconsideration of the consolidated
decision.

On April 26, 2002, without waiting for the result of its motion for reconsideration,
PHIMCO elevated its case to the CA through a petition for certiorari under Rule 65 of the Rules
of Court.[9]

THE CA RULING

In a Decision[10] promulgated on February 10, 2004, the CA dismissed PHIMCOs petition


for certiorari. The CA noted that the NLRC findings, that the picket was peaceful and that
PHIMCOs evidence failed to show that the picket constituted an illegal blockade or that it
obstructed the points of entry to and exit from the company premises, were supported by
substantial evidence.

PHIMCO came to us through the present petition after the CA denied[11] PHIMCOs
motion for reconsideration.[12]

THE PETITION

The petitioner argues that the strike was illegal because the respondents committed the
prohibited acts under Article 264(e) of the Labor Code, such as blocking the ingress and egress
of the company premises, threat, coercion, and intimidation, as established by the evidence on
record.
Page 76

THE CASE FOR THE RESPONDENTS

The respondents, on the other hand, submit that the issues raised in this case are
factual in nature that we cannot generally touch in a petition for review, unless compelling
reasons exist; the company has not shown any such compelling reason as the picket was
peaceful and uneventful, and no human barricade blocked the company premises.

THE ISSUE

In Montoya v. Transmed Manila Corporation,[13] we laid down the basic approach that should be
followed in the review of CA decisions in labor cases, thus:
In a Rule 45 review, we consider the correctness of the assailed CA decision, in
contrast with the review for jurisdictional error that we undertake under Rule
65. Furthermore, Rule 45 limits us to the review of questions of law raised
against the assailed CA decision. In ruling for legal correctness, we have to view
the CA decision in the same context that the petition for certiorari it ruled upon
was presented to it; we have to examine the CA decision from the prism of
whether it correctly determined the presence or absence of grave abuse of
discretion in the NLRC decision before it, not on the basis of whether the NLRC
decision on the merits of the case was correct. In other words, we have to be
keenly aware that the CA undertook a Rule 65 review, not a review on appeal, of
the NLRC decision challenged before it. This is the approach that should be basic
in a Rule 45 review of a CA ruling in a labor case. In question form, the question
to ask is: Did the CA correctly determine whether the NLRC committed grave
abuse of discretion in ruling on the case?

In this light, the core issue in the present case is whether the CA correctly ruled that the
NLRC did not act with grave abuse of discretion in ruling that the unions strike was legal.

OUR RULING

We find the petition partly meritorious.

Requisites of a valid strike

A strike is the most powerful weapon of workers in their struggle with management in
the course of setting their terms and conditions of employment. Because it is premised on the
concept of economic war between labor and management, it is a weapon that can either
breathe life to or destroy the union and its members, and one that must also necessarily affect
management and its members.[14]
Page 77

In light of these effects, the decision to declare a strike must be exercised responsibly
and must always rest on rational basis, free from emotionalism, and unswayed by the tempers
and tantrums of hot heads; it must focus on legitimate union interests. To be legitimate, a
strike should not be antithetical to public welfare, and must be pursued within legal bounds.
The right to strike as a means of attaining social justice is never meant to oppress or destroy
anyone, least of all, the employer.[15]
Since strikes affect not only the relationship between labor and management but also
the general peace and progress of the community, the law has provided limitations on the
right to strike. Procedurally, for a strike to be valid, it must comply with Article 263[16] 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.

These requirements are mandatory, and the unions failure to comply renders the strike
illegal.[17] 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.[18]
In the present case, the respondents fully satisfied the legal procedural requirements; a
strike notice was filed on March 9, 1995; a strike vote was reached on March 16, 1995;
notification of the strike vote was filed with the DOLE on March 17, 1995; and the actual strike
was launched only on April 25, 1995.

Strike may be illegal for commission of


prohibited acts

Despite the validity of the purpose of a strike and compliance with the procedural
requirements, a strike may still be held illegal where the means employed are illegal.[19]The
means become illegal when they come within the prohibitions under Article 264(e) of the
Labor Code which provides:

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.
Page 78

Based on our examination of the evidence which the LA viewed differently from
the NLRC and the CA, we find the PILA strike illegal. We intervene and rule even on the
evidentiary and factual issues of this case as both the NLRC and the CA grossly misread the
evidence, leading them to inordinately incorrect conclusions, both factual and legal. While the
strike undisputably had not been marred by actual violence and patent intimidation, the
picketing that respondent PILA officers and members undertook as part of their strike
activities effectively blocked the free ingress to and egress from PHIMCOs premises, thus
preventing non-striking employees and company vehicles from entering the PHIMCO
compound. In this manner, the picketers violated Article 264(e) of the Labor Code.

The Evidence

We gather from the case record the following pieces of relevant evidence adduced in the
compulsory arbitration proceedings.[20]

For the Company

1. Pictures taken during the strike, showing that the respondents


prevented free ingress to and egress from the company premises;[21]
2. Affidavit of PHIMCO Human Resources Manager Francis Ferdinand Cinco,
stating that he was one of the employees prevented by the strikers from entering the PHIMCO
premises;[22]
3. Affidavit of Cinco, identifying Erlinda Vazquez, Ricardo Sacristan,
Leonida Catalan, Maximo Pedro, Nathaniela R. Dimaculangan, Rodolfo Mojico, Romeo
Caramanza, Reynaldo Ganitano, Alberto Basconcillo, and Ramon Falcis as PILA officers;[23]
4. Affidavit of Cinco identifying other members of PILA;[24]
5. Folder 1, containing pictures taken during the strike identifying and showing
Leonida Catalan, Renato Ramos, Arsenio Zamora, Reynaldo Ganitano, Amelia Zamora, Angelito
Dejan, Teresa Permocillo, and Francisco Dalisay as the persons preventing Cinco and his group
from entering the company premises;[25]
6. Folder 2, with pictures taken on May 30, 1995, showing Cinco, together with
non-striking PHIMCO employees, reporting for work but being refused entry by strikers
Teofilo Manalili, Nathaniela Dimaculangan, Bernando Cuadra, Maximo Pedro, Nicanor Ilagan,
Julian Tuguin, Nemesio Mamonong, Abraham Caday, Ernesto Rio, Benjamin Juan, Sr., Ramon
Macaalay, Gerardo Feliciano, Alberto Basconcillo, Rodolfo Sanidad, Mariano Rosales, Roger
Caber, Angelito de Guzman, Angelito Balosa and Philip Garces who blocked the company
gate;[26]
Page 79

7. Folder 3, with pictures taken on May 30, 1995, showing the respondents
denying free ingress to and egress from the company premises;[27]
8. Folder 4, with pictures taken during the strike, showing that non-striking
employees failed to enter the company premises as a result of the respondents refusal to let
them in;[28]
9. Affidavit of Joaquin Aguilar stating that the pictures presented by Cinco were
taken during the strike;[29]
10. Pictures taken by Aguilar during the strike, showing non-striking employees
being refused entry by the respondents;[30]
11. Joint affidavit of Orlando Marfil and Rodolfo Digo, identifying the
pictures they took during the strike, showing that the respondents blocked ingress to and
egress from the company premises;[31] and,
12. Testimonies of PHIMCO employees Rodolfo Eva, Aguilar and Cinco, as well as
those of PILA officers Maximo Pedro and Leonida Catalan.

For the Respondents

1. Affidavit of Leonida Catalan, stating that the PILA strike complied with all the legal
requirements, and the strike/picket was conducted peacefully with no incident of any
illegality;[32]
2. Affidavit of Maximo Pedro, stating that the strike/picket was conducted
peacefully; the picket was always moving with no acts of illegality having been committed
during the strike;[33]
3. Certification of Police Station Commander Bienvenido de los Reyes that
during the strike there was no report of any untoward incident;[34]
4. Certification of Rev. Father Erick Adeviso of Dambanang Bayan Parish
Church that the strike was peaceful and without any untoward incident;[35]
5. Certification of Priest-In-Charge Angelito Fausto of the Philippine
Independent Church in Punta, Santa Ana, that the strike complied with all the requirements for
a lawful strike, and the strikers conducted themselves in a peaceful manner;[36]
6. Clearance issued by Punong Barangay Mario O. dela Rosa
and Barangay Secretary Pascual Gesmundo, Jr. that the strike from April 21 to July 7, 1995 was
conducted in an orderly manner with no complaints filed;[37] and,
7. Testimonies at the compulsory arbitration proceedings.

In its resolution of December 29, 1998,[38] the NLRC declared that the string of proofs
the company presented was overwhelmingly counterbalanced by the numerous pieces of
Page 80

evidence adduced by respondents x x x all depicting a common story that respondents put up a
peaceful moving picket, and did not commit any illegal acts x x xspecifically obstructing the
ingress to and egress from the company premises[.][39]

We disagree with this finding as the purported peaceful moving picket upon which
the NLRC resolution was anchored was not an innocuous picket, contrary to what the NLRC
said it was; 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.[40] 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.[41] 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[42] and the right to peaceably assemble to air grievances,[43]these rights
are by no means absolute. Protected picketing does not extend to blocking ingress to and
egress from the company premises.[44] 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.

In this regard, PHIMCO employees Rodolfo Eva and Joaquin Aguilar, and the companys
Human Resources Manager Francis Ferdinand Cinco testified during the compulsory
arbitration hearings:

ATTY. REYES: this incident on May 22, 1995, when a coaster or bus attempted to
enter PHIMCO compound, you mentioned that it was refused entry. Why
was this (sic) it refused entry?

WITNESS: Because at that time, there was a moving picket at the gate that is why
the bus was not able to enter.[45]

xxxx

Q: Despite this TRO, which was issued by the NLRC, were you allowed entry by
the strikers?
Page 81

A: We made several attempts to enter the compound, I remember on May 7,


1995, we tried to enter the PHIMCO compound but we were not allowed
entry.

Q: Aside from May 27, 1995, were there any other instances wherein you were
not allowed entry at PHIMCO compound?

A: On May 29, I recall I was riding with our Production Manager with the Pick-
up. We tried to enter but we were not allowed by the strikers.[46]

xxxx

ARBITER MAYOR: How did the strikers block the ingress of the company?

A: They hold around, joining hands, moving picket.[47]

xxxx

ARBITER MAYOR: Reform the question, and because of that moving picket
conducted by the strikers, no employees or vehicles can come in or go out
of the premises?

A: None, sir.[48]

These accounts were confirmed by the admissions of respondent PILA officers Maximo
Pedro and Leonida Catalan that the strikers prevented non-striking employees from entering
the company premises. According to these union officers:

ATTY. CHUA: Mr. witness, do you recall an incident when a group of managers of
PHIMCO, with several of the monthly paid employees who tried to enter
the PHIMCO compound during the strike?

MR. PEDRO: Yes, sir.

ATTY. CHUA: Can you tell us if these (sic) group of managers headed by Francis
Cinco entered the compound of PHIMCO on that day, when they tried to
enter?

MR. PEDRO: No, sir. They were not able to enter.[49]

xxxx

ATTY. CHUA: Despite having been escorted by police Delos Reyes, you still did
not give way, and instead proceeded with your moving picket?

MR. PEDRO: Yes, sir.

ATTY. CHUA: In short, these people were not able to enter the premises of
PHIMCO, Yes or No.

MR. PEDRO: Yes, sir. [50]

xxxx
Page 82

ATTY. CHUA: Madam witness, even if Major Delos Reyes instructed you to give
way so as to allow the employees and managers to enter the premises,
you and your co-employees did not give way?

MS. CATALAN: No sir.

ATTY. CHUA: the managers and the employees were not able to enter the
premises?

MS. CATALAN: Yes, sir.[51]

The NLRC resolution itself noted the above testimonial evidence, all building up a
scenario that the moving picket put up by [the] respondents obstructed the ingress to and
egress from the company premises[,][52] yet it ignored the clear import of the testimonies as to
the true nature of the picket. Contrary to the NLRC characterization that it was a peaceful
moving picket, it stood, in fact, as an obstruction to the companys points of ingress and egress.

Significantly, the testimonies adduced were validated by the photographs taken of the
strike area, capturing the strike in its various stages and showing how the strikers actually
conducted the picket. While the picket was moving, it was maintained so close to the company
gates that it virtually constituted an obstruction, especially when the strikers joined hands, as
described by Aguilar, or were moving in circles, hand-to-shoulder, as shown by the
photographs, that, for all intents and purposes, blocked the free ingress to and egress from the
company premises. In fact, on closer examination, it could be seen that the respondents were
conducting the picket right at the company gates.[53]

The obstructive nature of the picket was aggravated by the placement of benches, with
strikers standing on top, directly in front of the open wing of the company gates, clearly
obstructing the entry and exit points of the company compound.[54]

With a virtual human blockade and real physical obstructions (benches and makeshift
structures both outside and inside the gates),[55] it was pure conjecture on the part of the NLRC
to say that [t]he non-strikers and their vehicles were x x x free to get in and out of the company
compound undisturbed by the picket line.[56] Notably, aside from non-strikers who wished to
report for work, company vehicles likewise could not enter and get out of the factory because
of the picket and the physical obstructions the respondents installed. The blockade went to the
point of causing the build up of traffic in the immediate vicinity of the strike area, as shown by
photographs.[57] This, by itself, renders the picket a prohibited activity. Pickets may not
aggressively interfere with the right of peaceful ingress to and egress from the employers shop
or obstruct public thoroughfares; picketing is not peaceful where the sidewalk or entrance to a
Page 83

place of business is obstructed by picketers parading around in a circle or lying on the


sidewalk.[58]

What the records reveal belies the NLRC observation that the evidence x x x tends to
show that what respondents actually did was walking or patrolling to and fro within the
company vicinity and by word of mouth, banner or placard, informing the public concerning
the dispute.[59]

The peaceful moving picket that the NLRC noted, influenced apparently by the
certifications (Mayor delos Reyes, Fr. Adeviso, Fr. Fausto and Barangay Secretary Gesmundo
presented in evidence by the respondents, was peaceful only because of the absence of
violence during the strike, but the obstruction of the entry and exit points of the company
premises caused by the respondents picket was by no means a petty blocking act or an
insignificant obstructive act.[60]

As we have stated, while the picket was moving, the movement was in circles, very close
to the gates, with the strikers in a hand-to-shoulder formation without a break in their ranks,
thus preventing non-striking workers and vehicles from coming in and getting out. Supported
by actual blocking benches and obstructions, what the union demonstrated was a very
persuasive and quietly intimidating strategy whose chief aim was to paralyze the operations of
the company, not solely by the work stoppage of the participating workers, but by excluding
the company officials and non-striking employees from access to and exit from the company
premises. No doubt, the strike caused the company operations considerable damage, as the
NLRC itself recognized when it ruled out the reinstatement of the dismissed strikers.[61]

Intimidation

Article 264(e) of the Labor Code tells us that picketing carried on with violence, coercion or
intimidation is unlawful.[62] According to American jurisprudence, what constitutes unlawful
intimidation depends on the totality of the circumstances.[63] Force threatened is the
equivalent of force exercised. There may be unlawful intimidation without direct threats or
overt acts of violence. Words or acts which are calculated and intended to cause an ordinary
person to fear an injury to his person, business or property are equivalent to threats. [64]

The manner in which the respondent union officers and members conducted the picket in the
present case had created such an intimidating atmosphere that non-striking employees and
even company vehicles did not dare cross the picket line, even with police intervention. Those
Page 84

who dared cross the picket line were stopped. The compulsory arbitration hearings bear this
out.

Maximo Pedro, a PILA officer, testified, on July 30, 1997, that a group of PHIMCO
managers led by Cinco, together with several monthly-paid employees, tried to enter the
company premises on May 27, 1995 with police escort; even then, the picketers did not allow
them to enter.[65]Leonida Catalan, another union officer, testified that she and the other
picketers did not give way despite the instruction of Police Major de los Reyes to the picketers
to allow the group to enter the company premises.[66] (To be sure, police intervention and
participation are, as a rule, prohibited acts in a strike, but we note this intervention solely as
indicators of how far the union and its members have gone to block ingress to and egress from
the company premises.)

Further, PHIMCO employee Rodolfo Eva testified that on May 22, 1995, a company coaster or
bus attempted to enter the PHIMCO compound but it was refused entry by the moving
picket.[67] Cinco, the company personnel manager, also testified that on May 27, 1995, when the
NLRC TRO was in force, he and other employees tried to enter the PHIMCO compound, but they
were not allowed entry; on May 29, 1995, Cinco was with the PHIMCO production manager in
a pick-up and they tried to enter the company compound but, again, they were not allowed by
the strikers.[68] Another employee, Joaquin Aguilar, when asked how the strikers blocked the
ingress of the company, replied that the strikers hold around, joining hands, moving picket
and, because of the moving picket, no employee or vehicle could come in and go out of the
premises.[69]

The evidence adduced in the present case cannot be ignored. On balance, it supports the
companys submission that the respondent PILA officers and members committed acts during
the strike prohibited under Article 264(e) of the Labor Code. The testimonies of non-striking
employees, who were prevented from gaining entry into the company premises, and confirmed
no less by two officers of the union, are on record.

The photographs of the strike scene, also on record, depict the true character of the
picket; while moving, it, in fact, constituted a human blockade, obstructing free ingress to and
egress from the company premises, reinforced by benches planted directly in front of the
company gates. The photographs do not lie these photographs clearly show that the picketers
were going in circles, without any break in their ranks or closely bunched together, right in
front of the gates. Thus, company vehicles were unable to enter the company compound, and
were backed up several meters into the street leading to the company gates.
Page 85

Despite all these clear pieces of evidence of illegal obstruction, the NLRC looked the
other way and chose not to see the unmistakable violations of the law on strikes by the union
and its respondent officers and members. Needless to say, while the law protects the rights of
the laborer, it authorizes neither the oppression nor the destruction of the employer. [70] For
grossly ignoring the evidence before it, the NLRC committed grave abuse of discretion; for
supporting these gross NLRC errors, the CA committed its own reversible error.

Liabilities of union
officers and members

In the determination of the liabilities of the individual respondents, the applicable


provision is Article 264(a) of the Labor Code:

Art. 264. Prohibited activities. (a) x x x

xxxx

Any union officer who knowingly participates in an illegal strike and any worker
or union officer who knowingly participates in the commission of illegal acts
during a strike may be declared to have lost his employment status: Provided,
That mere participation of a worker in a lawful strike shall not constitute
sufficient ground for termination of his employment, even if a replacement had
been hired by the employer during such lawful strike.

We explained in Samahang Manggagawa sa Sulpicio Lines, Inc.-NAFLU v. Sulpicio Lines,


Inc.[71] that the effects of illegal strikes, outlined in Article 264 of the Labor Code, make a
distinction between participating workers and union officers. The services of an ordinary
striking worker cannot be terminated for mere participation in an illegal strike; proof must be
adduced showing that he or she committed illegal acts during the strike. The services of a
participating union officer, on the other hand, may be terminated, not only when he actually
commits an illegal act during a strike, but also if he knowingly participates in an illegal
strike.[72]

In all cases, the striker must be identified. But proof beyond reasonable doubt is not
required; substantial evidence, available under the attendant circumstances, suffices to justify
the imposition of the penalty of dismissal on participating workers and union officers as above
described.[73]

In the present case, respondents Erlinda Vazquez, Ricardo Sacristan, Leonida Catalan,
Maximo Pedro, Nathaniela Dimaculangan, Rodolfo Mojico, Romeo Caramanza, Reynaldo
Page 86

Ganitano, Alberto Basconcillo, and Ramon Falcis stand to be dismissed as participating union
officers, pursuant to Article 264(a), paragraph 3, of the Labor Code.This provision imposes the
penalty of dismissal on any union officer who knowingly participates in an illegal strike. The
law grants the employer the option of declaring a union officer who participated in an illegal
strike as having lost his employment.[74]

PHIMCO was able to individually identify the participating union members thru the
affidavits of PHIMCO employees Martimer Panis[75] and Rodrigo A. Ortiz,[76] and Personnel
Manager Francis Ferdinand Cinco,[77] and the photographs[78] of Joaquin Aguilar. Identified
were respondents Angelita Balosa, Danilo Banaag, Abraham Caday, Alfonso Claudio, Francisco
Dalisay, Angelito Dejan, Philip Garces, Nicanor Ilagan, Florencio Libongcogon, Nemesio
Mamonong, Teofilo Manalili, Alfredo Pearson, Mario Perea, Renato Ramos, Mariano Rosales,
Pablo Sarmiento, Rodolfo Tolentino, Felipe Villareal, Arsenio Zamora, Danilo Baltazar, Roger
Caber, Reynaldo Camarin, Bernardo Cuadra, Angelito de Guzman, Gerardo Feliciano, Alex
Ibaez, Benjamin Juan, Sr., Ramon Macaalay, Gonzalo Manalili, Raul Miciano, Hilario Pea, Teresa
Permocillo, Ernesto Rio, Rodolfo Sanidad, Rafael Sta. Ana, Julian Tuguin and Amelia Zamora as
the union members who actively participated in the strike by blocking the ingress to and
egress from the company premises and preventing the passage of non-striking employees. For
participating in illegally blocking ingress to and egress from company premises, these union
members stand to be dismissed for their illegal acts in the conduct of the unions strike.

PHIMCO failed to observe due process

We find, however, that PHIMCO violated the requirements of due process of the Labor
Code when it dismissed the respondents.

Under Article 277(b)[79] 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,[80] 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
Page 87

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.[81]

In the present case, PHIMCO sent a letter, on June 23, 1995, to thirty-six (36) union
members, generally directing them to explain within twenty-four (24) hours why they should
not be dismissed for the illegal acts they committed during the strike; three days later, or on
June 26, 1995, the thirty-six (36) union members were informed of their dismissal from
employment.

We do not find this company procedure to be sufficient compliance with the due
process requirements that the law guards zealously. It does not appear from the evidence that
the union officers were specifically informed of the charges against them and given the chance
to explain and present their side. Without the specifications they had to respond to, they were
arbitrarily separated from work in total disregard of their rights to due process and security of
tenure.

As to the union members, only thirty-six (36) of the thirty-seven (37) union members
included in this case were notified of the charges against them thru the letters dated June 23,
1995, but they were not given an ample opportunity to be heard and to defend themselves; the
notice of termination came on June 26, 1995, only three (3) days from the first notice - a
perfunctory and superficial attempt to comply with the notice requirement under the Labor
Code. The short interval of time between the first and second notice speaks for itself under the
circumstances of this case; mere token recognition of the due process requirements was made,
indicating the companys intent to dismiss the union members involved, without any
meaningful resort to the guarantees accorded them by law.

Under the circumstances, where evidence sufficient to justify the penalty of dismissal
has been adduced but the workers concerned were not accorded their essential due process
rights, our ruling in Agabon v. NLRC[82] finds full application; the employer, despite the just
cause for dismissal, must pay the dismissed workers nominal damages as indemnity for the
violation of the workers right to statutory due process. Prevailing jurisprudence sets the
amount of nominal damages at P30,000.00, which same amount we find sufficient and
appropriate in the present case.[83]
Page 88

WHEREFORE, in light of all the foregoing, we hereby REVERSE and SET


ASIDE the decision dated February 10, 2004 and the resolution dated December 12, 2005 of
the Court of Appeals in CA-G.R. SP No. 70336, upholding the rulings of the National Labor
Relations Commission.

The Decision, dated February 4, 1998, of Labor Arbiter Jovencio Ll. Mayor should
prevail and is REINSTATED with the MODIFICATION that Erlinda Vazquez, Ricardo Sacristan,
Leonida Catalan, Maximo Pedro, Nathaniela Dimaculangan, Rodolfo Mojico, Romeo Caramanza,
Reynaldo Ganitano, Alberto Basconcillo, Ramon Falcis, Angelita Balosa, Danilo Banaag,
Abraham Caday, Alfonso Claudio, Francisco Dalisay, Angelito Dejan, Philip Garces, Nicanor
Ilagan, Florencio Libongcogon, Nemesio Mamonong, Teofilo Manalili, Alfredo Pearson, Mario
Perea, Renato Ramos, Mariano Rosales, Pablo Sarmiento, Rodolfo Tolentino, Felipe Villareal,
Arsenio Zamora, Danilo Baltazar, Roger Caber,Reynaldo Camarin, Bernardo Cuadra, Angelito
de Guzman, Gerardo Feliciano, Alex Ibaez, Benjamin Juan, Sr., Ramon Macaalay, Gonzalo
Manalili, Raul Miciano, Hilario Pea, Teresa Permocillo, Ernesto Rio, Rodolfo Sanidad, Rafael Sta.
Ana, Julian Tuguin, and Amelia Zamora are each awarded nominal damages in the amount
of P30,000.00. No pronouncement as to costs.

SO ORDERED.

CASE NO. 11 (Sorry guys wala akong masearch na fullcase nito)

CASE NO. 12

Republic of the Philippines


Supreme Court
Baguio City

SECOND DIVISION

LEYTE GEOTHERMAL POWER PROGRESSIVE G.R. No. 170351


EMPLOYEES UNIONALU TUCP,
Petitioner, Present:

CARPIO, J.,
- versus - Chairperson,
NACHURA,
PERALTA,
ABAD, and
PHILIPPINE NATIONAL OIL COMPANY ENERGY MENDOZA, JJ.
DEVELOPMENT CORPORATION,
Respondent. Promulgated:

March 30, 2011

x------------------------------------------------------------------------------------x
Page 89

DECISION

NACHURA, J.:

Under review is the Decision[1] dated June 30, 2005 of the Court of Appeals (CA) in CA-
G.R. SP No. 65760, which dismissed the petition for certiorari filed by petitioner Leyte
Geothermal Power Progressive Employees Union ALU―TUCP (petitioner Union) to annul and
set aside the decision[2] dated December 10, 1999 of the National Labor Relations Commission
(NLRC) in NLRC Certified Case No. V-02-99.

The facts, fairly summarized by the CA, follow.

[Respondent Philippine National Oil Corporation]-Energy Development


Corporation [PNOC-EDC] is a government-owned and controlled corporation
engaged in exploration, development, utilization, generation and distribution of
energy resources like geothermal energy.

Petitioner is a legitimate labor organization, duly registered with the


Department of Labor and Employment (DOLE) Regional Office No.
VIII, Tacloban City.

Among [respondents] geothermal projects is the Leyte Geothermal Power


Project located at the Greater Tongonan Geothermal Reservation in Leyte. The
said Project is composed of the Tongonan 1 Geothermal Project (T1GP) and the
Leyte Geothermal Production Field Project (LGPF) which provide the power and
electricity needed not only in the provinces and cities of Central and Eastern
Visayas (Region VII and VIII), but also in the island of Luzon as well. Thus, the
[respondent] hired and employed hundreds of employees on a contractual basis,
whereby, their employment was only good up to the completion or termination
of the project and would automatically expire upon the completion of such
project.

Majority of the employees hired by [respondent] in its Leyte Geothermal Power


Projects had become members of petitioner. In view of that circumstance, the
petitioner demands from the [respondent] for recognition of it as the collective
bargaining agent of said employees and for a CBA negotiation with it. However,
the [respondent] did not heed such demands of the petitioner. Sometime in 1998
when the project was about to be completed, the [respondent] proceeded to
serve Notices of Termination of Employment upon the employees who are
members of the petitioner.

On December 28, 1998, the petitioner filed a Notice of Strike with DOLE against
the [respondent] on the ground of purported commission by the latter of unfair
labor practice for refusal to bargain collectively, union busting and mass
termination. On the same day, the petitioner declared a strike and staged such
strike.
Page 90

To avert any work stoppage, then Secretary of Labor Bienvenido E. Laguesma


intervened and issued the Order, dated January 4, 1999, certifying the labor
dispute to the NLRC for compulsory arbitration. Accordingly, all the striking
workers were directed to return to work within twelve (12) hours from receipt
of the Order and for the [respondent] to accept them back under the same terms
and conditions of employment prior to the strike. Further, the parties were
directed to cease and desist from committing any act that would exacerbate the
situation.

However, despite earnest efforts on the part of the Secretary of Labor and
Employment to settle the dispute amicably, the petitioner remained adamant
and unreasonable in its position, causing the failure of the negotiation towards a
peaceful compromise. In effect, the petitioner did not abide by [the] assumption
order issued by the Secretary of Labor.

Consequently, on January 15, 1999, the [respondent] filed a Complaint for Strike
Illegality, Declaration of Loss of Employment and Damages at the NLRC-RAB VIII
in Tacloban City and at the same time, filed a Petition for Cancellation of
Petitioners Certificate of Registration with DOLE, Regional Office No. VIII. The
two cases were later on consolidated pursuant to the New NLRC Rules of
Procedure. The consolidated case was docketed as NLRC Certified Case No. V-02-
99 (NCMB-RAB VIII-NS-12-0190-98; RAB Case No. VIII-1-0019-99). The said
certified case was indorsed to the NLRC 4th Division in Cebu City on June 21,
1999 for the proper disposition thereof.[3]

In due course, the NLRC 4th Division rendered a decision in favor of respondent, to wit:

WHEREFORE, based on the foregoing premises, judgment is hereby rendered as


follows:

1. Declaring the officers and members of [petitioner] Union as project


employees;

2. Declaring the termination of their employment by reason of the


completion of the project, or a phase or portion thereof, to which they
were assigned, as valid and legal;

3. Declaring the strike staged and conducted by [petitioner] Union


through its officers and members on December 28, 1998 to January 6,
1999 as illegal for failure to comply with the mandatory requirements
of the law on strike[;]

4. Declaring all the officers and members of the board of


[petitioner] Union who instigated and spearheaded the illegal strike
to have lost their employment[;]

5. Dismissing the claim of [petitioner] Union against PNOC-EDC for unfair


labor practice for lack of merit[;]

6. Dismissing both parties claims against each other for violation of the
Assumption Order dated January 4, 1999 for lack of factual basis[;]
Page 91

7. Dismissing all other claims for lack of merit.[4]


Petitioner Union filed a motion for reconsideration of the NLRC decision, which was
subsequently denied. Posthaste, petitioner Union filed a petition for certiorari before the CA,
alleging grave abuse of discretion in the decision of the NLRC. As previously adverted to, the
CA dismissed the petition for certiorari, thus:

WHEREFORE, in view of the foregoing premises, judgment is hereby rendered


by us DISMISSING the Petition. The assailed Decision dated December 10, 1999
of the NLRC 4th Division in NLRC Certified Case No. V-02-99 (NCMB-RAB VIII-NS-
12-0190-98; RAB Case No. VIII-1-0019-99) and its Order dated March 30, 2001
are hereby AFFIRMED.

Costs against the Petitioner.[5]

Hence, this appeal by certiorari filed by petitioner Union, positing the following questions of
law:
1. MAY THE HONORABLE COURT OF APPEALS SUSTAIN THE PROJECT
CONTRACTS THAT ARE DESIGNED TO DENY AND DEPRIVE THE EMPLOYEES
THEIR RIGHT TO SECURITY OF TENURE BY MAKING IT APPEAR THAT THEY
ARE MERE PROJECT EMPLOYEES?

2. WHEN THERE ARE NO INTERVALS IN THE EMPLOYEES CONTRACT,


SUCH THAT THE SO-CALLED UNDERTAKING WAS CONTINUOUS, ARE THE
EMPLOYEES PROPERLY TREATED AS PROJECT EMPLOYEES?

3. MAY THE HONORABLE COURT OF APPEALS IGNORE THE FIRMS OWN


ESTIMATE OF JOB COMPLETION, PROVING THAT THERE IS STILL 56.25%
CIVIL/STRUCTURAL WORK TO BE ACCOMPLISHED, AND RULE THAT THE
EMPLOYEES WERE DISMISSED FOR COMPLETION [OF] THE PROJECT?

4. MAY A FIRM HIDE UNDER THE SPURIOUS CLOAK OF PROJECT


COMPLETION TO DISMISS EN MASSE THE EMPLOYEES WHO HAVE ORGANIZED
AMONG THEMSELVES A LEGITIMATE LABOR ORGANIZATION TO PROTECT
THEIR RIGHTS?

5. WHEN THERE IS NO STOPPAGE OF WORK, MAY A PROTEST ACTIVITY


BE CONSIDERED AS A STRIKE CONTRARY TO ITS CONCEPTUAL DEFINITION
UNDER ARTICLE 212 (O) OF THE LABOR CODE OF THE PHILIPPINES?

6. WHEN THE DISMISSAL IS AIMED AT RIDDING THE COMPANY OF


MEMBERS OF THE UNION, IS THIS UNION BUSTING?[6]

Stripped of rhetoric, the issues for our resolution are:

1. Whether the officers and members of petitioner Union are project employees of respondent;
and
2. Whether the officers and members of petitioner Union engaged in an illegal strike.
Page 92

On the first issue, petitioner Union contends that its officers and members performed activities
that were usually necessary and desirable to respondents usual business. In fact,
petitioner Union reiterates that its officers and members were assigned to the Construction
Department of respondent as carpenters and masons, and to other jobs pursuant to civil works,
which are usually necessary and desirable to the department. Petitioner Union likewise points
out that there was no interval in the employment contract of its officers and members, who
were all employees of respondent, which lack of interval, for petitioner Union, manifests that
the undertaking is usually necessary and desirable to the usual trade or business of the
employer.
We cannot subscribe to the view taken by petitioner Union.

The distinction between a regular and a project employment is provided in Article 280,
paragraph 1, of the Labor Code:

ART. 280. Regular and Casual Employment. The provisions of written agreement
to the contrary notwithstanding and regardless of the oral agreement of the
parties, an employment shall be deemed to be regular where the employee has
been engaged to perform activities which are usually necessary or desirable in
the usual business or trade of the employer, except where the employment
has been fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of the engagement
of the employee or where the work or service to be performed is seasonal in
nature and the employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding


paragraph: Provided, That, any employee who has rendered at least one year of
service, whether such service is continuous or broken, shall be considered a
regular employee with respect to the activity in which he is employed and his
employment shall continue while such actually exists.[7]

The foregoing contemplates four (4) kinds of employees: (a) regular employees or those who
have been engaged to perform activities which are usually necessary or desirable in the usual
business or trade of the employer; (b) project employees or those whose employment has been
fixed for a specific project or undertaking[,] the completion or termination of which has been
determined at the time of the engagement of the employee; (c) seasonal employees or those
who work or perform services which are seasonal in nature, and the employment is for the
duration of the season;[8] and (d) casual employees or those who are not regular, project, or
seasonal employees. Jurisprudence has added a fifth kind a fixed-term employee.[9]

Article 280 of the Labor Code, as worded, establishes that the nature of the employment
is determined by law, regardless of any contract expressing otherwise. The supremacy of the
law over the nomenclature of the contract and the stipulations contained therein is to bring to
life the policy enshrined in the Constitution to afford full protection to labor. [10] Thus, labor
contracts are placed on a higher plane than ordinary contracts; these are imbued with public
interest and therefore subject to the police power of the State.[11]
Page 93

However, notwithstanding the foregoing iterations, project employment contracts


which fix the employment for a specific project or undertaking remain valid under the law:

x x x By entering into such a contract, an employee is deemed to understand that


his employment is coterminous with the project. He may not expect to be
employed continuously beyond the completion of the project. It is of judicial
notice that project employees engaged for manual services or those for special
skills like those of carpenters or masons, are, as a rule, unschooled. However,
this fact alone is not a valid reason for bestowing special treatment on them or
for invalidating a contract of employment. Project employment contracts are not
lopsided agreements in favor of only one party thereto. The employers interest
is equally important as that of the employee[s] for theirs is the interest that
propels economic activity. While it may be true that it is the employer who drafts
project employment contracts with its business interest as overriding
consideration, such contracts do not, of necessity, prejudice the employee.
Neither is the employee left helpless by a prejudicial employment contract. After
all, under the law, the interest of the worker is paramount.[12]
In the case at bar, the records reveal that the officers and the members of petitioner
Union signed employment contracts indicating the specific project or phase of work for which
they were hired, with a fixed period of employment. The NLRC correctly disposed of this issue:

A deeper examination also shows that [the individual members of


petitioner Union] indeed signed and accepted the [employment contracts] freely
and voluntarily. No evidence was presented by [petitioner] Union to prove
improper pressure or undue influence when they entered, perfected and
consummated [the employment] contracts. In fact, it was clearly established in
the course of the trial of this case, as explained by no less than the President of
[petitioner] Union, that the contracts of employment were read, comprehended,
and voluntarily accepted by them. x x x.

xxxx

As clearly shown by [petitioner] Unions own admission, both parties had


executed the contracts freely and voluntarily without force, duress or acts
tending to vitiate the worker[s] consent. Thus, we see no reason not to honor
and give effect to the terms and conditions stipulated therein. x x x.[13]

Thus, we are hard pressed to find cause to disturb the findings of the NLRC which are
supported by substantial evidence.

It is well-settled in jurisprudence that factual findings of administrative or quasi-judicial


bodies, which are deemed to have acquired expertise in matters within their respective
jurisdictions, are generally accorded not only respect but even finality, and bind the Court
when supported by substantial evidence.[14] Rule 133, Section 5 defines substantial evidence as
that amount of relevant evidence which a reasonable mind might accept as adequate to justify
a conclusion.
Page 94

Consistent therewith is the doctrine that this Court is not a trier of facts, and this is
strictly adhered to in labor cases.[15] We may take cognizance of and resolve factual issues, only
when the findings of fact and conclusions of law of the Labor Arbiter or the NLRC are
inconsistent with those of the CA.[16]

In the case at bar, both the NLRC and the CA were one in the conclusion that the officers and
the members of petitioner Union were project employees. Nonetheless,
petitioner Union insists that they were regular employees since they performed work which
was usually necessary or desirable to the usual business or trade of the Construction
Department of respondent.

The landmark case of ALU-TUCP v. NLRC[17] instructs on the two (2) categories of project
employees:

It is evidently important to become clear about the meaning and scope of the
term project in the present context. The project for the carrying out of which
project employees are hired would ordinarily have some relationship to the
usual business of the employer. Exceptionally, the project undertaking might not
have an ordinary or normal relationship to the usual business of the employer.
In this latter case, the determination of the scope and parameters of the project
becomes fairly easy. x x x. From the viewpoint, however, of the legal
characterization problem here presented to the Court, there should be no
difficulty in designating the employees who are retained or hired for the purpose
of undertaking fish culture or the production of vegetables as project employees,
as distinguished from ordinary or regular employees, so long as the duration and
scope of the project were determined or specified at the time of engagement of
the project employees. For, as is evident from the provisions of Article 280 of
the Labor Code, quoted earlier, the principal test for determining whether
particular employees are properly characterized as project employees as
distinguished from regular employees, is whether or not the project
employees were assigned to carry out a specific project or undertaking, the
duration (and scope) of which were specified at the time the employees
were engaged for that project.

In the realm of business and industry, we note that project could refer to
one or the other of at least two (2) distinguishable types of activities. Firstly, a
project could refer to a particular job or undertaking that is within the regular or
usual business of the employer company, but which is distinct and separate, and
identifiable as such, from the other undertakings of the company. Such job or
undertaking begins and ends at determined or determinable times. The typical
example of this first type of project is a particular construction job or project of a
construction company. A construction company ordinarily carries out two or
more [distinct] identifiable construction projects: e.g., a twenty-five-storey hotel
in Makati; a residential condominium building in Baguio City; and a domestic air
terminal in Iloilo City. Employees who are hired for the carrying out of one of
these separate projects, the scope and duration of which has been determined
and made known to the employees at the time of employment, are properly
treated as project employees, and their services may be lawfully terminated at
completion of the project.

The term project could also refer to, secondly, a particular job or
undertaking that is not within the regular business of the corporation. Such a job
Page 95

or undertaking must also be identifiably separate and distinct from the ordinary
or regular business operations of the employer. The job or undertaking also
begins and ends at determined or determinable times.[18]

Plainly, the litmus test to determine whether an individual is a project employee lies in setting
a fixed period of employment involving a specific undertaking which completion or
termination has been determined at the time of the particular employees engagement.

In this case, as previously adverted to, the officers and the members of petitioner Union were
specifically hired as project employees for respondents Leyte Geothermal Power Project
located at the Greater Tongonan Geothermal Reservation in Leyte. Consequently, upon the
completion of the project or substantial phase thereof, the officers and the members of
petitioner Union could be validly terminated.

Petitioner Union is adamant, however, that the lack of interval in the


employment contracts of its officer and members negates the latters status
as mere project employees. For petitioner Union, the lack of interval further drives home its
point that its officers and members are regular employees who performed work which was
usually necessary or desirable to the usual business or trade of respondent.

We are not persuaded.

Petitioner Unions members employment for more than a year does equate to their
regular employment with respondent. In this regard, Mercado, Sr. v. NLRC[19] illuminates:

The first paragraph [of Article 280 of the Labor Code] answers the question of
who are regular employees. It states that, regardless of any written or oral
agreement to the contrary, an employee is deemed regular where he is engaged
in necessary or desirable activities in the usual business or trade of the
employer, except for project employees.

A project employee has been defined to be one whose employment has been
fixed for a specific project or undertaking, the completion or termination of
which has been determined at the time of the engagement of the employee, or
where the work or service to be performed is seasonal in nature and the
employment is for the duration of the season, as in the present case.

The second paragraph of Art. 280 demarcates as casual employees, all other
employees who do not fall under the definition of the preceding paragraph. The
proviso, in said second paragraph, deems as regular employees those casual
employees who have rendered at least one year of service regardless of the fact
that such service may be continuous or broken.

Petitioners, in effect, contend that the proviso in the second paragraph of Art.
280 is applicable to their case and that the Labor Arbiter should have considered
them regular by virtue of said proviso. The contention is without merit.

The general rule is that the office of a proviso is to qualify or modify only the
phrase immediately preceding it or restrain or limit the generality of the clause
Page 96

that it immediately follows. Thus, it has been held that a proviso is to be


construed with reference to the immediately preceding part of the provision to
which it is attached, and not to the statute itself or to other sections thereof. The
only exception to this rule is where the clear legislative intent is to restrain or
qualify not only the phrase immediately preceding it (the proviso) but also
earlier provisions of the statute or even the statute itself as a whole.

Policy Instruction No. 12 of the Department of Labor and Employment discloses


that the concept of regular and casual employees was designed to put an end to
casual employment in regular jobs, which has been abused by many employers
to prevent so called casuals from enjoying the benefits of regular employees or
to prevent casuals from joining unions. The same instructions show that the
proviso in the second paragraph of Art. 280 was not designed to stifle small-
scale businesses nor to oppress agricultural land owners to further the interests
of laborers, whether agricultural or industrial. What it seeks to eliminate are
abuses of employers against their employees and not, as petitioners would have
us believe, to prevent small-scale businesses from engaging in legitimate
methods to realize profit. Hence, the proviso is applicable only to the employees
who are deemed casuals but not to the project employees nor the regular
employees treated in paragraph one of Art. 280.

Clearly, therefore, petitioners being project employees, or, to use the correct
term, seasonal employees, their employment legally ends upon completion of the
project or the [end of the] season. The termination of their employment cannot
and should not constitute an illegal dismissal.
Considering our holding that the officers and the members of petitioner Union were
project employees, its claim of union busting is likewise dismissed.

On the second issue, petitioner Union contends that there was no stoppage of work;
hence, they did not strike. Euphemistically, petitioner Union avers that it only engaged in
picketing,[20] and maintains that without any work stoppage, [its officers and members] only
engaged in xxx protest activity.

We are not convinced. Petitioner Union splits hairs.

To begin with, quite evident from the records is the undisputed fact that
petitioner Union filed a Notice of Strike on December 28, 1998 with the Department of Labor
and Employment, grounded on respondents purported

unfair labor practices, i.e., refusal to bargain collectively, union busting and mass termination.
On even date, petitioner Union declared and staged a strike.

Second, then Secretary of Labor, Bienvenido E. Laguesma, intervened and issued a


Return-to-Work Order[21] dated January 4, 1999, certifying the labor dispute to the NLRC for
compulsory arbitration. The Order narrates the facts leading to the labor dispute, to wit:

On 28 December 1998, [petitioner Union] filed a Notice of Strike against


[respondent] citing unfair labor practices, specifically: refusal to bargain
collectively, union busting and mass termination as the grounds [therefor]. On
Page 97

the same day, [petitioner] Union went on strike and took control over
[respondents] facilities of its Leyte Geothermal Project.

Attempts by the National Conciliation and Mediation Board RBVIII to


forge a mutually acceptable solution proved futile.

In the meantime, the strike continues with no settlement in sight placing in


jeopardy the supply of much needed power supply in the Luzon and Visayas
grids.

xxxx

The on-going strike threatens the availability of continuous electricity to these


areas which is critical to day-to-day life, industry, commerce and trade. Without
doubt, [respondents] operations [are] indispensable to the national interest and
falls (sic) within the purview of Article 263 (g) of the Labor Code, as amended,
which warrants (sic) the intervention of this Office.

Third, petitioner Union itself, in its pleadings, used the word strike.

Ultimately, petitioner Unions asseverations are belied by the factual findings of the
NLRC, as affirmed by the CA:

The failure to comply with the mandatory requisites for the conduct of strike is
both admitted and clearly shown on record. Hence, it is undisputed that no strike
vote was conducted; likewise, the cooling-off period was not observed and that
the 7-day strike ban after the submission of the strike vote was not complied
with since there was no strike vote taken.

xxxx

The factual issue of whether a notice of strike was timely filed by


[petitioner] Union was resolved by the evidence on record. The evidence
revealed that [petitioner] Union struck even before it could file the required
notice of strike. Once again, this relied on [petitioner] Unions proof. [Petitioner]
Union[s] witness said:

Atty. Sinsuat : You stated that you struck on 28 December 1998 is that
correct?
Witness : Early in the morning of December 1998.
xxxx

Atty. Sinsuat : And you went there to conduct the strike did you not?

Witness : Our plan then was to strike at noon of December 28 and the
strikers will be positioned at their respective
areas.[22]

Article 263 of the Labor Code enumerates the requisites for holding a strike:

Art. 263. Strikes, picketing, and lockouts. (a) x x x.

x x x x.
Page 98

(c) In cases of bargaining deadlocks, the duly certified or recognized


bargaining agent may file a notice of strike or the employer may file a notice of
lockout with the Department at least 30 days before the intended date thereof. In
cases of unfair labor practice, the period of notice shall be 15 days and in the
absence of a duly certified bargaining agent, the notice of strike may be filed by
any legitimate labor organization in behalf of its members. However, in case of
dismissal from employment of union officers duly elected in accordance with the
union constitution and by-laws, which may constitute union busting, where the
existence of the union is threatened, the 15-day cooling-off period shall not
apply and the union may take action immediately.
(d) The notice must be in accordance with such implementing rules and
regulations as the Department of Labor and Employment may promulgate.
(e) During the cooling-off period, it shall be the duty of the Department to
exert all efforts at mediation and conciliation to effect a voluntary settlement.
Should the dispute remain unsettled until the lapse of the requisite number of
days from the mandatory filing of the notice, the labor union may strike or the
employer may declare a lockout.
(f) A decision to declare a strike must be approved by a majority of the
total union membership in the bargaining unit concerned, obtained by secret
ballot in meetings or referenda called for that purpose. A decision to declare a
lockout must be approved by a majority of the board of directors of the
corporation or association or of the partners in a partnership, obtained by secret
ballot in a meeting called for that purpose. The decision shall be valid for the
duration of the dispute based on substantially the same grounds considered
when the strike or lockout vote was taken. The Department may, at its own
initiative or upon the request of any affected party, supervise the conduct of the
secret balloting. In every case, the union or the employer shall furnish the
Department the results of the voting at least seven days before the intended
strike or lockout, subject to the cooling-off period herein provided.

In fine, petitioner Unions bare contention that it did not hold a strike cannot trump the
factual findings of the NLRC that petitioner Union indeed struck against respondent. In fact,
and more importantly, petitioner Union failed to comply with the requirements set by law
prior to holding a strike.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R.
SP No. 65760 is AFFIRMED. Costs against petitioner Union.

SO ORDERED.

CASE NO. 13

SECOND DIVISION

[G.R. No. 170351, March 30 : 2011]

LEYTE GEOTHERMAL POWER PROGRESSIVE EMPLOYEES UNION - ALU - TUCP,


Page 99

PETITIONER, VS. PHILIPPINE NATIONAL OIL COMPANY - ENERGY DEVELOPMENT


CORPORATION, RESPONDENT.

DECISION

NACHURA, J.:

Under review is the Decision[1] dated June 30, 2005 of the Court of Appeals (CA) in CA-G.R. SP
No. 65760, which dismissed the petition for certiorari filed by petitioner Leyte Geothermal
Power Progressive Employees Union - ALU?TUCP (petitioner Union) to annul and set aside the
decision[2]dated December 10, 1999 of the National Labor Relations Commission (NLRC) in Â-
ÂÂÂÂNLRC Certified Case No. V-02-99.

The facts, fairly summarized by the CA, follow.

blockquote>[Respondent Philippine National Oil Corporation]-Energy Development


Corporation [PNOC-EDC] is a government-owned and controlled corporation engaged in
exploration, development, utilization, generation and distribution of energy resources like
geothermal energy.

Petitioner is a legitimate labor organization, duly registered with the Department of Labor and
Employment (DOLE) Regional Office No. VIII, Tacloban City.

Among [respondent's] geothermal projects is the Leyte Geothermal Power Project located at
the Greater Tongonan Geothermal Reservation in Leyte. The said Project is composed of the
Tongonan 1 Geothermal Project (T1GP) and the Leyte Geothermal Production Field Project
(LGPF) which provide the power and electricity needed not only in the provinces and cities of
Central and Eastern Visayas (Region VII and VIII), but also in the island of Luzon as well. Thus,
the [respondent] hired and employed hundreds of employees on a contractual basis, whereby,
their employment was only good up to the completion or termination of the project and would
automatically expire upon the completion of such project.

Majority of the employees hired by [respondent] in its Leyte Geothermal Power Projects had
become members of petitioner. In view of that circumstance, the petitioner demands from the
[respondent] for recognition of it as the collective bargaining agent of said employees and for a
CBA negotiation with it. However, the [respondent] did not heed such demands of the
petitioner. Sometime in 1998 when the project was about to be completed, the [respondent]
proceeded to serve Notices of Termination of Employment upon the employees who are
members of the petitioner.

On December 28, 1998, the petitioner filed a Notice of Strike with DOLE against the
[respondent] on the ground of purported commission by the latter of unfair labor practice for
"refusal to bargain collectively, union busting and mass termination." On the same day, the
petitioner declared a strike and staged such strike.

To avert any work stoppage, then Secretary of Labor Bienvenido E. Laguesma intervened and
issued the Order, dated January 4, 1999, certifying the labor dispute to the NLRC for
compulsory arbitration. Accordingly, all the striking workers were directed to return to work
within twelve (12) hours from receipt of the Order and for the [respondent] to accept them
back under the same terms and conditions of employment prior to the strike. Further, the
parties were directed to cease and desist from committing any act that would exacerbate the
situation.

However, despite earnest efforts on the part of the Secretary of Labor and Employment to
settle the dispute amicably, the petitioner remained adamant and unreasonable in its position,
causing the failure of the negotiation towards a peaceful compromise. In effect, the petitioner
Page 100

did not abide by [the] assumption order issued by the Secretary of Labor.

Consequently, on January 15, 1999, the [respondent] filed a Complaint for Strike Illegality,
Declaration of Loss of Employment and Damages at the NLRC-RAB VIII in Tacloban City and at
the same time, filed a Petition for Cancellation of Petitioner's Certificate of Registration with
DOLE, Regional Office No. VIII. The two cases were later on consolidated pursuant to the New
NLRC Rules of Procedure. The consolidated case was docketed as NLRC Certified Case No. V-
02-99 (NCMB-RAB VIII-NS-12-0190-98; RAB Case No. VIII-1-0019-99). The said certified case
was indorsed to the NLRC 4th Division in Cebu City on June 21, 1999 for the proper disposition
thereof.[3]

In due course, the NLRC 4th Division rendered a decision in favor of respondent, to wit:

WHEREFORE, based on the foregoing premises, judgment is hereby rendered as follows:

1. Declaring the officers and members of [petitioner] Union as project employees;

2. Declaring the termination of their employment by reason of the completion of the


project, or a phase or portion thereof, to which they were assigned, as valid and legal;

3. Declaring the strike staged and conducted by [petitioner] Union through its officers and
members on December 28, 1998 to January 6, 1999 as illegal for failure to comply with
the mandatory requirements of the law on strike[;]

4. Declaring all the officers and members of the board of [petitioner] Union who instigated
and spearheaded the illegal strike to have lost their employment[;]

5. Dismissing the claim of [petitioner] Union against PNOC-EDC for unfair labor practice
for lack of merit[;]

6. Dismissing both parties' claims against each other for violation of the Assumption
Order dated January 4, 1999 for lack of factual basis[;]

7. Dismissing all other claims for lack of merit.[4]

Petitioner Union filed a motion for reconsideration of the NLRC decision, which was
subsequently denied. Posthaste, petitioner Union filed a petition for certiorari before the CA,
alleging grave abuse of discretion in the decision of the NLRC. As previously adverted to, the
CA dismissed the petition for certiorari, thus:

WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by


us DISMISSING the Petition. The assailed Decision dated December 10, 1999 of the NLRC
4th Division in NLRC Certified Case No. V-02-99 (NCMB-RAB VIII-NS-12-0190-98; RAB Case No.
VIII-1-0019-99) and its Order dated March 30, 2001 are hereby AFFIRMED.

Costs against the Petitioner.[5]

Hence, this appeal by certiorari filed by petitioner Union, positing the following questions of
law:

1. MAY THE HONORABLE COURT OF APPEALS SUSTAIN THE "PROJECT CONTRACTS" THAT
ARE DESIGNED TO DENY AND DEPRIVE THE EMPLOYEES' THEIR RIGHT TO SECURITY OF
TENURE BY MAKING IT APPEAR THAT THEY ARE MERE PROJECT EMPLOYEES?

2. WHEN THERE ARE NO INTERVALS IN THE EMPLOYEES' CONTRACT, SUCH THAT THE SO-
CALLED UNDERTAKING WAS CONTINUOUS, ARE THE EMPLOYEES PROPERLY TREATED
Page 101

AS PROJECT EMPLOYEES?

3. MAY THE HONORABLE COURT OF APPEALS IGNORE THE FIRM'S OWN ESTIMATE OF JOB
COMPLETION, PROVING THAT THERE IS STILL 56.25% CIVIL/STRUCTURAL WORK TO BE
ACCOMPLISHED, AND RULE THAT THE EMPLOYEES WERE DISMISSED FOR COMPLETION
[OF] THE "PROJECT?"

4. MAY A FIRM HIDE UNDER THE SPURIOUS CLOAK OF "PROJECT COMPLETION" TO


DISMISS EN MASSE THE EMPLOYEES WHO HAVE ORGANIZED AMONG THEMSELVES A
LEGITIMATE LABOR ORGANIZATION TO PROTECT THEIR RIGHTS?

5. WHEN THERE IS NO STOPPAGE OF WORK, MAY A PROTEST ACTIVITY BE CONSIDERED AS


A STRIKE CONTRARY TO ITS CONCEPTUAL DEFINITION UNDER ARTICLE 212 (O) OF THE
LABOR CODE OF THE PHILIPPINES?

6. WHEN THE DISMISSAL IS AIMED AT RIDDING THE COMPANY OF MEMBERS OF THE


UNION, IS THIS UNION BUSTING?[6]

Stripped of rhetoric, the issues for our resolution are:

1. Whether the officers and members of petitioner Union are project employees of
respondent; and

2. Whether the officers and members of petitioner Union engaged in an illegal strike.

On the first issue, petitioner Union contends that its officers and members performed activities
that were usually necessary and desirable to respondent's usual business. In fact, petitioner
Union reiterates that its officers and members were assigned to the Construction
Department of respondent as carpenters and masons, and to other jobs pursuant to civil works,
which are usually necessary and desirable to the department. Petitioner Union likewise points
out that there was no interval in the employment contract of its officers and members, who
were all employees of respondent, which lack of interval, for petitioner Union, "manifests that
the `undertaking' is usually necessary and desirable to the usual trade or business of the
employer."

We cannot subscribe to the view taken by petitioner Union.

The distinction between a regular and a project employment is provided in Article 280,
paragraph 1, of the Labor Code:

ART. 280. Regular and Casual Employment.-- The provisions of written agreement to the
contrary notwithstanding and regardless of the oral agreement of the parties, an employment
shall be deemed to be regular where the employee has been engaged to perform activities
which are usually necessary or desirable in the usual business or trade of the employer, except
where the employment has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of the engagement
of the employee or where the work or service to be performed is seasonal in nature and the
employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding


paragraph: Provided, That, any employee who has rendered at least one year of service,
whether such service is continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment shall continue while such
actually exists.[7]
Page 102

The foregoing contemplates four (4) kinds of employees: (a) regular employees or those who
have been "engaged to perform activities which are usually necessary or desirable in the usual
business or trade of the employer"; (b) project employees or those "whose employment has
been fixed for a specific project or undertaking[,] the completion or termination of which has
been determined at the time of the engagement of the employee"; (c) seasonal employees or
those who work or perform services which are seasonal in nature, and the employment is for
the duration of the season;[8] and (d) casual employees or those who are not regular, project, or
seasonal employees. Jurisprudence has added a fifth kind-- a fixed-term employee.[9]

Article 280 of the Labor Code, as worded, establishes that the nature of the employment is
determined by law, regardless of any contract expressing otherwise. The supremacy of the law
over the nomenclature of the contract and the stipulations contained therein is to bring to life
the policy enshrined in the Constitution to "afford full protection to labor."[10] Thus, labor
contracts are placed on a higher plane than ordinary contracts; these are imbued with public
interest and therefore subject to the police power of the State. [11]

However, notwithstanding the foregoing iterations, project employment contracts which fix
the employment for a specific project or undertaking remain valid under the law:

x x x By entering into such a contract, an employee is deemed to understand that his


employment is coterminous with the project. He may not expect to be employed continuously
beyond the completion of the project. It is of judicial notice that project employees engaged for
manual services or those for special skills like those of carpenters or masons, are, as a rule,
unschooled. However, this fact alone is not a valid reason for bestowing special treatment on
them or for invalidating a contract of employment. Project employment contracts are not
lopsided agreements in favor of only one party thereto. The employer's interest is equally
important as that of the employee[s'] for theirs is the interest that propels economic activity.
While it may be true that it is the employer who drafts project employment contracts with its
business interest as overriding consideration, such contracts do not, of necessity, prejudice the
employee. Neither is the employee left helpless by a prejudicial employment contract. After all,
under the law, the interest of the worker is paramount.[12]

In the case at bar, the records reveal that the officers and the members of petitioner Union
signed employment contracts indicating the specific project or phase of work for which they
were hired, with a fixed period of employment. The NLRC correctly disposed of this issue:

A deeper examination also shows that [the individual members of petitioner Union] indeed
signed and accepted the [employment contracts] freely and voluntarily. No evidence was
presented by [petitioner] Union to prove improper pressure or undue influence when they
entered, perfected and consummated [the employment] contracts. In fact, it was clearly
established in the course of the trial of this case, as explained by no less than the President of
[petitioner] Union, that the contracts of employment were read, comprehended, and
voluntarily accepted by them. x x x.

x x x x

As clearly shown by [petitioner] Union's own admission, both parties had executed the
contracts freely and voluntarily without force, duress or acts tending to vitiate the worker[s']
consent. Thus, we see no reason not to honor and give effect to the terms and conditions
stipulated therein. x x x.[13]

Thus, we are hard pressed to find cause to disturb the findings of the NLRC which are
supported by substantial evidence.

It is well-settled in jurisprudence that factual findings of administrative or quasi-judicial


Page 103

bodies, which are deemed to have acquired expertise in matters within their respective
jurisdictions, are generally accorded not only respect but even finality, and bind the Court
when supported by substantial evidence.[14] Rule 133, Section 5 defines substantial evidence as
"that amount of relevant evidence which a reasonable mind might accept as adequate to justify
a conclusion."

Consistent therewith is the doctrine that this Court is not a trier of facts, and this is strictly
adhered to in labor cases.[15] We may take cognizance of and resolve factual issues, only when
the findings of fact and conclusions of law of the Labor Arbiter or the NLRC are inconsistent
with those of the CA.[16]

In the case at bar, both the NLRC and the CA were one in the conclusion that the officers and
the members of petitioner Union were project employees. Nonetheless, petitioner Union
insists that they were regular employees since they performed work which was usually
necessary or desirable to the usual business or trade of the Construction Department of
respondent.

The landmark case of ALU-TUCP v. NLRC[17] instructs on the two (2) categories of project
employees:

It is evidently important to become clear about the meaning and scope of the term "project" in
the present context. The "project" for the carrying out of which "project employees" are hired
would ordinarily have some relationship to the usual business of the employer. Exceptionally,
the "project" undertaking might not have an ordinary or normal relationship to the usual
business of the employer. In this latter case, the determination of the scope and parameters of
the "project" becomes fairly easy. x x x. From the viewpoint, however, of the legal
characterization problem here presented to the Court, there should be no difficulty in
designating the employees who are retained or hired for the purpose of undertaking fish
culture or the production of vegetables as "project employees," as distinguished from ordinary
or "regular employees," so long as the duration and scope of the project were determined or
specified at the time of engagement of the "project employees." For, as is evident from the
provisions of Article 280 of the Labor Code, quoted earlier, the principal test for
determining whether particular employees are properly characterized as "project
employees" as distinguished from "regular employees," is whether or not the "project
employees" were assigned to carry out a "specific project or undertaking," the duration
(and scope) of which were specified at the time the employees were engaged for that
project.

In the realm of business and industry, we note that "project" could refer to one or the other of
at least two (2) distinguishable types of activities. Firstly, a project could refer to a particular
job or undertaking that is within the regular or usual business of the employer company, but
which is distinct and separate, and identifiable as such, from the other undertakings of the
company. Such job or undertaking begins and ends at determined or determinable times. The
typical example of this first type of project is a particular construction job or project of a
construction company. A construction company ordinarily carries out two or more [distinct]
identifiable construction projects: e.g., a twenty-five-storey hotel in Makati; a residential
condominium building in Baguio City; and a domestic air terminal in Iloilo City. Employees
who are hired for the carrying out of one of these separate projects, the scope and duration of
which has been determined and made known to the employees at the time of employment, are
properly treated as "project employees," and their services may be lawfully terminated at
completion of the project.

The term "project" could also refer to, secondly, a particular job or undertaking that
is not within the regular business of the corporation. Such a job or undertaking must also be
identifiably separate and distinct from the ordinary or regular business operations of the
Page 104

employer. The job or undertaking also begins and ends at determined or determinable
times.[18]

Plainly, the litmus test to determine whether an individual is a project employee lies in setting
a fixed period of employment involving a specific undertaking which completion or
termination has been determined at the time of the particular employee's engagement.

In this case, as previously adverted to, the officers and the members of petitioner Union were
specifically hired as project employees for respondent's Leyte Geothermal Power Project
located at the Greater Tongonan Geothermal Reservation in Leyte. Consequently, upon the
completion of the project or substantial phase thereof, the officers and the members of
petitioner Union could be validly terminated.

Petitioner Union is adamant, however, that the lack of interval in the


employment contracts of its officer and members negates the latter's status

as mere project employees. For petitioner Union, the lack of interval further drives home its
point that its officers and members are regular employees who performed work which was
usually necessary or desirable to the usual business or trade of respondent.

We are not persuaded.

Petitioner Union's members' employment for more than a year does equate to their regular
employment with respondent. In this regard, Mercado, Sr. v. NLRC[19] illuminates:

The first paragraph [of Article 280 of the Labor Code] answers the question of who are regular
employees. It states that, regardless of any written or oral agreement to the contrary, an
employee is deemed regular where he is engaged in necessary or desirable activities in the
usual business or trade of the employer, except for project employees.

A project employee has been defined to be one whose employment has been fixed for a specific
project or undertaking, the completion or termination of which has been determined at the
time of the engagement of the employee, or where the work or service to be performed is
seasonal in nature and the employment is for the duration of the season, as in the present case.

The second paragraph of Art. 280 demarcates as "casual" employees, all other employees who
do not fall under the definition of the preceding paragraph. The proviso, in said second
paragraph, deems as regular employees those "casual" employees who have rendered at least
one year of service regardless of the fact that such service may be continuous or broken.

Petitioners, in effect, contend that the proviso in the second paragraph of Art. 280 is applicable
to their case and that the Labor Arbiter should have considered them regular by virtue of said
proviso. The contention is without merit.

The general rule is that the office of a proviso is to qualify or modify only the phrase
immediately preceding it or restrain or limit the generality of the clause that it immediately
follows. Thus, it has been held that a proviso is to be construed with reference to the
immediately preceding part of the provision to which it is attached, and not to the statute itself
or to other sections thereof. The only exception to this rule is where the clear legislative intent
is to restrain or qualify not only the phrase immediately preceding it (the proviso) but also
earlier provisions of the statute or even the statute itself as a whole.

Policy Instruction No. 12 of the Department of Labor and Employment discloses that the
concept of regular and casual employees was designed to put an end to casual employment in
regular jobs, which has been abused by many employers to prevent so - called casuals from
enjoying the benefits of regular employees or to prevent casuals from joining unions. The same
Page 105

instructions show that the proviso in the second paragraph of Art. 280 was not designed to
stifle small-scale businesses nor to oppress agricultural land owners to further the interests of
laborers, whether agricultural or industrial. What it seeks to eliminate are abuses of employers
against their employees and not, as petitioners would have us believe, to prevent small-scale
businesses from engaging in legitimate methods to realize profit. Hence, the proviso is
applicable only to the employees who are deemed "casuals" but not to the "project" employees
nor the regular employees treated in paragraph one of Art. 280.

Clearly, therefore, petitioners being project employees, or, to use the correct term, seasonal
employees, their employment legally ends upon completion of the project or the [end of the]
season. The termination of their employment cannot and should not constitute an illegal
dismissal.

Considering our holding that the officers and the members of petitioner Union were project
employees, its claim of union busting is likewise dismissed.

On the second issue, petitioner Union contends that there was no stoppage of work; hence,
they did not strike. Euphemistically, petitioner Union avers that it "only engaged in
picketing,"[20] and maintains that "without any work stoppage, [its officers and members] only
engaged in xxx protest activity."

We are not convinced. Petitioner Union splits hairs.

To begin with, quite evident from the records is the undisputed fact that petitioner Union filed
a Notice of Strike on December 28, 1998 with the Department of Labor and Employment,
grounded on respondent's purported unfair labor practices, i.e., "refusal to bargain collectively,
union busting and mass termination." On even date, petitioner Union declared and staged a
strike.

Second, then Secretary of Labor, Bienvenido E. Laguesma, intervened and issued a Return-to-
Work Order[21] dated January 4, 1999, certifying the labor dispute to the NLRC for compulsory
arbitration. The Order narrates the facts leading to the labor dispute, to wit:

On 28 December 1998, [petitioner Union] filed a Notice of Strike against [respondent] citing
unfair labor practices, specifically: refusal to bargain collectively, union busting and mass
termination as the grounds [therefor]. On the same day, [petitioner] Union went on strike and
took control over [respondent's] facilities of its Leyte Geothermal Project.

Attempts by the National Conciliation and Mediation Board -RBVIII to forge a mutually
acceptable solution proved futile.

In the meantime, the strike continues with no settlement in sight placing in jeopardy the
supply of much needed power supply in the Luzon and Visayas grids.

x x x x

The on-going strike threatens the availability of continuous electricity to these areas which is
critical to day-to-day life, industry, commerce and trade. Without doubt, [respondent's]
operations [are] indispensable to the national interest and falls (sic) within the purview of
Article 263 (g) of the Labor Code, as amended, which warrants (sic) the intervention of this
Office.

Third, petitioner Union itself, in its pleadings, used the word "strike."

Ultimately, petitioner Union's asseverations are belied by the factual findings of the NLRC, as
affirmed by the CA:
Page 106

The failure to comply with the mandatory requisites for the conduct of strike is both admitted
and clearly shown on record. Hence, it is undisputed that no strike vote was conducted;
likewise, the cooling-off period was not observed and that the 7-day strike ban after the
submission of the strike vote was not complied with since there was no strike vote taken.

x x x x

The factual issue of whether a notice of strike was timely filed by [petitioner] Union was
resolved by the evidence on record. The evidence revealed that [petitioner] Union struck even
before it could file the required notice of strike. Once again, this relied on [petitioner] Union's
proof. [Petitioner] Union['s] witness said:

Atty. Sinsuat: You stated that you struck on 28 December 1998 is that correct?

Witness : Early in the morning of December 1998.

x x x x

Atty. Sinsuat: And you went there to conduct the strike did you not?

Witness : Our plan then was to strike at noon of December 28 and the strikers will be
positioned at their respective areas.[22]

Article 263 of the Labor Code enumerates the requisites for holding a strike:

Art. 263. Strikes, picketing, and lockouts. - (a) x x x.

x x x x.

(c) In cases of bargaining deadlocks, the duly certified or recognized bargaining agent may file
a notice of strike or the employer may file a notice of lockout with the Department at least 30
days before the intended date thereof. In cases of unfair labor practice, the period of notice
shall be 15 days and in the absence of a duly certified bargaining agent, the notice of strike may
be filed by any legitimate labor organization in behalf of its members. However, in case of
dismissal from employment of union officers duly elected in accordance with the union
constitution and by-laws, which may constitute union busting, where the existence of the
union is threatened, the 15-day cooling-off period shall not apply and the union may take
action immediately.

(d) The notice must be in accordance with such implementing rules and regulations as the
Department of Labor and Employment may promulgate.

(e)During the cooling-off period, it shall be the duty of the Department to exert all efforts at
mediation and conciliation to effect a voluntary settlement. Should the dispute remain
unsettled until the lapse of the requisite number of days from the mandatory filing of the
notice, the labor union may strike or the employer may declare a lockout.

(f) A decision to declare a strike must be approved by a majority of the total union
membership in the bargaining unit concerned, obtained by secret ballot in meetings or
referenda called for that purpose. A decision to declare a lockout must be approved by a
majority of the board of directors of the corporation or association or of the partners in a
partnership, obtained by secret ballot in a meeting called for that purpose. The decision shall
be valid for the duration of the dispute based on substantially the same grounds considered
when the strike or lockout vote was taken. The Department may, at its own initiative or upon
the request of any affected party, supervise the conduct of the secret balloting. In every case,
Page 107

the union or the employer shall furnish the Department the results of the voting at least seven
days before the intended strike or lockout, subject to the cooling-off period herein provided.

In fine, petitioner Union's bare contention that it did not hold a strike cannot trump the factual
findings of the NLRC that petitioner Union indeed struck against respondent. In fact, and more
importantly, petitioner Union failed to comply with the requirements set by law prior to
holding a strike.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No.
65760 is AFFIRMED. Costs against petitioner Union.

SO ORDERED.

CASE NO. 14

Republic of the Philippines


Supreme Court
Manila

THIRD DIVISION
Page 108

BAGONG PAGKAKAISA NG G.R. No. 167401


MANGGAGAWA NG TRIUMPH
INTERNATIONAL, represented by
SABINO F. GRAGANZA, Union
President, and REYVILOSA TRINIDAD,
Petitioners,

- versus -

SECRETARY OF THE DEPARTMENT OF


LABOR AND EMPLOYMENT and
TRIUMPH INTERNATIONAL (PHILS.),
INC.,
Respondents.
x ---------------------------------------- x
TRIUMPH INTERNATIONAL (PHILS.),
INC., G.R. No. 167407
Petitioner, Present:
- versus -
CARPIO MORALES, J., Chairperson,
BAGONG PAGKAKAISA NG BRION,
MANGGAGAWA NG TRIUMPH BERSAMIN,
INTERNATIONAL, ELOISA FIGURA, *ABAD, and
JERRY JAICTEN, ROWELL FRIAS, VILLARAMA, JR., JJ.
MARGARITA PATINGO and
ROSALINDA OLANGAR, Promulgated:
Respondents.
July 5, 2010

x----------------------------------------------------------------------------------------x

DECISION

BRION, J.:

Before the Court are two separate petitions[1] which were consolidated pursuant to our
Resolution dated June 8, 2005.[2] The first,[3] filed by the Bagong Pagkakaisa ng Manggagawa ng
Triumph International (union), seeks to set aside the decision[4] of the Court of Appeals (CA) in
CA-G.R. SP No. 60516, and the subsequent resolution[5] ofMarch 10, 2005, on the parties
motion for reconsideration. The second,[6] filed by Triumph International (Phils.), Inc.
Page 109

(company), prays for the annulment of the same decision and resolution with respect to the
illegal dismissal issue.

THE ANTECEDENTS

The relevant facts, clearly laid out in the challenged CA decision, are summarized below.

The union and the company had a collective bargaining agreement (CBA) that expired
on July 18, 1999. The union seasonably submitted proposals to the company for its
renegotiation. Among these proposals were economic demands for a wage increase of P180.00
a day, spread over three (3) years, as follows: P70.00/day from July 19, 1999; P60.00/day
from July 19, 2000, and P50.00/day from July 19, 2001. The company countered with a wage
increase offer, initially at P42.00 for three years, then increased it to P45.00, also for three
years.

The negotiations reached a deadlock, leading to a Notice of Strike the union filed
on October 15, 1999.[7] The National Conciliation and Mediation Board (NCMB) exerted efforts
but failed to resolve the deadlock.

On November 15, 1999, the company filed a Notice of Lock-out[8] for unfair labor
practice due to the unions alleged work slowdown. The union went on strike three days later,
or on November 18, 1999.

On January 27, 2000, Secretary Bienvenido E. Laguesma (Labor Secretary) of the


Department of Labor and Employment (DOLE) assumed jurisdiction over the labor dispute,
pursuant to Article 263(g) of the Labor Code.[9] The Labor Secretary directed all striking
workers to return to work within twenty-four (24) hours from receipt of the assumption
order, while the company was directed to accept them back to work under the same terms and
conditions existing before the strike. The Labor Secretary also required the parties to submit
their respective position papers.

On February 2 and 3, 2000, several employees attempted to report for work, but the
striking employees prevented them from entering the company premises.

In a petition dated February 8, 2000,[10] the company asked the Labor Secretary to issue
an order directing the union to allow free ingress to and egress from the company premises; to
dismantle all structures obstructing free ingress and egress; and, to deputize the Philippine
Page 110

National Police to assist the DOLE in the peaceful implementation of the Labor Secretary's
January 27, 2000 order.

The Labor Secretary reiterated his directives in another order dated February 22,
2000,[11] and deputized Senior Superintendent Manuel A. Cabigon, Director of the Southern
Police District, to assist in the peaceful and orderly implementation of this Order.

At a conciliation meeting held on February 29, 2000, the company agreed to extend the
implementation of the return-to-work order until March 6, 2000.[12] The union, through a
letter dated March 2, 2000,[13] advised the NCMB Administrator of the union executive boards
decision to return to work the following day. In a letter also dated March 2, 2000,[14] the
company advised the NCMB Administrator that it was willing to accept all returning
employees, without prejudice to whatever legal action it may take against those who
committed illegal acts. The company also stated that all the union officers and members and
the union board members would be placed under preventive suspension, pending
investigation of their alleged illegal acts.

The striking employees returned to work on March 3 and 4, 2000 but twenty (20) union
officers and a shop steward were not allowed entry into the company premises. The excluded
union leaders were each served identical letters[15] directing them to explain in writing why
their employment should not be terminated or why no disciplinary action should be imposed
on them for defying and violating the Labor Secretarys assumption order of January 27, 2000
and the second return-to-work order of February 22, 2000; for blocking and resisting the entry
of returning employees on February 2, 3, and 8, 2000; for acts of violence committed on
February 24 and 25, 2000; and for defying the company'sreturn-to-work order of all
employees on February 8, 2000.[16]

On March 6, 2000, the twenty-one (21) union officers, by motion, asked the Labor
Secretary to issue a reinstatement order and to cite the company for contempt. On March 9,
2000, the Labor Secretary directed the company to accept the union officers and the shop
steward back to work, without prejudice to the continuation of the investigation.[17]
At the conciliation meeting of March 15, 2000, the company agreed to reinstate the
union officers in the payroll effective March 13, 2000[18] and withdrew its notice of lockout.[19]

On March 21, 2000, the union officers again received identically worded letters
requiring them to explain in writing within twenty-four (24) hours why no disciplinary action,
Page 111

including dismissal, should be taken against them for leading, instigating, and participating in a
deliberate work slowdown during the CBA negotiations.[20]

The union officers explained, as required, through their respective affidavits, [21] and a
hearing followed on May 5, 2000. Thereafter, the union officers were each served a notice of
termination of employment effective at the close of office hours on May 11, 2000.[22]

On June 8, 2000, the union and the officers filed a petition to cite the company and its
responsible officers for contempt, and moved that a reinstatement order be issued.[23]They
claimed that: (1) the company officials violated the Labor Secretarys return-to-work order
when these officials placed them under preventive suspension and refused them entry into the
company premises; (2) the company also violated the March 9, 2000 order of the Labor
Secretary when they were reinstated only in the payroll; and (3) the company committed
unfair labor practice and dismissed them without basis.

THE LABOR SECRETARYS DECISION

The Labor Secretary resolved the bargaining deadlock[24] and awarded a wage increase
of P48.00 distributed over three years, as follows:[25]

Effective July 19, 1999 P15.00/day


Effective July 19, 2000 P16.00/day
Effective July 19, 2001 - P17.00/day

The unions other economic demands and non-economic proposals were all denied.

The union moved for the reconsideration[26] of the Labor Secretarys decision, while the
company moved for its own partial reconsideration.[27] The Labor Secretary denied both
motions, declaring that the petition to cite the company and its responsible officers for
contempt had already been rendered moot and academic.[28] He also ruled that the legality of
the union officers dismissal properly falls within the original and exclusive jurisdiction of the
labor arbiter under Article 217 of the Labor Code.

The union elevated the case to the CA, through a petition for certiorari under Rule 65 of the
Rules of Court,[29] on the following grounds:
Page 112

1. The Labor Secretary committed grave abuse of discretion amounting to lack or excess
of jurisdiction when he denied the proposals of the 1,130 union members to improve
the existing CBA.

2. The Labor Secretary committed grave abuse of discretion when he declared that the
issue of reinstatement of the officers of the union and the petition to cite the company
and its responsible officers for contempt had become academic.

The union insisted on its demanded P180.00 daily wage increase distributed over three years
(1999 to 2001), arguing that the demand is just, fair and reasonable based on the company's
capacity to pay and the companys bargaining history. It noted that the company gave a P55.00
increase for the years 1993-1995, and P64.00 for the years 1996 to 1998.It also objected the
rejection of its other economic demands and non-economic proposals.
The union also contended that the company and its responsible officers should have
been held in contempt for violating the Labor Secretarys return-to-work order. It argued that
the officers should have been reinstated in the absence of substantial evidence supporting the
charges against them.

The company responded by praying for the dismissal of the petition for lack of abuse of
discretion on the part of the Labor Secretary. It posited that the P48.00 wage increase award is
more than reasonable, and that the Labor Secretary properly stayed his hand on the issue of
illegal dismissal as the matter was beyond his jurisdiction. The company likewise argued that
any question on the award had been mooted by the workers acceptance of the wage increase.

While the petition was pending, individual settlements were reached between certain
individual petitioners (Cenon N. Dionisio, Catalina N. Velasquez, Nila P. Tresvalles, Vivian A.
Arcos, Delia N. Soliven, Leticia S. Santos, Emerita D. Maniebo, Conchita R. Encinas, Elpidia C.
Cancino, Consolacion S. Umalia, Nenette N. Gonzales, Creselita D. Rivera, and Rolando O.
Madera) and the company. These petitioners executed their respective Release, Waiver and
Quitclaim after receiving their separation pay and other benefits from the company.[30]

In light of these developments and the workers acceptance of the wage award (except for the
union officers), the company moved for the dismissal of the petition.[31] The union and the
remaining union officers opposed the motion, contending that the workers acceptance of the
awarded wage increase cannot be considered a waiver of their demand; the receipt of
the P48.00 award was merely an advance on their demand. The Release, Waiver and Quitclaim
Page 113

executed by the 13 officers, on the other hand, cannot bind the officers who opted to maintain
the petition.

On December 17, 2001, two more officers Juliana D. Galo and Remedios C. Barque also
executed their respective Release, Waiver and Quitclaim.[32]

THE CA DECISION

The CA found the petition partly meritorious. It affirmed the Labor Secretary's wage increase
award, but modified his ruling on the dismissal of the union officers.[33]

On the wage issue and related matters, the CA found the Labor Secretarys award legally in
order. It noted the following factors supportive of the award:

1. The average daily salary of an employee of P310.00 is more than the statutory
minimum wage as admitted by the union itself.

2. The company grants to its employees forty-two (42) other monetary and welfare
benefits.

3. The increase in the wages of the employees carries with it a corresponding increase in
their salary-based benefits.

4. The wage increase granted to workers employed in the industry is less than the
increase proposed by the company.

5. The Asian financial crisis.

The CA also noted that, in the meantime, the parties had executed a new CBA for the years
2002 to 2005 where they freely agreed on a total P45.00/day wage increase distributed over
three years.

On the other hand, the CA faulted the Labor Secretary for not ruling on the dismissal of the
union officers. It took exception to the Labor Secretary's view that the dismissal question is
within the exclusive jurisdiction of the labor arbiter pursuant to Article 217 of the Labor
Code. It invoked the ruling of this Court in Interphil Laboratories Employees Union-FFW v.
Interphil Laboratories, Inc.,[34] which, in turn, cited International Pharmaceuticals, Inc. v.
Secretary of Labor,[35] where we held that the Labor Secretary has jurisdiction over all
Page 114

questions and controversies arising from an assumed dispute, including cases over which the
labor arbiter has exclusive jurisdiction.

The CA pointed out that while the labor dispute before the Labor Secretary initially involved a
bargaining deadlock, a related strike ensued and charges were brought against the union
officers (for defiance of the return-to-work order of the Labor Secretary, and leading,
instigating, and participating in a deliberate work slowdown during the CBA negotiations)
resulting in their dismissal from employment; thus, the dismissal is intertwined with the strike
that was the subject of the Labor Secretarys assumption of jurisdiction.

The CA, however, avoided a remand of the illegal dismissal aspect of the case to the Labor
Secretary on the ground that it would compel the remaining six officers, lowly workers who
had been out of work for four (4) years, to go through the calvary of a protracted litigation. In
the CAs view, it was in keeping with justice and equity for it to proceed to resolve the dismissal
issue itself.

The six remaining officers of the union Reyvilosa Trinidad, Eloisa Figura, Jerry Jaicten, Rowell
Frias, Margarita Patingo, and Rosalinda Olangar (shop steward) all stood charged with defying
(1) the Labor Secretarys return-to-work order of January 27, 2000,[36] and (2) the companys
general notice for the return of all employees on February 8, 2000.[37]Later, they were also
charged with leading, instigating, and participating in a deliberate slowdown during the CBA
negotiations.

The charges were supported by the affidavits of Ernesto P. Dayag, Salvio


Bayon, Victoria Sanchez, Lyndon Dinglasan, Teresita Nacion, Herman Vinoya, and Leonardo
Gomez.[38] The CA noted that in all these affidavits, no mention was ever made of [anyone] of
the six (6) remaining individual petitioners, save for Reyvilosa Trinidad. Also, none of the said
affidavits even hinted at the culpabilities of petitioners Eloisa Figura, Jerry Jaicten, Rowell
Frias, Margarita Patingo, and Rosalinda Olangar for the alleged illegal acts imputed to them.[39]

For failure of the company to prove by substantial evidence the charges against the remaining
officers, the CA concluded that their employment was terminated without valid and just cause,
making their dismissal illegal.

With respect to Trinidad, the CA found that her presence in the picket line and participation in
an illegal act obstructing the ingress to and egress from the company's premises were duly
Page 115

established by the affidavit of Bayon.[40] For this reason, the CA found Trinidad's dismissal
valid.
The appellate court thus affirmed the May 31, 2000[41] order of the Labor Secretary and
modified the resolution dated July 14, 2000.[42]

The CA denied the motions for reconsideration that the union and its officers, and the company
filed.[43] Hence, the present petitions.

THE PETITIONS

G.R. No. 167401

The petition is anchored on the following grounds

1. The CA erred in sustaining the Labor Secretary's wage increase award of P48.00/day
spread over three years.

2. The CA erred in finding the dismissal of Trinidad valid.

The union presents the following arguments

On the CBA Award

The union contends that the CBA wage increases from 1994 to 1998 ranged from P16.00/day
to P27.00/day for every year of the CBA period; the arguments behind the companys
decreased wage offer were the same arguments it raised in previous CBA negotiations; the
alleged financial crisis in the region on which the CBA award was based actually did not affect
the company because it sourced its raw materials from its mother company, thereby avoiding
losses; the companys leading status in the industry in terms of wages should not be used in the
determination of the award; rather, it should be based on the companys financial condition
and its number one rank among 7,000 corporations in the country manufacturing ladies, girls,
and babies garments, and number 46 in revenues with gross revenues of P1.08B, assets
of P525.5M and stockholders equity of P232.1M; in granting only a wage increase out of 44
items in its proposal, the award disregarded the factors on which its demands were based such
Page 116

as the peso devaluation and the daily expenditure of P1,400.00/day for a family of six (6) as
found by the National Economic and Development Authority.

On the Dismissal of Reyvilosa Trinidad

The union seeks a reversal of the dismissal of Trinidad. It argues that she was dismissed for
alleged illegal acts based solely on the self-serving affidavits executed by officers of the
company; the strike had not been declared illegal for the company had not initiated an action
to have it declared illegal; Trinidad was discriminated against because of the four union
officers mentioned in the affidavits, three were granted one month separation pay plus other
benefits to settle the dispute in regard to the three; also the same arrangement was entered
into with the other officers, which resulted in the signing of the waiver, quitclaim and release;
the only statement in the affidavits against Trinidad was her alleged megaphone message to
the striking employees not to return to work.

The union thus asks this Court to modify the assailed CA ruling through an order improving
the CBA wage award and the grant of the non-wage proposals. It also asks that the dismissal
of Trinidad be declared illegal, and that the company be ordered to pay the union moral and
exemplary damages, litigation expenses, and attorney's fees.

G.R. No. 167407


For its part, the company seeks to annul the CA rulings on the dismissal issue, on the following
grounds

1. The CA erred in ruling that the Labor Secretary abused his discretion in not resolving
the issue of the validity of the dismissal of the officers of the union.

2. The CA erred in resolving the factual issue of dismissal instead of remanding the case
for further proceedings.

3. In resolving the issue, the company was deprived of its right to present evidence and,
therefore, to due process of law.

The company submits that the Labor Secretary has no authority to decide the legality or
illegality of strikes or lockouts, jurisdiction over such issue having been vested on the labor
arbiters pursuant to Article 217 of the Labor Code; under Article 263 of the Code, the Labor
Secretarys authority over a labor dispute encompasses only the issues, not the legality or
illegality of any strike that may have occurred in the meantime.[44] It points out that before the
Labor Secretary can take cognizance of an incidental issue such as a dismissal question, it must
Page 117

first be properly submitted to him, as in the case of International Pharmaceuticals, Inc. v.


Secretary of Labor[45] where the Labor Secretary was adjudged to have the power to assume
jurisdiction over a labor dispute and its incidental issues such as unfair labor practices subject
of cases already ongoing before the National Labor Relations Commission (NLRC).

The company takes exception to the CA ruling that it submitted the dismissal issue to
the Labor Secretary claiming that it can be seen from its opposition to the unions petition to
cite the company for contempt;[46] that it consistently maintained that the Labor Secretary has
no jurisdiction over the dismissal issue; that the affidavits it submitted to the Labor Secretary
were only intended to establish the unions violation of the return-to-work orders and, to
support its petition, on February 8, 2000,[47] for the issuance of a return-to-work order; and,
that the CA overstepped its jurisdiction when it ruled on a factual issue, the sole office
of certiorari being the corrections of errors of jurisdiction, including the commission of grave
abuse of discretion.

The company likewise disputes the CAs declaration that it took into consideration all
the evidence on the dismissal issue, claiming that the evidence on record is deficient, for it did
not have the opportunity to adduce evidence to prove the involvement of the union officers in
the individual acts for which they were dismissed; had it been given the opportunity to present
evidence, it could have done so. To prove its point, it included in its motion for partial
reconsideration[48] a copy of the information,[49] charging union officers Nenette Gonzales and
Margarita Patingo of malicious mischief for stoning a company vehicle on February 25, 2000,
while the strike was ongoing.

Even assuming that it could no longer submit evidence on the dismissal of the union
officers, the company posits that sufficient grounds exist to uphold the dismissals. It maintains
that the officers are liable to lose their employment status for knowingly staging a strike after
the assumption of jurisdiction by the Labor Secretary and in defying the return-to-work
mandated by the assumption, which are considered prohibited activities under Article 264(a)
of the Labor Code, not to mention that without first having filed a notice, when the union
officers and members engaged in and instigated a work slowdown, a form of strike, without
complying with the procedural requirements for staging a strike, the union officers had
engaged in an illegal strike.

The parties practically reiterated these positions and the positions taken below in their
respective comments to each others petition.

THE COURT'S RULING


Page 118

The CBA Award

We affirm the CA's disposition, upholding the Labor Secretarys award in resolving the
bargaining deadlock between the union and the company for their 1999-2001 CBA.
We find no compelling justification to disturb the award. We are convinced, as the appellate
court was, of the reasonableness of the award. It was based on the prevailing economic
indicators in the workplace, in the industry, and in the local and regional economy. As well, it
took into account the comparative standing of the company in terms of employees' wages and
other economic benefits. We find the following factors as sufficient justification for the award:

1. The regional financial crisis and the downturn in the economy at the time, impacting
on the performance of the company as indicated in its negative financial picture in
1999.

2. The companys favorable comparison with industry standards in terms of employee


benefits, especially wages. Its average daily basic wage of P310.00 is 40% higher than
the statutory minimum wage of P223.50, and superior to the industrys average
of P258.00. For the years prior to the 1999 negotiations, its aggregate daily wage
increase of P64.00 surpassed the statutory minimum increase of P33.00.

3. The forty-two (42) non-wage benefit programs of the company which undeniably
extend the reach of the employees' cash wage in enhancing the well-being of the
employees and their families.

The Labor Secretary's Order of May 31, 2000 fully explained these considerations as
follows:[50]

We fully agree with the Union that relations between management and labor

ought to be governed by the higher precepts of social justice as enshrined in the

Constitution and in the laws. We further agree with it that the worker's over-all

well-being is as much affected by his wages as by other macro-economic factors

as the CPI, cost of living, the varied needs of the family. Yet, the other macro-

economic factors cited by the company such as the after-effects of the regional

financial crisis, the existing unemployment rate, and the need to correlate the

rate of wage increase with the CPI are equally important. Of course[,] other
Page 119

macro-economic factors such as the contraction of sales and production as well

as the growing lack of direct investors, are also important considerations. It is

noteworthy that both the Unionand Management recognize that the entire

gamut of macro-economic factors necessarily impact on the micro-economic

conditions of an individual company even in terms of wage increases.

The Union also makes mention of the need to factor in the industry where the

employer belongs x x x. This is affirmed by the Company when it provides a

comparison with the other key players in the industry. It has been properly

shown that its prevailing levels of wages and other benefits are, generally,

superior to its counterparts in the local garments industry. x x x

But even as we agree with the Union that the Company's negative financial

picture for 1999 should not be an overriding consideration in coming up with an

adjudicated wage increase, We cannot make the historical wage increases as our

starting point in determining the appropriate wage adjustment. The Companys

losses for 1999 which, even the Union recognizes, amounts to millions of pesos,

coupled with the current economic tailspin warrant a more circumspect view[.]

Cognizance is likewise made of the Company's 42 non-wage benefits programs

which substantially [answer] the Union's concerns with respect to the living

wage and the needs of a family. It would not be amiss to mention that said

benefits have their corresponding monetary valuations that in effect increase a

worker's daily pay. Likewise, the needed family expenditure is answered for not

solely by an individual family member's income alone, but also from other

incomes derived by the entire family from all possible sources.


Page 120

Considering the foregoing circumstances, We deem it reasonable and fair to

balance our award on wages.

The conclusions of the Labor Secretary, drawn as they were from a close examination of the
submissions of the parties, do not indicate any legal error, much less any grave abuse of
discretion. We accord respect to these conclusions as they were made by a public official
especially trained in the delicate task of resolving collective bargaining disputes, and are on
their face just and reasonable. [U]nless there is a clear showing of grave abuse of discretion,
this Court cannot, and will not, interfere with the labor expertise of the public respondent
Secretary of Labor, as the Court held in Pier Arrastre and Stevedoring Services v. Ma. Nieves
Roldan-Confesor, et al.[51]

We also note that during the pendency of the present dispute, the parties entered into a new
CBA for the years 2000-2005, providing for a P45.00/day wage increase for the workers. The
CA cited this agreed wage adjustment as an indication of the reasonableness of the disputed
award. The Labor Secretary himself alluded to the letter-manifestation received by this Office
on 15 June 2000 containing the signatures of some 700 employees of the Company indicating the
acceptance of the award rendered in the 31 May 2000 Order.[52] There was also the
manifestation of the company dated February 7, 2006, advising the Court that it concluded
another CBA with the union providing for a wage increase of P22.00/day effective July 19,
2005; P20.00/day for July 19, 2006; and P20.00/day for July 19, 2007.[53] The successful
negotiation of two collective agreements even before the parties could sit down and formalize
the 1999-2001 CBA highlights the need for the parties to abide by the decision of the Labor
Secretary and move on to the next phase of their collective bargaining relationship.

The Illegal Dismissal Issue

Before we rule on the substantive aspect of this issue, we deem it proper to resolve first the
companys submission that the CA erred: (1) in ruling that the Labor Secretary gravely abused
his discretion in not deciding the dismissal issue; and, (2) in deciding the factual issue itself,
instead of remanding the case, thereby depriving it of the right to present evidence on the
matter.

We agree with the CA's conclusion that the Labor Secretary erred, to the point of
abusing his discretion, when he did not resolve the dismissal issue on the mistaken reading
that this issue falls within the jurisdiction of the labor arbiter. This was an egregious error and
Page 121

an abdication of authority on the matter of strikes the ultimate weapon in labor disputes that
the law specifically singled out under Article 263 of the Labor Code by granting the Labor
Secretary assumption of jurisdiction powers. Article 263(g) is both an extraordinary and a
preemptive power to address an extraordinary situation a strike or lockout in an industry
indispensable to the national interest. This grant is not limited to the grounds cited in the
notice of strike or lockout that may have preceded the strike or lockout; nor is it limited to the
incidents of the strike or lockout that in the meanwhile may have taken place. As the term
assume jurisdiction connotes, the intent of the law is to give the Labor Secretary full authority
to resolve all matters within the dispute that gave rise to or which arose out of the strike or
lockout; it includes and extends to all questions and controversies arising from or related to
the dispute, including cases over which the labor arbiter has exclusive jurisdiction.[54]

In the present case, what the Labor Secretary refused to rule upon was the dismissal from
employment that resulted from the strike. Article 264 significantly dwells on this exact subject
matter by defining the circumstances when a union officer or member may be declared to
have lost his employment. We find from the records that this was an issue that arose from the
strike and was, in fact, submitted to the Labor Secretary, through the unions motion for the
issuance of an order for immediate reinstatement of the dismissed officers and the companys
opposition to the motion. Thus, the dismissal issue was properly brought before the Labor
Secretary and this development in fact gave rise to his mistaken ruling that the matter is
legally within the jurisdiction of the labor arbiter to decide.

We cannot disagree with the CAs sympathies when it stated that a remand of the case would
only compel the individual petitioners, x x x lowly workers who have been out of work for more
than four (4) years, to tread once again the [calvary] of a protracted litigation.[55] The dismissal
issue and its resolution, however, go beyond the realm of sympathy as they are governed by
law and procedural rules. The recourse to the CA was through the medium of a petition
for certiorari under Rule 65 an extraordinary but limited remedy. The CA was correct in
declaring that the Labor Secretary had seriously erred in not ruling on the dismissal issue, but
was totally out of place in proceeding to resolve the dismissal issue; its action required the
prior and implied act of suspending the Rules of Court a prerogative that belongs to this Court
alone. In the recent case of Marcos-Araneta v. Court of Appeals,[56] we categorically ruled that
the CA cannot resolve the merits of the case on a petition for certiorari under Rule 65 and must
confine itself to the jurisdictional issues raised. Let this case be another reminder to the CA
of the limits of its certiorari jurisdiction.
Page 122

But as the CA did, we similarly recognize that undue hardship, to the point of injustice,
would result if a remand would be ordered under a situation where we are in the position to
resolve the case based on the records before us. As we said in Roman Catholic Archbishop
of Manila v. Court of Appeals:[57]

[w]e have laid down the rule that the remand of the case to the lower court for

further reception of evidence is not necessary where the Court is in a position to

resolve the dispute based on the records before it. On many occasions, the Court,

in the public interest and for the expeditious administration of justice, has

resolved actions on the merits instead of remanding them to the trial court for

further proceedings, such as where the ends of justice, would not be subserved

by the remand of the case.[58]

Thus, we shall directly rule on the dismissal issue. And while we rule that the CA could not
validly rule on the merits of this issue, we shall not hesitate to refer back to its dismissal ruling,
where appropriate.

The first question to resolve is the sufficiency of the evidence and records before us to
support a ruling on the merits. We find that the union fully expounded on the merits of the
dismissal issue while the companys positions find principal support from the affidavits of
Dayag, Bayon, Sanchez, Dinglasan, Nacion, Vinoya, and Gomez. The affidavits became the bases
of the individual notices of termination of employment sent to
the union officers. The parties affidavits and their submitted positions constitute sufficient
bases to support a decision on the merits of the dismissal issue.

The dismissed union officers of the union originally numbered twenty-one (21), twenty (20) of
whom led by union President Cenon Dionisio were executive officers and members of
the union board. Completing the list was shop steward Olangar. As mentioned earlier, fifteen
(15) of the dismissed officers, including Dionisio, executed a Release, Waiver andQuitclaim and
readily accepted their dismissal.[59] Those who remained to contest their dismissal were
Reyvilosa N. Trinidad, 2nd Vice-President; Eloisa Figura, Asst. Secretary; Jerry Jaicten, PRO;
Rowell Frias, Board Member; Margarita Patingo, Board Member; and
Rosalinda Olangar, Shop Steward.
Page 123

The officers of the union subject of the petition were dismissed from the service for allegedly
committing illegal acts (1) during the CBA negotiations and (2) during the strike declared by
the union, shortly after the negotiations reached a deadlock. The acts alluded to under the first
category[60] involved leading, instigating, participating in a deliberate slowdown during the
CBA negotiations and, under the second,[61] the alleged defiance and violation by the union
officers of the assumption of jurisdiction and the return-to-work order of the Labor Secretary
dated January 27, 2000, as well as the second return-to-work order dated February 22,
2000. More specifically, in the course of the strike, the officers were charged with blocking
and preventing the entry of returning employees on February 2, 3, and 8, 2000; and on
February 24 and 25, 2000, when acts of violence were committed. They likewise allegedly
defied the company's general return-to-work notice for the return of all employees on
February 8, 2000.[62]

The CA erred in declaring that except for Trinidad, the company failed to prove by substantial
evidence the charges against the remaining union officers, thus making this dismissal illegal.
The appellate court noted that in all the affidavits the company submitted as evidence no
mention was ever made of [anyone] of the six (6) remaining individual petitioners, save for
Reyvilosa Trinidad. Also, none of the said affidavits even hinted at the culpabilities of
petitioners Eloisa Figuna, Jerry Jaicten, Rowell Frias, Margarita Patingo and Rosalinda Olangar
for the alleged illegal acts imputed to them.[63]

The charges on which the company based its decision to dismiss the union officers and the
shop steward may be grouped into the following three categories: (1) defiance of the return-
to-work order of the Labor Secretary, (2) commission of illegal acts during the strike, and (3)
leading, instigating and participating in a deliberate work slowdown during the CBA
negotiations.

While it may be true that the affidavits the company submitted to the Labor Secretary did not
specifically identify Figuna, Jaiden, Frias, Patingo and Olangar to have committed individual
illegal acts during the strike, there is no dispute that the union defied the return-to-work
orders the Labor Secretary handed down on two occasions, first on January 27, 2000 (more
than two months after the union struck on November 18, 1999) and on February 22, 2000. In
decreeing a return-to-work for the second time, the Labor Secretary noted:

To date, despite the lapse of the return-to-work period indicated in the Order,
the Union continues with its strike. A report submitted by NCMB-NCR even
indicated that all gates of the Company are blocked thereby preventing free
ingress and egress to the premises.[64]

Under the law,[65] the Labor Secretary's assumption of jurisdiction over the dispute or its
certification to the National Labor Relations Commission for compulsory arbitration shall have
the effect of automatically enjoining the intended or impending strike or lockout and all
Page 124

striking or locked out employees shall immediately return to work and the employer shall
immediately resume operations and readmit all workers under the same terms and conditions
before the strike or lockout. The union and its officers, as well as the workers, defied the Labor
Secretary's assumption of jurisdiction, especially the accompanying return-to-work order
within twenty-four (24) hours; their defiance made the strike illegal under the law[66] and
applicable jurisprudence.[67] Consequently, it constitutes a valid ground for dismissal.[68] Article
264(a), paragraph 3 of the Labor Code provides that Any union officer who knowingly
participates in an illegal strike and any worker or union officer who knowingly participates in
the commission of illegal acts during a strike may be declared to have lost his employment
status.

The union officers were answerable not only for resisting the Labor Secretary's assumption of
jurisdiction and return-to-work orders; they were also liable for leading and instigating and, in
the case of Figura, for participating in a work slowdown (during the CBA negotiations), a form
of strike[69] undertaken by the union without complying with the mandatory legal
requirements of a strike notice and strike vote. These acts are similarly prohibited activities.[70]

There is sufficient indication in the case record that the union officers, collectively, save for
shop steward Olangar, were responsible for the work slowdown, the illegal strike, and the
violation of the Labor Secretary's assumption order, that started with the slowdown in July
1999 and lasted up to March 2000 (or for about ten (10) months). [71] These illegal concerted
actions could not have happened at the spur of the moment and could not have been sustained
for several months without the sanction and encouragement of the union and its officers;
undoubtedly, they resulted from a collective decision of the entire union leadership and
constituted a major component of the unions strategy to obtain concessions from the company
management during the CBA negotiations.

That the work slowdown happened is confirmed by the affidavits[72] and the
documentary evidence submitted by the company. Thus, Ernesto P. Dayag, a security officer of
the agency servicing the company (Tamaraw Security Service, Inc.) stated under oath that in
October 1999, the union members were engaging in a noise-barrage everyday and when it was
time to go back to work at noontime, they would mill around the production area or were at
the toilet discussing the ongoing CBA negotiations (among others), and were slow in their
movements; in late October (October 27, 1999), they did the same thing at about seven oclock
in the morning which was already time for work; even those who were already working were
deliberately slow in their movements. On November 12, 1999, when union officer Lisa
Velasquez talked to the union members at lunchtime regarding the CBA negotiations, only
about 50% of the union members returned to their work stations.

Victoria P. Sanchez, a sewer in the company's production department, deposed that sometime
in the middle of September 1999, the sewers were told by the shop stewards to reduce their
efficiency below 75%. They followed the order as it came from a decision of the union officers
at a meeting. It was not difficult to comply with the order because they only had to slow down
Page 125

at the pre-production and early segments of the production line so that the rest of the line
would suffer.

Teresita T. Nacion, another sewer, corroborated Sanchez's deposition stating that in mid-
September 1999, during the CBA negotiations, the sewers were told by the shop stewards to
reduce their efficiency below 75% pursuant to the union decision to slow down production so
that the company would suffer losses.

The work slowdown resulted in production losses to the company which it documented and
submitted in evidence[73] before the Labor Secretary and was summarized in the affidavit[74] of
Leonardo T. Gomez, who testified on the impact of the decrease of the workers production
efficiency that peaked in September, October, and November 1999, resulting in a financial loss
to the company of P69.277M. Specifically, the companys efficiency record for the year
1999[75] posted Eloisa C. Figuras[76] work performance from April to June 1999 at 77.19% and
from July to November 1999 at 51.77%, a substantial drop in her efficiency.

The unions two-pronged strategy to soften the companys stance in the CBA negotiations
culminated in its declaration of a strike on November 18, 1999, which prompted the Labor
Secretarys intervention through an assumption of jurisdiction. Judging from the manner the
union staged the strike, it is readily apparent that the unions objective was to paralyze the
company and to maintain the work stoppage for as long as possible.

This is the economic war that underlies the Labor Codes strike provisions, and which
the same Code also tries to temper by regulation. Thus, even with the assumption of
jurisdiction and its accompanying return-to-work order, the union persisted with the strike
and prevented the entry to the company premises of workers who wanted to report back for
work. In particular, Salvio Bayon, a company building technician and a member of the union,
deposed that at about seven o'clock in the morning of February 3, 2000, he and ten (10) of his
co-employees attempted to enter the company premises, but they were prevented by a
member of the strikers, led by union President Cenon Dionisio and other officers of the union;
the same thing happened on February 8, 24 and 28, 2000.[77]

In the face of the union's defiance of his first return-to-work order, the Labor Secretary issued
a second return-to-work directive on February 22, 2000 where the labor official noted that
despite the lapse of the return-to-work period indicated in the order, the union continued with
its strike.[78] At a conciliation meeting on February 29, 2000, the company agreed to extend the
implementation of the return-to-work order to March 6, 2000.[79] The union, through a letter
dated March 2, 2000,[80] advised the NCMB administrator of the decision of the union executive
board for the return to work of all striking workers the following day. In a letter also dated
March 2, 2000,[81] the company also advised the NCMB Administrator that it was willing to
accept all returning employees, without prejudice to whatever legal action it may take against
those who committed illegal acts.
Page 126

The above union letter clearly shows the involvement of the entire union leadership in
defying the Labor Secretary's assumption of jurisdiction order as well as return-to-work
orders. From the illegal work slowdown to the filing of the strike notice, the declaration of the
strike, and the defiance of the Labor Secretary's orders, it was the union officers who were
behind the every move of the striking workers; and collectively deciding the twists and turns of
the strike which even became violent as the striking members prevented and coerced
returning workers from gaining entry into the company premises. To our mind, all the union
officers who knowingly participated in the illegal strike knowingly placed their employment
status at risk.

In a different vein, the union faulted the company for having dismissed the officers, there being
no case filed on the legality or illegality of the strike. We see no merit in this argument. In Gold
City Integrated Port Service, Inc. v. NLRC,[82] we held that [t]he law, in using the word may,
grants the employer the option of declaring a union officer who participated in an illegal strike
as having lost his employment. We reiterated this principle in San Juan De Dios Educational
Foundation Employees Union-Alliance of Filipino Workers v. San Juan De Dios Educational
Foundation, Inc.,[83] where we stated that Despite the receipt of an order from the SOLE to
return to their respective jobs, the Union officers and members refused to do so and defied the
same. Consequently, then, the strike staged by the Union is a prohibited activity under Article
264 of the Labor Code. Hence, the dismissal of its officers is in order. The respondent
Foundation was, thus, justified in terminating the employment of the petitioner Union's
officers.
The union attempted to divert attention from its defiance of the return-to-work orders with
the specious submission that it was the company which violated the Labor Secretary's January
27, 2000 order, by not withdrawing its notice of lockout.[84]

The evidence indicates otherwise. The Labor Secretary himself, in his order of February 22,
2000,[85] noted that the union continued its strike despite the lapse of the return-to-work
period specified in his January 27, 2000 order. There is also the report of the NCMB-NCR
clearly indicating that all gates of the company were blocked, thereby preventing free ingress
to and egress from the company premises. There, too, was the letter of the company personnel
manager, Ralph Funtila, advising the union that the company will comply with the Labor
Secretary's January 27, 2000 order; Funtila appealed to the striking employees and the officers
to remove all the obstacles and to lift their picket line to ensure free ingress and
egress.[86] Further, as we earlier noted, the union itself, in its letter of March 2, 2000, advised
the NCMB that the union board of directors had decided to return to work on March 3, 2000
indicating that they had been on strike since November 18, 1999 and were defiant of the
return-to-work orders since January 28, 2000.

As a final point, the extension of the return-to-work order and the submission of all striking
workers, by the company, cannot in any way be considered a waiver that the union officers can
use to negate liability for their actions, as the CA opined in its assailed decision. [87] In the first
place, as clarified by Funtila's letter to the NCMB dated March 2, 2000,[88] the company will
accept all employees who will report for work up to March 6, 2000, without prejudice to
Page 127

whatever legal action it may take against those who committed illegal acts. He also clarified
that it extended the return-to-work, upon request of the union and the DOLE to accommodate
employees who were in the provinces, who were not notified, and those who were sick.

As a point of law, we find that the company did not waive the right to take action against the
erring officers, and this was acknowledged by the Labor Secretary himself in his order of
March 9, 2000,[89] when he directed the company to accept back to work the twenty (20) union
officers and one (1) shop steward[,] without prejudice to the Company's exercise of its
prerogative to continue its investigation. The order was issued upon complaint of the union
that the officers were placed under preventive suspension.

For having participated in a prohibited activity not once, but twice, the union officers, except
those our Decision can no longer reach because of the amicable settlement they entered into
with the company, legally deserve to be dismissed from the service. For failure of the company,
however, to prove by substantial evidence the illegal acts allegedly committed by Rosalinda
Olangar, who is a shop steward but not a union officer, we find her dismissal without a valid
cause.

WHEREFORE, premises considered, judgment is hereby


rendered AFFIRMING with MODIFICATION the challenged decision and
resolution of the Court of Appeals in CA-G.R. SP No. 60516, as follows:

1. The collective bargaining award of DOLE Secretary Bienvenido E. Laguesma,


contained in his order dated May 31, 2000, is fully AFFIRMED;
2. The dismissal of REYVILOSA TRINIDAD, union 2nd Vice-President, is
likewise AFFIRMED;
3. The dismissal of ELOISA FIGURA, Assistant Secretary; JERRY JAICTEN, Press
Relations Officer; and ROWELL FRIAS, Board Member, is declared VALID and for a
just cause; and
4. The dismissal of ROSALINDA OLANGAR is declared illegal. The CA award
is SUSTAINED in her case.

SO ORDERED.

CASE NO. 15

FIRST DIVISION

G.R. No. 168362 October 12, 2006

FAR EASTERN UNIVERSITY - DR. NICANOR REYES MEDICAL FOUNDATION (FEU-NRMF)


and LILIA P. LUNA. M.D., petitioners,
vs.
FEU-NRMF EMPLOYEES ASSOCIATION-ALLIANCE OF FILIPINO WORKERS (FEU-NRMFEA-
AFW), union officers DANTE F. SUCGANG, VIRGILIO P. BLANCO, FERNANDO S.P.
Page 128

VILLAPANDO, LORNA M. MELECIO, FLORENCIA O. REYES, MERCEDITA P. MENDOZA,


LEONOR B. VIAJAR, union members DORIS ABOLENCIA, SUSAN ADRIANO, AVELINO
AGUILAR, REYNALDO AGUSTIN, SERGIO ALINGOD, MARSHA EILEEN ALMAZAN, ELOISA
ALONZO, LILIAN AMBITO, FERDINAND ANGELES, PABLOITO ARGUIL, RAYMUNDO
ATAYDE, RANULFO AUSTRIA, JOHNNY BALABBO, DELIA BALINGIT, DAISY BANGUIS,
CRISPIN BARANGAN, EVELYN BARCENAS, JONATHAN BASILIO, ROMULO BLANCO,
ALFREDO CABALLES, NOLAN FERNANDEZ, VICENTE FERRER, ALLAN FLORES, MANUEL
GALANG, ESTELA CABANA, WILFREDO CABANTOG, VIRGINIA CABRERA, MEDI GRACE
CACHO, CLARA CANDELARIA, NELIA CHIU, ANTONIA CHOZAS, IGNACIO CHUA, RUTH
CUARTERO, AMELITA DECICATORIA, VICTORINO DELOS SANTOS, YOLANDA DEL
ROSARIO, JOSE ANTHONY DEL ROSARIO, FE DIZON, RENATO DUAÑO, ANTONIO DUARTE,
GERTRUDES DUNGO, DEOGRACIAS ESPAÑO, GREGORIO ESPINOSA, ELEANOR M.
FAJARDO, EMILIA FAJARDO, EDUARDO FRAMIL, DITCHER GARCIA, HILDA GARLITOS,
JUSTINA GOOT, JOSEFINA GRIMALDO, GERARDO GUTIERREZ, PRECILA IMPERIAL,
MELLYN INSERTO, MICHELLE IRAELA, DIVINE GRACE JEREZO, RAMERO JUSPICIO,
LORENA GRACE LAO, DEXTER LA TORRE, RONALD LANUZA, OFELIO LAZARO,
CARMELITA LIPANA, JESUS LIBERES, ZAIL BENNET LIM, MERLIE LIWANAG, ROSENDO
LOBERIANO, DELIO LOTERTE, MA. SHEILA LOTERTE, FELIX LUBAO, DENNIS LUCE,
ANASTACIO LUZON, ARACELI MAGLANTAY, NELIA MAGSINO, MA. TERESA MALALUAN,
REMUS MAPULA, MYRNA MARCENA, ROSEMARIE MANGONON, PANCHO MANUCOM,
GENARO MARASIGAN, MARIO MARCOS, WILDA MARTINEZ, DONALYN MENDOZA,
TERESITA MENDOZA, VIVIAN MENDOZA, FELIZA MERCADO, TOMAS MERCADO, ROSITA
MESINA, ADORA MEJICA, CRISANTO MONIS, HUBERTO NIEVA, JOHN NORCIO, HERMAN
OBRERO, JR., CRISTINA ONG, FLORDELIZA ORBIEN, LUCILA PAGLINAWAN, ROMEO
PAPIO, ROSARIO PACIAL, ALFREDO PARREÑAS, CHRISTINE PEREZ, RODOLFO PEREZ,
FRANCISCO PIDLAOAN, EDUARDO PUSING, FELIMON QUITALEG, BERNADETH RADOC,
HERMES RAQUEÑO, JASMIN RAZON, ELISA REYES, AGNES RIEGO, GLENDA RIVERA, JONEL
ROMERO, RODEL ROPEREZ, ELENITA RUAN, MARISA RUIZ, MARIO SANTOS, ARSENIA
SAOI, ROSIE SARAOSOS, DESIRE SARGADE, EDGAR SIM, LOLITA SISON, GERTRUDES
TALLADOR, ZENAIDA TAN, EVANGELINE TRINIDAD, VILMA TULABOT, MARIE TULLA,
MARY ANN VILLAFANIA, RODOLFO VILLEGAS, GLENDA VALLANO, DELSA WARQUEZ, the
ALLIANCE OF FILIPINO WORKERS (AFW), federation officers GREGORIO C. DEL PRADO
and JOSE UMALI, respondents.

DECISION

YNARES-SANTIAGO, J.:

Before Us is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court, as
amended, assailing the 22 March 2005 Decision1 of the Court of Appeals in CA-G.R. SP No.
86690 and its 22 June 2005 Resolution2 denying the Motion for Reconsideration of petitioner
Far Eastern University - Dr. Nicanor Reyes Medical Foundation’s (FEU-NRMF) Motion for
Reconsideration. The challenged Decision disposed thus:

WHEREFORE, finding grave abuse of discretion, committed by public respondent NLRC,


the instant petition is GRANTED. The assailed Resolution, dated 23 September 2002,
and Order, dated 30 June 2004, are hereby REVERSED and SET ASIDE in so far as the
illegality of the strike and loss of employment status of individual petitioners are
concerned. All other respects are AFFIRMED. No costs at this instance.3
Page 129

Petitioner FEU-NRMF is a medical institution duly organized and existing under the Philippine
laws. On the other hand, respondent union is a legitimate labor organization and is the duly
recognized representative of the rank and file employees of petitioner FEU-NRMF.

In 1994, petitioner FEU-NRMF and respondent union entered into a Collective Bargaining
Agreement (CBA) that will expire on 30 April 1996.

In view of the forthcoming expiry, respondent union, on 21 March 1996, sent a letter-
proposal4 to petitioner FEU-NRMF stating therein their economic and non-economic proposals
for the negotiation of the new CBA.

On 8 May 1996, petitioner FEU-NRMF sent a letter-reply5 flatly rejecting respondent union’s
demands and proposed to maintain the same provisions of the old CBA. Petitioner FEU-NRMF
reasoned that due to financial constraints, it cannot afford to accede to a number of their
demands for educational and death benefits, uniforms, longetivity pay, meal allowance and
special pay, but nevertheless gave an assurance that it will seriously consider their proposal on
salary increase.

In an effort to arrive at a compromise, subsequent conciliation proceedings were conducted


before the National Conciliation and Mediation Board - National Capital Region (NCMB-NCR)
but because of the unyielding stance of both parties, the negotiation failed.

On 6 August 1996, respondent union filed a Notice of Strike before NCMB-NCR on the ground
of bargaining deadlock. A strike vote was conducted on 23 August 1996 and the result thereof
was submitted to NCMB-NCR on 26 August 1996. After the expiration of the thirty-day cooling
off period and the seven-day strike ban, respondent union, on 6 September 1996, staged a
strike.6

Before the strike was conducted, respondent union, on 4 September 1996, offered a skeletal
force of nursing and health personnel who will man the hospital’s operation for the duration of
the strike. For reasons unknown to respondent union, however, petitioner FEU-NRMF failed or
refused to accept the offer.

For its part, petitioner FEU-NRMF, on 29 August 1996, filed a Petition for the Assumption of
Jurisdiction or for Certification of Labor Dispute with the National Labor Relations Commission
(NLRC), underscoring the fact that it is a medical institution engaged in the business of
providing health care for its patients.7

Acting on the petition, the Secretary of Labor, on 5 September 1996, granted the petition and
thus issued an Order8 assuming jurisdiction over the labor dispute, thereby prohibiting any
strike or lockout whether actual or impending, and enjoining the parties from committing any
acts which may exacerbate the situation.

On 6 September 1996, Francisco Escuadra, the NLRC process server, certified that, on 5
September 1996 at around 4:00 P.M., he attempted to serve a copy of the Assumption of
Jurisdiction Order to the union officers but since no one was around at the strike area, he just
posted copies of the said Order at several conspicuous places within the premises of the
hospital.

Claiming that they had no knowledge that the Secretary of Labor already assumed jurisdiction
over the pending labor dispute as they were not able to receive a copy of the Assumption of
Jurisdiction Order, striking employees continued holding a strike until 12 September 1996.

On 12 September 1996, the Secretary of Labor issued another Order9 directing all the striking
employees to return to work and the petitioner FEU-NRMF to accept them under the same
terms and conditions prevailing before the strike. Accordingly, on 13 September 1996, a
Page 130

Return to Work Agreement was executed by the disputing parties, whereby striking employees
agreed to return to their work and the petitioner FEU-NRMF undertook to accept them under
status pro ante. On the same day, the striking employees returned to their respective stations.

Subsequently, petitioner FEU-NRMF filed a case before the NLRC, contending that respondent
union staged the strike in defiance of the Assumption of Jurisdiction Order; hence, it was
illegal. Further, the said strike was conducted in a deleterious and prejudicial manner,
endangering the lives of the patients confined at the hospital. In its complaint docketed as
NLRC-NCR No. 10-11-0733-96, petitioner FEU-NRMF specifically alleged that the striking
employees effectively barricaded the ingress and egress of the hospital, thus, preventing trucks
carrying the supplies of medicines and food for the patients from entering the hospital’s
premises. In one instance, an ambulance carrying a patient in critical condition was likewise
prevented from passing through the blockade. Finally, respondent union also prevented
patients from seeking medical assistance by blocking their way into the hospital. In order to
redress the wrongful and illegal acts of the respondent union, petitioner FEU-NRMF prayed for
the declaration that the strike is illegal and, resultantly, for the dismissal of the striking
employees and decertification of the respondent union, plus damages.

In contrast, respondent union avers that petitioner FEU-NRMF refused to bargain collectively
despite hefty financial gains and, thus, guilty of surface bargaining. Before staging a strike,
respondent union complied with the procedural requirements by filing a notice of strike and
strike vote with the NCMB-NCR. The thirty-day cooling off period and the seven-day strike ban
was also fully observed. Respondent union also offered a skeletal work force but it was refused
by petitioner FEU-NRMF. The strike was conducted in a peaceful and orderly manner where
striking employees merely sat down outside the hospital’s premises with their placards airing
their grievances. Petitioner FEU-NRMF’s allegation of sabotage, therefore, was merely
concocted. Finally, respondent maintained that they did not defy any order of the Secretary of
Labor because neither its officers nor its members were able to receive a copy of the same.

On 27 May 1998, the Labor Arbiter rendered a Decision10 declaring the strike illegal and
dismissing the union officers for conducting the strike in defiance of the Assumption of
Jurisdiction Order. The dispositive portion of the decision reads:

WHEREFORE, a decision is hereby rendered cast in favor of complainants and against


the respondents declaring the strike conducted by the latter last September 5-14,
[1996] illegal and the following individual respondents officers of union employed by
complainant hospital to have lost their employment status, Dante F. Sugcang, Virgilio P.
Blanco, Fernando S.P. Villapando, Lorna M. Melecio, Florencia O. Reyes, Mercedita P.
Mendoza and Leonor P. Vajar.

The prayer for decertification is hereby denied for lack of jurisdiction and the prayer for
damages is likewise denied for lack of sufficient evidence.

Aggrieved, the respondent union filed a Partial Appeal11 before the NLRC asserting that the
Labor Arbiter gravely abused its discretion in denying a formal trial and in holding that the
Assumption of Jurisdiction Order dated 5 September 1996 was properly served. In its Partial
Appeal Memorandum12 filed on 29 July 1998, respondent union claimed that the Labor Arbiter
erred in declaring the strike illegal and in adjudging that the union officers have lost their
employment status.

On 23 September 2002, the NLRC handed down a Resolution13 affirming in toto the Decision of
the Labor Arbiter dated 27 May 1998 and, thus, upheld the illegality of the strike and loss of
employment status of the union officers. The NLRC found that during the conciliation
proceedings before the NCMB-NCR, the union officers admitted that they were aware that the
Secretary of Labor issued an Assumption of Jurisdiction Order which enjoined the strike they
Page 131

were conducting. There was, therefore, an utter defiance of the said Order, making the strike
illegal. The union officers’ dismissal is thus warranted.

Undaunted, the respondent union filed a Motion for Reconsideration14 which was likewise
denied by the NLRC in its Resolution15 dated 30 June 2004, for failure to present positive
averment that the Resolution16 dated 11 October 2002 contains palpable or patent errors as
required by the NLRC Revised Rules of Procedure.

Consequently, the respondent union brought a Petition for Certiorari under Rule 65 before the
Court of Appeals seeking to annul the NLRC Resolution dated 23 September 2002, affirming
the Decision of the Labor Arbiter dated 27 May 1998 and the Resolution dated 30 June 2004,
denying its Motion for Reconsideration. In its Petition17docketed as CA-G.R. SP No. 86690, FEU-
NRMF Employees Association-Alliance of Filipino Workers (FEU-NRMFEA-AFW), Dante Sugcang,
Virgilio Blanco, Norma Melencio and Florencia Reyes v. National Labor Relations Commission,
and Far Eastern University – Dr. Nicanor Reyes Medical Foundation (FEU-NRMF), respondent
union alleged that the public respondents committed grave abuse of discretion amounting to
lack or excess of jurisdiction in rendering the aforesaid judgments which are contrary to law
and established jurisprudence.

On 22 March 2005, the Court of Appeals rendered a Decision granting the Petition and
reversing the assailed Resolution dated 23 September 2002, and Order dated 30 June 2004, as
they were made with grave abuse of discretion amounting to lack or excess of jurisdiction. The
appellate court found that no personal service was validly effected by the process server that
could bind the striking employees.

Similarly ill-fated was petitioner FEU-NRMF’s motion for reconsideration which was denied
through the Court of Appeals’ Resolution promulgated on 22 June 2005.18

Petitioners are now before this Court assailing the aforementioned decision and resolution of
the Court of Appeals on the ground that the appellate court erred in reversing both the
decisions of the Labor Arbiter and the NLRC.19

For our resolution are the following issues:

I.

WHETHER OR NOT SERVICE OF THE ASSUMPTION OF JURISDICTION ORDER WAS


VALIDLY EFFECTED.

II.

WHETHER OR NOT THE STRIKE CONDUCTED BY THE RESPONDENT UNION WAS


ILLEGAL.

III.

WHETHER OR NOT THE DISMISSAL OF THE UNION OFFICERS WAS VALID.

The crucial question for the determination of this Court, however, is whether the service of the
Assumption of Jurisdiction Order was validly effected by the process server so as to bind the
respondent union and hold them liable for the acts committed subsequent to the issuance of
the said Order.

The certification/proof of service of the process server, Francisco A. Escuadra, dated 6


September 1996, reads:
Page 132

CERTIFICATION/PROOF OF SERVICE

This is to certify that on September 5, 1996 at around 4:00 P.M., I attempted to serve a
copy of the Order of Assumption of Jurisdiction issued by the Secretary of Labor and
Employment, to the officials of the FEU-NRMF Employees Association-AFL.

Since none of the officials of the said union was available to receive a copy of the said
Order, I posted copies of the same at several conspicuous places within the premises of
Far Eastern University Nicanor Reyes Medical Foundation (FEU-NRMF).

The copies of the Order were posted on September 5, 1996 at around 4:30 PM.

Manila, Philippines, 6 September 1996.20

It can be inferred from the foregoing that the process server resorted to posting the Order
when personal service was rendered impossible since the striking employees were not present
at the strike area. This mode of service, however, is not sanctioned by either the NLRC Revised
Rules of Procedure or the Revised Rules of Court.

The pertinent provisions of the NLRC Revised Rules of Procedure21 read:

Section 6. Service of Notices and Resolutions.

(a) Notices or summons and copies of orders, shall be served on the parties to the
case personally by the Bailiff or duly authorized public officer within three (3)
days from receipt thereof or by registered mail; Provided that in special
circumstances, service of summons may be effected in accordance with the
pertinent provisions of the Rules of Court; Provided further, that in cases of
decisions and final awards, copies thereof shall be served on both parties and
their counsel or representative by registered mail; Provided further, that in cases
where a party to a case or his counsel on record personally seeks service of the decision
upon inquiry thereon, service to said party shall be deemed effected upon actual receipt
thereof; Provided finally, that where parties are so numerous, service shall be made on
counsel and upon such number of complainants, as may be practicable, which shall be
considered substantial compliance with Article 224(a) of the Labor Code, as amended.
(Emphasis supplied.)

An Order issued by the Secretary of Labor assuming jurisdiction over the labor dispute is not a
final judgment for it does not dispose of the labor dispute with finality. 22 Consequently, the
rule on service of summons and orders, and not the proviso on service of decisions and final
awards, governs the service of the Assumption of Jurisdiction Order.

Under the NLRC Revised Rules of Procedure, service of copies of orders should be made by the
process server either personally or through registered mail. However, due to the urgent nature
of the Assumption of Jurisdiction Order and the public policy underlying the injunction carried
by the issuance of the said Order, service of copies of the same should be made in the most
expeditious and effective manner, without any delay, ensuring its immediate receipt by the
intended parties as may be warranted under the circumstances. Accordingly, in this
case, personal service is the proper mode of serving the Assumption of Jurisdiction
Order.

It is also provided under the same rules that in special circumstances, service of summons may
be effected in accordance with the pertinent provisions of the Rules of Court.23

Parenthetically, the manner upon which personal service may be made is prescribed by the
following provisions of the Revised Rules of Court:
Page 133

Rule 13. Filing and Service of Pleadings, Judgments And Other Papers.

Section 6. Personal service. – Service of the papers may be made by delivering


personally a copy to the party or his counsel, or by leaving it in his office with his clerk
or with a person having charge thereof. if no person is found in his office, or his office is
not known, or he has no office, then by leaving a copy, between the hours of eight in the
morning and six in the evening, at the party’s or counsel’s residence, if known, with a
person of sufficient age and discretion then residing therein.

Let it be recalled that the process server merely posted copies of the Assumption of
Jurisdiction Order in conspicuous places in the hospital. Such posting is not prescribed by the
rules, nor is it even referred to when the said rules enumerated the different modes of effecting
substituted service, in case personal service is impossible by the absence of the party
concerned.

Clearly, personal service effectively ensures that the notice desired under the constitutional
requirement of due process is accomplished. If, however, efforts to find the party concerned
personally would make prompt service impossible, service may be completed by substituted
service, that is, by leaving a copy, between the hours of eight in the morning and six in the
evening, at the party’s or counsel’s residence, if known, with a person of sufficient age and
discretion then residing therein.

Substituted service derogates the regular method of personal service. It is therefore required
that statutory restrictions for effecting substituted service must be strictly, faithfully and fully
observed. Failure to comply with this rule renders absolutely void the substituted service
along with the proceedings taken thereafter.24 The underlying principle of this rigid
requirement is that the person, to whom the orders, notices or summons are addressed, is
made to answer for the consequences of the suit even though notice of such action is made, not
upon the party concerned, but upon another whom the law could only presume would notify
such party of the pending proceedings.25

Applying this principle in the case at bar, presumption of receipt of the copies of the
Assumption of Jurisdiction Order could not be lightly inferred from the circumstances
considering the adverse effect in case the parties failed to heed to the injunction directed by
such Order. Worthy to note that in a number of cases, we have ruled that defiance of the
assumption and return-to-work orders of the Secretary of Labor after he has assumed
jurisdiction is a valid ground for the loss of employment status of any striking union officer or
member.26 Employment is a property right of which one cannot be deprived of without due
process.27 Due process here would demand that the respondent union be properly notified of
the Assumption of Jurisdiction Order of the Secretary of Labor enjoining the strike and
requiring its members to return to work. Thus, there must be a clear and unmistakable proof
that the requirements prescribed by the Rules in the manner of effecting personal or
substituted service had been faithfully complied with. Merely posting copies of the Assumption
of Jurisdiction Order does not satisfy the rigid requirement for proper service outlined by the
above stated rules. Needless to say, the manner of service made by the process server was
invalid and irregular. Respondent union could not therefore be adjudged to have defied the
said Order since it was not properly apprised thereof. Accordingly, the strike conducted by the
respondent union was valid under the circumstances.

For a strike to be valid, the following requisites must concur: (1) the thirty-day notice or the
fifteen-day notice, in case of unfair labor practices; (2) the two-thirds (2/3) required vote to
strike done by secret ballot; and (3) the submission of the strike vote to the Department of
Labor and Employment at least seven days prior to the strike.28In addition, in case of strikes in
hospitals, clinics and medical institutions, it shall be the duty of the striking employees to
provide and maintain an effective and skeletal workforce of medical and other health
personnel in order to insure the proper and adequate protection of the life and health of its
Page 134

patients.29 These procedural requirements, along with the mandatory cooling off and strike
ban periods had been fully observed by the respondent union.

It is true that the strike may still be declared invalid where the means employed are illegal
even if the procedural requisites before staging a strike were satisfied.30 However, in the
absence of evidence to support the allegations that the respondent union did not commit
illegal acts during the strike, we are constrained to dismiss the allegations and uphold the
strike as a valid exercise of the worker’s constitutional right to self-organization and collective
bargaining.

The affidavits presented by the petitioner FEU-NRMF and relied upon by the Labor Arbiter and
the NLRC, in arriving at the conclusion that the respondent union committed illegal acts during
the strike, could not be given probative value by this Court as the adverse party was not given
a chance to cross-examine the affiants. In a catena of labor cases, this Court has consistently
held that where the adverse party is deprived of the opportunity to cross-examine the affiants,
affidavits are generally rejected for being hearsay, unless the affiants themselves are placed on
the witness stand to testify thereon.31 Neither can this Court rely on the photographs
supporting these allegations without verifying its authenticity.

Verily, this Court is not bound to uphold the erroneous findings of the administrative bodies.
While it is well-settled that findings of facts of the Labor Arbiter, when affirmed by the NLRC,
are entitled to great respect and are generally binding on this Court, it is equally settled that
this Court will not uphold erroneous conclusions of the said bodies as when we find
insufficient or insubstantial evidence on record to support these factual findings. The same
holds true when it is perceived that far too much is concluded, inferred or deduced from the
bare allegations or insufficient evidence appearing on the record.

Prescinding from the above, as the strike conducted by the respondent union is valid and legal,
there is therefore no cogent reason to dismiss the union officers.

WHEREFORE, premises considered, the instant Petition is DENIED. Costs against the
petitioner.

SO ORDERED.

CASE NO. 16

G.R. No. 140518. December 16, 2004]

MANILA DIAMOND HOTEL EMPLOYEES UNION, petitioner, vs. THE HON. COURT OF
APPEALS, THE SECRETARY OF LABOR AND EMPLOYMENT, and THE MANILA
DIAMOND HOTEL, respondents.

DECISION
AZCUNA, J.:

This petition for review of a decision of the Court of Appeals arose out of a dispute
between the Philippine Diamond Hotel and Resort, Inc. (Hotel), owner of the Manila Diamond
Hotel, and the Manila Diamond Hotel Employees Union (Union). The facts are as follows:
Page 135

On November 11, 1996, the Union filed a petition for a certification election so that it may
be declared the exclusive bargaining representative of the Hotels employees for the purpose of
collective bargaining. The petition was dismissed by the Department of Labor and Employment
(DOLE) on January 15, 1997. After a few months, however, on August 25, 1997, the Union sent
a letter to the Hotel informing it of its desire to negotiate for a collective bargaining
agreement.[1] In a letter dated September 11, 1997, the Hotels Human Resources Department
Manager, Mary Anne Mangalindan, wrote to the Union stating that the Hotel cannot recognize
it as the employees bargaining agent since its petition for certification election had been earlier
dismissed by the DOLE.[2] On that same day, the Hotel received a letter from the Union stating
that they were not giving the Hotel a notice to bargain, but that they were merely asking for
the Hotel to engage in collective bargaining negotiations with the Union for its members only
and not for all the rank and file employees of the Hotel.[3]
On September 18, 1997, the Union announced that it was taking a strike vote. A Notice of
Strike was thereafter filed on September 29, 1997, with the National Conciliation and
Mediation Board (NCMB) for the Hotels alleged refusal x x x to bargain and for alleged acts of
unfair labor practice. The NCMB summoned both parties and held a series of dialogues, the
first of which was on October 6, 1997.
On November 29, 1997, however, the Union staged a strike against the Hotel. Numerous
confrontations between the two parties followed, creating an obvious strain between them.
The Hotel claims that the strike was illegal and it had to dismiss some employees for their
participation in the allegedly illegal concerted activity. The Union, on the other hand, accused
the Hotel of illegally dismissing the workers. What is pertinent to this case, however, is the
Order issued by the then Secretary of Labor and Employment Cresenciano B. Trajano assuming
jurisdiction over the labor dispute. A Petition for Assumption of Jurisdiction was filed by the
Union on April 2, 1998. Thereafter, the Secretary of Labor and Employment issued an Order
dated April 15, 1998, the dispositive portion of which states:

WHEREFORE, premises considered[,] this Office CERTIFIES the labor dispute at the Manila
Diamond Hotel to the National Labor Relations Commission, for compulsory arbitration,
pursuant to Article 263 (g) of the Labor Code, as amended.

Accordingly, the striking officers and members of the Manila Diamond Hotel Employees Union
--- NUWHRAIN are hereby directed to return to work within twenty-four (24) hours upon
receipt of this Order and the Hotel to accept them back under the same terms and conditions
prevailing prior to the strike. The parties are enjoined from committing any act that may
exacerbate the situation.

The Union received the aforesaid Order on April 16, 1998 and its members reported for
work the next day, April 17, 1998. The Hotel, however, refused to accept the returning workers
and instead filed a Motion for Reconsideration of the Secretarys Order.
On April 30, 1998, then Acting Secretary of Labor Jose M. Espaol, issued the disputed
Order, which modified the earlier one issued by Secretary Trajano. Instead of an actual return
to work, Acting Secretary Espaol directed that the strikers be reinstated only in the
payroll.[4] The Union moved for the reconsideration of this Order, but its motion was denied on
June 25, 1998. Hence, it filed before this Court on August 26, 1998, a petition
for certiorari under Rule 65 of the Rules of Court alleging grave abuse of discretion on the part
of the Secretary of Labor for modifying its earlier order and requiring instead the
reinstatement of the employees in the payroll. However, in a resolution dated July 12, 1999,
this Court referred the case to the Court of Appeals, pursuant to the principle embodied
in National Federation of Labor v. Laguesma.[5]
On October 19, 1999, the Court of Appeals rendered a Decision dismissing the Unions
petition and affirming the Secretary of Labors Order for payroll reinstatement. The Court of
Appeals held that the challenged order is merely an error of judgment and not a grave abuse of
Page 136

discretion and that payroll reinstatement is not prohibited by law, but may be called for under
certain circumstances.[6]
Hence, the Union now stands before this Court maintaining that:

THE HONORABLE COURT OF APPEALS GRIEVIOUSLY ERRED IN RULING THAT THE


SECRETARY OF LABORS UNAUTHORIZED ORDER OF MERE PAYROLL REINSTATEMENT IS
NOT GRAVE ABUSE OF DISCRETION[7]

The petition has merit.


The Court of Appeals based its decision on this Courts ruling in University of Santo Tomas
(UST) v. NLRC.[8] There, the Secretary assumed jurisdiction over the labor dispute between
striking teachers and the university. He ordered the striking teachers to return to work and the
university to accept them under the same terms and conditions. However, in a subsequent
order, the NLRC provided payroll reinstatement for the striking teachers as an alternative
remedy to actual reinstatement. True, this Court held therein that the NLRC did not commit
grave abuse of discretion in providing for the alternative remedy of payroll reinstatement. This
Court found that it was merely an error of judgment, which is not correctible by a special civil
action for certiorari. The NLRC was only trying its best to work out a satisfactory ad
hoc solution to a festering and serious problem.
However, this Court notes that the UST ruling was made in the light of one very important
fact: the teachers could not be given back their academic assignments since the order of the
Secretary for them to return to work was given in the middle of the first semester of the
academic year. The NLRC was, therefore, faced with a situation where the striking teachers
were entitled to a return to work order, but the university could not immediately reinstate
them since it would be impracticable and detrimental to the students to change teachers at
that point in time.
In the present case, there is no showing that the facts called for payroll reinstatement as an
alternative remedy. A strained relationship between the striking employees and management
is no reason for payroll reinstatement in lieu of actual reinstatement. Petitioner correctly
points out that labor disputes naturally involve strained relations between labor and
management, and that in most strikes, the relations between the strikers and the non-strikers
will similarly be tense.[9] Bitter labor disputes always leave an aftermath of strong emotions
and unpleasant situations. Nevertheless, the government must still perform its function and
apply the law, especially if, as in this case, national interest is involved.
After making the distinction between UST and the present case, this Court now addresses
the issue of whether the Court of Appeals erred in ruling that the Secretary did not commit any
grave abuse of discretion in ordering payroll reinstatement in lieu of actual reinstatement. This
question is answered by the nature of Article 263(g). As a general rule, the State encourages an
environment wherein employers and employees themselves must deal with their problems in
a manner that mutually suits them best. This is the basic policy embodied in Article XIII,
Section 3 of the Constitution,[10] which was further echoed in Article 211 of the Labor
Code.[11] Hence, a voluntary, instead of compulsory, mode of dispute settlement is the general
rule.
However, Article 263, paragraph (g) of the Labor Code, which allows the Secretary of
Labor to assume jurisdiction over a labor dispute involving an industry indispensable to the
national interest, provides an exception:

(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or
lockout in an industry indispensable to the national interest, the Secretary of Labor and
Employment may assume jurisdiction over the dispute and decide it or certify the same to the
Commission for compulsory arbitration. Such assumption or certification shall have the effect
of automatically enjoining the intended or impending strike or lockout as specified in the
assumption or certification order. If one has already taken place at the time of assumption or
Page 137

certification, all striking or locked out employees shall immediately return to work and the
employer shall immediately resume operations and readmit all workers under the same terms
and conditions prevailing before the strike or lockout. x x x

This provision is viewed as an exercise of the police power of the State. A prolonged strike
or lockout can be inimical to the national economy and, therefore, the situation is imbued with
public necessity and involves the right of the State and the public to self-protection.[12]
Under Article 263(g), all workers must immediately return to work and all employers
must readmit all of them under the same terms and conditions prevailing before the strike or
lockout. This Court must point out that the law uses the precise phrase of under the same
terms and conditions, revealing that it contemplates only actual reinstatement. This is in
keeping with the rationale that any work stoppage or slowdown in that particular industry can
be inimical to the national economy. It is clear that Article 263(g) was not written to protect
labor from the excesses of management, nor was it written to ease management from
expenses, which it normally incurs during a work stoppage or slowdown. It was an error on
the part of the Court of Appeals to view the assumption order of the Secretary as a measure to
protect the striking workers from any retaliatory action from the Hotel. This Court reiterates
that this law was written as a means to be used by the State to protect itself from an
emergency or crisis. It is not for labor, nor is it for management.
It is, therefore, evident from the foregoing that the Secretarys subsequent order for mere
payroll reinstatement constitutes grave abuse of discretion amounting to lack or excess of
jurisdiction. Indeed, this Court has always recognized the great breadth of discretion by the
Secretary once he assumes jurisdiction over a labor dispute. However, payroll reinstatement in
lieu of actual reinstatement is a departure from the rule in these cases and there must be
showing of special circumstances rendering actual reinstatement impracticable, as in
the UST case aforementioned, or otherwise not conducive to attaining the purpose of the law in
providing for assumption of jurisdiction by the Secretary of Labor and Employment in a labor
dispute that affects the national interest. None appears to have been established in this case.
Even in the exercise of his discretion under Article 236(g), the Secretary must always keep in
mind the purpose of the law. Time and again, this Court has held that when an official by-
passes the law on the asserted ground of attaining a laudable objective, the same will not be
maintained if the intendment or purpose of the law would be defeated.[13]
WHEREFORE, the petition is GRANTED and the assailed Decision of the Court of Appeals
dated October 19, 1999 is REVERSED and SET ASIDE. The Order dated April 30, 1998 issued
by the Secretary of Labor and Employment modifying the earlier Order dated April 15, 1998, is
likewise SET ASIDE. No pronouncement as to costs.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Ynares-Santiago, and Carpio, JJ., concur.
Quisumbing, J., no part.

CASE NO. 17

G.R. Nos. 88710-13 : December 19, 1990.]


192 SCRA 396
UNION OF FILIPRO EMPLOYEES (UFE), MANUEL L. SARMIENTO, BENJAMIN M.
ALTAREJOS, RODOLFO D. PAGLINAWAN, CARMELITA G. NUQUI, CORAZON Y SAZON,
RODRIGO P. LUCAS, RUDOLPH C. ARMAS, EDUARDO A. ABELLA, ANGEL A. CANETE,
JUANITO T. CAPILI, ADOLFO S. CASTILLO, JR., PONCIANO A. CARINGAL, ERIBERTO S.
LEONARDO, ADELAIDA B. MIRA, EUGENIA C. NUÑEZ, PAZ B. SAN JOSE, VENUSITO S. SOLIS,
EMMANUEL S. VILLENA, ALFONSO R. RICAFRENTE, MELANIO C. LANTIN, AMADOR M.
Page 138

MONTOJO, RODOLFO M. MUNSOD, RENATO P. DIAZ, RODRIGO M. URGELLES, CARLOS B.


SAN JOSE, EUSTAQUIO E. BUNYI, NELSON P. CENTENO, SOTERO A. GACUTAN, GUILLERMO
G. DE BORJA, DIONISIO H. NIPALES, EUGENIO S. SAN PEDRO, MANUEL DELA FUENTE,
CARLO MEDINA, CESAR B. PONCE, JORGE B. CASTRO, JR., RICARDO AREVALO, REY M.
BEO, FELIX ESGUERRA, REYNALDO ALMENANZA, MELITON C. ROXAS (as represented by
his surviving spouse, MA. CORAZON ROXAS), ROMEO A. ARANDELA, ISIDRO A.
NATIVIDAD, EMILIANO M. SAYAO, CELSO J. CENIDO, PAUL C. MEJARES, SILVERIO C.
PAMPANG, DIONISIO S. CANLOBO, GILBERT C. NOBLE, RODOLFO D. CALONG-CALONG,
SR., PEPITO Q. QUITLONG, DIONISIO C. COMPLETO, ANTONIO T. AVELINO, ANGELITO
PAYABYAB, ISAIAS A. RIEZA, DEODITO M. BELARMINO, QUEZON G. MATEO, CARLITO
PRE, CIPRIANO P. LUPEBA, EFREN P. DINSAY, WILDON C. BARROS, SUSAN A. BERRO,
MANUEL A. LAVIN, ROY U. BACONGUIS, JEROME T. FIEL, ANASTACIO G. CABALLERO, JR.,
ROGELIO E. RAIZ, JOSE T. ISIDTO, ANGELITO M. ANICIETE, RAUL ROBERTO C. NANQUIL,
LIZA T. VILLANUEVA, CESAR S. CRUZ, REYNALDO L. CALIGUIA, ERNESTO M. SOLOMON,
OSCAR G. AGUINALDO, DIEGO P. OLIVA, JAIME D. NILLAS, ELPIDIO A. HERMOCILLA,
DANTE L. ESCOSURA, FEDERICO P. CONTEMPRATO, LAURO C. MAKILING, RENATO O.
MINDANAO, RAFAEL C. TURA AND QUINTIN J. PEDRIDO, JR., Petitioners, vs. NESTLÉ
PHILIPPINES, INC., NATIONAL LABOR RELATIONS COMMISSION, HON. EDUARDO G.
MAGNO, HON. ZOSIMO T. VASALLO and HON. EVANGELINE S. LUBATON, Respondents.

DECISION

MEDIALDEA, J.:

This petition assails the decision of the NLRC, dated November 2, 1988 on the consolidated
appeals of petitioners, the dispositive portion of which provides as follows:
"1. In NLRC Case No. NCR-12-4007-85 and NLRC Case No. NCR-1-295-86 —
a. Declaring the strike illegal;
b. Declaring the following respondent union officers, namely; M.L. Sarmiento, B.M. Altarejos,
R.D. Paglinawan, C.G. Nuqui, C.Y. Sazon, R. Armas, E. Abella, A.A. Cañete, A.B. Mira, P.C. Caringal,
E. Leonardo E.C. Nuñez, P.D. San Jose, E. Villena A. Ricafrente, M. Lantin, A. Montojo, R. Monsud,
R. Diaz, R. Urgelles, C. San Jose, E. Bunyi, N. Centeno, R. Gacutan, G. de Borja, N. Nipales, E. San
Pedro, C. Ponce, J. Castro, R. Beo, E. Quino, M. Roxas, R. Arandela, W. Ramirez, I. Natividad, S.
Pampang, D. Canlobo, R. Calong-Calong, G. Noble, E. Sayao, C. Cenido, P. Mijares, P. Quitlong, A.
Avelino, L. Payabyab, I. Rieza, C. Pre, D. Belarmino, to have lost their employment status;
c. Ordering the reinstatement of the following respondents-appellants: Juanito Capili, Carlo
Medina, Rodrigo Lucas, Adoho Castillo, Jr., Venusito Solis, Ricardo Arevalo, Quezon G. Mateo,
Jr., Dionisio Completo, Felix Esguerra, Manuel dela Fuente and Reymundo Almenanza, to their
former or equivalent positions without loss of seniority rights but without backwages;
d. Declaring the union (UFE) guilty of unfair labor practice; and
e. Dismissing the union complaint for unfair labor practice.- nad
2. In RAB-X-2-0047-86, the decision sought to be set aside is AFFIRMED and the individual
respondents-appellants namely: Roy Baconguis, Jerome T. Fiel, Efren P. Dinsay, Anastacio G.
Caballero, Susan E. Berro, Jose T. Isidto, Wilson C. Barros, Rogelio E. Raiz, Manuel A. Lavin,
Cipriano P. Lupeba are hereby declared to have lost their employment status;.
3. In NLRC-00-09-0385-87, the challenged decision is likewise AFFIRMED, except as it affects
Cesar S. Cruz, who is ordered reinstated to his former or equivalent position without
backwages." (pp. 417-418, Rollo)
and the resolution dated March 7, 1989, quoted as follows:
Page 139

"NLRC CASE NO. NCR-12-4007-85 entitled Union of Filipro Employees (UFE), Petitioner-
Appellants, versus, Filipro, Inc., et al., Respondents-Appellees, NLRC CASE NO. NCR-1-295-86
entitled Nestle Phils., Inc., Petitioner-Appellee, versus, Union of Filipro Employees, et al.,
Respondents-Appellants, NLRC CASE NO. RAB-X-2-0047-86 entitled Nestle Phils., Inc.,
Petitioner-Appellee, versus, Cagayan de Oro Filipro Workers Union-WATU, et al., Respondents-
Appellants, NCR-00-09-0385-87 entitled Union of Filipro Employees (UFE) and its officers,
Complainants-Appellants, versus, Nestle Phils., et al., Respondents-Appellees. The Commission
sitting en banc, after deliberation, resolved to rectify par. 3 of the dispositive portion of our
November 2, 1988 resolution by ordering the reinstatement of Quezon G. Mateo, Jr. and
Dionisio Completo to their former or equivalent position without backwages and to deny the
motion for reconsideration filed by appellants UFE and its Officials adversely affected by said
resolution." (p. 429, Rollo)
In a lengthy and voluminous petition, dwelling largely on facts, petitioner Union of Filipro
Employees and 70 union officers and a member (henceforth "UFE") maintain that public
respondent NLRC had acted with grave abuse of discretion in its affirmance of the decisions of
the Labor Arbiters a quo, declaring illegal the strikes staged by UFE.
Respondent NLRC premised its decision on the following sets of facts:
1. In NCR 12-4007-85 and NCR 1-295-86:
UFE filed a notice of strike on November 14, 1985, (BLR-NS-11-344-85) with the Bureau of
Labor Relations against Filipro (now Nestle Philippines, Inc., ["Nestle"]). On December 4, 1988,
UFE filed a complaint for Unfair Labor Practice (ULP) against Nestle and its officials for
violation of the Labor Code (Art. 94) on Holiday Pay, non-implementation of the CBA
provisions (Labor Management Corporation scheme), Financial Assistance and other unfair
labor practice (p. 381, Rollo).:- nad
Acting on Nestle's petition seeking assumption of jurisdiction over the labor dispute or its
certification to the NLRC for compulsory arbitration, then Minister of Labor and Employment
Blas F. Ople assumed jurisdiction over the dispute and issued the following order on December
11, 1985:
"WHEREFORE, this Office hereby assumes jurisdiction over the labor dispute at Filipino, Inc.
pursuant to Article 264(g) of the Labor Code of the Philippines, as amended. In lime with this
assumption a strike, lockout, or any other form of concerted action such as slowdowns,
sitdowns, noise barrages during office hours, which tend to disrupt company operations, are
strictly enjoined.
Let a copy of this Order be published in three (3) conspicuous places inside company premises
for strict compliance of all concerned." (p. 381-382, Rollo)
On December 20, 1985, UFE filed a petition for Certiorari with prayer for issuance of
temporary restraining order, with this Court (G.R. No. 73129) assailing the assumption of
jurisdiction by the Minister. Notwithstanding the automatic injunction against any concerted
activity, and an absence of a restraining order, the union members, at the instigation of its
leaders, and in clear defiance of Minister Ople's Order of December 11, 1986, staged a strike
and continued to man picket lines at the Makati Administrative Office and all of Nestle's
factories and warehouses at Alabang, Muntinlupa, Cabuyao, Laguna, and Cagayan de Oro City.
Likewise, the union officers and members distributed leaflets to employees and passersby
advocating a boycott of company products (p. 383, Rollo).
On January 23, 1986, Nestle filed a petition to declare the strike illegal (NCR-1-295-86)
premised on violation of the CBA provisions on "no strike/no lockout" clause and the
grievance machinery provisions on settlement of disputes.
On January 30, 1986, then Labor Minister Ople issued another Order, with this disposition:
"WHEREFORE, in line with the Order of December 11, 1985, this Office hereby orders all the
striking workers to report for work and the company to accept them under the same terms
Page 140

and conditions prevailing before the work stoppage within forty eight (48) hours from notice
of this Order.
The Director of Labor Relations is designated to immediately conduct appropriate hearings
and meetings and submit his recommendations to enable this Office to decide the issues within
thirty (30) days." (p. 383, Rollo)
Despite receipt of the second order dated January 30, 1986, and knowledge of a notice caused
to be published by Nestle in the Bulletin on February 1, 1986, advising all workers to report to
work not later than February 3, 1986, the officers and members of UFE continued with the
strike.
On February 4, 1986, the Minister B. Ople denied their motion for reconsideration of the
return-to-work order portion as follows:
"WHEREFORE, the motion for reconsideration is hereby denied and no further motion of
similar nature shall be entertained.: nad
"The parties are further enjoined from committing acts that will disrupt the peaceful and
productive relations between the parties while the dispute is under arbitration as well as acts
considered illegal by law for the orderly implementation of this Order like acts of coercion,
harassment, blocking of public thoroughfares, ingress and egress to company premises for
lawful purposes or those undertaken without regard to the rights of the other party.
"Police and military authorities are requested to assist in the proper and effective
implementation of this Order." (p. 384, Rollo)
UFE defied the Minister and continued with their strike. Nestle filed criminal charges against
those involved.
On March 13, 1986, the new Minister of Labor and Employment, Augusto B. Sanchez, issued a
Resolution, the relevant portions of which stated thus:
"This Office hereby enjoins all striking workers to return-to-work immediately and
management to accept them under the same terms and conditions prevailing previous to the
work stoppage except as qualified in this resolution. The management of Nestle Philippines is
further directed to grant a special assistance as suggested by this Ministry in an order dated 30
January 1986 to all striking employees covered by the bargaining units at Makati, Alabang,
Cabuyao and Cagayan de Oro City in an amount equivalent to their weighted average monthly
basic salary, plus the cash conversion value of the vacation leave credits for the year 1986,
payable not later than five (5) days from the date of the actual return to work by the striking
workers." (p. 385, Rollo)
On March 17, 1986, the strikers returned to work.
On March 31, 1986, We granted UFE's Motion to Withdraw its Petition for Certiorari(G.R. No.
73129) (p. 385, Rollo)
On April 23, 1986, Minister Sanchez rendered a Decision, the dispositive portion of which
reads:
WHEREFORE, the Union charge for unfair labor practices is hereby dismissed for want of
merit. Nestle Philippines is hereby directed to make good its promise to grant an additional
benefit in the form of bonus equivalent to one (1) month's gross compensation to all
employees entitled to the same in addition to the one-month weighted average pay granted by
this office in the return-to-work Order." (p. 786, Rollo)
On June 6, 1986, Minister Sanchez modified the foregoing decision as follows:
"WHEREFORE, our 23 April 1986 Decision is hereby modified as follows:
"1. Nestle Philippines is directed to pay the Anniversary bonus equivalent to one month basic
salary to all its employees in lieu of the one month gross compensation previously ordered by
this office." (p. 787, Rollo)
Page 141

On November 13, 1987, after trial on the merits, Labor Arbiter Eduardo G. Magno issued his
decision, disposing as follows:
"WHEREFORE, judgment is hereby rendered:
"1. Declaring the strike illegal.: nad
"2. Declaring all the respondent union officers, namely: M.L. Sarmiento, R.M. Alterejos, R.D.
Paglinawan, C.G. Nuqui, C.Y. Sazon, R. Lucas, R. Armas, E. Abella, A.A. Cañete, J.T. Capili, A.S.
Castillo, Jr., P.C. Caringal, E. Leonardo, E.B. Mira, E.C. Nuñez, P.D. San Jose, V. Solis, E. Villena, A.
Ricafrente, M. Lantin, A. Mortojo, R. Munsod, R. Diaz, R. Urgelles, C. San Jose, E. Bunyi, N.
Centeno, R. Gacutan, G. de Borja, N. Nipales, E. San Pedro, M. de la Fuente, C. Medina, C. Ponce, J.
Castro Jr., R. Arevalo, R. Beo, F. Esguerra, R. Almenanza, E. Quino, M. Roxas, R. Arandela, W.
Ramirez, I. Natividad, S. Pampang, D. Canlobo, G. Noble, E. Sayao, C. Cenido, F. Mijares, R.
Calong-Calong, P. Quitlong, D. Completo, A. Avelino, L. Payabyab, I. Rieza, D. Belarmino, Q.
Mateo, and C. Pre to have lost their employment status.
"3. Declaring the union guilty of unfair labor practice; and
"4. Dismissing the Union complaint for unfair labor practice." (pp. 380-381, Rollo)
2. In RAB-X-2-0047-86:
Filipro (Nestle) and the Cagayan de Oro Filipro Workers Union-WATU, renewed a 3-year
contract, made effective from December 1, 1984 up to June 30, 1987. Petitioners signed the
CBA as the duly-elected officers of the Union.
On January 19, 1985, the union officers, together with other members of the union sent a letter
to Workers Alliance Trade Unions (WATU), advising them "that henceforth we shall administer
the CBA by ourselves and with the help of the Union of Filipro Employees (UFE) to where we
have allied ourselves." WATU disregarded the unions's advice, claiming to be the contracting
party of the CBA. UFE filed a petition (Case No. CRD-M-88-326-85) for administration of the
existing CBAs at Cebu, Davao and Cagayan de Oro bargaining units against TUPAS and WATU.
From January 22, 1986 to March 14, 1986, the rank and file employees of the company staged a
strike at the instigation of the UFE officers, who had represented themselves as officers.
Nestle filed a petition to declare the strike illegal. The strikers countered that their strike was
legal because the same was staged pursuant to the notice of strike filed by UFE on November
14, 1985 (BLR-NS-11-344-85), of which they claim to be members, having disaffiliated
themselves from CDO-FWU-WATU.
On November 24, 1987, Executive Labor Arbiter Zosimo Vasallo issued his decision, disposing
as follows:
"WHEREFORE, in view of the foregoing, judgment is hereby rendered:
"1. Declaring the strike illegal;
"2. Declaring respondent union guilty of unfair labor practice; and
"3. Declaring the following individual respondent Union officers namely: Roy Y. Baconguis,
Jerome T. Fiel, Efren P. Dinsay, Anastacio G. Caballero, Susan E. Berro, Jose T. Isidto, Wilson C.
Barros, Rogelio E. Raiz, Manuel A. Lavin and Cipriano P. Lupeba to have lost their employment
status." (p. 388, Rollo)
3. In NCR-00-09-03285-87.
(a) On August 13, 1986, UFE, its officers and members staged a walkout from their jobs, and
participated in the Welga ng Bayan. Nestlé filed a petition to declare the walkout illegal (NLRC
Case No. SRB-IV-1831-87) (p. 392, Rollo);
(b) On September 21, 1986, complainants (UFE) again did not proceed to their work, but
joined the picket line in sympathy with the striking workers of Southern Textile Mills, which
became the subject of an Illegal Strike Petition (NLRC Case SRB-IV-I 1831-87) (p. 392, Rollo);
Page 142

(c) On November 12, 1986, UFE its officers and members just left their work premises and
marched towards Calamba in a demonstration over the slaying of a labor leader, . . . hence a
complaint for Illegal Walkout (NLRC Case No. SRB-IV-1833-87) was filed by Nestle (p. 392,
Rollo);
(d) On December 4, 1986, UFE filed a Notice of Strike with the Bureau of Labor Relations (BLR-
NS-12-531-86) (to protest the unfair labor practices of Nestle, such as hiring of contractual
workers to perform regular jobs and wage discrimination) (p. 392, Rollo);
(e) On December 23, 1986, then Minister Augusto S. Sanchez certified the labor dispute to the
Commission for compulsory arbitration, strictly enjoining any intended or actual strike or
lockout (p. 392, Rollo);
(f) On August 18, 1987, UFE union officers and members at the Cabuyao factory again
abandoned their jobs and just walked out, leaving unfinished products on line and raw
materials leading to their spoilage. The walk-out resulted in economic losses to the company.
Nestle filed a Petition to Declare the Walkout Illegal. (NLRC Case No. SRB-IV-3-1898-87) (p.
407, Rollo);
(g) On August 21, 1987, UFE union officers and members at the Alabang factory also left their
jobs in sympathy with the walkout staged by their Cabuyao counterparts. Nestle filed again a
Petition to Declare the Strike Illegal (NLRC-NCR-Case No. 00-08-03003-87) (p. 407, Rollo);
(h) On August 27, 1987, UFE union members at the Alabang and Cabuyao factories, in
disregard of the Memorandum of Agreement entered into by the Union and Management on
August 21, 1987, (to exert their best efforts for the normalization of production targets and
standards and to consult each other on any matter that may tend to disrupt production to
attain industrial peace) participated in an indignation rally in Cabuyao because of the death of
two (2) members of PAMANTIC, and in Alabang because one of their members was allegedly
mauled by a policeman during the nationwide strike on August 26, 1987 (p. 408, Rollo);
(i) On September 4, 1987, around 6:00 P.M. all sections at the Alabang factory went on a 20-
minute mealbreak simultaneously, contrary to the agreement and despite admonition of
supervisors, resulting in complete stoppage of their production lines. Responsible officials
namely: Eugenio San Pedro, Carlos Jose, and Cesar Ponce, were suspended from work for six
(6) days without pay (p. 408, Rollo);
(j) From September 5 to 8, 1987, at the instigation of UFE union officers, all workers staged a
sitdown strike; and
(k) On September 7, 1987, Cabuyao's culinary section's union members sympathized with the
sitdown strike at Alabang, followed at 12:30 P.M. by the whole personnel of the production line
and certain areas in the Engineering Department. These sitdown strikes at the Alabang and
Cabuyao factories became the subject of two separate petitions to declare the strike illegal
(NCR-Case No. 00-09-03168-87 and SRB-IB-9-1903-87, respectively) (p. 408, Rollo);
(l) On September 8, 1987, Hon. F. Drilon issued the following order:
"All the workers are hereby directed to return to work immediately, refrain from resorting to
any further slowdown, sitdown strike, walkout and any other kind of activities that may tend
to disrupt the normal operations of the company. The company is directed to accept all
employees and to resume normal operations.: nad
Parties are likewise directed to cease and desist from committing any and all acts that would
aggravate the situation." (p. 394, Rollo)
(m) Despite the order, UFE staged a strike on September 11, 1987, without notice of strike,
strike vote and in blatant defiance of then Labor Minister Sanchez's certification order dated
November 23, 1986 and Secretary Drilon's return-to-work order dated September 8, 1987." (p.
409, Rollo);
(n) Nestle sent individual letter of termination dated September 14, 1987 dismissing them
from the service effective immediately for knowingly instigating and participating in an illegal
Page 143

strike, defying the order of the Secretary of Labor, dated September 8, 1987, and other illegal
acts (pp. 394-395, Rollo).
On September 22, 1987, UFE filed a complaint for Illegal Dismissal, ULP and damages (NLRC
NCR-00-03285-87). Labor Arbiter Evangeline Lubaton ruled on both issues of dismissal and
strike legality, upon the premise that the issue on validity of the dismissal of the individual
complainants from employment "depends on the resolution of the issue on whether or not the
strike declared by complainants was illegal."
The decision dated January 12, 1988, disposed as follows:
"WHEREFORE, in view of the foregoing, judgment is hereby rendered:
1. Dismissing the instant complaint for lack of merit; and
2. Confirming the dismissal of all individual complainants herein as valid and legally justified."
(p. 376, Rollo)
UFE appealed, assailing the three decisions, except that rendered in Case No. NLRC-NCR-12-
4007-85 (Complaint for Unfair Labor Practice Against UFE) "because it was already rendered
moot and academic by the return to work agreement and order dated March 10 and 13, 1986,
respectively." (p. 49, Rollo).
Upon UFE's subsequent motion, the three appeals were ordered consolidated and elevated to
the NLRC en banc (p, 95, Rollo)
The NLRC affirmed the unanimous decisions of the three labor arbiters which declared the
strikes illegal, premised on the view that "the core of the controversy rests upon the legality of
the strikes."
In the petition before Us, UFE assigns several errors (pp. 63-321, Rollo), which We have
summarized as follows:
1. that Articles 263 and 264 are no longer good laws, since compulsory arbitration has been
curtailed under the present Constitution.
2. that the question on the legality of the strike was rendered moot and academic when Nestle
management accepted the striking workers in compliance with the return-to-work order of
then Minister of Labor Augusto Sanchez dated March 13, 1986, (citing the case of Bisayan Land
Transportation Co. v. CIR (102 Phil. 439) and affirmed in the case of Feati University Faculty
Club (PAFLU) v. Feati University, G.R. No. L-31503, August 15, 1974, 58 SCRA 395).chanrobles
virtual law library
3. that the union did not violate the no-strike/no lock-out clause, considering that the
prohibition applies to economic strikes, pursuant to Philippine Metal Foundries v. CIR, G.R. No.
L-34948-49, May 15, 1979, 90 SCRA 135. UFE, it is claimed, premised their strike on a violation
of the labor standard laws or non-payment of holiday pay, which is, in effect, a violation of the
CBA.
4. on the commission of illegal and prohibited acts which automatically rendered the strike
illegal, UFE claimed that there were no findings of specific acts and identifies of those
participating as to render them liable (ESSO Phils. v. Malayang Manggagawa sa ESSO, G.R. No.
L-36545, January 26, 1977, 75 SCRA 72; Shell Oil Workers Union v. CIR, G.R. No. L-28607,
February 12, 1972, 43 SCRA 224). By holding the officers liable for the illegal acts of coercion,
or denial of free ingress and egress, without specifying and finding out their specific
participation therein, the Labor Arbiter resorted to the principle of vicarious liability which
has since been discarded in the case of Benguet Consolidated v. CIR, G.R. No. L-24711, April 30,
1968, 23 SCRA 465.
We agree with the Solicitor General that the petition failed to show that the NLRC committed
grave abuse of discretion in its affirmance of the decisions of the Labor Arbiters a quo.
At the outset, UFE questions the power of the Secretary of Labor under Art. 263(g) of the Labor
Code to assume jurisdiction over a labor dispute tainted with national interests, or to certify
Page 144

the same for compulsory arbitration. UFE contends that Arts. 263 and 264 are based on the
1973 Constitution, specifically Sec. 9 of Art. II thereof, the pertinent portion of which reads:
"Sec. 9. . . . The State may provide for compulsory arbitration." (p. 801, Rollo)
UFE argues that since the aforecited provision of Sec. 9 is no longer found in the 1987
Constitution, Arts. 263(g) and 264 of the Labor Code are now "unconstitutional and must be
ignored."
We are not persuaded. We agree with the Solicitor General that on the contrary, both
provisions are still applicable.
We quote:
"Article 7 of the New Civil Code declares that:
'Article 7. Laws are repealed only by subsequent ones, and their violation or non-observance
shall not be excused by disuse or custom or practice to the contrary.
x x x'
"In the case at bar, no law has ever been passed by Congress expressly repealing Articles 263
and 264 of the Labor Code. Neither may the 1987 Constitution be considered to have impliedly
repealed the said Articles considering that there is no showing that said articles are
inconsistent with the said Constitution. Moreover, no court has ever declared that the said
articles are inconsistent with the 1987 Constitution.
"On the contrary, the continued validity and operation of Articles 263 and 264 of the Labor
Code has been recognized by no less than the Congress of the Philippines when the latter
enacted into law R.A. 6715, otherwise known as Herrera Law, Section 27 of which amended
paragraphs (g) and (i) of Article 263 of the Labor Code.
"At any rate, it must be noted that Articles 263 (g) and 264 of the Labor Code have been
enacted pursuant to the police power of the State, which has been defined as the power
inherent in a Government to enact laws, within constitutional limits, to promote the order,
safety, health, morals and general welfare of society (People vs. Vera Reyes, 67 Phil. 190). The
police power, together with the power of eminent domain and the power of taxation, is an
inherent power of government and does not need to be expressly conferred by the
Constitution. Thus, it is submitted that the argument of petitioners that Articles 263 (g) and
264 of the Labor Code do not have any constitutional foundation is legally inconsequential."
(pp. 801-803, Rollo)
On the issue of the legality of the strike committed, UFE seeks to absolve itself by pointing out
qualifying factors such as motives, good faith, absence of findings on specific participation
and/or liability, and limiting the no-strike provision to economic strikes.
UFE completely misses the underlying principle embodied in Art. 264(g) on the settlement of
labor disputes and this is, that assumption and certification orders are executory in character
and are to be strictly complied with by the parties even during the pendency of any petition
questioning their validity. This extraordinary authority given to the Secretary of Labor is
aimed at arriving at a peaceful and speedy solution to labor disputes, without jeopardizing
national interests.
Regardless therefore of their motives, or the validity of their claims, the striking workers must
cease and/or desist from any and all acts that tend to, or undermine this authority of the
Secretary of Labor, once an assumption and/or certification order is issued. They cannot, for
instance, ignore return-to-work orders, citing unfair labor practices on the part of the
company, to justify their actions. Thus, the NLRC in its decision, re-emphasized the nature of a
return-to-work order within the context of Art. 264(g) as amended by BP Nos. 130 and 227:
"x x x
"One other point that must be underscored is that the return-to-work order is issued pending
the determination of the legality or illegality of the strike. It is not correct to say that it may be
Page 145

enforced only if the strike is legal and may be disregarded if the strike is illegal, for the purpose
precisely is to maintain the status quo while the determination is being made. Otherwise, the
workers who contend that their strike is legal can refuse to return to work to their work and
cause a standstill on the company operations while retaining the positions they refuse to
discharge or allow the management to fill. Worse, they will also claim payment for work not
done, on the ground that they are still legally employed although actually engaged in the
activities inimical to their employer's interest. (Emphasis supplied)
"This is like eating one's cake and having it too, and at the expense of the management. Such an
unfair situation surely was not contemplated by our labor laws and cannot be justified under
the social justice policy, which is a policy of fairness to both labor and management. Neither
can this unseemly arrangement be sustained under the due process clause as the order, if thus
interpreted, would be plainly oppressive and arbitrary.
". . ." (p. 415, Rollo)
Also, in the cases of Sarmiento v. Judge Tuico, (G.R. No. 75271-73; Asian Transmission
Corporation v. National Labor Relations Commission, G.R. 77567, 27 June 88, 162 SCRA 676).
We stated:
"The return to work order does not so much confer a right as it imposes a duty; and while as a
right it may be waived, it must be discharged as a duty even against the worker's will.
Returning to work in this situation is not a matter of option or voluntariness but of obligation.
The worker must return to his job together with his co-workers so the operations of the
company can be resumed and it can continue serving the public and promoting its interest.":
nad
We also wish to point out that an assumption and/or certification order of the Secretary of
Labor automatically results in a return-to-work of all striking workers, whether or not a
corresponding order has been issued by the Secretary of Labor. Thus, the striking workers
erred when they continued with their strike alleging absence of a return-to-work order. Article
264(g) is clear. Once an assumption/certification order is issued, strikes are enjoined, or if one
has already taken place, all strikers shall immediately return to work.
A strike that is undertaken despite the issuance by the Secretary of Labor of an assumption or
certification order becomes a prohibited activity and thus illegal, pursuant to the second
paragraph of Art. 264 of the Labor Code as amended (Zamboanga Wood Products, Inc. v. NLRC,
G.R. 82088, October 13, 1989; 178 SCRA 482). The Union officers and members, as a result, are
deemed to have lost their employment status for having knowingly participated in an illegal
act.
The NLRC also gave the following reasons:
1. The strike was staged in violation of the existing CBA provisions on "No Strike/No Lockout
Clause" stating that a strike, which is in violation of the terms of the collective bargaining
statement, is illegal, especially when such terms provide for conclusive arbitration clause
(Liberal Labor Union vs. Phil. Can Co., 91 Phil. 72; Phil. Airlines vs. PAL Employees Association,
L-8197, October 31, 1958). The main purpose of such an agreement is to prevent a strike and it
must, therefore, be adhered to strictly and respected if their ends are to be achieved (pp. 397-
398, Rollo)
2. Instead of exhausting all the steps provided for in the grievance machinery provided for in
the collective bargaining agreement to resolve the dispute amicably and harmoniously within
the plant level, UFE went on strike (p. 398, Rollo)
3. The prescribed mandatory cooling-off period and then 7-day strike and after submission of
the report of strike vote at Nestle's Makati Offices and Muntinlupa and Cabuyao Plants were
not complied with (NLRC-NCR-124007-85 & NCR-1-295-86), while no notice of strike was filed
by respondents when they staged the strike at Nestle's Cagayan de Oro Plant (RABX-2-0047-
86) contrary to the pertinent provision of Articles 263 and 264 of the Labor Code, emphasizing
that "the mandatory character of these cooling-off periods has already been categorically ruled
Page 146

upon by the Supreme Court" (National Federation of Sugar Workers (NFSW) vs. Ovejera, et al.,
114 SCRA 354) (p. 402, Rollo)- nad
4. In carrying out the strike, coercion, force, intimidation, violence with physical injuries,
sabotage, and the use of unnecessary and obscene language or epithets were committed by the
respondent officials and members of either UFE or WATU. It is well-settled that a strike
conducted in this manner is illegal (United Seamen's Union vs. Davao Shipowners Association,
20 SCRA 1226). In fact, criminal cases were filed with the Makati Fiscal's Office (p. 402, Rollo).
Thus, the NLRC correctly upheld the illegality of the strikes and the corresponding dismissal of
the individual complainants because of their "brazen disregard of successive lawful orders of
then Labor Ministers Blas F. Ople, Augusto Sanchez and Labor Secretary Franklin Drilon dated
December 11, 1985, January 30, 1986 and February 4, 1986, respectively, and the cavalier
treatment of the provisions of the Labor Code and the return-to-work orders of the Minister
(now Secretary) of Labor and Employment, or Articles 264 and 265 (now renumbered Arts.
263 and 264), providing in part as follows:
"ART. 263. Strikes, picketing and lockouts. —
x x x
"(g) When in his opinion there exists a labor dispute causing or likely to cause strikes or
lockouts adversely affecting the national interest, such as may occur in but not limited to
public utilities, companies engaged in the generation or distribution of energy, banks,
hospitals, and export-oriented industries including those within export processing zones, the
Minister of Labor and Employment shall assume jurisdiction over the dispute and decide it or
certify the same to the Commission for compulsory arbitration. Such assumption or
certification shall have the effect of automatically enjoining the intended or impending strike
or lockout as specified in the assumption or certification order. If one has already taken place
at the time of assumption or certification, all striking or locked out employees shall
immediately return to work and the employer shall immediately resume operations and
readmit all workers under the same terms and conditions prevailing before the strike or
lockout. The Minister may seek the assistance of law enforcement agencies to ensure
compliance with this provision as well as with such orders as he may issue to enforce the
same. (Italics supplied)- nad
"The foregoing notwithstanding, the President of the Philippines shall not be precluded from
determining the industries wherein (sic) his opinion labor disputes may adversely affect the
national interest, and from intervening at any time and assuming jurisdiction over any labor
dispute adversely affecting the national interest in order to settle or terminate the same.
x x x
ART. 264. Prohibited activities. —
(a) No labor organization or employer shall declare a strike or lockout without first having
bargained collectively in accordance with Title VII of this Book or without first having filed the
notice required in the preceding Article or without the necessary strike or lockout vote first
having been obtained and reported to the Ministry.
No strike or lockout shall be declared after assumption of jurisdiction by the President or the
Minister or after certification or submission of the dispute to compulsory or voluntary
arbitration or during the pendency o f cases involving the same grounds for the strike or
lockout." ([pp. 399-401, Rollo]) (Emphasis supplied)
On the alleged lack of jurisdiction of Labor Arbiter Lubaton, NLRC has clarified that the
question on the legality of strike was properly resolved by the Labor Arbiter, not only because
the question is perfectly within the original and exclusive jurisdiction of the Labor Arbiter to
adjudicate, but also because the issue was not subsumed by the Order of Labor Minister
Sanchez, dated December 23, 1986, certifying the Notice of Strike dated December 4, 1986 for
compulsory arbitration, further clarifying that the issue of whether or not the strike staged on
September 11, 1987 by UFE and its officials and members was illegal is a prejudicial question
Page 147

to the issue of whether or not the complainants were illegally dismissed. We shall not belabor
the issue any further.: nad
ACCORDINGLY, the petition is DISMISSED, and the decision of public respondent NLRC, dated
November 2, 1988, and its Resolution, dated March 7, 1989, are both AFFIRMED in their
entirety. No costs.
SO ORDERED.

CASE NO. 18

SECOND DIVISION

[G.R. NOS. 143013-14. December 18, 2000]

TELEFUNKEN SEMICONDUCTORS EMPLOYEES UNION-FFW and individual union


members DANILO G. MADARA and ROMEO L. MANAYAO,petitioners, vs., THE
COURT OF APPEALS, HON. BIENVENIDO LAGUESMA, as Secretary of Labor and
Employment, and TEMIC TELEFUNKEN MICROELECTRONICS, (PHILS.),
INC., respondents.

DECISION
DE LEON, JR., J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court seeking the
reversal of the Decision[1] of the Court of Appeals dated December 23, 1999 in CA-G.R. SP Nos.
54227 and 54665 and its Resolution[2] dated April 19, 2000, denying herein petitioners motion
for reconsideration.
The assailed Decision of respondent Court of Appeals granted the petition of private
respondent TEMIC TELEFUNKEN MICROELECTRONICS, (Phils.), INC., (Company, for brevity)
in CA-G.R. SP No. 54227 reversing and setting aside the Secretary of Labors: (1) Decision dated
May 28, 1999; and (2) Resolution dated July 16, 1999, insofar as the Company was directed to
pay backwages and grant financial assistance to the striking workers.
In CA-G.R. SP No. 54665, on the other hand, the petition of TELEFUNKEN
SEMICONDUCTORS EMPLOYEES UNION-FFW (Union, for brevity) and individual union
members DANILO G. MADARA and ROMEO L. MANAYAO was dismissed on a finding that the
Secretary of Labor did not abuse his discretion nor acted in excess of his jurisdiction when he
declared illegal the strike staged by the Union, its officers and members on September 14,
1995, and that as a result thereof, those who participated therein have lost their employment
status.
The petition is not meritorious, and the same should be as it is hereby dismissed.
The facts as borne by the records are as follows:
The labor dispute started on August 25, 1995 when the Company and the Union reached a
deadlock in their negotiations for a new collective bargaining agreement. On August 28, 1995,
the Union filed a Notice of Strike with the National Conciliation and Mediation Board (NCMB).
On September 8, 1995,[3] the then Acting Secretary of the Department of Labor and
Employment, Jose S. Brillantes, intervened and assumed jurisdiction over the dispute pursuant
to Art. 263, par. (g),[4] of the Labor Code, as amended. Thus, the Order[5] of the said Acting
Page 148

Secretary of Labor enjoined any strike or lockout, whether actual or intended, between the
parties. His Notice of the Assumption Order[6]was personally served on the representatives of
the Company, namely, on Atty. Allan Montao, counsel of the Union-FFW, on September 9, 1995
at 1:25 p.m. and twice on Ms. Liza Dimaano, Union President, first on September 8, 1995 at
7:15 p.m. and again on September 11, 1995 at 9:30 a.m. but both union representatives refused
to acknowledge receipt thereof.
Despite the assumption Order, the Union struck on September 14, 1995. Two (2) days
later, the Acting Secretary of Labor issued an Order[7]directing the striking workers to return
to work within twenty-four (24) hours and for the Company to admit them back to work under
the terms and conditions prevailing prior to the strike. Notice[8] of the Return-to-Work
Order[9] dated September 16, 1995 of the Acting Secretary of Labor was sent to the striking
Union members but still some of them refused to heed the order and continued with their
picket. The Federation of Free Workers (FFW) received and acknowledged receipt of the said
Return to Work Order on September 18, 1995. On September 23, 1995, violence erupted in the
picket lines. The service bus ferrying non-striking workers was stoned, causing injuries to its
passengers. Thereafter, complaints for threats, defamation, illegal detention and physical
injuries were filed against the strikers.
On October 2, 1995, the Company issued letters of termination for cause to the workers
who did not report back to work despite the Notice of Assumption and Return-to-Work Orders
issued by the Acting Secretary Jose S. Brillantes of the Department of Labor and Employment
(DOLE).
On October 27, 1995, the Acting Secretary of Labor issued another Order[10] directing the
Company to reinstate all striking workers except the Union Officers, shop stewards, and those
with pending criminal charges, x x x while the resolution of the legality of the strike was
pending. This exclusion Order was reaffirmed with some modifications in an Order[11] dated
November 24, 1995.
On December 5, 1995, the Union filed with this Court a petition for certiorari, docketed as
G.R. No. 122743, questioning the exclusions made in the aforesaid Orders.
On June 27, 1996, while the said petition in G.R. No. 122743 was pending, then Secretary of
Labor Leonardo A. Quisumbing issued a Writ of Execution[12] for the physical reinstatement of
the remaining striking workers who were not reinstated as contained in the thirty-two (32)
page list[13] attached to the aforesaid writ.
Accordingly, on July 3, 1996, the Company filed a Motion to Quash, Recall or Suspend the
Writ of Execution[14] issued by Secretary Quisumbing. This motion was denied[15] by the
Department of Labor and Employment (DOLE, for brevity) for lack of merit and, in the same
Order, the DOLE directed the issuance of an Alias Writ to enforce the actual and physical
reinstatement of the workers, or in case the same was not feasible, to effect payroll
reinstatement. On November 21, 1996, the Companys motion for reconsideration was also
denied.[16]
On December 9, 1996, the Company filed with this Court a petition for certiorari, docketed
as G.R. No. 127215, questioning the denial of its motion for reconsideration and the Alias Writ
issued by the DOLE to enforce the actual and physical reinstatement or the payroll
reinstatement of the workers (including the Original Writ of Execution of June 27, 1996).
After we consolidated[17] the petitions for certiorari of the Company and the Union in G.R.
Nos. 122743 and 127215, respectively, we rendered a Decision therein on December 12,
1997. The Companys petition for certiorari in G.R. No. 127215 was dismissed for lack of
merit. In G.R. No. 122743, we granted the Unions petition and ordered the reinstatement of all
striking workers without exception. We also directed the Secretary of Labor and Employment
to determine with dispatch the legality of the strike as well as the liability of the individual
strikers, if any.
Page 149

After receipt of our said Decision in G.R. Nos. 122743 and 127215, the DOLE issued an
Alias Writ of Execution on August 26, 1998. Thereafter, the Company moved to quash the Alias
Writ which was, however, denied[18] by the DOLE. The motion for reconsideration filed by the
Company was similarly denied.[19] Aggrieved by the preceding rulings of the DOLE, the
Company elevated this case to this Court via another petition for certiorari docketed as G.R. No.
135788.
On December 7, 1998, we resolved[20] to dismiss the said petition in G.R. No. 135788 for
(a) failing to state the place of service by registered mail on the adverse party; (b) failing to
submit a certification duly executed by the president of the petitioning Company or by its
representative which shows its authority to represent and act on behalf of the Company; and
(c) for lack of the requisite certificate of non-forum shopping. We denied this petition with
finality on our March 15, 1999 Resolution[21] where we held that the Secretary of Labor did not
abuse his discretion in denying the Companys motion to quash the execution of our Decision
dated December 12, 1997.
In compliance with our order to the Secretary of Labor and Employment to determine with
dispatch the legality of the strike, marathon hearings were conducted[22] at the DOLE Office
with Atty. Lita V. Aglibut as hearing officer. On September 22, 1998, both the Union and the
Company complied with the order to submit their respective position papers. The Company
adduced evidence and submitted its case for decision. The Union did not adduce
evidence. Instead, the Union manifested that it would file a motion to dismiss for failure of the
Company to prove its case with the request that it be allowed to present evidence should its
motion be denied.
During the subsequent hearings[23] conducted by the hearing officer of DOLE, the Union
insisted that a ruling should first be made on the Demurrer to Evidence it previously filed
notwithstanding repeated reminders by the Hearing Officer that the technical rules of evidence
and procedure do not apply to proceedings before DOLE. Thereafter, an exchange of pleadings,
reiterating their respective positions, ensued between the Company and the Union.
On May 19, 1999, the Union filed a motion before the DOLE praying for the issuance of
another Alias Writ of Execution in connection with our March 15, 1999 Resolution in G.R. No.
135788.The Union contended that this Resolution has declared the dismissals of the striking
workers as illegal and therefore a writ should be issued for the physical reinstatement of the
workers with full backwages and other benefits reckoned from June 27, 1996.
On May 28, 1999, the Secretary of Labor and Employment resolved the matter in a
Decision.[24] The Secretary of Labor declared therein that in hearings and resolutions of labor
disputes, before the DOLE, his Office is not governed by the strict and technical rules of
evidence and procedure observed in the regular courts of law, and that it will resolve the
issues based on the pleadings, the documentary evidence and other records of the case. The
dispositive portion of the said Decision dated May 28, 1999 reads:

WHEREFORE, PREMISED ON THE FOREGOING, this Office hereby:

a. Declares the strike conducted by the Telefunken Semiconductors Employees Union-


FFW on 14 September 1995 as illegal for having been waged in open, willful and
knowing defiance of the assumption order dated 8 September 1995 and the
subsequent return-to-work order dated 16 September 1995 and consequently, the
striking workers are declared to have lost their employment status;
b. Directs the payment of backwages and other benefits to the striking workers
corresponding to the temporary reinstatement periods (1) from 27 June 1996 to 28
October 1996, (2) from 21 November 1998 up to the date of this Decision;
c. Directs the Telefunken Micro-Electronics (Phils.), Inc. to grant financial assistance
equivalent to one (1) month for every year of service to the striking workers
Page 150

conformably with its grant of the same benefit to other strikers as manifested by
the Company to the Supreme Court on 20 November 1997.

In this connection, the Bureau of Working Conditions, this Department, is hereby directed to
compute the total award herein made and to submit its report of computation to this Office
within ten (10) days from receipt of this Decision.

SO ORDERED.[25]

Dissatisfied, both the Company and the Union together with individual union members
Nancy Busa and Arnel Badua, filed motions for reconsideration of the said Decision of the
Secretary of Labor. On July 16, 1999,[26] the Secretary of Labor denied the said motions.
The Company and the Union filed their respective petitions for certiorari docketed as CA-
G.R. SP Nos. 54227 and 54665 with the Court of Appeals and these were later on
consolidated. On December 23, 1999, the Court of Appeals rendered its now assailed Decision,
the dispositive portion of which states:

WHEREFORE, the COMPANYs Petition in CA-G.R. No. SP 54227 is GRANTED. The Secretary of
Labors Decision dated 28 May 1999 and his Resolution dated 16 July 1999 are REVERSED and
SET ASIDE in so far as they direct the company to pay backwages and grant financial assistance
to the striking workers. The said Decision and Resolution are AFFIRMED in all other
respects. The Unions Petitions in CA-G.R. SP No. 546654 is DISMISSED.

SO ORDERED.

On January 24, 2000, only the Union sought reconsideration[27] of the said Decision of the
appellate court. However, it was denied for lack of merit by the Court of Appeals on April 19,
2000 in its Resolution.[28]
In the petition at bench, petitioners Union, Madara and Manayao submits the following
assignment of errors, to wit:

THE HONORABLE COURT OF APPEALS ERRED:

IN AFFIRMING THE DECISION OF THE RESPONDENT SECRETARY OF LABOR IN FINDING THE


STRIKE STAGE BY THE UNION ILLEGAL WHICH WAS FEEBLY BASED ON THE COMPANYS
POSITION PAPER AND THE MATERIALS AND PICTORIALS ATTACHED THERETO WHICH ARE
BEREFT OF PROBATIVE VALUE BECAUSE THEY ARE PATENTLY INADMISSIBLE AND
INCOMPETENT.

II

.IN SUSTAINING THE RESPONDENT SECRETARYS DECISION EFFECTING THE WHOLESALE


TERMINATION OF EMPLOYMENT OF THE STRIKING TEMIC WORKERS WITHOUT ANY
DETERMINATION OF THEIR INDIVIDUAL LIABILITY, IF ANY, AS ORDERED BY THE
HONORABLE SUPREME COURT, IN THE ABSENCE OF ANY ILLEGAL ACTS COMMITTED BY
THE STRIKERS ATTENDANT TO THE STRIKE.

III

.IN RULING THAT THE SOLE OFFICE OF THE WRIT OF CERTIORARI IS THE CORRECTION OF
ERRORS OF JURISDICTION INCLUDING THE COMMISSION OF ABUSE OF DISCRETION
AMOUNTING TO LACK OF JURISDICTION, DOES NOT INCLUDE CORRECTION OF HEREIN
Page 151

PUBLIC RESPONDENT SECRETARY OF LABORS EVALUATION OF THE EVIDENCE AND


FACTUAL FINDINGS THEREON.

IV

.IN RULING IN A MANNER ABSOLUTE THAT TECHNICAL RULES OF EVIDENCE PREVAILING IN


THE COURTS OF LAW AND EQUITY HAVE NO ROOM IN ADMINISTRATIVE AND/OR QUASI-
JUDICIAL PROCEEDINGS.

.IN UPHOLDING THE RESPONDENT SECRETARY OF LABORS RULING THAT THE NON-
APPLICATION OF TECHNICAL RULES OF PROCEDURE IN PROCEEDINGS BEFORE THE OFFICE
OF THE SECRETARY OF LABOR BARS THE PETITIONERS FROM ADDUCING EVIDENCE AFTER
THE DENIAL OF THE UNION'S DEMURRER TO EVIDENCE.

VI

.IN NEGATING THE PETITIONERS VESTED RIGHT TO BACKWAGES.

The petition has no merit.


As to the first and second assigned errors, herein petitioners contend that according to the
Constitution[29] and jurisprudence,[30] strikes enjoy the presumption of legality and the burden
of proving otherwise rests upon the respondent Company; that the case should not have been
decided on the basis of the position paper method because in several instances [31] this Court
has looked with disfavor on the position paper method in disposing labor cases; that due to the
transcendental issues involved, a hearing should have been conducted to avoid the impression
of denial of due process considering the dearth of evidence submitted by respondent
Company; and that the pieces of evidence submitted by respondent Company are wanting in
probative value.
Herein petitioners also argue that for a union officer to lose his employment status it must
be proved that he knowingly participated in an illegal strike; and that in the case of an ordinary
member, it must not only be demonstrated that he actually participated in the illegal strike but
also that he has committed illegal acts during the strike and which respondent Company
allegedly failed to prove.
We do not agree. Despite petitioners vain attempt to structure the case to show, on its
surface, a question of law, nevertheless, the case essentially involves a question of fact. The
issues raised basically boils down to a determination of whether or not the position paper and
the pieces of evidence adduced by the Company before the DOLE are sufficient in probative
value to overthrow the constitutional presumption of the legality of the strike. As correctly
observed by the Solicitor General in his Comment,[32] it . . . .(the first and second assigned
errors) essentially involve questions of fact. It calls for a re-evaluation of facts and a re-
examination of the evidence.
We take this occasion to emphasize that the office of a petition for review
on certiorari under Rule 45 of the Rules of Court requires that it shall raise only questions of
law.[33] The factual findings by quasi-judicial agencies, such as the Department of Labor and
Employment, when supported by substantial evidence, are entitled to great respect in view of
their expertise in their respective fields.[34] Judicial review of labor cases does not go so far as
to evaluate the sufficiency of evidence on which the labor officials findings rest.[35] It is not our
function to assess and evaluate all over again the evidence, testimonial and documentary,
adduced by the parties to an appeal, particularly where the findings of both the trial court
(here, the DOLE Secretary) and the appellate court on the matter coincide, [36] as in this case at
bar. The Rule limits that function of the Court to the review or revision of errors of law and not
to a second analysis of the evidence.[37]Here, petitioners would have us re-calibrate all over
Page 152

again the factual basis and the probative value of the pieces of evidence submitted by the
Company to the DOLE, contrary to the provisions of Rule 45. Thus, absent any showing of
whimsical or capricious exercise of judgment, and unless lack of any basis for the conclusions
made by the appellate court be amply demonstrated, we may not disturb such factual findings.
Although we have ruled against the reliability of position papers in disposing of labor
cases, in the cases of Batongbacal v. Associated Bank[38] and Progress Homes v. NLRC,[39] this
was due to certain patent matters that should have been tried by the administrative agency
concerned, such as certain factual circumstances which, however, are unavailing in the case at
bar.
In Batongbacal, we withheld judgment on the case due to the absence of a definitive
factual determination of the status of petitioner therein as an assistant vice-president of
therein respondent Bank. It has not been established by the Labor Arbiter whether the
petitioner therein was a managerial or a rank-and-file employee, noting that there are different
causes of termination for both the managerial and rank-and-file employees. Thus, the need to
remand the case was necessary.
In Progress Homes, on the other hand, we found that despite the absence of any evidence
to establish and support therein private respondents claim that the petitioners therein were
their immediate employers, the Labor Arbiter forthwith concluded the illegal dismissal of the
private respondents. Also, there was the apparent failure of the Labor Arbiter to justify why
the private petitioner therein should be held solidarily liable with Progress Homes. There was
a clear absence of evidence to show that petitioner therein had engaged the services of private
respondents therein and that petitioner therein had acted maliciously and in bad faith in
terminating the services of private respondents.
The herein petitioners dismally failed to show that there really existed certain issues
which would necessitate the remand of this case at bar, or that the appellate court
misapprehended certain facts when it dismissed their petition for certiorari.
The need to determine the individual liabilities of the striking workers, the union officers
and members alike, was correctly dispensed with by the Secretary of Labor after he gave
sufficient opportunity to the striking workers to cease and desist from continuing with their
picket. Ensconced in the Labor Code of the Philippines, as amended, is the rule that:

Art. 263. Strikes, picketing and lockouts.

xxxxxxxxx
(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike
or lockout in an industry indispensable to the national interest, the Secretary of
Labor and Employment may assume jurisdiction over the dispute and decide
it or certify the same to the Commission for compulsory arbitration. Such
assumption per certification shall have the effect of automatically enjoining
the intended or impending strike or lockout as specified in the assumption or
certification order. If one had already taken place at the time of assumption or
certification, all striking or locked out employees shall immediately return to
work and the employer shall immediately resume operations and re-admit all
workers under the same terms and conditions prevailing before the strike or
lockout. The Secretary of Labor and Employment or the Commission may seek the
assistance of law enforcement agencies to ensure the compliance with this
provision as well as with such orders as he may issue to enforce the same.
(Emphasis Ours)
xxxxxxxxx
It is clear from the foregoing legal provision that the moment the Secretary of Labor assumes
jurisdiction over a labor dispute in an industry indispensable to national interest, such
assumption shall have the effect of automatically enjoining the intended or impending
Page 153

strike. It was not even necessary for the Secretary of Labor to issue another order directing
them to return to work. The mere issuance of an assumption order by the Secretary of Labor
automatically carries with it a return-to-work order, even if the directive to return to work is
not expressly stated in the assumption order.[40] However, petitioners refused to acknowledge
this directive of the Secretary of Labor on September 8, 1995 thereby necessitating the
issuance of another order expressly directing the striking workers to cease and desist from
their actual strike, and to immediately return to work but which directive the herein
petitioners opted to ignore. In this connection, Article 264(a) of the Labor Code clearly
provides that:

Article 264. Prohibited Activities.

(a) x x x

No strike or lock out shall be declared after the assumption of jurisdiction by the
President or the Secretary or after certification or submission of the dispute to
compulsory or voluntary arbitration or during the pendency of cases involving the same
grounds for the strike or lockout.

x x x. Any union officer who knowingly participates in illegal strike and any worker or
union officer who knowingly participates in the commission of illegal acts during a
strike may be declared to have lost his employment status: Provided, that mere
participation of a worker in a lawful strike shall not constitute sufficient ground for
termination of his employment even if a replacement had been hired by the employer
during such lawful strike. (Emphasis Ours)

The rationale of this prohibition is that once jurisdiction over the labor dispute has been
properly acquired by the competent authority, that jurisdiction should not be interfered with
by the application of the coercive processes of a strike.[41] We have held in a number of cases
that defiance to the assumption and return-to-work orders of the Secretary of Labor after he
has assumed jurisdiction is a valid ground for loss of the employment status of any striking
union officer or member.[42]
Furthermore, the claim of petitioners that the assumption and return-to-work Orders
issued by the Secretary of Labor were allegedly inadequately served upon them is untenable in
the light of what have already been clearly established in this case, to wit:

x x x, the reports of the DOLE process server, shows that the Notice of Order of 8 September
1995 was actually served on the Union President. The latter, however, refused to acknowledge
receipt of the same on two separate occasions (on 8 September 1995 at 7:15 p.m. and on 11
September 1995 at 9:30 a.m.). The Unions counsel of record, Atty. Allan Montano, similarly
refused to acknowledge receipt of the 8 September 1995 Order on 9 September 1995 at 1:25
p.m.

Records also show that the Order of 16 September 1995 was served at the strike area
with copies left with the striking workers, per the process servers return, although a
certain Virgie Cardenas also refused to acknowledge receipt. The Federation of Free
Workers officially received a copy as acknowledged by a certain Lourdes at 3:40 p.m. of
18 September 1995.

The foregoing clearly negate the Unions contention of inadequate service of the Orders dated 8
and 16 September 1995 of Acting Secretary Brillantes. Furthermore, the DOLE process servers
discharge of his function is an official act carrying the presumption of regularity in its
performance which the Union has not disproved, much less disputed with clear and convincing
evidence.
Page 154

Likewise, it would be stretching the limits of credibility if We were to believe that the Union
was unaware of the said Orders during all the conciliation conferences conducted by the
NCMB-DOLE.Specifically, in the conciliation meetings after the issuance of the Order of 8
September 1995 to settle the unresolved CBA issues and after the issuance of the Order of 16
September 1995 to establish the mechanics for a smooth implementation of this Offices
return-to-work directive, the Union with its officers and members in attendance never
questioned the propriety or adequacy by which these Orders were served upon them.

We are not unaware of the difficulty of serving assumption and return-to-work orders on
striking unions and their members who invariably view the DOLEs process servers with
suspicion and hostility. The refusal to receive such orders and other processes is, as described
by the Supreme Court in an analogous case, an apparent attempt to frustrate the ends of
justice. (Navale, et al. v. Court of Appeals, 253 SCRA 705)

Such being the case, We cannot allow the Union to thwart the efficacy of the assumption and
return to work orders, issued in the national interest, through the simple expediency of
refusing to acknowledge receipt thereof.

Having thus resolved the threshold issue as hereinabove discussed, it necessarily


follows that the strike of the Union cannot be viewed as anything but illegal for having
been staged in open and knowing defiance of the assumption and return-to-work
orders. The necessary consequence thereof are also detailed by the Supreme Court in its
various rulings. In Marcopper Mining Corp. v. Brillantes (254 SCRA 595), the High
Tribunal stated in no uncertain terms that -

by staging a strike after the assumption of jurisdiction or certification for arbitration,


workers forfeited their right to; be readmitted to work, having abandoned their
employment, and so could be validly replaced.

Again, in Allied Banking Corporation v. NLRC (258 SCRA 724), the Supreme Court ruled that:

xxx. However, private respondents failed to take into consideration the cases recently decided
by this Court which emphasized on the strict adherence to the rule that defiance of the return-
to-work order of the Secretary of Labor would constitute a valid ground for dismissal. The
respective liabilities of striking union officers and members who failed to immediately comply
with the return-to-work order, are clearly spelled out in Article 264 of the Labor Code which
provides that any declaration of a strike or lock out after the Secretary of Labor and
Employment has assumed jurisdiction over the labor dispute is considered an illegal
act. Therefore, any worker or union officer who knowingly participates in a strike defying a
return-to-work order may as a result thereof be considered to have lost his employment
status.

Viewed in the light of the foregoing, We have no alternative but to confirm the loss of
employment status of all those who participated in the strike in defiance of the assumption
order dated 8 September 1995 and did not report back to work as directed in the Order of 16
September 1995.[43]

To cast doubt on the regularity of the aforesaid service of the two Orders issued by the
Secretary of Labor, petitioners cite Section 1, Rule IX of the NLRC Manual on Execution of
Judgment which provides that:

Section 1. Hours and Days When Writ Shall Be Served. Writ of Execution shall be served at
any day, except Saturdays, Sundays and holidays, between the hours of eight in the morning
and five in the afternoon. x x x
Page 155

However, the above-cited rule is not applicable to the case at bar inasmuch as Sections
1[44]and 4,[45] Rule III of the same NLRC Manual provide that such Execution shall issue only
upon a judgment or order that finally disposes of an action or proceeding. The assumption and
return-to-work Orders issued by the Secretary of Labor in the case at bar are not the kind of
orders contemplated in the immediately cited rule of the NLRC because such Orders of the
Secretary of Labor did not yet finally dispose of the labor dispute. As pointed out by the
Secretary of Labor in his Decision, petitioners cannot now feign ignorance of his official
intervention, to wit:

The admissibility of the evidence presented by the Company, however, has been
questioned. The Unions arguments are less than convincing. The numerous publications of the
subject DOLE Orders in various newspapers, tabloids, radio and television cannot be
considered hearsay and subject to authentication considering that the subject thereof were the
lawful Orders of a competent government authority. In the case of the announcements posted
on the Unions bulletin board, pictures of which were presented by the Company in evidence,
suffice it for us to state that the bulletin board belonged to the Union. Since the veracity of the
contents of the announcements on the bulletin board were never denied by the Union except
to claim that these were self-serving, unverified/unverifiable and thus utterly inadmissible, We
cannot but admit the same for the purpose for which it was presented.[46]

As regards the third assigned error, petitioners contend that a resolution of a petition
for certiorari under Rule 65 of the Rules of Court should include the correction of the Secretary
of Labors evaluation of the evidence and factual findings thereon pursuant to the doctrine laid
down in Meralco v. The Honorable Secretary of Labor Leonardo A. Quisumbing.[47] That
contention is misplaced. In that case, we ruled that:

The extent of judicial review over the Secretary of Labors arbitral award is not limited to a
determination of grave abuse in the manner of the secretarys exercise of his statutory
powers. This Court is entitled to, and must in the exercise of its judicial power review the
substance of the Secretarys award when grave abuse of discretion is alleged to exist in the
award, i.e., in the appreciation of and the conclusions the Secretary drew from the evidence
presented.

However, this Courts review (of) the substance does not mean a re-calibration of the evidence
presented before the DOLE but only a determination of whether the Secretary of Labors award
passed the test of reasonableness when he arrived at his conclusions made thereon. Thus, we
declared in Meralco, that:

In this case we believe that the more appropriate and available standard and one does not
require a constitutional interpretationis simply the standard of reasonableness. In laymans
terms, reasonableness implies the absence of arbitrariness; in legal parlance, this translates
into the exercise of proper discretion and to the observance of due process. Thus, the question
we have to answer in deciding this case is whether the Secretarys actions have been
reasonable in light of the parties positions and the evidence they presented.[48]

Thus, notwithstanding any allegation of grave abuse of discretion, unless it can be amply
demonstrated that the Secretary of Labors arbitral award did not pass the test of
reasonableness, his conclusions thereon shall not be disturbed, as in the case at bar.
The main thrust of a petition for certiorari under Rule 65 of the Rules of Court is only the
correction of errors of jurisdiction including the commission of grave abuse of discretion
amounting to lack or excess of jurisdiction. However, for this Court to properly exercise the
power of judicial review over a decision of an administrative agency, such as the DOLE, it must
first be shown that the tribunal, board or officer exercising judicial or quasi-judicial functions
has indeed acted without or in excess of its or his jurisdiction, and that there is no appeal, or
any plain, speedy and adequate remedy in the ordinary course of law.[49] In the absence of any
Page 156

showing of lack of jurisdiction or grave abuse tantamount to lack or excess of jurisdiction,


judicial review may not be had over an administrative agencys decision. We have gone over the
records of the case at bar and we see no cogent basis to hold that the Secretary of Labor has
abused his discretion.
In the fourth and fifth assignment of errors, petitioners would have us believe that the
Court of Appeals, in its assailed Decision ruled in a manner absolute that prevailing technical
rules of evidence in the courts of law and equity have no room in administrative and/or quasi-
judicial proceedings; and that the non-application of technical rules of procedure in
proceedings before the Office of the Secretary of Labor should not have barred herein
petitioners from adducing evidence after their demurrer to evidence was denied.
We do not agree. That declaration of the Court of Appeals should be taken in the context of
the whole paragraph and the law and the jurisprudence cited in the assailed portion of its
decision.We do not sanction the piecemeal interpretation of a decision to advance ones
case. To get the true intent and meaning of a decision, no specific portion thereof should be
isolated and resorted to but the decision must be considered in its entirety. [50] The portion of
the Court of Appeals assailed Decision reads, to wit:

x x x, it cannot be gainsaid that technical rules of evidence prevailing in courts of law and
equity have no room in administrative and/or quasi-judicial proceedings (Lawin Security
Services, Inc. v. National Labor Relations Commission, 273 SCRA 132; Valderama v. National
Labor Relations Commission, 256 SCRA 466; De Ysasi III v. National Labor Relations
Commission, 231 SCRA 173). In fact, Article 221 of the Labor Code expressly mandates that in
proceedings before the (National Labor Relations) Commission or any of the Labor Arbiters, the
rules of evidence prevailing in courts of law or equity shall not be controlling x x x. This provision
is also applicable to proceedings before the Office of the Secretary of Labor and Employment
which, under the said Code, is empowered to hear and resolve matters arising from the
exercise of its plenary power to issue assumption or (sic) jurisdiction and return-to-work
orders, all in keeping with the national interest (Article 263(g) and Article 264 of the Labor
Code).[51]

The contention of petitioners that they should have been allowed to present evidence
when their demurrer to evidence was denied by the Secretary of Labor, is untenable. The
record shows that in the hearing of September 22, 1998 attended by the parties, Atty. Lita V.
Aglibut, Hearing Officer, of the public respondents office, who presided over the hearing
directed the parties to submit their respective position papers together with the
affidavits and documentary evidence within ten (10) days.[52] While the Company
submitted its position paper together with supporting evidence and rested its case for
resolution, herein petitioners, however, submitted only its position paper but without
attaching thereto any supporting documentary evidence.Petitioners chose to rely on the Rules
of Court by filing a demurrer to evidence in the hope of a favorable decision and disregarded
our resolution in G.R. No. 127215 ordering the Secretary ofLabor to determine with dispatch
the legality of the strike. On the other hand, the petitioners argued merely on the presumption
that the strike was legal. The fact that the Hearing Officer of DOLE admitted their demurrer to
evidence is not a valid excuse for herein petitioners not to comply with her said directive for
the petitioners to submit their position paper and to attach thereto affidavits and documentary
evidence within ten (10) days. Petitioners non-compliance with that directive by failing or
refusing to attach affidavits and supporting evidence to their position paper should not be
ascribed as the fault of the Secretary of Labor when he denied their demurrer to evidence and
forthwith rendered decision on the illegality of the strike. Petitioners have only themselves to
blame for having defied the order of the said Hearing Officer of DOLE to submit position
papers with supporting evidence. A party who has availed of the opportunity to present his
position paper cannot claim to have been denied due process.[53] The requirements of due
process are satisfied when the parties to a labor case are given the opportunity to submit
position papers wherein they are supposed to attach all the documents that would prove their
Page 157

claim in the event it will be decided that no further hearing should be conducted or that
hearing was not necessary.[54]
The grant of plenary powers to the Secretary of Labor under Art. 263(g) of the Labor Code,
as amended, makes it incumbent for him to bring about soonest, a fair and just solution to the
differences between the employer and the employees so that the damage such labor dispute
might cause upon the national interest may be minimized as much as possible, if not totally
averted, by avoiding stoppage of work or any lagging of the activities of the industry or the
possibility of these contingencies which might cause detriment to such national
interest.[55] Accordingly, he may adopt the most reasonable and expeditious way of
writing finis to the labor dispute. Otherwise, the result would be absurd and contrary to the
grant of plenary powers to him by the Labor Code over a labor dispute causing or likely to
cause a strike or lockout in an industry indispensable to the national interest.
And finally, with respect to petitioners claim of backwages, we find that the ratiocination
of the appellate court in its assailed Decision is in accord with law and settled jurisprudence, to
wit:

On the issue of the award of backwages and financial assistance to the striking workers, the
well-entrenched doctrine is that it is only when there is a finding of illegal dismissal that
backwages are granted (St. Theresas School of Novaliches Foundation vs. National Labor
Relations Commission, 289 SCRA 111; Industrial Timber Corporation-Stanply Operations vs.
National Labor Relations Commission, 253 SCRA 623; Jackson Building Condominium
Corporation, 246 SCRA 329), and financial assistance or separation pay allowed (Mabeza v.
National Labor Relations Commission, 271 SCRA 670; Capili v. National Labor Relations
Commission, 270 SCRA 688; Aurora Land Projects Corporation v. National Labor Relations
Commission, 266 SCRA 48).

Since, as correctly found by the Secretary of Labor, the strikers were not illegally
dismissed, the COMPANY is under no obligation to pay backwages to them. It is simply
inconsistent, nay, absurd, to award backwages when there is no finding of illegal
dismissal (Filflex Industrial and Manufacturing Corporation, 286 SCRA 245). xxx when
the record shows that the striking workers did not comply with lawful orders for them
to return to work during said periods of time. In fact, the Secretary of Labor observed
that while it was obligatory on the part of both parties to restore, in the meantime, the
status quo obtaining in the workplace, the same was not possible considering the strikers
had defied the return-to-work Order of this Office (p. 8, Ibid). With such blatant disregard
by the strikers of official edicts ordering their temporary reinstatement, there is no
basis to award them backwages corresponding to said time frames. Otherwise, they will
recover something they have not or could not have earned by their willful defiance of
the return-to-work order, a patently incongruous and unjust situation (Santos v.
National Labor Relations Commission, 154 SCRA 166).
The same view holds with respect to the award of financial assistance or separation
pay. The assumption for granting financial assistance or separation pay, which is, that there is
an illegally dismissed employee and that illegally dismissed employee would otherwise have
been entitled to reinstatement, is not present in the case at bench. Here, the striking workers
have been validly dismissed. Where the employees dismissal was for a just case, it would be
neither fair nor just to allow the employee to recover something he has not earned or could not
have earned. This being so, there can be no award of backwages, for it must be pointed out that
while backwages are granted on the basis of equity for earnings which a worker or employee has
lost due to his illegal dismissal, where private respondents dismissal is for just cause, as is (sic) the
case herein, there is no factual or legal basis to order the payment of backwages; otherwise,
private respondent would be unjustly enriching herself at the expense of petitioners. (Cathedral
School of Technology v. National Labor Relations Commission, 214 SCRA 551). Consequently,
granting financial assistance to the strikers is clearly a specious Inconsistency supra. We are of
course aware that financial assistance may be allowed as a measure of social justice in
Page 158

exceptional circumstances and as an equitable concession. We are likewise mindful that


financial assistance is allowed only in those instances where the employee is validly dismissed
for causes other than serious misconduct or those reflecting on his moral character (Zenco
Sales, Inc. v. National Labor Relations Commission, 234 SCRA 689). However, the attendant facts
show that such exceptional circumstances do not obtain in the instant cases to warrant the
grant of financial assistance to the striking workers. To our mind, the strikers open and willful
defiance of the assumption order dated September 16, 1995 constitute serious misconduct as
well as reflective of their moral character, hence, granting financial assistance to them is not
and cannot be justified (Philippines Airlines, Inc. v. National Labor Relations Commission, 282
SCRA 536, citing Philippine Long Distance Telephone Company v. National Labor Relations
Commission, 164 SCRA 671).[56]
In fine, there is no reversible error in the assailed Decision and Resolution of the Court of
Appeals.
WHEREFORE, the petition is DISMISSED. The appealed Decision dated December 23,
1999 and the Resolution dated April 19, 2000 of public respondent Court of Appeals
are AFFIRMED. No costs.
SO ORDERED.

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