SECOND DIVISION EXCEPTION.

— As a general rule, a certification election is the sole concern of the

workers. The only exception is where the employer has to file a petition for
[G.R. No. 77395. November 29, 1988.] certification election pursuant to Art. 259 of the Labor Code because the latter
was requested to bargain collectively. But thereafter the role of the employer in
BELYCA CORPORATION, Petitioner, v. DIR. PURA FERRER CALLEJA, the certification process ceases. The employer becomes merely a bystander
LABOR RELATIONS, MANILA, MINISTRY OF LABOR AND EMPLOYMENT; (Trade Union of the Phil. and Allied Services (TUPAS) v. Trajano, 120 SCRA 64
MED-ARBITER, RODOLFO S. MILADO, MINISTRY OF LABOR AND [1983]).
EMPLOYMENT, REGIONAL OFFICE NO. 10 AND ASSOCIATED LABOR
UNION (ALU-TUCP), MINDANAO REGIONAL OFFICE, CAGAYAN DE ORO 7. ID.; ID.; ID.; NOT A LITIGATION BUT A MERE INVESTIGATION OF A NON-
CITY, Respondents. ADVERSARY CHARACTER. — Considering that a petition for certification election is
not a litigation but a mere investigation of a non-adversary character to
Soriano and Araña Law Offices for Petitioner. determining the bargaining unit to represent the employees (LVN Pictures, Inc. v.
Philippine Musicians Guild, supra; Bulakeña Restaurant & Caterer v. Court of
The Solicitor General for public Respondent. Industrial Relations, 45 SCRA 88 [1972]; George Peter Lines, Inc. v. Associated
Labor Union, 134 SCRA 82 [1986]; Tanduay Distillery Labor Union v. NLRC, 149
Francisco D. Alas for respondent Associated Labor Unions-TUCP. SCRA 470 [1987]), and its only purpose is to give the employees true
representation in their collective bargaining with an employer (Confederation of
Citizens Labor Unions (CCLU) v. Noriel, 116 SCRA 694 [1982]), there appears to
SYLLABUS be no reason for the employer’s objection to the formation of subject union, much
less for the filing of the petition for a certification election.

1. LABOR AND SOCIAL LEGISLATIONS; LABOR CODE; COLLECTIVE BARGAINING

UNIT; PROPER CONSTITUENCY, CITED. — Among the factors considered in
Democratic Labor Association v. Cebu Stevedoring Co. Inc. (103 Phil 1103 [1958]) DECISION
are:" (1) will of employees (Glove Doctrine); (2) affinity and unity of employee’s
interest, such as substantial similarity of work and duties or similarity of
compensation and working conditions; (3) prior collective bargaining history; and
(4) employment status, such as temporary, seasonal and probationary PARAS, J.:
employees."

2. ID.; ID.; ID.; ID.; BASIC TEST OF ACCEPTABILITY. — In any event, whether
importance is focused on the employment status or the mutuality of interest of This is a petition for certiorari and prohibition with preliminary
the employees concerned "the basic test of an asserted bargaining unit’s
acceptability is whether or not it is fundamentally the combination which will best
injunction seeking to annul or to set aside the resolution of the
assure to all employees the exercise of their collective bargaining rights Bureau of Labor Relations dated November 24, 1986 and
(Democratic Labor Association v. Cebu Stevedoring Co. Inc. supra) denying the appeal, and the Bureau’s resolution dated January
13, 1987 denying petitioner’s motion for reconsideration.
3. ID.; ID.; CERTIFICATION ELECTION; CALL IS MANDATORY WHERE
STATUTORY REQUIREMENT IS MET. — Under Art. 257 of the Labor Code once
the statutory requirement is met, the Director of Labor Relations has no choice The dispositive portion of the questioned resolution dated
but to call a certification election (Atlas Free Workers Union (AFWU) PSSLU Local November 24, 1986 (Rollo, p. 4) reads as
v. Noriel, 104 SCRA 565 [1981]; Vismico Industrial Workers Association (VIWA) v. follows:jgc:chanrobles.com.ph
Noriel, 131 SCRA 569 [1984]) It becomes in the language of the New Labor Code
"Mandatory for the Bureau to conduct a certification election for the purpose of
determining the representative of the employees in the appropriate bargaining "WHEREFORE, in view of all the foregoing considerations, the
unit and certify the winner as the exclusive bargaining representative of all Order is affirmed and the appeal therefrom denied.
employees in the unit." (Federacion Obrera de la Industria Tabaquera y Otros
Trabajadores de Filipinas v. Noriel, 72 SCRA 24 [1976]; Kapisanan Ng Mga
Manggagawa v. Noriel, 77 SCRA 414 [1977]); more so when there is no existing Let, therefore, the pertinent records of the case be remanded to
collective bargaining agreement. (Samahang Manggagawa Ng Pacific Mills, Inc. v. the office of origin for the immediate conduct of the certification
Noriel, 134 SCRA 152 [1985]); and there has not been a certification election in election."cralaw virtua1aw library
the company for the past three years (PLUM Federation of Industrial and Agrarian
Workers v. Noriel, 119 SCRA 299 [1982]) as in the instant case.
The dispositive portion of the resolution dated January 13, 1987
4. ID.; ID.; ID.; ID.; DOUBTS AS TO THE AUTHENTICITY OF SIGNATURE OR TO (Rollo, p. 92) reads, as follows:chanrob1es virtual 1aw library
THE REQUIRED PERCENTAGE DO NOT BAR HOLDING OF ELECTION. — Any
doubt cast on the authenticity of signatures to the petition for holding a
certification election cannot be a bar to its being granted (Filipino Metals Corp. v.
WHEREFORE, the Motion for Reconsideration filed by respondent
Ople 107 SCRA 211 [1981]). Even doubts as to the required 30% being met Belyca Corporation (Livestock Agro-Division) is hereby dismissed
warrant holding of the certification election (PLUM Federation of Industrial and for lack of merit and the Bureau’s Resolution dated 24 November
Agrarian Workers v. Noriel, 119 SCRA 299 [1982]). In fact, once the required 1986 is affirmed. Accordingly, let the records of this case be
percentage requirement has been reached, the employees’ withdrawal from union
membership taking place after the filing of the petition for certification election will immediately forwarded to the Office of origin for the holding of
not affect said petition. On the contrary, the presumption arises that the the certification elections.
withdrawal was not free but was procured through duress, coercion or for a
valuable consideration (La Suerte Cigar and Cigarette Factory v. Director of the No further motion shall hereafter be entertained."cralaw
Bureau of Labor Relations, 123 SCRA 679 [1983]).
virtua1aw library
5. ID.; ID.; ID.; ID.; UNTIL A DECISION ON THE STRIKE HAS BECOME FINAL
STRIKES CANNOT BE DENIED IN THE ELECTION. — Until a decision, final in The antecedents of the case are as follows:chanrob1es virtual
character, has been issued declaring the strike illegal and the mass dismissal or
1aw library
retrenchment valid, the strikers cannot be denied participation in the certification
election notwithstanding, the vigorous condemnation of the strike and the fact
that the picketing were attended by violence. Under the foregoing circumstances, On June 3, 1986, private respondent Associated Labor Union
it does not necessarily follow that the strikers in question are no longer entitled to (ALU)-TUCP, a legitimate labor organization duly registered with
participate in the certification election on the theory that they have automatically
lost their jobs. (Barrera v. CIR, 107 SCRA 596 [1981]). For obvious reasons, the
the Ministry of Labor and Employment under Registration
duty of the employer to bargain collectively is nullified if the purpose of the Certificate No. 783-IP, filed with the Regional Office No. 10,
dismissal of the union members is to defeat the union in the consent requirement Ministry of Labor and Employment at Cagayan de Oro City, a
for certification election. (Samahang Manggagawa Ng Via Mare v. Noriel, 98 SCRA petition for direct certification as the sole and exclusive
507 [1980]).
bargaining agent of all the rank and file employees/workers of
6. ID.; ID.; ID.; CERTIFICATION ELECTION; A SOLE CONCERN OF WORKERS, Belyca Corporation (Livestock and Agro-Division), a duly
organized, registered and existing corporation engaged in the
business of poultry raising, piggery and planting of agricultural
crops such as corn, coffee and various vegetables, employing
approximately 205 rank and file employees/workers, the
collective bargaining unit sought in the petition, or in case of
doubt of the union’s majority representation, for the issuance of
an order authorizing the immediate holding of a certification
election (Rollo, p. 18). Although the case was scheduled for
hearing at least three times, no amicable settlement was
reached by the parties. During the scheduled hearing of July 31,
1986 they, however, agreed to submit simultaneously their
respective position papers on or before August 11, 1986 (rollo.
p. 62).
Petitioner ALU-TUCP, private respondent herein, in its petition
and position paper alleged, among others, (1) that there is no
existing collective bargaining agreement between the respondent
employer, petitioner herein, and any other existing legitimate
labor unions; (2) that there had neither been a certification
election conducted in the proposed bargaining unit within the
last twelve (12) months prior to the filing of the petition nor a
contending union requesting for certification as the sole and
exclusive bargaining representative in the proposed bargaining
unit; (3) that more than a majority of respondent employer’s
rank-and-file employees/workers in the proposed bargaining unit
or one hundred thirty-eight (138) as of the date of the filing of
the petition, have signed membership with the ALU-TUCP and
have expressed their written consent and authorization to the
filing of the petition; (4) that in response to petitioner union’s
two letters to the proprietor/General Manager of respondent
employer, dated April 21, 1986 and May 8, 1986, requesting for
direct recognition as the sole and exclusive bargaining agent of
the rank-and-file workers, respondent employer has locked out
119 of its rank-and-file employees in the said bargaining unit and
had dismissed earlier the local union president, vice-president
and three other active members of the local unions for which an
unfair labor practice case was filed by petitioner union against
respondent employer last July 2, 1986 before the NLRC in
Cagayan de Oro City (Rollo, pp. 18; 263).chanrobles.com :
virtual law library
Respondent employer, on the other hand, alleged in its position
paper, among others, (1) that due to the nature of its business,
very few of its employees are permanent, the overwhelming
majority of which are seasonal and casual and regular
employees; (2) that of the total 138 rank-and-file employees
who authorized, signed and supported the filing of the petition
(a) 14 were no longer working as of June 3, 1986 (b) 4 resigned
after June, 1986 (c) 6 withdrew their membership from
petitioner union (d) 5 were retrenched on June 23, 1986 (e) 12
were dismissed due to malicious insubordination and destruction
of property and (f) 100 simply abandoned their work or stopped
working; (3) that the 128 incumbent employees or workers of
the livestock section were merely transferred from the
agricultural section as replacement for those who have either
been dismissed, retrenched or resigned; and (4) that the
statutory requirement for holding a certification election has not
been complied with by the union (Rollo, p. 26).
The Labor Arbiter granted the certification election sought for by
petitioner union in his order dated August 18, 1986 (Rollo, p.
62).
On February 4, 1987, respondent employer Belyca Corporation,
appealed the order of the Labor Arbiter to the Bureau of Labor
Relations in Manila (Rollo, p. 67) which denied the appeal (Rollo,
p. 80) and the motion for reconsideration (Rollo, p. 92). Thus,
the instant petition received in this Court by mail on February 20,
1987 (Rollo, p. 3).
In the resolution of March 4, 1987, the Second Division of this
Court required respondent Union to comment on the petition and
issued a temporary restraining order (Rollo, p. 95).
Respondent union filed its comment on March 30, 1987 (Rollo, p.
190); public respondents filed its comment on April 8, 1987
(Rollo, p. 218).
On May 4, 1987, the Court resolved to give due course to the
petition and to require the parties to submit their respective
memoranda within twenty (20) days from notice (Rollo, p. 225).
The Office of the Solicitor General manifested on June 11, 1987
that it is adopting the comment for public respondents as its
memorandum (Rollo, p. 226); memorandum for respondent ALU
was filed on June 30, 1987 (Rollo, p. 231); and memorandum for
petitioner, on July 30, 1987 (Rollo, p. 435).
The issues raised in this petition are:chanrob1es virtual 1aw
library
I
WHETHER OR NOT THE PROPOSED BARGAINING UNIT IS AN
APPROPRIATE BARGAINING UNIT.
II
WHETHER OR NOT THE STATUTORY REQUIREMENT OF 30%
(NOW 20%) OF THE EMPLOYEES IN THE PROPOSED
BARGAINING UNIT, ASKING FOR A CERTIFICATION ELECTION
HAD BEEN STRICTLY COMPLIED WITH.
In the instant case, respondent ALU seeks direct certification as
the sole and exclusive bargaining agent of all the rank-and-file
workers of the livestock and agro division of petitioner BELYCA
Corporation (Rollo, p. 232), engaged in piggery, poultry raising
and the planting of agricultural crops such as corn, coffee and
various vegetables (Rollo, p. 26). But petitioner contends that
the bargaining unit must include all the workers in its integrated
business concerns ranging from piggery, poultry, to supermarts
and cinemas so as not to split an otherwise single bargaining
unit into fragmented bargaining units (Rollo, p. 435).
The Labor Code does not specifically define what constitutes an
appropriate collective bargaining unit. Article 256 of the Code
provides:jgc:chanrobles.com.ph
"Art. 256. Exclusive bargaining representative. — The labor
organization designated or selected by the majority of the
employees in an appropriate collective bargaining unit shall be
exclusive representative of the employees in such unit for the
purpose of collective bargaining. However, an individual
employee or group of employees shall have the right at any time
to present grievances to their employer.
According to Rothenberg, a proper bargaining unit maybe said to
be a group of employees of a given employer, comprised of all
or less than all of the entire body of employees, which the
collective interests of all the employees, consistent with equity to
the employer, indicate to be best suited to serve reciprocal rights
and duties of the parties under the collective bargaining
provisions of the law (Rothenberg in Labor Relations, p. 482).
This Court has already taken cognizance of the crucial issue of
determining the proper constituency of a collective bargaining
unit.
Among the factors considered in Democratic Labor Association v.
Cebu Stevedoring Co. Inc. (103 Phil 1103 [1958]) are:" (1) will
of employees (Glove Doctrine); (2) affinity and unity of
employee’s interest, such as substantial similarity of work and
duties or similarity of compensation and working conditions; (3)
prior collective bargaining history; and (4) employment status,
such as temporary, seasonal and probationary employees."
Under the circumstances of that case, the Court stressed the
importance of the fourth factor and sustained the trial court’s
conclusion that two separate bargaining units should be formed
in dealing with respondent company, one consisting of regular
and permanent employees and another consisting of casual
laborers or stevedores. Otherwise stated, temporary employees
should be treated separately from permanent employees. But
more importantly, this Court laid down the test of proper
grouping, which is community and mutuality of
interest.chanrobles lawlibrary : rednad
Thus, in a later case, (Alhambra Cigar and Cigarette
Manufacturing Co. Et. Al. v. Alhambra Employees’ Association
107 Phil. 28 [1960]) where the employment status was not at
issue but the nature of work of the employees concerned; the
Court stressed the importance of the second factor otherwise
known as the substantial-mutual-interest test and found no
reason to disturb the finding of the lower Court that the
employees in the administrative, sales and dispensary
departments perform work which has nothing to do with
production and maintenance, unlike those in the raw leaf, cigar,
cigarette, packing and engineering and garage departments and
therefore have a community of interest which justifies the
formation or existence as a separate appropriate collective
bargaining unit.
Still later in PLASLU v. CIR Et. Al. (110 Phil. 180 [1960]) where
the employment status of the employees concerned was again
challenged, the Court reiterating the rulings, both in Democratic
Labor Association v. Cebu Stevedoring Co. Inc. supra and
Alhambra Cigar and Cigarette Co. Et. Al. v. Alhambra Employees’
Association (supra) held that among the factors to be considered
are: employment status of the employees to be affected, that is
the positions and categories of work to which they belong, and
the unity of employees’ interest such as substantial similarity of
work and duties.
In any event, whether importance is focused on the employment
status or the mutuality of interest of the employees concerned
"the basic test of an asserted bargaining unit’s acceptability is
whether or not it is fundamentally the combination which will
best assure to all employees the exercise of their collective
bargaining rights (Democratic Labor Association v. Cebu
Stevedoring Co. Inc. supra)
Hence, still later following the substantial-mutual interest test,
the Court ruled that there is a substantial difference between the
work performed by musicians and that of other persons who
participate in the production of a film which suffice to show that
they constitute a proper bargaining unit. (LVN Pictures, Inc. v.
Philippine Musicians Guild, 1 SCRA 132 [1961]).
Coming back to the case at bar, it is beyond question that the
employees of the livestock and agro division of petitioner
corporation perform work entirely different from those
performed by employees in the supermarts and cinema. Among
others, the noted difference are: their working conditions, hours
of work, rates of pay, including the categories of their positions
and employment status. As stated by petitioner corporation in its
position paper, due to the nature of the business in which its
livestock-agro division is engaged very few of its employees in
the division are permanent, the overwhelming majority of which
are seasonal and casual and not regular employees (Rollo, p.
26). Definitely, they have very little in common with the
employees of the supermarts and cinemas. To lump all the
employees of petitioner in its integrated business concerns
cannot result in an efficacious bargaining unit comprised of
constituents enjoying a community or mutuality of interest.
Undeniably, the rank and file employees of the livestock-agro
division fully constitute a bargaining unit that satisfies both
requirements of classification according to employment status
and of the substantial similarity of work and duties which will
ultimately assure its members the exercise of their collective
bargaining rights.chanrobles law library
II
It is undisputed that petitioner BELYCA Corporation (Livestock
and Agro Division) employs more or less two hundred five (205)
rank-and-file employees and workers. It has no existing duly
certified collective bargaining agreement with any legitimate
labor organization. There has not been any certification election
conducted in the proposed bargaining unit within the last twelve
(12) months prior to the filing of the petition for direct
certification and/or certification election with the Ministry of
Labor and Employment, and there is no contending union
requesting for certification as the sole and exclusive bargaining
representative in the proposed bargaining unit.
The records show that on the filing of the petition for
certification and/or certification election on June 3, 1986; 124
employees or workers which are more than a majority of the
rank-and-file employees or workers in the proposed bargaining
unit had signed membership with respondent ALU-TUCP and had
expressed their written consent and authorization to the filing of
the petition. Thus, the Labor Arbiter ordered the certification
election on August 18, 1986 on a finding that 30% of the
statutory requirement under Art. 258 of the Labor Code has
been met.
But, petitioner corporation contends that after June 3, 1986 four
(4) employees resigned; six (6) subsequently withdrew their
membership; five (5) were retrenched; twelve (12) were
dismissed for illegally and unlawfully barricading the entrance to
petitioner’s farm; and one hundred (100) simply abandoned their
work.
Petitioner’s claim was however belied by the Memorandum of its
personnel officer to the 119 employees dated July 28, 1986
showing that the employees were on strike, which was
confirmed by the finding of the Bureau of Labor Relations to the
effect that they went on strike on July 24, 1986 (Rollo, p. 419).
Earlier the local union president, Warrencio Maputi; the Vice-
president, Gilbert Redoblado; and three other active members of
the union Carmen Saguing, Roberto Romolo and Iluminada
Bonio were dismissed and a complaint for unfair labor practice,
illegal dismissal etc. was filed by the Union in their behalf on July
2, 1986 before the NLRC of Cagayan de Oro City (Rollo, p. 415).
The complaint was amended on August 20, 1986 for respondent
Union to represent Warrencio Maputi and 137 others against
petitioner corporation and Bello Casanova President and General
Manager for unfair labor practice, illegal dismissal, illegal lockout,
etc. (Rollo, p. 416)
Under Art. 257 of the Labor Code once the statutory requirement
is met, the Director of Labor Relations has no choice but to call a
certification election (Atlas Free Workers Union (AFWU) PSSLU
Local v. Noriel, 104 SCRA 565 [1981]; Vismico Industrial Workers
Association (VIWA) v. Noriel, 131 SCRA 569 [1984]) It becomes
in the language of the New Labor Code "Mandatory for the
Bureau to conduct a certification election for the purpose of
determining the representative of the employees in the
appropriate bargaining unit and certify the winner as the
exclusive bargaining representative of all employees in the unit."
(Federacion Obrera de la Industria Tabaquera y Otros
Trabajadores de Filipinas v. Noriel, 72 SCRA 24 [1976];
Kapisanan Ng Mga Manggagawa v. Noriel, 77 SCRA 414 [1977]);
more so when there is no existing collective bargaining
agreement. (Samahang Manggagawa Ng Pacific Mills, Inc. v.
Noriel, 134 SCRA 152 [1985]); and there has not been a
certification election in the company for the past three years
(PLUM Federation of Industrial and Agrarian Workers v. Noriel,
119 SCRA 299 [1982]) as in the instant case.
It is significant to note that 124 employees out of the 205
employees of the Belyca Corporation have expressed their
written consent to the certification election or more than a
majority of the rank and file employees and workers; much more
than the required 30% and over and above the present
requirement of 20% by Executive Order No. 111 issued on
December 24, 1980 and applicable only to unorganized
establishments under Art. 257, of the Labor Code, to which the
BELYCA Corporation belong (Ass. Trade Unions (ATU) v. Trajano,
G.R. No. 75321, June 20, 1988).) More than that, any doubt cast
on the authenticity of signatures to the petition for holding a
certification election cannot be a bar to its being granted (Filipino
Metals Corp. v. Ople 107 SCRA 211 [1981]). Even doubts as to
the required 30% being met warrant holding of the certification
election (PLUM Federation of Industrial and Agrarian Workers v.
Noriel, 119 SCRA 299 [1982]). In fact, once the required
percentage requirement has been reached, the employees’
withdrawal from union membership taking place after the filing
of the petition for certification election will not affect said
petition. On the contrary, the presumption arises that the
withdrawal was not free but was procured through duress,
coercion or for a valuable consideration (La Suerte Cigar and
Cigarette Factory v. Director of the Bureau of Labor Relations,
123 SCRA 679 [1983]). Hence, the subsequent disaffiliation of
the six (6) employees from the union will not be counted against
or deducted from the previous number who had signed up for
certification elections (Vicmico Industrial Workers Association
(VIWA) v. Noriel 131 SCRA 569 [1984]). Similarly, until a
decision, final in character, has been issued declaring the strike
illegal and the mass dismissal or retrenchment valid, the strikers
cannot be denied participation in the certification election
notwithstanding, the vigorous condemnation of the strike and
the fact that the picketing were attended by violence. Under the
foregoing circumstances, it does not necessarily follow that the
strikers in question are no longer entitled to participate in the
certification election on the theory that they have automatically
lost their jobs. (Barrera v. CIR, 107 SCRA 596 [1981]). For
obvious reasons, the duty of the employer to bargain collectively
is nullified if the purpose of the dismissal of the union members
is to defeat the union in the consent requirement for certification
election. (Samahang Manggagawa Ng Via Mare v. Noriel, 98
SCRA 507 [1980]). As stressed by this Court, the holding of a
certification election is a statutory policy that should not be
circumvented. (George and Peter Lines Inc. v. Associated Labor
Unions (ALU), 134 SCRA 82 [1986]).
Finally, as a general rule, a certification election is the sole
concern of the workers. The only exception is where the
employer has to file a petition for certification election pursuant
to Art. 259 of the Labor Code because the latter was requested
to bargain collectively. But thereafter the role of the employer in
the certification process ceases. The employer becomes merely a
bystander (Trade Union of the Phil. and Allied Services (TUPAS)
v. Trajano, 120 SCRA 64 [1983]).chanrobles law library : red
There is no showing that the instant case falls under the above
mentioned exception. However, it will be noted that petitioner
corporation from the outset has actively participated and
consistently taken the position of adversary in the petition for
direct certification as the sole and exclusive bargaining
representative and/or certification election filed by respondent
Associated Labor Unions (ALU)-TUCP to the extent of filing this
petition for certiorari in this Court. Considering that a petition for
certification election is not a litigation but a mere investigation of
a non-adversary character to determining the bargaining unit to
represent the employees (LVN Pictures, Inc. v. Philippine
Musicians Guild, supra; Bulakeña Restaurant & Caterer v. Court
of Industrial Relations, 45 SCRA 88 [1972]; George Peter Lines,
Inc. v. Associated Labor Union, 134 SCRA 82 [1986]; Tanduay
Distillery Labor Union v. NLRC, 149 SCRA 470 [1987]), and its
only purpose is to give the employees true representation in
their collective bargaining with an employer (Confederation of
Citizens Labor Unions (CCLU) v. Noriel, 116 SCRA 694 [1982]),
there appears to be no reason for the employer’s objection to
the formation of subject union, much less for the filing of the
petition for a certification election.
PREMISES CONSIDERED, (a) the petition is DISMISSED for lack
of merit (b) resolution of the Bureau of Labor Relations dated
Nov. 24, 1986 is AFFIRMED; and the temporary restraining order
issued by the Court on March 4, 1987 is LIFTED
permanently.chanrobles lawlibrary : rednad
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
 
G.R. No. 89609 January 27, 1992
NATIONAL CONGRESS OF UNIONS IN THE SUGAR
INDUSTRY OF THE PHILIPPINES (NACUSIP)-
TUCP, petitioner,
vs.
HON. PURA FERRER-CALLEJA, in her capacity as Director
of the Bureau of Labor Relations; and the NATIONAL
FEDERATION OF SUGAR WORKERS (NFSW)-FGT-
KMU, respondents.
Zoilo V. De la Cruz, Jr., Beethoven R. Buenaventura and Pedro
E. Jimenez for petitioner.
Manlapao, Drilon, Ymballa and Chavez for private respondent .
MEDIALDEA, J.:
This is a petition for certiorari seeking the nullification of the
resolution issued by the respondent Director of the Bureau of
Labor Relations Pura Ferrer-Calleja dated June 26, 1989 setting
aside the order of the Med-Arbiter dated February 8, 1989
denying the motion to dismiss the petition and directing the
conduct of a certification election among the rank and file
employees or workers of the Dacongcogon Sugar and Rice
Milling Co. situated at Kabankalan, Negros Occidental.
The antecedent facts giving rise to the controversy at bar are as
follows:
Petitioner National Congress of Unions in the Sugar Industry of
the Philippines (NACUSIP-TUCP) is a legitimate national labor
organization duly registered with the Department of Labor and
Employment. Respondent Honorable Pura Ferrer-Calleja is
impleaded in her official capacity as the Director of the Bureau of
Labor Relations of the Department of Labor and Employment,
while private respondent National Federation of Sugar Workers
(NFSW-FGT-KMU) is a labor organization duly registered with the
Department of Labor and Employment.
Dacongcogon Sugar and Rice Milling Co., Inc. (Dacongcogon)
based in Kabankalan, Negros Occidental employs about five
hundred (500) workers during milling season and about three
hundred (300) on off-milling season.
On November 14, 1984, private respondent NFSW-FGT-KMU and
employer Dacongcogon entered into a collective bargaining
agreement (CBA) for a term of three (3) years, which was to
expire on November 14, 1987.
When the CBA expired, private respondent NFSW-FGT-KMU and
Dacongcogon negotiated for its renewal. The CBA was extended
for another three (3) years with reservation to negotiate for its
amendment, particularly on wage increases, hours of work, and
other terms and conditions of employment.
However, a deadlock in negotiation ensued on the matter of
wage increases and optional retirement. In order to obviate
friction and tension, the parties agreed on a suspension to
provide a cooling-off period to give them time to evaluate and
further study their positions. Hence, a Labor Management
Council was set up and convened, with a representative of the
Department of Labor and Employment, acting as chairman, to
resolve the issues.
On December 5, 1988, petitioner NACUSIP-TUCP filed a petition
for direct certification or certification election among the rank
and file workers of Dacongcogon.
On January 27, 1989, private respondent NFSW-FGT-KMU
moved to dismiss the petition on the following grounds, to wit:
I
The Petition was filed out of time;
II
There is a deadlocked (sic) of CBA negotiation
between forced intervenor and respondent-
central. (Rollo, p. 25)
On February 6, 1989, Dacongcogon filed an answer praying that
the petition be dismissed.
By an order dated February 8, 1989, the Med-Arbiter denied the
motion to dismiss filed by private respondent NFSW-FGT-KMU
and directed the conduct of certification election among the rank
and file workers of Dacongcogon, the dispositive portion of
which provides as follows:
WHEREFORE, premises considered, the Motion
to Dismiss the present petition is, as it is hereby
DENIED. Let therefore a certification election
among the rank and file employees/workers of
the Dacongcogon Sugar and Rice Milling Co.,
situated at Kabankalan, Neg. Occ., be
conducted with the following choices:
(1) National Congress of
Unions in the Sugar Industry
of the Philippines (NACUSIP-
TUCP);
(2) National Federation of
Sugar Workers (NFSW);
(3) No Union.
The designated Representation Officer is
hereby directed to call the parties for a pre-
election conference to thresh out the mechanics
of the election and to conduct and supervise
the same within twenty (20) days from receipt
 by the parties of this Order. The latest payroll
shall be used to determine the list of qualified
voters.
SO ORDERED. (Rollo, p. 34)
On February 9, 1989, private respondent filed a motion for
reconsideration and/or appeal alleging that the Honorable Med-
Arbiter misapprehended the facts and the law applicable
amounting to gross incompetence. Hence, private respondent
prayed that the order of the Med-Arbiter be set aside and the
motion to dismiss be reconsidered.
On February 27, 1989, petitioner filed its opposition to the
motion for reconsideration praying that the motion for
reconsideration and/or appeal be denied for lack of merit.
On June 26, 1989, respondent Director of the Bureau of Labor
Relations rendered a resolution reversing the order of the Med-
Arbiter, to wit:
WHEREFORE, premises considered, the Order
of the Med-Arbiter dated 8 February 1989 is
hereby set aside and vacated, and a new one
issued dismissing the above-entitled petition for
being filed out of time.
SO ORDERED. (Rollo, p. 46)
Hence, this petition raising four (4) issues, to wit:
I. RESPONDENT HON. PURA FERRER-CALLEJA,
IN HER CAPACITY AS DIRECTOR OF THE
BUREAU OF LABOR RELATIONS, COMMITTED
GRAVE ABUSE OF DISCRETION IN RENDERING
HER RESOLUTION DATED 26 JUNE 1989
REVERSING THE ORDER DATED FEBRUARY 8,
1989 OF MED-ARBITER FELIZARDO SERAPIO.
II. THAT THE AFORESAID RESOLUTION DATED
26 JUNE 1989 OF RESPONDENT PURA FERRER-
CALLEJA IS CONTRARY TO LAW AND
JURISPRUDENCE.
III. THAT THE AFORESAID RESOLUTION
DATED 26 JUNE 1989 OF RESPONDENT
DIRECTOR PURA FERRER-CALLEJA DENIES
THE RANK AND FILE EMPLOYEES OF THE
DACONGCOGON SUGAR & RICE MILLING
COMPANY, AND THE HEREIN PETITIONER
NACUSIP-TUCP, THEIR LEGAL AND
CONSTITUTIONAL RIGHTS.
IV. THAT RESPONDENT DIRECTOR PURA
FERRER-CALLEJA, IN RENDERING HER SAID
RESOLUTION DATED 26 JUNE 1989 WAS
BIASED AGAINST PETITIONER NACUSIP-TUCP.
(Rollo,
p. 2)
The controversy boils down to the sole issue of whether or not a
petition for certification election may be filed after the 60-day
freedom period.
Petitioner maintains that respondent Director Calleja committed
grave abuse of discretion amounting to excess of jurisdiction in
rendering the resolution dated June 26, 1989 setting aside,
vacating and reversing the order dated February 8, 1989 of Med-
Arbiter Serapio, in the following manner:
1) by setting aside and vacating the aforesaid
Order dated February 8, 1989 of Med-Arbiter
Felizardo Serapio and in effect dismissing the
Petition for Direct or Certification Election of
Petitioner NACUSIP-TUCP (Annex "A" hereof)
without strong valid, legal and factual basis;
2) by giving a very strict and limited
interpretation of the provisions of Section 6,
Rule V, Book V of the Implementing Rules and
Regulations of the Labor Code, as amended,
knowing, as she does, that the Labor Code,
being a social legislation, should be liberally
interpreted to afford the workers the
opportunity to exercise their legitimate legal
and constitutional rights to self-organization
and to free collective bargaining;
3) by issuing her questioned Resolution of June
26, 1989 knowing fully well that upon the
effectivity of Rep. Act No. 6715 on 21 March
1989 she had no longer any appellate powers
over decisions of Med-Arbiters in cases of
representation issues or certification elections;
4) by ignoring intentionally the applicable ruling
of the Honorable Supreme Court in the case
of Kapisanan ng Mga Manggagawa sa La
Suerte-FOITAF vs. Noriel, L-45475, June 20,
1977;
5) by clearly failing to appreciate the
significance (sic) of the fact that for more than
four (4) years there has been no certification
election involving the rank and file workers of
the Company; and,
6) by frustrating the legitimate desire and will
of the workers of the Company to determine
their sole and exclusive collective bargaining
representative through secret balloting. ( Rollo,
pp. 9-10)
However, the public respondent through the Solicitor General
stresses that the petition for certification election was filed out of
time. The records of the CBA at the Collective Agreements
Division (CAD) of the Bureau of Labor Relations show that the
CBA between Dacongcogon and private respondent NFSW-FGT-
KMU had expired on November 14, 1987, hence, the petition for
certification election was filed too late, that is, a period of more
than one (1) year after the CBA expired.
The public respondent maintains that Section 6 of the Rules
Implementing Executive Order No. 111 commands that the
petition for certification election must be filed within the last
sixty (60) days of the CBA and further reiterates and warns that
any petition filed outside the 60-day freedom period "shall be
dismissed outright." Moreover, Section 3, Rule V, Book V of the
Rules Implementing the Labor Code enjoins the filing of a
representation question, if before a petition for certification
election is filed, a bargaining deadlock to which the bargaining
agent is a party is submitted for conciliation or arbitration.
Finally, the public respondent emphasizes that respondent
Director has jurisdiction to entertain the motion for
reconsideration interposed by respondent union from the order
of the Med-Arbiter directing a certification election. Public
respondent contends that Section 25 of Republic Act No. 6715 is
not applicable, "(f)irstly, there is as yet no rule or regulation
established by the Secretary for the conduct of elections among
the rank and file of employer Dacongcogon; (s)econdly, even the
mechanics of the election which had to be first laid out, as
directed in the Order dated February 8, 1989 of the Med-Arbiter,
was aborted by the appeal therefrom interposed by respondent
union; and (t)hirdly, petitioner is estopped to question the
jurisdiction of respondent Director after it filed its opposition to
respondent union's Motion for Reconsideration (Annex
'F,' Petition) and without, as will be seen, in any way assailing
such jurisdiction. . . ." (Rollo, p.66)
We find the petition devoid of merit.
A careful perusal of Rule V, Section 6, Book V of the Rules
Implementing the Labor Code, as amended by the rules
implementing Executive Order No. 111 provides that:
Sec. 6. Procedure — . . .
This rule simply provides that a petition for certification election
or a motion for intervention can only be entertained within sixty
days prior to the expiry date of an existing collective bargaining
agreement. Otherwise put, the rule prohibits the filing of a
petition for certification election during the existence of a
collective bargaining agreement except within the freedom
period, as it is called, when the said agreement is about to
expire. The purpose, obviously, is to ensure stability in the
relationships of the workers and the management by preventing
frequent modifications of any collective bargaining agreement
earlier entered into by them in good faith and for the stipulated
original period. (Associated Labor Unions (ALU-TUCP) v. Trajano,
G.R. No. 77539, April 12, 1989, 172 SCRA 49, 57 citing
Associated Trade Unions (ATU v. Trajano, G.R. No. L-75321, 20
June 1988, 162 SCRA 318, 322-323)
Anent the petitioner's contention that since the expiration of the
CBA in 1987 private respondent NFSW-FGT-KMU and
Dacongcogon had not concluded a new CBA, We need only to
stress what was held in the case of Lopez Sugar Corporation
v. Federation of Free Workers, Philippine Labor Union
Association  (G.R. No. 75700-01, 30 August 1990, 189 SCRA 179,
191) quoting Article 253 of the Labor Code that "(i)t shall be the
duty of both parties to keep the status quo and to continue in
full force and effect the terms and conditions of the existing
agreement during the 60-day period and/or until a new
agreement is reached by the parties." Despite the lapse of the
formal effectivity of the CBA the law still considers the same as
continuing in force and effect until a new CBA shall have been
validly executed. Hence, the contract bar rule still applies.

In a petition involving an organized Besides, it should be emphasized that Dacongcogon, in its

establishment or enterprise where the majority answer stated that the CBA was extended for another three (3)
status of the incumbent collective bargaining years and that the deadlock was submitted to the Labor
union is questioned by a legitimate labor Management Council.
organization, the Med-Arbiter shall immediately
order the conduct of a certification election if
All premises considered, the Court is convinced that the
the petition is filed during the last sixty (60)
respondent Director of the Bureau of Labor Relations did not
days of the collective bargaining agreement.
commit grave abuse of discretion in reversing the order of the
Any petition filed before or after the sixty-day
Med-Arbiter.
freedom period shall be dismissed outright.

ACCORDINGLY, the petition is DENIED and the resolution of the

The sixty-day freedom period based on the
respondent Director of the Bureau of Labor Relations is hereby
original collective bargaining agreement shall
AFFIRMED.
not be affected by any amendment, extension
or renewal of the collective bargaining
agreement for purposes of certification election. SO ORDERED.

x x x           x x x          x x x

The clear mandate of the aforequoted section is that the petition

for certification election filed by the petitioner NACUSIP-TUCP
should be dismissed outright, having been filed outside the 60-
day freedom period or a period of more than one (1) year after
the CBA expired.

It is a rule in this jurisdiction that only a certified collective

bargaining agreement — i.e., an agreement duly certified by the
BLR may serve as a bar to certification elections. (Philippine
Association of Free Labor Unions (PAFLU) v. Estrella, G.R. No.
45323, February 20, 1989, 170 SCRA 378, 382) It is noteworthy
that the Bureau of Labor Relations duly certified the November
14, 1984 collective bargaining agreement. Hence, the contract-
bar rule as embodied in Section 3, Rule V, Book V of the rules
implementing the Labor Code is applicable.
FIRST DIVISION
[G.R. NO. 149833 : June 29, 2004]
NOTRE DAME OF GREATER MANILA, Petitioner, v. Hon. BIENVENIDO E. LAGUESMA,
(Undersecretary of the Department of Labor and Employment); Med-Arbiter TOMAS
FALCONITIN; and NOTRE DAME OF GREATERMANILA TEACHERS AND EMPLOYEES
UNION, Respondents.
DECISION
PANGANIBAN, J.:
Unless it has filed a petition for a certification election pursuant
to Article 258 of the Labor Code, an employer has no standing to
question such election or to interfere therein.Being the sole
concern of the workers, the election must be free from the
influence or reach of the company.
The Case
Before us is a Petition for Review 1 under Rule 45 of the Rules of
Court, challenging the March 31, 2000 Decision 2 and the August
28, 2001 Resolution3 of the Court of Appeals (CA) in CA-GR SP
No. 51287.The assailed Decision disposed as
follows:chanroblesvirtua1awlibrary
In sum, the Court finds that public respondents did not commit
any abuse of discretion in issuing the assailed decision and
order.There is no capricious and whimsical exercise of judgment
as is equivalent to lack of jurisdiction and hence there is no room
for the issuance of the equitable writ of certiorari .
WHEREFORE, the instant petition is dismissed.4 cralawred
The challenged Resolution denied petitioners Motion
Reconsideration.
The Facts
The factual antecedents of the case are summarized by the CA
as follows:chanroblesvirtua1awlibrary
On October 14, 1991, private respondent Notre Dame of Greater
Manila Teachers & Employees Union (NGMTEU for brevity) a
legitimate labor organization duly accredited and registered with
the Department of Labor & Employment (DOLE) under
Registration Certificate No. 9989 filed with the Med-Arbitration
Branch, National Capital Region, (DOLE) a petition for direct
certification as the sole and exclusive bargaining agent or
certification election among the rank and file employees of
petitioner NDGM.
On November 18, 1991, Med-Arbiter Tomas F. Falconitin issued
an order [granting the petition for certification election and]
directing Adelayda C. Francisco, Representation Officer, to
undertake a pre-election conference.The order
reads:chanroblesvirtua1awlibrary
Considering the manifestation of petitioner its legal counsel
praying that this case be submitted for resolution; and
considering further that the respondent failed to appear on
November 13, 1991 scheduled hearing despite knowledge of said
hearing; and considering furthermore [that] respondent is [an]
unorganized establishment within the purview of Art. 257 of the
Labor Code, as amended, we rule to grant certification election
instead of direct certification as prayed for by petitioner, in order
to give each employee a fair chance to choose their bargaining
agent.
Accordingly, the Representation Officer is hereby directed to
conduct the usual pre-election conference in connection thereof,
taking into account the following
choices:chanroblesvirtua1awlibrary
1.Notre Dame of Greater Manila Teachers and Employees Union
(NDGMTEU); andcralawlibrary
2.No Union.
SO ORDERED.
On January 8, 1992, a pre-election conference was conducted
wherein the parties agreed, among others, that the certification
election shall be conducted on January 18, 1992 from 10:00
oclock in the morning to 2:00 oclock in the afternoon and that
the eligible voters shall be those employees appearing in the list
submitted by management as agreed upon by the parties by
affixing their signatures on said list.
On January 13, 1992, petitioner NDGM registered a motion to
include probationary and substitute employees in the list of
qualified voters.On the same day, respondent Med-Arbiter
Falconitin denied said motion by handwritten notation on the
motion itself 1/13/92 The Rep. officer allow[s] only regular
employees to vote.
On January 17, 1992, petitioner NDGM filed an appeal from the
for
said handwritten order dated January 13, 1992 of Med. Arbiter
Falconitin in the form of a notation, in effect excluding
probationary and substitute employees from the list of voters.
On January 18, 1992, public respondent conducted a certification
election with the following results:
YES.. 56
NO.. 23
Number of segregated
Ballots 4
Number of spoiled
Ballots 1_
Total84
On January 18, 1992, petitioner filed a written notice of protest
against the conduct and results of the certification of election,
which was opposed by private respondent NDGMTEU.
On January 27, 1992, a motion to certify private respondent
NDGMTEU as the exclusive bargaining agent of petitioner was
filed.
On March 16, 1992[,] Med-Arbiter Tomas Falconitin issued an
order which certified private respondent NDGMTEU as the sole
and exclusive bargaining agent of all the rank-and-file employees
of petitioner and accordingly dismissed petitioners protest.
On March 30, 1992, petitioner lodged an appeal from the
aforementioned March 16, 1992 Order of Med-Arbiter Falconitin.
On July 23, 1992, respondent then Undersecretary Laguesma
rendered the questioned decision dismissing the appeal for lack
of merit.
Petitioner filed a motion for reconsideration of the Decision
which was rejected by public respondent in his order dated
October 12, 1992.
Dissatisfied, petitioner NDGM filed the instant petition
asseverating on the following issues,
viz:chanroblesvirtua1awlibrary
The issuance of the orders dated July 23, 1992 and October 12,
1992 is flagrantly contrary to and violative of the provisions of
the Labor Code of the Philippines.
1.On [o]rdering the [h]olding of the [c]ertification [e]lection on
January 18, 1992 despite [p]etitioners [p]erfected [a]ppeal on
January 17, 1992 with the Office of the Secretary of the
Department.
2.On the [a]rbitrary, whimsical and capricious exclusion from the
Qualified Voters List [p]robationary and [s]ubstitute
[e]mployees, contrary to law and established jurisprudence. 5
Ruling of the Court of Appeals
Ruling in favor of respondents, the appellate court held that
Med-Arbiter Falconitins notation on petitioners Motion to Include
Probationary and Substitute Employees in the List of Qualified
Voters was not an order that could be the subject of an appeal
to the Secretary of the Department of Labor and
Employment.Also, petitioner was deemed to have abandoned its
appeal of the notation when it filed another one on March 30,
1992, also with the labor secretary.Thus, the CA held that
staying the holding of the certification election was unnecessary.
The appellate court added that complaints regarding the conduct
of the certification election should have been raised with the
registration officer before the close of the proceedings.Moreover,
it held that only complaints relevant to the election could be
filed.Be that as it may, the pre-election conference was deemed
to have already dispensed with the issue regarding the
qualification of the voters.
Lastly, the CA ruled that petitioner had no standing to question
the qualification of the workers who should be included in the list
of voters because, in the process of choosing their collective
bargaining representative, the employer was definitely an
intruder.
Hence, this Petition. 6
The Issues
In its Memorandum, petitioner raises these issues for our
consideration:chanroblesvirtua1awlibrary
A .Whether or not Hon. Court of Appeals committed grave error
in dismissing the petition which petition alleged that Public
Respondent Laguesma flagrantly violated the provisions of the
Labor Code of the Philippines in the issuance of Orders, dated
July 23, 1992 and October 12, 1992[.]
B.Whether or not the Hon. Court of Appeals committed errors in
fact and law[.]7 cralawred
Simply put, the main issue is whether the holding of the
certification election was stayed by petitioners appeal of the
med-arbiters notation on the Motion to Include the Probationary
and Substitute Employees in the List of Qualified Voters.
This Courts Ruling
The Petition has no merit.
Main Issue:
Appeal of Med-Arbiters Handwritten
Denial of the Motion
The solution to the controversy hinges on the correct
interpretation of Article 259 of the Labor Code, which
provides:chanroblesvirtua1awlibrary
Art 259. Appeal from certification election orders. Any party to
an election may appeal the order or results of the election as
determined by the Med-Arbiter directly to the Secretary of Labor
and Employment on the grounds that the rules and regulations
or parts thereof established by the Secretary of Labor and
Employment for the conduct of the election have been violated.
Such appeal shall be decided within fifteen (15) calendar days.
This provision is supplemented by Section 10 of Rule V of Book
Five of the 1992 Omnibus Rules Implementing the Labor
Code.Stating that such appeal stays the holding of a certification
election, the later provision reads:chanroblesvirtua1awlibrary
Sec. 10. Decision of the Secretary final and inappealable . The
Secretary shall have fifteen (15) calendar days within which to
decide the appeal from receipt of the records of the case.The
filing of the appeal from the decision of the Med-Arbiter stays
the holding of any certification election.The decision of the
Secretary shall be final and inappealable.
Petitioner argues that the med-arbiters January 13, 1992
handwritten notation denying its Motion was the order referred
to by Article 259.Hence, petitioner insists that its appeal of the
denial should have stayed the holding of the certification
election.
Petitioner is mistaken.Article 259 clearly speaks of the order x x
x of the election. Hence, the Article pertains, not just to any of
the med-arbiters orders like the subject notation, but to the
order granting the petition for certification election -- in the
present case, that which was issued on November 18,
1991.8 This is an unmistakable inference from a reading of
Sections 6 and 7 of the implementing
rules:chanroblesvirtua1awlibrary
SEC. 6. Procedure.  Upon receipt of a petition, the Regional
Director shall assign the case to a Med-Arbiter for appropriate
action.The Med-Arbiter, upon receipt of the assigned petition,
shall have twenty (20) working days from submission of the case
for resolution within which to dismiss or grant the petition.In a
petition filed by a legitimate organization involving an
unorganized establishment, the Med-Arbiter shall immediately
order the conduct of a certification election.
In a petition involving an organized establishment or enterprise
where the majority status of the incumbent collective bargaining
union is questioned through a verified petition by a legitimate
labor organization, the Med-Arbiter shall immediately order the
certification election  by secret ballot if the petition is filed x x x.
x x x x x x x x x.(Italics supplied)cralawlibrary
SEC. 7. Appeal. Any aggrieved party may appeal the order of the
Med-Arbiter to the Secretary  on the ground that the rules and
regulations or parts thereof established by the Secretary for the
conduct of election have been violated.
x x x. (Italics supplied)cralawlibrary
Not all the orders issued by a med-arbiter are appealable.In fact,
[i]nterlocutory orders issued by the med-arbiter prior to the
grant or denial of the petition, including orders granting motions
for intervention issued after an order calling for a certification
election, shall not be appealable.However, any issue arising
therefrom may be raised in the appeal on the decision granting
or denying the petition.9 cralawred
The intention of the law is to limit the grounds for appeal that
may stay the holding of a certification election.This intent is
manifested by the issuance of Department Order No. 40. 10 Under
the new rules, an appeal of a med-arbiters order to hold a
certification election will not stay the holding thereof where the
employer company is an unorganized establishment, and where
no union has yet been duly recognized or certified as a
bargaining representative.
This new rule, therefore, decreases or limits the appeals that
may impede the selection by employees of their bargaining
representative.Expediting such selection process advances the
primacy of free collective bargaining, in accordance with the
States policy to promote and emphasize the primacy of free
collective bargaining x x x; and to ensure the participation of
workers in decision and policy-making processes affecting their
rights, duties and welfare.11 cralawred
Consequently, the appeal of the med-arbiters January 13, 1992
handwritten notation -- pertaining to the incidental matter of the
list of voters -- should not stay the holding of the certification
election.
More important, unless it filed a petition for a certification
election pursuant to Article 258 of the Labor Code, 12 the
employer has no standing to question the election, which is the
sole concern of the workers.The Labor Code states that any
party to an election  may appeal the decision of the med-
arbiter.13 Petitioner was not such a party to the proceedings, but
a stranger which had no right to interfere therein.
In Joya v. PCGG,14 this Court explained that [l]egal standing
means a personal and substantial interest in the case such that
the party has sustained or will sustain direct injury as a result of
the x x xact that is being challenged.The term interest is material
interest, an interest in issue and to be affected by the decree, as
distinguished from mere interest in the question involved, or a
mere incidental interest.Moreover, the interest of the party
plaintiff must be personal and not one based on a desire to
vindicate the constitutional right of some third and unrelated
party.15 cralawred
Clearly, petitioner did not and will not sustain direct injury as a
result of the non-inclusion of some of its employees in the
certification election.Hence, it does not have any material
interest in this case.Only the employees themselves, being the
real parties-in-interest,16 may question their removal from the
voters list.
To buttress its locus standi  to question the certification election,
petitioner argues that it has the support of all the excluded
employees.This support was made known to the representation
officer in a letter stating the employees desire to participate in
the certification election.17 To lend plausibility to its argument,
petitioner cites Monark International v. Noriel ,18 Eastland
Manufacturing Company v. Noriel 19 and Confederation of Citizens
Labor Union v. Noriel.20 It argues that in the instances therein,
management was allowed to interfere in certification elections.
All these cases, though, state precisely the opposite. True, as
unequivocally stated in the law, 21 all employees should be given
an opportunity to make known their choice of who shall be their
bargaining representative.Such provision, however, does not
clothe the employer with the personality to question the
certification election.In Monark International,22 in which it was
also the employer who questioned some incidents of one such
election, the Court held:chanroblesvirtua1awlibrary
There is another infirmity from which the petition suffers.It was
filed by the employer, the adversary in the collective bargaining
process. Precisely, the institution of collective bargaining is
designed to assure that the other party, labor, is free to choose
its representative.To resolve any doubt on the matter,
certification election, to repeat, is the most appropriate means of
ascertaining its will. It is true that there may be circumstances
where the interest of the employer calls for its being heard on
the matter.An obvious instance is where it invokes the obstacle
interposed by the contract-bar rule.This case certainly does not
fall within the exception.Sound policy dictates that as much as
possible, management is to maintain a strictly hands-off
policy.For [if] it does not, it may lend itself to the legitimate
suspicion that it is partial to one of the contending [choices in
the election].23 cralawred
This Court would be the last agency to support an attempt to
interfere with a purely internal affair of labor. 24 The provisions of
the Labor Code relating to the conduct of certification elections
were enacted precisely for the protection of the right of the
employees to determine their own bargaining
representative.Employers are strangers to these
proceedings.They are forbidden from influencing or hampering
the employees rights under the law.They should not in any way
affect, much less stay, the holding of a certification election by
the mere convenience of filing an appeal with the labor
secretary.To allow them to do so would do violence to the letter
and spirit of welfare legislations intended to protect labor and to
promote social justice.
WHEREFORE, the Petition is DENIED, and the assailed
Resolution AFFIRMED.Costs against petitioner.

SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 94045 September 13, 1991
CENTRAL NEGROS ELECTRIC COOPERATIVE, INC.
(CENECO), petitioner,
vs.
HONORABLE SECRETARY, DEPARTMENT OF LABOR AND
EMPLOYMENT, and CENECO UNION OF RATIONAL
EMPLOYEES (CURE), respondents.
Enrique S. Tabino for petitioner.
Edmundo G. Manlapao for private respondent.
REGALADO, J.:
In this special civil action for certiorari, petitioner Central Negros
Electric Cooperative, Inc. (CENECO) seeks to annul the
order1 issued by then Acting Secretary of Labor Bienvenido E.
Laguesma on June 6, 1990, declaring the projected certification
election unnecessary and directing petitioner CENECO to
continue recognizing private respondent CENECO Union of
Rational Employees (CURE) as the sole and exclusive bargaining
representative of all the rank-and-file employees of petitioner's
electric cooperative for purposes of collective bargaining.
It appears from the records that on August 15, 1987, CENECO
entered into a collective bargaining agreement with CURE, a
labor union representing its rank-and-file employees, providing
for a term of three years retroactive to April 1, 1987 and
extending up to March 31, 1990. On December 28, 1989, CURE
wrote CENECO proposing that negotiations be conducted for a
new collective bargaining agreement (CBA).
On January 18, 1990, CENECO denied CURE's request on the
ground that, under applicable decisions of the Supreme Court,
employees who at the same time are members of an electric
cooperative are not entitled to form or join a union. 2
Prior to the submission of the proposal for CBA renegotiation,
CURE members, in a general assembly held on December 9,
1989, approved Resolution No. 35 whereby it was agreed that
'tall union members shall withdraw, retract, or recall the union
members' membership from Central Negros Electric Cooperative,
Inc. in order to avail (of) the full benefits under the existing
Collective Bargaining Agreement entered into by and between
CENECO and CURE, and the supposed benefits that our union
may avail (of) under the renewed CBA. 3 This was ratified by 259
of the 362 union members. CENECO and the Department of
Labor and Employment, Bacolod District, were furnished copies
of this resolution.
However, the withdrawal from membership was denied by
CENECO on February 27, 1990 under Resolution No. 90 "for the
reason that the basis of withdrawal is not among the grounds
covered by Board Resolution No. 5023, dated November 22,
1989 and that said request is contrary to Board Resolution No.
5033 dated December 13, 1989, ..."4
By reason of CENECO's refusal to renegotiate a new CBA, CURE
filed a petition for direct recognition or for certification election,
supported by 282 or 72% of the 388 rank-and-file employees in
the bargaining unit of CENECO.
CENECO filed a motion to dismiss on the ground that there are
legal constraints to the filing of the certification election, citing
the ruling laid down by this Court in  Batangas I Electric
Cooperative Labor Union vs. Romeo A. Young ,5 (BATANGAS
case) to the effect that "employees who at the same time are
members of an electric cooperative are not entitled to form or
join unions for purposes of collective bargaining agreement, for
certainly an owner cannot bargain with himself or his co-
owners."
Med-Arbiter Felizardo T. Serapio issued an order, 6 granting the
petition for certification election which, in effect, was a denial of
CENECO's motion to dismiss, and directing the holding of a
certification election between CURE and No Union.
CENECO appealed to the Department of Labor and Employment
which issued the questioned order modifying the aforestated
order of the med-arbiter by directly certifying CURE as the
exclusive bargaining representative of the rank-and-file
employees of CURE.
Hence, this petition.
Petitioner CENECO argues that respondent Secretary committed
a grave abuse of discretion in not applying to the present case
the doctrine enunciated in the BATANGAS case that employees
of an electric cooperative who at the same time are members of
the electric cooperative are prohibited from forming or joining
labor unions for purposes of a collective bargaining agreement.
While CENECO recognizes the employees' right to self-
organization, it avers that this is not absolute. Thus, it opines
that employees of an electric cooperative who at the same time
are members thereof are not allowed to form or join labor unions
for purposes of collective bargaining. However, petitioner does
not hesitate to admit that the prohibition does not extend to
employees of an electric cooperative who are not members of
the cooperative.
The issue, therefore, actually involves a determination of
whether or not the employees of CENECO who withdrew their
membership from the cooperative are entitled to form or join
CURE for purposes of the negotiations for a collective bargaining
agreement proposed by the latter.
As culled from the records, it is the submission of CENECO that
the withdrawal from membership in the cooperative and, as a
consequence, the employees' acquisition of membership in the
union cannot be allowed for the following reasons:
1. It was made as a subterfuge or to subvert the ruling
in the BATANGAS case:
 2. To allow the withdrawal of the members of CENECO
from the cooperative without justifiable reason would
greatly affect the objectives and goals of petitioner as
an electric cooperative;
3. The Secretary of Labor, as well as the Med-Arbiter,
has no jurisdiction over the issue of the withdrawal from
membership which is vested in the National
Electrification Administration (NEA) which has direct
control and supervision over the operations of electric
cooperatives; and
4. Assuming that the Secretary has jurisdiction, CURE
failed to exhaust administrative remedies by not
referring the matter of membership withdrawal to the
NEA.
The petition is destitute of merit; certiorari will not lie.
We first rule on the alleged procedural infirmities affecting the
instant case. CENECO avers that the med-arbiter has no
jurisdiction to rule on the issue of withdrawal from membership
of its employees in the cooperative which, it claims, is properly
vested in the NEA which has control and supervision over all
electric cooperatives.
From a perusal of petitioner's motion to dismiss filed with the
med-arbiter, it becomes readily apparent that the sole basis for
petitioner's motion is the illegality of the employees' membership
in respondent union despite the fact that they allegedly are still
members of the cooperative. Petitioner itself adopted the
aforesaid argument in seeking the dismissal of the petition for
certification election filed with the med-arbiter, and the finding
made by the latter was merely in answer to the arguments
advanced by petitioner. Hence, petitioner is deemed to have
submitted the issue of membership withdrawal from the
cooperative to the jurisdiction of the med-arbiter and it is now
estopped from questioning that same jurisdiction which it
invoked in its motion to dismiss after obtaining an adverse ruling
thereon.
Under Article 256 of the Labor Code, to have a valid certification
election at least a majority of all eligible voters in the unit must
have cast their votes. It is apparent that incidental to the power
of the med-arbiter to hear and decide representation cases is the
power to determine who the eligible voters are. In so doing, it is
axiomatic that the med-arbiter should determine the legality of
the employees' membership in the union. In the case at bar, it
obviously becomes necessary to consider first the propriety of
the employees' membership withdrawal from the cooperative
before a certification election can be had.
Lastly, it is petitioner herein who is actually questioning the
propriety of the withdrawal of its members from the cooperative.
Petitioner could have brought the matter before the NEA if it
wanted to and. if such remedy had really been available, and
there is nothing to prevent it from doing so. It would be absurd
to fault the employees for the neglect or laxity of petitioner in
protecting its own interests.
The argument of CENECO that the withdrawal was merely to
subvert the ruling of this Court in the BATANGAS case is without
merit. The case referred to merely declared that employees who
are at the same time members of the cooperative cannot join
labor unions for purposes of collective bargaining. However,
nowhere in said case is it stated that member-employees are
prohibited from withdrawing their membership in the cooperative
in order to join a labor union.
As discussed by the Solicitor General, Article I, Section 9 of the
Articles of Incorporation and By- Laws of CENECO provides that
"any member may withdraw from membership upon compliance
with such uniform terms and conditions as the Board may
prescribe." The same section provides that upon withdrawal, the
member is merely required to surrender his membership
certificate and he is to be refunded his membership fee less any
obligation that he has with the cooperative. There appears to be
no other condition or requirement imposed upon a withdrawing
member. Hence, there is no just cause for petitioner's denial of
the withdrawal from membership of its employees who are also
members of the union.7
The alleged board resolutions relied upon by petitioner in
denying the withdrawal of the members concerned were never
presented nor their contents disclosed either before the med-
arbiter or the Secretary of Labor if only to prove the ratiocination
for said denial. Furthermore, CENECO never averred non-
compliance with the terms and conditions for withdrawal, if any.
It appears that the Articles of Incorporation of CENECO do not
provide any ground for withdrawal from membership which
accordingly gives rise to the presumption that the same may be
done at any time and for whatever reason. In addition,
membership in the cooperative is on a voluntary basis. Hence,
withdrawal therefrom cannot be restricted unnecessarily. The
right to join an organization necessarily includes the equivalent
right not to join the same.
The right of the employees to self-organization is a compelling
reason why their withdrawal from the cooperative must be
allowed. As pointed out by CURE, the resignation of the
member- employees is an expression of their preference for
union membership over that of membership in the cooperative.
The avowed policy of the State to afford fall protection to labor
and to promote the primacy of free collective bargaining
mandates that the employees' right to form and join unions for
purposes of collective bargaining be accorded the highest
consideration.
Membership in an electric cooperative which merely vests in the
member a right to vote during the annual meeting becomes too
trivial and insubstantial vis-a-vis the primordial and more
important constitutional right of an employee to join a union of
his choice. Besides, the 390 employees of CENECO, some of
whom have never been members of the cooperative, represent a
very small percentage of the cooperative's total membership of
44,000. It is inconceivable how the withdrawal of a negligible
number of members could adversely affect the business
concerns and operations of CENECO.
We rule, however, that the direct certification ordered by
respondent Secretary is not proper. By virtue of Executive Order
No. 111, which became effective on March 4, 1987, the direct
certification originally allowed under Article 257 of the Labor
Code has apparently been discontinued as a method of selecting
the exclusive bargaining agent of the workers. This amendment
affirms the superiority of the certification election over the direct
certification which is no longer available now under the change
in said provision.8
We have said that where a union has filed a petition for
certification election, the mere fact that no opposition is made
does not warrant a direct certification. 9 In said case which has
similar features to that at bar, wherein the respondent Minister
directly certified the union, we held that:

... As pointed out by petitioner in its petition, what the

respondent Minister achieved in rendering the assailed
orders was to make a mockery of the procedure
provided under the law for representation cases
because: ... (c) By directly certifying a Union without
sufficient proof of majority representation, he has in
effect arrogated unto himself the right, vested naturally
in the employee's to choose their collective bargaining
representative. (d) He has in effect imposed upon the
petitioner the obligation to negotiate with a union whose
majority representation is under serious question. This is
highly irregular because while the Union enjoys the
blessing of the Minister, it does not enjoy the blessing of
the employees. Petitioner is therefore under threat of
being held liable for refusing to negotiate with a union
whose right to bargaining status has not been legally
established.

While there may be some factual variances, the rationale therein

is applicable to the present case in the sense that it is not alone
sufficient that a union has the support of the majority. What is
equally important is that everyone be given a democratic space
in the bargaining unit concerned. The most effective way of
determining which labor organization can truly represent the
working force is by certification election.10

WHEREFORE, the questioned order for the direct certification of

respondent CURE as the bargaining representative of the
employees of petitioner CENECO is hereby ANNULLED and SET
ASIDE. The med-arbiter is hereby ordered to conduct a
certification election among the rank-and- file employees of
CENECO with CURE and No Union as the choices therein.

SO ORDERED.
Republic of the Philippines Minister of Labor, respectively, and Marcopper Employees Labor
SUPREME COURT Union, Petition for certiorari and Prohibition) was still pending in
Manila the Supreme Court. The Petition had been dismissed on June 11,
1981 on the vote of seven Justices. 1 A motion for
EN BANC reconsideration thereafter filed was denied in a resolution dated
December 15, 1981, with only five Justices voting for denial. (3
dissented; 2 reserved their votes: 4 did not take part.)
G.R. No. L-59743 May 31 1982

On December 18, 1981 — the decision of June 11, 1981 having

NATIONAL FEDERATION OF SUGAR WORKERS
become final and executory — entry of judgment was made.
(NFSW), petitioner,
vs.
ETHELWOLDO R. OVEJERA, CENTRAL AZUCARERA DE LA 5. After the Marcopper  decision had become final, NFSW
CARLOTA (CAC), COL. ROGELIO DEINLA, as Provincial renewed its demand that CAC give the 13th month pay. CAC
Commander, 3311st P.C. Command, Negros refused.
Occidental, respondents.
6. On January 22, 1982, NFSW filed with the Ministry of Labor
and Employment (MOLE) Regional Office in Bacolod City a notice
to strike based on non-payment of the 13th month pay. Six days
after, NFSW struck.
PLANA, J:

7. One day after the commencement of the strike, or on January

This is a petition for prohibition seeking to annul the decision
29, 1982, a report of the strike-vote was filed by NFSW with
dated February 20, 1982 of Labor Arbiter Ethelwoldo R. Ovejera
MOLE.
of the National Labor Relations Commission (NLRC) with station
at the Regional Arbitration Branch No. VI-A, Bacolod City, which,
among others, declared illegal the ongoing strike of the National 8. On February 8, 1982, CAC filed a petition (R.A.B. Case No.
Federation of Sugar Workers (NFSW) at the Central Azucarera de 0110-82) with the Regional Arbitration Branch VI-A, MOLE, at
la Carlota (CAC), and to restrain the implementation thereof. Bacolod City to declare the strike illegal, principally for being
violative of Batas Pambansa Blg. 130, that is, the strike was
declared before the expiration of the 15-day cooling-off period
I. FACTS  —
for unfair labor practice (ULP) strikes, and the strike was staged
before the lapse of seven days from the submission to MOLE of
1. NFSW has been the bargaining agent of CAC rank and file the result of the strike-vote.
employees (about 1200 of more than 2000 personnel) and has
concluded with CAC a collective bargaining agreement effective
9. After the submission of position papers and hearing, Labor
February 16, 1981 — February 15, 1984. Under Art. VII, Sec. 5
Arbiter Ovejera declared the NFSW strike illegal. The dispositive
of the said CBA —
part of his decision dated February 20, 1982 reads:

Bonuses — The parties also agree to maintain

Wherefore, premises considered, judgment is
the present practice on the grant of Christmas
hereby rendered:
bonus, milling bonus, and amelioration bonus to
the extent as the latter is required by law.
1. Declaring the strike commenced by NFSW on
January 28, 1982, illegal,
The Christmas and milling bonuses amount to 1-½ months'
salary.
2. Directing the Central to resume operations
immediately upon receipt hereof;
2. On November 28, 1981, NFSW struck allegedly to compel the
payment of the 13th month pay under PD 851, in addition to the
Christmas, milling and amelioration bonuses being enjoyed by 3. Directing the Central to accept back to work
CAC workers. all employees appearing in its payroll as of
January 28, 1982 except those covered by the
February 1, 1982 memorandum on preventive
3. To settle the strike, a compromise agreement was concluded
suspension but without prejudice to the said
between CAC and NFSW on November 30,1981. Under
employees' instituting appropriate actions
paragraph 4 thereof —
before this Ministry relative to whatever causes
of action they may have obtained proceeding
The parties agree to abide by the final decision from said memorandum;
of the Supreme Court in any case involving the
13th Month Pay Law if it is clearly held that the
4. Directing the Central to pay effective from
employer is liable to pay a 13th month pay
the date of resumption of operations the
separate and distinct from the bonuses already
salaries of those to be placed on preventive
given.
suspension as per February 1, 1982
memorandum during their period of preventive
4. As of November 30, 1981, G.R. No. 51254 (Marcopper Mining suspension; and
Corp. vs. Blas Ople and Amado Inciong, Minister and Deputy
 5. Directing, in view of the finding that the
subject strike is illegal, NFSW, its officers,
members, as well as sympathizers to
immediately desist from committing acts that
may impair or impede the milling operations of
the Central
The law enforcement authorities are hereby
requested to assist in the peaceful enforcement
and implementation of this Decision.
SO ORDERED.
10. On February 26, 1982, the NFSW — by passing the NLRC —
filed the instant Petition for prohibition alleging that Labor
Arbiter Ovejera, CAC and the PC Provincial Commander of
Negros Occidental were threatening to immediately enforce the
February 20, 1982 decision which would violate fundamental
rights of the petitioner, and praying that —
WHEREFORE, on the foregoing considerations,
it is prayed of the Honorable Court that on the
Petition for Preliminary Injunction, an order,
after hearing, issue:
1. Restraining implementation or enforcement
of the Decision of February 20, 1982;
2. Enjoining respondents to refrain from the
threatened acts violative of the rights of strikers
and peaceful picketers;
3. Requiring maintenance of the status quo as
of February 20, 1982, until further orders of the
Court;
and on the Main Petition, judgment be rendered after hearing.
1. Declaring the Decision of February 2O, l982
null and void;
2. Making the preliminary injunction
permanent;
3. Awarding such other relief as may be just in
the premises.
11. Hearing was held, after which the parties submitted their
memoranda. No restraining order was issued.
II ISSUES —
The parties have raised a number of issues, including some
procedural points. However, considering their relative
importance and the impact of their resolution on ongoing labor
disputes in a number of industry sectors, we have decided — in
the interest of expediency and dispatch — to brush aside non-
substantial items and reduce the remaining issues to but two
fundamental ones:
1. Whether the strike declared by NFSW is illegal, the resolution
of which mainly depends on the mandatory or directory
character of the cooling-off period and the 7-day strike ban after
report to MOLE of the result of a strike-vote, as prescribed in the
Labor Code.
2. Whether under Presidential Decree 851 (13th Month Pay
Law), CAC is obliged to give its workers a 13th month salary in
addition to  Christmas, milling and amelioration bonuses, the
aggregate of which admittedly exceeds by far the disputed 13th
month pay. (See petitioner's memorandum of April 12, 1982, p.
2; CAC memorandum of April 2, 1982, pp. 3-4.) Resolution of
this issue requires an examination of the thrusts and application
of PD 851.
III. DISCUSSION —
1. Articles 264 and 265 of the Labor Code, insofar as pertinent,
read:
Art. 264, Strikes, picketing and lockouts. — ...
(c) In cases of bargaining deadlocks, the
certified or duly recognized bargaining
representative may file a notice of strike with
the Ministry (of Labor and Employment) at
least thirty (30) days  before the intended date
thereof. In cases of unfair labor practices, the
period of notice shall be shortened to fifteen
(15) days; ...
(d) During the cooling-off period, it shall be the
duty of the voluntary sttlement. 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 declae a strike must be
approved by at least two-thirds (2/3) of the
total union membership in the bargaining unit
concerened by secret ballots in meetings or
referenda. A decision to declae a lockout must
be approved by at least two-thirds (2/3) of the
board of direcotrs of the employer corporation
or association or of the partners in a
partnership obtained by secret ballot in a
meeting called for the 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 intitiative
or upon the request of any affected party,
supervise the conduct of the secret balloting. In
every case, the union of the employer shall
furnish the Ministry the results of the voting at
least seven (7) days before the intended
strike  or lockout, subject to the cooling-off
period  herein provided. (Emphasis supplied).
ART. 265. Prohibited activities. — It shall be
unlawful for any labor organization or employer
to 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.
It shall likewise be unlawful to declare a
strike  or lockout 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 cases involving the same
grounds for the strike  or lockout. (Emphasis
supplied.)
(a) Language of the law . — The foregoing provisions hardly
leave any room for doubt that the cooling-off period in Art.
264(c) and the 7-day strike ban after the strike-vote report
prescribed in Art. 264(f) were meant to be, and should be
deemed, mandatory.
When the law says "the labor union may strike" should the
dispute "remain unsettled until the lapse  of the requisite number
of days (cooling-off period) from the filing of the notice," the
unmistakable implication is that the union may not strike before
the lapse of the cooling-off period. Similarly, the mandatory
character of the 7-day strike ban after the report on the strike-
vote is manifest in the provision that "in every case," the union
shall furnish the MOLE with the results of the voting "at least
seven (7) days before the intended strike,  subject to the
(prescribed) cooling-off period." It must be stressed that the
requirements of cooling-off period and 7-day strike ban must
both be complied with, although the labor union may take a
strike vote and report the same within the statutory cooling-off
period.
If only the filing  of the strike notice and the strike-vote report
would be deemed mandatory, but not the waiting periods so
specifically and emphatically prescribed by law,
the purposes (hereafter discussed) for which the filing of the
strike notice and strike-vote report is required would not be
achieved, as when a strike is declared immediately after  a strike
notice is served, or when — as in the instant case — the strike-
vote report is filed with MOLE after the strike had actually
commenced Such interpretation of the law ought not and cannot
be countenanced. It would indeed be self-defeating for the law
to imperatively require the filing on a strike notice and strike-
vote report without at the same time making the prescribed
waiting periods mandatory.
(b) Purposes of strike notice and strike-vote report .— In
requiring a strike notice and a cooling-off period, the avowed
intent of the law is to provide an opportunity for mediation and
conciliation. It thus directs the MOLE "to exert all efforts at
mediation and conciliation to effect a voluntary settlement"
during the cooling-off period . As applied to the CAC-NFSW
dispute regarding the 13th month pay, MOLE intervention could
have possibly induced CAC to provisionally give the 13th month
pay in order to avert great business loss arising from the project
strike, without prejudice  to the subsequent resolution of the
legal dispute by competent authorities; or mediation/conciliation
could have convinced NFSW to at least postpone the intended
strike so as to avoid great waste and loss to the sugar central,
the sugar planters and the sugar workers themselves, if the
strike would coincide with the mining season.
So, too, the 7-day strike-vote report is not without a purpose. As
pointed out by the Solicitor General —
Many disastrous strikes have been staged in the
past based merely on the insistence of minority
groups within the union. The submission of the
report gives assurance that a strike vote has
been taken and that, if the report concerning it
is false, the majority of the members can take
appropriate remedy before it is too late.
(Answer of public respondents, pp. 17-18.)
If the purpose of the required strike notice and strike-vote report
are to be achieved, the periods prescribed for their attainment
must, as aforesaid, be deemed mandatory., —
... when a fair interpretation of the statute,
which directs acts or proceedings to be done in
a certain way, shows the legislature intended a
compliance with such provision to be essential
to the validity of the act or proceeding, or when
some antecedent and prerequisite conditions
must exist prior to the exercise of power or
must be performed before certain other powers
can be exercised, the statute must be regarded
as mandatory. So it has been held that, when a
statute is founded on public policy [such as the
policy to encourage voluntary settlement of
disputes without resorting to strikes], those to
whom it applies should not be permitted to
waive its provisions. (82 C.J.S. 873-874.
Emphasis supplied.)
(c) Waiting period after strike notice and strike-vote report, valid
regulation of right to strike. — To quote Justice Jackson in
International Union vs. Wisconsin Employment Relations Board,
336 U.S. 245, at 259 —
The right to strike, because of its more serious
impact upon the public interest, is more
vulnerable to regulation than the right to
organize and select representatives for lawful
purposes of collective bargaining ...
The cooling-off period and the 7-day strike ban after the filing of
a strike- vote report, as prescribed in Art. 264 of the Labor Code,
are reasonable restrictions and their imposition is essential to
attain the legitimate policy objectives embodied in the law. We
hold that they constitute a valid exercise of the police power of
the state.
(d) State policy on amicable settlement of criminal liability . —
Petitioner contends that since the non-compliance (with PD 851)
imputed to CAC is an unfair labor practice which is an offense
against the state, the cooling-off period provided in the Labor
Code would not apply, as it does not apply to ULP strikes. It is
argued that mediation or conciliation in order to settle a criminal
offense is not allowed.
In the first place, it is at best unclear whether the refusal of CAC
to give a 13th month pay to NFSW constitutes a criminal act.
Under Sec. 9 of the Rules and regulations Implementing
Presidential Decree No. 851 —
Non-payment of the thirteenth-month pay
provided by the Decree and these rules shall be
treated as money claims cases and shall be
 processed in accordance with the Rules
Implementing the Labor Code of the Philippines
and the Rules of the National Labor Relations
Commission.
Secondly, the possible dispute settlement,
either permanent or temporary, could very well
be along legally permissible lines, as indicated
in (b) above or assume the form of measures
designed to abort the intended strike, rather
than compromise criminal liability, if any.
Finally, amicable settlement of criminal liability
is not inexorably forbidden by law. Such
settlement is valid when the law itself clearly
authorizes it. In the case of a dispute on the
payment of the 13th month pay, we are not
prepared to say that its voluntary settlement is
not authorized by the terms of Art. 264(e) of
the Labor Code, which makes it the duty of the
MOLE to exert all efforts at mediation and
conciliation to effect a voluntary settlement of
labor disputes.
(e) NFSW strike is illegal. — The NFSW
declared the strike six (6) days after filing a
strike notice, i.e., before the lapse of the
mandatory cooling-off period. It also failed to
file with the MOLE before launching the strike a
report on the strike-vote, when it should have
filed such report "at least seven (7) days before
the intended strike." Under the circumstances,
we are perforce constrained to conclude that
the strike staged by petitioner is not in
conformity with law. This conclusion makes it
unnecessary for us to determine whether the
pendency of an arbitration case against CAC on
the same issue of payment of 13th month pay
[R.A.B No. 512-81, Regional Arbitration Branch
No. VI-A, NLRC, Bacolod City, in which the
National Congress of Unions in the Sugar
Industry of the Philippines (NACUSIP) and a
number of CAC workers are the complainants,
with NFSW as Intervenor seeking the dismissal
of the arbitration case as regards unnamed CAC
rank and file employees] has rendered illegal
the above strike under Art. 265 of the Labor
Code which provides:
It shall likewise be unlawful to declare a
strike  or lockout 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 cases involving the same
grounds for the strike  or lockout. (Emphasis
supplied.)
(2) The Second Issue. — At bottom, the NFSW strike arose from
a dispute on the meaning and application of PD 851, with NFSW
claiming entitlement to a 13th month pay on top of  bonuses
given by CAC to its workers, as against the diametrically opposite
stance of CAC. Since the strike was just an offshoot of the said
dispute, a simple decision on the legality or illegality of the strike
would not spell the end of the NFSW-CAC labor dispute. And
considering further that there are other disputes and strikes —
actual and impending — involving the interpretation and
application of PD 851, it is important for this Court to definitively
resolve the problem: whether under PD 851, CAC is obliged to
give its workers a 13th month salary in addition to Christmas,
milling and amelioration bonuses stipulated in a collective
bargaining agreement amounting to more than a month's pay.
Keenly sensitive to the needs of the workingmen, yet mindful of
the mounting production cost that are the woe of capital which
provides employment to labor, President Ferdinand E. Marcos
issued Presidential Decree No. 851 on 16 December 1975.
Thereunder, "all employers are hereby required to pay salary of
not more than all their employees receiving a basic P1,000 a
month, regardless of the nature of their employment, a 13th
month pay not later than December 24 of every year." Exempted
from the obligation however are:
Employers already paying their employees a
13th month pay or its equivalent ...
(Section 2.)
The evident intention of the law, as revealed by the law itself,
was to grant an additional income in the form of a 13th month
pay to employees not already receiving the same. Otherwise put,
the intention was to grant some relief — not to all workers — but
only to the unfortunate ones not actually paid a 13th month
salary or what amounts to it, by whatever name called; but it
was not envisioned that a double burden would be imposed on
the employer already paying his employees a 13th month pay or
its equivalent — whether out of pure generosity or on the basis
of a binding agreement and, in the latter ease, regardless of the
conditional character of the grant (such as making the payment
dependent on profit), so long as there is actual payment.
Otherwise, what was conceived to be a 13th month salary would
in effect become a 14th or possibly 15th month pay.
This view is justified by the law itself which makes no distinction
in the grant of exemption: "Employers already paying their
employees a 13th month pay or its equivalent  are not covered
by this Decree." (P.D. 851.)
The Rules Implementing P.D. 851 issued by MOLE immediately
after the adoption of said law reinforce this stand. Under Section
3(e) thereof —
The term "its equivalent" ... shall
include Christmas bonus, mid-year
bonus,  profit-sharing payments and other cash
bonuses amounting to not less than 1/12th of
the basic salary but shall not include cash and
stock dividends, cost of living allowances and all
other allowances regularly enjoyed by the
employee, as well as non-monetary benefits.
Where an employer pays less than 1/12th of
the employee's basic salary, the employer shall
pay the difference." (Italics supplied.)
Having been issued by the agency charged with the
implementation of PD 851 as its contemporaneous interpretation
of the law, the quoted rule should be accorded great weight.
Pragmatic considerations also weigh heavily in favor of crediting
both voluntary and contractual bonuses for the purpose of
determining liability for the 13th month pay. To require
employers (already giving their employees a 13th month salary
or its equivalent) to give a second 13th month pay would be
unfair and productive of undesirable results. To the employer
who had acceded and is already bound to give bonuses to his
employees, the additional burden of a 13th month pay would
amount to a penalty for his munificence or liberality. The
probable reaction of one so circumstance would be to withdraw
the bonuses or resist further voluntary grants for fear that if and
when a law is passed giving the same benefits, his prior
concessions might not be given due credit; and this negative
attitude would have an adverse impact on the employees.

In the case at bar, the NFSW-CAC collective bargaining

agreement provides for the grant to CAC workers of Christmas
bonus, milling bonus and amelioration bonus, the aggregate of
which is very much more than a worker's monthly pay. When a
dispute arose last year as to whether CAC workers receiving the
stipulated bonuses would additionally  be entitled to a 13th
month pay, NFSW and CAC concluded a compromise agreement
by which they —

agree(d) to abide by the final decision of the

Supreme Court in any case involving the 13th
Month Pay Law if it is clearly held that the
employer is liable to pay a 13th month pay
separate and distinct from the bonuses already
given.

When this agreement was forged on November 30,1981, the

original decision dismissing the petition in the
aforecited Marcopper  case had already been promulgated by this
Court. On the votes of only 7 Justices, including the
distinguished Chief Justice, the petition of Marcopper Mining
Corp. seeking to annul the decision of Labor Deputy Minister
Amado Inciong granting a 13th month pay to Marcopper
employees (in addition to mid- year and Christmas bonuses
under a CBA) had been dismissed. But a motion for
reconsideration filed by Marcopper was pending as of November
30, 1981. In December 1981, the original decision was affirmed
when this Court finally denied the motion for reconsideration.
But the resolution of denial was supported by the votes of only 5
Justices. The Marcopper decision is therefore a Court decision
but without the necessary eight votes to be doctrinal. This being
so, it cannot be said that the Marcopper  decision "clearly held"
that "the employer is liable to pay a 13th month pay separate
and distinct from the bonuses already given," within the meaning
of the NFSW-CAC compromise agreement. At any rate, in view of
the rulings made herein, NFSW cannot insist on its claim that its
members are entitled to a 13th month pay in addition to the
bonuses already paid by CAC. WHEREFORE, the petition is
dismissed for lack of merit. No costs.

SO ORDERED.

Aquino, Guerrero, Escolin, Vasquez, Relova and Gutierrez, JJ.,

concur.

Concepcion, J., is on leave.

Teehankee, J., concurs in the result.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-17038             July 31, 1964
CONSOLIDATED LABOR ASSOCIATION OF THE
PHILS., petitioner,
vs.
MARSMAN and CO., INC., and the COURT OF
INDUSTRIAL RELATIONS, respondents.
-----------------------------
G.R. No. L-17057             July 31, 1964
MARSMAN and Co., INC., petitioner,
vs.
CONSOLIDATED LABOR ASSOCIATION OF THE
PHILIPPINES HON. JOSE S. BAUTISTA HON. ARSENIO I.
MARTINEZ, HON. BALTAZAR M. VILLANUEVA, and HON.
EMILIANO C. TABIGNE, respondents.
Salvador H. Laurel and Apolonio V. Santiago for petitioner.
Jose C. Espinas and Associates for respondent Consolidated
Labor Association of the Philippines.
CIR Legal Division for respondent Judges.
MAKALINTAL, J.:
In the Court of Industrial Relations, Marsman & Co., Inc.,
hereinafter referred to as the Company, was charged with unfair
labor practice committed against sixty-nine officers and members
of the Marsman & Company Employees and Laborers Association
(hereinafter referred to as MARCELA or simply as the Union).
The Court (Judge Jose S. Bautista), after hearing, found the
Company guilty of the charge and ordered it to reinstate 60 of
the aforementioned 69 complainants to their former positions or
to similar ones with the same rate of pay, without back wages.
On motions for reconsideration filed by the Union and by the
Company, respectively, the Court en banc  affirmed the decision
— with Judge Arsenio I. Martinez concurring in the result Judge
Baltazar M. Villanueva also concurring in the result in a special
opinion; Judge Emiliano C. Tabigne filing a separate concurring
and dissenting opinion; and Judge Amando C. Bugayong taking
no part.
Both the Union and the Company appealed. The former claims
that the 60 reinstated employees should be granted backpay
(G.R. No. L-17038) while the latter questions the Industrial
Court's finding of unfair labor practice (G.R. No. L-17057).
The facts, as found by the Industrial Court, are: The Company
had in its employ approximately 320 persons, about 140 of
whom where members of MARCELA and about 20 of the National
Labor Union. On December 23, 1953 the Industrial Court named
MARCELA as the employees' bargaining agent in regard to rates
of pay, terms and conditions of employment. At that time
MARCELA was affiliated with the Federation of Free Workers, or
FFW, a national labor organization. On March 17, 1954
MARCELA-FFW submitted to the Company a set of proposals for
collective bargaining, which the Company answered on March
24, 1954. In spite of negotiations held between the Company
and the Union, they failed to reach In agreement; so on April 8,
1954 the Union, failed a notice of strike with the Department of
Labor. Mediation by the Conciliation Service of that Department
proved fruitless.
Wherefore, the parties respectfully pray that the foregoing
stipulation of facts be admitted and approved by this Honorable
Court, without prejudice to the parties adducing other evidence
to prove their case not covered by this stipulation of
facts. 1äwphï1.ñët
On June 4, 1954 the Union declared a strike and at the same
time placed a "round-the-clock" picket line around the
Company's premises in Intramuros, Manila. The tense situation
in the strike zone prompted the Manila Police Department to
send policemen thereto to preserve peace. Meanwhile the Labor
Department's Conciliation Service continued to mediate between
the representatives of the Union and of the Company.
On July 21, 1954 some 50 employees, of whom nine were
members of the National Labor Union and one a member of
MARCELA, entered the Company premises under police escort in
order to return to work.
On July 30, 1954, in a conference called by Eleuterio Adevoso,
then Secretary of Labor, the Union officials and members then
present were prevailed upon by Adevoso to accept the proposals
of Antonio de las Alas, Company vice-president, that they stop
the strike and go back to work, and that when they were already
working the Company would discuss with them their demands.
Upon being informed to the Union's acceptance of the proposal
the strikers returned to work. The Company admitted back
sixteen picketing strikers on August 9, 1954 and later on, it also
reemployed non-union employees and a majority of the strikers.
However, complainants herein were refused admittance and
were informed by Company officials that they would not be
reinstated unless they ceased to be active Union members and
that in any case the Company already had enough men for its
business operations.
As a result the strike and the picketing were resumed, because
of which employees who had been admitted to work since July
21, 1954 had to stay inside the Company premises, where the
Company furnished them food and quarters up to October 1954.
Nevertheless some of those employed could go in and out after
office hours to visit their families.
During the strike, some of the picketers and some non-strikers
were arrested within the strike zone for having committed
unlawful acts, and were duly charged therewith.
A petition for writ of injunction filed by the Company against
MARCELA and its president, Buenaventura Bacay, on the ground
that the strike and picket were being maintained illegally, was
denied by the Court of First Instance of Manila, which pointed
out that proper criminal complaints should have been filed
against the individual strikers in the corresponding courts.
Because of the Company's consistent refusal to reinstate the 69
complainants even after repeated requests, the Confederation of
Labor Associations of the Philippines (CLAP), to which the Union
had affiliated after seceding from the FFW initiated the present
charge for unfair labor practice.
Initially the strike staged by the Union was meant to compel the
Company to grant it certain economic benefits set forth in its
proposal for collective bargaining. The strike was an economic
one,1 and the striking employees would have a tight to be
reinstated if, in the interim, the employer had not hired other
permanent workers to replace them. For it is recognized that
during the pendency of an economic strike an employer may
take steps to continue and protect his business by supplying
places left vacant by the strikers, and is not bound to discharge
those hired for that purpose upon election of the strikers to
resume their employment.2 But the strike changed its character
from the time the Company refused to reinstate complainants
because of their union activities after it had offered to admit all
the strikers and in fact did readmit the others. It was then
converted into an unfair labor practice strike.
The Company disputes the Industrial Court's findings that (1) it
offered to reinstate all the strikers; (2) the complainants made a
timely acceptance of the offer; and (3) the Company's refusal to
reinstate complainants was for the purpose of discouraging
union activities.
Substantial evidence supports the findings of fact of the Court of
Industrial Relations. Complainants Teodoro Bacalzo, Raymundo
Mostoles-Cruz, Mariano Bautista, and Godofredo Garcia testified
thus: They were all present at the July 30, 1954 conference
called by then Labor Secretary Eleuterio Adevoso in order to
settle the differences between the Company and the Union. It
was during this conference that Antonio de las Alas, then the
Company's vice-president, offered to take back all the strikers if
they would only stop the strike and as further inducement
promised that the Union's demands would be discussed when
the strikers were already working. Adevoso convinced the Union
officers and members who were present to accept De las Alas'
proposal.
The lower court's reasons, we think, amply answer the
Company's contention that De las Alas could not, by his offer,
have bound the Company because it was Velilla, and not he,
who had the authority to deal with the strikers:
The denial of respondent that Antonio de las Alas was
not authorized by the Company but Amando L. Velilla to
deal with the union with respect to the strike is not
worthy of belief. First, because then De las Alas was an
executive Vice-President while Velilla was only the
Secretary of the Company; second, while respondent
wants to impress this Court that Velilla's authority to
deal with the strikers was virtue of the Board resolution,
such document was not presented in Court and third not
even De las Alas was presented to make the denial.
The Company claims that the complainants applied for
readmission only on June 7, 1955, more than a year after the
offer, when the CLAP, in their behalf, wrote the Company asking
for their reinstatement. Prior to said letter, however,
complainants had, by various means, sought readmission. After
De las Alas' invitation to return to work was accepted by the
Union officers and members, they informed all the other strikers
accordingly. Thereupon the strikers terminated the strike and
presented themselves for work at the Company's premises.
Eighty one of the strikers were allowed to come back. But the
Company's security guards, upon instructions of the Company
officials, barred the entrance when complainants attempted to
enter, and informed them that they had to write individual letters
of application. So complainants complied with this requirement.
It appears that the applications were scrutinized by a committee
of employees composed of Salvador Bantique assistant
accountant of the mines division; Mariano Lee, purchasing
agent; Juan de Vera, paymaster; and Regina Cruz, accountant.
Then the applications were further screened by a personnel
committee composed of Jan H. Marsman, Antonio de las Alas,
Charles G. Herdman and Amando Velilla. None of the sixty-nine
applications met with favorable action by either committee.
In addition to writing formal letters of application a number of
complainants phoned while others personally approached their
respective chiefs of department in the Company. Some also went
to see Salvador Bantique, chairman of the screening committee,
and expressed their desire to work. Bantique, however, upon
learning that the strikers, among them Eulogio Labrador, were
still active union members, informed them that they should first
disaffiliate from the union in order to be reinstated. Furthermore,
Amando Velilla, when approached by a group of complainants,
told the latter that they had been away for a long time; that the
Company had enough employees and did not need additional
help; that some of those whom he had invited to return refused;
and that by that time (August, 1954) it was already too late for
them to wish to return.
The Company alleges that it was economic reasons, i.e., its
policy of retrenchment, not labor discrimination, which prevented
it from rehiring complainants. This is disproved, however, by the
fact that it not only readmitted the other strikers, but also hired
new employees and even increased the salaries of its personnel
by almost 50%. We are convinced that it was not business
exigency but a desire to discourage union activities which
prompted the Company to deny readmittance to complainants.
This is an indubitable case of unfair labor practice.
The strike was illegal of purpose, the Company insists, first,
because it was staged for a trifling reason; and second, the
union demands, which had precipitated the strikes, were already
covered by an Industrial Court judgment, for the alteration,
modification or setting aside of which a certain procedure has to
be followed.
The Union began the strike because it believed in good faith that
settlement of their demands was at an impasse and that further
negotiations would only come to naught. It stopped the strike
upon the belief they could go back to work. Then it renewed the
strike (or it started a new strike) as a protest against the
discrimination practiced by the Company. Both are valid grounds
for going on a strike.
It is true that on August 14, 1952 the Industrial Court
promulgated a decision in CIR Case No. 571-V, Marsman and
Company Employees and Labors Association (MARCELA-FFW) v.
Marsman and Company, Inc . However, except for the demand
for general salary increases, the demands in said labor case
were different from the demands which the Union made before it
went on strike. For this reason, it did not have to ask
modification of the aforementioned judgment. It had only to give
the proper strike notice, as in fact it did.
The Company further argues that since the methods used by the
strikers were illegal, it had the right to refuse them readmission.
Of the 69 complainants, nine, namely Alejandro Mojar, Manuel
Mazo, Esteban Borja, Cecilio Walo, Eugenio Valenzuela, Elias
Matic, Marcos Buccat, Malisimo Vargas and Ricardo Antonio,
were charged with and convicted of various crimes like coercion,
malicious mischief, physical injuries, breach of the peace, light
threats, and damage to property, all committed during the
period from September 4, 1954 to October 12, 1954. Admittedly,
the Company could not have condoned these acts which were
committed after it had offered to reinstate the strikers.
Nevertheless, as the lower court reasoned out, it does not
appear that the aforementioned individual acts were authorized
or even impliedly sanctioned by the Union. Hence, the other
strikers who were innocent of and did not participate in the
illegal acts should not be punished by being deprived of their
right of reinstatement. It is only those who had been found
guilty who should be penalized by the loss of the right. 3

We now come to the question of backpay. In an economic strike,

the strikers are not entitled to backpay, since the employer
should get the equivalent day's work for what he pays his
employees. During the time that the strike was an economic one,
complainants had no right to back pay. The Industrial Court
could not have made a finding of unfair labor practice with
respect to such time, as none had so far been committed. This
being an unfair labor practice case, it cannot, therefore, order
reinstatement much less back pay for that period. 4

On the other hand, even after the court has made a finding of
unfair labor practice, it still has the discretion to determine
whether or not to grant back pay. Such discretion was not
abused when it denied back wages to complainants, considering
the climate of violence which attended the strike and picket that
the complainants conducted. While the complainants ordered
reinstated did not actively take part in the acts of violence, their
minatory attitude towards the Company may be gathered from
the fact that from the very first day of the strike policemen had
to patrol the strike zone in order to preserve peace.

WHEREFORE, the judgment appealed from is affirmed, without

costs.

Bengzon, C.J., Padilla, Bautista Angelo, Concepcion, Reyes,

J.B.L., Paredes and Regala, JJ., concur.
FIRST DIVISION
[G.R. No. 91980. June 27, 1991.]
ILAW AT BUKLOD NG MANGGAGAWA (IBM), Petitioner,
v. NATIONAL LABOR RELATIONS COMMISSION (First
Division), HON. CARMEN TALUSAN and SAN MIGUEL
CORPORATION, Respondents.
Banzuela, Flores, Miralles, Raneses, Sy, Taquio &
Associates for Petitioner.
Jardeleza Law Offices for Private Respondents.
SYLLABUS
1. LABOR LAWS; POLICY AND OBJECTIVES; RIGHT TO ENGAGE
IN CONCERTED ACTIVITIES FOR MUTUAL BENEFITS AND
PROTECTION; ENJOYED BY BOTH EMPLOYEES AND
EMPLOYERS. — Among the rights guaranteed to employees by
the Labor Code in that of engaging in concerted activities in
order to attain their legitimate objectives. Article 263 of the
Labor Code, as amended, declares that in line with "the policy of
the State to encourage free trade unionism and free collective
bargaining, . . . (w)orkers shall have the right to engage in
concerted activities for purposes of collective bargaining or for
their mutual benefit and protection." A similar right to engage in
concerted activities for mutual benefit and protection is tacitly
and traditionally recognized in respect of employers.
2. ID.; ID.; ID.; DEPENDENT ON THE LEGALITY OF THE
PURPOSE SOUGHT TO BE ATTAINED AND THE MEANS
EMPLOYED. — The more common of these concerted activities
as far as employees are concerned are: strikes — the temporary
stoppage of work as a result of an industrial or labor dispute;
picketing — the marching to and fro at the employer’s premises,
usually accompanied by the display of placards and other signs
making known the facts involved in a labor dispute; and boycotts
— the concerted refusal to patronize an employer’s goods or
services and to persuade others to a like refusal. On the other
hand, the counterpart activity that management may licitly
undertake is the lockout — the temporary refusal to furnish work
on account of a labor dispute. In this connection, the same
Article 263 provides that the "right of legitimate labor
organizations to strike and picket and of employer to lockout,
consistent with the national interest, shall continue to be
recognized and respected." The legality of these activities is
usually dependent on the legality of the purposes sought to be
attained and the means employed therefor.
3. ID.; ID.; ID.; MAY BE RESTRICTED BY LAW OR CONTRACT.
— It goes without saying that these joint or coordinated
activities may be forbidden or restricted by law or contract. In
the particular instance of "distortions of the wage structure
within an establishment" resulting from "the application of any
prescribed wage increase by virtue of a law or wage order,"
Section 3 of Republic Act No. 6727 prescribes a specific, detailed
and comprehensive procedure for the correction thereof, thereby
implicitly excluding strikes or lockouts or other concerted
activities as modes of settlement of the issue. The legislative
intent that solution of the problem of wage distortions shall be
sought by voluntary negotiation or arbitration, and not by
strikes, lockouts, or other concerted activities of the employees
or management, is made clear in the rules implementing RA
6727 issued by the Secretary of Labor and Employment pursuant
to the authority granted by Section 13 of the Act. Section 16,
Chapter I of these implementing rules, after reiterating the policy
that wage distortions be first settled voluntarily by the parties
and eventually by compulsory arbitration, declares that, "Any
issue involving wage distortion shall not be a ground for a
strike /lockout."cralaw virtua1aw library
4. ID.; ID.; ID.; ID.; APPLICABLE IN CASE AT BAR. — The
collective bargaining agreement between the SMC and the
Union, relevant provisions of which are quoted by the former
without the latter’s demurring to the accuracy of the quotation,
also prescribes a similar eschewal of strikes or other similar or
related concerted activities as a mode of resolving disputes or
controversies, generally, said agreement clearly stating that
settlement of "all disputes, disagreements or controversies of
any kind" should be achieved by the stipulated grievance
procedure and ultimately by arbitration. The Union was thus
prohibited to declare and hold a strike or otherwise engage in
non-peaceful concerted activities for the settlement of its
controversy with SMC in respect of wage distortions, or for that
matter, any other issue "involving or relating to wages, hours of
work, conditions of employment and/or employer-employee
relations." The partial strike or concerted refusal by the Union
members to follow the five-year-old work schedule which they
had theretofore been observing, resorted to as a means of
coercing correction of "wage distortions," was therefore
forbidden by law and contract and, on this account, illegal.
5. ID.; ID.; ID.; "SLOWDOWN" ; CONSIDERED CONTRARY TO
LAW. — What has just been said makes unnecessary resolution
of SMC’s argument that the workers’ concerted refusal to adhere
to the work schedule in force for the last several years, is a
slowdown, an inherently illegal activity essentially illegal even in
the absence of a no-strike clause in a collective bargaining
contract, or statute or rule. The Court is in the substantial
agreement with the petitioner’s concept of a slowdown as a
"strike on the installment plan;" as a wilful reduction in the rate
of work by concerted action of workers for the purpose of
restricting the output of the employer, in relation to a labor
dispute; as an activity by which workers, without a complete
stoppage of work, retard production or their performance of
duties and functions to compel management to grant their
demands. The Court also agrees that such a slowdown is
generally condemned as inherently illicit and unjustifiable,
because while the employees "continue to work and remain at
their positions and accept wages paid them," they at the same
time "select what part of their allotted tasks they care to perform
of their own volition or refuse openly or secretly, to the
employer’s damage, to do other work;" in other words, they
"work on their own terms." But whether or not the workers’
activity in question — their concerted adoption of a different
work schedule than that prescribed by management and
adhered to for several years — constitutes a slowdown need not,
as already stated, be gone into. Suffice it to say that that activity
is contrary to the law, RA 6727, and the parties’ collective
bargaining agreement.
6. ID.; NATIONAL LABOR RELATIONS COMMISSION; POWER TO
ISSUE TEMPORARY OR PERMANENT INJUNCTION;
CONDITIONS. — Article 254 of the Code provides that "No
temporary or permanent injunction or restraining order in any
case involving or growing out of labor disputes shall be issued by
any court or other entity, except as otherwise provided in
Articles 218 and 264 . . .." Article 264 lists down specific
"prohibited activities" which may be forbidden or stopped by a
restraining order or injunction. Article 218 inter alia enumerates
the powers of the National labor Relations Commission and lays
down the conditions under which a restraining order or
preliminary injunction may issue, and the procedure to be
followed in issuing the same. Among the powers expressly
conferred on the Commission by Article 218 is the power to
"enjoin or restrain any actual or threatened commission of any
or all prohibited or unlawful acts or to require the performance
of a particular act in any labor dispute which, if not restrained or
performed forthwith, may cause grave or irreparable damage to
any party or render ineffectual any decision in favor of such
party . . .." The reception of evidence "for the application of a
writ of injunction may be delegated by the Commission to any of
its labor Arbiters who shall conduct such hearings in such places
as he may determine to be accessible to the parties and their
witnesses and shall submit thereafter his recommendation to the
Commission."cralaw virtua1aw library
7. ID.; ID.; ID.; REGULAR IN CASE AT BAR. — The record
reveals that the Commission exercised the power directly and
plainly granted to it by sub-paragraph (e) Article 217 in relation
to Article 254 of the Code, and that it faithfully observed the
procedure and complied with the conditions for the exercise of
that power prescribed in said sub-paragraph (e). It acted on
SMC’s application for immediate issuance of a temporary
restraining order ex parte on the ground that substantial and
irreparable injury to its property would transpire before the
matter could be heard on notice; it, however, first directed Labor
Arbiter Carmen Talusan to receive SMC’s testimonial evidence in
support of the application and thereafter submit her
recommendation thereon; it found SMC’s evidence adequate and
issued the temporary restraining order upon bond. No
irregularity may thus be imputed to the respondent Commission
in the issuance of that order.
DECISION
NARVASA, J.:
The controversy at bar had its origin in the "wage distortions"
affecting the employees of respondent San Miguel Corporation
allegedly caused by Republic Act No. 6727, otherwise known as
the Wage Rationalization Act.
Upon the effectivity of the Act on June 5, 1989, the union known
as "Ilaw at Buklod Ng Manggagawa (IBM)" — said to represent
4,500 employees of San Miguel Corporation, more or less,
"working at the various plants, offices, and warehouses located
at the National Capital Region" - presented to the company a
"demand" for correction of the "significant distortion in . . . (the
workers’) wages." In that "demand," the Union explicitly invoked
Section 4 (d) of RA 6727 which reads as follows:chanrob1es
virtual 1aw library
x       x       x
"(d) . . . This abandonment of the long-standing schedule of work and
Where the application of the increases in the wage rates under
this Section results in distortions as defined under existing laws
in the wage structure within an establishment and gives rise to a
dispute therein, such dispute shall first be settled voluntarily
between the parties and in the event of a deadlock, the same
shall be finally resolved through compulsory arbitration by the
regional branches of the National Labor Relations Commission
(NLRC) having jurisdiction over the workplace.
It shall be mandatory for the NLRC to conduct continuous
hearings and decide any dispute arising under this Section within
twenty (20) calendar days from the time said dispute is formally
submitted to it for arbitration. The pendency of a dispute arising
from a wage distortion shall not in any way delay the
applicability of the increase in the wage rates prescribed under
this Section."cralaw virtua1aw library
But the Union claims that "demand was ignored: 1
"The . . . COMPANY ignored said demand by offering a measly
across-the-board wage increase of P7.00 per day, per employee,
as against the proposal of the UNION of P25.00 per day, per
employee. Later, the UNION reduced its proposal to P15.00 per
day, per employee by way of amicable settlement.
When the . . . COMPANY rejected the reduced proposal of the
UNION the members thereof, on their own accord, refused to
render overtime services, most especially at the Beer Bottling
Plants at Polo, starting October 16, 1989."cralaw virtua1aw
library
In this connection, the workers involved issues a joint notice
reading as follows: 2
"SAMA-SAMANG PAHAYAG: KAMING ARAWANG MANGGAGAWA
NG POLO BREWERY PAWANG KASAPI NG ILAW AT BUKLOD NG
MANGGAGAWA (IBM) AY NAGKAISANG NAGPASYA NA
IPATUPAD MUNA ANG EIGHT HOURS WORK SHIFT
PANSAMANTALA HABANG HINDI IPINATUTUPAD NG SMC
MANAGEMENT ANG TAMANG WAGE DISTORTION."cralaw
virtua1aw library
The Union’s position (set out in the petition subsequently filed in
this Court, infra) was that the workers’ refusal "to work beyond
eight (8) hours everyday starting October 16, 1989" as a
legitimate means of compelling SMC to correct "the distortion in
their wages brought about by the implementation of the said
laws (R.A. 6640 and R.A. 6727) to newly-hired employees." 3
That decision to observe the "eight hours work shift" was
implemented on October 16, 1989 by "some 800 daily-paid
workers at the Polo Plant’s production line (of San Miguel
Corporation [hereafter, simply SMC]), joined by others at
statistical quality control and warehouse, all members of . . . IBM
. . ." 4 There ensued thereby a change in the work schedule
which had been observed by daily-paid workers at the Polo Plant
for the past five (5) years, i.e., "ten (10) hours for the first shift
and ten (10) to fourteen (14) hours for the second shift, from
Mondays to Fridays . . .; (and on) Saturdays, . . . eight (8) hours
for both shifts" — a work schedule which, SMC says, the workers
had "welcomed, and encouraged" because the automatic
overtime built into the schedule "gave them a steady source of
extra-income," and pursuant to which it (SMC) "planned its
production targets and budgets." 5
the reversion to the eight-hour shift apparently caused
substantial losses to SMC. Its claim is that there ensued "from 16
October 1989 to 30 November 1989 alone . . . work disruption
and lower efficiency . . . (resulting in turn, in) lost production of
2,004,105 cases of beer . . .; that (i)n "money terms, SMC lost 1) the "central issue . . . is the application of the Eight-Hour
P174,657,598 in sales and P48,904,311 in revenues . . . (and Labor Law . . . (i.e.) (m)ay an employer force an employee to
the) Government lost excise tax revenue of P42 Million, work everyday beyond eight hours a day?"
computed at the rate of P21 per case collectible at the plant." 6
These losses occurred despite such measures taken by SMC as 2). although the work schedule adopted by SMC with built-in
organizing "a third shift composed of regular employees and "automatic overtime," 10 "tremendously increased its production
some contractuals," and appeals "to the Union members, of beer at lesser cost," SMC had been paying its workers "wages
through letters and memoranda and dialogues with their plant far below the productivity per employee," and turning a deaf ear
delegates and shop stewards," to adhere to the existing work to the Union’s demands for wage increases;
schedule.chanrobles lawlibrary : rednad
3) the NLRC had issued the temporary restraining order of
Thereafter, on October 18, 1989, SMC filed with the Arbitration December 19, 1989 "with indecent haste, based on ex parte
Branch of the National Labor Relations Commission a complaint evidence of SMC; and such an order had the effect of "forcing
against the Union and its members "to declare the strike or the workers to work beyond eight (8) hours a day, everyday!!"
slowdown illegal" and to terminate the employment of the union
officers and shop stewards. The complaint was docketed as 4) the members of the NLRC had no authority to act as
NLRC-NCR Case No. 00-10-04917. 7 Commissioners because their appointments had not been
confirmed by the Commission on Appointment; and
Then on December 8, 1989, on the claim that its action in the
Arbitration Branch had as yet "yielded no relief," SMC filed 5) even assuming the contrary, the NLRC, as an essentially
another complaint against the Union and members thereof, this appellate body, had no jurisdiction to act on the plea for
time directly with the National Labor Relations Commission, "to injunction in the first instance.
enjoin and restrain illegal slowdown and for damages, with
prayer for the issuance of a cease-and-desist and temporary The petition thus prayed:chanrob1es virtual 1aw library
restraining order." 8 Before acting on the application for
restraining order, the NLRC’s First Division first directed SMC to 1) for judgment (a) annulling the Resolution of December 19,
present evidence in support of the application before a 1990; (b) declaring mandatory the confirmation by the
commissioner, Labor Arbiter Carmen Talusan. On December 19, Commission on Appointments of the appointments of National
1989, said First Division promulgated a Resolution on the basis Labor Relations Commissioners; and (c) ordering the removal
of "the allegations of the petitioner (SMC) and the evidence "from the 201 files of employees any and all memoranda or
adduced ex parte in support of their petition." The Resolution — disciplinary action issued imposed to the latter by reason of their
refusal to render overtime work;" and
1) authorized the issuance of "a Temporary Restraining Order for
a period of twenty (20) days . . . upon . . . a cash or surety bond 2) pending such judgment restraining (a) the NLR
in the amount of P50,000.00 . . . DIRECTlNG the respondents to Commissioners "from discharging their power and authority
CEASE and DESIST from further committing the acts complained under R.A. 6715 prior to their re-appointment and or
about particularly their not complying with the work schedule confirmation;" as well as (b) Arbiter Talusan and the Commission
established and implemented by the company through the years from acting on the matter or rendering a decision or issuing a
or at the least since 1984, which schedule appears to have been permanent injunction therein, or otherwise implementing said
adhered to by the respondents until October 16, 1989 . . .;" Resolution of December 19, 1989.

2) "set the incident on injunction for hearing before Labor Arbiter In traverse of the petition, SMC filed a pleading entitled
Carmen Talusan on 27 December 1989 . . . ."cralaw virtua1aw "Comment with Motion to Admit Comment as Counter-Petition,"
library in which it contended that:chanrob1es virtual 1aw library

The Labor Arbiter accordingly scheduled the incident for hearing
on various dates: December 27 and 29, 1989, January 8, 11, 16,
and 19, 1990. The first two settings were cancelled on account
of the unavailability of the Union’s counsel. The hearing on
January 8, 1990 was postponed also at the instance of said
counsel who declared that the Union refused to recognize the
NLRC’s jurisdiction. The hearings set on January 11, 16 and 19,
1990 were taken up with the cross-examination of SMC’s witness
on the basis of his affidavit and supplemental affidavits. The
Union thereafter asked the Hearing Officer to schedule other
hearings. SMC objected. The Hearing Officer announced she
would submit a report to the Commission relative to the
extension of the temporary restraining order of December 9,
1989, supra, prayed for by SMC. Here the matter rested until
February 14, 1990, when the Union filed the petition which
commenced the special civil action of certiorari and prohibition at
bar.
In its petition, the Union asserted that:chanrob1es virtual 1aw
library
1) the workers’ abandonment of the regular work schedule and
their deliberate and wilful reduction of the Polo plant’s
production efficiency is a slowdown, which is an illegal and
unprotected concerted activity;
2) against such a slowdown, the NLRC has jurisdiction to issue
injunctive relief in the first instance;
3) indeed, the NLRC has "the positive legal duty and statutory
obligation to enjoin the slowdown complained of and to compel
the parties to arbitrate . . . (and) to effectuate the important
national policy of peaceful settlement of labor disputes through
arbitration;" accordingly, said NLRC "had no legal choice but to
issue injunction to enforce the reciprocal no lockout-no
slowdown and mandatory arbitration agreement of the parties;
"and
9
4) the NLRC "gravely abused its discretion when it refused to
decide the application for injunction within the twenty day period
of its temporary restraining order, in violation of its own rules
and the repeated decisions of this . . . Court."cralaw virtua1aw
library
It is SMC’s submittal that the coordinated reduction by the
Union’s members of the work time theretofore willingly and
consistently observed by them, thereby causing financial losses
to the employer in order to compel it to yield to the demand for
correction of "wage distortions," is an illegal and "unprotected"
activity. It is, SMC argues, contrary to the law and to the
collective bargaining agreement between it and the Union. The
argument is correct and will be sustained.
Among the rights guaranteed to employees by the Labor Code is
that of engaging in concerted activities in order to attain their
legitimate objectives. Article 263 of the Labor Code, as amended,
declares that in line with "the policy of the State to encourage
free trade unionism and free collective bargaining, . . . (w)orkers
shall have the right to engage in concerted activities for
purposes of collective bargaining or for their mutual benefit and
protection." A similar right to engage in concerted activities for
mutual benefit and protection is tacitly and traditionally
recognized in respect of employers.
The more common of these concerted activities as far as
employees are concerned are: strikes — the temporary stoppage
of work as a result of an industrial or labor dispute; picketing —
the marching to and fro at the employer’s premises, usually
accompanied by the display of placards and other signs making
known the facts involved in a labor dispute; and boycotts — the
concerted refusal to patronize an employer’s goods or services
and to persuade others to a like refusal. On the other hand, the
counterpart activity that management may licitly undertake is
the lockout — the temporary refusal to furnish work on account
of a labor dispute. In this connection, the same Article 263
provides that the "right of legitimate labor organizations to strike
and picket and of employer to lockout, consistent with the
national interest, shall continue to be recognized and respected."
The legality of these activities is usually dependent on the
legality of the purposes sought to be attained and the means
employed therefor.
It goes without saying that these joint or coordinated activities
may be forbidden or restricted by law or contract. In the
particular instance of "distortions of the wage structure within an
establishment" resulting from "the application of any prescribed
wage increase by virtue of a law or wage order," Section 3 of
Republic Act No. 6727 prescribes a specific, detailed and
comprehensive procedure for the correction thereof, thereby
implicitly excluding strikes or lockouts or other concerted
activities as modes of settlement of the issue. The provision 11
states that — "Section 1. The UNION agrees that there shall be no strikes,
". . . the employer and the union shall negotiate to correct the
distortions. Any dispute arising from wage distortions shall be
resolved through the grievance procedure under their collective
bargaining agreement and, if it remains unresolved, through
voluntary arbitration. Unless otherwise agreed by the parties in
writing, such dispute shall be decided by the voluntary arbitrator
or panel of voluntary arbitrators within ten (10) calendar days
from the time said dispute was referred to voluntary arbitration.
In cases where there are no collective agreements or recognized
labor unions, the employers and workers shall endeavor to
correct such distortions. Any dispute arising therefrom shall be
settled through the National Conciliation and Mediation Board
and, if it remains unresolved after ten (10) calendar days of
conciliation, shall be referred to the appropriate branch of the
National Labor Relations Commission (NLRC). It shall be
mandatory for the NLRC to conduct continuous hearings and
decide the dispute within twenty (20) calendar days from the
time said dispute is submitted for compulsory arbitration.
The pendency of a dispute arising from a wage distortion shall
not in any way delay the applicability of any increase in
prescribed wage rates pursuant to the provisions of law or Wage
Order.
x       x       x
The legislative intent that solution of the problem of wage
distortions shall be sought by voluntary negotiation or
arbitration, and not by strikes, lockouts, or other concerted
activities of the employees or management, is made clear in the
rules implementing RA 6727 issued by the Secretary of Labor
and Employment 12 pursuant to the authority granted by Section
13 of the Act. 13 Section 16, Chapter I of these implementing
rules, after reiterating the policy that wage distortions be first
settled voluntarily by the parties and eventually by compulsory
arbitration, declares that, "Any issue involving wage distortion
shall not be a ground for a strike/lockout."cralaw virtua1aw
library
Moreover, the collective bargaining agreement between the SMC
and the Union, relevant provisions of which are quoted by the
former without the latter s demurring to the accuracy of the
quotation, 14 also prescribes a similar eschewal of strikes or
other similar or related concerted activities as a mode of
resolving disputes or controversies, generally, said agreement
clearly stating that settlement of "all disputes, disagreements or
controversies of any kind" should be achieved by the stipulated
grievance procedure and ultimately by arbitration. The provisions
are as follows:jgc:chanrobles.com.ph
"Section 1. Any and all disputes, disagreements and
controversies of any kind between the COMPANY and the UNION
and or the workers involving or relating to wages, hours of work,
conditions of employment and or employer-employee relations
arising during the effectivity of this Agreement or any renewal
thereof, shall be settled by arbitration in accordance with the
procedure set out in this Article. No dispute, disagreement or
controversy which may be submitted to the grievance procedure
in Article IX shall be presented for arbitration unless all the steps
of the grievance procedure are exhausted" (Article V —
Arbitration).
walkouts, stoppage or slowdown of work, boycotts, secondary
boycotts, refusal to handle any merchandise, picketing, sit-down
strikes of any kind, sympathetic or general strikes, or any other
interference with any of the operations of the COMPANY during
the terms of this agreement" (Article VI).
The Union was thus prohibited to declare and hold a strike or
otherwise engage in non-peaceful concerted activities for the
settlement of its controversy with SMC in respect of wage
distortions, or for that matter; any other issue "involving or
relating to wages, hours of work, conditions of employment
and/or employer-employee relations." The partial strike or
concerted refusal by the Union members to follow the five-year-
old work schedule which they had therefore been observing,
resorted to as a means of coercing correction of "wage
distortions," was therefore forbidden by law and contract and, on
this account, illegal.
Awareness by the Union of the proscribed character of its
members’ collective activities, is clearly connoted by its attempt
to justify those activities as a means of protesting and obtaining
redress against said members working overtime every day from
Monday to Friday (on an average of 12 hours), and every
Saturday (on 8-hour shifts), 15 rather than as a measure to
bring about rectification of the wage distortions caused by RA
6727 — which was the real cause of its differences with SMC. By
concealing the real cause of their dispute with management
(alleged failure of correction of wage distortion), and trying to
make it appear that the controversy involved application of the
eight-hour labor law, they obviously hoped to remove their case
from the operation of the rules implementing RA 6727 that "Any
issue involving wage distortion shall not be a ground for a
strike/lockout." The stratagem cannot succeed.chanrobles virtual
lawlibrary
In the first place, that it was indeed the wage distortion issue
that principally motivated the Union’s partial or limited strike is
clear from the facts. The work schedule (with "built-in overtime")
had not been forced upon the workers; it had been agreed upon
between SMC and its workers at the Polo Plant and indeed, had
been religiously followed with mutually beneficial results for the
past five (5) years. Hence, it could not be considered a matter of
such great prejudice to the workers as to give rise to a
controversy between them and management. Furthermore, the
workers never asked, nor were there ever any negotiations at
their instance, for a change in that work schedule prior to the
strike. What really bothered them, and was in fact the subject of
talks between their representatives and management, was the
"wage distortion" question, a fact made even more apparent by
the joint notice circulated by them prior to the strike, i.e., that
they would adopt the eight-hour work shift in the meantime
pending correction by management of the wage distortion
(IPATUPAD MUNA ANG EIGHT HOURS WORK SHIFT
PANSAMANTALA HABANG HINDI IPINATUTUPAD NG SMC
MANAGEMENT ANG TAMANG WAGE DISTORTION").
In the second place, even if there were no such legal prohibition,
and even assuming the controversy really did not involve the
wage distortions caused by RA 6727, the concerted activity in
question would still be illicit because contrary to the workers’
explicit contractual commitment "that there shall be no strikes,
walkouts, stoppage or slowdown of work, boycotts, secondary
boycotts, refusal to handle any merchandise, picketing, sit-down
strikes of any kind, sympathetic or general strikes, or any other
interference with any of the operations of the COMPANY during
the term of . . . (their collective bargaining) agreement." 16
What has just been said makes unnecessary resolution of SMC’s
argument that the workers’ concerted refusal to adhere to the
work schedule in force for the last several years, is a slowdown,
an inherently illegal activity essentially illegal even in the
absence of a no-strike clause in a collective bargaining contract,
or statute or rule. The Court is in substantial agreement with the
petitioner’s concept of a slowdown as a "strike on the installment
plan;" as a wilful reduction in the rate of work by concerted
action of workers for the purpose of restricting the output of the
employer, in relation to a labor dispute; as an activity by which
workers, without a complete stoppage of work, retard production
or their performance of duties and functions to compel
management to grant their demands. 17 The Court also agrees
that such a slowdown is generally condemned as inherently illicit
and unjustifiable, because while the employees "continue to
work and remain at their positions and accept the wages paid to
them," they at the same time "select what part of their allotted
tasks they care to perform of their own volition or refuse openly
or secretly, to the employer’s damage, to do other work;" in
other words, they "work on their own terms." 18 But whether or
not the workers’ activity in question - their concerted adoption of
a different work schedule than that prescribed by management
and adhered to for several years — constitutes a slowdown need
not, as already stated, be gone into. Suffice it to say that activity
is contrary to the law, RA 6727, and the parties’ collective
bargaining agreement.
The Union’s claim that the restraining order is void because
issued by Commissioners whose appointments had not been duly
confirmed by the Commission on Appointments should be as it is
hereby given short shift, for, as the Solicitor General points out,
it is an admitted fact that the members of the respondent
Commission were actually appointed by the President of the
Philippines on November 18, 1989; there is no evidence
whatever in support of the Union’s bare allegation that the
appointments of said members had not been confirmed; and the
familiar presumption of regularity in appointment and in
performance of official duty exists in their favor. 19
Also untenable is the Union’s other argument that the
respondent NLRC Division had no jurisdiction to issue the
temporary restraining order or otherwise grant the preliminary
injunction prayed for by SMC and that, even assuming the
contrary, the restraining order had been improperly issued. The
Court finds that the respondent Commission had acted entirely in
accord with applicable provisions of the Labor Code.
Article 254 of the Code provides that "No temporary or
permanent injunction or restraining order in any case involving
or growing out of labor disputes shall be issued by any court or
other entity, except as otherwise provided in Articles 218 and
264 . . . ." Article 264 lists down specific "prohibited activities"
which may be forbidden or stopped by a restraining order or
injunction. Article 218 inter alia enumerates the powers of the
National Labor Relations Commission and lays down the
conditions under which a restraining order or preliminary
injunction may issue, and the procedure to be followed in issuing
the same.chanrobles.com.ph : virtual law library
Among the powers expressly conferred on the Commission by
Article 218 is the power to "enjoin or restrain any actual or
threatened commission of any or all prohibited or unlawful acts
or to require the performance of a particular act in any labor
dispute which, if not restrained or performed forthwith, may
cause grave or irreparable damage to any party or render
ineffectual any decision in favor of such party . . . ."cralaw
virtua1aw library
As a rule such restraining orders or injunctions do not issue ex
parte, but only after compliance with the following requisites, to
wit:chanrob1es virtual 1aw library
a) a hearing held "after due and personal notice thereof has
been served, in such manner as the Commission shall direct, to
all known persons against whom relief is sought, and also to the
Chief Executive and other public officials of the province or city
within which the unlawful acts have been threatened or
committed charged with the duty to protect complainant’s
property;"
b) reception at the hearing of "testimony of witnesses, with
opportunity for cross-examination, in support of the allegations
of a complaint made under oath," as well as "testimony in
opposition thereto, if offered . . .;"
c) "a finding of fact by the Commission, to the effect:chanrob1es
virtual 1aw library
(1) That prohibited or unlawful acts have been threatened and
will be committed and will be continued unless restrained, but no
injunction or temporary restraining order shall be issued on
account of any threat, prohibited or unlawful act, except against
the person or persons, association or organization making the
threat or committing the prohibited or unlawful act or actually
authorizing or ratifying the same after actual knowledge thereof;
(2) That substantial and irreparable injury to complainant’s
property will follow;
(3) That as to each item of relief to be granted, greater injury
will be inflicted upon complainant by the denial of relief than will
be indicted upon defendants by the granting of relief;
(4) That complainant has no adequate remedy at law; and
(5) That the public officers charged with the duty to protect
complainant’s property are unable or unwilling to furnish
adequate protection."cralaw virtua1aw library
However, a temporary restraining order may be issued ex parte
under the following conditions:chanrob1es virtual 1aw library
a) the complainant "shall also allege that, unless a temporary
restraining order shall be issued without notice, a substantial and
irreparable injury to complainant’s property will be unavoidable;"
b) there is "testimony under oath, sufficient, if sustained, to
justify the Commission in issuing a temporary injunction upon
hearing after notice;"
temporary restraining order ex parte on the ground that
substantial and irreparable injury to its property would transpire
before the matter could be heard, on notice; it, however, first
direct SMC Labor Arbiter Carmen Talusan to receive SMC’s
testimonial evidence in support of the application and thereafter
submit her recommendation thereon; it found SMC’s evidence
adequate and issued the temporary restraining order upon bond.
No irregularity may thus be imputed to the respondent
Commission in the issuance of that order.
In any event, the temporary restraining order had a lifetime of
only twenty (20) days and became void ipso facto at the
expiration of that period.
In view of the foregoing factual and legal considerations, all
irresistibly leading to the basic conclusion that the concerted acts
of the members of petitioner Union in question are violative of
the law and their formal agreement with the employer, the
latter’s submittal, in its counter-petition that there was, in the
premises, a "legal duty and obligation" on the part of the
respondent Commission "to enjoin the unlawful and prohibited
acts and omissions of petitioner IBM and the workers complained
of" 20 — a proposition with which, it must be said, the Office of
the Solicitor General concurs, asserting that the "failure of the
respondent commission to resolve the application for a writ of
injunction is an abuse of discretion especially in the light of the
fact that the restraining order it earlier issued had already
expired" 21 — must perforce be conceded.chanrobles
virtualawlibrary chanrobles.com:chanrobles.com.ph
WHEREFORE, the petition is DENIED, the counter-petition is
GRANTED, and the case is REMANDED to the respondent
Commission (First Division) with instructions to immediately take
such action thereon as is indicated by and is otherwise in accord
with, the findings and conclusions herein set forth. Costs against
petitioner.
IT IS SO ORDERED.

c) the "complainant shall first file an undertaking with adequate Griño-Aquino and Medialdea, JJ., concur.
security in an amount to be fixed by the Commission sufficient to
recompense those enjoined for any loss, expense or damage Cruz, Jr., took no part.
caused by the improvident or erroneous issuance of such order
or injunction, including all reasonable costs, together with a Gancayco, J., is on leave.
reasonable attorney’s fee, and expense of defense against the
order or against the granting of any injunctive relief sought in
the same proceeding and subsequently denied by the
Commission;" and

d) the "temporary restraining order shall be effective for no

longer than twenty (20) days and shall become void at the
expiration of said twenty (20) days."cralaw virtua1aw library

The reception of evidence "for the application of a writ of

injunction may be delegated by the Commission to any of its
Labor Arbiters who shall conduct such hearings in such places as
he may determine to be accessible to the parties and their
witnesses and shall submit thereafter his recommendation to the
Commission."cralaw virtua1aw library

The record reveals that the Commission exercised the power

directly and plainly granted to it by sub-paragraph (e) Article 217
in relation to Article 254 of the Code, and that it faithfully
observed the procedure and complied with the conditions for the
exercise of that power prescribed in said sub-paragraph (e). It
acted on SMC’s application for immediate issuance of a
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-18461             February 10, 1967
NORTON & HARRISON CO. & JACKBILT CONCRETE
BLOCKS CO. LABOR UNION (NLU) petitioner,
vs.
NORTON & HARRISON CO. & JACKBILT CONCRETE
BLOCKS CO., INC. and ALBERTO GOLDEN, respondents.
Eulogio R. Lerum for petitioner.
Lantin & Morabe Law Offices for respondents.
BENGZON, J.P., J.:
Jaime Arcania was employed since 1953 in Norton & Harrison
Co. & Jackbilt Concrete Blocks Co., as a mechanic. Arcania joined
the Norton & Harrison & Jackbilt Concrete Blocks Co. Labor
Union-NLU. From September of 1956 to September of 1957, he
was the president of said union. And as president, he followed
up a petition of the union setting forth several demands.
Apparently, though promised to be considered, none of said
demands was granted during Arcaina's term as president. After
September 17, 1957, when Arcaina lost the presidency of the
union to Jorge Dakila, he remained an active member of the
union, pressing its officers to continue the aforementioned
demands.
On Saturday afternoon, May 24, 1958, Arcaina during the course
of his work, said to the assistant superintendent, Artemio
Martinez: "Pare, I will only work up to 5:00." Martinez did not
say anything. And Arcaina left at five that afternoon; his
prescribed hours of work were from twelve noon to eight in the
evening.1äwphï1.ñët
On the following Monday, May 26, 1959, Arcaina was dismissed
by Alberto Golden, Manager of Jackbilt Concrete Blocks Co.,
allegedly for having left his work without permission and in
violation of the rules of the company and continuous disregard
of orders from his superiors.
After incumbent Union president Jorge Dakila addressed a letter
to the company on May 28, 1958, requesting Arcaina's
reinstatement, the union filed, on May 30, 1958, a notice of
strike alleging unfair labor practice by the company.
The patties failed to reach thru the conciliation proceedings any
settlement, notwithstanding the efforts of the Department of
Labor to this end. And on July 29, 1958, the union struck.
Subsequently, on October 23, 1958, around 300 strikers offered
to return to work, but the company refused to accept them; it
appears that other persons had been hired to replace them. On
November 21, 1958, the union filed in the Court of Industrial
Relations a complaint against the company for unfair labor
practice, allegedly consisting of (1) the dismissal of Arcaina,
which precipitated the strike; and, (2) the refusal to accept the
strikers who offered to return to work, as afore-stated.
After joinder of issues and trial, on January 25, 1960, the Court
of Industrial Relations rendered thru Presiding Judge Jose S.
Bautista (as trial judge) a decision ordering Arcaina's
reinstatement with back wages from May 23, 1958 and the
reinstatement of the strikers who were refused acceptance when
they offered to return to work, also with back wages, from
October 23, 1958. Said trial Judge found that Arcaina's dismissal
was really done due to his activities for the union, and,
therefore, an unfair labor practice; and that the strike called
thereafter was prompted by said dismissal, and, thus, an unfair
labor practice strike, resulting in the strikers' right to be
reinstated with back wages even if their positions had been filled
by others during the strike.
Against this decision, the company filed a motion seeking
reconsideration by the full court. And on May 19, 1961, the Court
of Industrial Relations en banc reversed said decision per
resolution finding that Arcaina's dismissal was not due to union
activities but for a just cause, that is, leaving his work without
permission. It further held, as a result, that the strike was not an
unfair labor practice strike but merely an economic strike, so that
strikers replaced by other workers cannot demand
reinstatement.
Petitioner union herein appeals from the resolution of the Court
of Industrial Relations en banc. Appellant's contentions are that
Arcaina's dismissal constituted unfair labor practice; that the
strike was an unfair labor practice strike; and, that, therefore,
Arcaina and the strikers are entitled to reinstatement with
payment of back wages.
The record shows conflict of testimonies as to whether Arcaina
obtained permission from his superintendent to work only up to
five in the afternoon of May 24, 1958. 1 And the finding of the
Court of Industrial Relations en banc is, as afore-stated that he
did not. Said finding, being one of fact and supported by
substantial evidence, should not be disturbed by Us. 2
It has likewise been found, however, as borne out by the record,
that Arcaina's dismissal was in disregard and violation of the
stipulated procedure in the parties' collective bargaining
agreement. Said provision required that:
I. All personnel will be directly under the President of
the Company; and in his absence the Vice-President of
the Company will be in charge.
(1) All cases of dismissal will be handled by the
President of the Company. In his absence, the Vice-
President will take action on the recommendation of a
Board of four (4) representatives of management with
four (4) union representatives.
Not only did the management fail to observe the required and
usual procedure for dismissal, but it acted posthaste and without
affording Arcaina sufficient time and opportunity to present his
side. And said absence of fair chance to be heard was not
remedied when 18 days afterwards the president of the
company stated in a letter (Exh. I) to the union that he thereby
"confirmed" the dismissal.
Since Arcaina was the former president of the union and his
activities for and in the union — which were well known — had
continued even after his presidency, as a member of said union,
his swift dismissal without benefit of the required procedure, for
an infraction of a rule of the company that resulted in no
appreciable damage to the latter, could not but reasonably lead
the union and its members into believing that said dismissal was
in reality predicated upon his union activities.
For this reason they filed a notice of strike alleging unfair labor
practice; 3 they raised during the conciliation proceedings
Arcainas dismissal as alleged unfair labor practice; and in their
so-called "Union's Final Stand" in said proceedings, they
expressed willingness to forego their economic demands, but not
the reinstatement of Arcaina.
The net result of these facts and circumstances is to bring the
strike in the present case within the ruling in Ferrer, et al. vs.
C.I.R.,  L-24267-68, May 31, 1966. Said this Court therein:
Although the Management may have had the strict legal
right to take against union members the disciplinary and
other administrative measures above referred to, there
is no denying the fact that the time chosen by the
Management therefor, when considered in relation with
the attending circumstances, reasonably justified the
belief of the Union that the real or main purpose of the
Management was to discourage membership in the
Union, to discredit the officers thereof, to weaken the
Union and to induce or compel the same to sign the
draft of agreement Exhibit D as amended, on May 29
and 30 or 31, 1963. As stated in the decision of His
Honor, the trial Judge, said belief was confirmed by the
fact that prosecutors of the Court of Industrial Relations
found sufficient grounds to file and did file, against the
Management, a complaint for unfair labor practice.
In other words, both parties had, performed acts which
understandably induced each to believe that the other
was guilty of such practices — although, as we now
analyze the whole situation, without the excitement, the
heat and the passion of the direct participants in the
labor dispute, at the peak thereof, such belief may not
turn out to be borne out by the objective realities — and
both were reasonably justified in taking the counter
measures adopted by them. As a consequence, we hold
that the strike in question had been called to off-set
what petitioners were warranted in believing in good
faith to be unfair labor practices on the part of
Management, that petitioners were not bound,
therefore, to wait for the expiration of thirty (30) days
from notice of strike before staging the same, that said
strike was not, accordingly, illegal and that the strikers
had not thereby lost their status as employees of
respondents herein. Upon the other hand, considering
that the latter have been absolved from the charge of
unfair labor practice, the reinstatement of the strikers
must be without backpay.
management, said strike, following the Ferrer ruling, did not
result in the termination of the striking members' status as
employees, and, therefore, they are still entitled to reinstatement
but without back wages..
Anent the company's argument that reinstatement of said
strikers would be unfair to those who had been taken in to
replace them, during the strike, when the company direly
needed their services, suffice it to consider two other points. The
first is that said other workers must be deemed to have accepted
their employment as replacements with the knowledge that the
same is subject to the consequences of the labor dispute
between the strikers and the company on the resolution of which
depended the effects of the strike as to right to reinstatement of
the strikers. The second point is that said workers had by now
been engaged for almost nine years, so that it is not inequitable
for them to be made to yield their positions to those finally ruled
to be with right to occupy the same.
As to Arcaina himself, as heretofore said, his dismissal cannot be
sustained for lack of the requisite fair hearing; he should
therefore also be reinstated, without back wages, the intervening
period without pay between his dismissal and reinstatement
being deemed sufficient penalty for his leaving his work without
definite and clear permission from his superiors, a fact duty
ascertained only in the course of the proceedings in the Court of
Industrial Relations.
Wherefore, the resolution en banc  of the Court of Industrial
Relations dated May 19, 1961 is hereby reversed, and
respondents company and manager are hereby ordered to
reinstate, without back wages, Jaime Arcaina and the strikers of
the union who offered to return to work on October 23, 1958,
the reinstatement to be made, in both cases, sixty days after the
finality decision herein. So ordered.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar,
Sanchez and Castro, JJ., concur.
 

So, also, in this case, the act of the company in dismissing

Arcaina, done without the required fair hearing, and, therefore,
not tenable even under strict legal ground, induced the union
and its members to believe that said company was guilty of
unfair labor practice, although viewed now in retrospect said act
would fall short of unfair labor practice. Since the strike of the
union was in response to what it was warranted in believing in
good faith to be unfair labor practice on the part of the
SECOND DIVISION
G.R. No. 153664             July 18, 2003
GRAND BOULEVARD HOTEL (formerly known as SILAHIS
INTERNATIONAL HOTEL, INC.), petitioner,
vs.
GENUINE LABOR ORGANIZATION OF WORKERS IN
HOTEL, RESTAURANT AND ALLIED INDUSTRIES
(GLOWHRAIN), respondent.
x-----------------------------x
G.R. No. 153665             July 18, 2003
GRAND BOULEVARD HOTEL (formerly known as SILAHIS
INTERNATIONAL HOTEL, INC.), petitioner,
vs.
EDNA B. DACANAY, respondent.
CALLEJO, SR., J.:
Before us is a petition for review on certiorari of the Decision 1 of
the Court of Appeals in CA-G.R. SP Nos. 53284 & 53285 dated
January 9, 2002 and its Resolution2 dated May 27, 2002 denying
the petitioner's motion for reconsideration of the said decision.
The Antecedents
On February 27, 1987, Genuine Labor Organization of Workers in
Hotel, Restaurant and Allied Industries — Silahis International
Hotel Chapter (GLOWHRAIN-Silahis) (respondent union for
brevity) and the petitioner Grand Boulevard Hotel (then Silahis
International Hotel, Inc.) executed a Collective Bargaining
Agreement (CBA) covering the period from July 10, 1985 up to
July 9, 1988. The petitioner thereafter dismissed some of its
employees and suspended others who were members of the
respondent union. On May 26, 1987, the respondent union filed
a notice of strike with the Department of Labor and Employment,
National Capital Region (DOLE-NCR), based on the following
grounds:
a) Illegal dismissal
b) Illegal suspension
c) CBA violations
d) Harassments3
On June 4, 1987, the then Acting Secretary of Labor and
Employment (SOLE for brevity) issued a status quo ante
bellum order certifying the labor dispute to the National Labor
Relations Commission (NLRC) for compulsory arbitration
pursuant to Article 263(g) of the Labor Code; and further
directing the employees to return to work within forty-eight
hours from receipt of the order, 4 and for the petitioner to accept
all returning employees under the same terms and conditions
prevailing prior to the labor dispute. The respondent union
complied with the order of the SOLE. On May 9, 1990, the
respondent union filed another notice of strike against the
petitioner on account of alleged violations of the CBA and the
illegal dismissal of nine employees. The matter was docketed as
NCMB-NCR Case No. 06-400-90. On May 23, 1990, the SOLE
issued another status quo ante bellum order certifying the case
to the NLRC for compulsory arbitration, directing the nine
employees to return to work and enjoining both parties from
engaging in any strike or lockout that would exacerbate the
situation. The parties were also directed to sign a CBA within
fifteen days from notice of the said order.5
On June 15, 1990, the petitioner and the respondent union
entered into and signed a third CBA covering the period of July
10, 1988 to July 9, 1991. On August 22, 1990, Union President
Rogelio Soluta wrote the petitioner, calling its attention to and
protesting the following violations of the CBA:
1. Union dues and other assessments deducted from
CBU and union members' salary for July 15, 1990
payday.
2. Union dues and other assessments deducted from
CBU and union member's salary for July 31, 1990
payday.
3. Union dues and other assessments deducted from
CBU and union members' salary for August 15, 1990
payday.6
On September 6, 1990, the petitioner placed the respondent
union's Director for Grievances Apolonio Bondoc, Jr. under
preventive suspension. On September 13, 1990, the respondent
union filed a manifestation and motion in NCMB-NCR-NS Case
No. 06-400-90 praying that the petitioner be held in contempt
for violating the May 23, 1990 Order of the SOLE. On September
22, 1990, the petitioner suspended Francisco Pineda, a union
counselor.
On September 27, 1990, the respondent union filed a notice of
strike based on the following grounds:
a. Violation of CBA;
b. Coercion of employees;
c. Harassment;
d. Arbitrary transfer of employees; and
e. Illegal termination and suspension of employees 7
The matter was docketed as NCMB-NCR-NS-09-807-90. On
October 10, 1990, the respondent union moved that the SOLE
reconsider the May 23, 1990 Return-to-Work Order.
On October 16, 1990, Michael Wilson, the petitioner's general
manager, wrote the SOLE informing him of the petitioner's
decision to retrench seventeen less senior employees on a
staggered basis, spread over a period of sixty days, to lessen the
daily financial losses being incurred by the petitioner. A portion
of the letter reads:
Due to the present continued downturn in tourism, we
at the Silahis International Hotel are about to undertake
 a retrenchment program. As you know the other hotels
have also invoked this management prerogative in order
to lessen their financial losses incurred these last few
months.
Due to our unique situation/relationship with the KMU, I
am writing to you and appealing to your good sense of
fair play on case of problems arising from unruly
elements. We plan to retrench on a staggered basis one
hundred seventy-one (171) less senior employees over
a period of sixty (60) days, in order to stem the huge
losses being incurred by us daily, during this
unfortunate period.
Therefore, on behalf of my staff we ask fairness in this
situation and hope the above actions can be taken
smoothly and peacefully.8
The next day, the respondent union, through its president,
informed the DOLE-NCR that the union will conduct a strike vote
referendum on October 23 and 24, 1990. The members of the
respondent union voted to stage a strike. On October 25, 1990,
the respondent union informed the DOLE-NCR of the results of
the strike vote referendum. On October 31, 1990, the SOLE
issued another status quo ante bellum order certifying the case
to the NLRC for compulsory arbitration and enjoining the parties
from engaging in any strike or lockout. The decretal portion of
the order reads:
WHEREFORE, ABOVE PREMISES CONSIDERED, this
Office hereby certifies the labor disputes at Silahis
International Hotel, Inc., to the National Labor Relations
Commission for compulsory arbitration. Accordingly, any
strike or lockout, whether actual or intended, is hereby
enjoined.
Consequently, pending resolution of the legality of the
alleged dismissal of Apolonio Bondoc, Jr., the Company
is directed to effect payroll reinstatement and accord
him free access to the union office so that his duties as
union officer will not be impaired.9
The petitioner wrote the SOLE of its decision to implement its
retrenchment program to stem its huge losses. On November 5,
1990, the petitioner disseminated a circular to all the employees,
informing them that the personnel plantilla would be decreased
by two hundred employees to be implemented on a staggered
and "last in, first out" basis. It terminated the employment of
sixty employees and two officers of the respondent union
effective December 6, 1990. Moreover, the said employees,
including the two union officers, were immediately barred from
working. On November 7, 1990, the respondent union protested
the actions of the petitioner invoking Section 15, Article VI of the
CBA. The respondent union filed an urgent motion for a
reconsideration by the SOLE of the Certification Order dated
October 31, 1990. On November 14, 1990, the petitioner
terminated the employment of eighty-six more employees
effective December 14, 1990. The remaining employees were
also informed that it will close in six months. On November 14,
1990, the petitioner terminated the employment of Kristoffer
So, effective December 14, 1990.
By way of riposte, the respondent union filed on November 16,
1990 another notice of strike because of what it perceived as the
petitioner's continuing unfair labor practices (ULP). On the same
day, at about 12:00 noon, the officers of the respondent union
and some members staged a picket in the premises of the hotel,
obstructing the free ingress and egress thereto. At 3:00 p.m.,
the police operatives of the Western Police District arrived and
dispersed the picket line. Police officers detained the respondent
union's president Rogelio Soluta, Henry Baybay and Dennis
Cosico. On November 17, 1990, the petitioner sent identical
letters to the officers and members of the respondent union
terminating their employment effective that day on the following
grounds:
Management found that you have willingly and
knowingly participated in the illegal strike and concerted
activity which was staged against the Hotel beginning
on 16 November 1990. Management also found that you
have, singly and collectively with others, committed
illegal acts in the course of the said illegal strike such
as, among others, obstructing the free ingress and
egress to and from the hotel's premises.
In addition, Management has determined that you have
grossly and glaringly violated existing company rules on
peace and order such as, Rule V, and on promotion of
goodwill such as Rule IV of the Company Rules. Worse,
you have violated the Company Rule against
abandonment of work under Rule VII, thus, adversely
affecting the hotel operations.
Your foregoing acts are not only serious violations of the
law but also constitute grave misconduct and blatant
disregard of company rules, any or all of which, justify
your dismissal from the company.
In view of the foregoing, notice is hereby given upon
you that effective today, 17 November 1990, your
employment with the company is terminated for cause. 10
On November 28, 1990, the SOLE issued an order certifying the
labor dispute to the NLRC for consolidation with the previously
certified case (Certified Case No. NCMB-NCR-NS-09-807-90). The
SOLE issued a return-to-work order, excluding those who were
retrenched, and enjoined all parties from committing any act
that would aggravate the already tense situation. The SOLE
further stated that the validity and propriety of the retrenchment
program of the petitioner should be ventilated before and
resolved by the NLRC. The SOLE denied the respondent union's
motion to reconsider its October 31, 1990 Cease and Desist
Order, thus:
WHEREFORE, PREMISES CONSIDERED, and pursuant to
Article 263 (g) of the Labor Code, as amended, this
Office hereby certifies the instant labor dispute at the
Company to the National Labor Relations Commission
for consolidation with Certified Case No. NCMB-NCR-NS-
09-807-90.
Accordingly, all striking employees including those who
were terminated for participation in the alleged illegal
strike, but excluding those workers affected by the
retrenchment program, are directed to return to work
within twenty-four (24) hours from receipt hereof and
for the Company to accept them under the same terms
and conditions of employment prevailing prior to the
work stoppage.
 The validity and propriety of the Company's
retrenchment program shall be ventilated and
adjudicated by the NLRC.
The directive for the parties to cease and desist from
committing any act that will aggravate the situation is
hereby reiterated.
The union's Motion for Reconsideration is hereby
denied.
Finally, the Superintendent of the Western Police District
is hereby deputized to assist in the orderly and peaceful
implementation of this Order.11
In his order, the SOLE made the succinct observation that both
the petitioner and the respondent union were to blame for the
current labor conflict:
. . . From the series of events that occurred from the
time this Office issued the Order on 31 October 1990 up
to the declaration of the strike, it is very apparent that
several acts were committed by both parties that caused
the further deterioration of their relationship despite this
Office's admonition to desist from engaging in ay ( sic)
form of lockout or strike, whether actual or intended.
Likewise, it is also very obvious that the current labor
conflict is deeply rooted in an ( sic) intertwined with the
earlier dispute on account of the nature of the acts
committed by both parties. Unfair labor practices, by its
nature, could be committed through series of continuing
acts, and allegations of commission of unfair labor
practice acts should be ventilated in the forum earlier
tasked to resolve the dispute at the Company.12
The respondent officers and members complied with the order of
the SOLE and returned to work. On January 15, 1991, the SOLE
issued an order for the reinstatement of the thirty-five dismissed
employees with full backwages.
On February 1, 1991, the petitioner filed a complaint 13 with the
Regional Arbitration Office of the NLRC for illegal strike against
the union, its members and officers, namely: Rogelio M. Soluta,
Elmer C. Labor, Joselito A. Santos, Florentino P. Matilla, Edna B.
Dacanay, Henry N. Babay, Ray Antonio E. Rosaura, Dennis C.
Cosico, Vicente M. Delola, Irene B. Ragay, Apolonio Bondoc, Jr.,
Quintos B. Barra, Alfredo S. Bautista, Richard T. Galigo, John
Does and Jane Does. The petitioner alleged inter alia that the
union members and officers staged a strike on November 16,
1990 which lasted until November 29, 1990 without complying
with the requirements provided under Articles 263 and 264 of
the Labor Code. The petitioner alleged inter alia that:
1. The strike staged by the respondents from 16 to 29
November 1990 is illegal for failure of the strikers to
comply with the requirements provided for by law;
2. Individual respondents who are the union officers and
respondent John Does and Jane Does knowingly
participated in the commission of illegal acts during the
strike;
3. As a consequence of the illegal strike and concerted
activities by the respondents the company suffered
actual damages; and
4. Complainant Hotel was constrained to engage the
services of counsel and, therefore, should be paid
attorney's fees.14
It further alleged that the officers and members of the
respondent union blocked the main ingress to and egress from
the hotel.
The petitioner prayed that, after due proceedings, judgment be
rendered in its favor declaring the strike staged by the
respondent union illegal, that it be awarded damages, and that
the officers and members of the union who participated in the
strike be dismissed from their employment.
The respondents denied the material allegations of the complaint
and alleged that the petitioner committed unfair labor practices
prior to the filing of the November 16, 1990 notice of strike.
Hence, there was no need for the respondent union to comply
with Articles 263 and 264 of the Labor Code, as the notice filed
by the union on September 27, 1990 was sufficient compliance
with the law. The view posited by the respondent union was
summarized by its president Rogelio M. Soluta in his affidavit:
a. after the execution of the CBA on June 15, 1990 he
wrote on August 22, 1990 the company protesting its
violations [Exh. 8];
b. on September 13, 1990 their union wrote the
Secretary of Labor and Employment praying that the
company be cited in contempt for violation of his May
23, 1990 order [Exh. 10] which enjoined the parties
from engaging in strike or lockout [Exh. 7].
c. on September 27, 1990 the union filed a notice of
strike on grounds of unfair labor practices as
enumerated in par. 19 of Soluta's affidavit, acting on
which the Secretary of Labor certified the labor dispute
to the NLRC for compulsory arbitration and enjoining
any strike or lockout-again  [Exh. 16]. In violation of said
order, the company on November 5, 1990 issued a
circular to all employees that it will decrease its
personnel plantilla by 200 employees [Exh. 17] and on
November 6, 1990 it again issued a memorandum
terminating 60 employees including 2 union officers,
while effective still December 6, 1990 were not allowed
to work already on November 6, 1990, to which the
union on November 7, 1990 protested invoking Sec. 15,
Art. VI, 2nd par. of the CBA, only to be confirmed by the
Hotel in a letter that it will undertake a retrenchment of
200 employees [Exh. 19]. Union president Soluta sought
for a dialogue with the management but he was only
insulted and rebuffed by the Hotel when it issued a
memorandum terminating 86 employees effective
December 14, 1990 [Exh. 20] and not satisfied, the
Hotel's Executive Vice-President issued a memorandum
to all department heads that the Hotel will close for a
period of six months. [Exh. 21] (Emphasis ours, Record,
pp. 396-397)15
The respondent union and its officers filed on October 14, 1991
a motion to suspend the proceedings, alleging inter alia that:
8. In the determination of the validity or legality of a
strike, three (3) essential factors are to consider:
a) The purpose or objective of the strike;
b) The means employed;
c) Compliance with the requirements of the law
provided for under Article 263 of the Labor
Code of the Philippines, as amended.16
On February 12, 1992, Labor Arbiter Cornelio L. Linsangan
rendered a decision in favor of the petitioner, the decretal
portion of which reads:
WHEREFORE, finding the respondents guilty of illegal
strike as charged, judgment is hereby rendered
declaring the union officers to have lost and forfeited
their employment.17
The Labor Arbiter, although sympathetic with the respondent
union, held that for the latter's failure to comply with the
requirements laid down in Articles 263 and 264 of the Labor
Code, the strike that was staged on November 16, 1990 up to
November 29, 1990 was illegal. Considering the admissions of
the individual respondents that they participated in the said
strike, the termination of their employment by the petitioner was
legal. The Labor Arbiter noted that if as alleged by the
respondent union the petitioner was guilty of ULP, it should have
filed a complaint therefor against the petitioner and/or its
officials for which the latter could have been meted penal and
administrative sanctions as provided for in Article 272 of the
Labor Code. The respondent union failed to do so.
When the petitioner learned of the decision of the Labor Arbiter
on February 14, 1992, it forthwith barred the officers and
members of the respondent union from entering the hotel. On
February 22, 1992, the SOLE ordered the petitioner to accept the
dismissed officers and employees, but the petitioner refused. On
February 27, 1992, the officers of the union filed a very urgent
petition for the issuance of a writ of preliminary injunction
Against the petitioner under Article 218 (e) of the Labor Code.
On March 11, 1992, the NLRC issued a minute resolution in favor
of the officers/employees ordering the petitioner to reinstate
them. The petitioner filed a motion for reconsideration of the
said resolution but the said motion was denied. The petitioner
forthwith filed with this Court on March 11, 1992 a petition for
certiorari and prohibition against the respondent union and its
officers for the nullification of the said resolution. 18
In the meantime, the respondent union and the individual
respondents therein interposed an appeal from the decision of
the Labor Arbiter to the NLRC. The respondent union pointed out
in its appeal that it had complied with the requirements laid
down in Articles 263 and 264 of the Labor Code because its
November 16, 1990 notice of strike was a mere reiteration of its
September 27, 1990 notice of strike, which, in turn, complied
with all the requirements of the aforementioned articles, i.e., the
cooling-off period, the strike ban, the strike vote and the strike
vote report:
9. As above shown it is not disputed that the union filed
a notice of strike on September 27, 1990  [Exh. 12]; par.
5 (c) and for this purpose, the union conducted a strike
vote referendum and informed the Department of Labor
of the result of the strike vote, acting on which said
office issued its order of October 31, 1990 certifying the
labor dispute to the Honorable Commission for
compulsory arbitration and enjoining the parties from
going on strike lockout [same par.; Exh. 16]. But then
despite said order the Hotel intended to decrease its
plantilla by 200 employees [Exh. 17]; terminated 60
employees, including 2 union officers, despite the
vehement protests from the union; also terminating on
November 14, 1990, 86 employees effective December
14, 1990 [Exh. 20] and to put fear upon the union
members, circularized that the Hotel will close for a
period of six months. So at this point in time, November
14, 1990 their notice of strike of September 27, 1990
[Exh. 12] has not been withdrawn nor resolved one way
or another such that notice 'continued then as a
warning that anyday (sic) after' the 15-day cooling-off
period a strike impends (Morabe, The Law on Strikes,
1962 First Ed. p. 187) as it happened on November 16,
1990. The notice of strike filed on this date is a mere
reiteration of that earlier notice of strike of September
27, 1990. Thus Union President Soluta declared in his
affidavit:
"36. The requirements of the law relative to the
Notice of Strike filed on September 27, 1990
having been complied with, the union declared
a strike against the company on November 16,
1990 based on grounds stated in the Notice of
Strike filed on September 27, 1990."19
On August 4, 1993, this Court rendered a Decision in G.R. No.
104513 granting the petition and annulling the Resolution of the
NLRC dated March 11, 1992.20
Shortly thereafter, on September 30, 1993, the NLRC rendered a
decision affirming the decision of the labor arbiter, the decretal
portion of which reads:
WHEREFORE, the respondents' appeal is hereby
dismissed. The complainant Hotel is however urged, on
humanitarian consideration, to pay the respondents a
financial assistance computed at one month pay for
every year of service.21
The NLRC ratiocinated that the compliance by therein
respondents of the requirements laid down in Articles 263 and
264 of the Labor Code respecting the September 27, 1990 notice
of strike filed by the union cannot be carried over to the
November 16, 1990 notice of strike. Resultantly, for failure of the
union to comply with the aforementioned requirements for its
November 16, 1990 notice of strike, the strike staged on
November 16 up to November 29, 1990 was illegal. The NLRC
likewise cited the ruling of this Court in Union of Filipino
Employees v. Nestle Philippines, Inc. 22 However, the NLRC
appealed to the petitioner to grant separation pay to the
members/officers of the respondent union who joined the strike
in this language:
This notwithstanding, we have deliberated on the
question of whether or not the complainants should
 receive financial assistance. And while we are
unanimously inclined to grant all the respondents
separation pay equivalent to one month for every year
of service, we however are so intimidated by the ruling
of the Supreme Court in the case of Benito D. Chua v.
NLRC (G.R. No. 105775, February 8, 1993, 2nd Div.,
Feliciano, J.) where, despite the company's willingness
to pay financial assistance to complainant who was
found guilty of participating in an illegal strike at Nestle
Philippines, the Supreme Court deleted the NLRC's
award thereon. And, taking cue from the Supreme Court
ruling that the company is not precluded from "making a
grant on a voluntary ex gratia basis' (but not through an
award from this Commission) we appeal to the
complainant company that such a financial assistance,
for humanitarian reasons, be extended all the
respondents whose dismissals are hereby affirmed.23
The respondents filed a motion for reconsideration of the
decision but the NLRC issued an Order dated November 16, 1994
denying the same.24
Dissatisfied, the respondents filed a petition for certiorari under
Rule 65 before this Court docketed as G.R. No. 153664. Edna
Dacanay, another officer of the union, filed a similar petition
before this Court docketed as G.R. No. 153665. Upon motion of
the petitioner, the petitions were consolidated. Pursuant to the
ruling of this Court in St. Martin Funeral Homes v. NLRC ,25 the
petitions were remanded to the Court of Appeals (CA) and re-
docketed as CA-G.R. SP No. 53284 and CA-G.R. SP No. 53285,
respectively. On January 9, 2002, the CA rendered a decision
giving due course to and granting the petitions; and ordering the
remand of the case to the labor arbiter for the determination of
backwages due to the respondent officers under the said
decision. The decretal portion of the decision reads:
WHEREFORE, premises considered, the instant petitions
for certiorari are hereby GIVEN DUE COURSE and
GRANTED.
Consequently, the subject strike being LEGAL under the
prevailing circumstances then the DISMISSALS which
ensued by virtue of the assailed Decisions of Arbiter
Linsangan and respondent NLRC are UNJUSTIFIED and
WITHOUT LEGAL BASIS.
Resultantly, the dismissed petitioners are entitled to
reinstatement, if this is feasible, otherwise to separation
pay and backwages plus disturbance compensation of
P10,000.00 each, moral damages of P50,000.00 each
and exemplary damages of another P10,000.00 each.
On the strength of the Supreme Court ruling in Serrano
vs. NLRC, et al. (G.R. No. 117040, January 27, 2000),
except for the backwages and the separation pays
which would be determined by the LABOR ARBITER, the
Grand Boulevard Hotel, formerly known as Silahis
International Hotel, Inc., is ORDERED to pay
immediately the disturbance compensation, moral and
exemplary damages.
Upon finality hereof, lest it be forgotten that justice
delayed is justice denied, the subject petitions should be
REMANDED with dispatch to the Labor Arbiter for
immediate computation and payment of backwages and
separation pay due to petitioners. 26
In reversing the decisions of the NLRC and the Labor Arbiter, the
CA took into account the observation of the Solicitor General that
the petitioner (Silahis) retrenched employees pending the
resolution of the certified cases respecting the alleged illegal
suspension and dismissals effected by the petitioner during and
prior to the notices of strike filed by the union. The Solicitor
General opined that even if the strike was staged without the
proper notice and compliance with the cooling-off period, resort
thereto was simply triggered by the petitioners' belief in good
faith that respondent Silahis was engaged in ULP. 27 The CA cited
the Order of the SOLE dated November 28, 1990 and the rulings
of this Court in Bacus v. Ople;28 Bisig ng Manggagawa Sa
Concrete Aggregates, Inc. v. NLRC ;29 and Silahis International
Hotel, Inc. v. NLRC.30
Dissatisfied, the petitioner filed a motion for reconsideration of
the said decision. On May 27, 2002, the CA issued a resolution
denying the said motion.31
In its petition at bar, the petitioner assails the decision and
resolution of the CA and prays for the reversal thereof,
contending that:
I. The findings of fact of the Court of Appeals,
particularly those with respect to the unfair labor
practice of petitioner Hotel were not supported by the
real facts and circumstances attendant to the instant
case.
II. The Court of Appeals' finding of legality of the
union's strike was a clear disregard of the requirements
for a legal and valid strike as prescribed by law and
jurisprudence.32
Private respondent Dacanay, in her comment on the petition in
G.R. No. 153665, alleges that the retrenchment program of the
petitioner was without basis. The strike staged by the
respondent union was sanctioned by its officers, and was not a
wildcat strike. The requirements provided for in Articles 263 and
264 of the Labor Code had been complied with; the issues posed
by the petitioner are factual; hence, not proper in a court
petition. The petition should thus be dismissed and the decision
of the CA affirmed.
The respondent union, for its part, argues that the strike staged
on November 16, 1990 was lawful, considering the unfounded
and illegal retrenchment undertaken by the petitioner and the
unfair labor practices committed by the petitioner during the
pendency of the resolution of the certification cases. The
petitioner failed to show that the CA committed a grave abuse of
its discretion amounting to excess or lack of jurisdiction in
reversing the decisions of the Labor Arbiter and NLRC.
The respondent union likewise expostulated that the certificate
of non-forum shopping embedded in the petition is defective
because Jose Ma. Nuñez, who executed the certification, was not
authorized by board resolution to specifically file the instant
petition. The private respondent likewise asserted that the
petition should not be given due course for failure of the
petitioner to attach copies of relevant pleadings filed by the
parties before the Labor Arbiter and the NLRC.
The issues submitted for resolution are two-fold, namely: (1)
PROCEDURAL, to wit: (a) whether or not the certificate of non-
forum shopping is defective, and (b) whether or not the petition
is insufficient in form for failure of the petitioner to attach
relevant pleadings that form part of the decision; and (2)
SUBSTANTIVE, to wit: (a) whether or not the strike staged by
the respondent union on November 16 up to 29, 1990 is legal,
and (b) whether or not the dismissals of the private respondents
officers of the respondent union as a consequence of the strike
on November 16 to 29, 1990 are valid.
On the Procedural Issues
The respondents (except respondent Edna Dacanay) aver that
the certification of non-forum shopping embedded in the
resolution of the Board of Directors failed to specifically authorize
Jose Ma. Nuñez to file the petition at bar for and in behalf of the
petitioner. A reading of the comment of the said respondents
reveals that they do not assail the sufficiency of the certification
of non-forum shopping submitted by the petitioner; rather, they
aver that the resolution of the Board of Directors of the
petitioner appended to the petition does not specifically
authorize Jose Ma. Nuñez to file the petition at bar for and in its
behalf.
We do not agree. The resolution adverted to by the respondents
reads:
RESOLVED, That the Board of Directors of Grand
Boulevard Hotel hereby authorize Mr. Jose Ma. Nuñez to
do any and all of the following acts: 1. to cause the
filing of the proper legal actions, cases, proceedings in
the appropriate court; 2. to represent the Corporation in
any capacity in all suits of whatever kind and nature
brought for or against it and empowering him to engage
the services of counsel as it deems fit; and 3. to sign for
and verify as well as authenticate such petition,
pleadings, documents, record and other papers
necessary in the successful prosecution of such suits,
including the verification of such petitions and
pleadings.33
There is no doubt that the resolution of the Board of Directors is
broad enough as to authorize Jose Ma. Nuñez to file the petition
at bar for and in behalf of the petitioner.
Likewise, barren of merit is the respondents' contention that the
petition at bar should be denied due course for failure of the
petitioner to append to its petition copies of pleadings, such as
petitions, complaint, answer, resolutions, orders, and decisions
filed with the Labor Arbiter, the NLRC and the CA as required by
Section 4, Rule 45 of the Revised Rules of Court. What the rule
merely requires is for the petition to be accompanied by a clearly
legible and duplicate original or a certified true copy of the
judgment or final order or resolution of the court a quo and the
requisite number of plain copies thereof and such material
portions of the record as would support the petition. The said
rule does not require the petitioner to append copies of all
pleadings and decisions filed by the parties with the Labor
Arbiter, the NLRC and the CA. After all, under Section 7 of the
Rule, the Court may require the parties to file pleadings or other
documents as the Court deems necessary, and if the petition is
given due course, the Court may require the elevation of a
complete record of the case as provided for under Section 8 of
the Rule.
On the Substantive Issues
The petitioner contends that the CA erred in its ruling that the
petitioner committed (ULP) and acted oppressively against the
respondents; and in concluding that the strike staged by the
respondents on November 16, 1990 up to November 29, 1990
was legal, and the termination of employment of the
respondents officers unlawful. The CA likewise erred in finding
that even if the strike staged by the respondents on November
16 to 29, 1990 was defective, the same was cured when they
staged the strike in good faith in the light of the oppressive and
unfair labor practices of the petitioner.
A striker cannot invoke good faith where assumption orders of
the SOLE, which operate as an injunction against a prospective
strike, are disregarded. The respondents failed to prove that the
petitioner had committed any ULP on the respondents and its
employees. The testimony of respondent Rogelio Soluta and the
other officers of the respondent union before the Labor Arbiter
did not constitute sufficient proof of ULP. If the respondents
perceived that the petitioner committed ULP, the matter should
have been threshed out with the appropriate labor tribunal
(NLRC or CA). Instead, the respondents staged a strike. Thus,
the retrenchment by the petitioner of its employees was within
its prerogative and was necessitated by —
The years 1989 and 1990 were particularly harsh to
petitioner Hotel. Serious financial reverses were brought
about by the increase in operational costs and a marked
decline in its room occupancy rate. It was also at this
time that petitioner Hotel's business was threatened by
the emergence of more modern and refurbished hotels
in Metro Manila. It was in order to forestall the imminent
threat of a partial or a total closure of the business that
petitioner Hotel, after a thorough study and review of its
corporate structure and financial set-up, decided to
implement the retrenchment program. Certainly, the
employees were not unaware of this situation.34
The respondents assert that the issues posed by the petitioner in
its petition at bar involve questions of facts which are improper
in a petition for review on certiorari under Rule 45 of the Revised
Rules of Court. Under the said Rule, questions of facts should
not be raised in a petition for review. However, this rule admits
of exceptions, such as where the findings of facts of the Labor
Arbiter and the NLRC and those of the CA are contradictory;
when the conclusions of the CA are based on speculations,
surmises and conjectures; where the judgment of the CA is
premised on misapprehension of facts; or when the CA failed to
take into account and consider facts which if properly considered
would justify a different conclusion.
The CA did not commit any error in ruling that the petitioner was
guilty of ULP when it dismissed all the officers of the respondent
union despite the certificate orders of the SOLE and in defiance
of the said orders; and the respondents believed in good faith
that indeed the petitioner committed ULP which belief cured
whatever defects there may have been in the November 16 to
29, 1990 strike staged by the respondents. The findings of the
CA, and its conclusions anchored on the said findings are
supported by the evidence on record, thus:
In the case at bar, petitioners staged the strike because
of alleged unfair labor practices committed by
respondent Silahis, to wit, termination of two hundred
 (200) employees in the guise of retrenchment program,
despite the certification order of then Secretary Ruben
Torres (Order dated October 31, 1990) enjoining a
strike lockout. However, the Labor Arbiter and the
respondent NLRC did not rule on petitioners' claim of
unfair labor practices committed by respondent Silahis
but merely declared the strike illegal for not complying
with the required notice and cooling-off period and the
certification order. But whether or not the retrenchment
program was valid or not, is not material in this case.
The issue is whether or not there was warranted belief
in good faith on the part of petitioners that respondent
Silahis was then committing acts of unfair labor
practices.
It is established on record that on September 27, 1990,
petitioner Union filed a notice of strike against
respondent Silahis for harassment, arbitrary transfer of
employees and illegal dismissal and suspension.
Subsequently, respondent Silahis informed the Office of'
the Secretary of its plan to retrench on a staggered
basis one hundred seventy-one (171) least senior
employees over a period of sixty (60) days. On October
31, 1990, the Secretary certified the issues to the NLRC
for compulsory arbitration. The Order likewise enjoined
any strike or lockout, whether actual or intended.
On November 6, 1990, petitioner Union filed an Urgent
Motion for Reconsideration objecting to the certification
order. On even date, respondent Silahis informed the
Secretary about its decision to implement the
retrenchment program as previously stated. On account
of this action of respondent Silahis terminating the
services of some union officers and members, petitioner
union immediately filed a notice of strike on November
16, 1990 and on the same day stated an actual strike
(which strike lasted up to November 29, 1990).
On November 23, 1990, respondent Silahis further
effected the retrenchment of one hundred ten (110)
employees allegedly due to financial reverses and
seventy-two (72) additional workers due to their
participation in the strike.35
According to the respondents, the petitioner enforced its
retrenchment program at a time when there was an ongoing
dispute between the petitioner and the respondent union
regarding the dismissal and suspension of employees. This
engendered an honest belief on the part of the respondents that
the petitioner was indeed committing ULP which impelled them
to stage a strike to protect their basic rights.
The petition is meritorious.
The relevant provision of Article 263 of the Labor Code reads:
Article 263. . . . (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 Ministry 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 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.
...
(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 the 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 Ministry the voting at least
seven days before the intended strike or lock-out,
subject to the cooling-off period herein provided. 36
Under the aforequoted provisions, the requisites for a valid strike
are as follows: (a) a notice of strike fled with the DOLE thirty
days before the intended date thereof or fifteen days in case of
ULP; (b) strike vote 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; (c) notice given to
the DOLE of the results of the voting at least seven days before
the intended strike.37 The requisite seven-day period is intended
to give the DOLE an opportunity to verify whether the projected
strike really carries the approval of the majority of the union
members. The notice of strike and the cooling-off period were
intended to provide an opportunity for mediation and
conciliation. The requirements are mandatory and failure of a
union to comply therewith renders the strike illegal. 38 A strike
simultaneously with or immediately after a notice of strike will
render the requisite periods nugatory.
Moreover, a strike that is undertaken, despite the issuance by
the SOLE of an assumption or certification order, becomes a
prohibited activity and, thus, illegal pursuant to Article 264 of the
Labor Code of the Philippines, as amended. As this Court ruled
in Union of Filipro Employees v. Nestle Philippines, Inc .,39 under
Article 264(a) of the said code, once an assumption certification
order is issued by the SOLE, strikes are enjoined or if one has
already taken place, all strikers shall immediately return to work:
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) (sic) 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.40
In this case, the respondent union filed its notice of strike with
the DOLE on November 16, 1990 and on the same day, staged a
picket on the premises of the hotel, in violation of the law. Police
operatives of the Western Police District had to disperse the
picketers and take into custody Union President Rogelio Soluta
and the other officers of respondent union, Henry Babay and
Dennis Cosico. The respondents cannot argue that since the
notice of strike on November 16, 1990 were for the same
grounds as those contained in their notice of strike on
September 27, 1990 which complied with the requirements of
the law on the cooling-off period, strike ban, strike vote and
strike vote report, the strike staged by them on November 16,
1990 was lawful. The matters contained in the notice of strike of
September 27, 1990 had already been taken cognizance of by
the SOLE when he issued on October 31, 1990 a status quo ante
bellum order enjoining the respondent union from intending or
staging a strike. Despite the SOLE order, the respondent union
nevertheless staged a strike on November 16, 1990
simultaneously with its notice of strike, thus violating Article
264(a) of the Labor Code of the Philippines, as amended, which
reads:
Art. 264. . . .
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 arbitration or during the pendency of cases
involving the same grounds for the strike or lockout.
While it may be true that the petitioner itself barred the officers
of the respondent union from working and had terminated the
employment of Kristoffer So, and sent out circulars of its decision
to retrench its employees effective December 16, 1990, the
same were not valid justifications for the respondents to do
away with the statutory procedural requirements for a lawful
strike. It behooved the respondents to avail themselves of the
remedies under the CBA or file an illegal dismissal case in the
office of the Labor Arbiter against the petitioner or by agreement
of the parties, submit the case to the grievance machinery of the
CBA so that the matter may be subjected to voluntary arbitrary
proceedings instead of resorting to an immediate strike. 41 There
was no immediate and imperative need for the respondents to
stage a strike on the very day that the notice of strike on
November 16, 1990 was filed because the retrenchment
envisaged by the petitioner had yet to take effect on December
14, 1990. The grievances of the respondent union could still very
well be ordered and acted upon by the SOLE before December
14, 1990.
The respondents' claim of good faith is not a valid excuse to
dispense with the procedural steps for a lawful strike. As this
Court held in National Federation of Labor v. NLRC:42
Arguing that despite its failure to comply with the
statutory requirements necessary for a valid strike, NFL
asserts that the same can be declared legal for it was
done in good faith, citing the cases of People's
Industrial and Commercial Employees and Workers
Organization (FFW) v. People's Industrial and
Commercial Corp. and Philippine Metal Foundries, Inc.
v. Court of Industrial Relations. The reliance is
misplaced. People's Industrial did not rule that the
procedural steps can be dispensed with even if the
union believed in good faith that the company was
committing an unfair labor practice. While, it is true
that Philippine Metal held that a strike cannot be
declared as illegal for lack of notice, however, it is
important to note that said case was decided in 1979. At
this juncture, it must be stressed that with the
enactment of Republic Act No. 6715 which took effect
on March 21, 1989, the rule now is that such
requirements as the filing of a notice of strike, strike
vote, and notice given to the Department of Labor are
mandatory in nature.
Thus, even if the union acted in good faith in the belief
that the company was committing an unfair labor
practice, if no notice of strike and a strike vote were
conducted, the said strike is illegal.
In Lapanday Workers Union v. NLRC43 we held that a strike is the
most preeminent of the economic weapons of workers which
they unsheathe to force management to agree to an equitable
sharing of the joint product of labor and capital. But we also
emphasized that strikes exert some disquieting effects not only
on the relationship between labor and management, but also on
the general peace and progress of society, not to mention the
economic well-being of the State. It is a weapon that can either
breathe life to or destroy the union and members in their
struggle with management for a more equitable due of their
labors. Hence, the decision to wield the weapon of strike must
therefore rest on a rational basis, free from emotionalism,
unswayed by the tempers and tantrums of a few hotheads, and
firmly focused on the legitimate interest of the union which
should not however be antithetical to the public welfare. In
every strike staged by a union, the general peace and progress
of society and public welfare are involved. Indeed, in his Order
dated October 31, 1990, the SOLE stated:
"The Company is one of the biggest hotels in the
country and contributes substantially to the tourism
industry. It is recognized as one of the major sources of
foreign exchange earnings of the country, housing a
government-owned and controlled income generating
agency financing vital development projects of the
government. Clearly, the threatened work stoppage will
result in huge financial losses not only to the hotel but
likewise the country. The ongoing development
projects of the government will be severely jeopardized
and the economic recovery program of the government
will be unduly hampered. Moreover, the security of
employment of the more or less seven hundred (700)
employees is in grave state not to mention other
workers who are equally dependent on the continuous
operations of the Company."
These considerations have in the past guided this Office
in consistently exercising its powers under Article 263(g)
 of the Labor Code, as amended, in addressing and
handling labor disputes in the hotel industry. 44

Hence, the need for a union to adhere to and comply strictly

with the procedural conditions sine qua non provided for by the
law in staging a strike.

IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED.

The Decision of the Court of Appeals in CA-G.R. SP No.
5328445 and its Resolution in the same case Annex "B" of the
petition are REVERSED AND SET ASIDE. The Decision of the
Labor Arbiter46 is REINSTATED.

Costs against the respondents.

SO ORDERED.

Bellosillo, Austria-Martinez and Tinga, JJ.,  concur.

Quisumbing, J., on official leave.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 120505 March 25, 1999
ASSOCIATION OF INDEPENDENT UNIONS IN THE
PHILIPPINES (AIUP), JOEL DENSING, HENEDINO
MIRAFUENTES, CHRISTOPHER PATENTES, AND ANDRES
TEJANA, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC),
CENAPRO CHEMICAL CORPORATION and/or GO SING
CHAN in his capacity as Managing Director, respondents.
PURISMA, J.:
The Petition for review on Certiorari at bar seeks to reinstate the
Decision 1 of the Labor Arbiter insofar as it ordered the
reinstatement and payment of backwages of the four petitioners
herein. The said decision was affirmed 2 in toto by the NLRC. On
February 21, 1995, however, upon motion for reconsideration of
the respondent company, the NLRC came out with a
Resolution 3 modifying its decision, by deleting therefrom the
award of backwages, ordering payment of separation pay in lieu
of reinstatement, and declaring the loss of employment status of
petitioner Joel Densing.
The antecedent facts are as follows:
Joel Densing, Henedino Mirafuentes, Christopher Patentes, and
Andres Tejana, the petitioners herein, were casual employees of
respondent CENAPRO Chemicals Corporation. In the said
company, the collective bargaining representative of all rank and
file employees was CENAPRO Employees Association (CCEA),
with which respondent company had a collective bargaining
agreement (CBA). Their CBA excluded casual employees from
membership in the incumbent union. The casual employees who
have rendered at least one to six years of service sought
regularization of their employment. When their demand was
denied, they formed themselves into an organization and
affiliated with the Association of Independent unions in the
Philippines (AIUP). Thereafter, AIUP filed a petition for
certification election, which petition was opposed by the
respondent company. The CCEA anchored its opposition on the
contract bar rule.
On May 4 and July 3 1990, the union filed a notice of strike,
minutes of strike vote, and the needed documentation, with the
Department of Labor and Employment. The notice of strike cited
as grounds therefor the acts of respondent company constituting
unfair labor practice, more specifically coercion of employees and
systematic union busting.
On July 23, 1992, the union proceeded to stage a strike, in the
course of which, the union perpetrated illegal acts. The strikers
padlocked the gate of the company. The areas fronting the gate
of the company were barricaded and blocked by union strikers.
The strikers also prevented and coerced other non-striking
employees from reporting for work. Because of such illegal
activities, the respondent company filed a petition for injunction
with the NLRC, which granted a Temporary Restraining Order
(TRO), enjoining the strikers from doing further acts of violence,
coercion, or intimidation and from blocking fee ingress and
egress to the company premises.
Subsequently, or on July 25, 1990, to be precise, the respondent
company filed a complaint for illegal strike. The day before, July
24, 1990, petitioners filed a complaint for unfair labor practice
and illegal lockout against the respondent company.
In a consolidated Decision, dated September 10, 1993, the Labor
Arbiter declares illegal the strike staged by the petitioners, and
dismissed the charge of illegal lockout and unfair labor practice.
The dispositive portion of the Labor Arbiter's decision was to the
following effect:
WHEREFORE, premises considered, judgment is
hereby rendered finding the strike illegal and as
a consequence thereto, the officers who
participated in the illegal strike namely: Oscar
Enicio, Jaime dela Piedra, Lino Isidro, Ariel
Jorda, and Jose Catnubay are declared to have
lost their employment status. CENAPRO is
directed however to reinstate the other
workers, except Ireneo Sagaral, Artemio
Guinto, Ruben Tulod, Marcelo M. Matura,
Gilbert Holdilla, Cesar Buntol, Rey Siarot, Lucio
Nuneza, Jose Basco, Gervacio Baldespinosa, Jr.,
Cresecente Buntol, Dennis Pepito, Florencio
Pepito, Edwin Ramayrat, Daniel Canete, and
Vivencio Sinadjan who executed quitclaims in
favor of CENAPRO and cenapro is being
absolved from the charges of illegal lockout and
unfair labor practice.
SO ORDERED. 4
In short, five (5) union officers were declared to have lost their
employment status, fifteen (15) union members were not
reinstated because they executed quit claims in favor of the
respondent company, and six (6) workers, Rosalito Bantulan,
Edward Regner, Joel Densing, Henedino Mirafuentes,
Christopher Patentes, and Andres Tejana, ordered to be
reinstated.
On October 8, 1993, the Labor Arbiter issued an Order excluding
Rosalito Bantulan and Edward Regner from the list of those to be
reinstated and to be paid backwages. The remaining four (4)
workers, Joel Densing, Henedino Mirafuentes, Christopher
Patentes, and Andres Tejana, are the petitioners here.
On October 5, 1993, the respondent company appealed the
aforesaid decision insofar as it ordered the reinstatement of
some of the strikers.
On October 7, 1993, the petitioners also appealed the same
decision of the Labor Arbiter.
Pending resolution of the said appeals, petitioner AUIP filed with
the Labor Arbiter a Motion for Execution of the Labor Arbiter's
Decision directing reinstatement of some of its members. The
motion was granted in the Order dated October 15, 1993.
On December 7, 1993, respondent company presented
Manifestation/Motion praying that instead of reinstatement. it be
allowed to pay separation pay petitioners.
On December 16, 1993, petitioners presented a motion for
payroll reinstatement, which motion was opposed by the
respondent company, alleging mainly that the circumstances of
the case have strained the relationship of the parties herein,
rendering their reinstatement unwise and inappropriate. But
such opposition was overruled by the Labor Arbiter. In his Order
of March 23, 1994, the same Labor Arbiter issued a second writ
of execution directing actual, if not payroll reinstatement of the
strikers.
On April 6, 1994, respondent company appealed the second
order for the reinstatement of the strikers, placing reliance on
the same grounds raised in support of its first appeal.
In its Decision dated August 15, 1994, the NLRC affirmed
in toto the Labor Arbiter's decision, dismissed both the appeal of
private respondent and that of petitioners, and reiterated the
Labor Arbiter's Order for the reinstatement of the herein
petitioners, Joel Densing, Henedino Mirafuentes, Christopher
Patentes, and Andres Tejana. The said decision disposed and
directed as follows:
WHEREFORE, premises considered, these
appeals are DISMISSED, and the decision of the
Labor Arbiter is AFFIRMED in its entirety.
Appellant Cenapro Chemical Corporation is
hereby ordered to immediately comply with the
Labor Arbiter's Order dated March 23, 1994 and
to release the salaries of four (4) appellant-
workers namely Joel Densing, Henedino
Mirafuentes, Christopher Patentes, and Andres
Tejana from October 15, 1993 and continue
paying them up to the time this decision has
become final and executory, less earning
earned elsewhere.
SO ORDERED.5
Respondent company moved for reconsideration of that portion
of the NLRC's decision ordering the reinstatement of the said
strikers.
Acting thereupon, the NLRC modified its Decision of August 15,
1994, by ordering the payment of separation pay in lieu of the
reinstatement of the petitioners, deleting the award of
backwages, and declaring the loss of employment status of Joel
Densing. The dispositive portion of the Amendatory Resolution,
ruled thus:
WHEREFORE, the decision of the Commission
promulgated on August 15, 1994 is hereby
MODIFIED. In view of reinstatement to
complainants Henedino Mirafuentes,
Christopher Patentes, and Andres Tejana,
appellant-movant CENAPRO Chemicals
corporation is directed to pay them amount
equivalent to one (1) month pay for every year
of service and without backwages. As regards
Joel Densing, he is declared to have lost his
employment status.
SO ORDERED. 6
Hence, the present petition, theorizing that respondent NLRC
acted with grave abuse of discretion amounting to lack or excess
of jurisdiction in:
1) Entertaining the 6 April 1994 (the first appeal dated 5 October
1993) which was based on similar grounds.
2) Reversing its earlier Resolution of the first appeal
promulgated 15 August 1994 by way of another contradictory
and baseless ruling promulgated on 21 February 1995.
3) Depriving Henedino Mirafuentes, Christopher Patentes, and
Andres Tejana of their right to reinstatement and backwages;
and
4) Depriving Joel Densing of his right to reinstatement or
separation pay with backwages.
It is decisively clear that although the grounds invoked in the
two appeals were the same, the said appeals were the same, the
said appeals were separate and distinct remedies. Filed on
October 5, 1993, the first appeal was from the decision of Labor
Arbiter Nicasio Aninon, dated September 10, 1993, seeking loss
of employment status of all the union members who participated
in the illegal strike. The second appeal, dated April 6, 1994, was,
in effect, an opposition to the second writ of execution issued on
March 23, 1994. The second writ pertained to the order to effect
immediate actual or payroll reinstatement of the four petitioners
herein. The said appeals were acted upon separately by the
NLRC, which did not act with grave abuse of discretion in
entertaining such appeals.
When they filed the notice of strike, petitioners cited as their
grounds therefor unfair labor practice, specifically coercion of
employees and systematic union busting. But the said grounds
wee adjudged as baseless by the Labor Arbiter. The court quotes
with approval the following findings of Labor Arbiter Aninon, to
wit:
. . . In fact, in the undated Joint Affidavit of
Oscar Enecio, Edgardo Regner, Christopher
Patentes, Edgar Sanchez, Ariel Jorda, Jaime
dela Piedra, the workers stated that what they
considered as harassments and insults are
those when they were scolded for little
mistakes and memoranda for tardiness. These
acts, if really committed cannot be considered
as harassment and insults but were ordinary
acts which employers have to do as part of
their administrative supervision over their
employees. Moreover, Oscar Enecio's testimony
that some of his fellow union members like
vice-president Jaime dela Piedra, Christopher
Patentes and Henodino Mirafuentes, were also
harass when they were made to work another
 eight (8) hours after their tour of duty deserves
scant consideration not only because it is
uncorroborated but he could not even give the
dates when these workers were made to work
for sixteen (16) hours, how many instances
these happened and whether or not the
workers have actually worked. 7
The court discerns no basis for altering the aforesaid findings
which have been affirmed by the NLRC.
The court is not persuaded by petitioners' allegation of union
busting. The NLRC correctly ruled that the strike staged by
petitioners was in the nature of a union-recognition-strike. A
union-recognition-strike, as its legal designation implies, is
calculated to compel the employer to recognize one's union, and
not the other contending group, as the employees' bargaining
representative to work out a collective bargaining agreement
despite the striking union's doubtful majority status to merit
voluntary recognition and lack of formal certification as the
exclusive representative in the bargaining unit. It is undisputed
that at the time the petition for certification election was filed by
AUIP, petitioner union, there was an existing CBA between the
respondent company and CCEA, the incumbent bargaining
representative of all rank and file employees. The petition should
have not been entertained because of the contract bar rule.
When a collective bargaining agreement has been duly
registered in accordance with Article 231 of the Labor Code, a
petition for certification election or motion for intervention may
be entertained only within sixty (60) days prior to the expiry date
of the said agreement. 8 Outside the said period, as in the
present case, the petition for certification election or motion for
intervention cannot be allowed. Hence, the conclusion that the
respondent company did not commit the alleged union busting.
From the gamut of evidence on hand, it can be gathered that
the strike staged by the petitioner union was illegal for reasons,
that:
1) The strikers committed illegal acts in the course of the strike.
They formed human barricades to block the road, prevented the
passage of the respondent company's truck, padlocked the
company's gate, and prevented co-workers from entering the
company premises. 9
2) And violated the Temporary Restraining Order
(TRO) 10 enjoining the union and/or its members from
obstructing the company premises, and ordering the removal
therefrom of all the barricades.
A strike is a legitimate weapon in the universal struggle for
existence. 11 It is considered as the most effective weapon in
protecting the rights of the employees to improve the terms and
conditions of their employment. 12 But to be valid, a strike must
be pursued within legal bounds. The right to strike as a means
for the attainment of social justice is never meant to oppress or
destroy the employer. The law provides limits for its exercise.
Among such limits are the prohibited activities under Article 264
of the Labor Code, particularly paragraph (e), which states that
no person engaged in picketing shall:
a) commit any act of violence, coercion, or intimidation or
b) obstruct the free ingress to or egress from the employer's
premises for lawful purposes or
c) obstruct public thoroughfares.
Even if the strike is valid because its objective or purpose is
lawful, the strike may still be declared invalid where the means
employed are illegal. For instance, the strike was considered
illegal as the "strikers formed a human cordon along the side of
the Sta. Ana wharf and blocked all the ways and approaches to
the launches and vessels of Petitioners". 13
It follows therefore that the dismissal of the officers of the
striking union was justified and valid. Their dismissal as a
consequence of the illegality of the strike staged by them finds
support in Article 264 (a) of the Labor Code, pertinent portion of
which provides: " . . Any union officer who knowingly
participates in an illegal strike and any . . union officer who
knowingly participates in the commission of illegal acts during a
strike may be declared to have lost his employment status. . ."
Union officers are duty bound to guide their members to respect
the law. If instead of doing so, the officers urge the members to
violate the law and defy the duly constituted authorities, their
dismissal from the service is a just penalty or sanction for their
unlawful acts. The officers' responsibility is greater than that of
the members. 14
The court finds merit in the finding by the Labor Arbiter and the
NLRC that the respondent company committed no illegal lockout.
Lockout means temporary refusal of the employer to furnish
work as a result of an industrial or labor dispute. 15
As observed by the Labor Arbiter, it was the appellant-workers
who voluntarily stopped working because of their strike. In fact
the appellant workers admitted that non-striking workers who
wanted to return to work were allowed to do so. Their being
without work could not therefore be attributed to the employer's
refusal to give them work but rather, to the voluntary withdrawal
of their services in order to compel the company to recognize
their union. 16
The next aspect of the case to consider is the fate of the four
petitioners herein. Decisive on the matter is the pertinent
provision of Article 264 (a) of the Labor Code that: ". . any
worker . . who knowingly participates in the commission of illegal
acts during a strike may be declared to have lost his employment
status. . ." It can be gleaned unerringly from the aforecited
provision of law in point, however, that an ordinary striking
employee can not be terminated for mere participation in an
illegal strike. There must be proof that he committed illegal acts
during the strike 17 and the striker who participated in the
commission of illegal act must be identified. But proof beyond
reasonable doubt is not required. Substantial evidence available
under the attendant circumstances, which may justify the
imposition of the penalty of dismissal, may suffice.
In the landmark case of Ang Tibay vs. CIR, 18 the court ruled
"Not only must there be some evidence to support a finding or
conclusion, but the evidence must be "substantial". Substantial
evidence is more than a mere scintilla. It means such relevant
evidence that a reasonable mind might accept as sufficient to
support a conclusion."
Respondent company contends that sufficient testimonial,
documentary and real evidence, including the photographs
supposedly taken by a certain Mr. Ponce, were presented at the
arbitration level. It is argued that the said pictures best show the
participation of the strikers in the commission of illegal acts in
the course of the strike. In connection therewith, it is worthy to
point out the sole basis of the NLRC for declaring the loss of
employment status of petitioner Joel Densing, to wit:
ATTY. PINTOR:
Q: Now, Mr. Ponce, on page 1
of your affidavit, paragraph 4
thereof, you alleged that:
"While in the gate, I saw
several strikers of Cenapro
blocked its gate and prevented
the truck from proceeding to
its destination." Who were
these several workers you
referred to, in this affidavit of
yours?
WITNESS:
A. The strikers.
HON. LABOR ARBITER:
Q. Are you referring to the complainants in this case who are
now present?
WITNESS:
A. Yes sir, I am referring to AIU members.
HON, LABOR ARBITER:
Make it of record that the witness is referring to the five persons
inside the court namely: Rosalito Bentulan, Ariel Jorda, Ranulfo
Cabrestante, Jose Catnubay and Joel Densing. 19 (emphasis
supplied)
All things studiedly considered, the court is not convinced that
the quantum of proof on record hurdled the substantiality of
evidence test 20 to support a decision, a basic requirement in
administrative adjudication. If the said pictures exhibited before
the Labor Arbiter portrayed the herein petitioners performing
prohibited acts during the strike, why were these pictures not
exhibited for identification of petitioners? Petitioners could have
been identified in such pictures, if they were reflected therein, in
the same manner that the lawyer who examined Mr. Ponce,
asked witness Armamento to identify the Sheriff Mr. Leahmon
Tolo, thus:
ATTY. PINTOR:
Q I refer your attention Mr. Armamento to Exhibit "16". There is
a person here wearing a short sleeve barong tagalog. Can you
please tell the Honorable office if you will be able to identify this
person?
WITNESS:
A Yes, this is the Sheriff Mr. Leahmon Tolo. 21
The identification of the alleged pictures of the strikers, if
properly made, could have been categorized as substantial
evidence, which a reasonable mind may accept as adequate to
support a conclusion that Joel Densing participated in blocking
the gate of respondent company.
Verily, the uncorroborated testimony of Mr. Ponce does not
suffice to support a declaration of loss of employment status of
Joel Densing. This could be the reason why the Labor Arbiter
and the NLRC, in its decision dated August 15, 1994, upheld the
reinstatement of Joel Densing.
The contention of petitioners that the factual findings by the
Labor Arbiter, as trial officer in the case, deserve much weight is
tenable. The NLRC is bound by the factual findings of the Labor
Arbiter as the latter was in a better position to observe the
demeanor and department of the witnesses. "Absent any
substantial proof that the trial court's decision was based on
speculation, the same must be accorded full consideration and
should not be disturbed on appeal. 22
Premises studiedly considered, we are of the ineluctable
conclusion, and hold, that the NLRC gravely abused its discretion
in declaring the loss of employment status of Joel Densing.
As regards the other petitioners, Henedino Mirafuentes,
Christopher Patentes, and Andres Tejana, their reinstatement is
warranted. In its resolution, the NLRC adjudged petitioners as
"not entirely faultless" in light of the following revelation of Mr.
Ponce, to wit:
ATTY. PINTOR:
Q. Mr. Ponce, I will refer you to a picture previously marked as
our Annex "H". Showing to you the said picture. In said picture,
there are persons who are lying on the road. Can you please
identify who are these persons?
WITNESS:
A. They are the strikers.
ATTY. PINTOR:
Q. Are you referring to the AIU strikers the complainants in this
case?
WITNESS:
A. Yes. Sir. 23
For the severest administrative penalty of dismissal to attach,
the erring strikers must be duly identified. Simply referring to
them as "strikers", "AIU strikers" "complainants in this case" is
not enough to justify their dismissal.
On the issue of reinstatement and payment of salaries, the court
also find for petitioners. Telling on the monetary award is Article
223 of the Labor Code, the pertinent of which reads:
 . . . In any event, the decision of the labor
arbiter reinstating a dismissed employee shall
be immediately executory, even pending
appeal. The employee shall either be admitted
back to work under the same terms and
conditions prevailing prior to his dismissal or
separation or, at the option of the employer,
merely reinstated in the payroll. The posting of
bond shall not stay the execution of the
reinstatement provided therein. . . .

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

The unmeritorious appeal interposed by the respondent

company, let alone the failure to execute with dispatch the
award of reinstatement delayed the payroll reinstatement of
petitioners. But their long waiting is not completely in vain, for
the court holds that their (petitioners') salaries and backwages
must be computed from October 15, 1993 until full payment of
their separation pay, without any deduction. This is in
consonance with the ruling in the case of Bustamante vs.
NLRC, 24 where payment of full backwages without deductions
was ordered. The four petitioners herein are entitled to
reinstatement absent any just ground their dismissal.
Considering, however, that more than eight (8) years have
passed since subject strike was staged, an award of separation
pay equivalent to one (1) month pay for every year of service, in
lieu of reinstatement, is deemed more practical and appropriate
to all the parties concerned.

WHEREFORE, the petition is GRANTED; the Resolution of NLRC,

dated February 21, 1995, is SET ASIDE, and the Decision of the
Labor Arbiter of October 8, 1993 REINSTATED, with the
modification that the petitioners, Joel Densing, Henedino
Mirafuentes, Christopher Patentes, and Andres Tejana, be paid
full backwages computed from October 15, 1993 until full
payment of their separation pay. The payment of separation pay
in lieu of reinstatement, is hereby authorized. No pronouncement
as to costs.

SO ORDERED.

Romero, Vitug, Panganiban and Gonzaga-Reyes, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 120505 March 25, 1999
ASSOCIATION OF INDEPENDENT UNIONS IN THE
PHILIPPINES (AIUP), JOEL DENSING, HENEDINO
MIRAFUENTES, CHRISTOPHER PATENTES, AND ANDRES
TEJANA, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC),
CENAPRO CHEMICAL CORPORATION and/or GO SING
CHAN in his capacity as Managing Director, respondents.
PURISMA, J.:
The Petition for review on Certiorari at bar seeks to reinstate the
Decision 1 of the Labor Arbiter insofar as it ordered the
reinstatement and payment of backwages of the four petitioners
herein. The said decision was affirmed 2 in toto by the NLRC. On
February 21, 1995, however, upon motion for reconsideration of
the respondent company, the NLRC came out with a
Resolution 3 modifying its decision, by deleting therefrom the
award of backwages, ordering payment of separation pay in lieu
of reinstatement, and declaring the loss of employment status of
petitioner Joel Densing.
The antecedent facts are as follows:
Joel Densing, Henedino Mirafuentes, Christopher Patentes, and
Andres Tejana, the petitioners herein, were casual employees of
respondent CENAPRO Chemicals Corporation. In the said
company, the collective bargaining representative of all rank and
file employees was CENAPRO Employees Association (CCEA),
with which respondent company had a collective bargaining
agreement (CBA). Their CBA excluded casual employees from
membership in the incumbent union. The casual employees who
have rendered at least one to six years of service sought
regularization of their employment. When their demand was
denied, they formed themselves into an organization and
affiliated with the Association of Independent unions in the
Philippines (AIUP). Thereafter, AIUP filed a petition for
certification election, which petition was opposed by the
respondent company. The CCEA anchored its opposition on the
contract bar rule.
On May 4 and July 3 1990, the union filed a notice of strike,
minutes of strike vote, and the needed documentation, with the
Department of Labor and Employment. The notice of strike cited
as grounds therefor the acts of respondent company constituting
unfair labor practice, more specifically coercion of employees and
systematic union busting.
On July 23, 1992, the union proceeded to stage a strike, in the
course of which, the union perpetrated illegal acts. The strikers
padlocked the gate of the company. The areas fronting the gate
of the company were barricaded and blocked by union strikers.
The strikers also prevented and coerced other non-striking
employees from reporting for work. Because of such illegal
activities, the respondent company filed a petition for injunction
with the NLRC, which granted a Temporary Restraining Order
(TRO), enjoining the strikers from doing further acts of violence,
coercion, or intimidation and from blocking fee ingress and
egress to the company premises.
Subsequently, or on July 25, 1990, to be precise, the respondent
company filed a complaint for illegal strike. The day before, July
24, 1990, petitioners filed a complaint for unfair labor practice
and illegal lockout against the respondent company.
In a consolidated Decision, dated September 10, 1993, the Labor
Arbiter declares illegal the strike staged by the petitioners, and
dismissed the charge of illegal lockout and unfair labor practice.
The dispositive portion of the Labor Arbiter's decision was to the
following effect:
WHEREFORE, premises considered, judgment is
hereby rendered finding the strike illegal and as
a consequence thereto, the officers who
participated in the illegal strike namely: Oscar
Enicio, Jaime dela Piedra, Lino Isidro, Ariel
Jorda, and Jose Catnubay are declared to have
lost their employment status. CENAPRO is
directed however to reinstate the other
workers, except Ireneo Sagaral, Artemio
Guinto, Ruben Tulod, Marcelo M. Matura,
Gilbert Holdilla, Cesar Buntol, Rey Siarot, Lucio
Nuneza, Jose Basco, Gervacio Baldespinosa, Jr.,
Cresecente Buntol, Dennis Pepito, Florencio
Pepito, Edwin Ramayrat, Daniel Canete, and
Vivencio Sinadjan who executed quitclaims in
favor of CENAPRO and cenapro is being
absolved from the charges of illegal lockout and
unfair labor practice.
SO ORDERED. 4
In short, five (5) union officers were declared to have lost their
employment status, fifteen (15) union members were not
reinstated because they executed quit claims in favor of the
respondent company, and six (6) workers, Rosalito Bantulan,
Edward Regner, Joel Densing, Henedino Mirafuentes,
Christopher Patentes, and Andres Tejana, ordered to be
reinstated.
On October 8, 1993, the Labor Arbiter issued an Order excluding
Rosalito Bantulan and Edward Regner from the list of those to be
reinstated and to be paid backwages. The remaining four (4)
workers, Joel Densing, Henedino Mirafuentes, Christopher
Patentes, and Andres Tejana, are the petitioners here.
On October 5, 1993, the respondent company appealed the
aforesaid decision insofar as it ordered the reinstatement of
some of the strikers.
On October 7, 1993, the petitioners also appealed the same
decision of the Labor Arbiter.
Pending resolution of the said appeals, petitioner AUIP filed with
the Labor Arbiter a Motion for Execution of the Labor Arbiter's
Decision directing reinstatement of some of its members. The
motion was granted in the Order dated October 15, 1993.
On December 7, 1993, respondent company presented
Manifestation/Motion praying that instead of reinstatement. it be
allowed to pay separation pay petitioners.
On December 16, 1993, petitioners presented a motion for
payroll reinstatement, which motion was opposed by the
respondent company, alleging mainly that the circumstances of
the case have strained the relationship of the parties herein,
rendering their reinstatement unwise and inappropriate. But
such opposition was overruled by the Labor Arbiter. In his Order
of March 23, 1994, the same Labor Arbiter issued a second writ
of execution directing actual, if not payroll reinstatement of the
strikers.
On April 6, 1994, respondent company appealed the second
order for the reinstatement of the strikers, placing reliance on
the same grounds raised in support of its first appeal.
In its Decision dated August 15, 1994, the NLRC affirmed
in toto the Labor Arbiter's decision, dismissed both the appeal of
private respondent and that of petitioners, and reiterated the
Labor Arbiter's Order for the reinstatement of the herein
petitioners, Joel Densing, Henedino Mirafuentes, Christopher
Patentes, and Andres Tejana. The said decision disposed and
directed as follows:
WHEREFORE, premises considered, these
appeals are DISMISSED, and the decision of the
Labor Arbiter is AFFIRMED in its entirety.
Appellant Cenapro Chemical Corporation is
hereby ordered to immediately comply with the
Labor Arbiter's Order dated March 23, 1994 and
to release the salaries of four (4) appellant-
workers namely Joel Densing, Henedino
Mirafuentes, Christopher Patentes, and Andres
Tejana from October 15, 1993 and continue
paying them up to the time this decision has
become final and executory, less earning
earned elsewhere.
SO ORDERED.5
Respondent company moved for reconsideration of that portion
of the NLRC's decision ordering the reinstatement of the said
strikers.
Acting thereupon, the NLRC modified its Decision of August 15,
1994, by ordering the payment of separation pay in lieu of the
reinstatement of the petitioners, deleting the award of
backwages, and declaring the loss of employment status of Joel
Densing. The dispositive portion of the Amendatory Resolution,
ruled thus:
WHEREFORE, the decision of the Commission
promulgated on August 15, 1994 is hereby
MODIFIED. In view of reinstatement to
complainants Henedino Mirafuentes,
Christopher Patentes, and Andres Tejana,
appellant-movant CENAPRO Chemicals
corporation is directed to pay them amount
equivalent to one (1) month pay for every year
of service and without backwages. As regards
Joel Densing, he is declared to have lost his
employment status.
SO ORDERED. 6
Hence, the present petition, theorizing that respondent NLRC
acted with grave abuse of discretion amounting to lack or excess
of jurisdiction in:
1) Entertaining the 6 April 1994 (the first appeal dated 5 October
1993) which was based on similar grounds.
2) Reversing its earlier Resolution of the first appeal
promulgated 15 August 1994 by way of another contradictory
and baseless ruling promulgated on 21 February 1995.
3) Depriving Henedino Mirafuentes, Christopher Patentes, and
Andres Tejana of their right to reinstatement and backwages;
and
4) Depriving Joel Densing of his right to reinstatement or
separation pay with backwages.
It is decisively clear that although the grounds invoked in the
two appeals were the same, the said appeals were the same, the
said appeals were separate and distinct remedies. Filed on
October 5, 1993, the first appeal was from the decision of Labor
Arbiter Nicasio Aninon, dated September 10, 1993, seeking loss
of employment status of all the union members who participated
in the illegal strike. The second appeal, dated April 6, 1994, was,
in effect, an opposition to the second writ of execution issued on
March 23, 1994. The second writ pertained to the order to effect
immediate actual or payroll reinstatement of the four petitioners
herein. The said appeals were acted upon separately by the
NLRC, which did not act with grave abuse of discretion in
entertaining such appeals.
When they filed the notice of strike, petitioners cited as their
grounds therefor unfair labor practice, specifically coercion of
employees and systematic union busting. But the said grounds
wee adjudged as baseless by the Labor Arbiter. The court quotes
with approval the following findings of Labor Arbiter Aninon, to
wit:
. . . In fact, in the undated Joint Affidavit of
Oscar Enecio, Edgardo Regner, Christopher
Patentes, Edgar Sanchez, Ariel Jorda, Jaime
dela Piedra, the workers stated that what they
considered as harassments and insults are
those when they were scolded for little
mistakes and memoranda for tardiness. These
acts, if really committed cannot be considered
as harassment and insults but were ordinary
acts which employers have to do as part of
their administrative supervision over their
employees. Moreover, Oscar Enecio's testimony
that some of his fellow union members like
vice-president Jaime dela Piedra, Christopher
Patentes and Henodino Mirafuentes, were also
harass when they were made to work another
eight (8) hours after their tour of duty deserves
scant consideration not only because it is
uncorroborated but he could not even give the
dates when these workers were made to work
for sixteen (16) hours, how many instances
these happened and whether or not the
workers have actually worked. 7
The court discerns no basis for altering the aforesaid findings the Sta. Ana wharf and blocked all the ways and approaches to
which have been affirmed by the NLRC. the launches and vessels of Petitioners". 13

The court is not persuaded by petitioners' allegation of union
busting. The NLRC correctly ruled that the strike staged by
petitioners was in the nature of a union-recognition-strike. A
union-recognition-strike, as its legal designation implies, is
calculated to compel the employer to recognize one's union, and
not the other contending group, as the employees' bargaining
representative to work out a collective bargaining agreement
despite the striking union's doubtful majority status to merit
voluntary recognition and lack of formal certification as the
exclusive representative in the bargaining unit. It is undisputed
that at the time the petition for certification election was filed by
AUIP, petitioner union, there was an existing CBA between the
respondent company and CCEA, the incumbent bargaining
representative of all rank and file employees. The petition should
have not been entertained because of the contract bar rule.
When a collective bargaining agreement has been duly
registered in accordance with Article 231 of the Labor Code, a
petition for certification election or motion for intervention may
be entertained only within sixty (60) days prior to the expiry date
of the said agreement. 8 Outside the said period, as in the
present case, the petition for certification election or motion for
intervention cannot be allowed. Hence, the conclusion that the
respondent company did not commit the alleged union busting.
From the gamut of evidence on hand, it can be gathered that
the strike staged by the petitioner union was illegal for reasons,
that:
1) The strikers committed illegal acts in the course of the strike.
They formed human barricades to block the road, prevented the
passage of the respondent company's truck, padlocked the
company's gate, and prevented co-workers from entering the
company premises. 9
2) And violated the Temporary Restraining Order
(TRO) 10 enjoining the union and/or its members from
obstructing the company premises, and ordering the removal
therefrom of all the barricades.
A strike is a legitimate weapon in the universal struggle for
existence. 11 It is considered as the most effective weapon in
protecting the rights of the employees to improve the terms and
conditions of their employment. 12 But to be valid, a strike must
be pursued within legal bounds. The right to strike as a means
for the attainment of social justice is never meant to oppress or
destroy the employer. The law provides limits for its exercise.
Among such limits are the prohibited activities under Article 264
of the Labor Code, particularly paragraph (e), which states that
no person engaged in picketing shall:
a) commit any act of violence, coercion, or intimidation or
It follows therefore that the dismissal of the officers of the
striking union was justified and valid. Their dismissal as a
consequence of the illegality of the strike staged by them finds
support in Article 264 (a) of the Labor Code, pertinent portion of
which provides: " . . Any union officer who knowingly
participates in an illegal strike and any . . union officer who
knowingly participates in the commission of illegal acts during a
strike may be declared to have lost his employment status. . ."
Union officers are duty bound to guide their members to respect
the law. If instead of doing so, the officers urge the members to
violate the law and defy the duly constituted authorities, their
dismissal from the service is a just penalty or sanction for their
unlawful acts. The officers' responsibility is greater than that of
the members. 14
The court finds merit in the finding by the Labor Arbiter and the
NLRC that the respondent company committed no illegal lockout.
Lockout means temporary refusal of the employer to furnish
work as a result of an industrial or labor dispute. 15
As observed by the Labor Arbiter, it was the appellant-workers
who voluntarily stopped working because of their strike. In fact
the appellant workers admitted that non-striking workers who
wanted to return to work were allowed to do so. Their being
without work could not therefore be attributed to the employer's
refusal to give them work but rather, to the voluntary withdrawal
of their services in order to compel the company to recognize
their union. 16
The next aspect of the case to consider is the fate of the four
petitioners herein. Decisive on the matter is the pertinent
provision of Article 264 (a) of the Labor Code that: ". . any
worker . . who knowingly participates in the commission of illegal
acts during a strike may be declared to have lost his employment
status. . ." It can be gleaned unerringly from the aforecited
provision of law in point, however, that an ordinary striking
employee can not be terminated for mere participation in an
illegal strike. There must be proof that he committed illegal acts
during the strike 17 and the striker who participated in the
commission of illegal act must be identified. But proof beyond
reasonable doubt is not required. Substantial evidence available
under the attendant circumstances, which may justify the
imposition of the penalty of dismissal, may suffice.
In the landmark case of Ang Tibay vs. CIR, 18 the court ruled
"Not only must there be some evidence to support a finding or
conclusion, but the evidence must be "substantial". Substantial
evidence is more than a mere scintilla. It means such relevant
evidence that a reasonable mind might accept as sufficient to
support a conclusion."

b) obstruct the free ingress to or egress from the employer's
premises for lawful purposes or
c) obstruct public thoroughfares.
Even if the strike is valid because its objective or
lawful, the strike may still be declared invalid where
employed are illegal. For instance, the strike was
illegal as the "strikers formed a human cordon along
Respondent company contends that sufficient testimonial,
documentary and real evidence, including the photographs
supposedly taken by a certain Mr. Ponce, were presented at the
arbitration level. It is argued that the said pictures best show the
participation of the strikers in the commission of illegal acts in
the course of the strike. In connection therewith, it is worthy to
purpose is
point out the sole basis of the NLRC for declaring the loss of
the means
employment status of petitioner Joel Densing, to wit:
considered
the side of
 ATTY. PINTOR:
Q: Now, Mr. Ponce, on page 1
of your affidavit, paragraph 4
thereof, you alleged that:
"While in the gate, I saw
several strikers of Cenapro
blocked its gate and prevented
the truck from proceeding to
its destination." Who were
these several workers you
referred to, in this affidavit of
yours?
WITNESS:
A. The strikers.
HON. LABOR ARBITER:
Q. Are you referring to the
complainants in this case who
are now present?
WITNESS:
A. Yes sir, I am referring to
AIU members.
HON, LABOR ARBITER:
Make it of record that the
witness is referring to the five
persons inside the court
namely: Rosalito Bentulan,
Ariel Jorda, Ranulfo
Cabrestante, Jose Catnubay
and Joel Densing. 19 (emphasis
supplied)
All things studiedly considered, the court is not convinced that
the quantum of proof on record hurdled the substantiality of
evidence test 20 to support a decision, a basic requirement in
administrative adjudication. If the said pictures exhibited before
the Labor Arbiter portrayed the herein petitioners performing
prohibited acts during the strike, why were these pictures not
exhibited for identification of petitioners? Petitioners could have
been identified in such pictures, if they were reflected therein, in
the same manner that the lawyer who examined Mr. Ponce,
asked witness Armamento to identify the Sheriff Mr. Leahmon
Tolo, thus:
ATTY. PINTOR:
Q I refer your attention Mr.
Armamento to Exhibit "16".
There is a person here
wearing a short sleeve barong
tagalog. Can you please tell
the Honorable office if you will
be able to identify this person?
WITNESS:
A Yes, this is the Sheriff Mr.
Leahmon Tolo. 21
The identification of the alleged pictures of the strikers, if
properly made, could have been categorized as substantial
evidence, which a reasonable mind may accept as adequate to
support a conclusion that Joel Densing participated in blocking
the gate of respondent company.
Verily, the uncorroborated testimony of Mr. Ponce does not
suffice to support a declaration of loss of employment status of
Joel Densing. This could be the reason why the Labor Arbiter
and the NLRC, in its decision dated August 15, 1994, upheld the
reinstatement of Joel Densing.
The contention of petitioners that the factual findings by the
Labor Arbiter, as trial officer in the case, deserve much weight is
tenable. The NLRC is bound by the factual findings of the Labor
Arbiter as the latter was in a better position to observe the
demeanor and department of the witnesses. "Absent any
substantial proof that the trial court's decision was based on
speculation, the same must be accorded full consideration and
should not be disturbed on appeal. 22
Premises studiedly considered, we are of the ineluctable
conclusion, and hold, that the NLRC gravely abused its discretion
in declaring the loss of employment status of Joel Densing.
As regards the other petitioners, Henedino Mirafuentes,
Christopher Patentes, and Andres Tejana, their reinstatement is
warranted. In its resolution, the NLRC adjudged petitioners as
"not entirely faultless" in light of the following revelation of Mr.
Ponce, to wit:
ATTY. PINTOR:
Q. Mr. Ponce, I will refer you
to a picture previously marked
as our Annex "H". Showing to
you the said picture. In said
picture, there are persons who
are lying on the road. Can you
please identify who are these
persons?
WITNESS:
A. They are the strikers.
ATTY. PINTOR:
Q. Are you referring to the AIU
strikers the complainants in
this case?
WITNESS:
A. Yes. Sir. 23
For the severest administrative penalty of dismissal to attach,
the erring strikers must be duly identified. Simply referring to
them as "strikers", "AIU strikers" "complainants in this case" is
not enough to justify their dismissal.
On the issue of reinstatement and payment of salaries, the court
also find for petitioners. Telling on the monetary award is Article
223 of the Labor Code, the pertinent of which reads:

. . . In any event, the decision of the labor

arbiter reinstating a dismissed employee shall
be immediately executory, even pending
appeal. The employee shall either be admitted
back to work under the same terms and
conditions prevailing prior to his dismissal or
separation or, at the option of the employer,
merely reinstated in the payroll. The posting of
bond shall not stay the execution of the
reinstatement provided therein. . . .

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

The unmeritorious appeal interposed by the respondent

company, let alone the failure to execute with dispatch the
award of reinstatement delayed the payroll reinstatement of
petitioners. But their long waiting is not completely in vain, for
the court holds that their (petitioners') salaries and backwages
must be computed from October 15, 1993 until full payment of
their separation pay, without any deduction. This is in
consonance with the ruling in the case of Bustamante vs.
NLRC, 24 where payment of full backwages without deductions
was ordered. The four petitioners herein are entitled to
reinstatement absent any just ground their dismissal.
Considering, however, that more than eight (8) years have
passed since subject strike was staged, an award of separation
pay equivalent to one (1) month pay for every year of service, in
lieu of reinstatement, is deemed more practical and appropriate
to all the parties concerned.

WHEREFORE, the petition is GRANTED; the Resolution of NLRC,

dated February 21, 1995, is SET ASIDE, and the Decision of the
Labor Arbiter of October 8, 1993 REINSTATED, with the
modification that the petitioners, Joel Densing, Henedino
Mirafuentes, Christopher Patentes, and Andres Tejana, be paid
full backwages computed from October 15, 1993 until full
payment of their separation pay. The payment of separation pay
in lieu of reinstatement, is hereby authorized. No pronouncement
as to costs.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 92009 February 17, 1993
MASTER IRON LABOR UNION (MILU), WILFREDO ABULENCIA, ROGELIO CABANA, LOPITO
SARANILLA, JESUS MOISES, BASILIO DELA CRUZ, EDGAR ARANES, ELY BORROMEO, DANIEL
BACOLON, MATIAS PAJIMULA, RESTITUTO PAYABYAB, MELCHOR BOSE, TEOFILO ANTOLIN,
ROBERT ASPURIA, JUSTINO BOTOR, ALFREDO FABROS, AGAPITO TABIOS, BENARDO ALFON,
BENIGNO BARCENA, BERNARDO NAVARRO, MOISES LABRADOR, ERNESTO DELA CRUZ, EDUARDO
ESPIRITU, IGNACIO PAGTAMA, BAYANI PEREZ, SIMPLICIO PUASO, EDWIN VELARDE, BEATO
ABOGADO, DANILO SAN ANTONIO, BERMESI BORROMEO, and JOSE BORROMEO, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and MASTER IRON WORKS AND CONSTRUCTION
CORPORATION, respondents.
Banzuela, Flores, Mirrales, Rañeses, Sy, Taquio and Associates for petitioners.
Carlos L. Galarrita for private respondent.
MELO, J.:
The petition for certiorari before us seeks to annul and to set
aside the decision of the National Labor Relations Commission
(Second Division) dated July 12, 1986 which affirmed that of
Labor Arbiter Fernando V. Cinco declaring illegal the strike
staged by petitioners and terminating the employment of the
individual petitioners.
The Master Iron Works Construction Corporation (Corporation for
brevity) is a duly organized corporate entity engaged in steel
fabrication and other related business activities. Sometime in
February 1987, the Master Iron Labor Union (MILU) entered into
a collective barganing agreement (CBA) with the Corporation for
the three-year period between December 1, 1986 and November
30, 1989 (Rollo, p. 7). Pertinent provisions of the CBA state:
Sec. 1. That there shall be no strike and no
lockout, stoppage or shutdown of work, or any
other interference with any of the operation of
the COMPANY during the term of this
AGREEMENT, unless allowed and permitted by
law.
Sec. 2. Service Allowance — The COMPANY
agrees to continue the granting of service
allowance of workers assigned to work outside
the company plant, in addition to his daily
salary, as follows:
(a) For those assigned to work
outside the plant within Metro
Manila, the service allowance
shall be P12.00;
(b) For those assigned to work
outside Metro Manila, the
service allowance shall be
P25.00/day;
(c) The present practice of
conveying to and from jobsites
of workers assigned to work
outside of the company plant
shall be maintained.
Right after the signing of the CBA, the Corporation
subcontracted outside workers to do the usual jobs done by its
regular workers including those done outside of the company
plant. As a result, the regular workers were scheduled by the
management to work on a rotation basis allegedly to prevent
financial losses thereby allowing the workers only ten (10)
working days a month ( Rollo,  p. 8). Thus, MILU requested
implementation of the grievance procedure which had also been
agreed upon in the CBA, but the Corporation ignored the
request.
Consequently, on April 8, 1987, MILU filed a notice of strike
(Rollo,
p. 54) with the Department of Labor and Employment. Upon the
intervention of the DOLE, through one Atty. Bobot Hernandez,
the Corporation and MILU reached an agreement whereby the
Corporation acceded to give back the usual work to its regular
employees who are members of MILU (Rollo, p. 55).
Notwithstanding said agreement, the Corporation continued the
practice of hiring outside workers. When the MILU president,
Wilfredo Abulencia, insisted in doing his regular work of cutting
steel bars which was being done by casual workers, a supervisor
reprimanded him, charged him with insubordination and
suspended him for three (3) days ( Rollo, pp. 9 & 51-52). Upon
the request of MILU, Francisco Jose of the DOLE called for
conciliation conferences. The Corporation, however, insisted that
the hiring of casual workers was a management prerogative. It
later ignored subsequent scheduled conciliation conferences
(Rollo, pp. 51-52 & 57-58).
Hence, on July 9, 1987, MILU filed a notice of strike on the
following grounds: (a) violation of CBA; (b) discrimination; (c)
unreasonable suspension of union officials; and (d) unreasonable
refusal to entertain grievance (Rollo,
p. 9). On July 24, 1987, MILU staged the strike, maintaining
picket lines on the road leading to the Corporation's plant
entrance and premises.
At about 11 o'clock in the morning of July 28, 1987, CAPCOM
soldiers, who had been summoned by the Corporation's counsel,
came and arrested the picketers. They were brought to Camp
Karingal and, the following day, to the Caloocan City jail.
Charges for illegal possession of firearms and deadly weapons
were lodged against them. Later, however, those charges were
dismissed for failure of the arresting CAPCOM soldiers to appear
at the investigation (Rollo, p. 10). The dispersal of the picketlines
by the CAPCOM also resulted in the temporary lifting of the
strike.
On August 4, 1987, the Corporation filed with the NLRC National
Capital Region arbitration branch a petition to declare the strike
illegal (Rollo,
p. 40). On September 7, 1987, MILU, with the assistance of the
Alyansa ng Manggagawa sa Valenzuela (AMVA), re-staged the
strike. Consequently, the Corporation filed a petition for
injunction before the NLRC which, on September 24, 1987,
issued an order directing the workers to remove the barricades
and other obstructions which prevented ingress to and egress
from the company premises. The workers obliged on October 1,
1987 (Rollo, p. 25). On October 22, 1987, through its president,
MILU offered to return to work in a letter which states:
22 Okt. 1987
Mr. Elieze Hao
Master Iron Works & Construction Corp.
790 Bagbagin, Caloocan City
Dear Sir:
 Ang unyon, sa pamamagitan ng nakalagda sa
ibaba, ay nagmumungkahi, nagsusuhestiyon o
nag-oofer sa inyong pangasiwaan ng aming
kahilingan na bumalik na sa trabaho dahilan din
lang sa kalagayan na tuloy tuloy ang ating pag-
uusap para sa ikatitiwasay ng ating relasyon.
Gusto naming manatili ang ating magandang
pagtitinginan bilang magkasangga para sa ika-
uunlad ng ating kumpanya. Sana ay unawain
niyo kami dahil kailangan namin ng trabaho.
(Rollo, p. 590)
On October 30, 1987, MILU filed a position paper with counter-
complaint before the NLRC. In said counter-complaint, the
workers charged the Corporation with unfair labor practice for
subcontracting work that was normally done by its regular
workers thereby causing the reduction of the latter's workdays;
illegal suspension of Abulencia without any investigation;
discrimination for hiring casual workers in violation of the CBA,
and illegal dispersal of the picket lines by CAPCOM agents ( Rollo,
pp. 26-27).
In due course, a decision dated March 16, 1988 was rendered by
Labor Arbiter Fernando Cinco declaring illegal the strike staged
by MILU. The dispositive portion of the decision reads:
WHEREFORE, in the light of the foregoing
premises, judgment is hereby rendered, as
follows:
1. Declaring the strike by the respondents
illegal and unlawful;
2. Ordering the cancellation of the registered
permit of respondent union MILU for having
committed an illegal strike;
3. Ordering the termination of employment
status of the individual respondents, including
the forfeiture of whatever benefits are due
them under the law, for having actively
participated in an illegal strike,
namely: Wilfredo Abulencia, President; Rogelio
Cabana, Vice-President; Lopito Saranilla,
Secretary; Jesus Moises, Treasurer; Basilio dela
Cruz, Auditor; as Members of the Board: Edgar
Aranes, Melchor Bose, Restituto Payabyab,
Matias Pajimula, Daniel Bacolon, and Ely
Borromeo, as Members of the Union: Teofilo
Antolin, Robert Aspuria, Justino Botor, Alfredo
Fabros, Agapito Tabios, Bernardo Alfon,
Benigno Barcena, Bernardo Navaro, Moises
Labrador, Ernesto dela Cruz, Eduardo Espiritu,
Ignacio Pagtama, Bayani Perez, Simplicio
Puaso, Edwin Velarde, Beato Abogado, Danila
San Antonio, Bermes Borromeo and Jose
Borromeo.
The respondents as appearing in Annex "A" of
the Petition, but not included as among those
whose employment status were not terminated
as above-mentioned, are given priority of
reinstatement, without backwages, in the event
petitioner starts its normal operations, or shall
be paid their separation pay according to law.
4. Ordering the respondents to cease and desist
from further committing the illegal acts
complained of;
5. Ordering Respondent Union to pay the
amount of P10,000.00 to Petitioner's Counsel as
attorney's fees;
6. Ordering the dismissal of the claim for
damages for lack of merit; and
7. Ordering the dismissal of the counter-
complaint in view of the filing of a separate
complaint by the respondents.
SO ORDERED. (pp. 35-36, Rollo.)
On appeal to the NLRC, MILU and the individual officers and
workers named in Labor Arbiter Cinco's decision alleged that said
labor arbiter gravely abused his discretion and exhibited bias in
favor of the Corporation in disallowing their request to cross-
examine the Corporation's witnesses, namely, Corporate
Secretary Eleazar Hao, worker Daniel Ignacio and foreman
Marcial Barcelon, who all testified on the manner in which the
strike was staged and on the coercion and intimidation allegedly
perpetrated by the strikers (Rollo,
p. 151).
The Second Division of the NLRC affirmed with modifications the
decision of the labor arbiter. The decision, which was
promulgated on July 12, 1989 with Commissioners Domingo H.
Zapanta and Oscar N. Abella concurring and Commissioner
Daniel M. Lucas, Jr. dissenting, disagreed with the labor arbiter
on the "summary execution of the life of Master Iron Labor
Union (MILU)" on the grounds that the Corporation did not
specifically pray for the cancellation of MILU's registration and
that pursuant to Articles 239 and 240 of the Labor Code, only
the Bureau of Labor Relations may cancel MILU's license or
certificate of registration. It also deleted the award of
P10,000.00 as attorney's fees for lack of sufficient basis but it
affirmed the labor arbiter with regard to the declaration of
illegality of the strike and the termination of employment of
certain employees and the rest of the dispositive portion of the
labor arbiter's decision (Rollo, pp. 48-49).
In his dissent, Commissioner Lucas stated that he is "for the
setting aside of the decision appealed from, and remanding of
the case to the labor arbiter of origin, considering the
respondent's countercharge or complaint for unfair labor practice
was not resolved on the merits" (Rollo, p. 49).
MILU filed a motion for the reconsideration but the same was
denied by the NLRC for lack of merit in its Resolution of August
9, 1989 (Rollo, p. 50). Hence, the instant petition. 1
Petitioners contend that notwithstanding the non-strike provision
in the CBA, the strike they staged was legal because the reasons
therefor are non-economic in nature. They assert that the NLRC
abused its discretion in holding that there was "failure to exhaust
the provision on grievance procedure" in view of the fact that
they themselves sought grievance meetings but the Corporation
ignored such requests. They charge the NLRC with bias in failing
to give weight to the fact that the criminal charges against the
individual petitioners were dismissed for failure of the CAPCOM
soldiers to testify while the same individual strikers boldly faced
the charges against them. Lastly, they aver that the NLRC
abused its discretion in holding that the workers' offer to return
to work was conditional.
In holding that the strike was illegal, the NLRC relied solely on
the no-strike no-lockout provision of the CBA aforequoted. As
this Court has held in Philippine Metal Foundries,
Inc. vs. CIR  (90 SCRA 135 [1979]), a no-strike clause in a CBA
is applicable only to economic strikes. Corollarily, if the strike is
founded on an unfair labor practice of the employer, a strike
declared by the union cannot be considered a violation of the
no-strike clause.
An economic strike is defined as one which is to force wage or
other concessions from the employer which he is not required by
law to grant (Consolidated Labor Association of the Philippines
vs. Marsman & Co., Inc., 11 SCRA 589 [1964]). In this case,
petitioners enumerated in their notice of strike the following
grounds: violation of the CBA or the Corporation's practice of
subcontracting workers; discrimination; coercion of employees;
unreasonable suspension of union officials, and unreasonable
refusal to entertain grievance.
Private respondent contends that petitioner's clamor for the
implementation of Section 2, Article VIII of the CBA on service
allowances granted to workers who are assigned outside the
company premises is an economic issue ( Rollo, p. 70). On the
contrary, petitioners decry the violation of the CBA, specifically
the provision granting them service allowances. Petitioners are
not, therefore, already asking for an economic benefit not
already agreed upon, but are merely asking for the
implementation of the same. They aver that the Corporation's
practice of hiring subcontractors to do jobs outside of the
company premises was a way "to dodge paying service
allowance to the workers" (Rollo, pp. 61 & 70).
Much more than an economic issue, the said practice of the
Corporation was a blatant violation of the CBA — and unfair
labor practice on the part of the employer under Article 248(i) of
the Labor Code. Although the end result, should the Corporation
be required to observe the CBA, may be economic in nature
because the workers would then be given their regular working
hours and therefore their just pay, not one of the said grounds is
an economic demand within the meaning of the law on labor
strikes. Professor Perfecto Fernandez, in his
book Law  on Strikes, Picketing  and Lockouts  (1981 edition, pp.
144-145), states that an economic strike involves issues relating
to demands for higher wages, higher pension or overtime rates,
pensions, profit sharing, shorter working hours, fewer work days
for the same pay, elimination of night work, lower retirement
age, more healthful working conditions, better health services,
better sanitation and more safety appliances. The demands of
the petitioners, being covered by the CBA, are definitely within
the power of the Corporation to grant and therefore the strike
was not an economic strike.
The other grounds, i.e., discrimination, unreasonable suspension
of union officials and unreasonable refusal to entertain
grievance, had been ventilated before the Labor Arbiter. They
are clearly unfair labor practices as defined in Article 248 of the
Labor Code.2 The subsequent withdrawal of petitioners'
complaint for unfair labor practice (NLRC-NCR Case No. 00-11-
04132-87) which was granted by Labor Arbiter Ceferina Diosana
who also considered the case closed and terminated ( Rollo, pp.
97 & 109) may not, therefore, be considered as having
converted their other grievance into economic demands.
Moreover, petitioners staged the strike only after the Corporation
had failed to abide by the agreement forged between the parties
upon the intervention of no less than the DOLE after the union
had complained of the Corporation's unabated subcontracting of
workers who performed the usual work of the regular workers.
The Corporation's insistence that the hiring of casual employees
is a management prerogative betrays its attempt to coat with
legality the illicit curtailment of its employees' rights to work
under the terms of the contract of employment and to a fair
implementation of the CBA.
While it is true that an employer's exercise of management
prerogatives, with or without reason, does not  per se constitute
unjust discrimination, such exercise, if clearly shown to be in
grave abuse of discretion, may be looked into by the courts
(National Federation of Labor Unions vs. NLRC, 202 SCRA 346
[1991]). Indeed, the hiring, firing, transfer, demotion, and
promotion of employees are traditionally identified as
management prerogatives. However, they are not absolute
prerogatives. They are subject to limitations found in law, a
collective bargaining agreement, or general principles of fair play
and justice (University of Sto. Tomas vs. NLRC, 190 SCRA 758
[1990] citing Abbott Laboratories [Phil.], Inc. vs. NLRC, 154
SCRA 713 [1987]). The Corporation's assertion that it was
exercising a management prerogative in hiring outside workers
being contrary to the contract of employment which, of
necessity, states the expected wages of the workers, as well as
the CBA, is therefore untenable.
Private respondent's failure to traverse petitioners' allegations
that the NLRC abused its discretion in holding that the provision
on grievance procedure had not been exhausted clearly sustains
such allegation and upholds the petitioners' contention that the
Corporation refused to undergo said procedure. It should be
remembered that a grievance procedure is part of the
continuous process of collective bargaining (Republic Savings
Bank. vs. CIR, et al., 21 SCRA 226 [1967]). It is intended to
promote a friendly dialogue between labor and management as
a means of maintaining industrial peace. The Corporation's
refusal to heed petitioners' request to undergo the grievance
procedure clearly demonstrated its lack of intent to abide by the
terms of the CBA.
Anent the NLRC's finding that Abulencia's offer to return to work
is conditional, even a cursory reading of the letter aforequoted
would reveal that no conditions had been set by petitioners. It is
incongruous to consider as a "condition" the statement therein
that the parties would continue talks for a peaceful working
relationship ("tuloy tuloy ang ating pag-uusap sa ikatitiwasay ng
ating relasyon"). Conferences form part of the grievance
procedure and their mere mention in Abulencia's letter did not
make the same "conditional".
In the same manner, the following findings of the Labor Arbiter
showed the illegal breakup of the picket lines by the CAPCOM:
d) On 28 July 1987, CAPCOM soldiers, on
surveillance mission, arrived at the picket line of
respondents and searches were made on
reported deadly weapons and firearms in the
possession of the strikers. Several bladed
weapons and firearms in the possession of the
 strikers were confiscated by the CAPCOM
soldiers, as a result of which, the apprehended
strikers were brought to Camp Tomas Karingal
in Quezon City for proper investigation and
filing of the appropriate criminal charges
against them. The strikers who were charged of
illegal possession of deadly weapon and
firearms were: Edgar Aranes, Wilfredo
Abulencia, Ernesto dela Cruz, Beato Abogado,
Lopito Saranilla, Restituto Payabyab, Jose
Borromeo and Rogelio Cabana. Criminal
informations were filed by Inquest Fiscal,
marked as Exhibits "E", "E-1 to E-8". These
strikers were jailed for sometime until they
were ordered release after putting up the
required bail bond. Other strikers were also
arrested and brought to Camp Tomas Karingal,
and after proper investigation as to their
involvement in the offense charged, they were
released for lack of prima facie evidence. They
were Edwin Velarde, Bayani Perez, Daniel
Bacolon, Jesus Moises, Robert Aspurias and
Benigno Barcena.
After the strikers who were arrested were
brought to Camp Tomas Karingal on 28 July
1987, the rest of the strikers removed
voluntarily their human and material barricades
which were placed and posted at the road
leading to the premises of the Company. (Rollo,
p. 32)
The bringing in of CAPCOM soldiers to the peaceful picket lines
without any reported outbreak of violence, was clearly in
violation of the following prohibited activity under Article 264 of
the Labor Code:
(d) No public official or employee, including
officers and personnel of the New Armed
Forces of the Philippines or the Integrated
National Police, or armed person, shall bring in,
introduce or escort in any manner any
individual who seeks to replace strikers in
entering or leaving the premises of a strike
area, or work in place of the strikers. The police
force shall keep out of the picket lines unless
actual violence or other criminal acts occur
therein; Provided, That nothing herein shall be
interpreted to prevent any public officer from
taking any measure necessary to maintain
peace and order, protect life and property,
and/or enforce the law and legal order.
(Emphasis supplied.)
As the Labor Arbiter himself found, no pervasive or widespread
coercion or violence were perpetrated by the petitioners as to
warrant the presence of the CAPCOM soldiers in the picket lines.
In this regard, worth quoting is the following excerpt of the
decision in Shell Oil Workers' Union vs. Shell Company of the
Philippines, Ltd., 39 SCRA 276 [1971], which was decided by the
Court under the old Industrial Peace Act but which excerpt still
holds true:
. . . What is clearly within the law is the
concerted activity of cessation of work in order
that . . . employer cease and desist from an
unfair labor practice. That the law recognizes as
a right. There is though a disapproval of the
utilization of force to attain such an objective.
For implicit in the very concept of the legal
order is the maintenance of peaceful ways. A
strike otherwise valid, if violent in character,
may be placed beyond the pale. Care is to be
taken, however, especially where an unfair
labor practice is involved, to avoid stamping it
with illegality just because it is tainted with
such acts. To avoid rendering illusory the
recognition of the right to strike, responsibility
in such a case should be individual and not
collective. A different conclusion would be
called for, of course, if the existence of force
while the strike lasts is pervasive and
widespread, consistently and deliberately
resorted to as a matter of policy. It could be
reasonably concluded then that even if justified
as to ends, it becomes illegal because of the
means employed. (at p. 292.)
All told, the strike staged by the petitioners was a legal one even
though it may have been called to offset what the strikers
believed in good faith to be unfair labor practices on the part of
the employer (Ferrer, et al. vs. Court of Industrial Relations, et
al., 17 SCRA 352 [1966]). Verily, such presumption of legality
prevails even if the allegations of unfair labor practices are
subsequently found out to be untrue (People's Industrial and
Commercial Employees and Workers Org. [FFW] vs. People's
Industrial and Commercial Corporation, 112 SCRA 440 [1982]).
Consonant with these jurisprudential pronouncements, is Article
263 of the Labor Code which clearly states "the policy of the
State to encourage free trade unionism and free collective
bargaining". Paragraph (b) of the same article guarantees the
workers' "right to engage in concerted activities for purposes of
collective bargaining or for their mutual benefit and protection"
and recognizes the "right of legitimate labor organizations to
strike and picket and of employers to lockout" so long as these
actions are "consistent with the national interest" and the
grounds therefor do not involve inter-union and intra-union
disputes.
The strike being legal, the NLRC gravely abused its discretion in
terminating the employment of the individual petitioners, who,
by operation of law, are entitled to reinstatement with three
years backwages. Republic Act No. 6715 which amended Art.
279 of the Labor Code by giving "full backwages inclusive of
allowances" to reinstated employees, took effect fifteen days
from the publication of the law on March 21, 1989. The decision
of the Labor Arbiter having been promulgated on March 16,
1988, the law is not applicable in this case.
WHEREFORE, the questioned decision and resolution of the
NLRC as well as the decision of the Labor Arbiter are hereby SET
ASIDE and the individual petitioners are reinstated to their
positions, with three years backwages and without loss of
seniority rights and other privileges. Further, respondent
corporation is ordered to desist from subcontracting work usually
performed by its regular workers.
SO ORDERED.
Feliciano, Bidin, Davide, Jr. and Romero, JJ., concur.
Gutierrez, Jr., J., is on leave.
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 102672 October 4, 1995
PANAY ELECTRIC COMPANY, INC., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, FOURTH
DIVISION AND PANAY ELECTRIC COMPANY EMPLOYEES
AND WORKERS ASSOCIATION, respondents.
VITUG, J.:
In this petition for certiorari, petitioner Panay Electric Company,
Inc., seeks to set aside the questioned resolution of the National
Labor Relations Commission ("NLRC") in granting separation
benefits to Enrique Huyan and Prescilla Napiar, in awarding
moral and exemplary damages to Enrique Huyan, and in merely
sanctioning the suspension, instead of terminating the
employment status, of other officers and members of respondent
labor union.
Here following is a factual backdrop of the case.
On 30 October 1990, petitioner Panay Electric Company, Inc.,
posted in its premises a notice announcing the need for a
"Report Clerk" who could assume the responsibility of gathering
accounting and computer data at its power plant. The position
was open to any employee, "with Pay Class V," of petitioner
company. When nobody applied for the position, the
EDP/Personnel Manager recommended Enrique Huyan who was
at the time an Administrative Personnel Assistant at the head
office. Huyan was then also a Vice President of respondent
union. The recommendation was approved by the company's
President and General Manager.
In a letter, dated 09 November 1990, Enrique Huyan informed
petitioner that he was not interested in accepting the new
position. He gave the following reasons:
a. The manner or procedure of implementing
this notice of transfer is skeptical since from
Administrative Personnel Assistant to Report
Clerk is apparently a demotion in my part.
b. The position of Report Clerk is Pay Class III
per our Organizational Chart.
c. Being the Vice-President of PECEWA, my
transfer would certainly hinder my function in
settling labor matters and other problems with
other PECEWA Officers.
d. Currently, the activation of geothermal
power plant in Palimpinon, Negros had gave
rise to additional displaced workers in which my
transfer would be another onus to the Power
Plant supervisor and my lack of technical
knowhow, I presumed would obstruct the flow
of operation in the said department.1
On 20 November 1990, the EDP/Personnel Manager required
Huyan to explain within 48 hours why no disciplinary action
should be taken against him for gross insubordination and for
failure to follow the General Manager's approved directive.
Eventually, on 03 December 1990, Huyan was given a "notice of
dismissal" for:
1. Failure to comply with the GM's general
directive of 11/9/90 to a new assigned task in
the Power Plant;
2. Failure to comply with your direct superior's
(AO) verbal directive to proceed to the Power
Plant 11/10/90 & 11/19/90;
3 Failure to comply with the undersigned's, as
personnel manager, verbal directive to proceed
to the Power Plant last 11/16/90;
4. Continued & unauthorized entry & use of the
Personnel Section & property from 11/16/90 up
to the present; (and)
5. Failure to report to your assigned task in the
Power Plant for a period of more than seven
consecutive days from November 16, 1990 up
to the present.2
An administrative investigation was conducted;
thereafter, Huyan was ordered dismissed effective 10
December 1990.
Respondent union, on 20 December 1990, filed a notice of strike.
On 02 January 1990, a strike vote was taken where 113 out of
149 union members voted; the result showed 108 "yes" votes, 1
"no" vote, and 4 abstentions. On 22 January 1991, the union
went on strike. Forthwith, the company filed a petition to declare
the strike illegal. On 25 January 1991, upon receipt of an order
from the Secretary of Labor and Employment certifying the
dispute to the NLRC, the union lifted its strike and, on the day
following, the striking employees, including Huyan, reported for
work.
In its position paper and memorandum before the NLRC, the
union averred that the real reason for ordering the transfer of
Huyan was to penalize him for his union activities, particularly for
being the suspected "Mao," author of the column "Red Corner,"
in the Union's New Digest which featured an item on alleged
wrongdoings by top company officials at the power plant; that in
a letter, dated 10 October 1990, addressed by the Company's
Operation Manager to the General Manager, it was suggested
that an investigation of "Mao's" real identity be conducted and,
once ascertained, to have him dismissed from the company; that
the company had singled out Huyan for transfer to the power
plant; that the Personnel Manager's recommendation for such
transfer was made without Huyan's prior knowledge; that upon
learning of his impending reassignment, Huyan requested for a
reconsideration but the Personnel Manager did not bother to
reply, that the transfer of Huyan was a demotion; and that, per
the Company's Code Offenses, the "insubordination" charged
was punishable with dismissal only after a fourth commission of
the offense.
Petitioner company, in turn, maintained that Huyan's inexplicable
refusal to assume his new position was an act of insubordination
for which reason he was aptly dismissed; that the company's
directive was a valid exercise of management prerogative; that
in declaring a strike, the Union, including its officers and
members, committed a serious breach of the "no strike, no lock
out clause," of the Collective Bargaining Agreement ("CBA"); and
that during the strike, illegal acts were committed by the union
officers and members, e.g., —
a) . . . union director Rey Espinal blocked the
service vehicle of PECO collectors Domingo
Tabobo and James Russel Balin, hurled
invectives at them and challenged them to
fight.
b) . . . union (vice-president) Prescilla Napiar,
together with union member Ma. Teresa Cruz
approached PECO messenger Douglas
Legada . . . and snatched from him the
envelope containing . . . passbooks.
c) when PECO employees Carlos Miguel Borja
and Joemar Paloma were on their way to
deliver bank passbook to PECO messengers
riding in the car of Willy Hallares, union (vice-
president) Prescilla Napiar blocked their way at
the gate and demanded that the car be
inspected for PECO bills. An unidentified union
member placed a big stone against the right
front tire. Union auditor, Allen Aquino insisted
on inspecting the glove compartment of the
car.3
The NLRC, in its resolution of 18 October 1991, concluded:
WHEREFORE, in view of all the foregoing, we
resolve as follows:
1. We find the strike conducted by the Union
from January 22 to 25, 1991 to be illegal as the
same was staged in violation of the no strike,
no lock-out clause in the Collective Bargaining
Agreement existing between the parties and
also because the same disregarded the
grievance procedure.
2. Enrique Huyan and Prescilla Napiar are
deemed to have lost their employment status
but they shall be entitled to separation benefits
under the CBA, or one (1) month pay for every
year of service, whichever is higher. Further,
Enrique Huyan shall be paid the wages withheld
from him, moral damages in the sum of
TWENTY FIVE THOUSAND (P25,000.00) PESOS
and exemplary damages in the amount of TEN
THOUSAND (P10,000.00) PESOS.
3. Rey Espinal and Allen Aquino are penalized
by suspension for THREE (3) months.
4. The other officers of the Union, namely:
Nieva Glenna Abeto, Noel Orquinaza, Alex
Atutubo, Federico Anatado, and Efren Lopez are
penalized with suspension for ONE (1) month.
No pronouncement as to costs.
SO ORDERED.4
Petitioner assails NLRC's decision insofar as it has adjudged
monetary awards to private respondents Huyan and Napiar and
in not sanctioning the dismissal of other union officers and
members.
We begin by restating the well-settled rule that the findings of
fact of the NLRC, except when there is a grave abuse of
discretion committed by it, are practically conclusive on this
Court.5 It is only when NLRC's findings are bereft of any
substantial support from the records that the Court can step in
and proceed to make its own and independent evaluation of the
facts.
In rejecting petitioner's theory, the NLRC, in a carefully
considered assessment, said:
The company's contention that the decision to
transfer Huyan was done in the normal course
of business cannot be sustained in the light of
the attendant circumstances.
We note that the request of the Company's
Operations Manager which was used as the
basis for Huyan's transfer was made as early as
June 18, 1990 but it was acted only on October
15, 1990 as shown by the handwritten
notations thereon changing the designation of
Computer Data Clerk to Report Clerk. Perhaps,
it may only be a pure coincidence that such
action came a few days after the Operations
Manager made a strong recommendation to the
General Manager to investigate and find out
who "MAO" is and to have him dismissed.
The company argues that, contrary to the
Union's claim, Huyan was not being singled out
as shown by the fact that there was an
announcement posted in all bulletin boards of
the Company inviting applications for the
position of Report Clerk at the power plant. On
its face, this circumstance may indeed
show bona fides on the part of the Company.
However, the announcement limited those who
are qualified to employees in the Pay Class V
only and there were only 6 or 7 employees in
the entire work force that can qualify. Again,
maybe it is purely coincidental that Enrique
Huyan was one of those in the Pay Class V. The
point is, what is the logic and rationale behind
posting a general announcement when the
Company fully knows that only 6 or 7 out of
over a hundred employees can qualify? To Our
mind, the posting of the announcement stands
out as evidence of the Company's attempt to
camouflage its plan to target Huyan. Not only
that, even the Company's EDP/Personnel
Manager admitted in his testimony that only
Huyan had the best qualifications among the EDP/Personnel Manager to the General
Pay Class V employees, thus: Manager, a copy of which was furnished to the
Union and Huyan. Why no official notice was
xxx xxx xxx ever given to Huyan baffles Us. Even granting
for the sake of argument that such is a mere
formality, it betrays the insensitivity of the
The conclusion is irresistible that even before
Company for its employee for it expects him to
the announcement was posted, the Company,
rely on and act upon a piece of paper that is
or at least the EDP/Personnel Manager, knew
not even addressed to him. Circumstances like
that it was Huyan who will be transferred. After
this, no matter how trivial, indicate the
all, when the Company limited the choice to the
propensity of the Company to disregard the
Pay Class V employees, it can be assumed that
feelings of its employees. To top it all, the
the Company had already reviewed their
Company saw no need to respond to Huyan's
qualifications.
letter for reconsideration which was courteous
and respectful.
That indeed the plan was directed against
Huyan is made more evident by the fact that
We grant that Huyan did not comply with the
the EDP/Personnel Manager did not even
directives of the EDP/Personnel Manager to
discuss the matter of the transfer with Huyan
transfer. However, We find that his refusal to
before, and even after, making his
do so was not without reason or justification.
recommendation. This circumstance does not
As We see it, Huyan did not have it in his mind
exactly speak well of the way the personnel
to be defiant, otherwise he would not have
policies of the company is being managed. It
written his superior seeking reconsideration. He
simply shows that the concern for the well-
had to stand up for his rights and rightly so,
being and welfare of its employees is sorely
considering the treatment he received. To Our
lacking. It reduces the employees to mere
mind, therefore, in the context of the
pawns that can be sacrificed whenever the
antecedent circumstances there was no serious
Company or its managers feel like it. We cannot
misconduct or willful disobedience committed
understand why the Company will dispensed
by Huyan that would warrant his dismissal. It is
with this elementary courtesy on a very
as if he was provoked into resisting by what he
important matter affecting the work and even
believed was an affront to his dignity as a union
the future of the employee. This, by itself, is
officer and as a human being. Neither could
more than sufficient evidence to show the
there be abandonment, as this concept is
arbitrariness of the Company's decision to
understood in termination disputes.
transfer Huyan.

Be that as it may, we cannot sustain the charge

We cannot also blame Huyan if he felt, at that
of unfair labor practice against the Company.
time, that he was being demoted. The
As admitted by Huyan and the Union, the
announcement did not state that the position of
principal cause behind this controversy is the
Report Clerk which was formerly Pay Class III
Company's suspicion that Huyan was "MAO."
had already been upgraded to Pay Class V. Of
That Huyan was the Union vice-president was
course, it may be argued that because only
purely incidental. Put in another way, any
those employees with Pay Class V are qualified
employee who was suspected of being "MAO"
it follows that the position of Report clerk must
would have been the object of the Company's
be at least Pay Class V. However, it is the
moves, irrespective of whether that employee is
Company's fault that it did not clarify this
a union officer or not. Huyan was not
matter in the announcement. Perhaps had the
pinpointed because he was a union officer or
EDP/Personnel Manager discussed the matter
because the Company is anti-union but rather
with Huyan before reassigning the latter, the
because of the suspicion that he wrote the
misunderstanding could have been avoided. In
column that caught the ire of the company's
fact, from Huyan's letter to the EDP/Personnel
Operations Manager. No matter how
Manager, it can be deduced that he did not
detestable, the resultant moves of the company
know about the upgrading of the position. The
cannot be considered unfair labor practice.
least that the EDP/Personnel Manager could
have done was to clarify the matter upon
receipt of Huyan's letter. However, it would On the basis of the foregoing, we rule that
appear that the EDP/Personnel Manager was while the conduct of the company cannot be
concerned of enforcing his recommendation to strictly considered an unfair labor practice, still,
transfer Huyan more than anything else. the exercise of its management prerogative
cannot be sustained. The dismissal of Enrique
Huyan, is illegal. Ordinarily, when there is a
As to the subsequent dismissal of Huyan, the
finding of illegal dismissal, under Article 279 of
grounds therefor arose out of the disputed
the Labor Code, the employee is entitled to
transfer. There was never any official written
reinstatement and the payment of his
notice addressed to Huyan concerning his
backwages. However, in the case at bar, we are
reassignment. The Company's evidence consists
of the opinion that reinstatement cannot be
simply of the approved Memorandum from the
ordered not only because of the strained
 relationship between the parties herein but also
because Huyan's conduct as a union officer
leaves much to be desired . . . .
xxx xxx xxx
Considering also the motivations and actuations
of the company in orchestrating the transfer
and dismissal of Huyan, we shall award Moral
Damages in the sum of TWENTY FIVE
THOUSAND (P25,000.00) PESOS, and
Exemplary Damages in the amount of TEN
THOUSAND (P10,000.00) PESOS. After all
Huyan's dismissal was tainted with bad faith
and the motive of the Company for dismissing
Huyan was far from noble as shown by the
circumstances surrounding the dismissal. The
Company and its managers are admonished to
change their attitude and manner in dealing
with their employees, especially in matters such
as this.
xxx xxx xxx
1991 is illegal for being in violation of the "no
strike, no lock-out" proviso and the failure to
bring the union's grievances under the
grievance procedure in the CBA. It must be
borne in mind that prior to the dismissal of
Huyan, there was sufficient time to have the
matter of Huyan's transfer subjected to the
grievance procedure. That the Union considered
the procedure an exercise in futility is not
reason enough to disregard the same given the
circumstances in this case. Whatever wrong the
Union felt the Company committed cannot be
remedied by another wrong on the part of the
Union.10
Given its own above findings, the NLRC's grant of
separation benefits and damages to Huyan and Napiar
would indeed appear to be unwarranted. Article 264,
Title VIII, Book V, 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."

. . . The absence of good faith or the honest

In the case of the other union officers, however, the NLRC,
belief that the company is committing Unfair
having found no sufficient proof to hold them guilty of " bad
Labor Practice, therefore, is what inclines us to
faith" in taking part in the strike or of perpetrating " serious
rule that the strike conducted by the union from
disorders" during the concerted activity, merely decreed
January 22 to 25, 1991 is illegal for being in
suspension. We see no grave abuse of discretion by the NLRC in
violation of the "no strike, no lock-out" proviso
this regard and in not thus ordering the dismissal of said officers.
and the failure to bring the Union's grievance
under the grievance procedure in the CBA.6
Finally, in the case of Huyan, we sustain the NLRC in holding
that he, during the period of his illegal suspension (from 09
The State guarantees the right of all workers to self-
November 1990 when he was effectively suspended until 25
organization, collective bargaining and negotiations, as well as
January 1991 when he, along with the striking employees, were
peaceful concerted activities, including the right to strike, in
directed by the Secretary of Labor and Employment to return to
accordance with law.7 The right to strike, however, is not
the work premises), should be entitled to back salaries and
absolute. It has heretofore been held that a "no strike, no lock-
benefits plus moral damages, but in the reduced amount of
out" provision in the Collective Bargaining Agreement ("CBA") is
P10,000.00, in view of the findings of the NLRC, with which we
a valid stipulation although the clause may be invoked by an
concur, that petitioner company acted arbitrarily in its decision to
employer only when the strike is economic in nature or one
transfer Huyan. Exemplary damages, upon the other hand, are
which is conducted to force wage or other concessions from the
awarded only when a person acts in a wanton, fraudulent,
employer that are not mandated to be granted by the law
reckless, oppressive or malevolent manner (Art. 2232, Civil
itself.8 It would be inapplicable to prevent a strike which is
Code). NLRC's findings fall short of the underhandedness
grounded on unfair labor practice. In this situation, it is not
required so as to justify this award.
essential that the unfair labor practice act has, in fact, been
committed; it suffices that the striking workers are shown to
have acted honestly on an impression that the company has WHEREFORE, all considered, the questioned decision of public
committed such unfair labor practice and the surrounding respondent NLRC, dated 18 October 1991, is hereby MODIFIED
circumstances could warrant such a belief in good faith. 9 in that the award of separation benefits in favor of Enrique
Huyan and Prescilla Napiar is DELETED; the award to Huyan of
moral damages is REDUCED to P10,000.00; and the grant of
In the instant case, the NLRC found Enrique Huyan and Prescilla
exemplary damages is DELETED. The decision is AFFIRMED in all
Napiar, the "principal leaders" of the strike, not to have acted in
other respects. No special pronouncement on costs.
good faith. The NLRC said:

SO ORDERED.
It is bad enough that the Union struck despite
the prohibition in the CBA. What is worse is that
its principal leaders, Napiar and Huyan, cannot Feliciano and Romero, JJ., concur.
honestly claim that they were in good faith in
their belief that the Company was committing Melo, J., is on leave.
unfair labor practice. The absence of good faith
or the honest belief that the Company is
committing Unfair Labor Practice, therefore, is
what inclines us to rule that the strike
conducted by the Union from January 22 to 25,
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.
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.:

[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. 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:
"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 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)
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);
(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 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 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
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 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 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.
Narvasa, Gancayco and Griño-Aquino, JJ., concur.
Cruz, J., No part. Related to one of the counsel.
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 102185 February 15, 1993
PHILTREAD TIRE AND RUBBER CORPORATION, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and
ALLIANCE OF DEMOCRATIC FREE LABOR ORGANIZATION
(PHILTREAD CHAPTER), respondents.
Castillo, Laman, Tan & Pantaleon for petitioner.
The Solicitor General and the Chief Legal Officer, National Labor
Relations Commission for public respondent.
GRINO-AQUINO, J.:
This petition for certiorari  and prohibition under Rule 65 of the
Revised Rules of Court, with prayer for the issuance of a
temporary restraining order was filed by the Philtread Tire &
Rubber Corporation (hereafter Philtread) to set aside and annul
the Resolution dated February 14, 1991, of the National Labor
Relations Commission (NLRC), First Division, in NLRC-NCR
Certified Case No. 00002, as well as its Resolution dated
September 24, 1991, denying the petitioner's Motion for Partial
Reconsideration.
On March 3, 1990, private respondent Alliance of Democratic
Free Labor Organizations (ADFLO) — Philtread Chapter, filed a
Notice of Strike with the National Conciliation and Mediation
Board (NCMB) against the petitioner, Philtread, a corporation
engaged in the manufacture and sale of Firestone Tires and
Rubber products, for alleged discrimination, union busting, non-
granting of merit increases to outstanding employees, and other
acts of unfair labor practice.
Reacting to the union's notice of strike, Phil-tread filed a Notice
of Lockout on March 28, 1990, charging the union with acts of
unfair labor practice and violation of the collective bargaining
agreement. (Ibid.) It sought clearance to terminate the
employment of all the union officials. On April 10, 1990, it
announced that all salaried and supervising union employees
would not be allowed to work and enter the company premises
effective April 16, 1990" (p. 33, Rollo). It published in the Manila
Bulletin Classified Ads Section a notice of job vacancies for the
positions formerly occupied by its salaried and supervisory union
employees.
In retaliation, the union picketed the company and a complaint
for illegal dismissal of the union officers (NLRC Case No. NCR-00-
04-02207-90) was also filed.
Later, the company filed criminal charges for libel against thirty-
six (36) union officers and members who allegedly had
distributed to the public leaflets imputing defects in the
company's products.
On April 24, 1990, the union filed a letter-petition addressed to
the Secretary of Labor and Employment, requesting him to
assume jurisdiction over the labor dispute.
Acting on the petition, Secretary Ruben D. Torres, on April 30,
1990, certified the case to the NLRC, First Division, for
compulsory arbitration. The dispositive part of his order reads as
follows:
WHEREFORE, PREMISES CONSIDERED, the
entire dispute at the Philtread Tire and Rubber
Corporation is hereby certified to the National
Labor Relations Commission (NLRC) for
compulsory arbitration pursuant to Article 263
(g) of the Labor Code, as amended. To avoid
multiplicity of suits, the case for illegal dismissal
before the NLRC-NCR Branch docketed as Case
No. 00-04-02207-90 is hereby ordered
consolidated with the instant case.
In the interest of industrial peace and due
process, the effects of the termination of all
affected employees are hereby suspended.
Accordingly, the management is directed to
accept them back under the same terms and
conditions prevailing to the dispute. The parties
are strictly enjoined to cease and desist from
committing any act that will exacerbate the
situation..
The NLRC is further directed to ensure the
company's compliance with the directive for
reinstatement of the affected workers pending
resolution of the dispute. (pp. 162-163, Rollo.)
Philtread sought a reconsideration of the order but its motion
was denied by the Secretary of Labor.
Ultimately, Philtread partially complied with the Secretary's order
by announcing on May 7, 1990 that it would accept
back all  members of the supervising salaried units except the
thirty-six (36) union officers  who were facing libel charges. With
respect to them, the company (petitioner) filed a
manifestation/motion not to reinstate them pending resolution of
the labor dispute.
The union, on the other hand, filed in the NLRC a motion for
execution of the Labor Secretary's return-to-work order.
Acting on the company's urgent manifestation/motion and on the
union's motion for execution, the NLRC on August 20, 1990,
reiterated the Secretary's order to accept the workers back in
their jobs pending the resolution of the dispute:
On June 20, 1990, the counsel for the union
submitted a Motion praying that a Writ of
Execution be issued by this Commission to
implement the Order of the Secretary. A
considerable period of time has already lapsed
and the company has not taken any action to
comply with the directive contained in the two
(2) Orders of the Secretary of Labor and
Employment.
WHEREFORE, in view of the above premises,
the Commission directs the Philtread Tire and
Rubber Company and its officers to accept back
to work under the same terms and conditions
prevailing prior to the dispute the thirty six (36)
officers/members of the Alliance of Democratic
 Free Labor Organizations (ADFLO) who were
not accepted to work since April 16, 1990,
within three (3) days from receipt of this Order,
and to report its compliance therewith
immediately thereafter to this Commission;
otherwise, drastic action on this matter shall be
taken thereon. No motion for reconsideration of
this Order shall be entertained. (pp. 164-
165, Rollo).
However, Philtread was intransigent. It refused to reinstate the
36 employees/union officers, while it filed in this Court a petition
for certiorari  and prohibition with prayer for the issuance of a
temporary restraining order (G.R. No. 94695).
Meanwhile, upon the request and agreement of the parties,
conciliation meetings were held, presided over by Com. Vicente
S. Veloso III, to help the parties thresh out their differences.
They were attended by Labor Arbiter Emerson C. Tumanon, who
had been delegated earlier to hear and receive the evidence in
NLRC Certified Case No. 00002. Also present were Philtread's
counsel, the national president of the Federation-ADFLO, and a
majority of the members/officers of the union without counsel
(p. 1 of Labor Arbiter Tumanon's Special Status Report at p. 382,
Record).
During the conciliation meetings, Commissioner Veloso allegedly
put before the employees the idea of "deferment" of the
execution of the return-to-work order in exchange for financial
concessions from Philtread (p. 3, NLRC Resolution dated May 22,
1991) which according to a letter dated March 6, 1991
addressed to the NLRC by employees Glorieta T. Zacate and
Rudolfo Mantalba was acceptable to the majority of employees
present at the meetings.
However, on October 9, 1990, the union, through counsel,
refiled its motion for execution.
Instead of acting on the motion, the NLRC on February 14, 1991,
resolved the dispute between Philtread and the union by —
1) Awarding the unreinstated Supervisors
backwages computed from May 7, 1990, up to
September 19, 1990;
2) Awarding the said Supervisors a separation
pay computed at sixty (60) days for every year
of service, a remaining fraction of at least six
(6) months to be considered as one (1) whole
year;
3) Dismissing all other claims, for insufficiency
of evidence and for lack of merit. (p. 51, Rollo)
In view thereof, this Court declared G.R. No. 94695 closed and
terminated.
On February 26, 1991, Philtread filed a motion for partial
reconsideration on the ground that the award of two (2) months
separation pay per year of service was excessive and the award
of backwages had no legal basis.
The union, through counsel, likewise filed a motion for
reconsideration alleging that the decision was premature
because the Union had not yet completed the presentation of its
evidence that the workers had not agreed to defer the
implementation of the Secretary's return-to-work order and that
the award of backwages without reinstatement to the
unreinstated workers had no factual or legal basis.
On September 24, 1991, the NLRC denied both motions for
reconsideration.
Philtread filed a petition for certiorari  and prohibition with prayer
for a temporary restraining order, contending that:
1. the award of 60 days separation pay in effect
rewards disloyalty, de stabilization and the
instigation of labor unrest; and
2. the award of backwages was unjustified.
Unable to support the actions of the NLRC, the Solicitor General
asked that the Commission be given time to file its own
comment.
The NLRC defended its questioned resolutions.
After deliberating on the petition and the separate comments of
the public and private respondents, the Court finds the petition
partly meritorious.
Article 263 (g) of the Labor Code provides that:
(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 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 ours.)
Pursuant to the above provision, the Secretary of Labor certified
the dispute to the NLRC for compulsory arbitration which was
what Commissioner Veloso did when he called the parties to
conciliation meetings and thereafter decided the case of the
thirty-six (36) union officers/members who are facing libel
charges filed by the company.
As stated in the petition, the only matters in issue are the
separation benefits and backwages that the NLRC awarded to
the 36 supervisors facing libel charges whom Philtread did not
reinstate. The basis for computing those awards should be
reexamined.
ADFLO which did not file a petition for review of the NLRC's
decision is estopped from assailing the same for allegedly having
been rendered by the NLRC without due process or without
giving ADFLO a chance to finish the presentation of its evidence.
Its charge of lack of due process is not well taken for the record
shows that the NLRC bent over backward to accommodate it,
but it wasted its numerous opportunities to adduce evidence in
support of its charges against the company. Its lawyer, Attorney
Eulogio Lerum, absented himself repeatedly from the conciliation
proceedings and "unduly delayed the disposition of this case" (p.
32, Rollo).
The finding of the NLRC that Attorney Lerum's motion for
execution (with respect to the 36 unreinstated supervisors) of
the Secretary's return-to-work order "was unanimously objected
to  by his clients present during the September 19 and 20, 1990
Conciliation Conferences" (p. 32, Rollo) (because they preferred
financial concessions in lieu of reinstatement) has not been
denied by any of the parties.
The NLRC also found that the company had complied with the
procedural requirements of a valid lockout (Art. 263 of the Labor
Code) and that in view of the reasons therefor (enumerated in
pages 14-19 of the resolution of February 14, 1991), it was clear
to the NLRC that "the company in resorting to lockout wanted to
obtain industrial peace, a peace that seemed unobtainable as
long as those locked out obstructively formed part of its
operation" (p. 38, Rollo). This factual finding was not questioned
by any of the parties. The NLRC concluded that the company
incurred no liability to the locked out employees. The NLRC said:
But again, we concede, as this is not even
disputed by the Union, the company complied
with the procedural requirements of a valid
lockout. In relation, therefore, to the first
question, the company incurred no liability to
those employees affected by its lockout.
Nevertheless, the NLRC believed that the company should be
penalized for its failure to fully comply with the Secretary's
return-to-work order, by refusing to reinstate the 36 supervisors
facing charges of libel. It held the company liable for their
backwage from May 7, 1990, when Philtread called back to work
all other striking members of the union, up to September 19,
1990, when the 36 locked out supervisors chose to defer
execution of the Secretary's order during the conciliation
conferences. The computation of their backwages from May 7,
1990 conforms with, rather than contravenes, the NLRC's finding
that the lockout was lawful for it did not order the company to
pay backwages from the commencement of the lockout on April
16, 1990.
Sec. 5 (a) and Sec. 6, Rule IX, Certified Cases, of the NLRC Rules
of Procedure, however, provides:
Sec. 5. — Effects of Certification.
(a) Upon certification, the intended or
impending strike or lockout is automatically
enjoined, notwithstanding the filing of any
motion for reconsideration of the certification
order nor the non-resolution of any such motion
which may have been duly submitted to the
Office of the Secretary of Labor and
Employment. If a work stoppage has already
taken place at the time of the 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.
Sec 6. — Effects of Defiance. — Non
compliance with certification order of the
Secretary of Labor and Employment or a return
to work order of the Commission shall be
considered an illegal act committed in the
course of the strike or lock-out  and shall
authorize the Secretary of Labor and
Employment or the Commission, as the case
may be, to enforce the same under pain of loss
of employment status or entitlement to full
employment benefits from the locking-out
employer or backwages, damages and/or other
positive and/or affirmative reliefs, even to
criminal prosecution against the liable party/ies.
(Emphasis supplied.)
The Secretary's assumption and certification orders being
executory in character are to be strictly complied with by the
parties even during the pendency of a petition questioning their
validity for this extraordinary authority given by law to the
Secretary of Labor is "aimed at arriving at a peaceful and speedy
solution to labor disputes, without jeopardizing national
interests." (Union of Filipro Employees vs. Nestlé Philippines,
Inc., 192 SCRA 396, 410.) This Court further held in that case:
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
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 illegally employed although
actually engaged in activities inimical to their
employer's interest.
xxx xxx xxx
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 [benefits] to other more deserving employees. (p. 12, Rollo). It
together with his co-workers so the operations would indeed be unfair and demoralizing to the quiet and
of the company can be resumed and it can uncomplaining workers when the troublemakers can look
continue serving the public and promoting its forward to larger financial benefits than the law ordinarily allows.
interest. Paying a higher price to get rid of troublemakers would not be
conducive to industrial peace.
Since the return-to-work order was obtained by the workers, the
right to return-to-work could be waived by them, as they did in How much then are they entitled to receive as separation pay?
this case when they opted to defer their reinstatement while
negotiating with the company for financial benefits in lieu of The petitioner in its motion for partial reconsideration of the
reinstatement in view of the "bad blood" and "severely strained NLRC resolution dated February 14, 1991 prayed that the
relations" between them and management (p. 49, Rollo). The separation pay awarded by the NLRC "be reduced to one
award of separation pay in lieu of reinstatement is an equitable month's pay for every year of service" (p. 168, Rollo). Since such
recourse that has been sanctioned by this Court in a number of award accords with numerous previous decisions of this Court,
cases. (Commercial Motors Corporation vs. Commissioners, the same may be followed in this case (Commercial Motors
Second Division, National Labor Relations Commission and Pedro Corporation vs. Commissioners, Second Division, National Labor
Umlas, 92 SCRA 191, citing City trust Finance Corporation vs. Relations Commission and Pedro Umlas, 192 SCRA 191, citing
NLRC, 157 SCRA 87 [1988], cited in Quezon Electric Cooperative City trust Finance Corporation vs. NLRC, 157 SCRA 87 [1988],
vs. NLRC, 172 SCRA 88, 97-98 [1989]). cited in Quezon Electric Cooperative vs. NLRC, 172 SCRA 88, 97-
98 [1989]).
However, the NLRC's award of two (2) months instead of one (1)
month separation pay for every year of service to the 36 WHEREFORE, the petition for certiorari  and prohibition is
supervisors is unprecedented and unwarranted both in law (Art. partially GRANTED. The NLRC resolution of February 14, 1991 is
283, Labor Code), and jurisprudence, and the existing collective affirmed, except the award to the thirty-six (36) unreinstated
bargaining agreement between the union and the company. The supervisors of two months separation pay for every year of
CBA between the petitioner and ADFLO contains the following service which is hereby reduced to one month separation pay for
provision on separation pay. every year of service in the petitioner company a remaining
fraction of at least six (6) months to be considered as one (1)
ARTICLE XVIII year. In other respects, the decision/resolution order review is
AFFIRMED. No costs.
SEVERANCE PAY
SO ORDERED.
Sec. 1. Except for cases already covered by any
existing COMPANY policy or plan, permanent Cruz, Padilla and Bellosillo, JJ., concur.
employees who are laid off for lack of work,
reduction in force, or retrenchment  shall be Quiason, J., took no part.
paid one and one-half month's pay for each
year of service. Permanent employees who are
separated from the COMPANY due to work-
connected death and work-connected physical
disability  based on the finding of the COMPANY
Physician that the employee has become totally
disable to continue performing his regular
duties shall likewise be paid one and one-half
month's pay for year of continuous service .
Other cases of separation from employment
including retirement but excluding termination
for just cause and valid causes, shall be
compensated at one month's basic pay
multiplied by 1.115 for every year of
continuous service. Fractions of a year shall be
taken into account on a pro-rata basis to the
nearest full month but fraction of a month shall
be disregarded. If these cases of separation
from employment are also covered by any
existing COMPANY policy or plan, the employee
shall be entitled only to the benefit under such
COMPANY Plan or under this Agreement,
whichever is beneficial to the employee. (pp.
11-12, Rollo; Emphasis supplied.)

The petitioner correctly argued that this award of sixty (60) days
would send signals that disloyalty, destabilization, and the
fomenting of labor unrest is rewarded and given an extra
premium over and above the normal grant of retirement
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 98043 May 26, 1993
BAGUIO COLLEGES FOUNDATION, RAY DEAN SALVOSA
and CORAZON CONCEPCION, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, ALMA
ANGIWAN, DANILO SORIANO and RESTITUTO C.
RIVERA, respondents.
Tenefrancia, Agranzamendez, Liceralde & Associates for
petitioners.
Abelardo Estrada for private respondent Rivera.
Raul Mencio Molintas for private respondent Angiwan and
Soriano.
NOCON, J.:
Petitioners appear to have followed the adage, "When in doubt,
shoot first and ask questions later," in issuing the questioned
directive to its striking faculty employees. Encountering adverse
decision from both the Labor Arbiter 1 and the National Labor
Relations Commission,2 petitioners ask Us to reverse. Private
respondents, however, state that petitioners are asking this
Court to review findings of facts made by the NLRC and the
Labor Arbiter. As the petition poses a rather new issue for this
Court to rule upon, We have decide to review the findings of fact
made by the NLRC and the Labor Arbiter.
Public respondent National Labor Relations Commission found
the facts to be as follows:
Complainants Alma Angiwan, Danilo Soriano
and Restituto Rivera were hired respectively in
November 1987, June 1978 and May 1982.
Alma Angiwan is not a member of the Union
while the latter two complainants are members
of Kapisanan at Lakas ng mga Guro sa BCF-ALU
which staged a strike on March 8, 1988.
Claiming that their dismissals were illegal, private respondents
filed complaints against petitioners with the Labor Arbiter. On
On April 29, 1988, the Secretary of Labor and
January 8, 1990, Labor Arbiter Gambito rendered a joint decision
Employment Franklin M. Drilon issued an order
in favor of private respondents with the dispositive portion
directing the striking employees to return to
reading as follows:
work at the opening of the school year 1988-89
and for the school to accept them all under the
same terms and conditions prior to the work
stoppage.
On May 8, 1988, Baguio Colleges Foundation,
through its community newspaper, the "Gold
Ore," directed all the striking employees to
report to the office of Mrs. Corazon R.
Concepcion, Vice-President for Administration of
BCF, on May 14, 1988 between the hours of
8:00 o'clock a.m. to 10:00 o'clock a.m. That
aside from the published directive, respondent
Concepcion likewise issued written directive to
the individual union members directing them to
report to her office on said date and time (May
14, 1988 between 8 to 10 a.m.) "to signify their
compliance with the order of the Secretary."
Some of the union members including the
complainants who did not read the notice
published in the newspaper (Gold Ore) and who
did not receive the directive of Concepcion,
failed to report to her (Concepcion) on the date
and time set by her. Other union members who
received their notices on time reported to
Concepcion. They were required to enter her
office one at a time. Inside her office, they
were berated and chastised for participating in
the strike. Concepcion also told them to look for
another job and threatened them that she has
a hand in the assignment of teaching loads.
That later, the complainants came to know of
the directive of Concepcion. They went to their
office with their letters signifying their intention
to comply with the return to work order of the
Secretary. However, Concepcion told them that
she could no longer accommodate them
because they reported only after or beyond the
date and time indicated in her directive and
that they violated her written directive.
Subsequently, the complainants received
individual notices dated May 25, 1988, signed
by respondent Ray Dean Salvosa, Executive
Vice-President of BCF which states:
By failing to report to the V.P.
for Administration Corazon R.
Concepcion between 8:00
a.m. to 10:00 a.m. on May 14,
1988 despite notice, you
wilfully disobeyed the return
to work order issued by the
Hon. Franklin M. Drilon,
Secretary of Labor last April
28, 1988, and therefore, your
employment at Baguio
Colleges Foundation as Faculty
members is hereby
terminated.
WHEREFORE, in the light of the foregoing,
judgment is hereby rendered ORDERING the
respondents to reinstate Alma Angiwan, Danilo
Soriano and Restituto Rivera to their former
positions without loss of seniority rights and
without reduction in their teaching loads prior
to their dismissal and to pay their backwages
effective at the opening of classes of school
year 1988-1989 based on the minimum rate
provided in RA 6640, aside from the other
benefits and privileges they may have been
entitled to up to their actual reinstatement.
Respondents are likewise ordered to pay
P2,000.00 each to counsel for Angiwan and
Soriano and counsel for Rivera as attorney's
fees.
 SO ORDERED.4
Petitioners appealed to the National Labor Relations Commission.
On November 29, 1990, public respondent NLRC issued its
decision in favor of private respondents affirming in toto the
Labor Arbiter's decision.
Hence, this instant petition where petitioners claim that the
private respondent committed serious and palpable error
amounting to grave abuse of discretion in holding that:
1. they varied the tenor of the return-to-work
order issued by the Honorable Secretary of
Labor on April 29, 1988; and
2. the dismissal of private respondents Angiwan
(who was employed on a probationary basis)
and Soriano and Rivera (Both of whom are
contractual employees) are illegal.
The Honorable Secretary of Labor's April 29, 1988 Return-to-
Work Order which spawned the illegal dismissal cases before the
Labor Arbiter reads as follows:
WHEREFORE, ABOVE PREMISES CONSIDERED,
and pursuant to Article 263 (g) of the Labor
Code, as amended, this Office hereby assumes
jurisdiction over the entire labor dispute at
Baguio Colleges Foundation. Accordingly, all
members who are presently not rendering their
usual work but are engaged in concerted
activities are hereby enjoined from pursuing
their activities to avert exacerbation of the
situation and return to work at the opening of
the school year 1988-89 and for the College to
accept them all under the same terms and
conditions prior to the work stoppage.5
Petitioners claim that they were merely following said Order
when they had published in the "Gold Ore," a newspaper of
general circulation in Baguio City and in Benguet Province, the
following directive:
Please be informed that the Secretary of Labor,
the Hon. Franklin M. Drilon, has assumed
jurisdiction over the labor dispute at BCF.
Quoted below is the pertinent portion of the
order that was issued by the Department of
Labor and Employment last April 29, 1988 and
received by the BCF on May 5, 1988;
xxx xxx xxx
In view of this, all striking employees are
hereby directed to report to the office of the
Vice-President for Administration, BCF, between
the hours of 8 a.m. and 10:00 on Saturday,
May 14, 1988 to signify their compliance with
the Order of the Secretary.6
Petitioners terminated the employment of private respondents
who did not report as earlier ordered with a termination letter
which reads as follows:
By failing to report to the VP for Administration
Corazon R. Concepcion between 8:00 A.M. and
10:00 A.M. on May 14, 1988 despite notice, you
willfully disobeyed the return-to-work order
issued by the Hon. Franklin M. Drilon, Secretary
of Labor, last April 29, 1988, and, therefore,
your employment at Baguio Colleges
Foundation as faculty member is hereby
terminated.7
Petitioners claim that:
. . . The directive was issued not out of malice
but in all good faith, not for expediency but due
to necessity. Necessity because the opening of
the ensuing school year was drawing nearer,
and the school administrators needed to know
how many of those striking teachers were
coming back to teach. It was important for Your
Petitioners to know who among those in its
faculty roster were available for teaching
assignment for the ensuing semester because
the subjects-offerings for that semester would,
as in other semesters past, have to based on
the availability of teachers. . . .8
They also claim that:
Public Respondent likewise charged Your
Petitioners with having changed the time frame
set in the Order to only one day. (Resolution,
Annex "B", at p. 8). This is not correct. For, as
can be seen from one evidence, the directive in
question was published in the Gold Ore on May
8, 1988, and the date indicated therein for the
striking teachers to report was May 14, 1988,
or a period of six days — not one day.9
Private respondents complain that petitioners should have first
ascertained why they (private respondents) could not report on
May 14, 1988 as directed. They claim that as soon as they have
learned of said directive, they immediately reported to petitioner
Concepcion and this was way before the start of classes of
school year 1988-89.
The precedent case of Union of Filipino Employees v . Nestle
Philippines, Inc.10 leaves no doubt as to the character of the
Secretary of Labor's Assumption Order (i.e. return-to-work
order) and the compliance required of the parties, as follows:
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 or 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. . . .
11
 (Emphasis in the original)
Being executory in character, there was nothing for the parties
to do but implement the same.
It could be the case that petitioner school had to know several
weeks in advance, who are of the striking teachers were
available for teaching assignments for the school year 1988-89
"because the subject offerings . . . (would) have to be based on
the availability of teachers" 12 but it would have been prudent for
petitioner school to file with the Secretary of Labor a motion for
clarification13 of said assumption order and inform him of
petitioner school's peculiar requirements regarding the offering
of subjects based on the availability of teachers which had to be
determined way in advance of actual classes.
petitioners. Neither were they able to read the
publication of the notice in the Gold Ore.
Despite the lack of notice, however, as soon as
private respondents learned about the directive,
they lost no time within a reasonable period
before the start of the second semester in
going to the office of petitioner Concepcion to
signify their intention to follow the return to
work Order of the Secretary of Labor. However,
petitioners stuck to May 14, 1988 between 8 to
10 A.M. as the cut-off period for signifying their
intention to return to work. What can be
inferred from this act of petitioners is that they
really wanted private respondents removed
from their employment at all cost such that
they resorted to the ploy that since private
respondents did not return to their respective
work within the limited period set by
petitioners, the former were automatically
deemed to have abandoned their work or failed
to follow a lawful order of their employer. 15

Not having done so and having dismissed private respondents Not having found any gave abuse of discretion on the part of
for not reporting on the date the petitioner school had public respondent NLRC, its findings are conclusive on this Court
unilaterally determined, public respondent NLRC committed no as they are supported by substantial evidence. 16 Verily, We have
grave abuse of discretion in ruling as follows: to deny he petition.

By directing striking employees to report on a We find no need to discuss petitioners' second issue as it is clear
fixed date and time prior (to) the opening of from petitioner Salvosa's letter that private respondents were
school year 1988-89, respondents-appellants dismissed for not reporting on the date petitioner school stated
have indeed varied the tenor of the Return-to- in its directive. The issue of the status of employment of private
Work Order with the obvious effect of respondents was merely an afterthought to give some
restrictively changing the time frame set in the semblance of legality to the dismissal.
Order to only one day. Nothing in the Order
had authorized BCF, either indirectly or WHEREFORE, the questioned NLRC decision and resolution are
impliedly, to alter the period within which hereby AFFIRMED with the clarification that the award of
striking employees should report at a fixed date backwages is limited to a period of only THREE (3) years.
and time, must less clothe it with the power of
dismissal over the striking employees who SO ORDERED.
failed to report on the date it set.
Narvasa, C.J., Padilla and Regalado, JJ., concur.
The return-to-work Order is clear and
unambiguous. It admits (of) no further
interpretation such as (what) the BCF would
want to be read into it as part of its
prerogative, (Rollo, 60), which it, in turn,
invokes to justify the dismissal of herein
complainants. The publication of the directive in
the community newspaper and the mailing of
the same to the striking employees would not
give any added significance to an obviously
self-serving act.14

The Court can only suspect something sinister in petitioners'

actions which has been aptly pointed out by the Solicitor General
in his Memorandum as follows:

Moreover, the return to work order of the

Secretary of Labor was issued on April 29,
1988. The first semester of BCF was to start in
June 1988. The striking teachers were
requested to report on May 14, 1988 between 8
to 10 A.M. only. Private respondents, however,
did not receive the notice sent to them by
FIRST DIVISION

[G.R. No. 116128. July 12, 1996.] For review in these consolidated petitions is the Decision, dated
May 20, 1994, of the National Labor Relations Commission as
ALLIED BANKING CORPORATION, Petitioner, v. NATIONAL LABOR RELATIONS COMMISSION,
HON. JOSE G. DE VERA, ALLIED BANKING EMPLOYEES UNION — NUBE, TOMAS GONZALO, well as its Order, dated July 8, 1994, in NLRC NCR Case No.
CRISANTO BALISI, NORBERTO AGUJA, BENITO BARRERA, HERNANIE SISON, MAYNARD CUENCA,
VICTOR M. ALVARES, INOCENCIO SALVADOR, LUISITO MENDOZA, ARTURO VILLANUEVA, PEDRO 004005-92 and NLRC NCR Case No. 00316-92.
PASCUAL, TAGGERT ABASTILLAS, ALICIA ABILLE, NIDA ABUTAN, TONY ACIBAR, DAISY ADRIANO,
ANDREA JOCELYN AGUDO, ERLINDA AGUS, SONNY ALAYON, NESTOR ALCARION, RAUL ALIGAEN,
EDWIN AMORANTO, BUENERJES M. ANTE, LUISITO ARELLANO, CARLO ARRANZAMENDEZ, ALVIN In its petition, 1 the Bank questions the latter portion of the
ARROCO, JOSEFINA AVILLANOSA, SUSAN BALLESTERE, TEODORO BANATCILA, EDUARDO BANIS,
NOEL BARCENAS, MAGTANGGOL BAWAL, RODRIGO BEGINO, BENJIE C.S. BETRAN, VIRGILIO decision of the National Labor Relations Commission (NLRC)
BRILLANTES, JOSE BUFI, APOLONIO BURLAZA, EDUARDO CABALU, REYNALDO CALAROZA,
WALFRIDO CALCABIN, EDUARDO CALCES, LORENZO CALVELO, JR., EDUARDO CANIZARES, ROY
wherein it remanded to the Labor Arbiter the issue of whether or
CASIDO, ANGELITO CASTRO, SALLY CASTRO, ARTHUR CASTROGERES, EDNA CEOCO, SUSAN CHAN, not the forty-one (41) respondents are entitled to back wages
ANNE CHUA, LETTY CHUA, RODALIA CHUA, CARLOS CHUNG, RASAURO CLERIGO, MARY ANN CO,
DELIA CONDE, AVELINO CONDERO, MAXIMO CORNEJO, JR., CHARLIE CORPUZ, CYMBELINE CRUZ, corresponding to the period that they should have been
JUDITH DE LA CRUZ, VENERANDO CUI, ADRIANO CUTINES, JR., ED DAGUMAN, MARIE PAZ
DAGUMAN, EDUARDO DAYAO, JESUS DAYAO, WENCESLAO DIMO-OS, ROGELIO EDORA, LOLITA EL reinstated since 1986, pursuant to the guideline stated in our
FANTE, ABELARDO EUGENIO, JAIME FERRER, REYNALDO FERRERI, ROMEO T. FLORENTINO, JOY R.
FLORES, ROBERTINO FUCOY, BUENAVENTURA GABITAN, JOSE GACO, JR., RAUL GALSIM, RAUL
Resolution, dated May 4, 1988.
GONZALES, OSCAR CORDULA, CARMELITA GULAPA, OPHELIA DE GUZMAN, ROGER HAO, BALAGTAS
HERNANDEZ, GERARDO ILANO, ALAN DE JESUS, JAIME JIMENA, CONNIE DE JOYA, HECTOR
JULIANO, ALFREDO LEGASPI, DANILO DE LEON, ARMANDO LIM, ANGELITA LOPEZ, ROEL LOPEZ, Respondents, on the other hand, contend in their petition 2 that
CAROL MABUGAT, ERWIN MACALINO, RAUL MACATANGAY, CATALINO MACLANG, MANUEL C.
MADERAZO, REGINALD MALAPIT, MENARDO P. MALATE, GILBERT MANAOIS, TONY MANAOIS,
the NLRC gravely abused its discretion in affirming the validity of
JAIME MANIPIS, EDGAR MARCELO, AMELITA MARCO, ABELARDO MARIANO, JANE MINA
MARQUEZ, JULINO MARQUEZ, RUBEN MEDINA, ERNESTO MENDOZA, NORBEN MENDOZA, BELINDA
their dismissal by the Bank.
MIRANDA, LUCILLE MONTILLA, MARY ANN MUEDA, LOURDES MUGAR, DINDO NEMIADA, RENE NG,
EDGARDO NICASIO, RODEL NUNEZ, ROLANDO OCAMPO, IRENE OCOS, ALEX OLAES, JOSEFINA
ONA, AMADO F. ONG, GERSON OZARAGA, ROSALEO PACIBE, ANGELINO PALAO, MARIO PAPA, The dispute between petitioner and respondent Union started
ELIZABETH PARUNGGAO, LILIBETH PAYPON, ERNESTINA PELAEZ, ALFREDO DEL PILAR, ELPIDIO
PINEDA, MA. LOURDES PLANA, BLESIDA POBLETE, REMEDIOS POLINTA, AGUSTIN, QUILLA,
when their collective bargaining agreement which was to expire
JOSEFINO RAMIREZ, ANA ROBERTA RAMOS, ALFREDO RAYMUNDO, ROWENA REBOSA, CRISPINA on June 30, 1984 came up for renewal. They failed to reach an
REMIGIO, EPITANIO REYES, JR., SONIA REYES, VICTORINO REYES, ANTONIO REQUEPO, TOMAS
RUBIALES, ANGELITA SACLOLO, OSCAR SAGGE, ROMEO SALTING, NICANOR SAYSON, CARLOS amicable settlement particularly on the wage increase issue.
SANCHEZ, DEXTER SANCHEZ, ELOIS SAN MATEO, ALBERT SANTIAGO, CARMEN DE LOS SANTOS,
ROMEO SIMAN, HELEN T. SIY, NOEL SOLIS, GENESIS SORIANO, TERESITA SY, EVANGELINE Respondent Union thereupon filed a notice of strike with the
SUALOG, JUANITO SULLERA, AMELOU TAN, EVELYN TAN, GENE TAN, NANCY TAN, ROSALINO P.
TAN, EMILIO TARROSA, JR., EDUARDO TOLENTINO, RUFINO TRINIDAD, JR., ARACELI UY,
Bureau of Labor Relations.
ALEXANDER VALENZUELA, PRISCILA VELARDE, REUEL VELARDE, AUDIE VELASCO, WINSTON
VELASCO, LUISITO VENGCO, GRACE VICTORIA, IMELDA VILLAR, MA. CORAZON VILLEGAS, JOSE
VILLAMOR, ESTRELLA VILLAREAL, MA. VERONICA VILLARICA, ABE VILLARINO, FE YAP, RAMON On December 16, 1984, then Minister of Labor and Employment,
ZAFRA, MELY ABANO, ELLEN ABRIOL, GIL AJAS, VIRGILIO ALCORIZA, FRANCISCO AQUINO,
AUDREY ANN ARMENDI, FILIPINAS BOLLER, ROZIELO CALIWAGAN, MARIE LIAN CEMBRANO,
Blas Ople assumed jurisdiction over the dispute pursuant to
ZERALDA CHAN, MARY ANTONETTE CHU, VEDASTO DE CLARO, ARNOLD COLLANTES, REYNALDO Article 263 (g) of the Labor Code of the Philippines, as amended.
CRISTAL, RAMON DIOLAZO, PROCESO DUJUNCO, ANTONIO ENDERIZ, FLORIAN ENRIQUEZ,
ERNESTO ESBER, MARLENE GENEVIEVE ESQUIVEL, TITA FELIPE, EDILBERTO GALSIM, RIGOBERTO The orders enjoined the Union from declaring a strike and the
GARCIA, CLARO GANO, RAYMUNDO GANCIA, SYLVIA GUEVARRA, LAURO DE GUZMAN, ELENA
JABSON, RUBY KUIZON, ENRIQUE LABUSON, ERNESTO LAOANG, EDUARDO TIAM LEE, AMADO management from effecting a lock out. 3 The orders
LIM, SUSAN LIM, SHIRLEY LOCSIN, LEONARDO LULU, MERLE MACARUBBO, CECILIA MAGNO,
TERESITA MAHERALNAGH, PERSEVERANDA MALLARI, MARIO MARQUEZ, JOYCE ELIZABETH
notwithstanding, respondent Union nevertheless filed on
MELENCIO, ROMEO MENDOZA, SEVERO MORIN, DANILO NATIVIDAD, JANELYN NELSON, MA. December 20, 1984, a report on the results of the strike vote
TERESA PAMA, RAMONITA RECUENCO, EDGARDO REGOSO, TEDDY REY, EDITHA REYES, GEORGE
REYES, MA. CECILIA RIVERA, LOURDES ROSALES, ROBERTO SABAULAN, MANUEL SAN AGUSTIN, that it earlier conducted. On January 3, 1985, respondent Union
MA. CLEOFE SANCHEZ, MARIO SAN GREGORIO, ARTURO SANTERVA, CARMELITO SANTOS,
MEYNARDO SANTOS, LORETA SIA, MA. TERESA SORIANO, LEOPOLDO TACUGUE, NOEL TEANO,
staged a strike upon the Union president’s contention that the
TEDDY TUPAS, NILO URBINA, MARY ANN UY, CYNTHIA VICTORIA, VICENTE VIDAL, ERNESTO YAP, Labor Minister’s assumption order was a mere scrap of paper.
RUBEN ZARANDIN, TERESITA ALHAMBRA, EDMUND ARRIOLA, KELLY CALUNGSUD, MA. LAARNI
CHING, ELENITA DE CASTRO, FLORINDA REGOSO, LEOVINO REYES, RICARDO SALVADOR,
NICANOR SAYSON, and GRACE VENERACION, Respondents.
On January 4, 1985, petitioner filed with the Ministry of Labor
[G.R. No. 116461. July 12, 1996.]
and Employment a Manifestation and Urgent Motion praying for
ROLANDO G. OCAMPO, ROWENA C. REBOSA, DEXTER C. SANCHEZ, ELPIDIO PINEDA, BALAGTAS a return-to-work order. On January 6, 1985. Minister Ople
HERNANDEZ, ALAN DE JESUS, REYNALDO FERRER, ANGELITO CASTRO, JOSE VILLAMOR, JR.,
EVANGELINE SUALOG, LILIBETH PAYPON, GILBERT MANAWIS, SALLY CASTRO, JOSE BUFI, granted the motion and issued a return-to-work order which
IMELDA VILAR, JANE MINA MARQUEZ, SUSAN CHAM, CONNIE DE JOYA, TERESITA SY, SONIA
REYES, EVELYN TAN, AMELITA MARCO, HECTOR JULIANO, JUDITH DELA CRUZ, APOLONIO included a P1,000.00 grant per employee chargeable to future
BURLAZA, ROGELIO EDORA, JAIME MANIPIS, PRISCILA VELARDE, LOURDES MUGAR, RAUL
GONZALES, BLESILDA POBLETE, ANTONIO RAQUEPO, MARIO PAPA, TONY ACIBAR, VIRGILIO
CBA benefits.
BRILLANTES, TONY MANAOIS, ELOISA SAN MATEO, MA. LOURDES PLANA, ANGELITA LOPEZ,
ARTHUR CASTROGERES, EDGARDO NICASIO, DAISY ADRIANO, JESUS DAYAO, CARMEN DELOS
SANTOS, FE YAP, RUBEN MEDINA, ERNESTO MENDOZA, EDUARDO CALCES, LUISITO ARELLANO, In an Order, issued on January 18, 1985, Minister Ople directed
JOSE GACO, JR., TEODORO BANATICLA, ROEL LOPEZ, DANILO DE LEON, NOEL SOLIS, GENESIS
SORIANO, RUFINO TRINIDAD, JR., VICTORINO REYES, MAXIMINO CORNEJO, JR., ALVIN ARROCO,
the parties to continue negotiations until January 31, 1985;
ERWIN MACALINO, TOMAS RUBIALES, ANGELINO PALAO, EDNA CEOCO, JAIME FERRER, AUDIE otherwise, if no compromise agreement is reached, he will
VELASCO, ANGELITA SACLOLO, CAROL RAMOS, AVELINO CORDERO, EPIFANO REYES, JR.,
OPHELIA DE GUZMAN, IRENE OCOS, REGINALD MALAPIT, JOSEFINO RAMIREZ, ABELARDO personally resolve the bargaining deadlock.
MARIANO, RAMON ZARFA, DELIA CONDE, ANNE CHUA, NENA NG, ESTRELLA VILLAREAL, LETTY
CHUA, ANA ROBERTA RAMOS, EDUARDO CABALES, RODRIGO BEGINO, JAIME GIMENA, GENE TAN,
CARLOS CHUNG, WENCESLAO DIMO-OS, LOLITA ELFANTE, ALICIA ABILLE, ROY CASIDO, LUCILLE
MONTILLA, ALFREDO RAYMUNDO, DINDO NEMIADA, GERARDO ILANO, CARLOS SANCHEZ,
The parties failed to break the deadlock and so, Minister Ople
AGUSTIN QUILLA, CHARLIE CORPUZ, WINSTON VELASCO, RODALIA CHUA, ALEXANDER issued an Order, dated January 31, 1985, directing them to
VALENZUELA, EDGAR MARCELO, ALBERT SANTIAGO, RAUL GALSIM, CARLO ARRANZAMENDEZ,
JOSEFINA ONA, CARMELITA GULAPA, ARACELI UY, CRISPINA REMIGIO, BELINDA MIRANDA, incorporate in their collective agreement the awards granted. 4
GRACE VICTORIA, ROMEO SALTING, EDWIN AMORANTO, ROGER HAO, MA. VERONICA VILLARICA,
ALFREDO DEL PILAR, BUENAVENTURA GABITAN, LUISITO VENGCO, HERSON OZARAGA, SUSAN
BALLESTEROS, RAMONITA RECUENCO, ABE VILLARINO, RODEL NUNEZ, ALFRED LEGASPI, RAUL On February 11, 1985, "certain members of the Union resumed
MACATANGAY, REYNALDO CALAROZA, ADRIANO CUTINES, JR., EDGARDO DAYAO, LORENZO
CALVELO, JR., NESTOR ALCARION, EDUARDO CANIZARES, REFUNIO MARQUEZ, NIDA ABUTAN, the strike and, on the following day, acts of violence were
RAMON DIOLAZO, NORBEN MENDOZA, ROMEO SIMAN, CYMBELINE CRUZ, ROSALEO PACIBE,
ABELARDO EUGENIO, MARY ANN CO, ANDREA JOCELYN AGUDO, EMILIO TARROSA, JR., TAGGERT committed . . . resulting in the filing of criminal charges against
ABASTILLAS, RAUL ALIGAEN, CAROL MABUGAT, ERNESTINA PELAEZ, ROBERTINO FUCOY, MARY
ANN MUEDA, CATALINO MACLANG, REMEDIOS POLINTAN, NICANOR SAYSON, NANCY TAN,
some of the strikers." 5 Petitioner identified these "certain
JUANITO SULLERA, AMELOU TAN, SONNY ALAYON, WALFRIDO CALCABIN, VENERANDO CUI, members of the Union," numbering 271, the respondents
OSCAR GORDULA, ROSAURO CLERIGO, MAGTANGGOL BAWAL, HELEN SIY, ELIZABETH PARUNGAO,
REUEL VELARDE, NOEL BARCENAS, Petitioners, v. NATIONAL LABOR RELATIONS COMMISSION included.
and ALLIED BANKING CORPORATION, Respondents.

Petitioner, through notices published in the Bulletin Today, the

Times Journal, and the Daily Express, directed the striking
DECISION
employees to return to work not later than 1:00 p.m. of
February 13, 1985.
HERMOSISIMA, JR., J.:
In spite of these notices, respondents failed to report for work
on the stated deadline. Respondents explained that the
resumption of their picketing activities was brought about by
their belief that Minister Ople’s decision, dated January 31, 1985,
was not based on justice, equity and reason.
Private respondents’ posture of intransigence caused petitioner
to issue notices of their termination.
Meeting the Union demands halfway, Minister Ople, on March 7,
1985, issued a Resolution modifying his January 31, 1985 Order
and so the union lifted its picket lines and notified petitioner, on
March 11, 1985, that the striking employees were returning back
to work. Petitioner refused to accept them back on the ground
that the strikers have already been dismissed for abandonment
of work when they failed to obey the assumption order.
In order to quell further dispute, Minister Ople, on June 5, 1985,
issued an Order which directed the bank to reinstate
provisionally all striking workers except (a) those who have
already accepted their separation pay; (b) officers of the union;
and (c) those with pending criminal charges.
The Union then filed with us a petition for certiorari, with a
prayer for the issuance of a preliminary mandatory injunction,
docketed as G.R. No. 71239. In the said petition, the union
asked that the June 5, 1985 Order of Minister Ople be modified
to likewise direct the reinstatement of all union officers,
employees with pending criminal cases and employees who have
received their separation pay with full back wages, emergency
cost of living allowance (ECOLA) and employee benefits counted
from March 8, 1985 until actually reinstated. In a Resolution,
dated June 18, 1986, we remanded the petition to the Ministry
of Labor and Employment, with the instruction to resolve all
pending factual and legal issues relative to the petition.
On August 29, 1986, Minister Augusto Sanchez, the successor of
Minister Ople, modified the last Order of the latter by ordering
the reinstatement of all striking employees, except those who
have already accepted their separation pay. The bank, as a
consequence, filed a petition with the Supreme Court, docketed
as G.R. No. 75749, to nullify the aforesaid Order.
In amplification of our Resolution of September 15, 1986, we
issued in G.R. No. 75749 the following Resolution, dated May 4,
1988:jgc:chanrobles.com.ph
"In a resolution dated September 15, 1986 in G.R. No. 75749,
the Court issued ‘a Temporary Restraining Order’ enjoining
enforcement of the August 29, 1986 order of the Minister of
Labor and Employment only insofar as it directs the payment of
back wages, allowances, and other benefits due to the private
respondents effective March 11, 1985 until their actual
reinstatement. Considering, however, the financial plight of some
of the private respondent, the Court further Resolved to order
the petitioner to advance the equivalent of two (2) months
salary to each of the private respondents entitled to
reinstatement under the MOLE order, said amount to be repaid
to the petitioner or charged to accumulated back wages
depending on the final outcome of this case’ (p. 64, Rollo). A
motion for clarification of this Resolution filed by the Bank was
denied.
In view of the above-mentioned resolution, Minister Sanchez’
order to reinstate back to work all striking employees except
those who have accepted separation pay was ordered
implemented." 6 parties have given this Court conflicting data on positions of
It appears that the problem of reinstating striking employees
except those who had accepted separation pay was reduced a
bit when 71 of 112 affected employees were additionally
reinstated. Thus, only 41 among the individual respondents were
not reinstated.
In our Resolution dated May 4, 1988 we observed
that:jgc:chanrobles.com.ph
"The individual private respondents in G.R. No. 75749 have filed
motions to cite in contempt the Bank for violation of the Court’s
Resolution ordering the implementation of the reinstatement
order of Minister Sanchez. They alleged that they were ‘forced to
file the Motions to expose and protest the unabating display of
bad faith on the part of the Bank in effecting their reinstatement.
(p. 400, Rollo in 74749)."cralaw virtua1aw library
We did not act favorably upon private respondents’ "motion to
cite in contempt the bank for violation of the court’s Resolution
ordering the implementation of the reinstatement order of
Minister Sanchez." Instead, we dismissed said petitions of the
union and the individual respondents in G.R. No. 71239, and the
Bank’s petition in G.R. No. 71239, and in G.R. No. 75749; and
remanded them to the Department of Labor and Employment
and its pertinent agencies for further proceedings as stated in
our resolution, to wit:jgc:chanrobles.com.ph
"A thorough review of the voluminous records of these two
petitions shows that unresolved factual issues prevent a final
solution to the individual respondents’ and the Bank’s problems.
First, whether or not the strikes staged by the Union and the
individual respondents are legal remains unresolved. This
question has been pending before the Arbitration Branch of the
National Labor Relations Commission (NLRC) even before the
filing of the two petitions.
In his order dated August 29, 1986, Minister Sanchez ordered
reinstatement pending the final outcome of the petition initiated
by the Bank to declare the strike illegal. The reinstatement is,
therefore, provisional. A permanent reinstatement will depend on
the legality or illegality of the strike.
Second, the Department of Labor and Employment (DOLE) or
the NLRC must also look into the roles played by the individual
respondents should the strike be declared illegal.
Third, in this Court’s June 18, 1986 resolution, the respondent
Minister was ordered to resolve (sic) the certain factual
questions, to wit:chanrob1es virtual 1aw library
There are various factual issues which must first be resolved.
Counsel for the petitioners admits that the petitioners are not
authorized by the Allied Bank Employees Union nor NUBE to
speak for the Union or the bargaining unit. Neither have the
petitioners any authority to file a case in behalf of the Union
officers and certain separated employees whom they want this
Court to order reinstated. In fact, there are statements filed by
individual petitioners who manifest that they did not authorize
the petition to be filed in their names. Counsel for the petitioners
failed to clarify at the June 18, 1986 hearing how many of the
petitioners he really represents, how many workers have
received separation pay, and how many of these workers have
authorized the filling of a case in their behalf. Counsels for the
terminated personnel allegedly being filled by new employees
and various other factual matters necessitating the presentation
of evidence. It is also rather odd why a petitioner union affiliated
with NUBE and the Trade Union Congress of the Philippines
(TUCP) or its members should be represented in this case by the
legal counsel of a rival labor federation, the Kilusang Mayo Uno
(KMU).
There is at present pending with the respondent a supplemental
motion for partial reconsideration of the order now challenged in
this petition. Counsel for the petitioner admits that they have not
moved in the premises and have not asked the present Minister
of the MOLE whether or not he would reconsider the questioned
order issued by his predecessor. Both parties are agreed that
conciliation proceedings have not terminated and both expressed
a willingness to continue the proceedings. The issue of whether
or not the strike which commenced on February 11, 1985 is legal
remains pending determination by NLRC and calls for the
presentation of the evidence. The status of the pending criminal
case is likewise not clear. The Assistant Solicitor General who
represented MOLE informed the Court that the respondent
Minister had to suspend action on the various matter pending
before him because the petitioners decided to file this petition
before allowing the administrative process to make the initial
determination (p. 420, Rollo in G.R. No. 71239).
These questions have not been resolved to date.
And fourth, there are likewise factual matters that have cropped
up in G.R. No. 75749 with regards (sic) to which the court has
neither the means or (sic) the time to look into.
The appropriate agencies of DOLE should conduct hearings on
the contention of the bank that it is now impossible to reinstate
the remaining 41 respondents inspite (sic) of its alleged bona
fide attempts to find equivalent positions for them and on the
counter-contentions of the individual respondents that there was
discrimination in the reinstatement of their companions, that the
contractual employees were hired to displace them, that the
bank employed harassment tactics, and that their dismissal was
summary, arbitrary, and malicious in gross violation of this
Court’s twin resolutions on September 17 and 29, 1986.
All the unresolved factual questions call for the presentation of
evidence before the appropriate administrative agency. They
cannot be resolved through pleadings or oral arguments before
the Court." 7
x       x       x
In view of this development, the respondents, including the
forty-one (41) individual respondents, led by Rolando Ocampo,
Rowena Rebosa and Alfredo del Pilar, were not reinstated by the
bank.
Subsequently, arbitration of the Bank’s petition continued with
the issues confined to these matters, viz:jgc:chanrobles.com.ph
"(a) whether or not the subject strikes, i.e., one that took place
on January 3 and 4, 1985 to March 11, 1985, were illegal; (b)
whether or not anyone of the individual respondents committed
illegal acts during the duration of the strikes; (c) whether or not
the individual respondents were illegally dismissed and/or locked
out; and (d) whether or not the respondent-employees are
entitled to moral and exemplary damages." 8 The Labor Arbiter qualified that, under Article 264 (a) of the
After weighing the arguments of both parties, the Arbiter ruled
that:jgc:chanrobles.com.ph
"There is no dispute that under Art. 263, paragraph (g) of the
Labor code, as amended, the assumption by the Secretary of
Labor and Employment over a labor dispute has the automatic
effect of enjoining any intended or impending strike or lockout.
When then Minister Blas Ople assumed jurisdiction over the labor
dispute between the bank and the union on December 19, 1984,
by operation of law, the intended strike of the respondent union
was automatically enjoined. The union cannot feign ignorance of
this legal mandate. It is the law and compliance therewith
cannot be excused on the more convenient excuse of ignorance.
Besides, the order of December 19, 1984 clearly reiterated such
legal injunction such that the respondent union may not now be
allowed to assert that it did not violate any law or order of the
lawful authorities when it staged the strike on January 3 and 4,
1985.
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. Once an assumption/certification
order is issued strikers 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. . . .
Admittedly the respondent union went on strike on January 3
and 4, 1985, barely sixteen (16) days after then Minister of
Labor and Employment Blas Ople assumed jurisdiction. And
while the labor dispute between the parties was still pending
before Minister Blas Ople, another strike was staged on February
11, 1985 which continued up to March 11, 1985. Being in
violation of the provisions of Art. 263, paragraph (g) of the Labor
Code, as amended, as well as the assumption order of December
19, 1984, both strikes are, therefore, illegal and consequently, all
union officers, namely, Tomas Gonzalo, Crisanto Balisi, Norberto
Aguja, Benito Barrera, Hernanie Sison, Meynard Cuenca, Victor
Alvares, Inocencio Salvador, Luisito Mendoza, Arturo Villanueva,
and Pedro Pascual, are declared to have lost their employment
status.
This Branch does not agree with the respondents’ contention
that the strike on January 3 and 4, 1985 was already amicably
settled and/or condoned by the bank when it agreed to accept
back to work the striking workers. The bank merely complied
with the return-to-work order of Minister Blas Ople issued on
January 6, 1985 but this did not preclude the bank from
questioning the legality or illegality of the said strike.
Nor can this Branch accede to the respondents’ assertion that
they are merely acting in self-defense when they resumed their
concerted activity on February 11, 1985 allegedly on account of
unfair labor practices committed by the bank’s representatives
and agents. Regardless 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 the authority of Secretary
of Labor and Employment once an assumption 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 . . ." 9
Labor Code, the individual respondents other than the union
officers can be subjected to dismissal only in cases where they
knowingly participated in the commission of illegal acts during
the strike. Finding that all the individual respondents who were
not officers of the union did not commit the illegal acts
complained of, the Labor Arbiter held that they cannot validly be
declared to have lost their employment status.
With regard to the question of whether or not the Bank validly
dismissed the respondents for their failure to obey the return-to-
work notices, the Labor Arbiter held:jgc:chanrobles.com.ph
". . . Implicit in the petitioner’s argument is that the individual
respondents by their failure to comply with the published return-
to-work order are liable for abandonment of work. Abandonment
as a ground for dismissal must be shown to be deliberate and
that the employee involved has shown no more inclination to
resume work. This is not true in the instant case. At the time
they were terminated by the bank, the individual respondents
were then on strike, and until the legality or illegality of the
strike is resolved, the petitioner did not have any basis for
terminating the individual respondents’ services. Precisely, the
primary reason why the respondents struck was rooted on their
conviction that their economic demands that led to bargaining
deadlock were justified. If the respondents through the strike
have shown their eagerness in improving their employment
situation, how could they now be held liable for abandonment.
The grounds relied upon by the bank in terminating the
individual respondents being non-existent, perforce such subject
termination must be held to be without just and valid grounds,
and consequently, the individual respondents are entitled to
reinstatement with back wages from the time of their
termination until their actual reinstatement." 10
Hence, the Labor Arbiter’s disposition of the case,
viz:jgc:chanrobles.com.ph
"WHEREFORE, all the foregoing premises being considered,
judgment is hereby rendered as follows:chanrob1es virtual 1aw
library
a) Declaring the strikes complained of as illegal and
consequently, all union officers, namely, Tomas Gonzalo,
Crisanto Balisi, Norberto Aguja, Benito Barrera, Harnanie Sison,
Meynard Cuenca, Victor Alvarez, Inocencio Salvador, Luisito
Mendoza, Arturo Villanueva, and Pedro Pascual, lost their
employment status;
b) Dismissing the petition to declare the strike illegal as against
the other individual respondents;
c) Declaring the dismissal of the abovenamed 163 counter-
complainants as illegal and ordering the petitioner Allied Banking
Corporation to pay their aggregate back wages and other
computed benefits in the total sum of P5,049,692.73;
d) Ordering the petitioner Allied Banking Corporation to reinstate
the forty-one (41) counter-complainants led by Rolando
Ocampo, Rowena Rebosa and Alfredo del Pilar, to their former or
substantially equivalent position with all the rights, privileges and
benefits appertaining thereto including seniority, and to pay
them their backwages and other computed benefits in the
aggregate sum of P3,548,213.80 plus moral and exemplary
damages in the aggregate amount of P615,000.00; and
e) Ordering the petitioner Allied Banking Corporation to pay
attorney’s fees in the amount of P921,290.65. 11
On September 29, 1992, the forty-one (41) respondents who
were ordered reinstated filed a "Motion to Issue Partial Writ of
Execution." This was granted by the Labor Arbiter.
On September 30, 1992, petitioner appealed from the decision of
the Labor Arbiter. Respondents, on the other hand, filed, on
October 2, 1992, a partial appeal from the aforesaid decision of
the Labor Arbiter praying that the decision be modified: (1) to
reflect in the computation of back wages the actual basic
monthly rates of the individual union members, including the
other employees’ benefits; (2) to order the payment of actual,
moral, and exemplary damages, including attorney’s fees to all
163 dismissed employees; (3) to order the reinstatement of all
dismissed 163 employees; and (4) to include "Innocence
Salvador." . . as one of the Union officers deemed to have lost
their employment status."cralaw virtua1aw library
On October 6, 1992, petitioner filed a motion to quash the writ
of execution. This was denied on November 5, 1992. While the
Labor Arbiter’s September 4, 1992 decision and his September
30, 1992 writ of execution limited his identification of those to be
reinstated pending appeal to the forty-one (41) complainants led
by Rolando Ocampo, Rowena Rebosa and Alfredo del Pilar, he
later on identified all the respondents to be reinstated in his
Order, dated November 5, 1992, rationalizing that —
"This alleged ground cited that other than three (3) individual
respondents, namely, Rolando Ocampo, Alfredo del Pilar and
Rowena Rebosa, the thirty-eight (38) others were not identified,
the petitioner-bank cannot feign its lack of awareness as to who
are the thirty-eight (38) other individual respondents considering
that the petitioner itself notified the Supreme Court in its
Manifestation/Motion filed on March 7, 1988 that —
‘2. Since October 7, 1986 to date, petitioner has found
equivalent positions only for 71 among 112 of those ordered
reinstated by this Honorable Court, although petitioner Bank paid
their salaries and other monetary benefits continuously from
October 1986 to the present without rendering work, to the
damage and prejudice of petitioner;
‘3. Petitioner has exhausted all possible means to look for
adequate equivalent positions for the remaining 41 employees
but to no avail. . . .’
"The petitioner attached to the said Manifestation/Motion a list of
the forty-one (41) employees together with the corresponding
separation pay and other benefits they are supposed to receive.
And these forty-one (41) employees are, as follows: Daisy
Adriano, Luisito Arellano, Teodoro Banaticla, Ruben Beltran, Jose
Bufi, Walfrido Calcabin, Roy Casido, Edna Cioco, Rosauro Clerigo,
Mary Ann Co, Delia Conde, Judith dela Cruz, Roberta dela Cruz,
Carmen delos Santos, Rogelio Edora, Raul Gonzales, Balagtas
Hernandez, Gerardo Ilano, Alan de Jesus, Hector Juliano,
Teresita Licarte, Tony Manaois, Jaime Manipis, Edgar Marcelo,
Rufino Marquez, Edgardo Nicasio, Rolando Ocampo, Irene Ocos,
Herson Ozarraga, Alfredo del Pilar, Elpidio Pineda, Alfredo
Raymundo, Rowena Rebosa, Dexter Sanchez, Romeo Simon,
Noel Solis, Evangeline Saulog, Fe Uy, Ruel Velarde, Veronica
Villarica, and Mario Marquez." 12
On November 19, 1992, petitioner filed with the NLRC a
consolidated petition for injunction docketed as NLRC NCR IC
NO. 000316-92.
But, before the NLRC could decide on the issue of reinstatement
pending appeal, respondents filed a petition for mandamus with
us, docketed as G.R. No. 110687, to compel the Chairman of the
NLRC to issue a writ of execution as regards the reinstatement
aspect of the Labor Arbiter’s September 4, 1992 decision.
On December 15, 1993, we promulgated a resolution dismissing
the aforesaid petition for mandamus.
On April 7, 1994, the NLRC issued an Order directing the
reinstatement of forty-one (41) respondents pending appeal and
at the same time dismissing the bank’s petition for injunction.
The NLRC upheld the Labor Arbiter’s finding that the strikes
staged by the employees of the bank on January 3 & 4, 1985
and from February 11 to March 11, 1985 were in violation of the
provisions of Article 263 (g) of the Labor Code, as amended, as
well as the Assumption Order of December 19, 1984 and as such
the striking union members had lost their employment status.
However, in spite of its conclusion that the respondents were
validly dismissed the NLRC opined that "the 41 . . . respondents
earned for themselves the right to be reinstated not only under
Article 223 of the Labor Code, as amended by R.A. 6715, on
March 2, 1989, but retroactive September 15, 1986, the date the
Supreme Court ordered the implementation of the Order of
MOLE Minister Sanchez directing the reinstatement of ‘all striking
employees except those who have accepted separation pay’ [as
‘only 71 of the 112 affected employees’ were reinstated by the
Bank (May 4, 1988 Resolution of the Supreme Court in G.R.
71239 and G.R. 75749 p. 7)]. It then remanded to the Labor
Arbiter the query of whether or not the subject forty-one (41)
individual respondents, who were not reinstated since 1986, can
validly be paid back wages from September 1986 up to the time
the NLRC promulgated its decision. The dispositive portion of the
assailed decision reads as follows:jgc:chanrobles.com.ph
"WHEREFORE, the appealed September 4, 1992 Decision insofar
as concerns disposition (b) to (e) thereof, is hereby set aside.
Our Order of April 7, 1994 is hereby reconsidered and likewise
set aside. Instead, the question of whether or not the forty-one
(41). Individual Respondents (led by Rolando Ocampo, Rowena
Rebosa and Alfredo del Pilar) are entitled to back wages
corresponding to the period that they should have been
reinstated since 1986 is hereby remanded to the Arbiter of origin
pursuant to the earlier quoted guideline of the Supreme Court in
its May 4, 1988 resolution." 13
The opposing parties moved for a reconsideration of the said
decision, which motions were denied in a Resolution of the
NLRC, dated July 8, 1994.
Hence, these petitions.
The crux of the present controversy is whether or not the
striking union members terminated for abandonment of work
after failing to obey the return-to-work order of the Secretary of
Labor and Employment, should be reinstated with back wages.
Respondents contend that the NLRC committed grave abuse of
discretion when it ruled that their dismissal is legal considering
that mere participation of union members in an illegal strike
should not automatically result in their termination from
employment. 14
We agree with respondents’ contention that mere participation of
union members in an illegal strike should not automatically result
in their termination from employment. However, the case at bar
involves a different issue as a perusal of the records shows that
respondents were terminated from employment by reason of
their defiance to the return-to-work order of the Secretary of
Labor. Respondents staged a strike on January 3 and 4, 1985 or
fourteen (14) days after then Labor Minister Ople assumed
jurisdiction over the dispute between them and the bank.
Thereafter, respondents again staged a strike from February 11
up to March 11, 1985 while their labor dispute with the Bank was
still pending before Minister Ople.
The provisions of law which govern the effects of defying a
return-to-work order are:chanrob1es virtual 1aw library
1) Article 263 (g) of the Labor Code
x       x       x
"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
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 . . ." (as amended by Sec. 27, R.A. 6715; Emphasis
supplied.)
2) Article 264 (a)
"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 cases involving the same
grounds for the strike or lockout.
Any worker whose employment has been terminated as a
consequent 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."cralaw
virtua1aw library
In the case of Union of Filipro Employees v. Nestle Philippines.,
Inc., 15 we ruled that a strike undertaken despite the issuance
by the Secretary of Labor of an assumption or certification order
becomes a prohibited activity and thus, illegal, pursuant to
Article 264 (a) of the Labor Code. Moreover, the union officers
and members who have participated in the said illegal activity,
are, as a result, deemed to have lost their employment status.
Thus, we held that:jgc:chanrobles.com.ph
"UFE completely misses the underlying principle embodied in Art.
263 (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 . . ."cralaw virtua1aw library
‘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
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 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.
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.’"
In the cases of Sarmiento v. Tuico, 16 and Asian Transmission
Corporation v. National Labor Relations Commission, 17 we
explained the rationale for this rule:jgc:chanrobles.com.ph
"It is also important to emphasize that the return-to-work order
not so much confers 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. That is
the real reason such return can be compelled. So imperative is
the order in fact that it is not even considered violative of the
right against involuntary servitude, as this Court held in Kaisahan
Ng Mga Manggagawa sa Kahoy v. Gotamco Sawmills. The
worker can of course give up his work, thus severing his ties
with the company, if he does not want to obey the order; but
the order must be obeyed if he wants to retain his work even if
his inclination is to strike."cralaw virtua1aw library
This principle was reiterated in the case of St. Scholastica’s
College v. Torres, 18 wherein we cited the case of Federation of
Free Workers v. Inciong, 19 and held that:jgc:chanrobles.com.ph
"A strike 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. . . . The
Union officers and members, as a result, are deemed to have
lost their employment status for having knowingly participated in
an illegal act.
Hence, respondents’ failure to immediately comply with the
return-to-work order dated, December 16, 1984 and January 6,
1985 cannot be condoned.
Respondents also contend that there is nothing on record to
prove that they knowingly participated in an illegal strike. 20
Private respondents’ contentions are belied by the records as
there was an assumption order already issued by the Minister of
Labor when they first conducted a strike on January 3 and 4,
1985, and this assumption order was still in effect when they
struck continuously from February 11 to March 11, 1995. This
knowledge of the assumption order is manifested in their answer
dated September 26, 1985, which was summarized in the
Decision of the Labor Arbiter dated September 4, 1992, the
pertinent portions of which are hereby
quoted:jgc:chanrobles.com.ph
"On their part, the individual respondents in their answer dated
September 26, 1985 denied that the strike on January 3 and 4,
1985 was illegal contending that there was already an amicable
settlement pursuant to which the bank agreed to accept back to
work all striking employees. Further, the said respondents
alleged that the bank in an Order dated January 6, 1985 was
directed to accept back all striking employees under the same
terms and conditions previous to work stoppage and this order
allegedly became final and executory. Regarding the strike on
February 11, 1985, the respondents argued that the same is
legal for the following alleged reasons, namely: (a) they resorted
to such concerted action upon the representation of the union
officers that it was legal; (b) said concerted action was
resumption of their picketing activities considering that the Order
of January 31, 1985 was nothing but a mere reiteration of the
position taken by the bank on the deadlocked issues and the
Minister unjustly ignored the position of the respondents; (c) the
said action was justified in view of alleged acts of the bank
amounting to unfair labor practices; and (d) the order of January
31, 1985 of the Minister has not yet become final considering
that there was filed by this union a motion for reconsideration on
February 11, 1985. The respondents charged as unfair labor
practice the act of the petitioner in publishing in metropolitan
newspapers the notices requiring the striking employees to
return to work under threat of disciplinary action contending that
it was a coercive act which was tantamount to interference and
restraint when the publication adverted to the concerted action
on February 11, 1985 as illegal. Furthermore, the respondents
argued that even if the strike staged by them was illegal, they
did not incur any liability for the following stated reasons, to wit:
a) the individual respondents participated in the strike on the
strength of representations/assurances made by union officers
that the strike was legal; b) they have acted in good faith and
merely exercised their constitutional right to strike and engage in
concerted action; c) they acted in defense of their political and
economic rights which were allegedly ignored by the Minister of
Labor; d) they have acted in peaceful and orderly manner during
the picketing and they did not commit any illegal or violent act;
e) they have faithfully complied with the orders of the Minister of
Labor and f) they merely acted in self-defense to repel the
continuing acts of unfair labor practices committed by the
petitioner’s representatives and agents." 21
Furthermore, private respondents contend that a strike is not
synonymous with abandonment of work as the employer-
employee relationship is not terminated during the duration of
the strike but merely suspended. They also cited the cases of
Insular Life Assurance Co. Ltd., Employees Association — NATU
v. The Insular Life Assurance Co. Ltd., 22 and the case of RCPI
v. Philippine Communications Electronics & Electricity Worker’s
Federation, 23 wherein we held that mere failure to report for
work after notice to return, does not constitute abandonment
nor bar reinstatement.
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 lockout 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.
Moreover, as aptly stated by the NLRC in its
decision:jgc:chanrobles.com.ph
"Abandonment of work as a ground to dismiss under Article 282
(b) of the Labor Code should not be confused with abandonment
of work under the law on strike, particularly those as provided in
Article 263 (g) and Article 264 (a) of the Labor Code. To rule
that [t]o constitute abandonment of position, there must be
concurrence of the intention to abandon and some overt act
from which it may be inferred that the employee concerned has
no more interest in working . . . while available as a defense
against dismissals under Article 282 of the Labor Code, cannot,
however, be validly invoked in dismissals resulting from a
striker’s defiance of a DOLE Secretary’s assumption order so
clearly spelled out in Article 263 (g) of the Labor Code, much
less as a defense against the ban on strikes after assumption of
jurisdiction by . . . the Minister of Labor and Employment (Article
264 (a), Labor Code)." 24
Furthermore, as non-compliance with an assumption or
certification order is considered as an illegal act committed in the
course of a strike, the Ministry of Labor and Employment (now
DOLE) is authorize to impose such sanctions as may be provided
for by law which may include the hiring of replacements for
workers defying the order. In the case of Jackbilt Concrete Block
Company, Inc. v. Norton and Harrison Company, 25 it appeared
that in an earlier decision the Supreme Court ordered the
reinstatement without back wages of the strikers who staged a
strike on the good-faith belief that the Company had committed
an unfair labor practice. Some of the strikers reported for work
and were reinstated. The rest of the strikers listed in the order
either ignored or disobeyed said order. Of the strikers who
reported for work, some have either not submitted themselves to
medical examination as required and did not report back
anymore or after having gone through medical examination, did
not report back for work, or after reporting back for work did not
continue working anymore and the others were found suffering
from disease and unfit for work.
Before the Supreme Court, the Company raised in issue the
employment status of the strikers who failed to comply with the
return-to-work order, contending that they should be declared to
have forfeited their right to reinstatement. Sustaining this
contention, the Supreme Court said:jgc:chanrobles.com.ph
"We are also of the opinion and so hold that the strikers who
failed, without proper justification, to report for work assignment
despite the issuance of the orders reinstating them to their jobs
are deemed to have forfeited their right to reinstatement. Their
unexplained failure to request for another period or an extended
period within which to comply with the reinstatement orders and
report back for work militates against them.
In East Asiatic Company Ltd., Et. Al. v. CIR, et. al., G.R. No. L-
29068, August 31, 1971, 40 SCRA 521, this Court had occasion
to rule that the failure to report for work when one had the
opportunity to do so waived thereby his right to reinstatement.
Because of the apparent lack of interest of the strikers
concerned as shown by their failure to report for work without
justifiable reason with the petitioner herein, We are constrained
to declare them to have forfeited their right to
reinstatement."cralaw virtua1aw library
In the case at bar, we fully agree with the ruling of the NLRC in
declaring that respondents were validly dismissed considering
their defiance of the return-to-work order issued by the
Secretary of Labor. As a consequence of such defiance, they are
considered severed from their employment.
Apparently, the basis of the portion of NLRC’s decision
remanding the issue of back wages to the Labor Arbiter, is this
Court’s Resolution dated May 4, 1988 issued in the cases of
Allied Bank Employees Union-NUBE, Et. Al. v. Hon. Blas Ople, Et
Al., G.R. No. 71239 and Allied Banking Corporation v. Hon.
Augusto S. Sanchez, Et Al., G.R. No. 75749. In the said
resolution we remanded the aforecited cases to the Department
of Labor, the dispositive portion of which
reads:jgc:chanrobles.com.ph
"Considering the foregoing, the Court RESOLVED to DISMISS the
instant petitions and to REMAND them to the Department of
Labor and Employment and its pertinent agencies for further
proceedings as outlined in this resolution. This action is without
prejudice to either or both parties filing an appropriate and
concise petition with this Court, if they are so minded after the
final administrative determination of the issues has been made."
26
Furthermore, a perusal of our Resolution reveals that the issue
of whether or not the forty one (41) respondents should be paid
back wages from September, 1986 up to the date of the
promulgation of the decision, was not raised therein. Only the
determination of factual matters, i.e., whether or not the strike
was illegal; the roles played by respondents should the strike be
declared illegal; issue of representation and the impossibility of
reinstating the 41 respondents by bank, were remanded by this
Court to the DOLE.
This Resolution of ours, as must be noted, was issued when the
petition to declare the strike illegal has not yet been resolved. It
was only resolved last September 4, 1992, when the NLRC
issued a Decision declaring the strike illegal and upholding the
dismissal of the respondents. The reinstatement ordered by then
Minister Sanchez, in his August 29, 1986 order, was only
provisional and subject to the outcome of the petition to declare
the strike illegal, viz:jgc:chanrobles.com.ph
WHEREFORE, the NLRC Decision of May 20, 1994 is AFFIRMED
with respect to the finding that private respondents were validly
dismissed. However, as to its disposition that the issue of
reinstatement and computation of back wages be remanded to
the Labor Arbiter, the same, being inconsistent with the finding
of valid dismissal, is ANNULLED and SET ASIDE.
SO ORDERED.

"In his order dated August 29, 1986, Minister Sanchez ordered Padilla, Bellosillo, Vitug and Kapunan, JJ., concur.
reinstatement pending the final outcome of the petition initiated
by the Bank to declare the strike illegal. The reinstatement is,
therefore, provisional. A permanent reinstatement will depend on
the legality or illegality of the strike."cralaw virtua1aw library

As a consequence of the declaration of the illegality of the strike

and the upholding of the dismissal of respondents in the NLRC
Decision, the factual matters mentioned in our Resolution dated
May 4, 1988 have already become moot and academic.

Moreover, an award of back wages is incompatible with the

findings of the NLRC upholding the dismissal of respondents.

The NLRC’s disposition of the case remanding to the Labor

Arbiter the issue of reinstating respondents and the computation
of their back wages is an illogical consequence of respondents’
valid dismissal from their employment. Such disposition is
inconsistent with our pronouncement in the cases aforecited and
should be struck down as having been issued with grave abuse
of discretion.

Respondents also contend that the NLRC should have adopted a

liberal approach favoring labor which this Court has upheld in its
decisions and that the employers are urged to be more
compassionate as to their workers’ needs. 27

We agree with respondents’ contention that this Court should

view with compassion the plight of the workers. However, this
sense of compassion should be coupled with a sense of fairness
and justice to the parties concerned. Hence, while social justice
has an inclination to give protection to the working class, the
cause of the labor sector is not upheld at all times as the
employer has also a right entitled to respect in the interest of
simple fair play. 28 Thus, in the case of St. Scholastica’s College
v. Torres, 29 we stated that:jgc:chanrobles.com.ph

"The sympathy of the Court which, as a rule, is on the side of

the laboring classes (Reliance Surety and Insurance Co., Inc. v.
NLRC), cannot be extended to the striking union officers and
members in the instant petition. There was willful disobedience
not only to one but two return-to-work orders. Considering that
the UNION consisted mainly of teachers, who are supposed to
be well-lettered and well-informed, the court cannot overlook the
plain arrogance and pride displayed by the UNION in this labor
dispute. Despite containing threats of disciplinary action against
some union officers and members who actively participated in
the strike, the letter dated 9 November 1990 sent by the
COLLEGE enjoining the union officers and members to return to
work under the same terms and conditions prior to the strike.
Yet, the UNION decided to ignore the same. The COLLEGE,
correspondingly, had every right to terminate the services of
those who chose to disregard the return-to-work orders issued
by respondent SECRETARY in order to protect the interests of its
students who form part of the youth of the land."cralaw
virtua1aw library
THIRD DIVISION On November 19, 1997, then Acting Labor Secretary
Cresenciano B. Trajano issued an Order assuming
G.R. No. 144315             July 17, 2006 jurisdiction over the dispute, enjoining any strike or
lockout, whether threatened or actual, directing the
parties to cease and desist from committing any act that
PHILCOM EMPLOYEES UNION, petitioner,
may exacerbate the situation, directing the striking
vs.
workers to return to work within twenty-four (24) hours
PHILIPPINE GLOBAL COMMUNICATIONS and PHILCOM
from receipt of the Secretary's Order and for
CORPORATION, respondents.
management to resume normal operations, as well as
accept the workers back under the same terms and
DECISION conditions prior to the strike. The parties were likewise
required to submit their respective position papers and
CARPIO, J.: evidence within ten (10) days from receipt of said order
(Annex "4", Comment, pp. 610-611, ibid.). On
The Case November 28, 1997, a second order was issued
reiterating the previous directive to all striking
This is a petition for review1 to annul the Decision2 dated 31 July employees to return to work immediately.
2000 of the Court of Appeals in CA-G.R. SP No. 53989. The
Court of Appeals affirmed the assailed portions of the 2 October On November 27, 1997, the union filed a Motion for
1998 and 27 November 1998 Orders of the Secretary of Labor Reconsideration assailing, among others, the authority
and Employment in OS-AJ-0022-97. of then Acting Secretary Trajano to assume jurisdiction
over the labor dispute. Said motion was denied in an
The Facts Order dated January 7, 1998.

The facts, as summarized by the Court of Appeals, are as As directed, the parties submitted their respective
follows: position papers. In its position paper, the union raised
the issue of the alleged unfair labor practice of the
company hereunder enumerated as follows:
Upon the expiration of the Collective Bargaining
Agreement (CBA) between petitioner Philcom Employees
Union (PEU or union, for brevity) and private "(a) PABX transfer and contractualization of
respondent Philippine Global Communications, Inc. PABX service and position;
(Philcom, Inc.) on June 30, 1997, the parties started
negotiations for the renewal of their CBA in July 1997. "(b) Massive contractualization;
While negotiations were ongoing, PEU filed on October
21, 1997 with the National Conciliation and Mediation "(c) Flexible labor and additional work/function;
Board (NCMB) – National Capital Region, a Notice of
Strike, docketed as NCMB-NCR-NS No. 10-435-97, due "(d) Disallowance of union leave intended for
to perceived unfair labor practice committed by the union seminar;
company (Annex "1", Comment, p. 565, ibid.). In view
of the filing of the Notice of Strike, the company
"(e) Misimplementation and/or non-
suspended negotiations on the CBA which moved the
implementation of employees' benefits like shoe
union to file on November 4, 1997 another Notice of
allowance, rainboots, raincoats, OIC shift
Strike, docketed as NCMB-NCR-NS No. 11-465-97, on
allowance, P450.00 monthly allowance, driving
the ground of bargaining deadlock (Annex "2",
allowance, motorcycle award and full-time
Comment, p. 566, ibid.)
physician;

On November 11, 1997, at a conciliation conference

"(f) Non-payment, discrimination and/or
held at the NCMB-NCR office, the parties agreed to
deprivation of overtime, restday work,
consolidate the two (2) Notices of Strike filed by the
waiting/stand by time and staff meetings;
union and to maintain the status quo during the
pendency of the proceedings (Annex "3", Comment, p.
567, ibid.). "(g) Economic inducement by promotion during
CBA negotiation;
On November 17, 1997, however, while the union and
the company officers and representatives were meeting, "(h) Disinformation scheme, surveillance and
the remaining union officers and members staged a interference with union affairs;
strike at the company premises, barricading the
entrances and egresses thereof and setting up a "(i) Issuance of memorandum/notice to
stationary picket at the main entrance of the building. employees without giving copy to union,
The following day, the company immediately filed a change in work schedule at Traffic Records
petition for the Secretary of Labor and Employment to Section and ITTO policies; and
assume jurisdiction over the labor dispute in accordance
with Article 263(g) of the Labor Code.
 "(j) Inadequate transportation allowance, water
and facilities."
(Annex A, Petition; pp. 110-182, ibid.)
The company, on the other hand, raised in its position
paper the sole issue of the illegality of the strike staged
by the union (Annex B, Petition; pp. 302-320, ibid.).
On the premise that public respondent Labor Secretary
cannot rule on the issue of the strike since there was no
petition to declare the same illegal, petitioner union filed
on March 4, 1998 a Manifestation/Motion to Strike Out
Portions of & Attachments in Philcom's Position Paper
for being irrelevant, immaterial and impertinent to the
issues assumed for resolution (Annex C, Petition; pp.
330-333, ibid.).
In opposition to PEU's Manifestation/Motion, the
company argued that it was precisely due to the strike
suddenly staged by the union on November 17, 1997
that the dispute was assumed by the Labor Secretary.
Hence, the case would necessarily include the issue of
the legality of the strike (Opposition to PEU'S Motion to
Strike Out; Annex F, Petition; pp. 389-393, ibid.).3
On 2 October 1998, the Secretary of Labor and Employment
("Secretary") issued the first assailed order. The pertinent parts
of the Order read:
Going now to the first issue at hand, a reading of the
complaints charged by the Union as unfair labor
practices would reveal that these are not so within the
legal connotation of Article 248 of the Labor Code. On
the contrary, these complaints are actually mere
grievances which should have been processed through
the grievance machinery or voluntary arbitration
outlined under the CBA. The issues of flexible labor and
additional functions, misimplementation or non-
implementation of employee benefits, non-payment of
overtime and other monetary claims and inadequate
transportation allowance, are all a matter of
implementation or interpretation of the economic
provisions of the CBA subject to the grievance
procedure.
Neither do these complaints amount to gross violations
which, thus, may be treated as unfair labor practices
outside of the coverage of Article 261. The Union failed
to convincingly show that there is flagrant and/or
malicious refusal by the Company to comply with the
economic provisions stipulated in the CBA.
With respect to the charges of contractualization and
economic inducement, this Office is convinced that the
acts of said company qualify as a valid exercise of
management prerogative. The act of the Company in
contracting out work or certain services being
performed by Union members should not be seen as an
unfair labor practice act per se. First, the charge of
massive contractualization has not been substantiated
while the contractualization of the position of PABX
operator is an isolated instance. Secondly, in the latter
case, there was no proof that such contracting out
interfered with, restrained or coerced the employees in
the exercise of their right to self-organization. Thus, it is
not unfair labor practice to contract out work for reason
of reduction of labor cost through the acquisition of
automatic machines.
Likewise, the promotion of certain employees, who are
incidentally members of the Union, to managerial
positions is a prerogative of management. A promotion
which is manifestly beneficial to an employee should not
give rise to a gratuitous speculation that such a
promotion was made simply to deprive the union of the
membership of the promoted employee (Bulletin
Publishing Co. v. Sanchez, et. al., G.R. No. 74425,
October 7, 1986).
There remains the issue on bargaining deadlock. The
Company has denied the existence of any impasse in its
CBA negotiations with the Union and instead maintains
that it has been negotiating with the latter in good faith
until the strike was initiated. The Union, on the other
hand, contends otherwise and further prays that the
remaining CBA proposals of the Union be declared
reasonable and equitable and thus be ordered
incorporated in the new CBA to be executed.
As pointed out by the Union, there are already thirty-
seven (37) items agreed upon by the parties during the
CBA negotiations even before these were suspended.
Prior to this Office's assumption over the case, the
Company furnished the Union its improved CBA counter-
proposal on the matter of promotional and wage
increases which however was rejected by the Union as
divisive. Even as the Union has submitted its remaining
CBA proposals for resolution, the Company remains
silent on the matter. In the absence of any basis, other
than the Union's position paper, on which this Office
may make its determination of the reasonableness and
equitableness of these remaining CBA proposals, this
Office finds it proper to defer deciding on the matter
and first allow the Company to submit its position
thereon.
We now come to the question of whether or not the
strike staged by the Union on November 17, 1997 is
illegal. The Company claims it is, having been held on
grounds which are non-strikeable, during the pendency
of preventive mediation proceedings in the NCMB, after
this Office has assumed jurisdiction over the dispute,
and with the strikers committing prohibited and illegal
acts. The Company further prays for the termination of
some 20 Union officers who were positively identified to
have initiated the alleged illegal strike. The Union, on
the other hand, refuses to submit this issue for
resolution.
Considering the precipitous nature of the sanctions
sought by the Company, i.e., declaration of illegality of
the strike and the corresponding termination of the
errant Union officers, this Office deems it wise to defer
the summary resolution of the same until both parties
have been afforded due process. The non-compliance of
the strikers with the return-to-work orders, while it may
warrant dismissal, is not by itself conclusive to hold the
strikers liable. Moreover, the Union's position on the
 alleged commission of illegal acts by the strikers during
the strike is still to be heard. Only after a full-blown
hearing may the respective liabilities of Union officers
and members be determined. The case of Telefunken
Semiconductors Employees Union-FFW v. Secretary of
Labor and Employment and Temic Telefunken Micro-
Electronics (Phils.), Inc. (G.R. No. 122743 and 127215,
December 12, 1997) is instructive on this point:
It may be true that the workers struck after the
Secretary of Labor and Employment had
assumed jurisdiction over the case and that
they may have failed to immediately return to
work even after the issuance of a return-to-
work order, making their continued strike
illegal. For, a return-to-work order is
immediately effective and executory
notwithstanding the filing of a motion for
reconsideration. But, the liability of each of the
union officers and the workers, if any, has yet
to be determined. xxx xxx xxx.4
The dispositive portion of the Order reads:
WHEREFORE, in view of all the foregoing, judgment is
hereby rendered as follows:
The Union's Manifestation/Motion to Implead Philcom
Corporation is hereby granted. Let summons be issued
to respondent Philcom Corporation to appear before any
hearing that may hereafter be scheduled and to submit
its position paper as may be required.
The Union's Manifestation/Motion to Strike Out Portions
of and Attachments in Philcom's Position Paper is hereby
denied for lack of merit.
The Union's charges of unfair labor practice against the
Company are hereby dismissed.
Pending resolution of the issues of illegal strike and
bargaining deadlock which are yet to be heard, all the
striking workers are directed to return to work within
twenty-four (24) hours from receipt of this Order and
Philcom and/or Philcom Corporation are hereby directed
to unconditionally accept back to work all striking Union
officers and members under the same terms and
conditions prior to the strike. The parties are directed to
cease and desist from committing any acts that may
aggravate the situation.
Atty. Lita V. Aglibut, Officer-In-Charge of the Legal
Service, this Department is hereby designated as the
Hearing Officer to hear and receive evidence on all
matters and issues arising from the present labor
dispute and, thereafter, to submit a With respect to the unfair labor practice charges against
report/recommendation within twenty (20) days from
the termination of the proceedings.
The parties are further directed to file their respective
position papers with Atty. Lita V. Aglibut within ten (10)
days from receipt of this Order.
SO ORDERED.5
Philcom Corporation ("Philcom") filed a motion for
reconsideration. Philcom prayed for reconsideration of the Order
impleading it as party-litigant in the present case and directing it
to accept back to work unconditionally all the officers and
members of the union who participated in the strike. 6 Philcom
also filed a Motion to Certify Labor Dispute to the National Labor
Relations Commission for Compulsory Arbitration. 7
For its part, Philcom Employees Union (PEU) filed a Motion for
Partial Reconsideration. PEU asked the Secretary to "partially
reconsider" the 2 October 1998 Order insofar as it dismissed the
unfair labor practices charges against Philcom and included the
illegal strike issue in the labor dispute.8
The Secretary denied both motions for reconsideration of
Philcom and PEU in its assailed Order of 27 November 1998. The
pertinent parts of the Order read:
The question of whether or not Philcom Corporation
should be impleaded has been properly disposed of in
the assailed Order. We reiterate that neither the
Company herein nor its predecessor was able to
convincingly establish that each is a separate entity in
the absence of any proof that there was indeed an
actual closure and cessation of the operations of the
predecessor-company. We would have accommodated
the Company for a hearing on the matter had it been
willing and prepared to submit evidence to controvert
the finding that there was a mere merger. As it now
stands, nothing on record would prove that the two (2)
companies are separate and distinct from each other.
Having established that what took place was a mere
merger, we correspondingly conclude that the
employer-employee relations between the Company and
the Union officers and members was never severed. And
in merger, the employees of the merged companies or
entities are deemed absorbed by the new company
(Filipinas Port Services, Inc. v. NLRC, et. al., G.R. No.
97237, August 16, 1991). Considering that the Company
failed miserably to adduce any evidence to provide a
basis for a contrary ruling, allegations to the effect that
employer-employee relations and positions previously
occupied by the workers no longer exist remain just that
— mere allegations. Consequently, the Company cannot
now exempt itself from compliance with the Order.
Neither can it successfully argue that the employees
were validly dismissed. As held in Telefunken
Semiconductor Employees Union-FFW v. Secretary of
Labor and Employment (G.R. Nos. 122743 and 122715,
December 12, 1997), to exclude the workers without
first ascertaining the extent of their individual
participation in the strike or non-compliance with the
return-to-work orders will be tantamount to dismissal
without due process of law.
the Company, we have carefully reviewed the records
and found no reason to depart from the findings
previously rendered. The issues now being raised by the
Union are the same issues discussed and passed upon
in our earlier Order.
Finally, it is our determination that the issue of the
legality of the strike is well within the jurisdiction of this
 Office. The same has been properly submitted and
assumed jurisdiction by the Office for resolution. 9
The dispositive portion of the Order reads:
WHEREFORE, there being no merit in the remaining
Motions for Reconsideration filed by both parties, the
same are hereby DENIED. Our 2 October 1998 Order
STANDS. To expedite the resolution of the Motion to
Certify Labor Dispute to the NLRC for Compulsory
Arbitration, Philcom Employees Union is hereby directed
to submit its Opposition thereto within ten (10) days
from receipt of the copy of this Order.
SO ORDERED.10
PEU filed with this Court a petition for certiorari and prohibition
under Rule 65 of the Rules of Court assailing the Secretary's
Orders of 2 October 1998 and 27 November 1998. This Court, in
accordance with its Decision of 10 March 1999 in G.R. No.
123426 entitled National Federation of Labor (NFL) vs. Hon.
Bienvenido E. Laguesma, Undersecretary of the Department of
Labor and Employment, and Alliance of Nationalist Genuine
Labor Organization, Kilusang Mayo Uno (ANGLO-KMU) ,11 referred
the case to the Court of Appeals.12
The Ruling of the Court of Appeals
On 31 July 2000, the Court of Appeals rendered judgment as
follows:
WHEREFORE, PREMISES CONSIDERED, this petition is
hereby DENIED. The assailed portions of the Orders of
the Secretary of Labor and Employment dated October
2, 1998 and November 27, 1998 are AFFIRMED.
SO ORDERED.13
The Court of Appeals ruled that, contrary to PEU's view, the
Secretary could take cognizance of an issue, even only incidental
to the labor dispute, provided the issue must be involved in the
labor dispute itself or otherwise submitted to him for resolution.
The Court of Appeals pointed out that the Secretary assumed
jurisdiction over the labor dispute upon Philcom's petition as a
consequence of the strike that PEU had declared and not
because of the notices of strike that PEU filed with the National
Conciliation and Mediation Board (NCMB).
The Court of Appeals stated that the reason of the Secretary's
assumption of jurisdiction over the labor dispute was the staging
of the strike. Consequently, any issue regarding the strike is not
merely incidental to the labor dispute between PEU and Philcom,
but also part of the labor dispute itself. Thus, the Court of
Appeals held that it was proper for the Secretary to take
cognizance of the issue on the legality of the strike.
The Court of Appeals also ruled that for an employee to claim an
unfair labor practice by the employer, the employee must show
that the act charged as unfair labor practice falls under Article
248 of the Labor Code. The Court of Appeals held that the acts
enumerated in Article 248 relate to the workers' right to self-
organization. The Court of Appeals stated that if the act
complained of has nothing to do with the acts enumerated in
Article 248, there is no unfair labor practice.
The Court of Appeals held that Philcom's acts, which PEU
complained of as unfair labor practices, were not in any way
related to the workers' right to self-organization under Article
248 of the Labor Code. The Court of Appeals held that PEU's
complaint constitutes an enumeration of mere grievances which
should have been threshed out through the grievance machinery
or voluntary arbitration outlined in the Collective Bargaining
Agreement (CBA).
The Court of Appeals also held that even if by Philcom's acts,
Philcom had violated the provisions of the CBA, still those acts do
not constitute unfair labor practices under Article 248 of the
Labor Code. The Court of Appeals held that PEU failed to show
that those violations were gross or that there was flagrant or
malicious refusal on the part of Philcom to comply with the
economic provisions of the CBA.
The Court of Appeals stated that as of 21 March 1989, as held in
PAL vs. NLRC,14 violations of CBAs will no longer be deemed
unfair labor practices, except those gross in character. Violations
of CBAs, except those gross in character, are mere grievances
resolvable through the appropriate grievance machinery or
voluntary arbitration as provided in the CBAs.
Hence, this petition.
The Issues
In assailing the Decision of the Court of Appeals, petitioner
contends that:
1. The Honorable Court of Appeals has failed to
faithfully adhere with the decisions of the Supreme
Court when it affirmed the order/resolution of the
Secretary of Labor denying the Union's
Manifestation/Motion to Strike Out Portions of &
Attachments in Philcom's Position Paper and including
the issue of illegal strike notwithstanding the absence of
any petition to declare the strike illegal.
2. The Honorable Court of Appeals has decided a
question of substance in a way not in accord with law
and jurisprudence when it affirmed the order/resolution
of the Secretary of Labor dismissing the Union's charges
of unfair labor practices.
3. The Honorable Court of Appeals has departed from
the edict of applicable law and jurisprudence when it
failed to issue such order mandating/directing the
issuance of a writ of execution directing the Company to
unconditionally accept back to work the Union officers
and members under the same terms and conditions
prior to the strike and as well as to pay their
salaries/backwages and the monetary equivalent of their
other benefits from October 6, 1998 to date. 15
The Ruling of the Court
The petition must fail.
PEU contends that the Secretary should not have taken
cognizance of the issue on the alleged illegal strike because it
was not properly submitted to the Secretary for resolution. PEU
asserts that after Philcom submitted its position paper where it
raised the issue of the legality of the strike, PEU immediately
opposed the same by filing its Manifestation/Motion to Strike Out
Portions of and Attachments in Philcom's Position Paper . PEU
asserts that it stated in its Manifestation/Motion that certain
portions of Philcom's position paper and some of its attachments
were "irrelevant, immaterial and impertinent to the issues
assumed for resolution." Thus, PEU asserts that the Court of
Appeals should not have affirmed the Secretary's order denying
PEU's Manifestation/Motion.
PEU also contends that, contrary to the findings of the Court of
Appeals, the Secretary's assumption of jurisdiction over the labor
dispute was based on the two notices of strike that PEU filed
with the NCMB. PEU asserts that only the issues on unfair labor
practice and bargaining deadlock should be resolved in the
present case.
PEU insists that to include the issue on the legality of the strike
despite its opposition would convert the case into a petition to
declare the strike illegal.
PEU's contentions are untenable.
The Secretary properly took cognizance of the issue on the
legality of the strike. As the Court of Appeals correctly pointed
out, since the very reason of the Secretary's assumption of
jurisdiction was PEU's declaration of the strike, any issue
regarding the strike is not merely incidental to, but is essentially
involved in, the labor dispute itself.
Article 263(g) of the Labor Code provides:
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 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.
x x x x.
The powers granted to the Secretary under Article 263(g) of the
Labor Code have been characterized as an exercise of the police
power of the State, with the aim of promoting public
good.16 When the Secretary exercises these powers, he is
granted "great breadth of discretion" in order to find a
solution to a labor dispute. The most obvious of these
powers is the automatic enjoining of an impending strike or
lockout or its lifting if one has already taken place. 17
In this case, the Secretary assumed jurisdiction over the dispute
because it falls in an industry indispensable to the national
interest. As noted by the Secretary.
[T]he Company has been a vital part of the
telecommunications industry for 73 years. It is
particularly noted for its expertise and dominance in the
area of international telecommunications. Thus, it
performs a vital role in providing critical services
indispensable to the national interest. It is for this very
reason that this Office strongly opines that any
concerted action, particularly a prolonged work
stoppage is fraught with dire consequences. Surely, the
on-going strike will adversely affect not only the
livelihood of workers and their dependents, but also the
company's suppliers and dealers, both in the public and
private sectors who depend on the company's facilities
in the day-to-day operations of their businesses and
commercial transactions. The operational viability of the
company is likewise adversely affected, especially its
expansion program for which it has incurred debts in the
approximate amount of P2 Billion. Any prolonged work
stoppage will also bring about substantial losses in
terms of lost tax revenue for the government and would
surely pose a serious set back in the company's
modernization program.
At this critical time when government is working to
sustain the economic gains already achieved, it is the
paramount concern of this Office to avert any
unnecessary work stoppage and, if one has already
occurred, to minimize its deleterious effect on the
workers, the company, the industry and national
economy as a whole.18
It is of no moment that PEU never acquiesced to the submission
for resolution of the issue on the legality of the strike. PEU
cannot prevent resolution of the legality of the strike by merely
refusing to submit the issue for resolution. It is also immaterial
that this issue, as PEU asserts, was not properly submitted for
resolution of the Secretary.
The authority of the Secretary to assume jurisdiction over a labor
dispute causing or likely to cause a strike or lockout in an
industry indispensable to national interest includes and
extends to all questions and controversies arising from
such labor dispute. The power is plenary and
discretionary in nature to enable him to effectively and
efficiently dispose of the dispute.19
Besides, it was upon Philcom's petition that the Secretary
immediately assumed jurisdiction over the labor dispute on 19
November 1997.20 If petitioner's notices of strike filed on 21
October and 4 November 1997 were what prompted the
assumption of jurisdiction, the Secretary would have issued the
assumption order as early as those dates.
Moreover, after an examination of the position paper 21 Philcom
submitted to the Secretary, we see no reason to strike out those
portions which PEU seek to expunge from the records. A careful
study of all the facts alleged, issues raised, and arguments
presented in the position paper leads us to hold that the portions
PEU seek to expunge are necessary in the resolution of the
present case.
On the documents attached to Philcom's position paper, except
for Annexes MM-2 to MM-22 inclusive 22 which deal with the
supposed consolidation of Philippine Global Communications,
Inc. and Philcom Corporation, we find the other annexes
relevant and material in the resolution of the issues that have
emerged in this case.
PEU also claims that Philcom has committed several unfair labor
practices. PEU asserts that there are "factual and evidentiary
bases" for the charge of unfair labor practices against Philcom.
On unfair labor practices of employers, Article 248 of the Labor
Code provides:
Unfair labor practices of employers. - It shall be
unlawful for an employer to commit any of the following
unfair labor practice:
(a) To interfere with, restrain or coerce employees in
the exercise of their right to self-organization;
(b) To require as a condition of employment that a
person or an employee shall not join a labor
organization or shall withdraw from one to which he
belongs;
(c) To contract out services or functions being
performed by union members when such will interfere
with, restrain or coerce employees in the exercise of
their rights to self-organization;
(d) To initiate, dominate, assist or otherwise interfere
with the formation or administration of any labor
organization, including the giving of financial or other
support to it or its organizers or supporters;
(e) To discriminate in regard to wages, hours of work,
and other terms and conditions of employment in order
to encourage or discourage membership in any labor
organization. x x x
(f) To dismiss, discharge, or otherwise prejudice or
discriminate against an employee for having given or
being about to give testimony under this Code;
(g) To violate the duty to bargain collectively as
prescribed by this Code;
(h) To pay negotiation or attorney's fees to the union or
its officers or agents as part of the settlement of any
issue in collective bargaining or any other dispute; or
(i) To violate a collective bargaining agreement.
Unfair labor practice refers to acts that violate the workers' right
to organize. The prohibited acts are related to the workers' right
to self-organization and to the observance of a CBA. Without
that element, the acts, no matter how unfair, are not unfair labor
practices.23 The only exception is Article 248(f), which in any
case is not one of the acts specified in PEU's charge of unfair
labor practice.
A review of the acts complained of as unfair labor practices of
Philcom convinces us that they do not fall under any of the
prohibited acts defined and enumerated in Article 248 of the
Labor Code. The issues of misimplementation or non-
implementation of employee benefits, non-payment of overtime
and other monetary claims, inadequate transportation allowance,
water, and other facilities, are all a matter of implementation or
interpretation of the economic provisions of the CBA between
Philcom and PEU subject to the grievance procedure.
We find it pertinent to quote certain portions of the assailed
Decision, thus —
A reading of private respondent's justification for the
acts complained of would reveal that they were actually
legitimate reasons and not in anyway related to union
busting. Hence, as to compelling employees to render
flexible labor and additional work without additional
compensation, it is the company's explanation that the
employees themselves voluntarily took on work
pertaining to other assignments but closely related to
their job description when there was slack in the
business which caused them to be idle. This was the
case of the International Telephone Operators who tried
telemarketing when they found themselves with so
much free time due to the slowdown in the demand for
international line services. With respect to the Senior
Combination Technician at the Cebu branch who was
allegedly made to do all around work, the same
happened only once when the lineman was absent and
the lineman's duty was his ultimate concern. Moreover,
the new assignment of the technicians at CTSS who
were promoted to QCE were based on the job
description of QCE, while those of the other technicians
were merely temporary due to the promotion of several
technicians to QCE (pars. 9-12, Philcom's Reply to PEU's
Position Paper; Annex "E", Petition; pp. 350-351, ibid.).
On the alleged misimplementation and/or non-
implementation of employees' benefits, such as shoe
allowance, rainboots, raincoats, OIC shift
allowance, P450.00 monthly allowance, driving
allowance, motorcycle award and full-time physician, the
company gave the following explanation which this
Court finds plausible, to wit:
16. The employees at CTSS were given One
Thousand Pesos (P1,000.00) cash or its
equivalent in purchase orders because it was
their own demand that they be given the option
to buy the pair of leather boots they want. For
the Cebu branch, the employees themselves
failed to include these benefits in the list of
their demands during the preparation of the
budget for the year 1997 despite the instruction
given to them by the branch manager.
According to the employees, they were not
aware that they were entitled to these benefits.
They thought that because they have been
provided with two vans to get to their
respective assignments, these benefits are
 available only to collectors, messengers and
technicians in motorcycles.
17. The P450.00 monthly allowance was
provided by the CBA to be given to counter
clerks. However, the position of counter clerks
had been abolished in accordance with the
reorganization plan undertaken by the company
in April 1995, with the full knowledge of the
Union membership. As a result of the abolition
of the position of counter clerks, there was no
more reason for granting the subject allowance.
18. The company more than satisfied the
provision in the CBA to engage the services of a
physician and provided adequate medical
services. Aside from a part time physician who
reports for duty everyday, the company has
secured the services of Prolab Diagnostics,
which has complete medical facilities and
personnel, to serve the medical needs of the
employees. x x x
19. The Union demands that a full-time
physician to be assigned at the Head Office.
This practice, is not provided in the CBA and,
moreover is too costly to maintain. The medical
services offered by Prolab [D]iagnostics are
even better and more comprehensive than any
full time physician can give. It places at the
employees' disposal numerous specialists in
various fields of medicine. It is beyond
understanding why the Union would insist on
having a full-time physician when they could
avail of better services from Prolab Diagnostics.
(Philcom's Reply to PEU's Position Paper,
pp.352, 354, ibid.)
On the issue of non-payment, discrimination and/or
deprivation of overtime, restday work, waiting/stand by
time and staff meeting allowance, suffice it to state that
there is nothing on record to prove the same. Petitioner
did not present evidence substantial enough to support
its claim.
As to the alleged inadequate transportation allowance
and facilities, the company posits that:
30. The transportation allowances given to the
Dasmarinas and Pinugay employees are more
than adequate to defray their daily
transportation cost. Hence, there is absolutely
no justification for an increase in the said
allowance. In fact, said employees at
Dasmarinas and Pinugay, who are only residing
in areas near their place of work, are more
privileged as they receive transportation
expenses while the rest of the company
workers do not.
31. As to the demand for clean drinking water,
the company has installed sufficient and
potable water inside the Head Office even
before the strike was staged by the Union. Any
person who visits the Makati Head Office can
attest to this fact.
(Philcom's Reply to PEU's Position Paper, p.
357, ibid.)
Anent the allegation of PABX transfer and
contractualization of PABX service and position, these
were done in anticipation of the company to switch to
an automatic PABX machine which requires no operator.
This cannot be treated as ULP since management is at
liberty, absent any malice on its part, to abolish
positions which it deems no longer necessary (Arrieta
vs. National Labor Relations Commission, 279 SCRA 326,
332). Besides, at the time the company hired a
temporary employee to man the machine during
daytime, the subject position was vacant while the
assumption of the function by the company guard
during nighttime was only for a brief period.
With respect to the perceived massive contractualization
of the company, said charge cannot be considered as
ULP since the hiring of contractual workers did not
threaten the security of tenure of regular employees or
union members. That only 160 employees out of 400
employees in the company's payroll were considered
rank and file does not of itself indicate unfair labor
practice since this is but a company prerogative in
connection with its business concerns.
Likewise, the offer or promotions to a few union
members is neither unlawful nor an economic
inducement. These offers were made in accordance with
the legitimate need of the company for the services of
these employees to fill positions left vacant by either
retirement or resignation of other employees. Besides, a
promotion is part of the career growth of employees
found competent in their work. Thus, in Bulletin
Publishing Corporation vs. Sanchez (144 SCRA 628,
641), the Supreme Court held that "(T)he promotion of
employees to managerial or executive positions rests
upon the discretion of management. Managerial
positions are offices which can only be held by persons
who have the trust of the corporation and its officers. It
is the prerogative of management to promote any
individual working within the company to a higher
position. It should not be inhibited or prevented from
doing so. A promotion which is manifestly beneficial to
an employee should not give rise to a gratuitous
speculation that such a promotion was made simply to
deprive the union of the membership of the promoted
employee, who after all appears to have accepted his
promotion."
That the promotions were made near or around the
time when CBA negotiations were about to be held does
not make the company's action an unfair labor practice.
As explained by the company, these promotions were
based on the availability of the position and the
qualification of the employees promoted (p. 6, Annex
"4", Philcom's Reply to PEU's Position Paper; p. 380,
ibid.)
On the union's charge that management disallowed
leave of union officers and members to attend union
seminar, this is belied by the evidence submitted by the
union itself. In a letter to PEU's President, the company
granted the leave of several union officers and members
to attend a seminar notwithstanding that its request to
be given more details about the affair was left unheeded
by the union (Annex "Y", PEU's Position Paper; p. 222,
ibid.). Those who were denied leave were urgently
needed for the operation of the company.
On the ULP issue of disinformation scheme, surveillance
and interference with union affairs, these are mere
allegations unsupported by facts. The charge of "black
propaganda" allegedly committed by the company when
it supposedly posted two (2) letters addressed to the
Union President is totally baseless. Petitioner presents
no proof that it was the company which was behind the
incident. On the purported disallowance of union
members to observe the July 27, 1997 CBA meeting, the
company explained that it only allowed one (1)
employee from ITTO, instead of two (2), as it would
adversely affect the operation of the group. It also took
into consideration the fact that ITTO members represent
only 20% of the union. Other union members from
other departments of the company should have equal
representation (Annex "L", Position Paper for the Union;
pp. 205-206, ibid.). As to the alleged surveillance of the
company guards during a union seminar, We find the
idea of sending guards to spy on a mere union seminar
quite preposterous. It is thus not likely for the company
which can gain nothing from it to waste its resources in
such a scheme.
On the issuance of memorandum/notice to employees
without giving copy to union, change in work schedule
at Traffic Records Section and ITTO policies, the
company has sufficiently rebutted the same, thus:
27. The Union also whines about the failure of
the company to furnish copies of memoranda
or notices sent to employees and change of
work schedules at the Traffic Records Section
and ITTO policies. The CBA, however, does not
obligate the Company to give the Union a copy
of each and every memorandum or notice sent
to employees. This would be unreasonable and
impractical. Neither did the Union demand that
they be furnished copies of the same. This is
clearly a non-issue as copies of all memoranda
or notices issued by management are readily
available upon request by any employee or the
Union.
28. Contrary to the allegations of the Union, the
rationale and mechanics for the abolishment of
the midnight schedule at the Traffic Record
Services had been thoroughly and adequately
discussed with the Union's President, Robert
Benosa, and the staff of Traffic Record Services
in the meeting held on May 9, 1997. The
midnight services were abolished for purely
economic reasons. The company realized that
the midnight work can be handled in the
morning without hampering normal operations.
At the same time, the company will be able to
save on cost. For this objective, the employees
concerned agreed to create a manning and
shifting schedule starting at 6:00 a.m. up to
10:00 p.m., with each employee rendering only
eight hours of work every day without violating
any provision of the labor laws or the CBA.24
The Court has always respected a company's exercise of its
prerogative to devise means to improve its operations. Thus, we
have held that management is free to regulate, according to its
own discretion and judgment, all aspects of employment,
including hiring, work assignments, supervision and transfer of
employees, working methods, time, place and manner of work. 25
This is so because the law on unfair labor practices is not
intended to deprive employers of their fundamental right to
prescribe and enforce such rules as they honestly believe to be
necessary to the proper, productive and profitable operation of
their business.26
Even assuming arguendo that Philcom had violated some
provisions in the CBA, there was no showing that the same was
a flagrant or malicious refusal to comply with its economic
provisions. The law mandates that such violations should not be
treated as unfair labor practices.27
PEU also asserts that the Court of Appeals should have issued an
order directing the issuance of a writ of execution ordering
Philcom to accept back to work unconditionally the striking union
officers and members under the same terms and conditions
prevailing before the strike. PEU asserts that the union officers
and members should be paid their salaries or backwages and
monetary equivalent of other benefits beginning 6 October 1998
when PEU received a copy of the Secretary's 2 October 1998
return-to-work order.
PEU claims that even if the "issue of illegal strike can be included
in the assailed orders and that the union officers and members
have been terminated as a result of the alleged illegal strike, still,
the Secretary has to rule on the illegality of the strike and the
liability of each striker." PEU asserts that the union officers and
members should first be accepted back to work because a
return-to-work order is immediately executory. 28
We rule on the legality of the strike if only to put an end to this
protracted labor dispute. The facts necessary to resolve the
legality of the strike are not in dispute.
The strike and the strike activities that PEU had undertaken were
patently illegal for the following reasons:
1. Philcom is engaged in a vital industry protected by Presidential
Decree No. 823 (PD 823), as amended by Presidential Decree
No. 849, from strikes and lockouts. PD 823, as amended,
provides:
Sec. 1. It is the policy of the State to encourage free
trade unionism and free collective bargaining within the
framework of compulsory and voluntary arbitration.
Therefore, all forms of strikes, picketings and lockouts
are hereby strictly prohibited in vital industries, such as
in public utilities, including transportation
and communications, x x x. (Emphasis supplied)
Enumerating the industries considered as vital, Letter of
Instruction No. 368 provides:
For the guidance of workers and employers, some of
whom have been led into filing notices of strikes and
lockouts even in vital industries, you are hereby
instructed to consider the following as vital industries
and companies or firms under PD 823 as amended:
1. Public Utilities:
xxxx
B. Communications:
1) Wire or wireless
telecommunications such as
telephone, telegraph, telex,
and cable companies or firms;
(Emphasis supplied)
xxxx
It is therefore clear that the striking employees violated the no-
strike policy of the State in regard to vital industries.
2. The Secretary had already assumed jurisdiction over the
dispute. Despite the issuance of the return-to-work orders
dated 19 November and 28 November 1997, the striking
employees failed to return to work and continued with
their strike.
Regardless of their motives, or the validity of their claims, the
striking employees should have ceased or desisted from all acts
that would undermine the authority given the Secretary under
Article 263(g) of the Labor Code. They could not defy the return-
to-work orders by citing Philcom's alleged unfair labor practices
to justify such defiance.29
PEU could not have validly anchored its defiance to the return-
to-work orders on the motion for reconsideration that it had filed
on the assumption of jurisdiction order. A return-to-work
order is immediately effective and executory despite the
filing of a motion for reconsideration. It must be strictly
complied with even during the pendency of any petition
questioning its validity.30
The records show that on 22 November 1997, Philcom published
in the Philippine Daily Inquirer a notice to striking employees to
return to work.31 These employees did not report back to work
but continued their mass action. In fact, they lifted their picket
lines only on 22 December 1997.32 Philcom formally
notified twice these employees to explain in writing why they
should not be dismissed for defying the return-to-work
order.33 Philcom held administrative hearings on these
disciplinary cases.34 Thereafter, Philcom dismissed these
employees for abandonment of work in defiance of the return-
to-work order.35
A return-to-work order imposes a duty that must be discharged
more than it confers a right that may be waived. While the
workers may choose not to obey, they do so at the risk of
severing their relationship with their employer.36
The following provision of the Labor Code governs the effects of
defying a return-to-work order:
ART. 264. Prohibited activities. ─ (a) x x x x
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 cases involving the same grounds for
the strike or lockout x 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
supplied)
A strike undertaken despite the Secretary's issuance of an
assumption or certification order becomes a prohibited
activity, and thus, illegal, under Article 264(a) of the Labor
Code. The union officers who knowingly participate in the
illegal strike are deemed to have lost their employment status.
The union members, including union officers, who commit
specific illegal acts or who knowingly defy a return-to-work order
are also deemed to have lost their employment
status.37 Otherwise, the workers will simply refuse to return to
their work and cause a standstill in the company operations
while retaining the positions they refuse to discharge and
preventing management to fill up their positions. 38
Hence, the failure of PEU's officers and members to comply
immediately with the return-to-work orders dated 19 November
and 28 November 1997 cannot be condoned. Defiance of the
return-to-work orders of the Secretary constitutes a
valid ground for dismissal.39
3. PEU staged the strike using unlawful means and methods.
Even if the strike in the present case was not illegal per se, the
strike activities that PEU had undertaken, especially the
establishment of human barricades at all entrances to and
egresses from the company premises and the use of coercive
methods to prevent company officials and other personnel from
leaving the company premises, were definitely illegal. 40 PEU is
deemed to have admitted that its officers and members had
committed these illegal acts, as it never disputed Philcom's
assertions of PEU's unlawful strike activities in all the pleadings
that PEU submitted to the Secretary and to this Court.
PEU's picketing officers and members prohibited other tenants at
the Philcom building from entering and leaving the premises.
Leonida S. Rabe, Country Manager of Societe Internationale De
Telecommunications Aeronautiques (SITA), a tenant at the
Philcom building, wrote two letters addressed to PEU President
Roberto B. Benosa. She told Benosa that PEU's act of obstructing
the free ingress to and egress from the company premises "has
badly disrupted normal operations of their organization." 41
The right to strike, while constitutionally recognized, is not
without legal constrictions. Article 264(e) of the Labor Code, on
prohibited activities, 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.
The Labor Code is emphatic against the use of violence,
coercion, and intimidation during a strike and to this end
prohibits the obstruction of free passage to and from the
employer's premises for lawful purposes. A picketing labor union
has no right to prevent employees of another company from
getting in and out of its rented premises, otherwise, it will be
held liable for damages for its acts against an innocent by-
stander.42
1997.48 PEU could have just taken up their grievances in their
negotiations for the new CBA. This is what a Philcom officer had
suggested to the Dasmariñas staff when the latter requested on
16 June 1997 for an increase in transportation allowance. 49 In
fact, when PEU declared the strike, Philcom and PEU had already
agreed on 37 items in their negotiations for the new CBA. 50
The bottom line is that PEU should have immediately resorted to
the grievance machinery provided for in the CBA. 51 In
disregarding this procedure, the union leaders who knowingly
participated in the strike have acted unreasonably. The law
cannot interpose its hand to protect them from the
consequences of their illegal acts.52
A strike declared on the basis of grievances which have not been
submitted to the grievance committee as stipulated in the CBA of
the parties is premature and illegal.53

The sanction provided in Article 264(a) is so severe that 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.43
By insisting on staging the prohibited strike and defiantly
picketing Philcom's premises to prevent the resumption of
company operations, the striking employees have forfeited their
right to be readmitted.44
4. PEU declared the strike during the pendency of preventive
mediation proceedings at the NCMB.
On 17 November 1997, while a conciliation meeting was being
held at the NCMB in NCMB-NCR-NS 10-435-97, PEU went on
strike. It should be noted that in their meeting on 11 November
1997, both Philcom and PEU were even "advised to maintain the
status quo."45 Such disregard of the mediation proceedings was a
blatant violation of Section 6, Book V, Rule XXII of the Omnibus
Rules Implementing the Labor Code, which explicitly obliges the
parties to bargain collectively in good faith and prohibits them
from impeding or disrupting the proceedings. 46 The relevant
provision of the Implementing Rules provides:
Section 6. Conciliation. ─ x x x x
Having held the strike illegal and having found that PEU's officers
and members have committed illegal acts during the strike, we
hold that no writ of execution should issue for the return to work
of PEU officers who participated in the illegal strike, and PEU
members who committed illegal acts or who defied the return-
to-work orders that the Secretary issued on 19 November 1997
and 28 November 1997. The issue of who participated in the
illegal strike, committed illegal acts, or defied the return-to-work
orders is a question of fact that must be resolved in the
appropriate proceedings before the Secretary of Labor.
WHEREFORE, we DISMISS the petition and AFFIRM the
Decision of the Court of Appeals in CA-G.R. SP No. 53989, with
the MODIFICATION that the Secretary of Labor is directed to
determine who among the Philcom Employees Union officers
participated in the illegal strike, and who among the union
members committed illegal acts or defied the return-to-work
orders of 19 November 1997 and 28 November 1997. No
pronouncement as to costs.
SO ORDERED.
Quisumbing, Chairman, Carpio-Morales, Tinga, Velasco, Jr.,
J.J., concur.

During the proceedings, the parties shall not do any act

which may disrupt or impede the early settlement of
dispute. They are obliged, as part of their duty, to
bargain collectively in good faith, to participate fully and
promptly in the conciliation meetings called by the
regional branch of the Board. x x x x

Article 264(a) of the Labor Code also considers it a prohibited

activity to declare a strike "during the pendency of cases
involving the same grounds for the same strike."

Lamentably, PEU defiantly proceeded with their strike during the

pendency of the conciliation proceedings.

5. PEU staged the strike in utter disregard of the grievance

procedure established in the CBA.

By PEU's own admission, "the Union's complaints to the

management began in June 1997 even before the start of the
1997 CBA renegotiations."47 Their CBA expired on 30 June
SECOND DIVISION
 
G.R. Nos. 92981-83 January 9, 1992
INTERNATIONAL PHARMACEUTICALS, INC., petitioner,
vs.
HON. SECRETARY OF LABOR and ASSOCIATED LABOR
UNION (ALU), respondents.
E.B. Ramos & Associates for petitioner.
Celso C. Reales for private respondent.
REGALADO, J.:
The issue before us is whether or not the Secretary of the
Department of Labor and Employment has the power to assume
jurisdiction over a labor dispute and its incidental controversies,
including unfair labor practice cases, causing or likely to cause a
strike or lockout in an industry indispensable to the national
interest.
The operative facts which culminated in the present recourse are
undisputed.
Prior to the expiration on January 1, 1989 of the collective
bargaining agreement between petitioner International
Pharmaceuticals, Inc. (hereafter, Company) and the Associated
Labor Union (Union, for brevity), the latter submitted to the
Company its economic and political demands. These were not
met by the Company, hence a deadlock ensued.
On June 27, 1989, the Union filed a notice of strike with Regional
Office No. VII of the National Conciliation and Mediation Board,
Department of Labor and Employment, which was docketed as
NCMB-RBVII-NS-06-050-89. After all conciliation efforts had
failed, the Union went on strike on August 8, 1989 and the
Company's operations were completely paralyzed.
Subsequently, three other labor cases involving the same parties
were filed with the National Labor Relations Commission (NLRC)
to wit:
1. International Pharmaceuticals,
Inc. vs. Associated Labor Union, NLRC Case No.
VII-09-0810-89, 1 a petition for injunction and
damages with temporary restraining order filed
by the Company against the Union and some of
its members for picketing the Company's
establishment in Cebu, Davao, and Metro
Manila allegedly without the required majority
of the employees approving and agreeing to
the strike and with simulated strike votes, in
direct violation of the provisions of their
collective bargaining agreement and in total
and complete defiance of the provisions of the
Labor Code;
2. Associated Labor Union vs. International
Pharmaceuticals, Inc., et al., NLRC Case No-
VII-08-0715-89, 2 a complaint for unfair labor
practice with prayer for damages and attorney's
fees filed by the Union against the Company, its
personnel manager, and the Workers Alliance of
Trade Unions (WATU) as a result of the
Company's refusal to include the sales workers
in the bargaining unit resulting in a deadlock in
the bargaining negotiations; for coddling the
respondent WATU as a separate bargaining
agent of the sales workers despite a contrary
ruling of the Med-Arbiter; and undue
interference by the Company in the right of the
workers to self-organization through
harassment and dispersal of a peaceful picket
during the strike; and
3. International Pharmaceuticals, Inc ., et
al. vs. Associated Labor Union, NLRC Case No.
VII-08-0742-89, 3 a petition to declare the
strike illegal with prayer for damages filed by
the Company alleging, among others, that the
notice of strike filed by the Union with the
National Conciliation and Mediation Board did
not conform with the requirements of the Labor
Code, and that the Union, in violation of the
Labor Code provisions on the conduct of the
strike, totally blockaded and continued to
blockade the ingress and egress of the
Company's premises by human barricades,
placards, benches and other obstructions,
completely paralyzing its business operations.
Meanwhile, considering that the Company belongs to an industry
indispensable to national interest, it being engaged in the
manufacture of drugs and pharmaceuticals and employing
around 600 workers, then Acting Secretary of Labor, Ricardo C.
Castro, invoking Article 263 (g) of the Labor Code, issued an
order dated September 26, 1989 assuming jurisdiction over the
aforesaid case docketed as NCMB-RBVII-NS-06-050-89 and
directing the parties to return to the status quo  before the work
stoppage. The decretal portion of the order reads:
WHEREFORE, PREMISES CONSIDERED, this
Office hereby assumes jurisdiction over the
labor dispute at the International
Pharmaceuticals, Incorporated pursuant to
Article 263 (g) of the Labor Code, as amended.
Accordingly, all striking workers are hereby
directed to return to work and management to
accept them under the same terms and
conditions prevailing before the work stoppage,
within twenty four (24) hours from receipt of
this Order. Management is directed to post
copies of this Order in three (3) conspicuous
places in the company premises.
The parties are likewise ordered to cease and
desist from committing any and all acts that will
prejudice either party and aggravate the
situation as well as the normalization of
operations.
SO ORDERED. 4
On January 15, 1990, the Union filed a motion in NCMB-RBVII-
NS-06-050-85, the case over which jurisdiction had been
assumed by the Secretary of Labor and Employment (hereafter
referred to as the Secretary), seeking the consolidation of the
three NLRC cases (NLRC Cases Nos. VII-09-0810-89, VII-08-
0715-89, and VII-08-0742-89) with the first stated case.
In an order dated January 31, 1990, Secretary of Labor Ruben
D. Torres granted the motion and ordered the consolidation of
the three NLRC cases with NCMB-RBVII-NS-06-050-89, as
follows:
WHEREFORE, finding the Associated Labor
Union's Motion to be meritorious, the same is
granted and NLRC Cases Nos. VII-09-0810-89,
VII-08-0715-89 and VII-08-0742-89 are hereby
ordered consolidated with the instant
proceedings. The Labor Arbiter handling the
same is directed to immediately transmit the
records of the said cases to the Asst. Regional
Director, DOLE Regional Office No. 7 who has
been designated to hear and receive the
evidence of the parties.
SO ORDERED. 5
The Company's subsequent motion for reconsideration of the
order consolidating the cases was denied by the Secretary on
March 5, 1990. 6 Thereafter, the Assistant Regional Director of
Regional Office No. VII, as directed, assumed jurisdiction over
the consolidated cases and set the same for reception of
evidence.
Petitioner Company now comes to this Court assailing the
aforesaid orders and alleging grave abuse of discretion on the
part of the public respondent in the issuance thereof. The Union,
as the bargaining agent of the rank and file workers of the
Company, was impleaded as the private respondent.
Petitioner Company submits that the exclusive jurisdiction to
hear and decide the three NLRC cases above-specified is vested
in the labor arbiter as provided in paragraph (a) (1) and (5) of
Article 217 of the Labor Code.
Moreover, petitioner insists that there is nothing in Article 263
(g) of the Labor Code which directs the labor arbiter to hold in
abeyance all proceedings in the NLRC cases and await
instruction from the Secretary. Otherwise, so it postulates,
Section 6, Rule V of the Revised Rules of the NLRC which is
invoked by the Secretary is null and void since it orders the
cessation of all proceedings before the labor arbiter and orders
him to await instructions from the Secretary in labor disputes
where the Secretary bas assumed jurisdiction, thereby amending
Article 263 (g) of the Labor Code by enlarging the jurisdiction of
the Secretary.
Petitioner further contends that, granting arguendo  that Section
6, Rule V of the Revised Rules of the NLRC is in accordance with
Article 263 (g) of the Labor Code, still the Secretary should not
have ordered the consolidation of the three unfair labor practice
cases with NCMB-RBVII-NS-06-050-89, since the Secretary
assumed jurisdiction only over the deadlock in the negotiation of
the collective bargaining agreement and the petition for
contempt as a result of the said deadlock.
Respondents, on the other band, assert that the authority to
assume jurisdiction over labor disputes, vested in the Secretary
by Article 263 (g) of the Labor Code, extends to all questions
and incidents arising therein causing or likely to cause strikes or
lockouts in industries indispensable to national interest.
Moreover, respondents counter that Section 6, Rule V of the
Revised Rules of the NLRC is in accordance with Article 263 (g)
of the Labor Code, notwithstanding the provisions of Article 217
of the Labor Code. To rule otherwise, they point out, would
encourage splitting of jurisdiction, multiplicity of suits, and
possible conflicting findings and decisions which could only result
in delay and complications in the disposition of the labor
disputes.
It was also stressed that the three NLRC cases which respondent
Secretary ordered consolidated with the labor dispute over which
he had assumed jurisdiction arose from or are directly related to
and are incidents of the said labor dispute.
Finally, respondents invoke the rule that all doubts in the
implementation and interpretation of the Labor Code provisions
should be resolved in favor of labor. By virtue of the assailed
orders, the Union and its members were relieved of the burden
of having to litigate their interrelated cases in different fora.
There are three governing labor law provisions which are
determinative of the present issue of jurisdiction, viz.:
1. Article 217 (a) (1) and (5) of the Labor Code which provides:
Art. 217. Jurisdiction of Labor Arbiters and the
Commission — (a) Except as otherwise
provided under this Code the Labor Arbiters
shall have original and exclusive jurisdiction to
hear and decide . . . the following cases
involving all workers. . . .
1. Unfair labor practice cases;
xxx xxx xxx
5. Cases arising from any violation of Article
264 of this Code, including questions involving
the legality of strikes and lockouts; . . .
2. Article 263 (g) of the Labor Code which declares:
(g) When, in his opinion, there exists a labor
dispute causing or likely to cause a strike of
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. . . .
3. Section 6, Rule V of the Revised Rules of the NLRC which
states:
Sec. 6. Disposition of cases. — . . .
Provided, that when the Minister (Secretary) of
Labor and Employment has assumed
 jurisdiction over a strike or lockout dispute or
certified the same to the Commission, the
parties to such dispute shall immediately inform
the Minister (Secretary) or the Commission as
the case may be, of all cases between them
pending before any Regional Arbitration Branch,
and the Labor Arbiter handling the same of
such assumption or certification, whereupon all
proceedings before the Labor Arbiter
concerning such cases shall cease and the
Labor Arbiter shall await instructions from the
Minister (Secretary) or the Commission.
The foregoing provisions persuade us that the Secretary did not
gravely abuse his discretion when he issued the questioned
orders.
As early as 1913, this Court laid down in Herrera vs. Baretto, et
al., 7 the fundamental normative rule that jurisdiction is the
authority to bear and determine a cause — the right to act in a
case. However, this should be distinguished from the exercise of
jurisdiction. The authority to decide a case at all and not the
decision rendered therein is what makes up jurisdiction. Where
there is jurisdiction over the person and the subject matter, the
decision of all other questions arising in the case is but an
exercise of that jurisdiction. 8
In the present case, the Secretary was explicitly granted by
Article 263 (g) of the Labor Code the authority to assume
jurisdiction over a labor dispute causing or likely to cause a strike
or lockout in an industry indispensable to the national interest,
and decide the same accordingly. Necessarily, this authority to
assume jurisdiction over the said labor dispute must include and
extend to all questions and controversies arising therefrom,
including cases over which the labor arbiter has exclusive
jurisdiction.
Moreover, Article 217 of the Labor Code is not without, but
contemplates, exceptions thereto. This is evident from the
opening proviso therein reading "(e)xcept as otherwise provided
under this Code . . ." 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. 9 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." 10
In fine, the issuance of the assailed orders is within the province
of the Secretary as authorized by Article 263 (g) of the Labor
Code and Article 217 (a) (1) and (5) of the same Code, taken
conjointly and rationally construed to subserve the objective of
the jurisdiction vested in the Secretary.
Our pronouncement on this point should be distinguished from
the situation which obtained and our consequent ruling
in Servando's, Inc. vs. The Secretary of Labor and Employment,
et al. 11 wherein we referred to the appropriate labor arbiter a
case previously decided by the Secretary. The said case was
declared to be within the exclusive jurisdiction of the labor
arbiter since the aggregate claims of each of the employees
involved exceeded P5,000.00. In Servando, the Secretary
invoked his visitorial and enforcement powers to assume
jurisdiction over the case, the exclusive and original jurisdiction
of which belongs to the labor arbiter. We said that to uphold the
Secretary would empower him, under his visitorial powers, to
hear and decide an employee's claim of more than P5,000.00.
We held that he could not do that and we, therefore, overruled
him.
In the present case, however, by virtue of Article 263 (g) of the
Labor Code, the Secretary has been conferred jurisdiction over
cases which would otherwise be under the original and exclusive
jurisdiction of labor arbiters. There was an existing labor dispute
as a result of a deadlock in the negotiation for a collective
bargaining agreement and the consequent strike, over which the
Secretary assumed jurisdiction pursuant to Article 263 (g) of the
Labor Code. The three NLRC cases were just offshoots of the
stalemate in the negotiations and the strike. We, therefore,
uphold the Secretary's order to consolidate the NLRC cases with
the labor dispute pending before him and his subsequent
assumption of jurisdiction over the said NLRC cases for him to be
able to competently and efficiently dispose of the dispute in its
totality.
Petitioner's thesis that Section 6, Rule V of the Revised Rules of
the NLRC is null and void has no merit. The aforesaid rule has
been promulgated to implement and enforce Article 263 (g) of
the Labor Code. The rule is in harmony with the objectives
sought to be achieved by Article 263 (g) of the Labor Code,
particularly the Secretary's assumption of jurisdiction over a
labor dispute and his subsequent disposition of the same in the
most expeditious and conscientious manner. To be able to
completely dispose of a labor dispute, all its incidents would
have to be taken into consideration. Clearly, the purpose of the
questioned regulation is to carry into effect the broad provisions
of Article 263 (g) of the Labor Code.
By and large, Section 6, Rule V of the Revised Rules of the NLRC
is germane to the objects and purposes of Article 263 (g) of the
Labor Code, and it is not in contradiction with but conforms to
the standards the latter requires. Thus, we hold that the terms
of the questioned regulation are within the statutory power of
the Secretary to promulgate as a necessary implementing rule or
regulation for the enforcement and administration of the Labor
Code, in accordance with Article 5 of the same Code.
Besides, to uphold petitioner Company's arguments that the
NLRC cases are alien and totally separate and distinct from the
deadlock in the negotiation of the collective bargaining
agreement is to sanction split jurisdiction which is obnoxious to
the orderly administration of justice. 12
Moreover, the rule is that all doubts in the interpretation and
implementation of labor laws should be resolved in favor of
labor. In upholding the assailed orders of the Secretary, the
Court is only giving meaning to this rule. The Court should help
labor authorities provide workers immediate access to their
rights and benefits, without being hampered by arbitration or
litigation processes that prove to be not only nerve-wracking, but
financially burdensome in the long run. 13 Administrative rules of
procedure should be construed liberally in order to promote their
object and assist the parties, especially the workingman, in
obtaining just, speedy, and inexpensive determination of their
respective claims and defenses. By virtue of the assailed orders.
The Union and its members are relieved of the burden of
litigating their interrelated cases in different tribunals.
WHEREFORE. there being no grave abuse of discretion
committed by the Secretary of Labor and Employment, the
petition at bar is hereby DISMISSED.
SO ORDERED. Melencio-Herrera, Paras and Padilla, JJ., concur.
Nocon, J., took no part.
FIRST DIVISION
G.R. No. L-59407 March 29, 1985
CITY SERVICE CORP. WORKERS UNION, EMILIANO
BILONOAC, JUANITO VALENCIA, NOEL VALENCIA and
JULIETO ENOSLAY, Petitioners, vs. CITY SERVICE
CORPORATION, JAIME ABRAHAM, MANUEL L.
VILLAMAYOR and NATIONAL LABOR RELATIONS
COMMISSION, Respondents.
PLANA, J.:
This petition for certiorari seeks to partially annul the decision
dated December 22, 1980 of the National Labor Relations
Commission (NLRC) insofar as it grants individual petitioners
separation pay instead of reinstatement with backwages after
finding that they had been illegally dismissed by respondent
corporation.chanroblesvirtualawlibrary chanrobles virtual law
library
City Service Corporation (CSC) is an entity engaged in the
business of providing janitorial and allied services to various
clients. For this purpose, it maintains a pool of janitorial
employees.chanroblesvirtualawlibrary chanrobles virtual law
library
In 1965, CSC hired petitioner Juanito Valencia, and in 1979, the
other individual petitioners, and assigned them to one of its
clients, the Army and Navy Club. On February 4, 1974, CSC
terminated the employment of individual petitioners on the basis
of the report of the Army and Navy Club that they could have
been stealing club properties. The termination was done without
previous formal investigation. Nor was it previously cleared by
the Secretary of Labor, as required by the then prevailing
law.chanroblesvirtualawlibrary chanrobles virtual law library
Hence an illegal dismissal case was filed by petitioners against
CSC. After hearing, the Labor Arbiter found individual petitioners
to have been illegally dismissed and ordered their reinstatement
with backwages.chanroblesvirtualawlibrary chanrobles virtual law
library
On appeal the NLRC sustained the finding of illegal dismissal for
lack of prior MOLE clearance. However, instead of ordering
individual petitioners to be reinstated with backwages, the NLRC
simply directed their payment of separation pay equivalent to
one month's salary for every year of service.
The individual complainants were hired and assigned by the
respondent corporation at the Army and Navy Club of Manila,
Inc. Their termination of employment was brought about by the
request of the management of the Army and Navy Club of
Manila, Inc. for their replacement because of the suspicion that
one or more of them were taking out property belonging to the
club. Since they were no longer acceptable by the club
management, the respondent corporation had no other choice
but to replace them And since complainants could not be
relocated or reassigned to other clients of the respondent
corporation, while this may be considered a valid reason for their
termination, the respondents, however, should have filed the
requisite application for clearance to dismiss
them.chanroblesvirtualawlibrarychanrobles virtual law library
... Hence, we find there is a necessity for prior written clearance
from the Secretary (now Minister) of Labor as required by the
Presidential Decree No. 21.chanroblesvirtualawlibrary chanrobles
virtual law library
Considering further that the termination has taken place six
years ago and the possibility of reinstatement to their former
position has become remote, and (sic) to say, impossible, we
order that each of the complainants be given separation pay
equivalent to one month pay for every year of service. (NLRC
decision of December 22, 1980. Rollo, pp. 45-46.)
In the instant petition, petitioners assail the NLRC decision for
failing to order the reinstatement of individual petitioners after
finding them to have been illegally dismissed. The issue thus
raised is whether individual petitioners are entitled to
reinstatement with
backwages.chanroblesvirtualawlibrary chanrobles virtual law
library
The basis of the NLRC award of separation pay in lieu of
reinstatement with backwages is the speculation that "the
possibility of reinstatement (of individual petitioners) to their
former position has become remote, and (sic) to say impossible",
considering that their dismissal took place six years ago. For the
record fails to show that the NLRC had verified that there were
no available positions to which individual petitioners could be
reinstated. It would seem that the NLRC simply assumed that
individual petitioners could no longer be re-employed because of
the lapse of six years since their
dismissal.chanroblesvirtualawlibrarychanrobles virtual law library
It appears that CSC is still in business and continues to provide
janitorial services to numerous clients. Considering the nature of
the position (janitor) of individual petitioners, it would not be
difficult for CSC to re-employ
them.chanroblesvirtualawlibrary chanrobles virtual law library
Security of tenure is a right of paramount value. Precisely, it is
given specific recognition and guarantee by the Constitution no
less. The State shall afford protection to labor and "shall assure
the rights of workers to . . . security of tenure", so runs the
Constitutional mandate. (Art. 11, Sec. 9.) It stands to reason
that a right so highly ranked as security of tenure should not
lightly be denied on so nebulous a basis as mere
speculation.chanroblesvirtualawlibrary chanrobles virtual law
library
Under Section 280 of the Labor Code, an employee who has
been unjustly dismissed shall be entitled to reinstatement
without loss of seniority rights and backwages from the time his
compensation was withheld up to the time of as reinstatement.
However, in the compelling interest of justice and kindred
considerations, this Court in a number of illegal dismissal cases
has adopted the policy of granting backwages for a limited
period without deduction on account of interim earnings realized
elsewhere by the dismissed employee. (See, e.g., Mercury Drug
Co., Inc. vs. Court of Industrial Relations, 56 SCRA 694;
Philippine Airlines, Inc. vs. NLRC, 126 SCRA 223.) chanrobles
virtual law libraryPremises considered, judgment is hereby
rendered ordering respondent CSC to reinstate individual
petitioners to their janitorial positions or, in the event said
positions are no longer available, to substantially equivalent
positions, with backwages equivalent to their compensation for
three years. The NLRC decision of December 22, 1980 is
accordingly so modified. SO ORDERED.
SECOND DIVISION
G.R. No. L-43835 March 31, 1981
DOMINGO F. BONDOC, petitioner,
vs.
PEOPLE'S BANK AND TRUST COMPANY, BANK OF THE
PHILIPPINES ISLANDS (Surviving Bank) and JACOBO C.
CLAVE (as Presidential Executive Assitant), respondents.
AQUINO, J.:
This certiorari case involves the issue of whether respondent
Presidential Executive Assistant committed a grave abuse of
discretion amounting to lack of jurisdiction in confirming the
abolition of petitioner's position as a department manager in a
bank and the payment to him of separation pay instead of
reinstating him with backwages.
Domingo F. Bondoc, who used to be an assistant of Jaime C.
Velazquez in the Ayala Secutrities Corporation (p. 116, Rollo),
joined the People's Bank and Trust Company on October 1, 1966
upon the recommendation of Velazquez, a director, to Roman
Azanza, the bank president (p. 35, Rollo).
He replaced Ariston Estrada, Jr. (p. 37, Rollo). Bondoc was
chosen by the bank's board of directors on February 21, 1967 as
the first manager of the bank's department of economic research
and statistics which was organized in January, 1967 (Exh. 4 and
5).
That department had only four employees: a stenographer and
three clerks who were formerly employed in the comtroller's
office, accounting department and office of the corporate
secretary (p. 117-118, Rollo).
Every year, from 1968 to 1973, Bondoc was elected to the
position of department manager and assistant vice-president by
the bank's board of directors at its annual organizational meeting
(Exh. 1-B to 1-F).
On May 15, 1973, Bondoc reported in writing to Manuel
Chuidian, a bank director, certain anomalies committed by the
officers of the bank. The Central Bank found that some officers
of the bank utilized its found for their own interests. Because of
those anomalies, the Monetary Board suspendedBenito R.
Araneta, a director and vice-president, and reprimanded the
other officers involved, namely, Severino Coronacion, Nicanor O.
Corpus, Guillermo D. Teodoro, Feldres G. San Pedro, Carlos
Villaluz, Godofredo Galindez, Fernando Macalanlayand Manuel P.
Elepaño (pp. 6-8 Rollo).
On September 19, 1973, the board of directors of the People's
Bank, in the course of its deliberation on the bank's projected
merger with the Bank of the Philippine islands, resolved to
abolish itts department of economic research and statistics
which, as already noted, was headed by Bondoc (p. 35, Rollo).
The board regarded the said department as a rededant unit
whose functions could be performed by other departments. The
Bank of P.I., like twenty-three other commercial banks, has no
such department (p. 117, Rollo). Bondoc's four subordinates
were absorbed by the accounting department.
Bondoc was advised of the abolition ofhis department in the later
part of September, 1973. He asked the personnel manager to
compute his separations pay. Bondoc was told that his
separation pay was equivalent to seventy-five percent of his
salary for every year of service. It amounted to P10,481.33
under its car finacing plan. (p. 118, Rollo).
Bondoc allegedly told the personnel manager that he would use
his separation pay to liquidate his debt and issue a check for
P3,012.08 to cover the balance of his debt. He requested the
personnel manager to expedite the preparation of the bill of sale
for the Toyota car so that he could get the document on the
following day. But he did not show up that day (p. 118, Rollo).
It is relevant to state that the merger of the two banks was
effected in accompliance with the Central Bank's requirement
that commercial banks should increase their capital stock to a
minimum of one hundred million pesos through mergers and
consolidations or other lawful means. The merger was approved
by the Monetary Board and the Securities and Exchange
Commission. The merger agreement was signed in January,
1974. It was consummated on June 1, 1974.
On November 2, 1973, the People's Bank, pursuant to section 11
of Presidential Decree No. 21 (creating the ad hoc National Labor
Relations Commission), applied with the Secretary of Labor for
clearnce to terminate Bondoc's services effective on November 5
(p. 35, Rollo).
He lost no time in filing with the NLRC his opposition to the
termination his services. He alleged in his opposition that he was
dismissed without cause (p. 114, Rollo).
As all efforts for the amicable settlement of the case were
fruitless, it was submitted for compulsory arbitration.
During the hearing, Bondoc tried to prove that the abolition of
his position was a reprisal for his aforementioned exposure of
some anomalies in the bank which resulted in the suspension or
reprimand by the Monetary Board of certain senior officers of the
bank headed by Benito R. Araneta, a nephew of J. Antonio
Araneta, the chairman of the board (p. 48, Rollo).
After hearing, the NLRC arbitrator recommended to the
Secretary of Labor the denial of the application to terminate
Bondoc's employment and ordered the People's Bank to reinstate
him with backwages from November 16, 1973 and with
allowances and other benefits guaranteed by law and without
loss of status and seniority rights (pp. 42-43, Rollo).
On appeal, the NLRC (Commissioners Castro, Borromeo ans
Seno) in its decision of January 21, 1975 reversed the decision of
the arbitrartor, approved the clearance for Bondoc's dismissal
and ordered the People's Bank to pay him seventy five percent
(75%) of his monthly salary for every year of service in lieu of
one-half month salary for every year of service fixed in the
Termination Pay Law, Republic Act No. 1052, as amended by
Republic Act no. 1787 (p. 45, Rollo).
The NLRC adduced as reason to justify the abolition of Bondoc's
position (1) the fact that his position as manager being
confidential in character, the bank had the rperogative to
terminate his employment anytimel (2) Bondoc's department
was nolonger necessary to the efficient operation of the bank in
view of the merger; (3) the management is not precluded from
undertakings a reorganization or making changes to meet the
demands of the present and (4) in case of mergers, departments
or position may be abolished or new ones created, as the
necessity for them requires (p. 44-45, Rollo).
Bondoc appealed tot he Secretary of Labor. That high official in
the resolution of September 29, 1975 reversed the NLRC's
decision on the grounds that the motivation for the termination
of Bondoc's services was not taken into account by the NLRC
and that the People's Bank should not have abolished Bondoc's
department without prior clearance. He denied the application
for clearance to dismiss Bondocs (p. 50, Rollo).
He ordered the People's Bank to reinstate Bondoc to his former
position or any substantially equivalent position with backwages
equivalent to his salary for six months, it being undrstood that
the Bank of the P.I. has assumred all the liabilities and
obligations of the People's Bank. The Secretary denied the
application for clearance to dismiss Bondoc. (pp. 48-50, Rollo).
From the resolution, the Bank of P.I., as successor of the
People's Bank, appealed tot he president of the Philippines.
One the grounds relied upon in that appeal was that Bondoc was
convicted of bigamy, a crime involving moral turpitude (Criminal
Case No. 7185, Manila CFI, Exh. 1).
The Bank of P.I. cited Central Bank Circular No. 356, which
disqualifies a person convicted of a crime involving moral
turpitude from becoming an officer of a bank (pp. 213-4, Rollo).
In a decision dated May 17, 1976, Presidential Executive
Assistant Jacobo C. Clave set aside the decisions of the arbitrator
and the Secretary and confirmed in toto  the NLRC's decision (p.
Rollo).
The office of the President held that under the Termination Pay
Law an employment without a definite period may be terminated
with or without a cause, thatthe abolition of Bondoc's position
was a necesary incident of the merger of the two banks and that
his services were no longer indispensable to them. hence, the
clearance for his removal was authorized for his removal was
authorized (pp. 52-54, Rollo).
The review of the Presidential decision was sought by Bondoc in
the petition which he filed in this Courton May 27, 1976. This is
the fifth  decision to be rendered in this case.
We hold that under the peculiar or particular facts of this case
the termination of bondoc's employment was lawful and justified
and that no grave abuse of discretion was lawful and justified
and that no grave abuse of discretion amounting to lack of
jurisdiction was committed by the Presidential Executive
Assistant in affirming the NLRC's decision sustaining ther
termination of his employment.
Bondoc was not employed for a fixed period. He held his position
of department manager at the pleasure of the bank's board of
directors. He occupied a managerial position and his stay in
therein depended on his retention of the trust and confidence of
the management and whether there was any need for his
services.
Although some vindictive motivation might have impelled the
aboliton of his position, yet, it is undeniable that the bank's
board of directors possessed the power to remove him and to
determine whether the interest of the bank justified the
existence of his department.
Under the old Termination Pay Law, it was held that in the
absence of a contract of employment for a specific period the
employer has the right to dismiss his employees at anytime with
or without just cause (De Dios vs. Bristol Laboratories (Phils.),
Inc., L-25530, January 29, 1974, 55 SCRA 349, 358; Jaguar
Transportation Co., Inc. vs. Cornista, L-32959, May 11, 1978, 83
SCRA 77).
It may be noted that under Policy Instructions No. 8 of the
Secretary of Labor "the employer is not required to obtain a
previous written clearnace to terminate managerial employees in
order to enable him to manage effectively". (SEe Associated
Citizens Bank vs. Ople, L-48896, February 24, 1981.)
The petitioner invokes the policy of the State to assure the right
of "workers" to security of tenure (Sec. 9, Art. II, Constitution).
That guarantee is an act of social justice. When a person has no
property, his job may possibly be his only possession or means
of livelihood. Therefore, he should be protected against any
arbitrary and unjust deprivation of his job.
Article 280 of the Labor Code has construed security of tenure as
referring to regular employment and as meaning that "the
employer shall not terminate the services of an employee except
for a just cause or when authorized by" the Code.
As already noted above, the facts of this case do not warrant the
conclusion that Bondoc's right to security of tenure was
oppressively abridged. He knew all along that his tenure as a
department manager rested in the discretion of the bank's board
of directors and that at anytime his services might be dispensed
with or his position might be abolished.
On equitable considerations, we hold that Bondoc should be paid
as separation pay his salary and allowances, if any, for seven
months.
WHEREFORE, the decision of respondent Presidential Executive
Assistant is affirmed with the modification that the Bank of the
P.I. should pay to the petitioner separation pay equivalent to his
salary and allowances (if any) for seven months. No costs.
SO ORDERED.
FIRST DIVISION
G. R. No. 148492 : May 9, 2003
BUENAVENTURA C. MAGSALIN & COCA-COLA BOTTLERS
PHILS., INC., Petitioners, v. NATIONAL ORGANIZATION OF
WORKING MEN (N.O.W.M.), RODOLFO MELGAR, ARNEL DELOS
SANTOS, SILVERIO MINDAJAO, RUBEN NAVALES, BOBBY
AUSTERO, RAYMUNDO GAUDICOS, CHRISTOPHER PERALTA,
GIOVANI DELA CRUZ, JOSELITO OCCIDENTAL, AMADO
BODASAN, FREDERIK MAGALINO, CHITO OCCIDENTAL,
ALEXANDER DELOS SANTOS, DEONIL MESA, OLIVER
VILLAFLOR, ROBERTO TUMONBA, RODRIGO ANGELES, ROMMEL
ABAD, FELIX AVENIDO, ARMANDO AMOR, FREDERICK DE
GUZMAN, CEA CARMELO, MARIANO CAETE, ALBERTO
ANTONES, ROMEO BASQUINAS, ROGELIO MALINIS, EDMUNDO
BAYOS, RAMIL REVADO, JOEL PIATA, OSCAR MALINAY, ROBERT
REYES, JIMMY REYES, RETCHEL HAUTEA, VICTORINO
TORRALBA, NOEL RUBAI, RENATO DE OCAMPO, JESUS NOZON,
JOEL MALINIS, REYNALDO GREGORY, MICHAEL RUBIA,
JOSELITO VILLANUEVA, LEONARDO MONDINA, EDUARDO
BELLA, WILFREDO BELLA, ALBERTO MAGTIBAY, MIGUEL
CUESTA, JOSE MARCOS RODRIGUEZ III, HERMINIO ROFLO,
ERNIE CHAVEZ, NELSON LOGRONIO, LEONILO GALAPIN, REY
PANGILINAN, LARRY JAVIER, MATIAS ARBUES, RONILO
AUSTERO, ADEMAR ESTUITA, EDWIN DE LEON, RANDY DE
CHAVEZ, respondents.
DECISION
VITUG, J.:
Coca-Cola Bottlers Phils., Inc., herein petitioner, engaged the
services of respondent workers as sales route helpers for a
limited period of five months. After five months, respondent
workers were employed by petitioner company on a day-to-day
basis. According to petitioner company, respondent workers
were hired to substitute for regular sales route helpers whenever
the latter would be unavailable or when there would be an
unexpected shortage of manpower in any of its work places or
an unusually high volume of work. The practice was for the
workers to wait every morning outside the gates of the sales
office of petitioner company. If thus hired, the workers would
then be paid their wages at the end of the day.
Ultimately, respondent workers asked petitioner company to
extend to them regular appointments. Petitioner company
refused. On 07 November 1997, twenty-three (23) of the
temporary workers (herein respondents) filed with the National
Labor Relations Commission (NLRC) a complaint for the
regularization of their employment with petitioner company. The
complaint was amended a number of times to include other
complainants that ultimately totaled fifty-eight (58) workers.
Claiming that petitioner company meanwhile terminated their
services, respondent workers filed a notice of strike and a
complaint for illegal dismissal and unfair labor practice with the
NLRC.
On 01 April 1998, the parties agreed to submit the controversy,
including the issue raised in the complaint for regularization of
employment, for voluntary arbitration. On 18 May 1998, the
voluntary arbitrator rendered a decision dismissing the complaint
on the thesis that respondents (then complainants) were not
regular employees of petitioner company.
Respondent workers filed with the Court of Appeals a petition for
review under Rule 43 of the Rules of Civil Procedure assailing the
decision of the voluntary arbitrator, therein contending that -
1. The Voluntary Arbitrator committed errors in finding that
petitioners voluntarily and knowingly agreed to be employed on
a day-to-day basis; and
2. The Voluntary Arbitrator committed errors in finding that
petitioners dismissal was valid.[1cräläwvirtualibräry
In its decision of 11 August 2000, the Court of Appeals reversed
and set aside the ruling of the voluntary arbitrator, it concluded -
WHEREFORE, the assailed decision of the Voluntary Arbitrator is
hereby REVERSED and SET ASIDE and anew one is entered:
1. Declaring petitioners as regular employees of Coca-Cola
Bottlers Phils., Inc. and their dismissal from employment as
illegal;
2. Ordering respondent Coca-Cola Bottlers Phils., Inc. to
reinstate petitioners to their former positions with full
backwages, inclusive of allowances that petitioners had been
receiving during their employment and 13th month pay,
computed from the date of their termination up to the time of
their actual reinstatement (Paramount Vinyl Product Corp. vs.
NLRC, 190 SCRA 526).2cräläwvirtualibräry
Petitioner companys motion for reconsideration was denied in a
resolution, dated 21 May 2001, of the appellate court.
The focal issues revolve around the matter of whether or not the
nature of work of respondents in the company is of such nature
as to be deemed necessary and desirable in the usual business
or trade of petitioner that could qualify them to be regular
employees.
The basic law on the case is Article 280 of the Labor Code. Its
pertinent provisions read:
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 services 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 activity exists.
Coca-Cola Bottlers Phils., Inc., is one of the leading and largest
manufacturers of softdrinks in the country. Respondent workers
have long been in the service of petitioner company. Respondent
workers, when hired, would go with route salesmen on board
delivery trucks and undertake the laborious task of loading and
unloading softdrink products of petitioner company to its various
delivery points.
Even while the language of law might have been more definitive,
the clarity of its spirit and intent, i.e., to ensure a regular
workers security of tenure, however, can hardly be doubted. In
determining whether an employment should be considered
regular or non-regular, the applicable test is the reasonable
connection between the particular activity performed by the
employee in relation to the usual business or trade of the
employer. The standard, supplied by the law itself, is whether
the work undertaken is necessary or desirable in the usual
business or trade of the employer, a fact that can be assessed
by looking into the nature of the services rendered and its
relation to the general scheme under which the business or trade
is pursued in the usual course. It is distinguished from a specific
undertaking that is divorced from the normal activities required
in carrying on the particular business or trade. But, although the
work to be performed is only for a specific project or seasonal,
where a person thus engaged has been performing the job for at
least one year, even if the performance is not continuous or is
merely intermittent, the law deems the repeated and continuing
need for its performance as being sufficient to indicate the
necessity or desirability of that activity to the business or trade
of the employer. The employment of such person is also then
deemed to be regular with respect to such activity and while
such activity exists.3cräläwvirtualibräry
The argument of petitioner that its usual business or trade is
softdrink manufacturing and that the work assigned to
respondent workers as sales route helpers so involves merely
postproduction activities, one which is not indispensable in the
manufacture of its products, scarcely can be persuasive. If, as so
argued by petitioner company, only those whose work are
directly involved in the production of softdrinks may be held
performing functions necessary and desirable in its usual
business or trade, there would have then been no need for it to
even maintain regular truck sales route helpers. The nature of
the work performed must be viewed from a perspective of the
business or trade in its entirety[4 and not on a confined scope.
The repeated rehiring of respondent workers and the continuing
need for their services clearly attest to the necessity or
desirability of their services in the regular conduct of the
business or trade of petitioner company. The Court of Appeals
has found each of respondents to have worked for at least one
year with petitioner company. While this Court, in Brent School,
Inc. vs. Zamora,[5 has upheld the legality of a fixed-term
employment, it has done so, however, with a stern admonition
that where from the circumstances it is apparent that the period
has been imposed to preclude the acquisition of tenurial security
by the employee, then it should be struck down as being
contrary to law, morals, good customs, public order and public
policy. The pernicious practice of having employees, workers and
laborers, engaged for a fixed period of few months, short of the
normal six-month probationary period of employment, and,
thereafter, to be hired on a day-to-day basis, mocks the law. Any
obvious circumvention of the law cannot be countenanced. The
fact that respondent workers have agreed to be employed on
such basis and to forego the protection given to them on their
security of tenure, demonstrate nothing more than the serious
problem of impoverishment of so many of our people and the
resulting unevenness between labor and capital. A contract of
employment is impressed with public interest. The provisions of
applicable statutes are deemed written into the contract, and the
parties are not at liberty to insulate themselves and their
relationships from the impact of labor laws and regulations by
simply contracting with each other.[6cräläwvirtualibräry
With respect to the Release, Waiver and Quitclaim executed by
thirty-six (36) of the original complainants, namely, Rommel
Abad, Armando Amor, Bobby Austero, Felix Avenido, Amado
Badasan, Edmundo Bayos, Eduardo Bella, Jr., Mariano Caete,
Carmelo Cea, Ernie Chavez, Randy Dechaves, Frederick De
Guzman, Renato De Ocampo, Ademar Estuita, Leonilo Galapin,
Raymund Gaudicos, Retchel Hautea, Larry Javier, Nelson
Logrinio, Alberto Magtibay, Frederick Magallano, Rogelio Malinis,
Rodolfo Melgar, Silverio Mindajao, Leonardo Mondina, Ruben
Navales, Rey Pangilinan, Christopher Peralta, Jimmy Reyes,
Herminio Roflo, Michael Rubia, Noel Rubia, Roberto Tumomba,
Oliver Villaflor, and Joselito Villanueva, this Court finds the
execution of the same to be in order. During the pendency of the
appeal with the Court of Appeals, these thirty-six (36)
complainants individually executed voluntarily a release, waiver
and quitclaim and received from petitioner company the amount
of fifteen thousand (P15,000.00) pesos each. The amount
accords with the disposition of the case by the voluntary
arbitrator thusly:
WHEREFORE, above premises considered, the herein complaint
is hereby DISMISSED for lack of merit.
However, we cannot completely negate the fact that
complainants did and do actually render services to the
Company. It is with this in mind and considering the difficulty the
complainants may face in looking for another job in case they
are no longer re-engaged that we direct the company to pay
complainants Fifteen Thousand Pesos each (P15,000.00) as
financial assistance. It is however understood that the financial
assistance previously extended by the Company to some of the
complainants shall be deducted from the financial assistance
herein awarded.7cräläwvirtualibräry
The receipt of the amount awarded by the voluntary arbitrator,
as well as the execution of a release, waiver and quitclaim, is, in
effect, an acceptance of said decision. There is nothing on
record which could indicate that the execution thereof by thirty-
six (36) of the respondent workers has been attended by fraud
or deceit. While quitclaims executed by employees are commonly
frowned upon as being contrary to public policy and are
ineffective to bar claims for the full measure of their legal rights,
there are, however, legitimate waivers that represent a voluntary
and reasonable settlement of laborers claims which should be so
respected by the Court as the law between the parties.[8 Where
the person making the waiver has done so voluntarily, with a full
understanding thereof, and the consideration for the quitclaim is
credible and reasonable, the transaction must be recognized as
being a valid and binding undertaking. Dire necessity is not an
acceptable ground for annulling the release, when it is not
shown that the employee has been forced to execute
it.9cräläwvirtualibräry
WHEREFORE, the questioned decision of the Court of Appeals,
in CA-G.R. SP No. 47872 is hereby AFFIRMED with
MODIFICATION in that the Release, Waiver and Quitclaim
executed by the thirty-six (36) individual respondents are hereby
declared VALID and LEGAL.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Ynares-Santiago, Carpio,
and Azcuna, JJ., concur
SPECIAL FIRST DIVISION
G.R. No. 110524 - July 29, 2002
DOUGLAS MILLARES and ROGELIO LAGDA, Petitioners,
vs. NATIONAL LABOR RELATIONS COMMISSION, TRANS-
GLOBAL MARITIME AGENCY, INC. and ESSO
INTERNATIONAL SHIPPING CO., LTD. respondents.
RESOLUTION
KAPUNAN, J.:
On March 14, 2000, the Court promulgated its decision in the
above-entitled case, ruling in favor of the petitioners. The
dispositive portion reads, as follows:
WHEREFORE, premises considered, the assailed Decision,
dated June 1, 1993, of the National Labor Relations Commission
is hereby REVERSED and SET ASIDE and a new judgment is
hereby rendered ordering the private respondents to:
(1) Reinstate petitioners Millares and Lagda to their former
positions without loss of seniority rights, and to pay full
backwages computed from the time of illegal dismissal to the
time of actual reinstatement;
(2) Alternatively, if reinstatement is not possible, pay petitioners
Millares and Lagda separation pay equivalent to one month's
salary for every year of service; and,
(3) Jointly and severally pay petitioners One Hundred Percent
(100%) of their total credited contributions as provided under
the Consecutive Enlistment Incentive Plan.
SO ORDERED.1
A motion for reconsideration was consequently filed 2 by the
private respondents to which petitioners filed an Opposition
thereto.3
In a Minute Resolution dated June 28, 2000, the Court resolved
to deny the motion for reconsideration with finality. 4
Subsequently, the Filipino Association for Mariners Employment,
Inc. (FAME) filed a Motion for Leave to Intervene and to Admit a
Motion for Reconsideration in Intervention.
Private respondents, meanwhile, also filed a Motion for Leave to
File a Second Motion for Reconsideration of our decision.
In both motions, the private respondents and FAME respectively
pray in the main that the Court reconsider its ruling that "Filipino
seafarers are considered regular employees within the context of
Article 280 of the Labor Code." They claim that the decision may
establish a precedent that will adversely affect the maritime
industry.
The Court resolved to set the case for oral arguments to enable
the parties to present their sides.
To recall, the facts of the case are, as follows:
Petitioner Douglas Millares was employed by private respondent
ESSO International Shipping Company LTD. (Esso International,
for brevity) through its local manning agency, private respondent
Trans-Global Maritime Agency, Inc. (Trans-Global, for brevity) on
November 16, 1968 as a machinist. In 1975, he was promoted
as Chief Engineer which position he occupied until he opted to
retire in 1989. He was then receiving a monthly salary of US
$1,939.00.
On June 13, 1989, petitioner Millares applied for a leave of
absence for the period July 9 to August 7, 1989. In a letter dated
June 14, 1989, Michael J. Estaniel, President of private
respondent Trans-Global, approved the request for leave of
absence. On June 21, 1989, petitioner Millares wrote G.S. Hanly,
Operations Manager of Exxon International Co., (now Esso
International) through Michael J. Estaniel, informing him of his
intention to avail of the optional retirement plan under the
Consecutive Enlistment Incentive Plan (CEIP) considering that he
had already rendered more than twenty (20) years of continuous
service. On July 13, 1989 respondent Esso International, through
W.J. Vrints, Employee Relations Manager, denied petitioner
Millares' request for optional retirement on the following
grounds, to wit: (1) he was employed on a contractual basis; (2)
his contract of enlistment (COE) did not provide for retirement
before the age of sixty (60) years; and (3) he did not comply
with the requirement for claiming benefits under the CEIP, i.e.,
to submit a written advice to the company of his intention to
terminate his employment within thirty (30) days from his last
disembarkation date.
On August 9, 1989, petitioner Millares requested for an
extension of his leave of absence from August 9 to 24, 1989. On
August 19, 1989, Roy C. Palomar, Crewing Manager, Ship Group
A, Trans-global, wrote petitioner Millares advising him that
respondent Esso International "has corrected the deficiency in its
manpower requirement specifically in the Chief Engineer rank by
promoting a First Assistant Engineer to this position as a result of
(his) previous leave of absence which expired last August 8,
1989. The adjustment in said rank was required in order to meet
manpower schedules as a result of (his) inability."
On September 26, 1989, respondent Esso International, through
H. Regenboog, Personnel Administrator, advised petitioner
Millares that in view of his absence without leave, which is
equivalent to abandonment of his position, he had been dropped
from the roster of crew members effective September 1, 1989.
On the other hand, petitioner Lagda was employed by private
respondent Esso International as wiper/oiler in June 1969. He
was promoted as Chief Engineer in 1980, a position he continued
to occupy until his last COE expired on April 10, 1989. He was
then receiving a monthly salary of US$1,939.00.
On May 16, 1989, petitioner Lagda applied for a leave of
absence from June 19, 1989 up to the whole month of August
1989. On June 14, 1989, respondent Trans-Global's President,
Michael J. Estaniel, approved petitioner Lagda's leave of absence
from June 22, 1989 to July 20, 1989 and advised him to report
for re-assignment on July 21, 1989.
On June 26, 1989, petitioner Lagda wrote a letter to G.S.
Stanley, Operations Manager of respondent Esso International,
through respondent Trans-Global's President Michael J. Estaniel,
informing him of his intention to avail of the optional early
retirement plan in view of his twenty (20) years continuous
service in the complaint.
On July 13, 1989, respondent Trans-global denied petitioner
Lagda's request for availment of the optional early retirement
scheme on the same grounds upon which petitioner Millares
request was denied.
On August 3, 1989, he requested for an extension of his leave of
absence up to August 26, 1989 and the same was approved.
However, on September 27, 1989, respondent Esso
International, through H. Regenboog, Personnel Administrator,
advised petitioner Lagda that in view of his "unavailability for
contractual sea service," he had been dropped from the roster of
crew members effective September 1, 1989.
On October 5, 1989, petitioners Millares and Lagda filed a
complaint-affidavit, docketed as POEA (M) 89-10-9671, for illegal
dismissal and non-payment of employee benefits against private
respondents Esso International and Trans-Global, before the
POEA.5
On July 17, 1991, the POEA rendered a decision dismissing the
complaint for lack of merit.
On appeal to the NLRC, the decision of the POEA was affirmed
on June 1, 1993 with the following disquisition:
The first issue must be decided in the negative. Complainants-
appellants, as seamen and overseas contract workers are not
covered by the term "regular employment" as defined under
Article 280 of the Labor Code. The POEA, which is tasked with
protecting the rights of the Filipino workers for overseas
employment to fair and equitable recruitment and employment
practices and to ensure their welfare, prescribes a standard
employment contract for seamen on board ocean-going vessels
for a fixed period but in no case to exceed twelve (12) months
(Part 1, Sec. C). This POEA policy appears to be in consonance
with the international maritime practice. Moreover, the Supreme
Court in Brent School, Inc. vs. Zamora, 181 SCRA 702, had held
that a fixed term is essential and natural appurtenance of
overseas employment contracts to which the concept of regular
employment with all that it implies is not applicable, Article 280
of the Labor Code notwithstanding. There is, therefore, no
reason to disturb the POEA Administrator's finding that
complainants-appellants were hired on a contractual basis and
for a definite period. Their employment is thus governed by the
contracts they sign each time they are re-hired and is terminated
at the expiration of the contract period.6
Undaunted, the petitioners elevated their case to this Court 7 and
successfully obtained the favorable action, which is now
vehemently being assailed.
At the hearing on November 15, 2000, the Court defined the
issues for resolution in this case, namely:
I. ARE PETITIONERS REGULAR OR CONTRACTUAL EMPLOYEES
WHOSE EMPLOYMENTS ARE TERMINATED EVERYTIME THEIR
CONTRACTS OF EMPLOYMENT EXPIRE?
II. ASSUMING THAT PETITIONERS ARE REGULAR EMPLOYEES,
WERE THEY DISMISSED WITHOUT JUST CAUSE SO AS TO BE
ENTITLED TO REINSTATEMENT AND BACKWAGES, INCLUDING
PAYMENT OF 100% OF THEIR TOTAL CREDITED
CONTRIBUTIONS TO THE CONSECUTIVE ENLISTMENT
INCENTIVE PLAN (CEIP)?
III. DOES THE PROVISION OF THE POEA STANDARD CONTRACT
FOR SEAFARERS ON BOARD FOREIGN VESSELS (SEC. C.,
DURATION OF CONTRACT) PRECLUDE THE ATTAINMENT BY
SEAMEN OF THE STATUS OF REGULAR EMPLOYEES?
IV. DOES THE DECISION OF THE COURT IN G.R. NO. 110524
CONTRAVENE INTERNATIONAL MARITIME LAW, ALLEGEDLY
PART OF THE LAW OF THE LAND UNDER SECTION 2, ARTICLE
II OF THE CONSTITUTION?
V. DOES THE SAME DECISION OF THE COURT CONSTITUTE A
DEPARTURE FROM ITS RULING IN COYOCA VS. NLRC  (G.R. NO.
113658, March 31, 1995)?8
In answer to the private respondents' Second Motion for
Reconsideration and to FAME's Motion for Reconsideration in
Intervention, petitioners maintain that they are regular
employees as found by the Court in the March 14, 2000
Decision. Considering that petitioners performed activities which
are usually necessary or desirable in the usual business or trade
of private respondents, they should be considered as regular
employees pursuant to Article 280, Par. 1 of the Labor
Code.9 Other justifications for this ruling include the fact that
petitioners have rendered over twenty (20) years of service, as
admitted by the private respondents; 10 that they were recipients
of Merit Pay which is an express acknowledgment by the private
respondents that petitioners are regular and not just contractual
employees;11 that petitioners were registered under the Social
Security System (SSS).
The petitioners further state that the case of Coyoca v.
NLRC12 which the private respondents invoke is not applicable to
the case at bar as the factual milieu in that case is not the same.
Furthermore, private respondents' fear that our judicial
pronouncement will spell the death of the manning industry is
far from real. Instead, with the valuable contribution of the
manning industry to our economy, these seafarers are supposed
to be considered as "Heroes of the Republic" whose rights must
be protected.13 Finally, the first motion for reconsideration has
already been denied with finality by this Court and it is about
time that the Court should write finis to this case.
The private respondents, on the other hand, contend that: (a)
the ruling holding petitioners as regular employees was not in
accord with the decision in Coyoca v. NLRC, 243 SCRA 190; (b)
Art. 280 is not applicable as what applies is the POEA Rules and
Regulations Governing Overseas Employment; (c) seafarers are
not regular employees based on international maritime practice;
(d) grave consequences would result on the future of seafarers
and manning agencies if the ruling is not reconsidered; (e) there
was no dismissal committed; (f) a dismissed seafarer is not
entitled to back wages and reinstatement, that being not allowed
under the POEA rules and the Migrant Workers Act; and, (g)
petitioners are not entitled to claim the total amount credited to
their account under the CEIP. 14
Meanwhile, Intervenor Filipino Association of Mariners
Employment (FAME) avers that our decision, if not reconsidered,
will have negative consequences in the employment of Filipino
Seafarers overseas which, in turn, might lead to the demise of
the manning industry in the Philippines. As intervenor FAME puts
it:
xxx
7.1 Foreign principals will start looking for alternative sources for
seafarers to man their ships. AS reported by the BIMCO/ISF
study, "there is an expectancy that there will be an increasing
demand for (and supply of) Chinese seafarers, with some
commentators suggesting that this may be a long-term
alternative to the Philippines." Moreover, "the political changes
within the former Eastern Bloc have made new sources of supply
available to the international market." Intervenor's recent survey
among its members shows that 50 Philippine manning
companies had already lost some 6,300 slots to other Asian, East
Europe and Chinese competition for the last two years;
7.2 The Philippine stands to lose an annual foreign income
estimated at U.S. DOLLARS TWO HUNDRED SEVENTY FOUR
MILLION FIVE HUNDRED FORTY NINE THOUSAND (US$
274,549,000.00) from the manning industry and another US
DOLLARS FOUR BILLION SIX HUNDRED FIFTY MILLION SEVEN
HUNDRED SIX THOUSAND (US$ 4,650,760,000.00) from the
land-based sector if seafarers and equally situated land-based
contract workers will be declared regular employees;
7.3 Some 195,917 (as of 1998) deployed overseas Filipino
seafarers will be rendered jobless should we lose the market;
7.4 Some 360 manning agencies (as of 30 June 2000) whose
principals may no longer be doing business with them will close
their shops;
7.5 The contribution to the Overseas Worker's Welfare
Administration by the sector, which is USD 25.00 per contract
and translates to US DOLLARS FOUR MILLION (US$
4,000,000.00)annually, will be drastically reduced. This is not to
mention the processing fees paid to POEA, Philippine Regulatory
Commission (PRC), Department of Foreign Affairs (DFA) and
Maritime Industry Authority (MARINA) for the documentation of
these seafarers;
7.6 Worst, some 195,917 (as of 1998) families will suffer socially
and economically, as their breadwinners will be rendered jobless;
and
7.7 It will considerably slow down the government's program of
employment generation, considering that, as expected foreign
employers will now avoid hiring Filipino overseas contract
workers as they will become regular employees with all its
concomitant effects.15
Significantly, the Office of the Solicitor General, in a departure
from its original position in this case, has now taken the opposite
view. It has expressed its apprehension in sustaining our
decision and has called for a re-examination of our ruling. 16
Considering all the arguments presented by the private
respondents, the Intervenor FAME and the OSG, we agree that
there is a need to reconsider our position with respect to the
status of seafarers which we considered as regular employees
under Article 280 of the Labor Code. We, therefore, partially
grant the second motion for reconsideration.
In Brent School Inc. v. Zamora ,17 the Supreme Court stated that
Article 280 of the Labor Code does not apply to overseas
employment.
In the light of the foregoing description of the development of
the provisions of the Labor Code bearing on term or fixed-period
employment that the question posed in the opening paragraph
of this opinion should now be addressed. Is it then the legislative
intention to outlaw stipulations in employment contracts laying
down a definite period therefor? Are such stipulations in essence
contrary to public policy and should not on this account be
accorded legitimacy?
On the other hand, there is the gradual and progressive
elimination of references to term or fixed-period employment in
the Labor Code, and the specific statement of the rule that:
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 employee 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.
There is, on the other hand, the Civil Code, which has always
recognized, and continues to recognize, the validity and
propriety of contracts and obligations with a fixed or definite
period, and imposes no restraints on the freedom of the parties
to fix the duration of a contract, whatever its object, be it
specific, goods or services, except the general admonition
against stipulations contrary to law, morals, good customs,
public order or public policy. Under the Civil code, therefore, and
as a general proposition, fixed-term employment contracts are
not limited, as they are under the present Labor Code, to those
by natural seasonal or for specific projects with predetermined
dates of completion; they also include those to which the parties
by free choice have assigned a specific date of termination.
Some familiar examples may be cited of employment
contract which may be neither for seasonal work nor for
specific projects, but to which a fixed term is an
essential and natural appurtenance: overseas
employment contracts, for one, to which, whatever the
nature of the engagement, the concept of regular
employment with all that it implies does not appear ever
to have been applied. Article 280 of the Labor Code
notwithstanding also appointments to the positions of dean,
assistant dean, college secretary, principal, and other
administrative offices in educational institutions, which are by
practice or tradition rotated among the faculty members, and
where fixed terms are a necessity without which no reasonable
rotation would be possible. Similarly, despite the provisions of
Article 280, Policy Instructions. No. 8 of the Minister of Labor
implicitly recognize that certain company officials may be elected
for what would amount to fix periods, at the expiration of which
they would have to stand down, in providing that these officials,
xxx may lose their jobs as president, executive vice-president or
vice-president, etc. because the stockholders or the board of
directors for one reason or another did not reelect them.
There can of course be no quarrel with the proposition that
where from the circumstances it is apparent that periods have
been imposed to preclude acquisition of tenurial security by the
employee, they should be struck down or disregard as contrary
to public policy, morals, etc. But where no such intent to
circumvent the law is shown, or stated otherwise, where the
reason for the law does not exists, e.g., where it is indeed the
employee himself who insists upon a period or where the nature
of the engagement is such that, without being seasonal or for a
specific project, a definite date of termination is a sine qua non,
would an agreement fixing a period be essentially evil or illicit,
therefore anathema? Would such an agreement come within the
scope of Article 280 which admittedly was enacted "to prevent
the circumvention of the right of the employee to be secured in
xxx his employment
As it is evident from even only the three examples already given
that Article 280 of the Labor Code, under a narrow and literal
interpretation, not only fails to exhaust the gamut of
employment contracts to which the lack of a fixed period would
be an anomaly, but would also appear to restrict, without
reasonable distinctions, the right of an employee to freely
stipulate within his employer the duration of his engagement, it
logically follows that such a literal interpretation should be
eschewed or avoided. The law must be given a reasonable
interpretation, to preclude absurdity in its application. Outlawing
the whole concept of term employment and subverting to boot
the principle of freedom of contract to remedy the evil of
employer's using it as a means to prevent their employees from
obtaining security of tenure is like cutting off the nose to spite
the face or, more relevantly, curing a headache by lopping of the
head.
It is a salutary principle in statutory construction that there exists
a valid presumption that undesirable consequences were never
intended by a legislative measure, and that a construction of
which the statute is fairly susceptible is favored, which will avoid
all objectionable, mischievous, indefensible, wrongful, evil, and
injurious consequences."
Nothing is better settled than that courts are not to give words a
meaning which would lead to absurd or unreasonable
consequences. That is a principle that goes back to In re Allen
decided on October 27, 1902, where it was held that a literal
interpretation is to be rejected if it would be unjust or lead to
absurd results. That is a strong argument against its adoption.
The words of Justice Laurel are particularly apt. Thus: "the
appellants would lead to an absurdity is another argument for
rejecting it."
xxx We have, here, then a case where the true intent of the law
is clear that calls for the application of the cardinal rule of
statutory construction that such intent of spirit must prevail over
the letter thereof, for whatever is within the spirit of a statute is
within the statute, since adherence to the letter would result in
absurdity, injustice and contradictions and would defeat the plain
and vital purpose of the statute.
Accordingly, and since the entire purpose behind the
development of legislation culminating in the present
Article 280 of the Labor code clearly appears to have
been, as already observed, to prevent circumvention of
the employee's right to be secure in his tenure, the
clause in said article indiscriminately and completely
ruling out all written or oral agreements conflicting with
the concept of regular employment as defined therein
should be construed to refer to the substantive evil that
the Code itself has singled out; agreements entered into
precisely to circumvent security of tenure. It should have
no application to instances where a fixed period of
employment was agreed upon knowingly and voluntarily
by the parties, without any force, duress or improper
pressure being brought to bear upon the employee and
absent any other circumstances vitiating his consent, or
where it satisfactorily appears that the employer and
employee dealt with each other on more or less equal
terms with no moral dominance whatever being
exercised by the former over the latter. Unless thus limited
in its purview, the law would be made to apply to purposes other
than those explicitly stated by its framers; it thus becomes
pointless and arbitrary, unjust in its effects and apt to lead to
absurd and unintended consequences.
Again, in Pablo Coyoca v. NLRC,18 the Court also held that a
seafarer is not a regular employee and is not entitled to
separation pay. His employment is governed by the POEA
Standard Employment Contract for Filipino Seamen.
x x x. In this connection, it is important to note that neither does
the POEA standard employment contract for Filipino seamen
provide for such benefits.
As a Filipino seaman, petitioner is governed by the Rules
and Regulations Governing Overseas Employment and
the said Rules do not provide for separation or
termination pay. What is embodied in petitioner's contract is
the payment of compensation arising from permanent partial
disability during the period of employment. We find that private
respondent complied with the terms of contract when it paid
petitioner P42,315.00 which, in our opinion, is a reasonable
amount, as compensation for his illness.
Lastly, petitioner claims that he eventually became a regular
employee of private respondent and thus falls within the purview
of Articles 284 and 95 of the Labor Code. In support of this
contention, petitioner cites the case of Worth Shipping Service,
Inc., et al. v. NLRC, et al.,  wherein we held that the crew
members of the shipping company had attained regular status
and thus, were entitled to separation pay. However, the facts of
said case differ from the present. In Worth, we held that the
principal and agent had "operational control and management"
over the MV Orient Carrier and thus, were the actual employers
of their crew members.
From the foregoing cases, it is clear that seafarers are
considered contractual employees. They can not be considered
as regular employees under Article 280 of the Labor Code. Their
employment is governed by the contracts they sign everytime
they are rehired and their employment is terminated when the
contract expires. Their employment is contractually fixed for a
certain period of time. They fall under the exception of Article
280 whose employment has been fixed for a specific project or
undertaking the completion or termination of which has been
determined at the time of engagement of the employee or where
the work or services to be performed is seasonal in nature and
the employment is for the duration of the season. 19 We need not
depart from the rulings of the Court in the two aforementioned
cases which indeed constitute stare decisis with respect to the
employment status of seafarers.
Petitioners insist that they should be considered regular
employees, since they have rendered services which are usually
necessary and desirable to the business of their employer, and
that they have rendered more than twenty(20) years of service.
While this may be true, the Brent case has, however, held that
there are certain forms of employment which also require the
performance of usual and desirable functions and which exceed
one year but do not necessarily attain regular employment status
under Article 280.20 Overseas workers including seafarers fall
under this type of employment which are governed by the
mutual agreements of the parties.
In this jurisdiction and as clearly stated in the Coyoca case,
Filipino seamen are governed by the Rules and Regulations of
the POEA. The Standard Employment Contract governing the
employment of All Filipino seamen on Board Ocean-Going
Vessels of the POEA, particularly in Part I, Sec. C specifically
provides that the contract of seamen shall be for a fixed period.
And in no case should the contract of seamen be longer than 12
months. It reads:
Section C. Duration of Contract
The period of employment shall be for a fixed period but in no
case to exceed 12 months and shall be stated in the Crew
Contract. Any extension of the Contract period shall be subject
to the mutual consent of the parties.
Moreover, it is an accepted maritime industry practice that
employment of seafarers are for a fixed period only. Constrained
by the nature of their employment which is quite peculiar and
unique in itself, it is for the mutual interest of both the seafarer
and the employer why the employment status must be
contractual only or for a certain period of time. Seafarers spend
most of their time at sea and understandably, they can not stay
for a long and an indefinite period of time at sea. 21 Limited
access to shore society during the employment will have an
adverse impact on the seafarer. The national, cultural and lingual
diversity among the crew during the COE is a reality that
necessitates the limitation of its period.22
Petitioners make much of the fact that they have been
continually re-hired or their contracts renewed before the
contracts expired (which has admittedly been going on for
twenty (20) years). By such circumstance they claim to have
acquired regular status with all the rights and benefits
appurtenant to it.
Such contention is untenable. Undeniably, this circumstance of
continuous re-hiring was dictated by practical considerations that
experienced crew members are more preferred. Petitioners were
only given priority or preference because of their experience and
qualifications but this does not detract the fact that herein
petitioners are contractual employees. They can not be
considered regular employees. We quote with favor the
explanation of the NLRC in this wise:
xxx The reference to "permanent" and "probationary" masters
and employees in these papers is a misnomer and does not alter
the fact that the contracts for enlistment between complainants-
appellants and respondent-appellee Esso International were for a
definite periods of time, ranging from 8 to 12 months. Although
the use of the terms "permanent" and "probationary" is
unfortunate, what is really meant is "eligible for-re-hire". This is
the only logical conclusion possible because the parties cannot
and should not violate POEA's requirement that a contract of
enlistment shall be for a limited period only; not exceeding
twelve (12)months.23
From all the foregoing, we hereby state that petitioners are not
considered regular or permanent employees under Article 280 of
the Labor Code. Petitioners' employment have automatically
ceased upon the expiration of their contracts of enlistment
(COE). Since there was no dismissal to speak of, it follows that
petitioners are not entitled to reinstatement or payment of
separation pay or backwages, as provided by law.
With respect to the benefits under the Consecutive Enlistment
Incentive Plan (CEIP), we hold that the petitioners are still
entitled to receive 100% of the total amount credited to him
under the CEIP. Considering that we have declared that
petitioners are contractual employees, their compensation and
benefits are covered by the contracts they signed and the CEIP
is part and parcel of the contract.
The CEIP was formulated to entice seamen to stay long in the
company. As the name implies, the program serves as an
incentive for the employees to renew their contracts with the
same company for as long as their services were needed. For
those who remained loyal to them, they were duly rewarded
with this additional remuneration under the CEIP, if eligible.
While this is an act of benevolence on the part of the employer,
it can not, however, be denied that this is part of the benefits
accorded to the employees for services rendered. Such right to
the benefits is vested upon them upon their eligibility to the
program.
The CEIP provides that an employee becomes covered under the
Plan when he completes thirty-six (36) months or an equivalent
of three (3) years of credited service with respect to employment
after June 30, 1973.24 Upon eligibility, an amount shall be
credited to his account as it provides, among others:
III. Distribution of Benefits
A. Retirement, Death and Disability
When the employment of an employee terminates because of his
retirement, death or permanent and total disability, a percentage
of the total amount credited to his account will be distributed to
him (or his eligible survivor(s) in accordance with the following:
Reason for Termination Percentage
a) Attainment of mandatory retirement age of 60. 100%
b) Permanent and total disability, while under contract, 100%
that is not due to accident or misconduct.
c) Permanent and total disability, while under contract, 100%
that is due to accident, and not due to misconduct.
xxx
B. Voluntary Termination
When an employee voluntary terminates his employment with at
least 36 months of credited service without any misconduct on
his part, 18 percent of the total amount credited to his account,
plus an additional of one percent for each month (up to a
maximum of 164 months of credited service in excess of 36, will
be distributed to him provided (1) the employee has completed
his last Contract of Enlistment and (2) employee advises the
company in writing, within 30 days, from his last disembarkation
date, of his intention to terminate his employment. (To advise
the Company in writing means that the original letter must be
sent to the Company's agent in the Philippines, a copy sent to
the Company in New York).
xxx
C. Other Terminations
When the employment of an employee is terminated by the
Company for a reason other than one in A and B above, without
any misconduct on his part, a percentage of the total amount
credited to his account will be distributed to him in accordance
with the following.
Credited Service Percentage
36 months 50%
48 " 75%
60 " 100%
When the employment of an employee is terminated due to his
poor-performance, misconduct, unavailability, etc., or if
employee is not offered re-engagement for similar reasons, no
distribution of any portion of employee's account will ever be
made to him (or his eligible survivor[s]).
It must be recalled that on June 21, 1989, Millares wrote a letter
to his employer informing his intention to avail of the optional
retirement plan under the CEIP considering that he has rendered
more than twenty (20) years of continuous service. Lagda,
likewise, manifested the same intention in a letter dated June
26, 1989. Private respondent, however, denied their requests for
benefits under the CEIP since: (1) the contract of enlistment
(COE) did not provide for retirement before 60 years of age; and
that (2) petitioners failed to submit a written notice of their
intention to terminate their employment within thirty (30) days
from the last disembarkation date pursuant to the provision on
Voluntary Termination of the CEIP. Petitioners were eventually
dropped from the roster of crew members and on grounds of
"abandonment" and "unavailability for contractual sea service",
respectively, they were disqualified from receiving any benefits
under the CEIP.25
In our March 14, 2000 Decision, we, however, found that
petitioners Millares and Lagda were not guilty of "abandonment"
or "unavailability for contractual sea service," as we have stated:
The absence of petitioners was justified by the fact that they
secured the approval of private respondents to take a leave of
absence after the termination of their last contracts of
enlistment. Subsequently, petitioners sought for extensions of
their respective leaves of absence. Granting arguendo that their
subsequent requests for extensions were not approved, it cannot
be said that petitioners were unavailable or had abandoned their
work when they failed to report back for assignment as they
were still questioning the denial of private respondents of their
desire to avail of the optional early retirement policy, which they
believed in good faith to exist.26
Neither can we consider petitioners guilty of poor performance
or misconduct since they were recipients of Merit Pay Awards for
their exemplary performances in the company.
Anent the letters dated June 21, 1989 (for Millares) and June 26,
1989 (for Lagda) which private respondent considered as belated
written notices of termination, we find such assertion specious.
Notwithstanding, we could conveniently consider the petitioners
eligible under Section III-B of the CEIP (Voluntary Termination),
but this would, however, award them only a measly amount of
benefits which to our mind, the petitioners do not rightfully
deserve under the facts and circumstances of the case. As the
CEIP provides:
III. Distribution of Benefits
xxx
E. Distribution of Accounts
When an employee terminates under conditions that would
qualify for a distribution of more than one specified in A, B or C
above, the largest single amount, only, will be distributed.
Since petitioners' termination of employment under the CEIP do
not fall under Section III-A (Retirement, Death and Disability) or
Section III-B (Voluntary Termination), nor could they be they be
considered under the second paragraph of Section III-C, as
earlier discussed; it follows that their termination falls under the
first paragraph of Section III-C for which they are entitled to
100% of the total amount credited to their accounts. The private
respondents can not now renege on their commitment under the
CEIP to reward deserving and loyal employees as the petitioners
in this case.
In taking cognizance of private respondent's Second Motion for
Reconsideration, the Court hereby suspends the rules to make
them comformable to law and justice and to subserve an
overriding public interest.

IN VIEW OF THE FOREGOING, the Court Resolved

to Partially GRANT Private Respondent's Second Motion for
Reconsideration and Intervenor FAMES' Motion for
Reconsideration in Intervention. The Decision of the National
Labor Relations Commission dated June 1, 1993 is
hereby REINSTATED with MODIFICATION. The Private
Respondents, Trans-Global Maritime Agency, Inc. and Esso
International Shipping Co., Ltd. are hereby jointly and
severally ORDERED to pay petitioners One Hundred Percent
(100%) of their total credited contributions as provided under
the Consecutive Enlistment Incentive Plan(CEIP).

SO ORDERED.

Davide, Jr., C.J., (Chairman), Puno, and Ynares-Santiago,

JJ.,  concur.
Austria-Martinez, J.,  no part. Did not participate in the Decision.
THIRD DIVISION
G.R. No. 149440            January 28, 2003
HACIENDA FATIMA and/or PATRICIO VILLEGAS,
ALFONSO VILLEGAS and CRISTINE SEGURA, petitioners,
vs.
NATIONAL FEDERATION OF SUGARCANE WORKERS-
FOOD AND GENERAL TRADE, respondents.
PANGANIBAN, J.:
the union for the purpose of entering into a collective
bargaining agreement. Moreover, the workers including
complainants herein were not given work for more than
one month. In protest, complainants staged a strike
which was however settled upon the signing of a
Memorandum of Agreement which stipulated among
others that:
'a) The parties will initially meet for CBA
negotiations on the 11th day of January 1991
and will endeavor to conclude the same within
thirty (30) days.

Although the employers have shown that respondents performed

'b) The management will give priority to the
work that was seasonal in nature, they failed to prove that the
women workers who are members of the union
latter worked only for the duration of one particular season. In
in case work relative . . . or amount[ing] to
fact, petitioners do not deny that these workers have served
gahit and [dipol] arises.
them for several years already. Hence, they are regular — not
seasonal — employees.
'c) Ariston Eruela Jr. will be given back his
normal work load which is six (6) days in a
The Case
week.

Before the Court is a Petition for Review under Rule 45 of the

'd) The management will provide fifteen (15)
Rules of Court, seeking to set aside the February 20, 2001
wagons for the workers and that existing
Decision of the Court of Appeals 1 (CA) in CA-GR SP No. 51033.
workforce prior to the actual strike will be given
The dispositive part of the Decision reads:
priority. However, in case the said workforce
would not be enough, the management can
"WHEREFORE, premises considered, the instant special hire additional workers to supplement them.
civil action for certiorari is hereby DENIED." 2
'e) The management will not anymore allow the
On the other hand, the National Labor Relations scabs, numbering about eighteen (18)
Commission (NLRC) Decision, 3 upheld by the CA, workers[,] to work in the hacienda; and
disposed in this wise:
'f) The union will immediately lift the picket
"WHEREFORE, premises considered, the decision of the upon signing of this agreement.'
Labor Arbiter is hereby SET ASIDE and VACATED and a
new one entered declaring complainants to have been
"However, alleging that complainants failed to load the
illegally dismissed. Respondents are hereby ORDERED
fifteen wagons, respondents reneged on its commitment
to reinstate complainants except Luisa Rombo, Ramona
to sit down and bargain collectively. Instead, respondent
Rombo, Bobong Abriga and Boboy Silva to their previous
employed all means including the use of private armed
position and to pay full backwages from September
guards to prevent the organizers from entering the
1991 until reinstated. Respondents being guilty of unfair
premises.
labor practice are further ordered to pay complainant
union the sum of P10,000.00 as moral damages and
P5,000.00 as exemplary damages." 4 "Moreover, starting September 1991, respondents did
not any more give work assignments to the
complainants forcing the union to stage a strike on
The Facts
January 2, 1992. But due to the conciliation efforts by
the DOLE, another Memorandum of Agreement was
The facts are summarized in the NLRC Decision as follows: signed by the complainants and respondents which
provides:
"Contrary to the findings of the Labor Arbiter that
complainants [herein respondents] refused to work 'Whereas the union staged a strike against management
and/or were choosy in the kind of jobs they wanted to on January 2, 1992 grounded on the dismissal of the
perform, the records is replete with complainants' union officials and members;
persistence and dogged determination in going back to
work.
'Whereas parties to the present dispute agree to settle
the case amicably once and for all;
"Indeed, it would appear that respondents did not look
with favor workers' having organized themselves into a
'Now therefore, in the interest of both labor and
union. Thus, when complainant union was certified as
management, parties herein agree as follows:
the collective bargaining representative in the
certification elections, respondents under the pretext
that the result was on appeal, refused to sit down with
 '1. That the list of the names of affected union
members hereto attached and made part of this
agreement shall be referred to the Hacienda
payroll of 1990 and determine whether or not
this concerned Union members are hacienda
workers;
'2. That in addition to the payroll of 1990 as
reference, herein parties will use as guide the
subjects of a Memorandum of Agreement
entered into by and between the parties last
January 4, 1990;
'3. That herein parties can use other
employment references in support of their
respective claims whether or not any or all of
the listed 36 union members are employees or
hacienda workers or not as the case may be;
'4. That in case conflict or disagreement arises
in the determination of the status of the
particular hacienda workers subject of this
agreement herein parties further agree to
submit the same to voluntary arbitration;
'5. To effect the above, a Committee to be
chaired by Rose Mengaling is hereby created to
be composed of three representatives each and
is given five working days starting Jan. 23,
1992 to resolve the status of the subject 36
hacienda workers. (Union representatives:
Bernardo Torres, Martin Alas-as, Ariston Arulea
Jr.)"
"Pursuant thereto, the parties subsequently met and the
Minutes of the Conciliation Meeting showed as follows:
'The meeting started at 10:00 A.M. A list of
employees was submitted by Atty. Tayko based
on who received their 13th month pay. The
following are deemed not considered
employees:
1. Luisa Rombo
2. Ramona Rombo
3. Bobong Abrega
4. Boboy Silva
'The name Orencio Rombo shall be verified in
the 1990 payroll.
'The following employees shall be reinstated
immediately upon availability of work:
1. Jose Dagle 7. Alejandro Tejares
2. Rico Dagle 8. Gaudioso Rombo
3. Ricardo Dagle 9. Martin Alas-as Jr. Consistent with the discussion in petitioners' Memorandum, we
shall take up Items A and B as the first issue and Item C as the
4. Jesus Silva 10. Cresensio Abrega
second.
5. Fernando Silva 11. Ariston Eruela Sr.
6. Ernesto Tejares 12. Ariston Eruela Jr.'The Court's Ruling
"When respondents again reneged on its commitment;
complainants filed the present complaint.
"But for all their persistence, the risk they had to
undergo in conducting a strike in the face of
overwhelming odds, complainants in an ironic twist of
fate now find themselves being accused of 'refusing to
work and being choosy in the kind of work they have to
perform'." 5 (Citations omitted)
Ruling of the Court of Appeals
The CA affirmed that while the work of respondents was
seasonal in nature, they were considered to be merely on leave
during the off-season and were therefore still employed by
petitioners. Moreover, the workers enjoyed security of tenure.
Any infringement upon this right was deemed by the CA to be
tantamount to illegal dismissal.
The appellate court found neither "rhyme nor reason in
petitioner's argument that it was the workers themselves who
refused to or were choosy in their work." As found by the NLRC,
the record of this case is "replete with complainants' persistence
and dogged determination in going back to work." 6
The CA likewise concurred with the NLRC's finding that
petitioners were guilty of unfair labor practice.
Hence this Petition. 7
Issues
Petitioners raise the following issues for the Court's
consideration:
"A. Whether or not the Court of Appeals erred in holding
that respondents, admittedly seasonal workers, were
regular employees, contrary to the clear provisions of
Article 280 of the Labor Code, which categorically state
that seasonal employees are not covered by the
definition of regular employees under paragraph 1, nor
covered under paragraph 2 which refers exclusively to
casual employees who have served for at least one
year.
"B. Whether or not the Court of Appeals erred in
rejecting the ruling in Mercado, . . . and relying instead
on rulings which are not directly applicable to the case
at bench, viz, Philippine Tobacco, Bacolod-Murcia, and
Gaco, . . .
"C Whether or not the Court of Appeals committed
grave abuse of discretion in upholding the NLRC's
conclusion that private respondents were illegally
dismissed, that petitioner[s were] guilty of unfair labor
practice, and that the union be awarded moral and
exemplary damages." 8
The Petition has no merit.
First Issue:
Regular Employment
At the outset, we must stress that only errors of law are
generally reviewed by this Court in petitions for review on
certiorari of CA decisions. 9 Questions of fact are not
entertained. 10 The Court is not a trier of facts and, in labor
cases, this doctrine applies with greater force. 11 Factual
questions are for labor tribunals to resolve. 12 In the present
case, these have already been threshed out by the NLRC. Its
findings were affirmed by the appellate court.
Contrary to petitioners' contention, the CA did not err when it
held that respondents were regular employees.
Article 280 of the Labor Code, as amended, states:
"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
services 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 activity exist." (Italics
supplied)
For respondents to be excluded from those classified as regular
employees, it is not enough that they perform work or services
that are seasonal in nature. They must have also been employed
only for the duration of one season. The evidence proves the
existence of the first, but not of the second, condition. The fact
that respondents — with the exception of Luisa Rombo, Ramona
Rombo, Bobong Abriga and Boboy Silva — repeatedly worked as
sugarcane workers for petitioners for several years is not denied
by the latter. Evidently, petitioners employed respondents for
more than one season. Therefore, the general rule of regular
employment is applicable.
In Abasolo v. National Labor Relations Commission , 13 the Court
issued this clarification:
"[T]he test of whether or not an employee is a regular
employee has been laid down in De Leon v. NLRC, in
which this Court held:
"The primary standard, therefore, of determining regular
employment is the reasonable connection between the
particular activity performed by the employee in relation
to the usual trade or business of the employer. The test
is whether the former is usually necessary or desirable
in the usual trade or business of the employer. The
connection can be determined by considering the nature
of the work performed and its relation to the scheme of
the particular business or trade in its entirety. Also if the
employee has been performing the job for at least a
year, even if the performance is not continuous and
merely intermittent, the law deems repeated and
continuing need for its performance as sufficient
evidence of the necessity if not indispensability of that
activity to the business. Hence, the employment is
considered regular, but only with respect to such activity
and while such activity exists.
xxx           xxx           xxx
". . . [T]he fact that [respondents] do not work
continuously for one whole year but only for the
duration of the . . . season does not detract from
considering them in regular employment since in a litany
of cases this Court has already settled that seasonal
workers who are called to work from time to time and
are temporarily laid off during off-season are not
separated from service in said period, but merely
considered on leave until re-employed." 14
The CA did not err when it ruled that Mercado v. NLRC 15 was
not applicable to the case at bar. In the earlier case, the workers
were required to perform phases of agricultural work for a
definite period of time, after which their services would be
available to any other farm owner. They were not hired regularly
and repeatedly for the same phase/s of agricultural work, but on
and off for any single phase thereof. On the other hand, herein
respondents, having performed the same tasks for petitioners
every season for several years, are considered the latter's
regular employees for their respective tasks. Petitioners' eventual
refusal to use their services — even if they were ready, able and
willing to perform their usual duties whenever these were
available — and hiring of other workers to perform the tasks
originally assigned to respondents amounted to illegal dismissal
of the latter.
The Court finds no reason to disturb the CA's dismissal of what
petitioners claim was their valid exercise of a management
prerogative. The sudden changes in work assignments reeked of
bad faith. These changes were implemented immediately after
respondents had organized themselves into a union and started
demanding collective bargaining. Those who were union
members were effectively deprived of their jobs. Petitioners'
move actually amounted to unjustified dismissal of respondents,
in violation of the Labor Code.
"Where there is no showing of clear, valid and legal cause for
the termination of employment, the law considers the matter a
case of illegal dismissal and the burden is on the employer to
prove that the termination was for a valid and authorized
cause." 16 In the case at bar, petitioners failed to prove any such
cause for the dismissal of respondents who, as discussed above,
are regular employees.
Second Issue:
Unfair Labor Practice
The NLRC also found herein petitioners guilty of unfair labor
practice. It ruled as follows:

"Indeed, from respondents' refusal to bargain, to their

acts of economic inducements resulting in the
promotion of those who withdrew from the union, the
use of armed guards to prevent the organizers to come
in, and the dismissal of union officials and members,
one cannot but conclude that respondents did not want
a union in their hacienda—a clear interference in the
right of the workers to self-organization." 17

We uphold the CA's affirmation of the above findings. Indeed,

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. Their
findings are binding on the Supreme Court. 18 Verily, their
conclusions are accorded great weight upon appeal, especially
when supported by substantial evidence. 19 Consequently, the
Court is not duty-bound to delve into the accuracy of their
factual findings, in the absence of a clear showing that these
were arbitrary and bereft of any rational basis." 20

The finding of unfair labor practice done in bad faith carries with
it the sanction of moral and exemplary damages." 21

WHEREFORE, the Petition is hereby DENIED and the assailed

Decision AFFIRMED. Costs against petitioners.

SO ORDERED.

Puno, Sandoval-Gutierrez and Corona, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 104690 February 23, 1994
ZENAIDA GACO, petitioner,
vs.
THE HONORABLE NATIONAL LABOR RELATIONS
COMMISSION and ORIENT LEAF TOBACCO
CORPORATION, respondents.
Marita B. Balloguing for petitioner.
Gregorio Alcaraz, Jr. for private respondent.
NOCON, J.:
It may appear that the work in private respondent Orient Leaf
Tobacco Corporation is seasonal, however, the records reveal
that petitioner Zenaida Gaco was repeatedly re-hired, sufficiently
evidencing the necessity and indispensability of her services to
the former's business or trade.1 Furthermore, she has been
employed since 1974 up to the end of the season in 1989. Owing
to her length of service, she became a regular employee, by
operation of law, one year after she was employed. 2 Being a
regular employee, she enjoys security of tenure in the sense that
she cannot be dismissed from employment except for just or
authorized cause.3
Briefly stated, the antecedent facts are:
Petitioner was hired by private respondent on April 17, 1974 for
the position of Picker. In 1975, after a year of service, she was
promoted to the position of Production Recorder. She held this
position for a period of fourteen (14) years until the end of
private respondent's working season in 1989. In April, 1990,
when petitioner reported for work at the start of the working
season for that year, she found out that her position was already
occupied by another employee and that she was being demoted
to the position of Picker.
Petitioner believed that, having been with private respondent for
fifteen (15) years without any derogatory record, her demotion
was not justified. Considering it as constructive dismissal,
petitioner thus refused to report for work and filed a complaint
before the Labor Arbiter for payment of separation pay.
Private respondent raised the defense that the demotion of
petitioner was effected on a valid ground, that is, gross
inefficiency. It described her work, as follows:
. . . she was assigned as the production
recorder. This job assignment is not too difficult
nor complicated. All she has to do is to record
correctly and accurately weights on tags placed
inside tobacco containers as against the
Production Reports which she accomplishes. In
other words, the weights appearing on the tags
must be correctly recorded on her Production
Report. This is very important because the said
Production Report, among other things, will be
the basis in the preparation of the delivery
Orders when the Respondent corporation
effects the delivery of its tobacco to its buyers,
both local and foreign. To illustrate, if the
weight appearing on the Delivery Orders is less
than what appears on the tags inside the
container, the difference in the weight
represents the loss to the respondent.
Conversely, if the weight appearing on the
Delivery Order is more than what appears on
the tags inside the container the difference can
be the basis for the respondent's customer to
demand a refund and a possible damage suit.
In both cases, the respondent corporation
stands to lose, particularly its own credibility.
This is how serious mistakes in the weights may
result.4
It is in this particular job assignment that she manifested said
gross inefficiency, committing the same mistakes frequently in
spite of her attention being called repeatedly and advised to take
the necessary corrective measures.
On July 31, 1991, the Labor Arbiter rendered judgment favorable
to petitioner, the dispositive portion of which, reads:
CONFORMABLY WITH THE FOREGOING,
judgment is hereby rendered:
1.) Declaring the demotion of complainant to be
unjustified;
2.) Ordering respondent Orient Leaf Tobacco
Corporation to pay complainant her backwages
to be computed from April 1990, the time her
demotion was effected, up to July 31, 1991,
and separation pay in lieu of reinstatement, to
be computed from April 1974, the date of
hiring, up to July 31, 1991, as follows:
a.)
Backwages
P35,490.00
b.)
Separation
Pay
40,222.00
————
T o t a l
P75,712.00
3.) Dismissing the charge of unfair labor
practice for want of merit.
SO ORDERED.5
The Labor Arbiter declared that petitioner's demotion was
unjustified and she was not accorded due process by private
respondent:
. . .The evidence, consisting of a series of
memoranda, are all dated March 20, 1990,
before complainant reported for the next
working season. This would indicate that these
memoranda were prepared as an afterthought.
And this observation is bolstered by the fact
that the reported inaccurate recording of
complainant, which was made (the) basis for
the claimed inefficiency, is not substantially
supported. The alleged reports made by
complainant's supervisor and the Senior
Accounting Clerk of the Production Department
(Annexes "B" and "C", Respondent's Position
Paper), being both dated March 20, 1990, can
very well be merely simulated reports done to
justify the otherwise unjustified action they
were about to implement. Respondent failed to
submit even a single copy of the alleged
erroneous (sic), "dirty and untidy" reports of
complaint.
We cannot rely on the documentary evidence
presented by the respondent as the same were
(sic) but communications between the officers
of the company.
True, there were reports made by
complainant's direct superiors regarding her
gross inefficiency from which respondent based
its action (Annexes "A" to "C", Ibid.). Yes,
management's decision to approve the
recommendation to demote complainant was
based on valid grounds (Annex "D", Ibid.). But
the truthfulness of the supposed valid grounds
is here being attacked. And all of these
transpired — from the initial report to the time
the management decided to implement its
decision to demote her — without
complainant's participation and knowledge at
any stage. The records are bereft of any
showing that complainant was notified in
advance of respondent's impending action and
the reason or reasons thereof before it was
actually effected. Neither does the record show
that complainant was afforded any opportunity
to be heard.
xxx xxx xxx
While due process required by law is applied on
dismissals, the same is also applicable to
demotions likewise affect the employment of a
worker whose right to continued employment,
under the same terms and conditions, is also
protected by law. Moreover, considering that
demotion is, like dismissal, also a punitive
action, the employee being demoted should as
in cases of dismissals, be given the chance to
contest the same.
xxx xxx xxx
Gauged against the foregoing well-established
factual and settled legal considerations, the
demotion of complainant is definitely unjustified
and, having been found to be have been in bad
faith, must be declared as constituting
constructive dismissal.
This finds further support in the fact that when
complainant Gaco refused to report for work as
Picker, they immediately promoted somebody
to that position and offered her the lower
position of Reject Piler and, when complainant
again refused to report, they offered a much
lower position from the Relief Crew, a very
positive indication of constructive dismissal.
Unjustified demotion, in effect, constitutes
constructive dismissal, which is illegal, and
which would entitle complainant to
reinstatement and payment of backwages.6
On appeal before public respondent National Labor Relations
Commission by private respondent, the aforementioned decision
was modified. The dispositive portion of its decision dated
January 27, 1992 reads:
WHEREFORE, the appealed Decision is hereby
MODIFIED by computing the separation pay in
accordance with the above or in the total
amount of P15,015.00 and electing the award
of backwages.
SO ORDERED.7
While it concurred with the finding of the Labor Arbiter that the
demotion of petitioner was unjustified, it expressed the contrary
view that there was no constructive dismissal:
. . . We could not countenance the arbitrary
and unilateral declaration of complaint not to
report for work for what she perceived to be
unjust. Such open defiance against the exercise
of management's prerogative even if it be
conceded to be unjust would wreck havoc on
the natural and orderly business structure and
would encourage anarchism. An employee
should recognize the prerogative of
management to transfer, demote or even to
dismiss to protect its business subject however,
to such restraints as the law provides.8
Hence the present petition.
Petitioner imputes grave abuse of discretion on the part of
respondent NLRC in:
1) deleting the award of backwages;
2) computing the separation pay on the basis of one-half (1/2)
month pay for every twelve (12) months of service; and
3) not awarding moral damages and attorney's fees to petitioner.
Petitioner argues that she should be awarded backwages
because she was dismissed illegally. Respondent NLRC had no
basis in computing the separation pay at one-half (1/2) month
pay for every year of service. In numerous labor cases decided
by this Court, the basis for computation thereof is one (1) month
pay for every year of service. As a normal consequence of
having been dismissed illegally and forced to litigate, she should
be awarded moral damages and attorney's fees.
The Office of the Solicitor General supports entirely the decision
of respondent NLRC. It maintains that petitioner is not entitled to
backwages since private respondent did not terminate her
services. Rather, it was petitioner who terminated her
employment by refusing to report for work despite several
demands made upon her private respondent to do so.
Respondent NLRC had sufficient basis in its computation of the
separation pay. Inasmuch as petitioner was demoted without
due process, appropriate sanction (in the form of separation
pay) should be meted against private respondent. Nevertheless,
the sanction must be mitigated by the fact that: a) she refused
to return to work without just reason after repeated requests by
private respondent; b) her union acquisced to her demotion c)
her work is seasonal in nature. There is no justification for her
claim for award of moral damages and attorney's fees.
After a judicious review of all the pleadings in this case vis-a-
vis the questioned decision, this Court finds merit in the petition
and holds that respondent NLRC gravely abused its discretion
when it modified the decision of the Labor Arbiter.
pay in lieu of reinstatement." 13 Instead, the period thereof shall
be reckoned from the time her compensation was withheld from
her, or in April, 1990 up to the finality of our decision.
Respondent NLRC reduced the amount of separation pay, as
follows:
Under the foregoing circumstances,
complainant should be reinstated without
backwages; however, since she already
manifested her desire not to work for
respondent anymore, she should instead be
granted separation pay in lieu of reinstatement,
further asking into consideration her long
service with respondent. It appearing that the
work at the respondent's company is seasonal
in nature, the separation pay should be
computed on the basis of one-half (1/2) month
pay for every twelve (12) months of service, or
a total of eleven (11) constructive years.
(Rollo 40)14
Again, we sustain the ruling of the Labor Arbiter granting
separation pay in the amount of one (1) month to pay for every
year of service. This has been our consistent ruling in numerous
decisions awarding separation pay to an illegally dismissed
employee in lieu of reinstatement. 15 It should be emphasized
that separation pay is being awarded in this case for this reason,
a fact which the Office of the Solicitor General overlooked.

The case of Philippine Japan Active Carbon Corporation, et al. v. We note that the issued regarding award of moral damages and
NLRC, et al.,9 which was cited in the recent case of Lemery attorney's fees to petitioner is being raised only in the
Savings and Loan Bank, et al. v. NLRC. et al ., 10 defines proceedings before this Court, thus, she cannot impute grave
constructive dismissal as a quitting because continued abuse of discretion on the part of respondent NLRC on this
employment is rendered impossible, unreasonable or unlikely; aspect.
as, an offer involving a demotion in rank and a diminution in
pay. As we have stated previously, both the Labor Arbiter and
WHEREFORE, the petition is hereby GRANTED. The decision of
respondent NLRC arrived at a factual finding that petitioner was
the National Labor Relations Commission dated January 27, 1992
demoted to her former position without any justifiable cause.
is SET ASIDE and the decision of the Labor Arbiter dated July 31,
However, they differed in the conclusions they derived
1991 is REINSTATED subject to the modification that the period
therefrom: the Labor Arbiter considered petitioner's demotion as
of backwages should be from April, 1990 up to the finality of this
constructive dismissal whereas respondent NLRC held that
decision less earnings elsewhere, if any, during this period
constructive dismissal could not deduced from the
whereas the period of separation pay should be from April, 1974
circumstances. On the basis of the foregoing jurisprudence
up to the finality of this decision.
defining the term constructive dismissal, we sustain the ruling of
the Labor Arbiter and his rationalization thereon. Consequently,
petitioner is entitled to her full backwages, inclusive of SO ORDERED.
allowances, and other benefits or their monetary equivalent
computed from the time her compensation was withheld from Narvasa, C.J., Padilla, Regalado, Puno, JJ., concu
her up to the time of her actual reinstatement. 11 In ascertaining
the total amount of backwages payable to her, we enunciated in
the case of Pines City Educational Center, et al. v. NLRC, et
al. 12 the doctrine that:

. . . we go back to the rule prior to the Mercury

Drug rule that the total amount derived from
employment elsewhere by the employee from
the date of reinstatement , if any, should be
deducted therefrom. . . .

However, we shall not follow Article 279 of the Labor Code to

the letter regarding the period of backwages in view of the
peculiar circumstances of the present case, namely, "there is
now a strained relationship between (petitioner) and (private
respondent) and (petitioner) prays for payment of separation
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 71664 February 28, 1992
BAGUIO COUNTRY CLUB CORPORATION, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION,
ASSOCIATED LABOR UNION (ALU) and JIMMY
CALAMBA, respondents.
Guillermo B. Bandonill and A.N. Bolinao, Jr. for petitioner.
Jose C. Evangelista for Jimmy Calamba.
MEDIALDEA, J.:
This petition for certiorari seeks to annul and set aside the
resolution issued by the respondent National Labor Relations
Commission dated June 10, 1985 dismissing the appeal of
petitioner for lack of merit and affirming in toto  the decision of
the Executive Labor Arbiter dated September 15, 1982 declaring
private respondent Calamba as a regular employee entitled to
reinstatement to the position of gardener without loss of
seniority and with full backwages, benefits and privileges from
the time of his dismissal up to reinstatement including 13th
month pay.
The antecedent facts are as follows:
Petitioner Baguio Country Club Corporation (corporation) is a
recreational establishment certified by the Ministry of Labor and
Employment as an" entertainment-service" establishment.
Respondent National Labor Relations Commission (Commission)
is a government instrumentality created by law, impleaded in its
official capacity, while private respondent Associated Labor
Union (union) is a duly registered labor organization and private
respondent Jimmy Calamba is an employee of the petitioner
corporation as laborer, dishwasher, and gardener.
Private respondent Jimmy Calamba was employed on a day to
day basis in various capacities as laborer and dishwasher for a
period of ten (10) months from October 1, 1979 to July 24,
1980. On September 1, 1980 to October 1, 1980, private
respondent Calamba was hired as a gardener and rehired as
such on November 15, 1980 to January 4, 1981 when he was
dismissed by the petitioner corporation. (see Rollo, pp. 28-36)
On August 3, 1981, private respondent Jimmy Calamba assisted
by private respondent union instituted a complaint against
petitioner corporation with the Ministry of Labor (now
Department of Labor and Employment), Baguio District Office,
Baguio City for unfair labor practice, illegal dismissal and non-
payment of 13th month pay for 1979 and 1980.
The Executive Labor Arbiter Sotero L. Tumang rendered a
decision on September 15, 1982 declaring private respondent
Calamba as a regular employee and ordering petitioner to
reinstate private respondent to the position of gardener without
loss of seniority and with full backwages, benefits and privileges
from the time of his dismissal up to reinstatement including 13th
month pay.
Labor Arbiter Tumang found as follows:
After a careful perusal of the facts presented by
the parties, we find the complaint for illegal
dismissal and non-payment of thirteenth (13th)
month pay, meritorious for the following
reasons:
1. Complainant Jimmy Calamba has attained
regular status as an employee of the Club on
account of the nature of the job he was hired,
to perform continuously and on staggered basis
for a span of thirteen months. True that there
were employment contracts executed between
the Club and the complainant indicating the
period or the number of days the complainant
is being needed but what is to be considered is
not the agreement, written or otherwise, of the
parties in determining the regularity or
casualness of job but it should be the nature of
the job. Clearly, the work of a gardener is not a
seasonal or for a specific period undertaking
but it is a whole year round activity. We must
not lose sight of the fact that the Baguio
Country Club Corporation is an exclusive Club
with sustaining members who avails ( sic) of its
facilities the whole year round and it is
necessary, is has been observed and of
common knowledge, that the gardens including
the green of its golf course where the
complainant was assigned must be properly
kept and maintained.
2. Being a regular employee with more than
one (1) year length of service with the
respondent, Jimmy Calamba could not be
terminated without a just or valid cause. This is
so explicit in our Constitution that the security
of tenure of a worker must be safeguarded and
protected and Jimmy Calamba should enjoy no
less protection.
3. Jimmy Calamba was dismissed without any
written clearance from the Ministry of Labor
and Employment prior to his termination.
Worse, the respondent fired the complainant
from his job due to the a (sic) alleged
expiration of his employment contract ten (10)
times but not even a single report of his
dismissal as mandated by law was submitted to
the Ministry of Labor and Employment.
4. The Company did not refute the claim of
Jimmy Calamba for payment of his thirteenth
(13th) month pay under P.D. 851 nor presented
any report of compliance to that effect with the
 Ministry of Labor and Employment and,
therefore, he must be paid correspondingly.
(Rollo, pp. 39-40)
Hence, the petitioner interposed an appeal to the respondent
Commission.
On June 10, 1985, after finding that there existed no sufficient
justification to disturb the appealed decision, the respondent
Commission rendered a resolution dismissing the appeal for lack
of merit.
Hence, this present petition raising four (4) assignments of
errors, which are as follows:
I xxx xxx xxx
THAT THE RESPONDENT COMMISSION
GRAVELY ERRED IN HOLDING THAT PRIVATE
RESPONDENT JIMMY CALAMBA WAS A
"CASUAL" EMPLOYEE AND HAD ATTAINED THE
STATUS OF A REGULAR EMPLOYEE, DESPITE
THE INCONTROVERTIBLE FACT THAT SAID
PRIVATE RESPONDENT WAS A CONTRACTUAL
AND SEASONAL EMPLOYEE.
II
THAT THE RESPONDENT COMMISSION
GRAVELY ERRED IN HOLDING THAT THE
CONCLUSIONS OF THE EXECUTIVE LABOR
ARBITER WERE FULLY SUPPORTED BY THE
EVIDENCE AND IN UPHOLDING THE
REINSTATEMENT OF PRIVATE RESPONDENT
JIMMY CALAMBA.
III
THAT THE RESPONDENT COMMISSION
GRAVELY ERRED IN HOLDING THAT THE
DISMISSAL OF PRIVATE RESPONDENT JIMMY
CALAMBA REQUIRED PRIOR CLEARANCE FROM
THE MINISTRY OF LABOR AND EMPLOYMENT
EACH TIME HIS CONTRACT OF EMPLOYMENT
EXPIRED.
IV
THAT THE RESPONDENT COMMISSION
GRAVELY ERRED IN NOT HOLDING THAT
PRIVATE RESPONDENT ASSOCIATED LABOR
UNION HAS NO LEGAL PERSONALITY TO FILE
THIS CASE FOR PRIVATE RESPONDENT JIMMY
CALAMBA BEFORE THE REGIONAL OFFICE OF
THE NATIONAL LABOR RELATIONS
COMMISSION, AS SAID PRIVATE RESPONDENT
BEING A CONTRACTUAL EMPLOYEE IS
EXPRESSLY EXCLUDED FROM THE
BARGAINING UNIT UNDER THE COLLECTIVE
BARGAINING AGREEMENT (Rollo, pp. 98-99)
Petitioner maintains that private respondent Calamba was a
contractual employee whose employment was for a fixed and
specific period as set forth and evidenced by the private
respondent's contracts of employment, the pertinent portions of
which are quoted as follows:
xxx xxx xxx
. . . the employment may be terminated any
time without liability to the Baguio Country Club
other than for salary actually earned up to and
including the date of last service.
His/her employment shall be on a day to
day BASIS for a temporary period . . . subject
to termination at any time at the discretion of
the Baguio Country Club Corporation.
(Rollo, p. 7)
In addition, petitioner stresses that there was absolutely no oral
or documentary evidence to support the conclusion of the
Executive Labor Arbiter which was subsequently affirmed by the
respondent Commission that private respondent Calamba has
rendered thirteen (13) months of continuous service.
On the contrary, respondent Commission through the Solicitor
General argues that private respondent Calamba, having
rendered services as laborer, gardener and dishwasher for more
than one (1) year, was a regular employee at the time his
employment was terminated.
Moreover, the nature of private respondent Calamba's
employment as laborer, gardener, and dishwasher pertains to a
regular employee because they are necessary or desirable in the
usual business of petitioner as a recreational establishment.
The pivotal issue therefore in whether or not the private
respondent Jimmy Calamba has acquired the status of a regular
employee at the time his employment was terminated.
After a careful review of the records of this case the Court finds
no merit in the petition and holds that the respondent
Commission did not gravely abuse its discretion when it
affirmed in toto the decision of the labor arbiter.
The law on the matter is Article 280 of the Labor Code which
defines regular and casual employment as follows:
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 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 services 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.
This provision reinforces the Constitutional
mandate to protect the interest of labor. Its
language evidently manifests the intent to
safeguard the tenurial interest of the worker
who may be denied the rights and benefits due
a regular employee by virtue of lopsided
agreements with the economically powerful
employer who can maneuver to keep an
employee on a casual status for as long as
convenient. Thus, contrary agreements
notwithstanding, an employment is deemed
regular when the activities performed by the
employee are usually necessary or desirable in
the usual business or trade of the employer.
Not considered regular are the so-called
"project employment" the completion or
termination of which is more or less
determinable at the time of employment, such
as those employed in connection with a
particular construction project, and seasonal
employment which by its nature is only
desirable for a limited period of time. However,
any employee who has rendered at least one
year of service, whether continuous or
intermittent, is deemed regular with respect to
the activity he performed and while such
activity actually exits.
The primary standard, therefore, of determining
a regular employment is the reasonable
connection between the particular activity
performed by the employee in relation to the
usual business or trade of the employer. The
test is whether the former is usually necessary
or desirable in the usual business or trade of
the employer. The connection can be
determined by considering the nature of the
work performed and its relation to the scheme
of the particular business or trade in its
entirety. Also, if the employee has been
performing the job for at least one year, even if
the performance is not continuous or merely
intermittent, the law deems the repeated and
continuing need for its performance as
sufficient evidence of the necessity if not
indispensability of that activity to the business.
Hence, the employment is also considered
regular, but only with respect to such activity
and while such activity exists. (De Leon v.
National Labor Relations Commission, G.R. No.
70705, August 21, 1989. 176 SCRA 615, 620-
621)
In the case at bar, the petitioner corporation, which is certified
by the Ministry of Labor and Employment as an "entertainment-
service" establishment, claims that private respondent was
contracted for a fixed and specific period. However, the records
are that the private respondent was repeatedly re-hired to
perform tasks ranging from dishwashing and gardening, aside
from performing maintenance work.
Such repeated rehiring and the continuing need for his service
are sufficient evidence of the necessity and indispensability of his
service to the petitioner's business or trade.
The law demands that the nature and entirety of the activities
performed by the employee be considered. It is not tenable to
argue that the aforementioned tasks of private respondent are
not necessary in petitioner's business as a recreational
establishment, just as it cannot be said that only those who are
directly involved in providing entertainment service may be
considered as necessary employees. Otherwise, there would
have been no need for the regular maintenance section of
petitioner corporation.
Furthermore, the private respondent performed the said tasks
which lasted for more than one year, until early January, 1981
when he was terminated. Certainly, by this fact alone he is
entitled by law to be considered a regular employee.
Owing to private respondent's length of service with the
petitioner corporation, he became a regular employee, by
operation of law, one year after he was employed. It is more in
consonance with the intent and spirit of the law to rule that the
status of regular employment attaches to the casual employee
on the day immediately after the end of his first year of service.
To rule otherwise is to impose a burden on the employee which
is not sanctioned by law. (see Kimberly Independent Labor Union
for Solidarity, Activism and Nationalism in Line Industries and
Agriculture v. Drilon, G.R. No. 77629, May 9, 1990, 185 SCRA
190, 203-204)
It is of no moment that private respondent was told when he
was hired that his employment would only be "on a day to day
basis for a temporary period" and may be terminated at any time
subject to the petitioner's discretion. Precisely, the law overrides
such conditions which are prejudicial to the interest of the
worker. Evidently, the employment contracts entered into by
private respondent with the petitioner have the purpose of
circumventing the employee's security of tenure. The Court
therefore, rigorously disapproves said contracts which
demonstrate a clear attempt to exploit the employee and deprive
him of the protection sanctioned by the Labor Code.
It is noteworthy that what determines whether a certain
employment is regular or casual is not the will and word of the
employer, to which the desperate worker often accedes. It is the
nature of the activities performed in relation to the particular
business or trade considering all circumstances, and in some
cases the length of time of its performance and its continued
existence. (see De Leon v. NLRC, Ibid)
All premises considered, the Court is convinced that the assailed
resolution of the respondent Commission is not tainted with
arbitrariness that would amount to grave abuse of discretion or
lack of jurisdiction and therefore, We find no reason to disturb
the same.
ACCORDINGLY, the petition is DISMISSED for lack of merit.
SO ORDERED.

Narvasa, C.J., Cruz and Griño-Aquino, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 74246 January 26, 1989
MARIWASA MANUFACTURING, INC., and ANGEL T.
DAZO, petitioners,
vs.
HON. VICENTE LEOGARDO, JR., in his capacity as Deputy
Minister of Ministry of Labor and Employment judgment,
and JOAQUIN A. DEQUILA, respondents.
Cruz, Agabin, Atienza & Alday for petitioners.
The Solicitor General of public respondent.
Norberto M. Alensuela, Sr. for private respondent.
NARVASA,  J.:
There is no dispute about the facts in this case, and the only
question for the Court is whether or not, Article 282 of the Labor
Code notwithstanding, probationary employment may validly be
extended beyond the prescribed six-month period by agreement
of the employer and the employee.
Private respondent Joaquin A. Dequila (or Dequilla) was hired on
probation by petitioner Mariwasa Manufacturing, Inc. (hereafter,
Mariwasa only) as a general utility worker on January 10, 1979.
Upon the expiration of the probationary period of six months,
Dequila was informed by his employer that his work had proved
unsatisfactory and had failed to meet the required standards. To
give him a chance to improve his performance and qualify for
regular employment, instead of dispensing with his service then
and there, with his written consent Mariwasa extended his
probation period for another three months from July 10 to
October 9, 1979. His performance, however, did not improve
and on that account Mariwasa terminated his employment at the
end of the extended period. 1
Dequila thereupon filed with the Ministry of Labor against
Mariwasa and its Vice-President for Administration, Angel T.
Dazo, a complaint for illegal dismissal and violation of
Presidential Decrees Nos. 928 and 1389. 2 His complaint was
dismissed after hearing by Director Francisco L. Estrella, Director
of the Ministry's National Capital Region, who ruled that the
termination of Dequila's employment was in the circumstances
justified and rejected his money claims for insufficiency of
evidence. 3 On appeal to the Office of the Minister, however, said
disposition was reversed. Respondent Deputy Minister Vicente
Leogardo, Jr. held that Dequila was already a regular employee
at the time of his dismissal, therefore, could not have been
lawfully dismissed for failure to meet company standards as a
probationary worker. He was ordered reinstated to his former
position without loss of seniority and with full back wages from
the date of his dismissal until actually reinstated. 4 This last order
appears later to have been amended so as to direct payment of
Dequila's back wages from the date of his dismissal to December
20, 1982 only. 5
Mariwasa and Dazo, now petitioners, thereafter be sought this
Court to review Hon. Leogardo's decision on certiorari and
prohibition, urging its reversal for having been rendered with
grave abuse of discretion and/or without or in excess of
jurisdiction. 6
The petition, as well as the parties' comments subsequently
submitted all underscore the fact that the threshold issue here
is, as first above stated, the legal one of whether employer and
employee may by agreement extend the probationary period of
employment beyond the six months prescribed in Art. 282 of the
Labor Code, which provides that:
Art. 282. Probationary Employment. —
Probationary employment shall not exceed six
(6) months from the date the employee started
working, unless it is covered by an
apprenticeship agreement stipulating a longer
period. The services of an employee who has
been engaged on a probationary basis may be
terminated for a just cause or when he fails to
qualify as a regular employee in accordance
with reasonable standards made known by the
employer to the employee at the time of his
engagement. An employee who is allowed to
work after probationary period shall be
considered a regular employee.'
The Court agrees with the Solicitor General, who takes the same
position as the petitioners, that such an extension may lawfully
be covenanted, notwithstanding the seemingly restrictive
language of the cited provision. Buiser vs. Leogardo,
Jr  . 7 recognized agreements stipulating longer probationary
periods as constituting lawful exceptions to the statutory
prescription limiting such periods to six months, when it upheld
as valid an employment contract between an employer and two
of its employees that provided for an eigthteen-month probation
period. This Court there held:
'It is petitioners' submission that probationary
employment cannot exceed six (6) months, the
only exception being apprenticeship and
learnership agreements as provided in the
Labor Code; that the Policy Instruction of the
Minister of Labor and Employment nor any
agreement of the parties could prevail over this
mandatory requirement of the law; that this six
months prescription of the Labor Code was
mandated to give further efficacy to the
constitutionally-guaranteed security of tenure of
workers; and that the law does not allow any
discretion on the part of the Minister of Labor
and Employment to extend the probationary
period for a longer period except in the
aforecited instances. Finally, petitioners
maintain that since they are regular employees,
they can only be removed or dismissed for any
of the just and valid causes enumerated under
Article 283. of the Labor Code.
 We reject petitioners' contentions. They have and further a probationary employee's prospects of
no basis in law. demonstrating his fitness for regular employment.

Generally, the probationary period of
employment is limited to six (6) months. The
exception to this general rule is when the
parties to an employment contract may agree
otherwise, such as when the same is
established by company policy or when the
same is required by the nature of work to be
performed by the employee. In the latter case,
there is recognition of the exercise of
managerial prerogatives in requiring a longer
period of probationary employment, such as in
the present case where the probationary period
was set for eighteen (18) months, i.e. from
May, 1980 to October, 1981 inclusive, especially
where the employee must learn a particular
kind of work such as selling, or when the job
requires certain qualifications, skills experience
or training.
Having reached the foregoing conclusions, the Court finds it
unnecessary to consider and pass upon the additional issue
raised in the Supplemental Petition 8 that the back wages
adjudged in favor of private respondent Dequila were
erroneously computed.
WHEREFORE, the petition is granted. The orders of the public
respondent complained of are reversed and set aside. Private
respondent's complaint against petitioners for illegal dismissal
and violation of Presidential Decrees 928 and 1389 is dismissed
for lack of merit, without pronouncement as to costs.
SO ORDERED.
Cruz, Gancayco, Griño-Aquino and Medialdea, JJ., concu

xxx

We therefore, hold and rule that the

probationary employment of petitioners set to
eighteen (18) months is legal and valid and that
the Regional Director and the Deputy Minister
of Labor and Employment committed no abuse
of discretion in ruling accordingly.

The single difference between Buiser and the present case: that

in the former involved an eighteen-month probationary period
stipulated in the original contract of employment, whereas the
latter refers to an extension agreed upon at or prior to the
expiration of the statutory six-month period, is hardly such as to
warrant or even suggest a different ruling here. In both cases
the parties' agreements in fact resulted in extensions of the
period prescribed by law. That in this case the inability of the
probationer to make the grade became apparent only at or
about the end of the six-month period, hence an extension could
not have been pre-arranged as was done in Buiser assumes no
adverse significance, given the lack, as pointed out by the
Solicitor General, of any indication that the extension to which
Dequila gave his agreement was a mere stratagem of petitioners
to avoid the legal consequences of a probationary period
satisfactorily completed.

For aught that appears of record, the extension of Dequila's

probation was ex gratia, an act of liberality on the part of his
employer affording him a second chance to make good after
having initially failed to prove his worth as an employee. Such an
act cannot now unjustly be turned against said employer's
account to compel it to keep on its payroll one who could not
perform according to its work standards. The law, surely, was
never meant to produce such an inequitable result.

By voluntarily agreeing to an extension of the probationary

period, Dequila in effect waived any benefit attaching to the
completion of said period if he still failed to make the grade
during the period of extension. The Court finds nothing in the
law which by any fair interpretation prohibits such a waiver. And
no public policy protecting the employee and the security of his
tenure is served by prescribing voluntary agreements which, by
reasonably extending the period of probation, actually improve
 Republic of the Philippines Dear Pearl,
SUPREME COURT
Manila After having successfully passed the pre-employment
requirements, you are hereby appointed as follows:
EN BANC
Position Title : Regulatory Affairs Manager
G.R. No. 192571               July 23, 2013
Department : Hospira
ABBOTT LABORATORIES, PHILIPPINES, CECILLE A.
TERRIBLE, EDWIN D. FEIST, MARIA OLIVIA T. The terms of your employment are:
YABUTMISA, TERESITA C. BERNARDO, AND ALLAN G.
ALMAZAR, Petitioners,
Nature of Employment : Probationary
vs.
PEARLIE ANN F. ALCARAZ, Respondent.
Effectivity : February 15, 2005 to August 14, 2005
DECISION
Basic Salary : ₱110,000.00/ month
PERLAS-BERNABE, J.:
It is understood that you agree to abide by all existing policies,
rules and regulations of the company, as well as those, which
Assailed in this petition for review on certiorari  are the
1
may be hereinafter promulgated.
Decision2 dated December 10,2009 and Resolution3 dated June
9, 2010 of the Court of Appeals (CA) in CA-G.R. SP No. 101045
which pronounced that the National Labor Relations Commission Unless renewed, probationary appointment expires on the date
(NLRC) did not gravely abuse its discretion when it ruled that indicated subject to earlier termination by the Company for any
respondent Pearlie Ann F. Alcaraz (Alcaraz) was illegally justifiable reason.
dismissed from her employment.
If you agree to the terms and conditions of your employment,
The Facts please signify your conformity below and return a copy to HRD.

On June 27, 2004, petitioner Abbott Laboratories, Philippines Welcome to Abbott!

(Abbott) caused the publication in a major broadsheet
newspaper of its need for a Medical and Regulatory Affairs
Manager (Regulatory Affairs Manager) who would: (a) be
responsible for drug safety surveillance operations, staffing, and
budget; (b) lead the development and implementation of
standard operating procedures/policies for drug safety
surveillance and vigilance; and (c) act as the primary interface
with internal and external customers regarding safety operations
and queries.4 Alcaraz - who was then a Regulatory Affairs and
Information Manager at Aventis Pasteur Philippines,
Incorporated (another pharmaceutical company like Abbott) –
showed interest and submitted her application on October 4,
2004.5
On December 7, 2004, Abbott formally offered Alcaraz the
abovementioned position which was an item under the
company’s Hospira Affiliate Local Surveillance Unit (ALSU)
department.6 In Abbott’s offer sheet.7 it was stated that Alcaraz
was to be employed on a probationary basis. 8 Later that day, she
accepted the said offer and received an electronic mail (e-mail)
from Abbott’s Recruitment Officer, petitioner Teresita C.
Bernardo (Bernardo), confirming the same. Attached to
Bernardo’s e-mail were Abbott’s organizational chart and a job
description of Alcaraz’s work.9
On February 12, 2005, Alcaraz signed an employment contract
which stated, inter alia, that she was to be placed on probation
for a period of six (6) months beginning February 15, 2005 to
August 14, 2005. The said contract was also signed by Abbott’s
General Manager, petitioner Edwin Feist (Feist): 10
PROBATIONARY EMPLOYMENT
Very truly yours,
Sgd.
EDWIN D. FEIST
General Manager
CONFORME:
Sgd.
PEARLIE ANN FERRER-ALCARAZ
During Alcaraz’s pre-employment orientation, petitioner Allan G.
Almazar (Almazar), Hospira’s Country Transition Manager,
briefed her on her duties and responsibilities as Regulatory
Affairs Manager, stating that: (a) she will handle the staff of
Hospira ALSU and will directly report to Almazar on matters
regarding Hopira’s local operations, operational budget, and
performance evaluation of the Hospira ALSU Staff who are on
probationary status; (b) she must implement Abbott’s Code of
Good Corporate Conduct (Code of Conduct), office policies on
human resources and finance, and ensure that Abbott will hire
people who are fit in the organizational discipline; (c) petitioner
Kelly Walsh (Walsh), Manager of the Literature Drug Surveillance
Drug Safety of Hospira, will be her immediate supervisor; (d) she
should always coordinate with Abbott’s human resource officers
in the management and discipline of the staff; (e) Hospira ALSU
will spin off from Abbott in early 2006 and will be officially
incorporated and known as Hospira, Philippines. In the interim,
Hospira ALSU operations will still be under Abbott’s
management, excluding the technical aspects of the operations
which is under the control and supervision of Walsh; and (f) the
processing of information and/or raw material data subject of
Hospira ALSU operations will be strictly confined and controlled
under the computer system and network being maintained and
operated from the United States. For this purpose, all those
involved in Hospira ALSU are required to use two identification
cards: one, to identify them as Abbott’s employees and another,
to identify them as Hospira employees. 11
On March 3, 2005, petitioner Maria Olivia T. Yabut-Misa (Misa),
Abbott’s Human Resources (HR) Director, sent Alcaraz an e-mail
which contained an explanation of the procedure for evaluating
the performance of probationary employees and further
indicated that Abbott had only one evaluation system for all of its
employees. Alcaraz was also given copies of Abbott’s Code of
Conduct and Probationary Performance Standards and
Evaluation (PPSE) and Performance Excellence Orientation
Modules (Performance Modules) which she had to apply in line
with her task of evaluating the Hospira ALSU staff. 12
Abbott’s PPSE procedure mandates that the job performance of
a probationary employee should be formally reviewed and
discussed with the employee at least twice: first on the third
month and second on the fifth month from the date of
employment. The necessary Performance Improvement Plan
should also be made during the third-month review in case of a
gap between the employee’s performance and the standards set.
These performance standards should be discussed in detail with
the employee within the first two (2) weeks on the job. It was
equally required that a signed copy of the PPSE form must be
submitted to Abbott’s Human Resources Department (HRD) and
shall serve as documentation of the employee’s performance
during his/her probationary period. This shall form the basis for
recommending the confirmation or termination of the
probationary employment.13
During the course of her employment, Alcaraz noticed that some
of the staff had disciplinary problems. Thus, she would
reprimand them for their unprofessional behavior such as non-
observance of the dress code, moonlighting, and disrespect of
Abbott officers. However, Alcaraz’s method of management was
considered by Walsh to be "too strict." 14 Alcaraz approached Misa
to discuss these concerns and was told to "lie low" and let Walsh
handle the matter. Misa even assured her that Abbott’s HRD
would support her in all her management decisions. 15
On April 12, 2005, Alcaraz received an e-mail from Misa
requesting immediate action on the staff’s performance
evaluation as their probationary periods were about to end. This
Alcaraz eventually submitted.16
On April 20, 2005, Alcaraz had a meeting with petitioner Cecille
Terrible (Terrible), Abbott’s former HR Director, to discuss
certain issues regarding staff performance standards. In the
course thereof, Alcaraz accidentally saw a printed copy of an e-
mail sent by Walsh to some staff members which essentially
contained queries regarding the former’s job performance.
Alcaraz asked if Walsh’s action was the normal process of
evaluation. Terrible said that it was not.17
On May 16, 2005, Alcaraz was called to a meeting with Walsh
and Terrible where she was informed that she failed to meet the
regularization standards for the position of Regulatory Affairs
Manager.18 Thereafter, Walsh and Terrible requested Alcaraz to
tender her resignation, else they be forced to terminate her
services. She was also told that, regardless of her choice, she
should no longer report for work and was asked to surrender her
office identification cards. She requested to be given one week
to decide on the same, but to no avail.19
On May 17, 2005, Alcaraz told her administrative assistant,
Claude Gonzales (Gonzales), that she would be on leave for that
day. However, Gonzales told her that Walsh and Terrible already
announced to the whole Hospira ALSU staff that Alcaraz already
resigned due to health reasons.20
On May 23, 2005, Walsh, Almazar, and Bernardo personally
handed to Alcaraz a letter stating that her services had been
terminated effective May 19, 2005.21 The letter detailed the
reasons for Alcaraz’s termination – particularly, that Alcaraz: (a)
did not manage her time effectively; (b) failed to gain the trust
of her staff and to build an effective rapport with them; (c) failed
to train her staff effectively; and (d) was not able to obtain the
knowledge and ability to make sound judgments on case
processing and article review which were necessary for the
proper performance of her duties. 22 On May 27, 2005, Alcaraz
received another copy of the said termination letter via
registered mail.23
Alcaraz felt that she was unjustly terminated from her
employment and thus, filed a complaint for illegal dismissal and
damages against Abbott and its officers, namely, Misa, Bernardo,
Almazar, Walsh, Terrible, and Feist.24 She claimed that she
should have already been considered as a regular and not a
probationary employee given Abbott’s failure to inform her of the
reasonable standards for her regularization upon her
engagement as required under Article 295 25 of the Labor Code.
In this relation, she contended that while her employment
contract stated that she was to be engaged on a probationary
status, the same did not indicate the standards on which her
regularization would be based. 26 She further averred that the
individual petitioners maliciously connived to illegally dismiss her
when: (a) they threatened her with termination; (b) she was
ordered not to enter company premises even if she was still an
employee thereof; and (c) they publicly announced that she
already resigned in order to humiliate her.27
On the contrary, petitioners maintained that Alcaraz was validly
terminated from her probationary employment given her failure
to satisfy the prescribed standards for her regularization which
were made known to her at the time of her engagement. 28
The LA Ruling
In a Decision dated March 30, 2006, 29 the LA dismissed Alcaraz’s
complaint for lack of merit.
The LA rejected Alcaraz’s argument that she was not informed of
the reasonable standards to qualify as a regular employee
considering her admissions that she was briefed by Almazar on
her work during her pre-employment orientation meeting 30 and
that she received copies of Abbott’s Code of Conduct and
Performance Modules which were used for evaluating all types of
Abbott employees.31 As Alcaraz was unable to meet the
standards set by Abbott as per her performance evaluation, the
LA ruled that the termination of her probationary employment
was justified.32 Lastly, the LA found that there was no evidence
to conclude that Abbott’s officers and employees acted in bad
faith in terminating Alcaraz’s employment.33
Displeased with the LA’s ruling, Alcaraz filed an appeal with the
National Labor Relations Commission (NLRC).
The NLRC Ruling
On September 15, 2006, the NLRC rendered a Pending resolution of the First CA Petition, Alcaraz moved for the
Decision,34 annulling and setting aside the LA’s ruling, the
dispositive portion of which reads:
WHEREFORE, the Decision of the Labor Arbiter dated 31 March
2006 [sic] is hereby reversed, annulled and set aside and
judgment is hereby rendered:
1. Finding respondents Abbot [sic] and individual
respondents to have committed illegal dismissal;
2. Respondents are ordered to immediately reinstate
complainant to her former position without loss of
seniority rights immediately upon receipt hereof;
3. To jointly and severally pay complainant backwages
computed from 16 May 2005 until finality of this
decision. As of the date hereof the backwages is
computed at
a. Backwages for 15 PhP
months - 1,650,000.00
b. 13th month pay - 110,000.00
PhP
TOTAL
1,760,000.00
4. Respondents are ordered to pay complainant moral
damages of ₱50,000.00 and exemplary damages of
₱50,000.00.
5. Respondents are also ordered to pay attorney’s fees
of 10% of the total award.
6. All other claims are dismissed for lack of merit.
SO ORDERED.35
The NLRC reversed the findings of the LA and ruled that there
was no evidence showing that Alcaraz had been apprised of her
probationary status and the requirements which she should have
complied with in order to be a regular employee. 36 It held that
Alcaraz’s receipt of her job description and Abbott’s Code of
Conduct and Performance Modules was not equivalent to her
being actually informed of the performance standards upon
which she should have been evaluated on. 37 It further observed
that Abbott did not comply with its own standard operating
procedure in evaluating probationary employees. 38 The NLRC
was also not convinced that Alcaraz was terminated for a valid
cause given that petitioners’ allegation of Alcaraz’s "poor
performance" remained unsubstantiated.39
Petitioners filed a motion for reconsideration which was denied
by the NLRC in a Resolution dated July 31, 2007. 40
Aggrieved, petitioners filed with the CA a Petition for Certiorari
with Prayer for Issuance of a Temporary Restraining Order
and/or Writ of Preliminary Injunction, docketed as CA G.R. SP
No. 101045 (First CA Petition), alleging grave abuse of discretion
on the part of NLRC when it ruled that Alcaraz was illegally
dismissed.41
execution of the NLRC’s Decision before the LA, which
petitioners strongly opposed. The LA denied the said motion in
an Order dated July 8, 2008 which was, however, eventually
reversed on appeal by the NLRC. 42 Due to the foregoing,
petitioners filed another Petition for Certiorari with the CA,
docketed as CA G.R. SP No. 111318 (Second CA Petition),
assailing the propriety of the execution of the NLRC decision. 43
The CA Ruling
With regard to the First CA Petition, the CA, in a Decision 44 dated
December 10, 2009, affirmed the ruling of the NLRC and held
that the latter did not commit any grave abuse of discretion in
finding that Alcaraz was illegally dismissed.
It observed that Alcaraz was not apprised at the start of her
employment of the reasonable standards under which she could
qualify as a regular employee.45 This was based on its
examination of the employment contract which showed that the
same did not contain any standard of performance or any
stipulation that Alcaraz shall undergo a performance evaluation
before she could qualify as a regular employee. 46 It also found
that Abbott was unable to prove that there was any reasonable
ground to terminate Alcaraz’s employment. 47 Abbott moved for
the reconsideration of the aforementioned ruling which was,
however, denied by the CA in a Resolution48 dated June 9, 2010.
The CA likewise denied the Second CA Petition in a Resolution
dated May 18, 2010 (May 18, 2010 Resolution) and ruled that
the NLRC was correct in upholding the execution of the NLRC
Decision.49 Thus, petitioners filed a motion for reconsideration.
While the petitioners’ motion for reconsideration of the CA’s May
18, 2010 Resolution was pending, Alcaraz again moved for the
issuance of a writ of execution before the LA. On June 7, 2010,
petitioners received the LA’s order granting Alcaraz’s motion for
execution which they in turn appealed to the NLRC – through a
Memorandum of Appeal dated June 16, 2010 (June 16, 2010
Memorandum of Appeal ) – on the ground that the
implementation of the LA’s order would render its motion for
reconsideration moot and academic.50
Meanwhile, petitioners’ motion for reconsideration of the CA’s
May 18, 2010 Resolution in the Second CA Petition was denied
via a Resolution dated October 4, 2010. 51 This attained finality on
January 10, 2011 for petitioners’ failure to timely appeal the
same.52 Hence, as it stands, only the issues in the First CA
petition are left to be resolved.
Incidentally, in her Comment dated November 15, 2010, Alcaraz
also alleges that petitioners were guilty of forum shopping when
they filed the Second CA Petition pending the resolution of their
motion for reconsideration of the CA’s December 10, 2009
Decision i.e., the decision in the First CA Petition. 53 She also
contends that petitioners have not complied with the certification
requirement under Section 5, Rule 7 of the Rules of Court when
they failed to disclose in the instant petition the filing of the June
16, 2010 Memorandum of Appeal filed before the NLRC. 54
The Issues Before the Court
The following issues have been raised for the Court’s resolution:
(a) whether or not petitioners are guilty of forum shopping and
have violated the certification requirement under Section 5, Rule
7 of the Rules of Court; (b) whether or not Alcaraz was
sufficiently informed of the reasonable standards to qualify her
as a regular employee; (c) whether or not Alcaraz was validly
terminated from her employment; and (d) whether or not the
individual petitioners herein are liable.
The Court’s Ruling
A. Forum Shopping and
Violation of Section 5, Rule 7 NLRC likewise cover different subject matters and causes of
of the Rules of Court.
At the outset, it is noteworthy to mention that the prohibition
against forum shopping is different from a violation of the
certification requirement under Section 5, Rule 7 of the Rules of
Court. In Sps. Ong v. CA,55 the Court explained that:
x x x The distinction between the prohibition against forum
shopping and the certification requirement should by now be too
elementary to be misunderstood. To reiterate, compliance with
the certification against forum shopping is separate from and
independent of the avoidance of the act of forum shopping itself.
There is a difference in the treatment between failure to comply
with the certification requirement and violation of the prohibition
against forum shopping not only in terms of imposable sanctions
but also in the manner of enforcing them. The former constitutes
sufficient cause for the dismissal without prejudice to the filing of
the complaint or initiatory pleading upon motion and after
hearing, while the latter is a ground for summary dismissal
thereof and for direct contempt. x x x. 56
As to the first, forum shopping takes place when a litigant files
multiple suits involving the same parties, either simultaneously
or successively, to secure a favorable judgment. It exists where
the elements of litis pendentia are present, namely: (a) identity
of parties, or at least such parties who represent the same
interests in both actions; (b) identity of rights asserted and relief
prayed for, the relief being founded on the same facts; and (c)
the identity with respect to the two preceding particulars in the
two (2) cases is such that any judgment that may be rendered in
the pending case, regardless of which party is successful, would
amount to res judicata in the other case. 57
In this case, records show that, except for the element of
identity of parties, the elements of forum shopping do not exist.
Evidently, the First CA Petition was instituted to question the
ruling of the NLRC that Alcaraz was illegally dismissed. On the
other hand, the Second CA Petition pertains to the propriety of
the enforcement of the judgment award pending the resolution
of the First CA Petition and the finality of the decision in the
labor dispute between Alcaraz and the petitioners. Based on the
foregoing, a judgment in the Second CA Petition will not
constitute res judicata insofar as the First CA Petition is
concerned. Thus, considering that the two petitions clearly cover
different subject matters and causes of action, there exists no
forum shopping.
As to the second, Alcaraz further imputes that the petitioners
violated the certification requirement under Section 5, Rule 7 of
the Rules of Court58 by not disclosing the fact that it filed the
June 16, 2010 Memorandum of Appeal before the NLRC in the
instant petition.
In this regard, Section 5(b), Rule 7 of the Rules of Court requires
that a plaintiff who files a case should provide a complete
statement of the present status of any pending case if the latter
involves the same issues as the one that was filed. If there is no
such similar pending case, Section 5(a) of the same rule provides
that the plaintiff is obliged to declare under oath that to the best
of his knowledge, no such other action or claim is pending.
Records show that the issues raised in the instant petition and
those in the June 16, 2010 Memorandum of Appeal filed with the
action. In this case, the validity of Alcaraz’s dismissal is at issue
whereas in the said Memorandum of Appeal, the propriety of the
issuance of a writ of execution was in question.
Thus, given the dissimilar issues, petitioners did not have to
disclose in the present petition the filing of their June 16, 2010
Memorandum of Appeal with the NLRC. In any event,
considering that the issue on the propriety of the issuance of a
writ of execution had been resolved in the Second CA Petition –
which in fact had already attained finality – the matter of
disclosing the June 16, 2010 Memorandum of Appeal is now
moot and academic.
Having settled the foregoing procedural matter, the Court now
proceeds to resolve the substantive issues.
B. Probationary employment;
grounds for termination.
A probationary employee, like a regular employee, enjoys
security of tenure. However, in cases of probationary
employment, aside from just or authorized causes of
termination, an additional ground is provided under Article 295
of the Labor Code, i.e., the probationary employee may also be
terminated for failure to qualify as a regular employee in
accordance with the reasonable standards made known by the
employer to the employee at the time of the
engagement.59 Thus, the services of an employee who has been
engaged on probationary basis may be terminated for any of the
following: (a) a just or (b) an authorized cause; and (c) when he
fails to qualify as a regular employee in accordance with
reasonable standards prescribed by the employer. 60
Corollary thereto, Section 6(d), Rule I, Book VI of the
Implementing Rules of the Labor Code provides that if the
employer fails to inform the probationary employee of the
reasonable standards upon which the regularization would be
based on at the time of the engagement, then the said employee
shall be deemed a regular employee, viz.:
(d) In all cases of probationary employment, the employer shall
make known to the employee the standards under which he will
qualify as a regular employee at the time of his engagement.
Where no standards are made known to the employee at that
time, he shall be deemed a regular employee.
In other words, the employer is made to comply with two (2)
requirements when dealing with a probationary employee: first,
the employer must communicate the regularization standards to
the probationary employee; and second, the employer must
make such communication at the time of the probationary
employee’s engagement. If the employer fails to comply with
either, the employee is deemed as a regular and not a
probationary employee.
Keeping with these rules, an employer is deemed to have made
known the standards that would qualify a probationary employee
to be a regular employee when it has exerted reasonable efforts
to apprise the employee of what he is expected to do or
accomplish during the trial period of probation. This goes
without saying that the employee is sufficiently made aware of
his probationary status as well as the length of time of the
probation.
The exception to the foregoing is when the job is self-descriptive
in nature, for instance, in the case of maids, cooks, drivers, or
messengers.61 Also, in Aberdeen Court, Inc. v. Agustin, 62 it has
been held that the rule on notifying a probationary employee of
the standards of regularization should not be used to exculpate
an employee who acts in a manner contrary to basic knowledge
and common sense in regard to which there is no need to spell
out a policy or standard to be met. In the same light, an
employee’s failure to perform the duties and responsibilities
which have been clearly made known to him constitutes a
justifiable basis for a probationary employee’s non-regularization.
In this case, petitioners contend that Alcaraz was terminated
because she failed to qualify as a regular employee according to
Abbott’s standards which were made known to her at the time of
her engagement. Contrarily, Alcaraz claims that Abbott never
apprised her of these standards and thus, maintains that she is a
regular and not a mere probationary employee.
The Court finds petitioners’ assertions to be well-taken.
six (6) months beginning February 15, 2005 to August
14, 2005;
(d) On the day Alcaraz accepted Abbott’s employment
offer, Bernardo sent her copies of Abbott’s
organizational structure and her job description through
e-mail;
(e) Alcaraz was made to undergo a pre-employment
orientation where Almazar informed her that she had to
implement Abbott’s Code of Conduct and office policies
on human resources and finance and that she would be
reporting directly to Walsh;
(f) Alcaraz was also required to undergo a training
program as part of her orientation;
(g) Alcaraz received copies of Abbott’s Code of Conduct
and Performance Modules from Misa who explained to
her the procedure for evaluating the performance of
probationary employees; she was further notified that
Abbott had only one evaluation system for all of its
employees; and
(h) Moreover, Alcaraz had previously worked for another
pharmaceutical company and had admitted to have an
"extensive training and background" to acquire the
necessary skills for her job.63
Considering the totality of the above-stated circumstances, it
cannot, therefore, be doubted that Alcaraz was well-aware that
her regularization would depend on her ability and capacity to
fulfill the requirements of her position as Regulatory Affairs
Manager and that her failure to perform such would give Abbott
a valid cause to terminate her probationary employment.

A punctilious examination of the records reveals that Abbott had

Verily, basic knowledge and common sense dictate that the
indeed complied with the above-stated requirements. This
adequate performance of one’s duties is, by and of itself, an
conclusion is largely impelled by the fact that Abbott clearly
inherent and implied standard for a probationary employee to be
conveyed to Alcaraz her duties and responsibilities as Regulatory
regularized; such is a regularization standard which need not be
Affairs Manager prior to, during the time of her engagement,
literally spelled out or mapped into technical indicators in every
and the incipient stages of her employment. On this score, the
case. In this regard, it must be observed that the assessment of
Court finds it apt to detail not only the incidents which point out
adequate duty performance is in the nature of a management
to the efforts made by Abbott but also those circumstances
prerogative which when reasonably exercised – as Abbott did in
which would show that Alcaraz was well-apprised of her
this case – should be respected. This is especially true of a
employer’s expectations that would, in turn, determine her
managerial employee like Alcaraz who was tasked with the vital
regularization:
responsibility of handling the personnel and important matters of
her department.
(a) On June 27, 2004, Abbott caused the publication in
a major broadsheet newspaper of its need for a
In fine, the Court rules that Alcaraz’s status as a probationary
Regulatory Affairs Manager, indicating therein the job
employee and her consequent dismissal must stand.
description for as well as the duties and responsibilities
Consequently, in holding that Alcaraz was illegally dismissed due
attendant to the aforesaid position; this prompted
to her status as a regular and not a probationary employee, the
Alcaraz to submit her application to Abbott on October
Court finds that the NLRC committed a grave abuse of discretion.
4, 2004;

To elucidate, records show that the NLRC based its decision on

(b) In Abbott’s December 7, 2004 offer sheet, it was
stated that Alcaraz was to be employed on a
probationary status;
(c) On February 12, 2005, Alcaraz signed an
employment contract which specifically stated, inter alia,
that she was to be placed on probation for a period of
the premise that Alcaraz’s receipt of her job description and
Abbott’s Code of Conduct and Performance Modules was not
equivalent to being actually informed of the performance
standards upon which she should have been evaluated on. 64 It,
however, overlooked the legal implication of the other attendant
circumstances as detailed herein which should have warranted a
contrary finding that Alcaraz was indeed a probationary and not
a regular employee – more particularly the fact that she was
well-aware of her duties and responsibilities and that her failure
to adequately perform the same would lead to her non-
regularization and eventually, her termination.
Accordingly, by affirming the NLRC’s pronouncement which is
tainted with grave abuse of discretion, the CA committed a
reversible error which, perforce, necessitates the reversal of its
decision.
C. Probationary employment;
termination procedure.
A different procedure is applied when terminating a probationary
employee; the usual two-notice rule does not govern. 65 Section
2, Rule I, Book VI of the Implementing Rules of the Labor Code
states that "if the termination is brought about by the x x x
failure of an employee to meet the standards of the employer in
case of probationary employment, it shall be sufficient that a
written notice is served the employee, within a reasonable time
from the effective date of termination."
As the records show, Alcaraz's dismissal was effected through a
letter dated May 19, 2005 which she received on May 23, 2005
and again on May 27, 2005. Stated therein were the reasons for
her termination, i.e., that after proper evaluation, Abbott
determined that she failed to meet the reasonable standards for
her regularization considering her lack of time and people
management and decision-making skills, which are necessary in
the performance of her functions as Regulatory Affairs
Manager.66 Undeniably, this written notice sufficiently meets the
criteria set forth above, thereby legitimizing the cause and
manner of Alcaraz’s dismissal as a probationary employee under
the parameters set by the Labor Code.67
D. Employer’s violation of
company policy and
procedure.
Nonetheless, despite the existence of a sufficient ground to
terminate Alcaraz’s employment and Abbott’s compliance with
the Labor Code termination procedure, it is readily apparent that
Abbott breached its contractual obligation to Alcaraz when it
failed to abide by its own procedure in evaluating the
performance of a probationary employee.
Veritably, a company policy partakes of the nature of an implied
contract between the employer and employee. In Parts Depot,
Inc. v. Beiswenger,68 it has been held that:
Employer statements of policy . . . can give rise to contractual
rights in employees without evidence that the parties mutually
agreed that the policy statements would create contractual rights
in the employee, and, hence, although the statement of policy is
signed by neither party, can be unilaterally amended by the
employer without notice to the employee, and contains no
reference to a specific employee, his job description or
compensation, and although no reference was made to the
policy statement in pre-employment interviews and the
employee does not learn of its existence until after his hiring.
Toussaint, 292 N.W .2d at 892. The principle is akin to estoppel.
Once an employer establishes an express personnel policy and
the employee continues to work while the policy remains in
effect, the policy is deemed an implied contract for so long as it
remains in effect. If the employer unilaterally changes the policy,
the terms of the implied contract are also thereby
changed.1âwphi1 (Emphasis and underscoring supplied.)
Hence, given such nature, company personnel policies create an
obligation on the part of both the employee and the employer to
abide by the same.
Records show that Abbott’s PPSE procedure mandates, inter alia,
that the job performance of a probationary employee should be
formally reviewed and discussed with the employee at least
twice: first on the third month and second on the fifth month
from the date of employment. Abbott is also required to come up
with a Performance Improvement Plan during the third month
review to bridge the gap between the employee’s performance
and the standards set, if any. 69 In addition, a signed copy of the
PPSE form should be submitted to Abbott’s HRD as the same
would serve as basis for recommending the confirmation or
termination of the probationary employment.70
In this case, it is apparent that Abbott failed to follow the above-
stated procedure in evaluating Alcaraz. For one, there lies a
hiatus of evidence that a signed copy of Alcaraz’s PPSE form was
submitted to the HRD. It was not even shown that a PPSE form
was completed to formally assess her performance. Neither was
the performance evaluation discussed with her during the third
and fifth months of her employment. Nor did Abbott come up
with the necessary Performance Improvement Plan to properly
gauge Alcaraz’s performance with the set company standards.
While it is Abbott’s management prerogative to promulgate its
own company rules and even subsequently amend them, this
right equally demands that when it does create its own policies
and thereafter notify its employee of the same, it accords upon
itself the obligation to faithfully implement them. Indeed, a
contrary interpretation would entail a disharmonious relationship
in the work place for the laborer should never be mired by the
uncertainty of flimsy rules in which the latter’s labor rights and
duties would, to some extent, depend.
In this light, while there lies due cause to terminate Alcaraz’s
probationary employment for her failure to meet the standards
required for her regularization, and while it must be further
pointed out that Abbott had satisfied its statutory duty to serve a
written notice of termination, the fact that it violated its own
company procedure renders the termination of Alcaraz’s
employment procedurally infirm, warranting the payment of
nominal damages. A further exposition is apropos.
Case law has settled that an employer who terminates an
employee for a valid cause but does so through invalid
procedure is liable to pay the latter nominal damages.
In Agabon v. NLRC (Agabon), 71 the Court pronounced that where
the dismissal is for a just cause, the lack of statutory due
process should not nullify the dismissal, or render it illegal, or
ineffectual. However, the employer should indemnify the
employee for the violation of his statutory rights. 72 Thus, in
Agabon, the employer was ordered to pay the employee nominal
damages in the amount of ₱30,000.00.73
Proceeding from the same ratio, the Court modified Agabon in
the case of Jaka Food Processing Corporation v. Pacot
(Jaka)74 where it created a distinction between procedurally
defective dismissals due to a just cause, on one hand, and those attributes the loss of some of her remaining belongings to
due to an authorized cause, on the other. them.81

It was explained that if the dismissal is based on a just cause Alcaraz’s contention fails to persuade.
under Article 282 of the Labor Code (now Article 296) but the
employer failed to comply with the notice requirement, the A judicious perusal of the records show that other than her
sanction to be imposed upon him should be tempered because unfounded assertions on the matter, there is no evidence to
the dismissal process was, in effect, initiated by an act imputable support the fact that the individual petitioners herein, in their
to the employee; if the dismissal is based on an authorized cause capacity as Abbott’s officers and employees, acted in bad faith or
under Article 283 (now Article 297) but the employer failed to were motivated by ill will in terminating
comply with the notice requirement, the sanction should be
stiffer because the dismissal process was initiated by the
Alcaraz’s services. The fact that Alcaraz was made to resign and
employer’s exercise of his management prerogative. 75 Hence, in
not allowed to enter the workplace does not necessarily indicate
Jaka, where the employee was dismissed for an authorized
bad faith on Abbott’s part since a sufficient ground existed for
cause of retrenchment76 – as contradistinguished from the
the latter to actually proceed with her termination. On the
employee in Agabon who was dismissed for a just cause of
alleged loss of her personal belongings, records are bereft of any
neglect of duty77 – the Court ordered the employer to pay the
showing that the same could be attributed to Abbott or any of its
employee nominal damages at the higher amount of ₱50,000.00.
officers. It is a well-settled rule that bad faith cannot be
presumed and he who alleges bad faith has the onus of proving
Evidently, the sanctions imposed in both Agabon and Jaka it. All told, since Alcaraz failed to prove any malicious act on the
proceed from the necessity to deter employers from future part of Abbott or any of its officers, the Court finds the award of
violations of the statutory due process rights of employees. 78 In moral or exemplary damages unwarranted.
similar regard, the Court deems it proper to apply the same
principle to the case at bar for the reason that an employer’s
WHEREFORE, the petition is GRANTED. The Decision dated
contractual breach of its own company procedure – albeit not
December 10, 2009 and Resolution dated June 9, 2010 of the
statutory in source – has the parallel effect of violating the
Court of Appeals in CA-G.R. SP No. 101045 are hereby
laborer’s rights. Suffice it to state, the contract is the law
REVERSED and SET ASIDE. Accordingly, the Decision dated
between the parties and thus, breaches of the same impel
March 30, 2006 of the Labor Arbiter is REINSTATED with the
recompense to vindicate a right that has been violated.
MODIFICATION that petitioner Abbott Laboratories, Philippines
Consequently, while the Court is wont to uphold the dismissal of
be ORDERED to pay respondent Pearlie Ann F. Alcaraz nominal
Alcaraz because a valid cause exists, the payment of nominal
damages in the amount of ₱30,000.00 on account of its breach
damages on account of Abbott’s contractual breach is warranted
of its own company procedure.
in accordance with Article 2221 of the Civil Code. 79

SO ORDERED.
Anent the proper amount of damages to be awarded, the Court
observes that Alcaraz’s dismissal proceeded from her failure to
comply with the standards required for her regularization. As ESTELA M. PERLAS-BERNABE
such, it is undeniable that the dismissal process was, in effect, Associate Justice
initiated by an act imputable to the employee, akin to dismissals
due to just causes under Article 296 of the Labor Code.
Therefore, the Court deems it appropriate to fix the amount of
nominal damages at the amount of ₱30,000.00, consistent with
its rulings in both Agabon and Jaka.

E. Liability of individual
petitioners as corporate
officers.

It is hornbook principle that personal liability of corporate

directors, trustees or officers attaches only when: (a) they
assent to a patently unlawful act of the corporation, or when
they are guilty of bad faith or gross negligence in directing its
affairs, or when there is a conflict of interest resulting in
damages to the corporation, its stockholders or other persons;
(b) they consent to the issuance of watered down stocks or
when, having knowledge of such issuance, do not forthwith file
with the corporate secretary their written objection; (c) they
agree to hold themselves personally and solidarily liable with the
corporation; or (d) they are made by specific provision of law
personally answerable for their corporate action. 80

In this case, Alcaraz alleges that the individual petitioners acted

in bad faith with regard to the supposed crude manner by which
her probationary employment was terminated and thus, should
be held liable together with Abbott. In the same vein, she further
 THIRD DIVISION
[G.R. No. L-80383. September 26, 1988.]
REV. FR. EMMANUEL LABAJO, personally and in his
capacity as Director of San Andres High School,
Maramag, Bukidnon, and, SAN ANDRES HIGH SCHOOL
OF MARAMAG, INCORPORATED, Petitioners, v. PUREZA
V. ALEJANDRO, ZENAIDA S. DAHILAN, JOSEPHINE A.
CHAN, HERNANI C. MIAGUE, OPHELIA M. MIAGUE,
ROLANDO T. AMAR and The HON. NATIONAL LABOR
RELATIONS COMMISSION, Respondents.
Jesus V . Agana, for Petitioners.
The Office of the Solicitor General for public Respondent.
Rodolfo M. Tan for Private Respondents.
SYLLABUS
1. LABOR LAW; LABOR CODE; TERMINATION OF EMPLOYMENT
PROBATIONARY AND CONTRACTUAL EMPLOYEES; MANUAL OF
REGULATIONS FOR PRIVATE SCHOOLS; MAXIMUM PERIOD OF
PROBATIONARY EMPLOYMENT. — Considering first the nature of
private respondents’ employment, we note that the applicability
in this case of paragraph 75 of the Manual of Regulations for
Private Schools is not disputed by the parties. The three (3)-year
period of service mentioned in paragraph 75 above is of course
the maximum period or upper limit, so to speak, of probationary
employment allowed in the case of private school teachers. This
necessarily implies that a regular or permanent employment
status may, under certain conditions, be attained in less than
three (3) years. By and large, however, whether or not one has
indeed attained permanent status in one’s employment, before
the passage of three (3) years, is a matter of proof. The
evidence of record shows that none of the six (6) private
respondents had been able to accumulate at least three (3)
years of service with the San Andres High School at the time of
their separation therefrom. Moreover, it is the length of time Mr.
Amar has been teaching at petitioner High School that is material
in determining whether or not he in fact is qualified as a regular
employee thereof. And, as already mentioned, at the time of
receipt by him of Fr. Labajo’s letter, private respondent Amar
had been employed three (3) years.
2. ID.; ID.; ID.; ID.; EMPLOYMENT ENDS AT THE EXPIRATION
OF CONTRACT. — What appears clearly from the record,
therefore, is that all of the six (6) private respondents in this
case were at the time they received the disputed letter of Fr.
Labajo, non-permanent, contractual employees of the San
Andres High School. As probationary and contractual employees,
private respondents enjoyed security of tenure, but only to a
limited extent — i. e., they remained secure in their employment
during the period of time their respective contracts of
employment remained in effect. That temporary security of
tenure, however, ended the moment their employment contracts
expired on 31 March 1985 and petitioners declined to renew the
same for the next succeeding school year. Consequently, as
petitioners were not under obligation to renew those contracts of
employment, the separation of private respondents in this case
cannot be said to have been without justifiable cause, much less
illegal.
3. ID.; ID.; ID.; ID.; ID.; NOTICE OF TERMINATION IS A
REMINDER OF EXPIRATION OF CONTRACT. — We note that
private respondents were informed in writing by petitioner Fr.
Labajo that their services at the San Andres High School would
be "terminated" effective 31 March 1985. Private respondents
claim that this allegedly "unusual antedated letter of termination"
did not sufficiently inform them of the reasons for their
dismissal, nor did the same satisfy the due process requirements
in termination cases. These contentions, however, appear to
ignore the fact that private respondents’ employment at
petitioner High School was on a contractual basis and for a
stipulated period of time: both parties knew beforehand that the
employment relation would come to an end on 31 March 1985.
In view of these circumstances, Fr. Labajo’s letter cannot
properly be regarded as one of termination. The use of the word
"terminated" was inept and unfortunate but need not preclude
recognition of the real nature of that letter. Such letter was
either a formal reminder to private respondents that their
respective contracts of employment with petitioners for school
year 1984-1985 were due to expire on 31 March 1985, or
advance notice that such contracts would no longer be renewed
for school year 1985-1986, or both. Assuming (though merely
arguendo) that prior notice of expiration of the contractual term
was necessary in this case, we consider that Fr. Labajo’s letter
substantially complied with that requirement.
DECISION
FELICIANO, J.:
The present "Petition for Certiorari with Preliminary Injunction
and/or Restraining Order" is directed at: (a) the Resolution of
the National Labor Relations Commission dated 8 May 1987
which affirmed the 18 November 1985 Decision of the Labor
Arbiter in NLRC RAB X Case No. 5-0410-85; and (b) the
Commission’s Resolution dated 17 July 1987 denying petitioners’
Motion for Reconsideration.
The background facts are as follows:chanrob1es virtual 1aw
library
The six (6) private respondents had all been contracted by
petitioners to work as classroom teachers at the San Andres
High School, a private learning institution situated in Maramag,
Bukidnon. Private respondents Pureza V. Alejandro and Rolando
T. Amar were assigned to handle petitioner High School’s regular
day classes; private respondents Zenaida S. Dahilan, Josephine
A. Chan, Hernani C. Miague and Ophelia M. Miague, upon the
other hand, were assigned to handle the school’s special evening
classes.
On 3 June 1985, private respondents filed a Complaint 1
(docketed as NLRC RAB X Case No. 5-0410-85) with Regional
Arbitration Branch No. 10 (Cagayan de Oro City) of the then
Ministry of Labor and Employment, alleging that they had each
received on 29 March 1985 from petitioner Fr. Emmanuel Labajo,
Director of the San Andres High School, a copy of the following
letter:jgc:chanrobles.com.ph
"March 13, 1985
(Name omitted)

Maramag, Bukidnon
Dear (Name omitted):chanrob1es virtual 1aw library
Please be informed that your service at the San Andres High
School will be terminated effective March 31, 1985.
Thank you for all services you have rendered to the school.
Very truly yours,
(Sgd.) Fr. Emmanuel Labajo
Director"
Private respondents alleged that their dismissal by petitioner
High School was without justifiable cause and in violation of their
rights to due process and security of tenure. It was also alleged
that petitioners had failed to pay private respondents the full
amounts corresponding to certain employment benefits (i.e.,
daily wages, basic pay, service incentive leave, sick leave, and
cost of living allowance) granted to the latter under labor laws.
Prayers for reinstatement and payment of the stated
differentials, including moral and exemplary damages, attorney’s
fees, and litigation expenses, closed out the complaint. In a
subsequent Position Paper 2 dated 21 June 1985, private
respondents set out the total amount of monetary claims against
petitioners at P177,831.39, plus 10% thereof.
Petitioners filed their own Position Paper 3 where it was admitted
that private respondents had not been paid in full the
employment benefits enumerated by the latter in their
complaint. It was alleged, however, that private respondents,
prior to their acceptance of teaching jobs at the San Andres High
School, "were already made aware that the school could not give
them everything due them under existing laws" and, hence,
were estopped from claiming such benefits. Petitioners, further,
denied having dismissed illegally any of the six (6) private
respondents and, in turn, alleged that each of the latter were, at
the time of their dismissal, merely probationary employees of the
San Andres High School whose services thereat were terminated
for just cause — i.e., upon expiration on 31 March 1985 of their
respective contracts of employment with petitioner High School
— and before any of them had achieved regular or permanent
status in their jobs. With respect to private respondents Amar
and Alejandro, allegations of estafa committed by the two
against a number of their pupils were raised as additional
grounds for their dismissal. Finally, Petitioners, while they
acknowledged an indebtedness of P52,173.67 to private
respondents, interposed a counterclaim for moral and exemplary
damages, attorney’s fees, and litigation expenses, in the
aggregate amount of P64,000.00.
On 18 November 1985, the Labor Arbiter rendered a Decision, 4
the dispositive portion of which read:jgc:chanrobles.com.ph
"WHEREFORE, premises considered, judgment is hereby entered
in favor of Complainants and against Respondent:chanrob1es
virtual 1aw library
(1) Ordering Respondent to reinstate Complainants to their
former positions with three (3) months backwages without
qualification and deduction;
(2) Ordering Respondents to pay Complainants the sum of
P52,173.67.
The claim for moral and exemplary damages [is] dismissed for
lack of merits.
The counterclaim filed by Respondent is dismissed for lack of
jurisdiction.
SO ORDERED."cralaw virtua1aw library
The Labor Arbiter held that dismissal of the six (6) private
respondents in this case "was violative of the Constitution which
guarantees security of tenure of employment and a provision of
Batas Pambansa Blg. 130 which requires notice and investigation
before outright termination from the service." The Labor Arbiter
also held that, contrary to the claim of petitioners, private
respondents were not under probation at the time of their
dismissal; even assuming that private respondents were then
merely probationary employees of and under contract with
petitioner High School, nevertheless, they could only be
dismissed for cause and only after having been accorded due
process. Finally, the Labor Arbiter cited a letter, 5 dated 9 April
1985, addressed to the private respondents and written by Mr.
Jose M. Veloso, Regional Supervisor for Private Schools (Regional
Office No. 10, Cagayan de Oro City) of the then Ministry of
Education, Culture and Sports, stating, among other things, that
"the Ministry sees no ground for your [private respondents’]
termination, suspension or separation."cralaw virtua1aw library
In a Resolution 6 dated 8 May 1987, public respondent National
Labor Relations Commission, affirmed on appeal the decision of
the Labor Arbiter. 7 A Motion for Reconsideration filed by
petitioners was denied by the Commission. 8
The petitioners are now before this Court on Petition
for Certiorari. On 14 October 1987, the Court issued a temporary
restraining order in this case, 9 and on 6 January 1988, gave
due course to the Petition and required the parties to submit
their respective Memoranda. 10
The two (2) main issues presented for consideration are: (1)
whether or not the private respondents were illegally dismissed
by petitioners; and (2) whether or not reinstatement of all six (6)
private respondents is proper in this case.
Petitioners deny having illegally dismissed any of the private
respondents. In their Petition, it is contended once more that
private respondents were all probationary employees of the San
Andres High School at the time of their separation therefrom;
that private respondents’ right to due process had not been
violated; and that there existed in this case justifiable cause for
private respondents’ separation from petitioner High School.
Considering first the nature of private respondents’ employment,
we note that the applicability in this case of paragraph 75 of the
Manual of Regulations for Private Schools is not disputed by the
parties. The provision reads:jgc:chanrobles.com.ph
"(75) Full-time teachers who have rendered three years of
satisfactory service shall be considered permanent." ( Emphasis
supplied).
The three (3)-year period of service mentioned in paragraph 75
above is of course the maximum period or upper limit, so to
speak, of probationary employment allowed in the case of
private school teachers. This necessarily implies that a regular or
permanent employment status may, under certain conditions, be
attained in less than three (3) years. By and large, however,
whether or not one has indeed attained permanent status in
one’s employment, before the passage of three (3) years, is a
matter of proof.
The evidence of record shows that none of the six (6) private
respondents had been able to accumulate at least three (3)
years of service with the San Andres High School at the time of
their separation therefrom. Private respondents Zenaida S.
Dahilan, Josephine A. Chan, Ophelia M. Miague and Hernani C.
Miague openly admitted in their own Position Paper filed with the
Labor Arbiter that, as of 31 March 1985, they were actually then
still probationary employees of petitioner High School. Private
respondents Rolando T. Amar and Pureza V. Alejandro, however,
asserted that they had both been made regular employees of
petitioner High School prior to dismissal therefrom and hence,
enjoyed security of tenure. On this point, private respondent
Amar argued that the twelve (12) years of teaching experience
he had accumulated prior to his acceptance of employment at
petitioner High School in June of 1982, qualified him as a regular
employee thereof. For her part, private respondent Alejandro
asserted in the main that her appointment on 27 April 1984 as
"Night Principal" of the San Andres High School — after having
served a year thereat as a non-regular full-time teacher —
amounted to a promotion which raised her status to that of a
regular employee at petitioner High School.
The contention of private respondent Amar is not persuasive.
First of all, aside from the assertions of private respondents in
their own pleadings, the record is bereft of evidence of Mr.
Amar’s supposed extensive prior teaching experience. Second, it
is the length of time Mr. Amar has been teaching at petitioner
High School that is material in determining whether or not he in
fact qualified as a regular employee thereof. Third, as already
mentioned at the time of receipt by him of Fr. Labajo’s letter,
private respondent Amar had been employed by the San Andres
High School for less than three (3) years. Private respondents
have not shown, and the record is bare of evidence to show that
petitioner High School had otherwise extended to Mr. Amar a
regular and permanent appointment prior to Fr. Labajo’s letter.
The contention of private respondent Alejandro is likewise not
persuasive. As previously stated, Ms. Alejandro lacked the
requisite number of years of service to qualify as a regular
employee of petitioner High School: Ms. Alejandro had taught
there for at most only two (2) years. Furthermore, mere
appointment as "Night Principal" is not, by itself and absent any
additional evidence, sufficient proof that her employment status
had in fact been upgraded from probationary to regular. What
appears clearly from the record, therefore, is that all of the six
(6) private respondents in this case were at the time they
received the disputed letter of Fr. Labajo, non-permanent,
contractual employees of the San Andres High School.
The Court notes that the contracts of employment entered into
by the San Andres High School separately with each of the six
(6) private respondents stipulated, among others: (a) that
employment of the individual concerned took effect at the
beginning of the school year, or sometime in the month of June;
and (b) that payment of that individual’s salary would be made
"every month for 10 months." 11 We read these stipulations
together to mean that such contracts each had an effective term
often (10) months, i.e., from June until either March or April of
the following year, excluding the two-month summer holiday
period between school years. New contracts for another period
of ten (10) months were negotiated between petitioner High
School and private respondents at the beginning of each school
year. It does not appear from the record or from the stipulations
in those contracts, however, that renewal was obligatory upon
either party. In this case, between 1982 and 1985, petitioner
High School gave Mr. Amar three (3) consecutive and Ms.
Alejandro two (2) consecutive ten-month contracts; Mr. Miague
and Ms. Miague, upon the other hand, were each given two (2)
non-consecutive ten-month contracts during that same period of
time while Ms. Dahilan was contracted only for school year 1984-
1985. With the exception possibly of private respondent Chan,
who taught at petitioner High School merely on a part-time basis
and only for a few months in 1984 and 1985, private
respondents’ employment contracts for the school year 1984-
1985 provided a term of ten (10) months and took effect on 1
June 1984; those contracts were thus due to expire on 31 March
1985.
We note that private respondents were informed in writing 12 by
petitioner Fr. Labajo that their services at the San Andres High
School would be "terminated" effective 31 March 1985. Private
respondents claim that this allegedly "unusual antedated letter of
termination" did not sufficiently inform them of the reasons for
their dismissal, nor did the same satisfy the due process
requirements in termination cases. These contentions, however,
appear to ignore the fact that private respondents’ employment
at petitioner High School was on a contractual basis and for a
stipulated period of time: both parties knew beforehand that the
employment relation would come to an end on 31 March 1985.
In view of these circumstances, Fr. Labajo’s letter cannot
properly be regarded as one of termination. The use of the word
"terminated" was inept and unfortunate but need not preclude
recognition of the real nature of that letter. Such letter was
either a formal reminder to private respondents that their
respective contracts of employment with petitioners for school
year 1984-1985 were due to expire on 31 March 1985, or
advance notice that such contracts would no longer be renewed
for school year 1985-1986, or both. Assuming (though merely
arguendo) that prior notice of expiration of the contractual term
was necessary in this case, we consider that Fr. Labajo’s letter
substantially complied with that requirement.
Coming now to the matter of the existence of justifiable grounds
for the disputed separation, we find applicable here Biboso v.
Victorias Milling Company, Inc., 13 a case which also involved
the separation of private school teachers, probationary
employees who had been covered similarly by corresponding
contracts of employment. The Court, speaking through then Mr.
Justice Fernando, stated in that case:jgc:chanrobles.com.ph
"2. This is by no means to assert that the security of tenure
protection of the Constitution does not apply to probationary
employees. The Labor Code has wisely provided for such a case
thus: ‘The termination of employment of probationary employees
and those employed with a fixed period shall be subject to such
regulations as the Secretary of Labor may prescribe to prevent
the circumvention of the right of the employees to be secured in
their employment as provided herein.’ There is no question here,
as noted in the assailed order of Presidential Executive Assistant
Clave, that petitioners did not enjoy a permanent status. During
such period they could remain in their positions and any
circumvention of their rights, in accordance with the statutory
scheme, subject to inquiry and thereafter correction by the
Department of Labor. Thus there was the safeguard as to the
duration of their employment being respected. To that extent,
their tenure was secured. The moment, however, the period
expired in accordance with contracts freely entered into, they
could no longer invoke the constitutional protection. . . ." 14
(Emphasis supplied).

In view of all the foregoing, we hold that none of the six (6)
private respondents in this case, at the time of their separation,
had achieved permanent status in their employment as teachers
at the San Andres High School. As probationary and contractual
employees, private respondents enjoyed security of tenure, but
only to a limited extent — i. e., they remained secure in their
employment during the period of time their respective contracts
of employment remained in effect. That temporary security of
tenure, however, ended the moment their employment contracts
expired on 31 March 1985 and petitioners declined to renew the
same for the next succeeding school year. Consequently, as
petitioners were not under obligation to renew those contracts of
employment, the separation of private respondents in this case
cannot be said to have been without justifiable cause, much less
illegal.

Since the six (6) private respondents were not illegally

dismissed, the twin remedies of reinstatement and backwages
are not available to them. Finally, the Court notes that
petitioners had willingly acknowledged an indebtedness of
P52,173.67 in favor of private respondents, although they
interposed in turn a counterclaim against the six (6) for
P64,000.00 for moral and exemplary damages and litigation
expenses which public respondent Commission, however,
subsequently dismissed for lack of merit. In respect of the latter,
we note that petitioners have not shown here any grave abuse
of discretion on the part of public respondent Commission. Thus,
the Court affirms the decision appealed from to the extent that
such decision: (a) holds petitioners liable to private respondents
in the amount of P52,173.67; and (b) dismisses petitioners’
counterclaim.

WHEREFORE, the Resolution of the public respondent National

Labor Relations Commission dated 8 May 1987 in NLRC RAB X
Case No. 5-0410-85 is hereby SET ASIDE, except for the portion
thereof ordering the dismissal of petitioners’ counterclaim, and
directing petitioners to pay the amount of P52,173.67 in favor of
private respondents. No pronouncement as to costs.

SO ORDERED.