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ILAW at BUKLOD ng MANGGAGAWA vs.

NLRC 198 S SCRA 586NARVASA; June 27, 1991 FACTS -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." -Union claims that demand was ignored- 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 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." 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.-This abandonment of the long-standing schedule of work and the reversion to the eight-hour shift apparently caused s substantial losses to SMC.-SMC filed with the Arbitration Branch of the National Labor Relations Commission a complaint against the Union and its members "to declare the strike or slowdown illegal" and to terminate the e employment of the union officers and shop stewards. -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.

ISSUE: Whether or not the strike is legal in the resolution of wage distortion. RULING: The strike involving the issue of wage distortion is illegal as a means of resolving it. The legality of these activities is usually dependent on the legality of the purposes sought to be attained and the means employed therefore. It goes without saying that these joint or coordinated activities may be forbidden or restricted by law or contract. In the 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 states that 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 there from 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. 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." [GR 113907, 20 April 2001] Malayang Samahan ng mga Manggagawasa M. Greenfield (MSMG-UWP) vs. Ramos FACTS: [28 February 2000 decision; Purisima] MalayangSamahanngmgaManggagawasa M. Greenfield, Inc., (B) (MSMG, the "local union"), is an affiliate of United Lumber and General Workers of the Philippines (ULGWP, the "federation"). On 12 September 1986, a local union election was held under the auspices of the ULGWP wherein MSMG-UWP, Beda Magdalena Villanueva, and the other union officers were proclaimed as winners. Minutes of said election were duly filed with the Bureau of Labor Relations on 29 September 1986. On 21 March 1987, a Petition for Impeachment was filed with the national federation ULGWP by the defeated candidates in the aforementioned election. On 16 June 1987, the federation conducted an audit of the local union-funds. The investigation. did not yield any unfavorable result and the local union. officers were cleared of the charges of anomaly in the custody, handling and disposition of the union funds. The 14 defeated candidates filed a Petition for Impeachment/Expulsion of the local union officers with the DOLE NCR on 5 November 1987 (NCROD-M-11-780-87). However, the same was dismissed on 2 March 1988, by Med-Arbiter Renato Parungo for failure to substantiate the charges and to present evidence in support of the allegations. On 17 April 1988, the local union held a general membership meeting at the Caruncho Complex in Pasig. Several union members failed to attend the meeting, prompting the Executive Board to create a committee tasked to investigate the non-attendance of several union members in the said assembly, pursuant to Sections 4 and 5, Article V of the Constitution and ByLaws of the union. On 27 June 1988, the local union wrote ULGWP a letter requesting it to deduct the union fines from the wages/salaries of those union members who failed to attend the general membership meeting. In a Memorandum dated 3 July 1988, the Secretary General of the national federation, GodofredoPaceo, Jr. disapproved the resolution of the local union imposing the P50.00 fine. The union officers protested such action by the Federation in a Reply dated 4 July 1988. On 11 July 1988, the federation wrote M. Greenfield (B) a letter advising the latter not to deduct the fifty-peso fine from the salaries of the union members. The following day, the company sent a reply to MSMG's request in a letter, stating that it cannot deduct fines from the employees'

salary without going against certain laws. The company suggested that the union refer the matter to the proper government office for resolution in order to avoid placing the company in the middle of the issue. The imposition of P50.00 fine became the subject of bitter disagreement between the Federation and the local union culminating in the latter's declaration of general autonomy from the former through Resolution 10 passed by the local executive board and ratified by the general membership on 16 July 1988. In retaliation, the national federation asked the company to stop the remittance of the local union's share in the education funds effective August 1988. This was objected to by the local union which demanded that the education fund be remitted to it in full. The company was thus constrained to file a Complaint for Interpleader with a Petition for Declaratory Relief with the Med-Arbitration Branch of the Department of Labor and Employment (Case OD-M-8-435-88). This was resolved on 28 October 1988, by Med-Arbiter AnastacioBactin in an Order, ordering (1) That the United Lumber and General Workers of the Philippines (ULGWP) through its local union officers shall administer the collective bargaining agreement (CBA); (2) That the company shall remit the P10,000.00 monthly labor education program fund to the ULGWP subject to the condition that it shall use the said amount for its intended purpose. and (3) that the Treasurer of the MSMG shall be authorized to collect from the 356 union members the amount of P50.00 as penalty for their failure to attend the general membership assembly on 17 April 1988. However, if the MSMG Officers could present the individual written authorizations of the 356 union members, then the company is obliged to deduct from the salaries of the 356 union members the P50.00 fine." On appeal, Director Pura-FerrerCalleja issued a Resolution dated 7 February 1989, which modified in part the earlier disposition, to the extent that the company should remit the amount of P5,000.00 of the P10,000.00 monthly labor education program fund to ULGWP and the other P5,000.00 to MSMG, both unions to use the same for its intended purpose." Meanwhile, on 2 September 1988, several local unions (Top Form, M. Greenfield, Grosby, Triumph International, General Milling, and Vander Hons chapters) filed a Petition for Audit and Examination of the federation and education funds of ULGWP which was granted by Med-Arbiter Rasidali Abdullah on 25 December 1988 in an Order which directed the audit and examination of the books of account of ULGWP. On 30 September 1988, the officials of ULGWP called a Special National Executive Board Meeting at Nasipit, Agusan del Norte where a Resolution was passed placing the MSMG under trusteeship and appointing

Cesar Clarete as administrator. On 27 October 1988, the said administrator wrote the company informing the latter of its designation of a certain Alfredo Kalingking as local union president and "disauthorizing" the incumbent union officers from representing the employees. This action by the national federation was protested by the MSMG in a letter to the company dated 11 November 1988. On 13 November 1988, MSMG union officers received identical letters from the administrator requiring them to explain within 72 hours why they should not be removed from their office and expelled from union membership. On 26 November 1988, MSMG replied, However, as early as 21 November 1988, the officers were expelled from the ULGWP. On the same day, the federation advised respondent company of the expulsion of the 30 union officers and demanded their separation from employment pursuant to the Union Security Clause in their collective bargaining agreement. This demand was reiterated twice, through letters dated February 21 and March 4, 1989, respectively, to the company. Thereafter, the Federation filed a Notice of Strike with the National Conciliation and Mediation Board to compel the company to effect the immediate termination of the expelled union officers. On 7 March 1989, under the pressure of a threatened strike, the company terminated the 30 union officers from employment, serving them identical copies of the termination letter, The expelled union officers assigned in the first shift were physically or bodily brought out of the company premises by the company's security guards. Likewise, those assigned to the second shift were not allowed to report for work. this provoked some of the members of the local union to demonstrate their protest for the dismissal of the said union officers. Some union members left their work posts and walked out of the company premises. On the other hand, the Federation, having achieved its objective, withdrew the Notice of Strike filed with the NCMB. On 8 March 1989, MSMG filed a Notice of Strike with the NCMB, DOLE, Manila (NCMB-NCR-NS03-216-89). The following day, a strike vote referendum was conducted and out of 2,103 union members who cast their votes, 2,086 members voted to declare a strike. On 10 March 1989, the 30 dismissed union officers filed an urgent petition (NCMB-NCR-NS-03-216-89), with the Office of the Secretary of the Department of Labor and Employment praying for the suspension of the effects of their termination from employment. However, the petition was dismissed by then Secretary Franklin Drilon on 11 April 1989. On March 13 and 14, 1989, a total of 78 union shop stewards were placed under preventive suspension by the company. This prompted the union members to again stage a walk-out and resulted in the official declaration of strike at around 3:30 p.m. of 14 March 1989. The strike was attended with violence,

force and intimidation on both sides resulting to physical injuries to several employees, both striking and nonstriking, and damage to company properties. The employees who participated in the strike and allegedly figured in the violent incident were placed under preventive suspension by the company. The company also sent return to-work notices to the home addresses of the striking employees thrice successively, on March 27, April 8 and April 31, 1989, respectively. However, only 261 employees were eventually accepted back to work. Those who did not respond to the return-to-work notice were sent termination letters dated 17 May 1989. On 7 August 1989, MSMG filed a verified complaint with the Arbitration Branch, National Capital Region, DOLE, Manila, (NCR -00-09-04199-89), charging the corporation, etc. of unfair labor practice which consists of union busting, illegal dismissal, illegal suspension interference in union activities, discrimination, threats, intimidation, coercion, violence, and oppression. After the filing of the complaint, the lease contracts on the company's office and factory at Merville Subdivision, Paraaque expired and were not renewed. Upon demand of the owners of the premises, the company was compelled to vacate its office and factory. Thereafter, the company transferred its administration and account/client servicing department at AFP-RSBS Industrial Park in Taguig, Metro Manila. For failure to find a suitable place in Metro Manila for relocation of its factory and manufacturing operations, the company was constrained to move the said departments to Tacloban, Leyte. Hence, on 16 April 1990, the company accordingly notified its employees of a temporary shutdown. in operations. Employees who were interested in relocating to Tacloban were advised to enlist on or before 23 April 1990. On 15 December 1992, finding the termination to be valid in compliance with the union security clause of the collective bargaining agreement, Labor Arbiter Cresencio Ramos dismissed the complaint. MSMG then appealed to the NLRC. The First Division affirmed the Labor Arbiter's disposition. With the denial of their motion for reconsideration on 28 January 1994, MSMG elevated the case to the Supreme Court. The Supreme Court on 28 February 2000, ordered M. Greenfield to immediately reinstate the affected employees and officers to their respective positions; that should reinstatement be not feasible, said company shall pay separation pay of one month salary for every year of service; that since the affected employees and officers were terminated without the requisite written notice at least 30 days prior to their termination, the company was ordered to pay full backwages to the affected employees while the Federation was ordered to pay full backwages

to the affected union officers who were dismissed upon its instigation; that since the dismissal of the affected employees and officers was without cause, backwages are to be computed from the time the affected employees and union officers were dismissed until their actual reinstatement, and that should reinstatement be not feasible, their backwages shall be computed from the time the affected employees and officers were terminated until the finality of the Court's decision; with costs against the company. In the decision, the court held that the company officials cannot be held personally liable for damages on account of the employees' dismissal because the employer corporation has a personality separate and distinct from its officers who merely acted as its agents. MSMG-UWG filed a motion for partial reconsideration. ISSUE: Whether the company officials cannot be held personally liable for damages on account of employees' dismissal because the employer corporation has a personality separate and distinct from its officers who merely acted as its agents. HELD: A corporation is a juridical entity with legal personality separate and distinct from those acting for and in its behalf and, in general from the people comprising it. The rule is that obligations incurred by the corporation, acting through its directors, officers and employees, are its sole liabilities. True, solidary liabilities may at times be incurred but only when exceptional circumstances warrant such as, generally, in the following cases: (1) When directors and trustees or, in appropriate cases, the officers of a corporation (a) Vote for or assent to patently unlawful acts of the corporation; (b) act in bad faith or with gross negligence in directing the corporate affairs; (c) are guilty of conflict of interest to the prejudice of the corporation, its stockholders or members, and other persons. (2) When a director or officer has consented to the issuance of watered stocks or who, having knowledge thereof, did not forthwith file with the corporate secretary his written objection thereto. (3) When a director, trustee or officer has contractually agreed or stipulated to hold himself personally and solidarily liable with the Corporation. (4) When a director, trustee or officer is made, by specific provision of law, personally liable for his corporate action. In labor cases, particularly, the Court has held corporate directors and officerssolidarily liable with the corporation for the termination of employment of corporate employees done with malice or in bad faith. Bad faith or negligence is a question of fact and is evidentiary. It has been held that bad faith does not connote bad judgment or negligence; it imports a dishonest purpose or some moral obliquity and conscious doing of wrong; it means breach of a known

duty thru some motive or interest or ill will; it partakes of the nature of fraud. Herein, there is nothing substantial on record to show that the corporate officers acted in patent bad faith or were guilty of gross negligence in terminating the services of the affected employees and officers so as to warrant personal liability. ALLIED BANKING CORP v NLRC (ALLIED BANKING EMPLOYEES UNION-NUBE et al) 258 SCRA 724 HERMOSISIMA; July 12, 1996 FACTS - The dispute between petitioner and Union started when their CBA which was to expire on June 30, 1984 came up for renewal. They failed to reach an amicable settlement particularly on the wage increase issue. The Union filed a notice of strike with the Bureau of Labor Relations. - On Dec 16, 1984, then Minister of Labor and Employment, Blas Ople assumed jurisdiction over the dispute pursuant to Article 263 (g) LC. The orders enjoined the Union from declaring a strike and the management from effecting a lock out. The orders notwithstanding, Union filed on Dec 20, 1984, a report on the results of the strike vote that it earlier conducted. On Jan 3, 985, Union staged a strike upon the Union president's contention that the Labor Minister's a assumption order was a mere scrap of paper. - On Jan 4, 1985, petitioner filed with MOLE a Manifestation and Urgent Motion praying for a return-to-work order. On Jan 6, 1985, Minister Ople granted the motion and issued a return-to-work order which included a P1,000.00 grant per employee chargeable to future CBA benefits. - Minister Ople directed the parties to continue negotiations until Jan 31, 1985; otherwise, if no compromise agreement is reached, he will personally r resolve the bargaining deadlock.- The parties failed to break the deadlock; Minister Ople directed them to incorporate in their collective agreement the awards granted in his order. - On Feb 11, 1985, "certain members of the Union resumed the strike and, on the following days, acts of violence were committed . . . resulting in the filing of criminal charges against some of the strikers." - Petitioner, through notices published in the Bulletin Today, the Times Journal, and the Daily Express, directed the striking employees to return to work not later t than 1:00 p.m. of Feb 13, 1985.- respondents failed to report for work on the stated deadline, and explained that the resumption of their picketing activities was brought about by their belief that Minister Ople's decision

was not based on justice, equity and reason. Petitioner issued notices of their termination. - Meeting the Union demands halfway, Minister Ople issued a Resolution modifying his Jan 31, 1985 Order, and so the union lifted its picket lines and notified petitioner 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 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. - Union then filed with SC a petition for certiorari, with a prayer for the issuance of a preliminary mandatory injunction, asking that the 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. SC remanded the petition to MOLE, with the instruction to resolve all pending factual and legal issues relative to the petition. - Minister Augusto Sanchez, 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 filed a petition with the SC to nullify the aforesaid Order. - SC issued resolution: 1) granting "a Temporary Restraining Order" enjoining enforcement of the order of the Minister of Labor and Employment only insofar as it directs the payment of back wages, allowances, and other benefits due to private respondents effective March 11, 1985 until their actual reinstatement; 2) ordering 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 the case. ISSUE: WON the striking union members terminated for abandonment of work after failing to obey the return-towork order of the Secretary of Labor and Employment should be reinstated with back wages.

HELD: NO. The 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. An award of back wages is incompatible with the findings of the NLRC upholding the dismissal of respondents. - Mere participation of union members in an illegal strike should not automatically result in their termination from employment. However, 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. - The provisions of law which govern the effects of d defying a return-to- work order are:1) Article 263 (g) of t the Labor Codexxx xxx xxx 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 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 s 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 s strike.- Union of Filipro Employees v. Nestle Philippines, Inc.: xxx the underlying principle embodied in Art. 263 (g) on the settlement of labor disputes... 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-towork orders, citing unfair labor practices on the part of t the company, to justify their actions. . . .xxxxxx xxx- 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 i interest.- Sarmiento v. Tuico, and Asian Transmission Corporation v. National Labor Relations Commission: 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... The worker can of course give up his work, thus severing his tieswith 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. Disposition NLRC Decision is AFFIRMED with respect to the finding that private respondents were validly

dismissed. As to the issue of reinstatement and computation of back wages, the same, being inconsistent with the finding of valid dismissal, is ANNULLED and SET ASIDE. CHUAYUCO STEEL MANUFACTURING CORPORATION AND/OR EDWIN CHUA vs. BUKLOD NG MANGGAGAWA SA CHUAYUCO STEEL MANUFACTURING CORPORATION 513 SCRA 621 (2007), SECOND DIVISION, (Carpio Morales, J.) A union officer who knowingly participates in an illegal strike and a worker who knowingly participates in the commission of an illegal strike are deemed to have lost their employment status. Buklodng Manggagawa sa Chuayuco Steel Manufacturing Corporation (the union), a legitimate labororganization, is the recognized bargaining agent of Chuayuco Steel Manufacturing Corporation (thecorporation) of which its co-petitioner Edwin Chua is the President. In the election of the union officers, CamiloL enizo (Lenizo) emerged as President. The corporation however refused to recognize the newly elected officers for the reason that there is an intra-union conflict between the factions of Lenizo and Romeo Ibanez, the former acting union president. The union staged a strike which causes illegal acts that intimidated and harassed the corporation and nonstriking employees. The strikers use physical violence and harass those employees who are not on their side by shouting and threatening them not to go to work anymore. The Labor Arbiter declared the strike illegal and thus, some of the members who participated in the mass action lost their employment status. ISSUE: Whether or not some of the employees who participated in the strike should be reinstated without loss of seniority rights HELD: Article 264 (a) of the Labor Code states that any union officer who knowingly participates in an illegal strike and any worker or union who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status. Thus, a union officer may be declared to have lost his employment status if he knowingly participates in an

illegal strike and in this case, the strike is declared illegal by the court because the means employed by the union are illegal. SAMAHAN NG MGA MANGGAGAWA SA MOLDEX PRODUCTS V NLRC (MADRIAGA, MOLDEX AND UY) 3 324 SCRA 242PURISIMA; February 1, 2000 NATURE: Petition for certiorari FACTS - In the earlier part of 1993, petitioners and private respondents negotiated for the renewal of their Collective Bargaining Agreement. Due to some economic differences, the negotiations ended in a d deadlock.- April 2, 1993 - Petitioners filed a notice of strike with the National Conciliation and Mediation Board. The series of conferences proved unavailing. - April 24, 1993 - Union conducted a strike vote among its members, and the results of the voting were thereafter conveyed to the Alliance of Nationalist and Genuine Labor Organization for submission to the NCMB, but for some unknown reason, the same was not made. - May 5, 1993 - Petitioners went on strike without the r report of the strike vote submitted to the NCMB.- June 17, 1993 - Moldex filed a petition to declare the strike illegal and to authorize the dismissal of the officers involved. The petition alleged that the petitioners barricaded the three gates of the company and committed acts of violence, threats and coercion. - An amicable settlement failed so trial on the merits began. Moldex presented witnesses whereas the union only presented its memorandum. They alleged that the pieces of evidence presented by Moldex were hearsay. - March 7, 1994 The Labor Arbiter came out with an order which declared the strike illegal and ordered the d dismissal of employees responsible for the strike.- An appeal before the NLRC was made and the NLRC ordered a remand of the case for the reason that both parties were not able, for reasons and/or causes known only to them, to submit crucial evidence in support of their respective contentions. ISSUE WON the order of the NLRC was correct HELD NO Reasoning

- Reception of evidence would be a futile exercise considering that the facts are already clear and c complete, and would not alter the outcome of the case.It has been shown that the results of the strike-vote were never forwarded to the NCMB, as admitted by petitioners themselves and as attested to by a Certification of NonSubmission of Strike Vote issued by the NCMB. There is thus no need for additional evidence on the matter, as it would not change the fact that the results of the strikevote were not submitted to the NCMB. Without the submission of the results of the strike-vote, the strike was illegal, pursuant to Article 264 of the Labor Code. - The requirements of procedural due process had been complied with. Petitioners and private respondents were allowed to present their witnesses and evidence. Private respondents presented their witnesses, while petitioners did not, opting instead to file a Memorandum, challenging the admissibility of private respondents' pieces of evidence. So long as a party is given an opportunity to be heard and to submit his evidence, the requirements of procedural due process are complied with. - Aside from not submitting the result of the strike-vote to the NCMB, petitioners also committed acts of violence, t threats, coercion and intimidation during the strike.- It bears stressing that factual findings of labor officials are conclusive and binding on the Supreme Court when supported by substantial evidence. After going over the records on hand, the Court discerns no ground for disturbing the above-quoted findings of the Labor Arbiter as the same are basically supported by substantial evidence and his conclusion accords with law. Disposition Decision set aside SAN MIGUEL CORP v. NLRC, IBM 403 SCRA 418 AZCUNA, June 10, 2003 NATURE Petition for certiorari and prohibition FACTS -SMC and Ilaw at Buklod ng Manggagawa (IBM) executed a CBA wherein they agreed to submit all disputes to grievance and arbitration proceedings, aside from no-strike, no-lockout agreement. -IBM, through its VP and subsequently through its president (which was opposed by the VP), filed with NCMB a notice of strike against SMC for allegedly committing: (1) illegal dismissal of union members, (2) illegal transfer, (3) violation of CBA, (4) contracting out of jobs being performed by union members, (5) labor-only contracting, (6) harassment of union officers and members, (7) nonrecognition of duly-elected union officers, and (8) other acts of unfair labor practice. SMC filed a Motion for

Severance of Notices of Strike with Motion to Dismiss on the grounds that the notices raised non-strikeable issues and that they affected 4 corporations. -NCMB: issues are non-strikeable, as only SMC was impleaded when 4 different companies were involved. Notices of strike converted into preventive mediation. -while separate preventive mediation conferences were ongoing, the Union through its VP filed a notice of holding a strike vote. SMC opposed, invoking PAL v. Drilon (no strike could be legally declared during the pendency of preventive mediation). NCMB reiterated conversion of notice of strike into preventive mediation and grounds raised were only intra-union conflict nonstrikeable (who between the 2 groups shall represent the workers for collective bargaining purposes, union leadership). -IBM President group filed 2nd notice of strike against SMC, NCMB found the additional grounds to be mere amplifications of issues alleged in the 1st notice of strike. Ordered consolidation of the 2nd notice of strike with 1st notice of strike. Group informed SMC of its plan to hold a strike. -VP group notified the NCMB that their strike vote favored the holding of a strike. NCMB issued a letter reminding the group of the PAL v Drilon. IBM went on strike. Strike paralyzed the operations of SMC, which caused millions of loses. -SMC filed with NLRC a Petition for Injunction with Prayer for the Issuance of TRO, Free Ingress and Egress Order and Deputization Order, which was issued by NLRC, without prejudice to the unions right to peaceful picketing and continuous hearings on the injunction case. SMC also entered into a Memorandum of Agreement with Union, calling for lifting of picket lines and resumption of work in exchange of good faith talks between the management and the labor management committees. The MOA also stated that cases filed in relation to their dispute will continue and will not be affected in any manner whatsoever by the agreement. Work was then resumed. -NLRC reconsidered the issuance of TRO, and sought to dismiss the injunction case. SMC opposed, submitted copies of flyers wherein IBM expressed their threat to revive the strike. NLRC issued decision denying the petition for injunction for lack of factual basis, there being no circumstance to constitute an actual or threatened commission of unlawful acts. MFR denied ISSUES WON the strike held by IBM was illegal (therefore, NLRC committed grave abuse of discretion in denying the petition for injunction filed by SMC) HELD YES a. Procedural aspect of the strike -For a strike to be valid, it must be pursued within legal bounds. One of the procedural requisites that A263 of the LC and its IRR prescribe is the filing of a valid notice of strike with the NCMB. Imposed for the purpose of encouraging the voluntary settlement of disputes, this

requirement has been held to be mandatory, the lack of which shall render a strike illegal. -In accordance with the Implementing Rules of the Labor Code, the conversion of the notice of strike to preventive mediation has the effect of dismissing the notices of strike filed by respondent. A case in point is PAL v. Drilon, where we declared a strike illegal for lack of a valid notice of strike, in view of the NCMBs conversion of the notice therein into a preventive mediation case. During the pendency of preventive mediation proceedings no strike could be legally declared. -therefore, since the notice of strike filed by the union was converted into preventive mediation proceedings, the union had lost the notices of strike required under A263. However, the union defiantly proceeded with the strike while mediation was ongoing. Such disregard of the mediation proceedings was a blatant violation of theImplementing Rules, which explicitly oblige the parties to bargain collectively in good faith and prohibit them from impeding or disrupting the proceedings. b. on ruling of NLRC that there was lack of factual basis (no circumstance to constitute an actual or threatened commission of unlawful acts) -at the time the injunction was being sought, there existed a threat to revive the unlawful strike as evidenced by the flyers then being circulated by the IBM, which were not denied by the respondent union. Moreover, a declaration of strike without first having filed the required notice is a prohibited activity (A264(a)), which may be prevented through an injunction in accordance with A254. c. on IBMs failure to observe the CBA provisions on grievance and arbitration - Strikes held in violation of the terms contained in a collective bargaining agreement are illegal especially when they provide for conclusive arbitration clauses. These agreements must be strictly adhered to and respected if their ends have to be achieved. -We cannot sanction the respondent-unions brazen disregard of legal requirements imposed purposely to carry out the state policy of promoting voluntary modes of settling disputes. The states commitment to enforce mutual compliance therewith to foster industrial peace is affirmed by no less than our Constitution. Trade unionism and strikes are legitimate weapons of labor granted by our statutes. But misuse of these instruments can be the subject of judicial intervention to forestall grave injury to a business enterprise. Disposition. WHEREFORE, the instant petition is hereby GRANTED. The decision and resolution of the NLRC in Injunction Case No. 00468-94 are REVERSED and SET ASIDE. Petitioner and private respondent are hereby directed to submit the issues raised in the dismissed notices of strike to grievance procedure and proceed with arbitration proceedings as prescribed in their CBA, if necessary. No pronouncement as to costs. SO ORDERED. G.R. No. 115180 November 16, 1999

FILIPINO PIPE AND FOUNDRY CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, NATIONAL LABOR UNION TUCP, and EULOGIO LERUM, respondents. PURISIMA,
J.:

On December 23, 1988, petitioner company moved for the partial dismissal of the Complaint against forty-three (43) officers and members of FPWU-NLU, but maintained the action against the NLU-TUCP and Atty. Eulogio Lerum. 8 On August 31, 1992, the Labor Arbiter came out with a decision for petitioner company, ruling as follows:
WHEREFORE, judgment is hereby rendered declaring that the strike staged by respondents from March 3, 1986 to June 13, 1986 was ILLEGAL. Accordingly and in conformity with the Return-to-Work Agreement, respondent National Labor Union-TUCP is hereby directed to pay the complainant company the following: a) Actual damages in the form of loss of revenue during the duration of the strike which lasted for 100 days or in the amount of ONE MILLION PESOS (P1,000, 000. 00); b) Damages to the good business standing and commercial credit of the company in the amount of THREE HUNDRED FIFTY THOUSAND PESOS (P350,000.00); and c) Exemplary damages to deter others similarly inclined from committing similar acts and to serve as an example for the public good, in the amount of TWO HUNDRED FIFTY THOUSAND PESOS (P250,000.00). Further, respondent NLU is hereby directed to pay the attorney's fees equivalent to 10% of the actual damages, or the amount of ONE HUNDRED THOUSAND PESOS (P100,000.00). For lack of showing that respondent Lerum acted in his personal capacity, he is hereby ABSOLVED from any liability. Pursuant to the Agreement, the complaint against all the other individual respondents are hereby DISMISSED. SO ORDERED. 9

At bar is a Petition for Certiorari under Rule 65 of the Revised Rules of Court seeking to annul and set aside the Decision 1 of the National Labor Relations Commission, 2 dated September 29, 1993, in NLRC NCR CA No. 003806-92, which reversed the Decision 3 of the Labor Arbiter, 4 dated August 31, 1992, in NLRC Case No. 4-1309-86, disposing thus:
WHEREFORE, premises considered, the appeal of complainant corporation is hereby dismissed for lack of merit; the appeal of Atty. Lerum and NLU is hereby granted, and the Decision dated August 31, 1992 is hereby annulled and set side, and a new judgment is hereby entered declaring the complaint below dismissed for lack of merit insofar as respondent NLU and Atty. Lerum are concerned. SO ORDERED. 5

The antecedent facts can be culled as follows: On February 10, 1986, respondent National Labor Union-Trade Union Trade Union Congress of the Philippines (NLU-TUCP), a national federation of labor unions, filed with the then Ministry of Labor and Employment, in behalf of its local chapter, the Filipino Pipe Workers Union-National Labor Union (FPWU-NLU, hereinafter referred to as Union), a notice of strike signed by its national president, Atty. Eulogio R. Lerum, against the petitioner, Filipino Pipe and Foundry Corporation, alleging as grounds therefor union busting and non-implementation of the Collective Bargaining Agreement. 6 The initial conciliation conference was set on February 24, 1986 but due to lack of notice thereof to petitioner company, as well as the failure of FPWU-NLU to furnish the latter a copy of the notice of strike, the initial conciliation conference was re-set to March 3, 1986. In the early morning of March 3, 1986, however, without waiting for the outcome of the conciliation conference scheduled on said date, the FPWU-NLU staged the strike in question which lasted until June 13, 1986, when a return to work agreement was reached by the union and petitioner company. 7 On April 8, 1986, petitioner company interposed before the Arbitration Branch of the then Ministry of Labor and Employment, a petition to declare the strike illegal with prayer for damages against FPWU-NLU, NLU-TUCP and its national president, Atty. Eulogio Lerum.

Therefrom, both parties appealed to the NLRC which on September 29, 1993, rendered the assailed decision. Dissatisfied therewith, the petitioner company found its way to this Court via the present petition; theorizing that:
I PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION ERRED IN LAW, CAPRICIOUSLY AND WHIMSICALLY DISREGARDED THE EVIDENCE SUBMITTED IN THE CASE AND GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK AND/OR EXCESS OF JURISDICTION WHEN IT HELD THAT PRIVATE

RESPONDENTS NATIONAL LABOR UNION (NLU)-TUCP AND ATTY. EULOGIO LERUM ARE NOT PRIMARILY RESPONSIBLE AND, THEREFORE, NOT LIABLE FOR DAMAGES SUFFERED BY PETITIONER ON ACCOUNT OF THE ILLEGAL STRIKE THEY HAD DIRECTLY AIDED, ASSISTED, ABETTED AND PARTICIPATED IN. II PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK AND/OR EXCESS OF JURISDICTION AND ACTED CAPRICIOUSLY AND WHIMSICALLY IN TOTAL DISREGARD OF THE EVIDENCE PRESENTED IN THE CASE WHEN IT HELD THAT PRIVATE RESPONDENTS MERELY ASSISTED THE LOCAL CHAPTER AND ITS MEMBERS IN STAGING A STRIKE AGAINST PETITIONER AND THAT SUCH ASSISTANCE WAS NOT THE CAUSE NOR WAS IT AN INDESPENSABLE ELEMENT OF THE STRIKE. III PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION GRAVELY ERRED IN LAW AND GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK AND/OR EXCESS OF JURISDICTION WHEN IT CONCLUDED THAT PETITIONER LOST ITS CAUSE OF ACTION AGAINST PRIVATE RESPONDENTS AFTER THE LOCAL UNION HIRED A NEW COUNSEL AND PETITIONER MOVED FOR PARTIAL DISMISSAL OF ITS COMPLAINT AGAINST THE STRIKING WORKERS INASMUCH AS PRIVATE RESPONDENTS ARE MERE THIRD PARTIES. 10

unfair labor practice and shall not be strikeable. No strike or lockout may be declared on grounds involving inter-union and intra-union disputes or on issues brought to voluntary or compulsory arbitration. xxx xxx xxx Sec. 3. Notice of strike or lockout. In cases of bargaining deadlocks, a notice of strike or lockout shall be filed with the regional branch of the Board at least thirty (30) days before the intended date thereof, a copy of said notice having been served on the other party concerned. . . . xxx xxx xxx Sec. 6. Conciliation. Upon receipt of the notice, the regional branch of the Board shall exert all efforts at mediation and conciliation to enable the parties to settle the dispute amicably. The regional branch of the Board may, upon consultation, recommend to the parties that the notice be treated as a preventive mediation case. It shall also encourage the parties to submit the dispute to voluntary arbitration. During the proceedings, the parties shall not do any act which may disrupt or impede the early settlement of the dispute. They are obliged as part of the duty to bargain collectively in good faith, to participate fully and promptly in the conciliation meetings called by the regional branch of the board. The regional branch of the Board shall have the power to issue subpoenas requiring the attendance of the parties to the meetings. . . .

Applying the aforecited provision of law in point to the case under consideration, the Court is of the finding and conclusion that the strike staged by FPWU-NLU was illegal for want of any legal basis. Contrary to the grounds advanced by the union in the notice of strike, it turned out during the March 3, 1986 conciliation conference that the purpose of the strike was to pressure the petitioner company to:
1) include in the salary of the strikers the P3.00 wage increase 11 effective March 1, 1986. 2) compute their backwages covering the period from December 1, 1980 to February 28, 1986, including vacation leave and sick leave.

Rule XXII, Book V, of the Rules Implementing the Labor Code, provides:
Sec. 1. Grounds for strike and lockout. A strike or lockout may be declared in cases of bargaining deadlocks and unfair labor practices. Violations of collective bargaining agreements, except flagrant and/or malicious refusal to comply with its economic provisions, shall not be considered

A thorough sifting of the pertinent records discloses that the alleged union busting was not substantiated and the supposed nonimplementation of the collective bargaining agreement was groundless because the demands of FPWU-NLU, at the time the notice of strike was filed and at the time the by the union actually struck, were the subject of a pending application for a writ of execution filed by the union in Case No. AB-7933-80 (NCR-CA8-674-80), which application was granted on April 4, 1986 by the Labor Arbiter. 12 Verily, the strike staged by FPWU-NLU was baseless since it was still pre-mature then for the union to insist

on the implementation of the adverted provision of the collective bargaining agreement, which was the subject of a pending writ of execution. Then too, the failure of the union to serve petitioner company a copy of the notice of strike is a clear violation of Section 3 of the aforestated Rules. The constitutional precepts of due process mandate that the other party be notified of the adverse action of the opposing party. So also, the same Section provides for a mandatory thirty (30) day cooling-off period which the union ignored when it struck on March 3, 1986, before the 30th day from the time the notice of strike was filed on February 10, 1986. What is more, the same strike blatantly disregarded the prohibition on the doing of any act which may impede or disrupt the conciliation proceedings, when the union staged the strike in the early morning of March 3, 1986, the very same day the conciliation conference was scheduled by the former Ministry of Labor. In light of the foregoing, it is beyond cavil that subject strike staged by the union was illegal. Anent the responsibility for the damages allegedly sustained by petitioner company on account of the illegal strike, the latter theorized that the liability therefor should be borne by NLU-TUCP and its national president, Atty. Eulogio Lerum, for having directly participated in aiding and abetting the illegal strike. It is argued that FPWUNLU is a mere agent of respondent NLU-TUCP, because FPWU-NLU, which was formed by respondent NLU-TUCP is not registered as a local unit or chapter but directly affiliated with the latter and therefore, could not have acted on its own. Otherwise stated, petitioner is of the view that FPWU-NLU, a local union, cannot act as the principal of respondent NLU-TUCP, a mother federation, because it is not a legitimate labor organization. 13 In support of this stance, petitioner cited the following letter of Atty. Lerum to the company, to wit:
NATIONAL LABOR UNION An Affiliate of the Trade Union of the Philippines 3199 RAMON MAGSAYSAY BLVD., MANILA, PHILIPPINES Tel. 61-42-65 March 29, 1983 Dear Sirs: Please be informed that we have formed a local union in your company and the officers thereof are the following: President Virgilio Bernal Vice-Pres. Ramon Alborte

Secretary Ernesto Ballesteros Treasure Arsenio Agustin Auditor Genaro Gabule Board Members: 1. Eduardo Cenina 4. Felimon Simborio 2. Dante Canete 5. Joseph Olazo 3. Reynaldo Adelante 6. Virgilio Elnar Shop Stewards: 1. Pablito Fajardo 2. Ruperto Manlangit 3. Ruben Bongaos We have given them full authority to deal with you on all matters covered by our authority as sole collective bargaining representative of your rank and file workers.

Very truly y (Sgd) EULOGIO

National Pr

In Progressive Development Corporation vs. Secretary, Department of Labor and Employment, 15 the Court explained the nature of the relationship between a mother union/federation and a local union, thus:
At this juncture, it is important to clarify the relationship between the mother union and the local union. In the case of Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc., 66 SCRA 512 [1975], the Court held that the mother union, acting for and in behalf of its affiliate, had the status of an agent while the local union remained the basic unit of the association free to serve the common interest of all its members subject only to the restraints imposed by the constitution and by-laws of the association. . . . 16

The same is true even if the local union is not a legitimate labor organization. Conformably, in the abovecited case the Court ruled that the mother federation was a mere agent and the local chapter/union was the principal, notwithstanding the failure of the local union to comply with the procedural requirements that would make it a legitimate labor organization. Evidently, in the case under scrutiny, whether or not FPWU, the local chapter, complied with the procedural

requirements that would make it a legitimate labor organization is immaterial. It would not affect its status as the principal and basic unit of the association. The requirement laid down in the Progressive Development case, that the local union must be a legitimate labor organization, pertains to the conditions before a union may file a petition for certification election and to be certified as sole and exclusive bargaining agent. In the present case, there is no dispute that FPWU-NLU is the sole and exclusive bargaining representative of the rank and file employees of petitioner company. The union's status as a legitimate labor organization is therefore of no moment in the resolution of the controversy here. As the local union, it is considered as the principal; the entity which staged the illegal strike and the one responsible for the resulting damages allegedly sustained by petitioner company. Furthermore, the petitioner company is now estopped from reneging on the recognition it extended to the FPUW-NLU as the bargaining representative of its rank and file workers, by belatedly attacking its status which petitioner company had voluntarily recognized. It should be noted that even as early as 1981, when the collective bargaining agreement sought to be implemented by the union was entered into, the latter was already the bargaining representative of the employees concerned. It is not, therefore, true that it was respondent NLUTUCP which formed FPWU. At most, the entry into the picture of the private respondent on March 23, 1983, merely affirmed the status of FPWU as the recognized bargaining representative of the rank and file employees of petitioner company. Evidently, direct and primary responsibility for the damages allegedly caused by the illegal strike sued upon fall on the local union FPWU, being the principal, and not on respondent NLU-TUCP, a mere agent of FPWU-NLU which assisted the latter in filing the notice of strike. Being just an agent, the notice of strike filed by Atty. Eulogio Lerum, the national president of NLUTUCP, is deemed to have been filed by its principal, the FPWU-NLU. Having thus dismissed the claim for damages against the principal, FPWU-NLU, the action for damages against its agent, respondent NLU-TUCP, and Atty. Lerum, has no more leg to stand on and should also be dismissed. Premises studiedly considered, the Court is of the ineluctable conclusion, and so holds, that the National Labor Relations Commission did not act with grave abuse of discretion in reversing the Decision of the Labor Arbiter in NLRC CASE No. 4-1309-86. WHEREFORE, for lack of merit, the Petition is DISMISSED, and the Decision of the National Labor Relations Commission in NLRC NCR CA No. 003806-92 AFFIRMED. No pronouncement as to costs. SO ORDERED.

Melo, Vitug, Panganiban and Gonzaga-Reyes, JJ., concur. G.R. No. 106316 May 5, 1997 FIRST CITY INTERLINK TRANSPORTATION CO., INC., doing business under the name and style FIL TRANSIT, petitioner, vs. THE HONORABLE SECRETARY MA. NIEVES ROLDAN-CONFESOR, in her capacity as Secretary of Labor and Employment, and NAGKAKAISANG MANGGAGAWA NG FIL TRANSIT-NATIONAL FEDERATION OF LABOR (NMF-NFL), respondents.

MENDOZA,

J.:

This is a petition for review on certiorari to set aside the order dated July 23, 1992 of the respondent Secretary of the Department of Labor and Employment, ordering the payment of backwages and separation pay to striking employees of petitioner First City Interlink Transportation Co., Inc. Petitioner First City Interlink Transportation Co., Inc., is a public utility corporation doing business under the name and style Fil Transit. Respondent Nagkakaisang Manggagawa ng Fil Transit-National Federation of Labor (NM-NFL) is a labor union composed of employees of Fil Transit. On May 27, 1986, the Fil Transit Employees Union filed a notice of strike with the Bureau of Labor Relations (BLR) because of alleged unfair labor practice of petitioner. Despite several conciliation conferences, the parties failed to reach an agreement, so that, on June 17, 1986, the Union went on strike. As a result several workers were dismissed. The Union filed another notice of strike alleging unfair labor practice, massive dismissal of union officers and members, coercion of employees and violation of workers' rights to self-organization. Conciliation conferences were again held but, on July 27, 1986, the Union again went on strike, lifting their picket only on August 2, 1986. On September 16, 1986, the then Minister of Labor and Employment, after assuming jurisdiction over the dispute under Art. 264(g) and Art. 278(b) of the Labor Code, ordered
(1) all striking employees including those who were dismissed prior to the June 17, 1986 strike to return to work within forty-eight (48) hours from receipt of the order; and (2) petitioner to accept all the returning employees under the same terms and conditions prevailing previous to the dispute.

On September 22, 1986, petitioner filed a motion for reconsideration and later a supplemental motion for reconsideration, contending that no strike vote had been obtained before the strike was called and the result of strike vote was not reported to the Ministry of Labor and Employment. Its motion was, however, not acted upon for the reason that petitioner had already brought the matter to this Court on certiorari, resulting in the issuance of a temporary restraining order. The petition for certiorari was denied and the temporary restraining order was lifted by this Court in its resolution dated February 23, 1987. On November 24, 1987, the Department of Labor and Employment issued a writ of execution, ordering the chief of the execution arm of the NLRC to cause the actual and physical return to work of all striking employees, including those dismissed prior to the June 17, 1986 strike under the same terms and conditions prevailing previous to the dispute, and to secure certification that the parties have complied with such return to work order. The Union then filed a motion for the award of backwages in the total amount of P1,364,800.00 for the period December 9, 1987 up to February 9, 1988 and for the issuance of a writ of execution. On March 23, 1988, the Sheriff reported in his return that only 66 employees reported back to work and were accepted by petitioner on condition that they submit certain requirements. On May 15, 1990 the Secretary of Labor issued the order awarding backwages and the corresponding writ of execution as follows:
Considering the unreasonable stance adopted by Fil Transit, Inc., vis-a-vis the implementation of the return to work order, and the consequent denial to the workers of their means of livelihood, this office is inclined to grant the union's prayer for backwages computed from the time the Writ of Execution was first served upon the company. We demur, however, to the amount of P1,364,800.00 backwages as computed by the union. This is a matter which is best discussed and maybe the subject of later proceedings. In the meantime, our paramount concern is the readmission of the workers to forestall further economic suffering arising from their loss income. WHEREFORE, in view of the foregoing, the management of Fil Transit, Inc. is ordered to comply strictly with the return to work directive dated September 16, 1986, as sought to be implemented by the writ of execution of November 24, 1987. The list of employees attached to the aforementioned writ is hereby adopted en toto as the sole basis for management's compliance. . . . 1

WHEREFORE, premises considered, the instant motion for reconsideration is hereby DENIED. The Fil Transit, Inc. and Fil Transit Employees Union NFL are hereby directed to file their position papers and evidence with this office, within fifteen (15) days from receipt hereof, on the following issues, to wit: (a) Amount of backwages due to the workers covered by the Return to Work Order of September 16, 1986 using as basis therefore the list attached to the writ of execution; (b) the issues identified in the Assumption Order of September 16, 1986, to wit; (1) Alleged unfair labor practices, harassment, coercion, violation of worker's right to self-organization, alleged non-payment of ECOLA. (2) Validity of fines and suspensions; (3) Validity of charge of wage distortion. The Order dated 15 May 1990, calling for the compliance with the return to work directive of September 16, 1986 is hereby AFFIRMED. No further motions of this same nature shall be entertained. 2

Petitioner questioned the order in a petition for certiorari, prohibition and mandamus filed with this Court which, however, dismissed the petition on September 23, 1991, for lack of showing that the Secretary of Labor committed a grave abuse of discretion in rendering the questioned order. 3 Thereafter, respondent Union submitted its position paper on October 30, 1991 and asked the Secretary of Labor.
1. To declare respondent company guilty of unfair labor practice for its continuous defiance of the return to work Order issued by the Department of Labor and Employment. 2. To pay complainant backwages from the time they were refused of their reinstatement last 1986. 3. To pay individual complainants their separation pay, in lieu of reinstatement considering that complainants are no longer interested to go back to Fil Transit. 4. To pay complainant union attorney's fees . . .

Petitioner moved for a reconsideration but its motion was denied. In his order dated August 27, 1991, the Secretary of Labor ruled:

On the other hand, petitioner First City Interlink Transportation Co., Inc. asked that:

1. The Order of 27th August 1991, be amended, to include, among the issues the question of the legality or illegality of the strike; 2. Respondent be given an extension of thirty (30) days from today within which to file its position paper; 3. That after the parties shall have submitted their respective position papers the case be set for hearing to afford the respondent the opportunity to cross examine the supposed complainants.

First. Petitioner's main contention is that the strike called by the Union was illegal. Pursuant to Art. 263(c)(f) of the Labor Code, the requisites for a valid strike are as follows:
(1) a notice of strike filed with the Department of Labor at least 30 days before the intended date thereof or 15 days in case of unfair labor practice; (2) 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; (3) notice given to the Department of Labor and Employment of the results of the voting at least 7 days before the intended strike.

Petitioner asked for another extension of the time for submitting its position paper that as of the date of respondent's questioned order of July 23, 1992, it had not yet submitted its paper. Without waiting for the paper, the Secretary of Labor ruled the strike of the Union legal and awarded backwages and separation pay to the strikers. The dispositive portion of her decision, dated July 23, 1992, states:
WHEREFORE, premises considered, Fil Transit Co., Inc., is hereby ordered to pay the dismissed striking employees the following: 1. Backwages for three (3) years without qualification and deduction and; 2. Separation pay equivalent to one-half month pay for every year of service in lieu of reinstatement, the date of this office's order as the cut-off date. The Director, Bureau of Working Conditions (BWC), this Department, is hereby directed to immediately compute the monetary award, as ordered, which computation shall form part of this order.

These requirements are mandatory. 4 Petitioner contends that the strike staged by the Union was illegal because no strike vote had been taken before the strike was called. This matter was raised by petitioner before the Secretary of Labor and now in this petition. However, in none of the numerous pleadings filed by respondent Union before this Court, has it been shown that a strike vote had been taken before declaring a strike. As between petitioner and respondent Union, the latter is in a better position to present proof of such fact. The Union's failure to do so raises the strong probability that there was no strike vote taken. The first and only instance it is mentioned that such a vote had been taken before the strike was called was in the order dated July 23, 1992 of the Secretary of Labor in which she stated:
. . . the records show that a notice of strike was filed by the union with the Bureau of Labor Relations (BLR) on May 27, 1986, and after a failure of several conciliation conferences due to management's consistent refusal to appear, the union went on strike on June 17, 1986, after a strike vote was obtained. 5 (Emphasis added)

Hence, this second petition questioning the grove order. The petitioner contends that:
1. The Honorable Respondent Secretary of Labor erred in declaring the strike legal; 2. The strikers, having engaged in violent, illegal and criminal acts, have lost their employment status; 3. The Honorable Secretary erred in declaring that management refused to comply with the Return to Work Order; 4. The Honorable Secretary erred in disregarding the report of the sheriff. 5. The striking employees are not entitled to backwages; 6. Assuming that backwages could properly be awarded, there was no basis for the amount fixed by the Secretary of Labor. 7. The judgment against Fil Transit is null and void.

But the Secretary of Labor did not indicate the basis for her statement nor the date the strike vote was allegedly taken. Neither did she mention whether her office had been notified of the strike vote as required by law. For that matter the statement in the same order that a notice of strike had been filed because several conciliation conferences failed "due to management's consistent refusal to appear" is contrary to evidence in the record. Annexes E and F of the petition show that management was duly represented during the conciliation proceeding prior to the strike on June 17, 1986. Annex G likewise shows that at the conciliation conference held on July 17, 1986, management actively participated, contrary to the statement in the order of the Secretary of Labor that the failure of the second set of conciliation conferences was due to management's refusal to attend.

Moreover, even assuming that a strike vote had been taken, we agree with petitioner that the Union nevertheless failed to observe the required seven-day strike ban from the date the strike vote should have been reported to the DOLE up to the time the Union staged the strike on June 17, 1986. As petitioner contends:
It must be noted in this regard that as shown in the minutes of conciliation conferences (Annex "F"), the parties met in a conciliation conference on June 13, 1986, four (4) days before the June 17, 1986 strike. So even if it is conceded that a strike vote was taken, there would have been noncompliance with the requisite cooling off period and the 7-day strike ban for the simple reason that between June 13, 1986, the day the parties met for conciliation conference and June 17, 1986, the day of the strike, there were only four (4) days. 6

meeting with petitioner on the scheduled conciliation meeting on June 17, 1986 as agreed upon, private respondent went on strike. Certainly, this act of the private respondent cannot be characterized as having been made in good faith. 9

Indeed, there is no finding in this case that petitioner was guilty of the alleged unfair labor practices as charged by the Union. The award of backwages and separation pay was based solely on the alleged refusal of petitioner to comply with the Return to Work Order an issue which will be discussed in the latter part of this decision. Hence, the ruling in Ferrer v. CIR that the strike staged before the expiration of the 30-day cooling off period is not illegal because of what the strikers perceived in good faith to be unfair labor practices of the employer does not apply. Second. Petitioner contends that the strikers, having engaged in violent, illegal, and criminal acts, have lost their employment status. The Labor Code considers the commission of these acts a "prohibited activity" 10 and any worker or union officer, who knowingly participates in their commission during a strike, may be declared to have lost his employment status. Respondent Secretary held that responsibility for such acts should be individual and not collective. In her questioned order of July 23, 1992, she stated:
It is contended, by the Company, that several acts of violence were allegedly committed by former employees of the company during the strike. However, in the absence of clear proof that the strikers committed the same by design or policy, only those strikers who committed illegal acts could be held personally responsible therefor. To our mind, a wholesale dismissal of the strikers from their employment on the basis that the strike was attended by violence, is not warranted in the case at bar. As held by the Supreme Court in the case of FEATI Faculty Club v. FEAU University, et al.; G.R. NO. L-31504, to wit: Not every form of violence suffices to affix the seal of illegality on a strike as to cause the loss of employment of the guilty party. Where acts of violence while the strike lasts are sporadic and not pervasive by design and policy, responsibility therefore is individual and not collective.
11

It is nonetheless contended by the Solicitor General that "[a] strike inspired by good faith is not illegal simply because certain requirements were not followed," citing the case of Ferrer v. CIR. 7 The contention has no merit. In Ferrer, the strikers failed to observe the 30-day cooling off period, but this Court found the strike legal because of the strikers' belief in good faith that the employer committed unfair labor practice. But, in the case at bar, what is lacking is the strike vote which should have been reported to the DOLE seven days before staging the strike. The importance of the strike vote and reporting of the results to the DOLE cannot be gainsaid as it is the Union itself that the law seeks to protect by ensuring that the majority of its members voted in favor of the strike. As held in National Federation of Sugar Workers (NFSW) v. Ovejera: 8
When the law says "the labor union may strike" should the dispute "domain unsettled until the lapse of the requisite number of days (cooling-off period) from the mandatory filing of the notice," the unmistakeable implication is that the union may not strike before the lapse of the cooling-off period. Similarly, the mandatory character of the 7day strike ban after the report on the strike-vote is manifest in the provision that "in any 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) coolingoff 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.

Moreover, petitioner is right that good faith can not be invoked by the Union in the case.
As the records will bear out, the private respondent had clearly acted in bad faith when it went on strike. Annex "F" of the petition (June 13, 1986 Minutes of Conciliation Proceedings) attached to the records of the case, shows that at the time the strike was staged, conciliation meetings were going on. In fact, said Annex "F" reveals that the parties met in a conciliation meeting on June 13, 1986 and agreed to meet further on June 17, 1986 at 2:00 P.M. (Please see Annex "F"). Instead of

Contrary to respondent Secretary's finding, the strike declared by the Union was attended by pervasive and widespread violence. The acts of violence committed were not mere isolated incidents which could normally occur during any strike. The hijacking of Fil-Transit Bus No. 148 at the intersection of EDSA and Quezon Avenue on Sunday, July 27, 1986, three days before the scheduled conciliation conference, reveals that it was staged in pursuance of a preconceived plan. This was followed by the barricading of the terminal in Alabang by means of five buses which had also been hijacked. In

the days that followed, the strikers persisted in their violent acts, (1) the hijacking of 26 more buses which resulted in injuries to some employees and panic to the commuters; (2) the puncturing of tires; (3) the cutting of electric wirings, water hoses and fan belts; and (4) the alleged theft of expensive equipment such as fuel injections worth P30,000 each. The commission of these illegal acts was neither isolated nor accidental but deliberately employed to intimidate and harass the employer and the public. The strikers even resorted to the use of molotov bombs which were thrown into the petitioner's compound. Nevertheless, we are constrained to uphold the respondent Secretary's ruling that responsibility for these illegal acts must be on an individual and not collective basis. Therefore, although the strike was illegal because of the commission of illegal acts, only the union officers and strikers who engaged in violent, illegal and criminal acts against the employer are deemed to have lost their employment status. Union members who were merely instigated to participate in the illegal strike should be treated differently. 12 Third. As already noted, respondent Secretary awarded backwages on the ground that petitioner had refused to comply with the Return to Work Order of September 16, 1986. Petitioner explains that its failure to immediately reinstate the employees was due to the Union's insistence on the reinstatement of even those who had been dismissed for cause and had been dismissed even before the strike held on June 17, 1986. Moreover, by the time the respondent Secretary issued the questioned order of July 23, 1992, petitioner had already complied with the Return to Work Order. Out of the approximately 160 employees included in the Return to Work Order of the Secretary of Labor, 66 employees had been admitted back to work. The rest were not readmitted to work because they simply did not return on March 8, 1988, the date agreed upon by the parties. On the other hand, the Union contends that petitioner imposed certain requirements as condition for reinstatement which amounted to a refusal to comply with the Return to Work Order. These were: 1. Cash of P1,000.00 2. X-Ray, urinalysis and stool results 3. Birth Certificate/Baptismal 4. NBI Clearance 5. Police Clearance 6. Barangay Clearance

7. Residence Certificate 8. High School Diploma/Transcript of records 9. Certification of employment 10. Driver's/Conductors/Conductresses license 11. Marriage Contract (If married) 12. Pictures 4 1x1 colored 13. Pictures 4 2x2 black and white Some requirements are indeed unreasonable considering that the strikers were not being hired for the first time but merely being reinstated. Reinstatement connotes a continuity of the employer-employee relationship as contrasted to an initial employment. Hence, a distinction must be made between requirements which are valid management prerogatives and those which are unreasonable. On the other hand, there are certain conditions which are valid. The requirement to submit NBI, Police and Barangay clearances is reasonable to enable management to determine whether the returning employees have pending charges of illegal acts especially those committed during the strike. So also is the requirement to have driver's and conductor's/conductress' license, to enable them to perform their tasks. The pictures required are necessary for the employer's personnel records and so can validly be required. With respect to the required medical examination, the same can be justified as management prerogative since it is the employer's right to ensure that the employees are physically fit to resume the performance of their duties. This is especially true in this case, because two years had elapsed since the time of dismissal of the employees. As held in Jackbilt Concrete Block Co., Inc. v. Norton & Harrison Co., 13 an employer should not be compelled to reinstate an employee who is no longer physically fit for the job from which he was ousted. It is true that in Davao Free Workers Front v. CIR, 14 it was held that the medical examination could not be required as a condition for reinstatement, but that is in cases where the employer is guilty of unfair labor practice. As this Court explained:
To require [employees] to undergo a physical or medical examination as a precondition of reinstatement or return to work simply because of the long pendency of their case which is due to no fault of theirs would not only defeat the purpose of the law and the constitutional and statutory mandates to protect labor but would work to their

unfair prejudice as aggrieved parties and give an undue advantage to employers as the offenders who have the means and resources to wage attrition and withstand the bane of protracted litigation. Hence, the aggrieved workers may be subject to periodic physical or medical examination as old reinstated workers, but not as a precondition to their reinstatement or return to work with the important consequence that if they are found to be ill or suffering from some disability, they would be entitled to all the benefits that the laws and company practices provide by way of compensation, medical care, disability benefits and gratuities, etc. to employees and workers. 15

2. . . . However, it appearing [sic] that only sixty-six (66) employees reported back for work, as evidenced in the yellow pad showing the names and their corresponding signatures. Acting on the same, Management accepted the returning employees. . . 17 xxx xxx xxx From the foregoing, undersigned is of the opinion that the Order has been complied with upon completion of the above-requirements being requested by Management. . . .

In the present case, although the Union has charged petitioner with unfair labor practice, the matter is still to be resolved. Hence, the ruling in Davao Free Workers Front v. CIR 16 does not apply. With respect to some of the requirements (i.e., P1,000, cash bond, birth/baptismal certificate, residence certificate, high school diploma/transcript of records, certification of employment, and marriage contract), we agree with respondent Union that these requirements cannot be imposed being more appropriate for employees who are being hired for the first time. However, the imposition of such requirements by the employer did not amount to a refusal to admit workers back to work or an illegal lock-out so as to entitle the workers to the payment of backwages under Art. 264(g) of the Local Code, the pertinent portion of which states:
. . . For this purpose, the contending parties are strictly enjoined to comply with such orders, prohibitions or injunctions as are issued by the Secretary of Labor and Employment or the Commission, under pain of immediate disciplinary action, including dismissal or loss of employment status or payment by the locking-out employer of backwages, damages and other affirmative relief, even criminal prosecution against either or both of them. . .

In Jackbilt Concrete Block Co., Inc., v. Norton & Harrison Co., 18 the unjustified refusal of the striking employees to return to work and comply with the employer's requirement to undergo a medical examination was considered a waiver of their right to reinstatement. Consequently, petitioner is not liable for backwages. Employees, who are not guilty of illegal acts and, therefore, are entitled to reinstatement would only be entitled to backwages if they were refused readmission. As none of such employees was refused readmission, no backwages are due from petitioner. On the other hand, employees who are entitled to be reinstated because they did not take part in illegal acts would be entitled to separation pay in lieu of reinstatement in view of the fact that, after all the time that this case has been pending, reinstatement is no longer feasible. Separation pay should be computed only up to March 8, 1988, the date when employees were supposed to return as agreed upon by the parties. Those who failed to return on March 8, 1988, will not be entitled to separation pay after such date. In view of the conclusion thus far reached, we find it unnecessary to discuss the other questions raised in this case. To summarize, this Court holds that:

For the fact is that petitioner after all accepted all returning employees. If there were workers who were not taken in, they were those who did not return to work on March 8, 1988. In the Sheriff's Return dated March 23, 1988, Antonio P. Soriano, Deputy Sheriff, reported:
1. That on 01 March 1988, as per appointment, undersigned together with a number of returning employees went to the company (FIL TRANSIT, INC.,) to discuss the final details of the implementation of the Order. The parties sat down with Mr. Virgilio M. Aquino, who represented Management. After a while and upon suggestion of said Mr. Aquino, parties agreed that the employee will return on 08 March 1988, where the returning employee duly covered by and qualified under the Order shall report for work with Management reiterating its willingness to comply strictly with the said Order of this Honorable Office;

1) The respondent Secretary of Labor erred in declaring the strike legal. There is no evidence to show that a strike vote had in fact been taken before a strike was called. Even assuming that a strike vote had been taken, the strike called by the Union was illegal because of nonobservance by the Union of the mandatory sevenday strike ban counted from the date the strike vote should have been reported to the Department of Labor and Employment up to the time the Union staged the strike on June 17, 1986. In accordance with Art. 264 of the Labor Code, any union officer who knowingly participated in the illegal strike is deemed to have lost his employment status. 2) The commission of the illegal acts during the strike rendered it illegal. However, only officers and leaders of the Union and workers guilty of illegal acts are liable. Such employees are deemed to have lost their

employment status in accordance with Art. 264 of the Labor Code. 3) Petitioner substantially complied with the Return to Work Order. The medical examination, NBI, Police and Barangay Clearances as well as the driver's and conductor's/conductress licenses and photographs required as conditions for reinstatement were reasonable management prerogatives. However, the other requirements imposed as condition for reinstatement were unreasonable considering that the employees were not being hired for the first time, although the imposition of such requirements did not amount to refusal on the part of the employer to comply with the Return to Work Order or constitute illegal lockout so as to warrant payment of backwages to the strikers. If at all, it is the employees' refusal to return to work that may be deemed a refusal to comply with the Return to Work Order resulting in loss of their employment status. As both the employer and the employees were, in a sense, at fault or in pari delicto, the nonreturning employees, provided they did not participate in illegal acts; should be considered entitled to reinstatement. But since reinstatement is no longer feasible, they should be given separation pay computed up to March 8, 1988 (the date set for the return of the employees) in lieu of reinstatement. 4) Because the award of backwages was based on the alleged refusal of the employer to comply with the Return to Work Older, the same should be set aside for being without basis. WHEREFORE, the questioned order of respondent Secretary of Labor is SET ASIDE. The union officers who participated in the illegal strike and those who participated in the commission of illegal acts are deemed to have lost their employment status. Petitioner is ORDERED to pay the employees who did not participate in the commission of illegal acts during the strike separation pay. SO ORDERED. Regalado, Romero, Puno and Torres, Jr., JJ., concur. G.R. No. 37687 March 15, 1982 PEOPLE'S INDUSTRIAL AND COMMERCIAL EMPLOYEES AND WORKERS ORGANIZATION (FFW), ERNESTO PAGAYATAN, ANTONIO ERIO, RODRIGO BOADO AND LINO FRANCISCO, petitioners, vs. PEOPLE'S INDUSTRIAL AND COMMERCIAL CORPORATION, FEDERATION OF TENANTS AND LABORERS ORGANIZATION, and THE COURT OF INDUSTRIAL RELATIONS, respondents.

GUERRERO, J.: Petition for review of the decision and en banc resolution of the Court of Industrial Relations dated April 2, 1973 and October 3, 1973, respectively, promulgated in three (3) consolidated cases. 1 The decision penned by Associate Judge Alberto S. Veloso adopting in full the report of CIR Hearing Examiner Atty. Francisco de los Reyes made the following dispositive portion, thus
After a careful review, scrutiny and evaluation of the records of these cases, as well as of every piece of evidence adduced by the parties, pro and con, this court finds the findings of facts and conclusions of law contained in the aforequoted Report to be amply substantiated, and, therefore, adopts the same as its own. WHEREFORE, in view of all the foregoing, aboveentitled cases should therefore be, as they are hereby ordered DISMISSED. SO ORDERED.

This petition limits itself to the controversy in Case No. 4498-ULP filed by People's Industrial and Commercial Employees and Workers Organization against People's Industrial and Commercial Corporation and the Federation of Tenants and Laborers Organization. On the basis of the Examiner's Report, the following facts appear: On April 30, 1964, the Federation of Tenants and Laborers Organization, Rizal Chapter, FTLO for short, entered into a collective bargaining agreement with respondent People's Industrial and Commercial Corporation, hereafter referred to as PINCOCO, (Exhibits "2" and "G"). At the time the agreement was consummated, herein individual petitioners, Ernesto Pagayatan, Antonio Erio, Rodrigo Boado and Lino Francisco, who were also the individual complainants in Case No. 4498-ULP, together with those mentioned in Annex "A" of the complaint (List of some forty-five [45] other employees), were employees of PINCOCO and members of FTLO. The relevant portions of the working agreement stipulate:
xxx xxx xxx Art. II. Union Security Maintenance Shop. Those who are members in good standing of the Union before the signing of this working agreement, shall continue to be union members in good standing as a prerequisite for continued employment in the company. xxx xxx xxx Any employee covered by this agreement who during its term, should resign from the union or shall be expelled therefrom according to its normal procedures for any of the causes hereafter enumerated, shall upon written notice by the union directorate, be discharged from employment,

provided that the causes for expulsion from the Union be any of the following: 1. Working in the interest of any labor organization other than the Union which claims or exercises jurisdiction similar to that claimed or exercised by the Union; 2. Refusal to pay or non-payment of Union dues and Assessment; 3. Disloyalty to the Union; 4. Separation from the Union for cause. xxx xxx xxx Art. VIII. No Strike, No Lockout. For the duration of the Agreement, the COMPANY shall not lockout its employees, nor shall the UNION or any employee stage any strike, picket or other concerted activity other than in protest of unfair labor practice, and the court decision in the case that may be filed in this connection shall determine the propriety of such concerned activity under the Agreement. Violation of this paragraph shall be treated as subject to the same sanctions as a violation of the duty to bargain collectively.

union (PICEWO) together with the set of officers elected with him in the last election retaining their respective positions. Further, in the same certification, the union counsel of FTLO, Atty. David Advincula, was disauthorized to represent the signatories. The certification contains no specific reason or cause for the change of union name. On February 10, 1965, the new union was granted a certificate of registration by the Department of Labor (Exhibit " 1-FFW "), On March 23, 1965, Ernesto Pagayatan, assuming the capacity of chapter president of FTLO and not as a president of PICEWO, notified in writing respondent PINCOCO of their desire to terminate the working agreement. Later, a set of collective bargaining proposals was sent in the name of PICEWO (Exhibits "e", "10" and " 11 "). PINCOCO replied this wise:
xxx xxx xxx That in view of the study effected by the management as to its stand with regard to the said proposals and further submission of the same to our legal counsel for consultation and advice and considering that April 15, 1965 is a legal holiday we cannot serve you, our formal reply within the period specified by existing statute. However, we assure you of our formal reply to your proposal on April 14, 1965 and that management will endeavor to avail of the remedies within the financial capacity of the company and other factors to be considered to meet the terms of your proposal.

A stoppage of work or cessation of operation due to poor sales, lack of raw material, or any other business reason, or to force majeure shall not be deemed a lockout for the purpose of the preceding paragraph. In any case that the COMPANY should stop operations due to any of the foregoing reasons, adequate notice shall be given to the UNION whenever possible.
xxx xxx xxx Art. XI. Duration of the Agreement. This agreement shall take effect this day of April, 1964 and shall only be in effect for a period of one (1) year thereafter. Unless written notice of a desire to terminate or modify the same is given by either party to the other at least thirty (30) days before its expiration, this agreement shall be deemed to be renewed for another year. xxx xxx xxx

On October 18, 1964, it appears that with the knowledge of PINCOCO, an election of union officers of the Rizal Chapter of FTLO was conducted by virtue of a resolution (Exhibit "2-FFW", t.s.n., pp. 24-31, October 10, 1969) and that individual petitioners were elected as the new officers with Ernesto Pagayatan as chapter president (Exhibits "4-FFW" and "5-FFW"). On January 10, 1965, individual petitioners together with fifty-one (51) other employees executed a Certification (Exhibit "3-FFW") stating that they are members of the Federation of Tenants and Laborers Organization, but as of the above date, they have changed the name of their union to People's Industrial and Commercial Employees and Workers Organization (PICEWO) and have affiliated this new union with the Federation of Free Workers, Ernesto Pagayatan was again made the president of the new

On April 13, 1965, FTLO passed a resolution expelling petitioners Ernesto Pagayatan, Antonio Erio Rodrigo Boado and Lino Francisco from the Federation of Tenants and Laborers Organization (FTLO) on grounds of disloyalty and working for the interest of another labor federation (Exhibit "F"). On April 22, 1965, Ernesto Pagayatan, this time as president of PICEWO filed a notice of strike, alleging as cause thereof respondent employer's refusal to bargain. (Exhibit "9-H"). On April 29,1965, prompted by the demand of the majority of the FTLO directorate to enforce the maintenance of membership shop of the working agreement, respondent PINCOCO dismissed Ernesto Pagayatan and his companions from employment (Exhibits "12- FFW "12-AFFW" to "12-CFFW"). On May 1, 1965, the FTLO and respondent PINCOCO executed a collective bargaining agreement for a period of three (3) years (Exhibits "ACO" and "D"). Meantime, on April 30, 1965, PICEWO, led by individual petitioners struck. Thereafter, at the behest of the FTLO, respondent PINCOCO posted a notice for the strikers to return to work within a period of five (5) or ten (10) days or else they shall be considered to have abandoned their work. None of the strikers returned and picketing went on for a period of six (6) months. Later, PINCOCO again posted a notice that it had decided to resume operation on March 9, 1966, and between March 7 and 8 of the same year, all employees were advised to signify their

ability to work at which time they will be required to submit police clearances and to medical and physical examination by the company physician, otherwise their failure to return within the period shall be considered as abandonment of work. On March 31, 1966 petitionerunion, through its president, signified the intention to return to work beginning April 4, 1966. None of the strikers, however, were allowed to work. From the preceding developments, three separate cases were filed with the Court of Industrial Relations. In Case No. 4428-ULP, FTLO indicted herein individual petitioners for unfair labor practice in staging an illegal strike after they were already dismissed from the company. In Case No. 167-INJ, FTLO sought for the issuance of a permanent injunction to stop the alleged illegal strike. In Case No. 4498-ULP, PICEWO sued PINCOCO and FTLO for unfair labor practice, alleging that by illegally dismissing petitioners, the company discriminated against them in regard to hire, tenure and/or other conditions of employment by unlawfully acceding and effecting the request of FTLO without proper investigation thereof, with no just reason but to encourage membership in the FTLO; and that respondent federation, in recommending and insisting on the dismissal of individual petitioners, had interfered in their right to self-organization. (Annex "C", p. 39, Rollo) After the reception of evidence, the Hearing Examiner designated by the Court of Industrial Relations, reported that the petitioners were, beyond doubt, members of the FTLO when the Working Agreement of April 30, 1964 took effect and that the working agreement required in Article II thereof maintenance of membership in the federation as condition for continued employment in the company. Since the specific causes for expulsion from membership have been enumerated, particularly that of working for the interest of another organization and disloyalty to the union, the Hearing Examiner concluded that petitioners' conduct is within the said causes expressed in the agreement. The Report also established that FTLO is the sole and exclusive bargaining representative of the employees which entered into a bona fide agreement, putting a limitation of petitioners' right to leave the union and join another. The Examiner found no unfair labor practice committed by either the FTLO or PINCOCO, and that the strike staged by petitioners was not on account of any unfair labor practice, but, rather, done to force recognition. Based on the above findings, respondent court dismissed the three cases. On April 10, 1973, petitioners filed their motion for reconsideration; same was denied in the en banc resolution of October 3, 1973. Petitioners now raise the following assignment of errors: a) The respondent court erred in holding that the Motion for Reconsideration and the Memorandum in support of the Motion for Reconsideration were filed out of time;

b) The respondent court erred in holding that the strike declared by herein petitioners was intended only to force recognition; c) The respondent court erred in not declaring both respondent Corporation and respondent Federation guilty of committing unfair labor practice; d) The respondent court erred in not declaring as illegal the dismissal from employment of individual petitioners; and e) Respondent court erred in not ordering the return to work of the striking members of petitioner Union with backwages and other fringe benefits from April 30, 1965 until their actual reporting for work. The last day for filing the motion for reconsideration was April 9, 1973 which was a holiday (BATAAN DAY), and the last day for filing the arguments in support of the motion for reconsideration, ten days after, was April 19, 1973, also a holiday (MAUNDY THURSDAY). Since petitioners have filed their pleadings on the next respective business days, that is, April 10, 1973, for the motion for reconsideration and April 23 for the arguments in support thereof (April 20 to 22 not being business days), the pleadings were, therefore, filed on time. On this procedural aspect, the resolution of October 3, 1973 has erred. It is the policy of the law to disregard technicalities in procedure so as not to deprive the litigant's pursuit of his substantial rights under the Rules. Under Article 13, last paragraph, of the Civil Code, in computing the period, the first day shall be excluded, and the last day included. And under Rule 28 of the Rules of Court, Section 1, time is computed thus
Sec. 1. How to compute time.-In computing any period of time prescribed or allowed by these rules, by order of court, or by any applicable statute, the day of the act, event, or default after the designated period of time begins to run is not to be included. The last day of the period so computed is to be included, unless it is a Sunday or a legal holiday, in which event the time shall run until the end of the next day which is neither a Sunday nor a holiday.

Under the second assignment of error, the question to be resolved is whether or not the petitioners' act of disaffiliating themselves from the mother federation constitutes an act of disloyalty to the union which would warrant their expulsion and consequently their dismissal from the company in pursuance to the union security clause embodied in the CBA. Petitioners contend that no disloyalty is involved since what they did on January 10, 1965 was merely to change, as they did change, the name of Rizal Chapter of the Federation of Tenants and Laborers Organization

FTLO to People's Industrial and Commercial Employees and Workers Organization (PICEWO). While We are not convinced with the petitioners' argument that the only act that they have done was to change the name of their union for they have registered the new union and affiliated it with the Federation of Free Workers, We rule that individual petitioners do not merit the dismissals meted by the company. In Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills, 2 We held that the validity of the dismissals pursuant to the security clause of the CBA hinges on the validity of the disaffiliation of the local union from the federation. It was further held in this case that PAFLU (the federation) had the status of an agent while the local union remained the basic unit of association free to serve the common interest of all its members including the freedom to disaffiliate when the circumstances warrant such an act. The Supreme Court, speaking thru Justice Esguerra, said:
All these questions boil down to the single issue of whether or not the dismissal of the complaining employees, petitioners herein, was justified or not. The resolution of this question hinges on a precise and careful analysis of the Collective Bargaining Agreements. (Exhs. "H" and "l"). In these contracts it appears that PAFLU has been recognized as the sole bargaining agent for all the employees of the Company other than its supervisors and security guards. Moreover it likewise appears that "PAFLU, represented in this Act by its National Treasurer, and duly authorized representative, ... (was) acting for and in behalf of its affiliate, the Liberty Cotton Mills Workers Union and the employees of the Company, etc." In other words, the PAFLU, acting for and in behalf of its affiliate, had the status of an agent while the local union remained the basic unit of the association free to serve the common interest of all its members including the freedom to disaffiliate when the circumstances warrant. This is clearly provided in its Constitution and By-Laws, specifically Article X on Union Affiliation, supra. At this point, relevant is the ruling in an American case. (Harker et al. vs. Mckissock et al., 81A 2d 480, 482). The locals are separate and distinct units primarily designed to secure and maintain an equality of bargaining power between the employer and their employee-members in the economic struggle for the fruits of the joint productive effort of labor and capital; and the association of the locals into the national union (as PAFLU) was in furtherance of the same end. These associations are consensual entities capable of entering into such legal relations with their members. The essential purpose was the affiliation of the local unions into a common enterprise to increase by collective action the common bargaining power in respect of the terms and conditions of labor. Yet the locals remained the basic units of association, free to serve their own and the common interest of all, subject to the restraints imposed by the Constitution and By-Laws of the Association, and free also to renounce the affiliation for mutual welfare upon the terms laid down in the agreement which brought it into existence.

The right of the local members to withdraw from the federation and to form a new local depends upon the provisions of the union's constitution, by- laws and charter. In the absence of enforceable provisions in the federation's constitution preventing disaffiliation of a local union, a local may sever its relationship with its parent. There is nothing shown in the records nor is it claimed by respondent federation that the local union was expressly forbidden to disaffiliate from the federation. Except for the union security clause, the federation claims no other ground in expelling four of the fifty-one who signed the certification. Fifty-one out of sixty employees is equivalent to eighty five percent (85%) of the total working force. This is not a case where one or two members of the old union decided to organize another union in order to topple down the former, but it is a case where majority of the union members decided to reorganize the union and to disaffiliate from the mother federation. There is no merit to the contention of the respondent federation that the act of disaffiliation is disloyalty to the union. The federation and the union are two different entities and it was the federation which actively initiated the dismissal of the individual petitioners. A local union does not owe its existence to the federation to which it is affiliated. It is a separate and distinct voluntary association owing its creation and continued existence to the will of its members. The very essence of selforganization is for the workers to form a group for the effective enhancement and protection of their common interests. The third, fourth and fifth assignment of errors maybe resolved on the same issue which is the legality of the strike and the consequences thereof. Petitioners allege that the strike which was started on April 30, 1965 was staged because of the unfair labor practice of the respondent company in refusing to bargain collectively with PICEWO and in dismissing individual petitioners. The Hearing Officer in his Report which was adopted in full by the Court of Industrial Relations settled the legality of the strike in the following manner:
xxx xxx xxx While the reply of respondent PINCOCO to the proposal of the new union evokes ambiguity, the same may not be treated as a refusal to bargain. At the time the letter proposal was sent, the presumed bargaining agent was the FTLO. No showing had been made that the PICEWO, upon its organization was should should have been accorded the status of a majority bargaining representative. The letter reply of PINCOCO, although it seem to cast doubt as to its motivation, should not be held and taken against it as a positive design to discriminate in the absence of any additional or corroborative showing that the new union actually represented the majority of the

employees in the unit and that this fact was known to the management. The strike therefore of the PICEWO was not on account of any unfair labor practice acts committed by the respondent PINCOCO. It seem to have been more of a strike to force recognition. xxx xxx xxx

We do not agree with the finding of the Hearing Officer that the strike was staged to force recognition. The chain of events which preceded the strike belie this conclusion. On April 5, 1965, Ernesto Pagayatan, the president of PICEWO sent to the management a set of proposals for a collective bargaining agreement. The management on April 13, 1965 replied that the formal reply to the proposals cannot be made within the reglementary period because they will submit the said proposals to their legal counsel for further study and instead their reply would be made on April 19, 1965. No reply was made on that date. On April 29, 1965, individual petitioners were dismissed. A strike was staged the next day. One day after the petitioners struck, a new collective bargaining agreement was signed by the respondent company and the FTLO. The respondent company knew that a new union was formed composed of about 85% of the total number of its employees. It was furnished a copy of the certification that the majority of the FTLO members are forming a new union called PICEWO. The set of bargaining proposals were in the name of the new union. While a company cannot be forced to sit down and bargain collectively with the new union since it had no notice of the union's official capacity to act as the bargaining agent, the respondent company cannot deny that it had factual knowledge of the existence of a majority union. It could have asked for further proof that the new union was indeed the certified bargaining agent. It did not. Instead, it dismissed individual petitioners and signed a new CBA the day after the expiration of the old CBA, on the pretext that FTLO was presumed to be the certified bargaining agent. Such pretext does not seem justified nor reasonable in the face of the established fact that a new union enjoyed a majority status within the company. On the belief that the respondent company refused to bargain collectively with PICEWO, individual petitioners together with the other members staged a strike. We have in several cases ruled that a strike may be considered legal when the union believed that the respondent company committed unfair labor acts and the circumstances warranted such belief in good faith although subsequently such allegation of unfair labor practices are found out as not true. Thus, in Norton and Harrison Co. and Jackbilt Blocks company Labor Union (NLU) vs. Norton and Harrison, et al., 3 We held that "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 management, said strike following the berrer ruling did not result in the termination of the striking members' status as employees and therefore, they are still entitled to reinstatement without backwages." The Ferrer 4 ruling was also upheld in Shell Oil Workers Union vs. Shell Company of the Phil. Ltd. 5 where We stated that "(i)t is not even required that there be in fact an unfair labor practice committed by the employer. It suffices, if such a belief in good faith is entertained by labor as the inducing factor for staging a strike. So it was clearly stated by the present Chief Justice while still an Associate Justice of this Court: 'As a consequence, we hold that the strike in question had been called to offset 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. The Ferrer ruling was promulgated in 1966, that in the Shell Oil case in 1971. In 1980, there was the case of Pepito vs. Secretary of Labor, L-49418, Feb. 29, 1980, where petitioner therein was separated for having been implicated in a pilferage case by a co-employee but was later absolved from the charge. The Supreme Court thru Chief Justice Fernando ruled that the cause for his dismissal was proved non-existent or false and thus ordered his reinstatement with three years backwages, without deduction and qualification. We adopt the Pepito ruling and We hold that the petitioners in the case at bar are entitled not only to reinstatement but also to three years backwages without deduction and qualification. This is . justified and proper since the strike was proved and We held the same to be not illegal but was induced in the honest belief that management had committed unfair labor practices and, therefore, the cause of their dismissal from employment was non-existent. It is clear that management gave cause or reason to induce the staging of the strike by improperly refusing to recognize the new union formed by petitioners. It has been twelve (12) years since petitioners were dismissed from their employment and in their destitute and deplorable condition, to them the benign provisions of the New Constitution for the protection of labor, assuring the rights of workers to selforganization, collective bargaining and security of tenure would be useless and meaningless. Labor, being the weaker in economic power and resources than capital, deserve protection that is actually substantial and material.

WHEREFORE, IN VIEW OF THE FOREGOING, the decision under review is hereby SET ASIDE. The respondent company is hereby ordered to reinstate individual petitioners and other striking members within thirty (30) days from notice of this decision, with backwages equivalent, to three (3) years at the rates actually received by them before their dismissal without deduction and qualification. In view of the length of time that this dispute has been pending, this decision shall be immediately executory upon promulgation and notice to the parties. Without pronouncement as to costs. SO ORDERED. Teehankee (Chairman), Makasiar, Fernandez, Melencio-Herrera and Plana, JJ., concur.

GRAND BOULEVARD HOTEL V GENUINE LABORERS ORGANIZATION 406 SCRA 688 CALLEJO; July 18, 2003 NATURE Petition for review on certiorari FACTS - Respondent Genuine Labor Organization of Workers in Hotel, Restaurant and Allied Industries Silahis International Hotel Chapter (Union) and the petitioner Grand Boulevard Hotel (then Silahis International Hotel, Inc.) executed a CBA covering the period from July 10, 1985 up to July 9, 1988. - Thereafter, Union filed several notices of strike on account of alleged violations of CBA, illegal dismissal and suspension of EEs. In these instances, SOLE issued a status quo ante bellum order certifying the labor dispute to the NLRC for compulsory arbitration pursuant to Article 263(g) of LC. After notice was given by Hotel re its decision to implement retrenchment program, Union informed the DOLE that the union will conduct a strike vote referendum. The members of the Union voted to stage a strike. Union informed the DOLE of the results of the strike vote referendum. 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. Then, another notice of strike was filed by Union on

account of the illegal dismissal of EEs pusrsuant to Hotels act of retrenching around 171 EEs. Officers of the respondent union and some members staged a picket in the premises of the hotel, obstructing the free ingress and egress thereto. Because of this, they were terminated. - Hotel filed a complaint with NLRC for illegal strike against the union, its members and officers. Petitioner Hotel 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. It further alleged that the officers and members of the respondent union blocked the main ingress to and egress from the hotel. - The respondent Union denied the material allegations of the complaint and alleged that the petitioner committed ULP prior to the filing of the Nov. 16, 1990 notice of strike. Hence, there was no need for the union to comply with A263 and 264 of LC, as the notice - LA Linsangans Ruling: Unions failure to comply with the requirements laid down in A263 and 264 of LC, the strike that was staged 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. LA noted that if as alleged by the respondent union the petitioner was guilty of ULP, it should have filed a complaint therefor against the Hotel and/or its officials for which the latter could have been meted penal and administrative sanctions as provided for in A272 of LC. The Union failed. Appeal by Union to NLRC: that it had complied with the requirements laid down in A263 and 264 of LC because its Nov 16, 1990 notice of strike was a mere reiteration of its Sept 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. - NLRC affirmed LA Decision. Compliance of the requirements laid down in A263 and 264 of LC respecting the Sept 27, 1990 notice of strike filed by the union cannot be carried over to the Nov 16, 1990 notice of strike. Resultantly, for failure of the union to comply with the requirements, the strike staged on November 16 up to November 29, 1990 was illegal. - CA reversed NLRC and LA: It took into account the observation of the Sol-Gen that the Hotel retrenched EEs pending the resolution of the certified cases respecting the alleged illegal suspension and dismissals effected by Hotel during and prior to the notices of strike filed by Union. Sol-Gen 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 Hotel was engaged in ULP. Hence, this petition ISSUES 1 WON the strike staged by the respondent union on Nov16-29, 1990 is legal 2 WON the dismissals of the officers and some members of the Union as a consequence of the strike on Nov16-29, 1990 are valid. HELD 1. NO Re: Procedural Requirements - Under A263 (c) and (f) of LC, the requisites for a valid strike are as follows: (a) a notice of strike fled with the DOLE 30 days before the intended date thereof or 15 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 7 days before the intended strike. The requisite 7-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. A strike simultaneously with or immediately after a notice of strike will render the requisite periods nugatory. - In this case, union filed its notice of strike with the DOLE on Nov 16, 1990 and on the same day, staged a picket on the premises of the hotel, in violation of the law. Union cannot argue that since the notice of strike on Nov 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 Nov16, 1990 was lawful. The matters contained in the notice of strike of Sept 27, 1990 had already been taken cognizance of by the SOLE when he issued on Oct 31, 1990 a status quo ante bellum order enjoining union from intending or staging a strike. Despite SOLE order, the union nevertheless staged a strike on Nov16, 1990 simultaneously with its notice of strike, thus violating A264(a) LC Grounds - 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 A264 of LC: 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. - 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. 2. YES Re: Effect of Illegality Ratio Since 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 A264 of LC, the union officers and members, as a result, are deemed to have lost their employment status for having knowingly participated in an

illegal act. Disposition Petition is GRANTED. LA Decision REINSTATED. 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, Raeses, Sy, Taquio and Associates for petitioners. Carlos L. Galarrita for private respondent.

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.

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

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 paguusap para sa ikatitiwasay ng ating relasyon. Gusto naming manatili ang ating magandang pagtitinginan bilang magkasangga para sa ikauunlad ng ating kumpanya. Sana ay unawain niyo kami dahil kailangan namin ng trabaho.

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 abovementioned, 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.)

Gumagalang, (Sgd.) WILFREDO ABULENCIA Pangulo (Rollo, p. 590)

On October 30, 1987, MILU filed a position paper with counter-complaint before the NLRC. In said countercomplaint, 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

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 nostrike 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.)

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. PANAY ELECTRIC CO. INC V NLRC (PANAY ELECTRIC CO. EMPLOYEES AND WORKERS ASSOCIATION 248 SCRA 668 VITUG; October 4, 1995 NATURE Petiton for certiorari FACTS -On 30 October 1990, petitioner Panay Electric Company, Inc., posted a notice announcing the need for a "Report Clerk" who could assume the responsibility of gathering accounting and computer data at its power plant -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. -Enrique Huyan informed petitioner that he was not interested in accepting the new position. -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" -An administrative investigation was conducted; thereafter, Huyan was ordered dismissed effective 10 December 1990. -On 22 January 1991, the respondent union went on strike. -Forthwith, the company filed a petition to declare the strike illegal as it was a serious breach of the "no strike, no lock out clause," of the Collective Bargaining Agreement ("CBA") -The NLRC found 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

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.

same disregarded the grievance procedure ISSUE WON the strike committed by the respondent union was illegal HELD Yes -The State guarantees the right of all workers to selforganization, collective bargaining and negotiations, as well as peaceful concerted activities, including the right to strike, in accordance with law. -The right to strike, however, is not absolute. It has heretofore been held that a "no strike, no lock-out" provision in the Collective Bargaining Agreement ("CBA") is a valid stipulation although the clause may be invoked by an employer only when the strike is economic in nature or one which is conducted to force wage or other concessions from the employer that are not mandated to be granted by the law itself. -It would be inapplicable to prevent a strike which is grounded on unfair labor practice. -In this situation, it is not 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 committed such unfair labor practice and the surrounding circumstances could warrant such a belief in good faith. -In the instant case, the NLRC found Enrique Huyan and Prescilla Napiar, the "principal leaders" of the strike, not to have acted in good faith. The NLRC said: 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 honestly claim that they were in good faith in their belief that the Company was committing 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, 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. Disposition Decision is affirmed (as regards the illegality of the stirke)

[G.R. NOS. 143013-14. December 18, 2000]


TELEFUNKEN SEMICONDUCTORS EMPLOYEES UNION-FFW and individual union members DANILO G. MADARA and ROMEO L. MANAYAO, petitioners, vs., THE COURT OF APPEALS, HON. BIENVENIDO LAGUESMA, as Secretary of Labor and Employment, and TEMIC TELEFUNKEN MICROELECTRONICS, (PHILS.), INC., respondents. DECISION DE LEON, JR., J.: This is a petition for review on certiorari under Rule 45 of the Rules of Court seeking the reversal of the Decision of the Court of Appeals dated December 23, 1999 in CA-G.R. SP Nos. 54227 and 54665 and its Resolution dated April 19, 2000, denying herein petitioners motion for reconsideration. The assailed Decision of respondent Court of Appeals granted the petition of private respondent TEMIC TELEFUNKEN MICROELECTRONICS, (Phils.), INC., (Company, for brevity) in CA-G.R. SP No. 54227 reversing and setting aside the Secretary of Labors: (1) Decision dated May 28, 1999; and (2) Resolution dated July 16, 1999, insofar as the Company was directed to pay backwages and grant financial assistance to the striking workers. In CA-G.R. SP No. 54665, on the other hand, the petition of TELEFUNKEN SEMICONDUCTORS EMPLOYEES UNION-FFW (Union, for brevity) and individual union members DANILO G. MADARA and ROMEO L. MANAYAO was dismissed on a finding that the Secretary of Labor did not abuse his discretion nor acted in excess of his jurisdiction when he declared illegal the strike staged by the Union, its officers and members on September 14, 1995, and that as a result thereof, those who participated therein have lost their employment status. The petition is not meritorious, and the same should be as it is hereby dismissed. The facts as borne by the records are as follows: The labor dispute started on August 25, 1995 when the Company and the Union reached a deadlock in their negotiations for a new collective bargaining agreement. On August 28, 1995, the Union filed a Notice of Strike with the National Conciliation and Mediation Board (NCMB). On September 8, 1995, the then Acting Secretary of the Department of Labor and Employment, Jose S. Brillantes, intervened and assumed jurisdiction over the

dispute pursuant to Art. 263, par. (g), of the Labor Code, as amended. Thus, the Order of the said Acting Secretary of Labor enjoined any strike or lockout, whether actual or intended, between the parties. His Notice of the Assumption Orderwas personally served on the representatives of the Company, namely, on Atty. Allan Montao, counsel of the Union-FFW, on September 9, 1995 at 1:25 p.m. and twice on Ms. Liza Dimaano, Union President, first on September 8, 1995 at 7:15 p.m. and again on September 11, 1995 at 9:30 a.m. but both union representatives refused to acknowledge receipt thereof. Despite the assumption Order, the Union struck on September 14, 1995. Two (2) days later, the Acting Secretary of Labor issued an Orderdirecting the striking workers to return to work within twenty-four (24) hours and for the Company to admit them back to work under the terms and conditions prevailing prior to the strike. Notice of the Return-to-Work Order dated September 16, 1995 of the Acting Secretary of Labor was sent to the striking Union members but still some of them refused to heed the order and continued with their picket. The Federation of Free Workers (FFW) received and acknowledged receipt of the said Return to Work Order on September 18, 1995. On September 23, 1995, violence erupted in the picket lines. The service bus ferrying non-striking workers was stoned, causing injuries to its passengers. Thereafter, complaints for threats, defamation, illegal detention and physical injuries were filed against the strikers. On October 2, 1995, the Company issued letters of termination for cause to the workers who did not report back to work despite the Notice of Assumption and Return-to-Work Orders issued by the Acting Secretary Jose S. Brillantes of the Department of Labor and Employment (DOLE). On October 27, 1995, the Acting Secretary of Labor issued another Order directing the Company to reinstate all striking workers except the Union Officers, shop stewards, and those with pending criminal charges, x x x while the resolution of the legality of the strike was pending. This exclusion Order was reaffirmed with some modifications in an Order dated November 24, 1995. On December 5, 1995, the Union filed with this Court a petition for certiorari, docketed as G.R. No. 122743, questioning the exclusions made in the aforesaid Orders. On June 27, 1996, while the said petition in G.R. No. 122743 was pending, then Secretary of Labor Leonardo A. Quisumbing issued a Writ of Execution for the physical reinstatement of the remaining striking workers who were not reinstated as contained in the thirty-two (32) page list attached to the aforesaid writ. Accordingly, on July 3, 1996, the Company filed a Motion to Quash, Recall or Suspend the Writ of

Execution issued by Secretary Quisumbing. This motion was denied by the Department of Labor and Employment (DOLE, for brevity) for lack of merit and, in the same Order, the DOLE directed the issuance of an Alias Writ to enforce the actual and physical reinstatement of the workers, or in case the same was not feasible, to effect payroll reinstatement. On November 21, 1996, the Companys motion for reconsideration was also denied. On December 9, 1996, the Company filed with this Court a petition for certiorari, docketed as G.R. No. 127215, questioning the denial of its motion for reconsideration and the Alias Writ issued by the DOLE to enforce the actual and physical reinstatement or the payroll reinstatement of the workers (including the Original Writ of Execution of June 27, 1996). After we consolidated the petitions for certiorari of the Company and the Union in G.R. Nos. 122743 and 127215, respectively, we rendered a Decision therein on December 12, 1997. The Companys petition for certiorari in G.R. No. 127215 was dismissed for lack of merit. In G.R. No. 122743, we granted the Unions petition and ordered the reinstatement of all striking workers without exception. We also directed the Secretary of Labor and Employment to determine with dispatch the legality of the strike as well as the liability of the individual strikers, if any. After receipt of our said Decision in G.R. Nos. 122743 and 127215, the DOLE issued an Alias Writ of Execution on August 26, 1998. Thereafter, the Company moved to quash the Alias Writ which was, however, denied by the DOLE. The motion for reconsideration filed by the Company was similarly denied. Aggrieved by the preceding rulings of the DOLE, the Company elevated this case to this Court via another petition for certiorari docketed as G.R. No. 135788. On December 7, 1998, we resolved to dismiss the said petition in G.R. No. 135788 for (a) failing to state the place of service by registered mail on the adverse party; (b) failing to submit a certification duly executed by the president of the petitioning Company or by its representative which shows its authority to represent and act on behalf of the Company; and (c) for lack of the requisite certificate of non-forum shopping. We denied this petition with finality on our March 15, 1999 Resolution where we held that the Secretary of Labor did not abuse his discretion in denying the Companys motion to quash the execution of our Decision dated December 12, 1997. In compliance with our order to the Secretary of Labor and Employment to determine with dispatch the legality of the strike, marathon hearings were conducted at the DOLE Office with Atty. Lita V. Aglibut as hearing officer. On September 22, 1998, both the Union and the Company complied with the order to submit their respective position papers. The Company adduced

evidence and submitted its case for decision. The Union did not adduce evidence. Instead, the Union manifested that it would file a motion to dismiss for failure of the Company to prove its case with the request that it be allowed to present evidence should its motion be denied. During the subsequent hearings conducted by the hearing officer of DOLE, the Union insisted that a ruling should first be made on the Demurrer to Evidence it previously filed notwithstanding repeated reminders by the Hearing Officer that the technical rules of evidence and procedure do not apply to proceedings before DOLE. Thereafter, an exchange of pleadings, reiterating their respective positions, ensued between the Company and the Union. On May 19, 1999, the Union filed a motion before the DOLE praying for the issuance of another Alias Writ of Execution in connection with our March 15, 1999 Resolution in G.R. No. 135788. The Union contended that this Resolution has declared the dismissals of the striking workers as illegal and therefore a writ should be issued for the physical reinstatement of the workers with full backwages and other benefits reckoned from June 27, 1996. On May 28, 1999, the Secretary of Labor and Employment resolved the matter in a Decision. The Secretary of Labor declared therein that in hearings and resolutions of labor disputes, before the DOLE, his Office is not governed by the strict and technical rules of evidence and procedure observed in the regular courts of law, and that it will resolve the issues based on the pleadings, the documentary evidence and other records of the case. The dispositive portion of the said Decision dated May 28, 1999 reads: WHEREFORE, PREMISED ON THE FOREGOING, this Office hereby: a. Declares the strike conducted by the Telefunken Semiconductors Employees Union-FFW on 14 September 1995 as illegal for having been waged in open, willful and knowing defiance of the assumption order dated 8 September 1995 and the subsequent return-to-work order dated 16 September 1995 and consequently, the striking workers are declared to have lost their employment status; b. Directs the payment of backwages and other benefits to the striking workers corresponding to the temporary reinstatement periods (1) from 27 June 1996 to 28 October 1996, (2) from 21 November 1998 up to the date of this Decision; c. Directs the Telefunken Micro-Electronics (Phils.), Inc. to grant financial assistance equivalent to one (1) month for every year of service to the striking workers conformably with its grant of the same benefit to other strikers as manifested by the Company to the Supreme Court on 20 November 1997.

In this connection, the Bureau of Working Conditions, this Department, is hereby directed to compute the total award herein made and to submit its report of computation to this Office within ten (10) days from receipt of this Decision. SO ORDERED. Dissatisfied, both the Company and the Union together with individual union members Nancy Busa and Arnel Badua, filed motions for reconsideration of the said Decision of the Secretary of Labor. On July 16, 1999, the Secretary of Labor denied the said motions. The Company and the Union filed their respective petitions for certiorari docketed as CA-G.R. SP Nos. 54227 and 54665 with the Court of Appeals and these were later on consolidated. On December 23, 1999, the Court of Appeals rendered its now assailed Decision, the dispositive portion of which states: WHEREFORE, the COMPANYs Petition in CA-G.R. No. SP 54227 is GRANTED. The Secretary of Labors Decision dated 28 May 1999 and his Resolution dated 16 July 1999 are REVERSED and SET ASIDE in so far as they direct the company to pay backwages and grant financial assistance to the striking workers. The said Decision and Resolution are AFFIRMED in all other respects. The Unions Petitions in CA-G.R. SP No. 546654 is DISMISSED. SO ORDERED. On January 24, 2000, only the Union sought reconsideration of the said Decision of the appellate court. However, it was denied for lack of merit by the Court of Appeals on April 19, 2000 in its Resolution. In the petition at bench, petitioners Union, Madara and Manayao submits the following assignment of errors, to wit: THE HONORABLE COURT OF APPEALS ERRED: I IN AFFIRMING THE DECISION OF THE RESPONDENT SECRETARY OF LABOR IN FINDING THE STRIKE STAGE BY THE UNION ILLEGAL WHICH WAS FEEBLY BASED ON THE COMPANYS POSITION PAPER AND THE MATERIALS AND PICTORIALS ATTACHED THERETO WHICH ARE BEREFT OF PROBATIVE VALUE BECAUSE THEY ARE PATENTLY INADMISSIBLE AND INCOMPETENT. II .IN SUSTAINING THE RESPONDENT SECRETARYS DECISION EFFECTING THE WHOLESALE TERMINATION OF EMPLOYMENT OF

THE STRIKING TEMIC WORKERS WITHOUT ANY DETERMINATION OF THEIR INDIVIDUAL LIABILITY, IF ANY, AS ORDERED BY THE HONORABLE SUPREME COURT, IN THE ABSENCE OF ANY ILLEGAL ACTS COMMITTED BY THE STRIKERS ATTENDANT TO THE STRIKE. III .IN RULING THAT THE SOLE OFFICE OF THE WRIT OF CERTIORARI IS THE CORRECTION OF ERRORS OF JURISDICTION INCLUDING THE COMMISSION OF ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION, DOES NOT INCLUDE CORRECTION OF HEREIN PUBLIC RESPONDENT SECRETARY OF LABORS EVALUATION OF THE EVIDENCE AND FACTUAL FINDINGS THEREON. IV .IN RULING IN A MANNER ABSOLUTE THAT TECHNICAL RULES OF EVIDENCE PREVAILING IN THE COURTS OF LAW AND EQUITY HAVE NO ROOM IN ADMINISTRATIVE AND/OR QUASIJUDICIAL PROCEEDINGS. V .IN UPHOLDING THE RESPONDENT SECRETARY OF LABORS RULING THAT THE NON-APPLICATION OF TECHNICAL RULES OF PROCEDURE IN PROCEEDINGS BEFORE THE OFFICE OF THE SECRETARY OF LABOR BARS THE PETITIONERS FROM ADDUCING EVIDENCE AFTER THE DENIAL OF THE UNION'S DEMURRER TO EVIDENCE. VI .IN NEGATING THE PETITIONERS VESTED RIGHT TO BACKWAGES. The petition has no merit. As to the first and second assigned errors, herein petitioners contend that according to the Constitution and jurisprudence, strikes enjoy the presumption of legality and the burden of proving otherwise rests upon the respondent Company; that the case should not have been decided on the basis of the position paper method because in several instances this Court has looked with disfavor on the position paper method in disposing labor cases; that due to the transcendental issues involved, a hearing should have been conducted to avoid the impression of denial of due process considering the dearth of evidence submitted by respondent Company; and that the pieces of evidence submitted by respondent Company are wanting in probative value.

Herein petitioners also argue that for a union officer to lose his employment status it must be proved that he knowingly participated in an illegal strike; and that in the case of an ordinary member, it must not only be demonstrated that he actually participated in the illegal strike but also that he has committed illegal acts during the strike and which respondent Company allegedly failed to prove. We do not agree. Despite petitioners vain attempt to structure the case to show, on its surface, a question of law, nevertheless, the case essentially involves a question of fact. The issues raised basically boils down to a determination of whether or not the position paper and the pieces of evidence adduced by the Company before the DOLE are sufficient in probative value to overthrow the constitutional presumption of the legality of the strike. As correctly observed by the Solicitor General in his Comment, it . . . .(the first and second assigned errors) essentially involve questions of fact. It calls for a re-evaluation of facts and a re-examination of the evidence. We take this occasion to emphasize that the office of a petition for review on certiorari under Rule 45 of the Rules of Court requires that it shall raise only questions of law. The factual findings by quasi-judicial agencies, such as the Department of Labor and Employment, when supported by substantial evidence, are entitled to great respect in view of their expertise in their respective fields. Judicial review of labor cases does not go so far as to evaluate the sufficiency of evidence on which the labor officials findings rest. It is not our function to assess and evaluate all over again the evidence, testimonial and documentary, adduced by the parties to an appeal, particularly where the findings of both the trial court (here, the DOLE Secretary) and the appellate court on the matter coincide, as in this case at bar. The Rule limits that function of the Court to the review or revision of errors of law and not to a second analysis of the evidence. Here, petitioners would have us re-calibrate all over again the factual basis and the probative value of the pieces of evidence submitted by the Company to the DOLE, contrary to the provisions of Rule 45. Thus, absent any showing of whimsical or capricious exercise of judgment, and unless lack of any basis for the conclusions made by the appellate court be amply demonstrated, we may not disturb such factual findings. Although we have ruled against the reliability of position papers in disposing of labor cases, in the cases of Batongbacal v. Associated Bank and Progress Homes v. NLRC, this was due to certain patent matters that should have been tried by the administrative agency concerned, such as certain factual circumstances which, however, are unavailing in the case at bar. In Batongbacal, we withheld judgment on the case due to the absence of a definitive factual determination of the status of petitioner therein as an assistant vice-president of therein respondent Bank. It has not been established

by the Labor Arbiter whether the petitioner therein was a managerial or a rank-and-file employee, noting that there are different causes of termination for both the managerial and rank-and-file employees. Thus, the need to remand the case was necessary. In Progress Homes, on the other hand, we found that despite the absence of any evidence to establish and support therein private respondents claim that the petitioners therein were their immediate employers, the Labor Arbiter forthwith concluded the illegal dismissal of the private respondents. Also, there was the apparent failure of the Labor Arbiter to justify why the private petitioner therein should be held solidarily liable with Progress Homes. There was a clear absence of evidence to show that petitioner therein had engaged the services of private respondents therein and that petitioner therein had acted maliciously and in bad faith in terminating the services of private respondents. The herein petitioners dismally failed to show that there really existed certain issues which would necessitate the remand of this case at bar, or that the appellate court misapprehended certain facts when it dismissed their petition for certiorari. The need to determine the individual liabilities of the striking workers, the union officers and members alike, was correctly dispensed with by the Secretary of Labor after he gave sufficient opportunity to the striking workers to cease and desist from continuing with their picket. Ensconced in the Labor Code of the Philippines, as amended, is the rule that: Art. 263. Strikes, picketing and lockouts. xxx x xx xxx

xxx x

xx xxx

It is clear from the foregoing legal provision that the moment the Secretary of Labor assumes jurisdiction over a labor dispute in an industry indispensable to national interest, such assumption shall have the effect of automatically enjoining the intended or impending strike. It was not even necessary for the Secretary of Labor to issue another order directing them to return to work. The mere issuance of an assumption order by the Secretary of Labor automatically carries with it a return-to-work order, even if the directive to return to work is not expressly stated in the assumption order. However, petitioners refused to acknowledge this directive of the Secretary of Labor on September 8, 1995 thereby necessitating the issuance of another order expressly directing the striking workers to cease and desist from their actual strike, and to immediately return to work but which directive the herein petitioners opted to ignore. In this connection, Article 264(a) of the Labor Code clearly provides that: Article 264. Prohibited Activities. (a) x x x No strike or lock out shall be declared after the assumption of jurisdiction by the President or the Secretary or after certification or submission of the dispute to compulsory or voluntary arbitration or during the pendency of cases involving the same grounds for the strike or lockout. x x x. Any union officer who knowingly participates in illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status: Provided, that mere participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his employment even if a replacement had been hired by the employer during such lawful strike. (Emphasis Ours) The rationale of this prohibition is that once jurisdiction over the labor dispute has been properly acquired by the competent authority, that jurisdiction should not be interfered with by the application of the coercive processes of a strike. We have held in a number of cases that defiance to the assumption and return-towork orders of the Secretary of Labor after he has assumed jurisdiction is a valid ground for loss of the employment status of any striking union officer or member. Furthermore, the claim of petitioners that the assumption and return-to-work Orders issued by the Secretary of Labor were allegedly inadequately served upon them is untenable in the light of what have already been clearly established in this case, to wit:

(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory arbitration. Such assumption per certification shall have the effect of automatically enjoining the intended or impending strike or lockout as specified in the assumption or certification order. If one had already taken place at the time of assumption or certification, all striking or locked out employees shall immediately return to work and the employer shall immediately resume operations and re-admit all workers under the same terms and conditions prevailing before the strike or lockout. The Secretary of Labor and Employment or the Commission may seek the assistance of law enforcement agencies to ensure the compliance with this provision as well as with such orders as he may issue to enforce the same. (Emphasis Ours)

x x x, the reports of the DOLE process server, shows that the Notice of Order of 8 September 1995 was actually served on the Union President. The latter, however, refused to acknowledge receipt of the same on two separate occasions (on 8 September 1995 at 7:15 p.m. and on 11 September 1995 at 9:30 a.m.). The Unions counsel of record, Atty. Allan Montano, similarly refused to acknowledge receipt of the 8 September 1995 Order on 9 September 1995 at 1:25 p.m. Records also show that the Order of 16 September 1995 was served at the strike area with copies left with the striking workers, per the process servers return, although a certain Virgie Cardenas also refused to acknowledge receipt. The Federation of Free Workers officially received a copy as acknowledged by a certain Lourdes at 3:40 p.m. of 18 September 1995. The foregoing clearly negate the Unions contention of inadequate service of the Orders dated 8 and 16 September 1995 of Acting Secretary Brillantes. Furthermore, the DOLE process servers discharge of his function is an official act carrying the presumption of regularity in its performance which the Union has not disproved, much less disputed with clear and convincing evidence. Likewise, it would be stretching the limits of credibility if We were to believe that the Union was unaware of the said Orders during all the conciliation conferences conducted by the NCMB-DOLE. Specifically, in the conciliation meetings after the issuance of the Order of 8 September 1995 to settle the unresolved CBA issues and after the issuance of the Order of 16 September 1995 to establish the mechanics for a smooth implementation of this Offices return-to-work directive, the Union with its officers and members in attendance never questioned the propriety or adequacy by which these Orders were served upon them. We are not unaware of the difficulty of serving assumption and return-to-work orders on striking unions and their members who invariably view the DOLEs process servers with suspicion and hostility. The refusal to receive such orders and other processes is, as described by the Supreme Court in an analogous case, an apparent attempt to frustrate the ends of justice. (Navale, et al. v. Court of Appeals, 253 SCRA 705) Such being the case, We cannot allow the Union to thwart the efficacy of the assumption and return to work orders, issued in the national interest, through the simple expediency of refusing to acknowledge receipt thereof. Having thus resolved the threshold issue as hereinabove discussed, it necessarily follows that the strike of the Union cannot be viewed as anything but illegal for having been staged in open and knowing defiance of the assumption and return-towork orders. The necessary consequence thereof

are also detailed by the Supreme Court in its various rulings. In Marcopper Mining Corp. v. Brillantes (254 SCRA 595), the High Tribunal stated in no uncertain terms that by staging a strike after the assumption of jurisdiction or certification for arbitration, workers forfeited their right to; be readmitted to work, having abandoned their employment, and so could be validly replaced. Again, in Allied Banking Corporation v. NLRC (258 SCRA 724), the Supreme Court ruled that: xxx. However, private respondents failed to take into consideration the cases recently decided by this Court which emphasized on the strict adherence to the rule that defiance of the return-to-work order of the Secretary of Labor would constitute a valid ground for dismissal. The respective liabilities of striking union officers and members who failed to immediately comply with the return-to-work order, are clearly spelled out in Article 264 of the Labor Code which provides that any declaration of a strike or lock out after the Secretary of Labor and Employment has assumed jurisdiction over the labor dispute is considered an illegal act. Therefore, any worker or union officer who knowingly participates in a strike defying a return-to-work order may as a result thereof be considered to have lost his employment status. Viewed in the light of the foregoing, We have no alternative but to confirm the loss of employment status of all those who participated in the strike in defiance of the assumption order dated 8 September 1995 and did not report back to work as directed in the Order of 16 September 1995. To cast doubt on the regularity of the aforesaid service of the two Orders issued by the Secretary of Labor, petitioners cite Section 1, Rule IX of the NLRC Manual on Execution of Judgment which provides that: Section 1. Hours and Days When Writ Shall Be Served. Writ of Execution shall be served at any day, except Saturdays, Sundays and holidays, between the hours of eight in the morning and five in the afternoon. x xx However, the above-cited rule is not applicable to the case at bar inasmuch as Sections 1 and 4, Rule III of the same NLRC Manual provide that such Execution shall issue only upon a judgment or order that finally disposes of an action or proceeding. The assumption and returnto-work Orders issued by the Secretary of Labor in the case at bar are not the kind of orders contemplated in the immediately cited rule of the NLRC because such Orders of the Secretary of Labor did not yet finally dispose of the labor dispute. As pointed out by the Secretary of Labor in his Decision, petitioners cannot now feign ignorance of his official intervention, to wit:

The admissibility of the evidence presented by the Company, however, has been questioned. The Unions arguments are less than convincing. The numerous publications of the subject DOLE Orders in various newspapers, tabloids, radio and television cannot be considered hearsay and subject to authentication considering that the subject thereof were the lawful Orders of a competent government authority. In the case of the announcements posted on the Unions bulletin board, pictures of which were presented by the Company in evidence, suffice it for us to state that the bulletin board belonged to the Union. Since the veracity of the contents of the announcements on the bulletin board were never denied by the Union except to claim that these were self-serving, unverified/unverifiable and thus utterly inadmissible, We cannot but admit the same for the purpose for which it was presented. As regards the third assigned error, petitioners contend that a resolution of a petition for certiorari under Rule 65 of the Rules of Court should include the correction of the Secretary of Labors evaluation of the evidence and factual findings thereon pursuant to the doctrine laid down in Meralco v. The Honorable Secretary of Labor Leonardo A. Quisumbing. That contention is misplaced. In that case, we ruled that: The extent of judicial review over the Secretary of Labors arbitral award is not limited to a determination of grave abuse in the manner of the secretarys exercise of his statutory powers. This Court is entitled to, and must in the exercise of its judicial power review the substance of the Secretarys award when grave abuse of discretion is alleged to exist in the award, i.e., in the appreciation of and the conclusions the Secretary drew from the evidence presented. However, this Courts review (of) the substance does not mean a re-calibration of the evidence presented before the DOLE but only a determination of whether the Secretary of Labors award passed the test of reasonableness when he arrived at his conclusions made thereon. Thus, we declared in Meralco, that: In this case we believe that the more appropriate and available standard and one does not require a constitutional interpretationis simply the standard of reasonableness. In laymans terms, reasonableness implies the absence of arbitrariness; in legal parlance, this translates into the exercise of proper discretion and to the observance of due process. Thus, the question we have to answer in deciding this case is whether the Secretarys actions have been reasonable in light of the parties positions and the evidence they presented. Thus, notwithstanding any allegation of grave abuse of discretion, unless it can be amply demonstrated that the Secretary of Labors arbitral award did not pass the test of reasonableness, his conclusions thereon shall not be disturbed, as in the case at bar.

The main thrust of a petition for certiorari under Rule 65 of the Rules of Court is only the correction of errors of jurisdiction including the commission of grave abuse of discretion amounting to lack or excess of jurisdiction. However, for this Court to properly exercise the power of judicial review over a decision of an administrative agency, such as the DOLE, it must first be shown that the tribunal, board or officer exercising judicial or quasijudicial functions has indeed acted without or in excess of its or his jurisdiction, and that there is no appeal, or any plain, speedy and adequate remedy in the ordinary course of law. In the absence of any showing of lack of jurisdiction or grave abuse tantamount to lack or excess of jurisdiction, judicial review may not be had over an administrative agencys decision. We have gone over the records of the case at bar and we see no cogent basis to hold that the Secretary of Labor has abused his discretion. In the fourth and fifth assignment of errors, petitioners would have us believe that the Court of Appeals, in its assailed Decision ruled in a manner absolute that prevailing technical rules of evidence in the courts of law and equity have no room in administrative and/or quasijudicial proceedings; and that the non-application of technical rules of procedure in proceedings before the Office of the Secretary of Labor should not have barred herein petitioners from adducing evidence after their demurrer to evidence was denied. We do not agree. That declaration of the Court of Appeals should be taken in the context of the whole paragraph and the law and the jurisprudence cited in the assailed portion of its decision. We do not sanction the piecemeal interpretation of a decision to advance ones case. To get the true intent and meaning of a decision, no specific portion thereof should be isolated and resorted to but the decision must be considered in its entirety. The portion of the Court of Appeals assailed Decision reads, to wit: x x x, it cannot be gainsaid that technical rules of evidence prevailing in courts of law and equity have no room in administrative and/or quasi-judicial proceedings (Lawin Security Services, Inc. v. National Labor Relations Commission, 273 SCRA 132; Valderama v. National Labor Relations Commission, 256 SCRA 466; De Ysasi III v. National Labor Relations Commission, 231 SCRA 173). In fact, Article 221 of the Labor Code expressly mandates that in proceedings before the (National Labor Relations) Commission or any of the Labor Arbiters, the rules of evidence prevailing in courts of law or equity shall not be controlling x x x. This provision is also applicable to proceedings before the Office of the Secretary of Labor and Employment which, under the said Code, is empowered to hear and resolve matters arising from the exercise of its plenary power to issue assumption or (sic) jurisdiction and return-to-work orders, all in keeping with the national interest (Article 263(g) and Article 264 of the Labor Code).

The contention of petitioners that they should have been allowed to present evidence when their demurrer to evidence was denied by the Secretary of Labor, is untenable. The record shows that in the hearing of September 22, 1998 attended by the parties, Atty. Lita V. Aglibut, Hearing Officer, of the public respondents office, who presided over the hearing directed the parties to submit their respective position papers together with the affidavits and documentary evidence within ten (10) days. While the Company submitted its position paper together with supporting evidence and rested its case for resolution, herein petitioners, however, submitted only its position paper but without attaching thereto any supporting documentary evidence. Petitioners chose to rely on the Rules of Court by filing a demurrer to evidence in the hope of a favorable decision and disregarded our resolution in G.R. No. 127215 ordering the Secretary of Labor to determine with dispatch the legality of the strike. On the other hand, the petitioners argued merely on the presumption that the strike was legal. The fact that the Hearing Officer of DOLE admitted their demurrer to evidence is not a valid excuse for herein petitioners not to comply with her said directive for the petitioners to submit their position paper and to attach thereto affidavits and documentary evidence within ten (10) days. Petitioners noncompliance with that directive by failing or refusing to attach affidavits and supporting evidence to their position paper should not be ascribed as the fault of the Secretary of Labor when he denied their demurrer to evidence and forthwith rendered decision on the illegality of the strike. Petitioners have only themselves to blame for having defied the order of the said Hearing Officer of DOLE to submit position papers with supporting evidence. A party who has availed of the opportunity to present his position paper cannot claim to have been denied due process. The requirements of due process are satisfied when the parties to a labor case are given the opportunity to submit position papers wherein they are supposed to attach all the documents that would prove their claim in the event it will be decided that no further hearing should be conducted or that hearing was not necessary. The grant of plenary powers to the Secretary of Labor under Art. 263(g) of the Labor Code, as amended, makes it incumbent for him to bring about soonest, a fair and just solution to the differences between the employer and the employees so that the damage such labor dispute might cause upon the national interest may be minimized as much as possible, if not totally averted, by avoiding stoppage of work or any lagging of the activities of the industry or the possibility of these contingencies which might cause detriment to such national interest. Accordingly, he may adopt the most reasonable and expeditious way of writing finis to the labor dispute. Otherwise, the result would be absurd and contrary to the grant of plenary powers to him by the Labor Code over a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest.

And finally, with respect to petitioners claim of backwages, we find that the ratiocination of the appellate court in its assailed Decision is in accord with law and settled jurisprudence, to wit: On the issue of the award of backwages and financial assistance to the striking workers, the well-entrenched doctrine is that it is only when there is a finding of illegal dismissal that backwages are granted (St. Theresas School of Novaliches Foundation vs. National Labor Relations Commission, 289 SCRA 111; Industrial Timber Corporation-Stanply Operations vs. National Labor Relations Commission, 253 SCRA 623; Jackson Building Condominium Corporation, 246 SCRA 329), and financial assistance or separation pay allowed (Mabeza v. National Labor Relations Commission, 271 SCRA 670; Capili v. National Labor Relations Commission, 270 SCRA 688; Aurora Land Projects Corporation v. National Labor Relations Commission, 266 SCRA 48). Since, as correctly found by the Secretary of Labor, the strikers were not illegally dismissed, the COMPANY is under no obligation to pay backwages to them. It is simply inconsistent, nay, absurd, to award backwages when there is no finding of illegal dismissal (Filflex Industrial and Manufacturing Corporation, 286 SCRA 245). xxx when the record shows that the striking workers did not comply with lawful orders for them to return to work during said periods of time. In fact, the Secretary of Labor observed that while it was obligatory on the part of both parties to restore, in the meantime, the status quo obtaining in the workplace, the same was not possible considering the strikers had defied the return-to-work Order of this Office (p. 8, Ibid). With such blatant disregard by the strikers of official edicts ordering their temporary reinstatement, there is no basis to award them backwages corresponding to said time frames. Otherwise, they will recover something they have not or could not have earned by their willful defiance of the return-towork order, a patently incongruous and unjust situation (Santos v. National Labor Relations Commission, 154 SCRA 166). The same view holds with respect to the award of financial assistance or separation pay. The assumption for granting financial assistance or separation pay, which is, that there is an illegally dismissed employee and that illegally dismissed employee would otherwise have been entitled to reinstatement, is not present in the case at bench. Here, the striking workers have been validly dismissed. Where the employees dismissal was for a just case, it would be neither fair nor just to allow the employee to recover something he has not earned or could not have earned. This being so, there can be no award of backwages, for it must be pointed out that while backwages are granted on the basis of equity for earnings which a worker or employee has lost due to his illegal dismissal, where private respondents dismissal is

for just cause, as is (sic) the case herein, there is no factual or legal basis to order the payment of backwages; otherwise, private respondent would be unjustly enriching herself at the expense of petitioners. (Cathedral School of Technology v. National Labor Relations Commission, 214 SCRA 551). Consequently, granting financial assistance to the strikers is clearly a specious Inconsistency supra. We are of course aware that financial assistance may be allowed as a measure of social justice in exceptional circumstances and as an equitable concession. We are likewise mindful that financial assistance is allowed only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character (Zenco Sales, Inc. v. National Labor Relations Commission, 234 SCRA 689). However, the attendant facts show that such exceptional circumstances do not obtain in the instant cases to warrant the grant of financial assistance to the striking workers. To our mind, the strikers open and willful defiance of the assumption order dated September 16, 1995 constitute serious misconduct as well as reflective of their moral character, hence, granting financial assistance to them is not and cannot be justified (Philippines Airlines, Inc. v. National Labor Relations Commission, 282 SCRA 536, citing Philippine Long Distance Telephone Company v. National Labor Relations Commission, 164 SCRA 671). In fine, there is no reversible error in the assailed Decision and Resolution of the Court of Appeals. WHEREFORE, the petition is DISMISSED. The appealed Decision dated December 23, 1999 and the Resolution dated April 19, 2000 of public respondent Court of Appeals are AFFIRMED. No costs. SO ORDERED. Bellosillo, (Chairman), Mendoza, and Buena, JJ., concur. G.R. No. 127422 April 17, 2001

Leonardo A. Quisumbing,1 in OS-AJ-05-10(1)-96, "IN RE: LABOR DISPUTE AT LMB CHEMICALS CORPORATION" The facts as culled from the records are: LMG Chemicals Corporation, (petitioner) is a domestic corporation engaged in the manufacture and sale of various kinds of chemical substances, including aluminum sulfate which is essential in purifying water, and technical grade sulfuric acid used in thermal power plants. Petitioner has three divisions, namely: the Organic Division, Inorganic Division and the Pinamucan Bulk Carriers. There are two unions within petitioner's Inorganic Division. One union represents the daily paid employees and the other union represents the monthly paid employees. Chemical Workers Union, respondent, is a duly registered labor organization acting as the collective bargaining agent of all the daily paid employees of petitioner's Inorganic Division. Sometime in December 1995, the petitioner and the respondent started negotiation for a new Collective Bargaining Agreement (CBA) as their old CBA was about to expire. They were able to agree on the political provisions of the new CBA, but no agreement was reached on the issue of wage increase. The economic issues were not also settled. The positions of the parties with respect to wage issue were: "Petitioner Company P40 per day on the first year P40 per day on the second year P40 per day on the third year Respondent Union P350 per day on the first 18 months, and P150 per day for the next 18 months" In the course of the negotiations, respondent union pruned down the originally proposed wage increase quoted above to P215 per day, broken down as follows: "P142 for the first 18 months P73 for the second 18 months" With the CBA negotiations at a deadlock, on March 6, 1996, respondent union filed a Notice of Strike with the National Conciliation and Mediation Board, National Capital Region. Despite several conferences and efforts

LMG CHEMICALS CORPORATION, LMG CHEMICALS CORPORATION, petitioner, vs. THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, THE HON. LEONARDO A. QUISUMBING, and CHEMICAL WORKER'S UNION, respondents. SANDOVAL-GUTIERREZ, J.: Before us is a petition certiorari with prayer for a temporary restraining order and a writ of preliminary injunction under Rule 65 of the 1997 Rules of Civil Procedure, as amended, seeking to nullify the orders dated October 7, 1996 and December 17, 1996, issued by the then Secretary of Labor and Employment, Hon.

of the designated conciliator-mediator, the parties failed to reach an amicable settlement. On April 16, 1996, respondent union staged a strike. IN an attempt to end the strike early, petitioner, on April 24, 1996, made an improved offer of P135 per day, spread over the period of three years, as follows: "P55 per day on the first year; P45 per day on the second year; P35 per day on the third year." On May 9, 1996, another conciliation meeting was held between the parties. In that meeting, petitioner reiterated its improved offer of P135 per day which was again rejected by the respondent union. On May 20, 1996, the Secretary of Labor and Employment, finding the instant labor dispute impressed with national interest, assumed jurisdiction over the same. In compliance with the directive of the Labor Secretary, the parties submitted their respective positive papers both dated June 21, 1996. In its position paper, petitioner made a turn-around, stating that it could no longer afford to grant its previous offer due to serious financial losses during the early months of 1996. It then made the following offer: Zero increase in the first year; P30 per day increase in the second year; and P20 per day increase in the third year. In its reply to petitioner's position paper, respondent union claimed it had a positive performance in terms of income during the covered period. On October 7, 1996, the Secretary of Labor and Employment issued the first assailed order, pertinent portions of which read: "xxx. In the light of the Company's last offer and the Union's last position, We decree that the Company's offer of P135 per day wage increase be further increased to P140 per (day), which shall be incorporated in the new CBA, as follows: P90 per day for the first 18 months, and P50 per day for the next 18 months.

After all, the Company had granted its supervisory employees an increase of P4,500 per month or P166 per day, more or less, if the period reckoned is 27 working days. In regard to the division of the three-year period into two sub-periods of 18 months each, this office take cognizance of the same practice under the old CBA. 2. Other economic demands Considering the financial condition of the Company, all other economic demands except those provided in No. 3 below are rejected. The provisions in the old CBA as well as those contained in the Company's Employee's Primer of Benefits as of Aug. 1, 1994 shall be retained and incorporated in the new CBA. 3. Effectivity of the new CBA Article 253-A of the Labor Code, as amended, provides that when no new CBA is signed during a period of six months from the expiry date of the old CBA, the retroactivity period shall be according to the parties' agreement, Inasmuch as the parties could not agree on this issue and since this Office has assumed jurisdiction, then this matter now lies at the discretion of the Secretary of labor and Employment. Thus the new Collective Bargaining Agreement which the parties will sign pursuant to this Order shall retroact to January 1, 1996. x x x

Forthwith, petitioner filed a motion for reconsideration but was denied by the Secretary in his order dated December 16, 1996. Petitioner now contends that in issuing the said orders, respondent Secretary gravely abused his discretion, thus: I "THE HONORABLE SECRETARY OF LABOR COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN DISREGARDING THE EVIDENCE OF PETITIONER'S FINANCIAL LOSSES AND IN GRANTING A P140.00 WAGE INCREASE TO THE RESPONDENT UNION. II

THE HONORABLE SECRETARY OF LABOR COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN DECREEING THAT THE NEW COLLECTIVE BARGAINING AGREEMENT TO BE SIGNED BY THE PARTIES SHALL RETROACT TO JANUARY 1, 1996." Anent the first ground, petitioner asserts that the decreed amount of P140 wage increase has no basis in fact and in law. Petitioner insists that public respondent Secretary whimsically presumed that the company can survive despite the losses being suffered by its Inorganic Division and its additional losses caused by the strike held by respondent union. Petitioner further contends that respondent Secretary disregarded its evidence showing that for the first part of 1996, its Inorganic Division suffered serious losses amounting to P15.651 million. Hence, by awarding wage increase without any basis, respondent Secretary gravely abused his discretion and violated petitioner's right to due process. We are not persuaded. As aptly stated by the Solicitor General in his comment on the petition dated July 1, 1996, respondent Secretary considered all the evidence and arguments adduced by both parties. In ordering the wage increase, the Secretary ratiocinated as follows: "xxx In the Company's Supplemental Comment, it says that it has three divisions, namely: the Organic Division, Inorganic Division and the Pinamucan Bulk Carriers. The Union in this instant dispute represent the daily wage earners in the Inorganic Division. The respective income of the three divisions is shown in Annex B to the Company's Supplemental Comment. The Organic Division posted an income of P369,754,000 in 1995. The Inorganic Division realized an income of P261,288,000 in the same period. The tail ender is the Pinamucan Bulk Carriers Division with annual income of P11,803,000 for the same period. Total Company income for the period was P642,845,000. It is a sound business practice that a Company's income from all sources are collated to determine its true financial condition. Regardless of whether one division or another losses or gains in its yearly operation is not material in reckoning a Company's financial status. In fact, the loss in one is usually offset by the gains in the others. It is not a good business practice to isolate the employees or workers of one division, which incurred an operating loss

for a particular period. That will create demoralization among its ranks, which will ultimately affect productivity. The eventual loser will be the company. So, even if We believe the position of the company that its Inorganic Division lost last year and during the early months of this year, it would not be a good argument to deny them of any salary increase. When the Company made the offer of P135 per day for the three year period, it was presumed to have studied its financial condition properly, taking into consideration its past performance and projected income. In fact, the Company realized a net income of P10,806,678 for 1995 in all its operations, which could be one factor why it offered the wage increase package of P135 per day for the Union members.1wphi1.nt Besides, as a major player in the country's corporate field, reneging from a wage increase package it previously offered and later on withdrawing the same simply because this Office had already assumed jurisdiction over its labor dispute with the Union cannot be countenanced. It will be worse if the employer is allowed to withdraw its offer on the ground that the union staged a strike and consequently subsequently suffered business setbacks in its income projections. To sustain the Company's position is like hanging the proverbial sword of Damocles over the Union's right to concerted activities, ready to fall when the latter clamors for better terms and conditions of employment. But we cannot also sustain the Union's demand for an increase of P215 per day. If we add the overload factors such as the increase in SSS premiums, medicare and medicaid, and other multiplier costs, the Company will be saddled with additional labor cost, and its projected income for the CBS period may not be able to absorb the added cost without impairing its viability. xxx" Verily, petitioner's assertion that respondent Secretary failed to consider the evidence on record lacks merit. It was only the Inorganic Division of the petitioner corporation that was sustaining losses. Such incident does not justify the withholding of any salary increase as petitioner's income from all sources are collated for the determination of its true financial condition. As correctly stated by the Secretary, "the loss in one is usually offset by the gains in the others."

Moreover, petitioner company granted its supervisory employees, during the pendency of the negotiations between the parties, a wage increase of P4,500 per month or P166 per day, more or less. Petitioner justified this by saying that the said increase was pursuant to its earlier agreement with the supervisions. Hence, the company had no choice but to abide by such agreement even if it was already sustaining losses as a result of the strike of the rank-and-file employees. Petitioner's actuation is actually a discrimination against respondent union members. If it could grant a wage increase to its supervisors, there is no valid reason why it should deny the same to respondent union members. Significantly, while petitioner asserts that it sustained losses in the first part of 1996, yet during the May 9, 1996 conciliation meeting, it made the offer of P135 daily wage to the said union members. This Court, therefore, holds that respondent Secretary did not gravely abuse his discretion in ordering the wage increase. Grave abuse of discretion implies whimsical and capricious exercise of power which, in the instant case, is not obtaining. On the second ground, petitioner contends that public respondent committed grave abuse of discretion when he ordered that the new CBA which the parties will sign shall retroact to January 1, 1996, citing the cases of Union of Filipro Employees vs. NLRC,2 and Pier 8 Arrastre and Stevedoring Services, Inc. vs. Roldan Confesor.3 Invoking the provisions of Article 253-A of the Labor Code, petitioner insists that public respondent's discretion on the issue of the date of the effectivity of the new CBA is limited to either: (1) leaving the matter of the date of effectivity of the new CBA is limited to either: (1) leaving the matter of the date of effectivity of the new CBA to the agreement of the parties or (2) ordering that the terms of the new CBA be prospectively applied. It must be emphasized that respondent Secretary assumed jurisdiction over the dispute because it is impressed with national interest. As noted by the Secretary, "the petitioner corporation was then supplying the sulfate requirements of MWSS as well as the sulfuric acid of NAPOCOR, and consequently, the continuation of the strike would seriously affect the water supply of Metro Manila and the power supply of the Luzon Grid." Such authority of the Secretary to assume jurisdiction carries with it the power to determine the retroactivity of the parties' CBA. It is well settled in our jurisprudence that the authority of the Secretary of Labor 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 therefrom. The power is plenary and

discretionary in nature to enable him to effectively and efficiently dispose of the primary dispute.4 In St. Luke's Medical Center, Inc. vs. Torres5, a deadlock developed during the CBA negotiations between the management and the union. The Secretary of Labor assumed jurisdiction and ordered that their CBA shall retroact to the date of the expiration of the previous CBA. The management claimed that the Secretary of Labor gravely abused his discretion. This Court held: "xxx Finally, the effectivity of the Order of January 28, 1991, must retroact to the date of the expiration of the previous CBA, contrary to the position of the petitioner. Under the circumstances of the case, Art. 253-A cannot be properly applied to herein case. As correctly stated by public respondent in his assailed Order of April 12, 1991 'Anent the alleged lack of basis for retroactivity provisions awarded, We would stress that the provision of law invoked by the Hospital, Article 253-A of the Labor Code, speaks of agreement by and between the parties, and not arbitral awards.' Therefore in the absence of the specific provision of law prohibiting retroactivity of the effectivity of the arbitral awards issued by the Secretary of Labor pursuant to Article 263(g) of the Labor Code, such as herein involved, public respondent is deemed vested with plenary powers to determine the effectivity thereof." Finally, to deprive respondent Secretary of such power and discretion would run counter to the well-established rule that all doubts in the interpretation of labor laws should be resolved in favor of labor. In upholding the assailed orders of respondent Secretary, this Court is only giving meaning to this rule. Indeed, the Court should help labor authorities in providing workers immediate benefits, without being hampered by arbitration or litigation processes that prove to be not only nerve-wracking but financially burdensome in the long run. As we said in Maternity Children's Hospital vs. Secretary of Labor6: "Social Justice Legislation, to be truly meaningful and rewarding to our workers, must not be hampered in its application by long winded-arbitration and litigation. Rights must be asserted and benefits received with the least inconvenience. Labor laws are

meant to promote, not to defeat, social justice." WHEREFORE, the instant petition is DENIED. The assailed orders of the Secretary of Labor dated October 7, 1996 and December 16, 1996 are AFFIRMED. Costs against petitioner. SO ORDERED. Melo, Vitug, Panganiban, Gonzaga-Reyes, JJ., concur. G.R. No. 151379 January 14, 2005

d. Guidance Counselors 1 This matter was submitted for voluntary arbitration. On November 8, 1994, the panel of voluntary arbitrators rendered a decision, the dispositive portion of which states: WHEREFORE, premises considered, the Panel hereby resolves to exclude the above-mentioned secretaries, registrars, chief of the accounting department, cashiers and guidance counselors from the coverage of the bargaining unit. The accounting clerks and the accounting staff member are hereby ordered included in the bargaining unit.2 The UNION moved for the reconsideration of the above decision. Pending, however, the resolution of its motion, on December 9, 1994, it filed a notice of strike with the National Conciliation and Mediation Board (NCMB) of Davao City, on the grounds of bargaining deadlock and unfair labor practice. During the thirty (30) day coolingoff period, two union members were dismissed by petitioner. Consequently, the UNION went on strike on January 20, 1995. On January 23, 1995, the then Secretary of Labor, Ma. Nieves R. Confessor, issued an Order assuming jurisdiction over the labor dispute. The dispositive portion of the said Order states: 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 the University of the Immaculate Concepcion College. Accordingly, all workers are directed to return to work within twenty-four (24) hours upon receipt of this Order and for Management to accept them back under the same terms and conditions prevailing prior to the strike. Parties are further directed to cease and desist from committing any or all acts that might exacerbate the situation. Finally, the parties are hereby directed to submit their respective position papers within ten (10) days from receipt hereof. SO ORDERED.3 On February 8, 1995, the panel of voluntary arbitrators denied the motion for reconsideration filed by the UNION. The UNIVERSITY then furnished copies of the panels denial of the motion for reconsideration and the Decision dated November 8, 1995 to the individual respondents herein: 1. Lelian Concon Grade School Guidance Counselor

UNIVERSITY of IMMACULATE, CONCEPCION, INC., petitioner, vs. The HONORABLE SECRETARY OF LABOR, THE UIC TEACHING and NON-TEACHING PERSONNEL AND EMPLOYEES UNION, LELIAN CONCON, MARY ANN DE RAMOS, JOVITA MAMBURAM, ANGELINA ABADILLA, MELANIE DE LA ROSA, ZENAIDA CANOY, ALMA VILLACARLOS, JOSIE BOSTON, PAULINA PALMA GIL, GEMMA GALOPE, LEAH CRUZA, DELFA DIAPUEZ, respondent. DECISION AZCUNA, J.: This is a petition for review of a decision of the Court of Appeals and the resolution denying reconsideration thereof. The principal issue to be resolved in this recourse is whether or not the Secretary of Labor, after assuming jurisdiction over a labor dispute involving an employer and the certified bargaining agent of a group of employees in the workplace, may legally order said employer to reinstate employees terminated by the employer even if those terminated employees are not part of the bargaining unit. This case stemmed from the collective bargaining negotiations between petitioner University of Immaculate Concepcion, Inc. (UNIVERSITY) and respondent The UIC Teaching and Non-Teaching Personnel and Employees Union (UNION). The UNION, as the certified bargaining agent of all rank and file employees of the UNIVERSITY, submitted its collective bargaining proposals to the latter on February 16, 1994. However, one item was left unresolved and this was the inclusion or exclusion of the following positions in the scope of the bargaining unit: a. Secretaries b. Registrars c. Accounting Personnel

2. Mary Ann de Ramos High School Guidance Counselor 3. Jovita Mamburam Secretary to [the] Vice President for Academic Affairs/ Dean of College 4. Angelina Abadilla Secretary to [the] Vice President for Academic Affairs/ Dean of College 5. Melanie de la Rosa Secretary to [the] Dean of [the] College of Pharmacy/ Academic Affairs/ Dean of College 6. Zenaida Canoy Secretary to [the] Vice President for Academic Affairs/ Dean of College 7. Alma Villacarlos Guidance Counselor (College) 8. Josie Boston Grade School Psychometrician 9. Paulina Palma Gil Cashier 10. Gemma Galope High School Registrar 11. Leah Cruza Guidance Counselor (College) 12. Delfa Diapuez High School Psychometrician 4 Thereafter, the UNIVERSITY gave the abovementioned individual respondents two choices: to resign from the UNION and remain employed as confidential employees or resign from their confidential positions and remain members of the UNION. The UNIVERSITY relayed to these employees that they could not remain as confidential employees and at the same time as members or officers of the Union. However, the individual respondents remained steadfast in their claim that they could still retain their confidential positions while being members or officers of the Union. Hence, on February 21, 1995, the UNIVERSITY sent notices of termination to the individual respondents.1a\^/phi1.net On March 10, 1995, the UNION filed another notice of strike, this time citing as a reason the UNIVERSITYs termination of the individual respondents. The UNION alleged that the UNIVERSITYs act of terminating the individual respondents is in violation of the Order of the Secretary of Labor dated January 23, 1995. On March 28, 1995, the Secretary of Labor issued another Order reiterating the directives contained in the January 23, 1995 Order. The Secretary also stated therein that the effects of the termination from employment of these individual respondents be suspended pending the determination of the legality thereof. Hence, the UNIVERSITY was directed to

reinstate the individual respondents under the same terms and conditions prevailing prior to the labor dispute. The UNIVERSITY, thereafter, moved to reconsider the aforesaid Order on March 28, 1995. It argued that the Secretarys Order directing the reinstatement of the individual respondents would render nugatory the decision of the panel of voluntary arbitrators to exclude them from the collective bargaining unit. The UNIVERSITYs motion was denied by the Secretary in an Order dated June 16, 1995, wherein the Secretary declared that the decision of the panel of voluntary arbitrators to exclude the individual respondents from the collective bargaining unit did not authorize the UNIVERSITY to terminate their employment. The UNIVERSITY filed a second motion for reconsideration, which was again denied in an Order dated July 19, 1995. Undeterred, the UNIVERSITY filed a third motion for reconsideration. In the Order dated August 18, 1995, then Acting Secretary Jose S. Brilliantes denied the third motion for reconsideration, but modified the two previous Orders by adding: xxx Anent the Unions Motion, we find that superseding circumstances would not warrant the physical reinstatement of the twelve (12) terminated employees. Hence, they are hereby ordered placed under payroll reinstatement until the validity of their termination is finally resolved.5 xxx Still unsatisfied with the Order of the Secretary of Labor, the UNIVERSITY filed a petition for certiorari with this Court on September 15, 1995. However, its petition was referred to the Court of Appeals, following the ruling in St. Martin Funeral Homes v. Court of Appeals . 6 On October 8, 2001, the Court of Appeals promulgated its Decision, affirming the questioned Orders of the Secretary of Labor. The dispositive portion of the Decision states: WHEREFORE, the instant petition is DISMISSED for lack of merit.7 The UNIVERSITY then moved for the reconsideration of the abovementioned Decision,8 but on January 10, 2002, the Court of Appeals denied the motion on the ground that no new matters were raised therein that would warrant a reconsideration.9 Hence, this petition. The UNIVERSITY assigns the following error: THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN AFFIRMING THE ORDERS

OF THE SECRETARY OF LABOR THAT SUSPENDED THE EFFECTS OF THE TERMINATION OF TWELVE EMPLOYEES WHO WERE NOT PART OF THE BARGAINING UNIT INVOLVED IN A LABOR DISPUTE OVER WHICH THE SECRETARY OF LABOR ASSUMED JURISDICTION.10 The Court of Appeals relied upon the doctrine in St. Scholasticas College v. Torres.11 In the case therein, this Court, citing International Pharmaceuticals Incorporated v. the Secretary of Labor,12 declared that: x x x [T]he 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, the 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. The UNIVERSITY contends that the Secretary cannot take cognizance of an issue involving employees who are not part of the bargaining unit. It insists that since the individual respondents had already been excluded from the bargaining unit by a final and executory order by the panel of voluntary arbitrators, then they cannot be covered by the Secretarys assumption order. This Court finds no merit in the UNIVERSITYs contention. In Metrolab Industries, Inc. v. RoldanConfessor ,13 this Court declared that it recognizes the exercise of management prerogatives and it often declines to interfere with the legitimate business decisions of the employer. This is in keeping with the general principle embodied in Article XIII, Section 3 of the Constitution,14 which is further echoed in Article 211 of the Labor Code.15 However, as expressed in PAL v. National Labor Relations Commission,16 this privilege is not absolute, but subject to exceptions. One of these exceptions is when the Secretary of Labor assumes jurisdiction over labor disputes involving industries indispensable to the national interest under Article 263(g) of the Labor Code. This provision states: (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. x x x When the Secretary of Labor ordered the UNIVERSITY to suspend the effect of the termination of the individual respondents, the Secretary did not exceed her jurisdiction, nor did the Secretary gravely abuse the same. It must be pointed out that one of the substantive evils which Article 263(g) of the Labor Code seeks to curb is the exacerbation of a labor dispute to the further detriment of the national interest. In her Order dated March 28, 1995, the Secretary of Labor rightly held: It is well to remind both parties herein that the main reason or rationale for the exercise of the Secretary of Labor and Employments power under Article 263(g) of the Labor Code, as amended, is the maintenance and upholding of the status quo while the dispute is being adjudicated. Hence, the directive to the parties to refrain from performing acts that will exacerbate the situation is intended to ensure that the dispute does not get out of hand, thereby negating the direct intervention of this office.l^vvphi1.net The Universitys act of suspending and terminating union members and the Unions act of filing another Notice of Strike after this Office has assumed jurisdiction are certainly in conflict with the status quo ante. By any standards[,] these acts will not in any way help in the early resolution of the labor dispute. It is clear that the actions of both parties merely served to complicate and aggravate the already strained labor-management relations.17 Indeed, it is clear that the act of the UNIVERSITY of dismissing the individual respondents from their employment became the impetus for the UNION to declare a second notice of strike. It is not a question anymore of whether or not the terminated employees, the individual respondents herein, are part of the bargaining unit. Any act committed during the pendency of the dispute that tends to give rise to further contentious issues or increase the tensions between the parties should be considered an act of exacerbation and should not be allowed. With respect to the Secretarys Order allowing payroll reinstatement instead of actual reinstatement for the individual respondents herein, an amendment to the previous Orders issued by her office, the same is usually not allowed. Article 263(g) of the Labor Code aforementioned states that all workers must immediately return to work and all employers must readmit all of them under the same terms and conditions prevailing before the strike or lockout.l^vvphi1.net The phrase "under the same terms and conditions" makes it clear that the norm is actual reinstatement. This is consistent with the idea that any work stoppage or slowdown in that particular industry can be detrimental to the national interest.

In ordering payroll reinstatement in lieu of actual reinstatement, then Acting Secretary of Labor Jose S. Brillantes said: Anent the Unions Motion, we find that superseding circumstances would not warrant the physical reinstatement of the twelve (12) terminated employees. Hence, they are hereby ordered placed under payroll reinstatement until the validity of their termination is finally resolved.18 As an exception to the rule, payroll reinstatement must rest on special circumstances that render actual reinstatement impracticable or otherwise not conducive to attaining the purposes of the law.19 The "superseding circumstances" mentioned by the Acting Secretary of Labor no doubt refer to the final decision of the panel of arbitrators as to the confidential nature of the positions of the twelve private respondents, thereby rendering their actual and physical reinstatement impracticable and more likely to exacerbate the situation. The payroll reinstatement in lieu of actual reinstatement ordered in these cases, therefore, appears justified as an exception to the rule until the validity of their termination is finally resolved. This Court sees no grave abuse of discretion on the part of the Acting Secretary of Labor in ordering the same. Furthermore, the issue has not been raised by any party in this case. WHEREFORE, the Decision of the Court of Appeals dated October 8, 2001 and its Resolution dated January 10, 2002 in CA-G.R. SP No. 61693 are AFFIRMED. No costs. SO ORDERED. Davide, Jr., C.J., (Chairman), Quisumbing, YnaresSantiago, and Carpio, JJ., concur. 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.

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-090810-89, 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-VII08-0715-89, 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 selforganization 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-080742-89, 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

REGALADO, J.: The issue before us is whether or not the Secretary of the Department of Labor and Employment has the power

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-NS06-050-89 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

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 NCMBRBVII-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.

On January 15, 1990, the Union filed a motion in NCMBRBVII-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 NCMBRBVII-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

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; . . .

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.

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.

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. G.R. No. 140518 December 16, 2004

MANILA DIAMOND HOTEL EMPLOYEES UNION, petitioner, vs. THE HON. COURT OF APPEALS, THE SECRETARY OF LABOR AND EMPLOYMENT, and THE MANILA DIAMOND HOTEL, respondents.

DECISION

AZCUNA, J.: This petition for review of a decision of the Court of Appeals arose out of a dispute between the Philippine Diamond Hotel and Resort, Inc. ("Hotel"), owner of the Manila Diamond Hotel, and the Manila Diamond Hotel Employees Union ("Union"). The facts are as follows: On November 11, 1996, the Union filed a petition for a certification election so that it may be declared the exclusive bargaining representative of the Hotels employees for the purpose of collective bargaining. The petition was dismissed by the Department of Labor and Employment (DOLE) on January 15, 1997. After a few months, however, on August 25, 1997, the Union sent a letter to the Hotel informing it of its desire to negotiate for a collective bargaining agreement.1 In a letter dated September 11, 1997, the Hotels Human Resources Department Manager, Mary Anne Mangalindan, wrote to the Union stating that the Hotel cannot recognize it as the employees bargaining agent since its petition for certification election had been earlier dismissed by the DOLE.2 On that same day, the Hotel received a letter from the Union stating that they were not giving the Hotel a notice to bargain, but that they were merely asking for the Hotel to engage in collective bargaining negotiations with the Union for its members only and not for all the rank and file employees of the Hotel.3

On September 18, 1997, the Union announced that it was taking a strike vote. A Notice of Strike was thereafter filed on September 29, 1997, with the National Conciliation and Mediation Board (NCMB) for the Hotels alleged "refusal x x x to bargain" and for alleged acts of unfair labor practice. The NCMB summoned both parties and held a series of dialogues, the first of which was on October 6, 1997. On November 29, 1997, however, the Union staged a strike against the Hotel. Numerous confrontations between the two parties followed, creating an obvious strain between them. The Hotel claims that the strike was illegal and it had to dismiss some employees for their participation in the allegedly illegal concerted activity. The Union, on the other hand, accused the Hotel of illegally dismissing the workers. What is pertinent to this case, however, is the Order issued by the then Secretary of Labor and Employment Cresenciano B. Trajano assuming jurisdiction over the labor dispute. A Petition for Assumption of Jurisdiction was filed by the Union on April 2, 1998. Thereafter, the Secretary of Labor and Employment issued an Order dated April 15, 1998, the dispositive portion of which states: WHEREFORE, premises considered[,] this Office CERTIFIES the labor dispute at the Manila Diamond Hotel to the National Labor Relations Commission, for compulsory arbitration, pursuant to Article 263 (g) of the Labor Code, as amended. Accordingly, the striking officers and members of the Manila Diamond Hotel Employees Union --NUWHRAIN are hereby directed to return to work within twenty-four (24) hours upon receipt of this Order and the Hotel to accept them back under the same terms and conditions prevailing prior to the strike. The parties are enjoined from committing any act that may exacerbate the situation. The Union received the aforesaid Order on April 16, 1998 and its members reported for work the next day, April 17, 1998. The Hotel, however, refused to accept the returning workers and instead filed a Motion for Reconsideration of the Secretarys Order. On April 30, 1998, then Acting Secretary of Labor Jose M. Espaol, issued the disputed Order, which modified the earlier one issued by Secretary Trajano. Instead of an actual return to work, Acting Secretary Espaol directed that the strikers be reinstated only in the payroll.4 The Union moved for the reconsideration of this Order, but its motion was denied on June 25, 1998. Hence, it filed before this Court on August 26, 1998, a petition for certiorari under Rule 65 of the Rules of Court alleging grave abuse of discretion on the part of the Secretary of Labor for modifying its earlier order and requiring instead the reinstatement of the employees in the payroll. However, in a resolution dated July 12, 1999,

this Court referred the case to the Court of Appeals, pursuant to the principle embodied in National Federation of Labor v. Laguesma.5 On October 19, 1999, the Court of Appeals rendered a Decision dismissing the Unions petition and affirming the Secretary of Labors Order for payroll reinstatement. The Court of Appeals held that the challenged order is merely an error of judgment and not a grave abuse of discretion and that payroll reinstatement is not prohibited by law, but may be "called for" under certain circumstances.6 Hence, the Union now stands before this Court maintaining that: THE HONORABLE COURT OF APPEALS GRIEVIOUSLY ERRED IN RULING THAT THE SECRETARY OF LABORS UNAUTHORIZED ORDER OF MERE "PAYROLL REINSTATEMENT" IS NOT GRAVE ABUSE OF DISCRETION7 The petition has merit. The Court of Appeals based its decision on this Courts ruling in University of Santo Tomas (UST) v. NLRC.8 There, the Secretary assumed jurisdiction over the labor dispute between striking teachers and the university. He ordered the striking teachers to return to work and the university to accept them under the same terms and conditions. However, in a subsequent order, the NLRC provided payroll reinstatement for the striking teachers as an alternative remedy to actual reinstatement. True, this Court held therein that the NLRC did not commit grave abuse of discretion in providing for the alternative remedy of payroll reinstatement. This Court found that it was merely an error of judgment, which is not correctible by a special civil action for certiorari. The NLRC was only trying its best to work out a satisfactory ad hoc solution to a festering and serious problem. However, this Court notes that the UST ruling was made in the light of one very important fact: the teachers could not be given back their academic assignments since the order of the Secretary for them to return to work was given in the middle of the first semester of the academic year. The NLRC was, therefore, faced with a situation where the striking teachers were entitled to a return to work order, but the university could not immediately reinstate them since it would be impracticable and detrimental to the students to change teachers at that point in time. In the present case, there is no showing that the facts called for payroll reinstatement as an alternative remedy. A strained relationship between the striking employees and management is no reason for payroll reinstatement in lieu of actual reinstatement. Petitioner correctly points out that labor disputes naturally involve strained relations between labor and management, and that in most

strikes, the relations between the strikers and the nonstrikers will similarly be tense.9 Bitter labor disputes always leave an aftermath of strong emotions and unpleasant situations. Nevertheless, the government must still perform its function and apply the law, especially if, as in this case, national interest is involved. After making the distinction between UST and the present case, this Court now addresses the issue of whether the Court of Appeals erred in ruling that the Secretary did not commit any grave abuse of discretion in ordering payroll reinstatement in lieu of actual reinstatement. This question is answered by the nature of Article 263(g). As a general rule, the State encourages an environment wherein employers and employees themselves must deal with their problems in a manner that mutually suits them best. This is the basic policy embodied in Article XIII, Section 3 of the Constitution,10 which was further echoed in Article 211 of the Labor Code.11 Hence, a voluntary, instead of compulsory, mode of dispute settlement is the general rule. However, Article 263, paragraph (g) of the Labor Code, which allows the Secretary of Labor to assume jurisdiction over a labor dispute involving an industry indispensable to the national interest, provides an exception: (g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory arbitration. Such assumption or certification shall have the effect of automatically enjoining the intended or impending strike or lockout as specified in the assumption or certification order. If one has already taken place at the time of assumption or certification, all striking or locked out employees shall immediately return to work and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout. x x x This provision is viewed as an exercise of the police power of the State. A prolonged strike or lockout can be inimical to the national economy and, therefore, the situation is imbued with public necessity and involves the right of the State and the public to self-protection.12 Under Article 263(g), all workers must immediately return to work and all employers must readmit all of them under the same terms and conditions prevailing before the strike or lockout. This Court must point out that the law uses the precise phrase of "under the same terms and conditions," revealing that it contemplates only actual reinstatement. This is in keeping with the rationale

that any work stoppage or slowdown in that particular industry can be inimical to the national economy. It is clear that Article 263(g) was not written to protect labor from the excesses of management, nor was it written to ease management from expenses, which it normally incurs during a work stoppage or slowdown. It was an error on the part of the Court of Appeals to view the assumption order of the Secretary as a measure to protect the striking workers from any retaliatory action from the Hotel. This Court reiterates that this law was written as a means to be used by the State to protect itself from an emergency or crisis. It is not for labor, nor is it for management. It is, therefore, evident from the foregoing that the Secretarys subsequent order for mere payroll reinstatement constitutes grave abuse of discretion amounting to lack or excess of jurisdiction. Indeed, this Court has always recognized the "great breadth of discretion" by the Secretary once he assumes jurisdiction over a labor dispute. However, payroll reinstatement in lieu of actual reinstatement is a departure from the rule in these cases and there must be showing of special circumstances rendering actual reinstatement impracticable, as in the UST case aforementioned, or otherwise not conducive to attaining the purpose of the law in providing for assumption of jurisdiction by the Secretary of Labor and Employment in a labor dispute that affects the national interest. None appears to have been established in this case. Even in the exercise of his discretion under Article 236(g), the Secretary must always keep in mind the purpose of the law. Time and again, this Court has held that when an official by-passes the law on the asserted ground of attaining a laudable objective, the same will not be maintained if the intendment or purpose of the law would be defeated.13 WHEREFORE, the petition is GRANTED and the assailed Decision of the Court of Appeals dated October 19, 1999 is REVERSED and SET ASIDE. The Order dated April 30, 1998 issued by the Secretary of Labor and Employment modifying the earlier Order dated April 15, 1998, is likewise SET ASIDE. No pronouncement as to costs. SO ORDERED. Davide, Jr., C.J., (Chairman), Ynares-Santiago, and Carpio, JJ., concur. Quisumbing, J., no part. G.R. No. 100158 June 2, 1992 ST. SCHOLASTICA'S COLLEGE, petitioner, vs. HON. RUBEN TORRES, in his capacity as SECRETARY OF LABOR AND EMPLOYMENT, and

SAMAHANG NG MANGGAGAWANG PANGEDUKASYON SA STA. ESKOLASTIKA-NAFTEU, respondents.

BELLOSILLO, J.: The principal issue to be resolved in this recourse is whether striking union members terminated for abandonment of work after failing to comply with returnto-work orders of the Secretary of Labor and Employment (SECRETARY, for brevity) should by law be reinstated. On 20 July 1990, petitioner St. Scholastica's College (COLLEGE, for brevity) and private respondent Samahan ng Manggagawang Pang-Edukasyon sa Sta. Eskolastika-NAFTEU (UNION, for brevity) initiated negotiations for a first-ever collective bargaining agreement. A deadlock in the negotiations prompted the UNION to file on 4 October 1990 a Notice of Strike with the Department of Labor and Employment (DEPARTMENT, for brevity), docketed as NCMB-NCRNS-10-826. On 5 November 1990, the UNION declared a strike which paralyzed the operations of the COLLEGE. Affecting as it did the interest of the students, public respondent SECRETARY immediately assumed jurisdiction over the labor dispute and issued on the same day, 5 November 1990, a return-to-work order. The following day, 6 November 1990, instead of returning to work, the UNION filed a motion for reconsideration of the return-to-work order questioning inter alia the assumption of jurisdiction by the SECRETARY over the labor dispute. On 9 November 1990, the COLLEGE sent individual letters to the striking employees enjoining them to return to work not later than 8:00 o'clock A.M. of 12 November 1990 and, at the same time, giving notice to some twenty-three (23) workers that their return would be without prejudice to the filing of appropriate charges against them. In response, the UNION presented a list of (6) demands to the COLLEGE in a dialogue conducted on 11 November 1990. The most important of these demands was the unconditional acceptance back to work of the striking employees. But these were flatly rejected. Likewise, on 9 November 1990, respondent SECRETARY denied reconsideration of his return-towork order and sternly warned the striking employees to comply with its terms. On 12 November 1990, the UNION received the Order. Thereafter, particularly on 14 and 15 November 1990, the parties held conciliation meetings before the National Conciliation and Mediation Board where the UNION

pruned down its demands to three (3), viz.: that striking employees be reinstated under the same terms and conditions before the strike; that no retaliatory or disciplinary action be taken against them; and, that CBA negotiations be continued. However, these efforts proved futile as the COLLEGE remained steadfast in its position that any return-to-work offer should be unconditional. On 16 November 1990, the COLLEGE manifested to respondent SECRETARY that the UNION continued to defy his return-to-work order of 5 November 1990 so that "appropriate steps under the said circumstances" may be undertaken by him. 1 On 23 November 1990, the COLLEGE mailed individual notices of termination to the striking employees, which were received on 26 November 1990, or later. The UNION officers and members then tried to return to work but were no longer accepted by the COLLEGE. On 5 December 1990, a Complaint for Illegal Strike was filed against the UNION, its officers and several of its members before the National Labor Relations Commission (NLRC), docketed as NLRC Case No. 0012-06256-90. The UNION moved for the enforcement of the return-towork order before respondent SECRETARY, citing "selective acceptance of returning strikers" by the COLLEGE. It also sought dismissal of the complaint. Since then, no further hearings were conducted. Respondent SECRETARY required the parties to submit their respective position papers. The COLLEGE prayed that respondent SECRETARY uphold the dismissal of the employees who defied his return-to-work order. On 12 April 1991, respondent SECRETARY issued the assailed Order which, inter alia, directed the reinstatement of striking UNION members, premised on his finding that no violent or otherwise illegal act accompanied the conduct of the strike and that a fledgling UNION like private respondent was "naturally expected to exhibit unbridled if inexperienced enthusiasm, in asserting its existence". 2 Nevertheless, the aforesaid Order held UNION officers responsible for the violation of the return-to-work orders of 5 and 9 November 1990 and, correspondingly, sustained their termination. Both parties moved for partial reconsideration of the Order, with petitioner COLLEGE questioning the wisdom of the reinstatement of striking UNION members, and private respondent UNION, the dismissal of its officers. On 31 May 1991, in a Resolution, respondent SECRETARY denied both motions. Hence, this Petition for Certiorari, with Prayer for the Issuance of a Temporary Restraining Order.

On 26 June 1991, We restrained the SECRETARY from enforcing his assailed Orders insofar as they directed the reinstatement of the striking workers previously terminated. Petitioner questions the assumption by respondent SECRETARY of jurisdiction to decide on termination disputes, maintaining that such jurisdiction is vested instead in the Labor Arbiter pursuant to Art. 217 of the Labor Code, thus
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, within thirty (30) calendar days after the submission of the case by the parties for decision without extension, the following cases involving all workers, whether agricultural or nonagricultural: . . . 2. Termination disputes . . . 5. Cases arising from any violation of Article 264 of this Code, including questions on the legality of strikes and lock-outs . . .

The issue on whether respondent SECRETARY has the power to assume jurisdiction over a labor dispute and its incidental controversies, causing or likely to cause a strike or lockout in an industry indispensable to the national interest, was already settled in International Pharmaceuticals, Inc. v. Secretary of Labor and Employment. 6 Therein, We ruled that:
. . . [T]he 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 include and extend to all questions and controversies arising therefrom, including cases over which the Labor Arbiter has exclusive jurisdiction.

In support of its position, petitioner invokes Our ruling in PAL v. Secretary of Labor and Employment 3 where We held:
The labor Secretary exceeded his jurisdiction when he restrained PAL from taking disciplinary measures against its guilty employees, for, under Art. 263 of the Labor Code, all that the Secretary may enjoin is the holding of the strike but not the company's right to take action against union officers who participated in the illegal strike and committed illegal acts.

And rightly so, for, as found in the aforesaid case, Article 217 of the Labor Code did contemplate of exceptions thereto where the SECRETARY is authorized to assume jurisdiction over a labor dispute otherwise belonging exclusively to the Labor Arbiter. This is readily evident from its opening proviso reading "(e)xcept as otherwise provided under this Code . . . Previously, We held that Article 263 (g) of the Labor Code was broad enough to give the Secretary of Labor and Employment the power to take jurisdiction over an issue involving unfair labor practice. 7 At first glance, the rulings above stated seem to run counter to that of PAL v. Secretary of Labor and Employment, supra, which was cited by petitioner. But the conflict is only apparent, not real. To recall, We ruled in the latter case that the jurisdiction of the Secretary of Labor and Employment in assumption and/or certification cases is limited to the issues that are involved in the disputes or to those that are submitted to him for resolution. The seeming difference is, however, reconcilable. Since the matter on the legality or illegality of the strike was never submitted to him for resolution, he was thus found to have exceeded his jurisdiction when he restrained the employer from taking disciplinary action against employees who staged an illegal strike. Before the Secretary of Labor and Employment may take cognizance of an issue which is merely incidental to the labor dispute, therefore, the same must be involved in the labor disputed itself, or otherwise submitted to him for resolution. If it was not, as was the case in PAL v. Secretary or Labor and Employment, supra, and he nevertheless acted on it, that assumption of jurisdiction is tantamount to a grave abuse of discretion. Otherwise, the ruling in International Pharmaceuticals, Inc. v. Secretary of Labor and Employment, supra, will apply.

Petitioner further contends that following the doctrine laid down in Sarmiento v. Tuico 4 and Union of Filipro Employees v. Nestle Philippines, Inc., 5 workers who refuse to obey a return-to-work order are not entitled to be paid for work not done, or to reinstatement to the positions they have abandoned of their refusal to return thereto as ordered. Taking a contrary stand, private respondent UNION pleads for reinstatement of its dismissed officers considering that the act of the UNION in continuing with its picket was never characterized as a "brazen disregard of successive legal orders", which was readily apparent in Union Filipro Employees v. Nestle Philippines, Inc., supra, nor was it a willful refusal to return to work, which was the basis of the ruling in Sarmiento v. Tuico, supra. The failure of UNION officers and members to immediately comply with the return-towork orders was not because they wanted to defy said orders; rather, they held the view that academic institutions were not industries indispensable to the national interest. When respondent SECRETARY denied their motion for reconsideration, however, the UNION intimated that efforts were immediately initiated to fashion out a reasonable return-to-work agreement with the COLLEGE, albeit, if failed.

The submission of an incidental issue of a labor dispute, in assumption and/or certification cases, to the Secretary of Labor and Employment for his resolution is thus one of the instances referred to whereby the latter may exercise concurrent jurisdiction together with the Labor Arbiters. In the instant petition, the COLLEGE in its Manifestation, dated 16 November 1990, asked the "Secretary of Labor to take the appropriate steps under the said circumstances." It likewise prayed in its position paper that respondent SECRETARY uphold its termination of the striking employees. Upon the other hand, the UNION questioned the termination of its officers and members before respondent SECRETARY by moving for the enforcement of the return-to-work orders. There is no dispute then that the issue on the legality of the termination of striking employees was properly submitted to respondent SECRETARY for resolution. Such an interpretation will be in consonance with the intention of our labor authorities to provide workers immediate access to their rights and benefits without being inconvenienced by the arbitration and litigation process that prove to be not only nerve-wracking, but financially burdensome in the long run. Social justice legislation, to be truly meaningful and rewarding to our workers, must not be hampered in its application by long-winded arbitration and litigation. Rights must be asserted and benefits received with the least inconvenience. For, labor laws are meant to promote, not defeat, social justice (Maternity Children's Hospital v. Hon. Secretary of Labor ). 8 After all, Art. 4 of the Labor Code does state that all doubts in the implementation and interpretation of its provisions, including its implementing rules and regulations, shall be resolved in favor of labor. We now come to the more pivotal question of whether striking union members, terminated for abandonment of work after failing to comply strictly with a return-to-work order, should be reinstated. We quote hereunder the pertinent provisions of law which govern the effects of defying a return-to-work order: 1. Article 263 (g) of the Labor Code
Art. 263. Strikes, picketing, and lockouts. . . . (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 . . . (as amended by Sec. 27, R.A. 6715; emphasis supplied).

2. Article 264, same Labor Code


Art. 264. Prohibited activities. (a) No labor organization or employer shall declare a strike or lockout without first having bargained collectively in accordance with Title VII of this Book or without first having filed the notice required in the preceding Article or without the necessary strike or lockout vote first having been obtained and reported to the Ministry. No strike or lockout shall be declared after assumption of jurisdiction by the President or the Minister or after certification or submission of the dispute to compulsory or voluntary arbitration or during the pendency of cases involving the same grounds for the strike or lockout . . . (emphasis supplied). Any worker whose employment has been terminated as consequence of an unlawful lockout shall be entitled to reinstatement with full back wages. Any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status: Provided, That mere participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his employment, even if a replacement had been hired by the employer during such lawful strike . . . (emphasis supplied).

3. Section 6, Rule IX, of the New Rules of Procedure of the NLRC (which took effect on 31 August 1990)
Sec. 6. Effects of Defiance. Non-compliance with the 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 lockout and shall authorize the Secretary of Labor and Employment or the Commission, as the case may be, to enforce the same under pain or 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 parties . . . (emphasis supplied).

Private respondent UNION maintains that the reason they failed to immediately comply with the return-to-work order of 5 November 1990 was because they questioned the assumption of jurisdiction of respondent SECRETARY. They were of the impression that being an academic institution, the school could not be considered an industry indispensable to national interest, and that pending resolution of the issue, they were under no obligation to immediately return to work.

This position of the UNION is simply flawed. Article 263 (g) of the Labor Code provides that if a strike has already taken place at the time of assumption, "all striking . . . employees shall immediately return to work." This means that by its very terms, a return-to-work order is immediately effective and executory notwithstanding the filing of a motion for reconsideration (University of Sto. Tomas v. NLRC). 9 It must be strictly complied with even during the pendency of any petition questioning its validity (Union of Filipro Employees v. Nestle Philippines, Inc., supra). After all, the assumption and/or certification order is issued in the exercise of respondent SECRETARY's compulsive power of arbitration and, until set aside, must therefore be immediately complied with. The rationale for this rule is explained in University of Sto. Tomas v. NLRC, supra, citing Philippine Air Lines Employees Association v. Philippine Air Lines, Inc., 10 thus
To say that its (return-to-work order) effectivity must wait affirmance in a motion for reconsideration is not only to emasculate it but indeed to defeat its import, for by then the deadline fixed for the return to work would, in the ordinary course, have already passed and hence can no longer be affirmed insofar as the time element is concerned.

Section 6 Rule IX, of the New Rules of Procedure of the NLRC, which provides the penalties for defying a certification order of the Secretary of Labor or a returnto-work order of the Commission, also reiterates the same penalty. It specifically states that non-compliance with the aforesaid orders, which is considered an illegal act, "shall authorize the Secretary of Labor and Employment or the Commission . . . to enforce the same under pain of loss of employment status." Under the Labor Code, assumption and/or certification orders are similarly treated. Thus, we held in Sarmiento v. Tuico, supra, that by insisting on staging the restrained strike and defiantly picketing the company premises to prevent the resumption of operations, the strikers have forfeited their right to be readmitted, having abandoned their positions, and so could be validly replaced. We recently reiterated this stance in Federation of Free Workers v. Inciong, 12 wherein we cited Union of Filipro Employees v. Nestle Philippines, Inc., supra, thus
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.

Moreover, the assumption of jurisdiction by the Secretary of Labor and Employment over labor disputes involving academic institutions was already upheld in Philippine School of Business Administration v. Noriel 11 where We ruled thus:
There is no doubt that the on-going labor dispute at the school adversely affects the national interest. The school is a duly registered educational institution of higher learning with more or less 9,000 students. The on-going work stoppage at the school unduly prejudices the students and will entail great loss in terms of time, effort and money to all concerned. More important, it is not amiss to mention that the school is engaged in the promotion of the physical, intellectual and emotional well-being of the country's youth.

Despite knowledge of the ruling in Sarmiento v. Tuico, supra, records of the case reveal that private respondent UNION opted to defy not only the return-to-work order of 5 November 1990 but also that of 9 November 1990. While they claim that after receiving copy of the Order of 9 November 1990 initiatives were immediately undertaken to fashion out a return-to-work agreement with management, still, the unrebutted evidence remains that the striking union officers and members tried to return to work only eleven (11) days after the conciliation meetings ended in failure, or twenty (20) days after they received copy of the first return-to-work order on 5 November 1990. The sympathy of the Court which, as a rule, is on the side of the laboring classes (Reliance Surety & Insurance Co., Inc. v. NLRC), 13 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 on 12 November 1990 presented the workers an opportunity to

Respondent UNION's failure to immediately comply with the return-to-work order of 5 November 1990, therefore, cannot be condoned. The respective liabilities of striking union officers and members who failed to immediately comply with the return-to-work order is outlined in Art. 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. Any worker or union officer who knowingly participates in a strike defying a return-towork order may, consequently, "be declared to have lost his employment status."

return to work under the same terms and conditions or 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. Lastly, the UNION officers and members also argue that the doctrine laid down in Sarmiento v. Tuico, supra, and Union of Filipro Employees v. Nestle, Philippines, Inc., supra, cannot be made applicable to them because in the latter two cases, workers defied the return-to-work orders for more than five (5) months. Their defiance of the return-to-work order, it is said, did not last more than a month. Again, this line of argument must be rejected. It is clear from the provisions above quoted that from the moment a worker defies a return-to-work order, he is deemed to have abandoned his job. It is already in itself knowingly participating in an illegal act. Otherwise, the worker will just simply refuse to return to his work and cause a standstill in the company operations while retaining the positions they refuse to discharge or allow the management to fill (Sarmiento v. Tuico, supra). Suffice it to say, in Federation of Free Workers v. Inciong, supra, the workers were terminated from work after defying the return-to-work order for only nine (9) days. It is indeed inconceivable that an employee, despite a return-to-work order, will be allowed in the interim to stand akimbo and wait until five (5) orders shall have been issued for their return before they report back to work. This is absurd. In fine, respondent SECRETARY gravely abused his discretion when he ordered the reinstatement of striking union members who refused to report back to work after he issued two (2) return-to-work orders, which in itself is knowingly participating in an illegal act. The Order in question is, certainly, contrary to existing law and jurisprudence. WHEREFORE, the Petition for Certiorari is hereby GRANTED. The Order of 12 April 1991 and the Resolution 31 May 1991 both issued by respondent Secretary of Labor and Employment are SET ASIDE insofar as they order the reinstatement of striking union members terminated by petitioner, and the temporary restraining order We issued on June 26, 1991, is made permanent. No costs. SO ORDERED. Cruz, Grio-Aquino and Medialdea, JJ., concur. G.R. No. 101539 September 4, 1992

CECILE DE OCAMPO, WILFREDO SAN PEDRO, REYNALDO DOVICAR, BIEN MEDINA, CESAR ABRIOL, ARTEMIO CASTRO, LARRY ALCANTARA, MICHAEL NOCUM, JESUS DEO JR., PUBLEO DARAG, EDUARDO BINO, EDUARDO VELES, ERVIN DAVID, PROTACIO PEREZ, NOEL VICTOR, ELENO DACATIMBAN, ANTONIO BERNARDO, CARLITO VICTORIA, TIMOTEO MIJARES, ALEX RAMOS, REYNALDO CRUZ, MODESTO MAMESIA, DOMINGO SILARDE, RENATO PUENTAS, RENE VILLANUEVA, MARCELO DELA CRUZ and HERNANDO LEGASPI, petitioners vs. NATIONAL LABOR RELATIONS COMMISSION and BALIWAG MAHOGANY CORPORATION, respondents.

MEDIALDEA, J.: This Petition for certiorari seeks to annul and set aside the resolution issued by the respondent National Labor Relations Commission on July 8, 1991, in Certified Case No. 0548 entitled "In Re: Labor Dispute at Baliwag Mahogany Corporation," affirming with modification its previous decision dated October 23, 1990, declaring the union officers and/or members who participated in the illegal strike staged on February 6, 1990 to have lost their status of employment; and directing private respondent Baliwag Mahogany Corporation to pay separation pay to certain employees and to reinstate without backwages all union Members not found to have committed prohibited acts. The antecedent facts are as follows: Petitioners Cecile de Ocampo, Wilfredo San Pedro, Reynaldo Dovicar, Bien Medina, Cesar Abriol, Artemio Castro, Larry Alcantara, Michael Nocum, Jesus Deo, Jr., Publeo Darag, Eduardo Bino, Eduardo Veles, Ervin David, Prostacio Perez, Noel Victor, Eleno Dacatimban, Antonio Bernardo, Carlito Victoria, Timoteo Mijares, Alex Ramos, Reynaldo Cruz, Modesto Mamesia, Domingo Silarde, Renato Puertas, Rene Villanueva, Marcelo dela Cruz and Hernando Legaspi are employees of private respondent Baliwag Mahogany Corporation. They are either officers or members of the Baliwag Mahogany Corporation Union-CFW, the existing collective bargaining agent of the rank and file employees in the company. Private respondent Baliwag Mahogany Corporation is an enterprise engaged in the production of wooden doors and furniture and has a total workforce of about 900 employees. In 1988, private respondent Baliwag Mahogany Corporation (company) and Baliwag Mahogany Corporation Union-CFW (union) entered into a collective bargaining agreement containing, among other things, provisions on conversion into cash of unused vacation and sick leaves; grievance machinery procedure; and

the right of the company to schedule work on Sundays and holidays. In November, 1989, the union made several requests from the company, one of which was the cash conversion of unused vacation and sick leave for 19871988 and 1988-1989. Acting on the matter, the company ruled to allow payment of unused vacation and sick leaves for the period of 1987-1988 but disallowed cash conversion of the 1988-1989 unused leaves. On January 3, 1990, the company issued suspension orders affecting twenty (20) employees for failure to render overtime work on December 30, 1989. The suspension was for a period of three (3) days effective January 3, 1996 to January 5, 1990. On the same day, the union filed a notice of strike on the grounds of unfair labor practice particularly the violation of the CBA provisions on non-payment of unused leaves and illegal dismissal of seven (7) employees in November, 1989. On January 13, 1990, the company issued a notice of termination to three (3) employees or union members, namely, Cecile de Ocampo, Rene Villanueva and Marcelo dela Cruz, of the machinery department, allegedly to effect cost reduction and redundancy. The members of the union conducted a picket at the main gate of the company on January 18, 1990. On the same day, the company filed a petition to declare the strike illegal with prayer for injunction against the union, Cecile de Ocampo, Wilfredo San Pedro and Rene Aguilar. An election of officers was conducted by the union on January 19, 1990. Consequently, Cecile de Ocampo was elected as president. During the conciliation meeting held at National Conciliation and Mediation Board (NCMB) on January 22, 1990 relative to the notice of strike filed by the union on January 3, 1990, the issue pertaining to the legality of the termination of three (3) union members was raised by the union. However, both parties agreed to discuss it separately. Subsequently, in a letter dated January 28, 1990, the union requested for the presence of a NCMB representative during a strike vote held by the union. The strike vote resulted to 388 votes out of 415 total votes in favor of the strike. Consequently, the union staged a strike on February 6, 1990.

On February 7, 1990, the company filed a petition to assume jurisdiction with the Department of Labor and Employment. On February 16, 1990, the company filed an amended petition, praying among other things, that the strike staged by the union on February 6, 1990 be declared illegal, there being no genuine strikeable issue and the violation of the no-strike clause of the existing CBA between the parties. The Secretary of Labor in an order dated February 15, 1990, certified the entire labor dispute to the respondent Commission for compulsory arbitration and directed all striking workers including the dismissed employees to return to work and the management to accept them back. The company filed an urgent motion for assignment of a sheriff to enforce the order of the Secretary. In an order dated February 22, 1990, the Secretary of Labor directed Sheriff Alfredo Antonio, Jr., to implement the order. On February 23, 1990, the sheriff, with the assistance of the PC/INP of San Rafael, removed the barricades and opened the main gate of the company. Criminal complaints for illegal assembly, grave threats, and grave coercion were filed against Cecile de Ocampo, Timoteo Mijares, Modesto Mamesia and Domingo Silarde by the local police authorities on February 24, 1990. On February 25, 1990, the company caused the publication of his return to work order in two (2) newspapers, namely NGAYON and ABANTE. In its letter dated February 27, 1990, the union, through its President Cecile de Ocampo, requested the Regional Director of DOLE, Region III to intervene in the existing dispute with management. Meanwhile, the company extended the February 26, 1990 deadline for the workers to return to work until March 15, 1990. The respondent Commission rendered a decision on October 23, 1990, declaring the strikes staged on January 18, 1990 and February 6, 1990 illegal, the dispositive portion of which provides as follows, to wit:
WHEREFORE, judgment is hereby rendered as follows: 1. The strike staged on January 18, 1990 is hereby declared illegal and all employees who participated therein are reprimanded therefor or an further warned that future similar acts shall be dealt more severely;

2. The strike staged on February 6, 1990 is hereby declared illegal and the Union officers/members are deemed suspended from March 15, 1990 the last deadline of the company for them to report to the date of promulgation of this Decision. In short, the Union officers/members are ordered reinstated to their positions but without backwages;. 3. Baliwag Mahogany Corporation is hereby directed to immediately reinstate Cecile de Ocampo, Rene Villanueva and Marcelo dela Cruz to their former positions without loss of seniority rights to pay them full backwages for the period from January 17, 1990 to March 15, 1990 only; 4. The Baliwag Mahogany Corporation is hereby directed to immediately reinstate Alex Ramos, Ronaldo Cruz, Fernando Hernandez, Renato Puertas, Hernando Legaspi to their former positions and to pay them backwages from date of dismissal to March 15, 1990 only; 5. The Baliwag Mahogany Corporation is hereby exonerated of the charge of unfair labor practice; 6. The Baliwag Mahogany Corporation is directed to pay its employment the cash equivalent of unused sick leaves for year 1989; 7. The Baliwag Mahogany Corporation is directed to remit to the Union the dues for the month of January 1990. SO ORDERED. (Rollo, pp. 68-69)

who participated in said strike committed prohibited acts are deemed to have lost their status of employment, to wit: 1. Cecile de Ocampo 2. Wilfredo San Pedro 3. Reynaldo Aguilar 4. Bren Medina (Bien Medina) 5. Cesar Abriol 6. Artemio Castro 7. Larry Alcantara 8. Melie Nocum (Michael Nocum) 9. Jesus Deo, Jr. 10. Publeo Darag 11. Eduardo Bino 12. Eduardo Vices (Eduardo Veles) 13. Abroin David (Ervin David) 14. Protacio Perez (Prostacio Perez) 15. Celso Sarmiento 16. Neol Vicbon (Noel Victor) 17. Alano Dacatimban (Eleno Dacatimban) 18. Antonio Bernardo 19. Carlito Victoria 20. Timoteo Mijares 21. Alex Ramos 22. Reynaldo Cruz 23. Modesto Manesia 24. Domingo Silarde 25. Renato Puertas 26. Hernando Legaspi 2. The Baliwag Mahogany Corporation is directed to pay Cecile de Ocampo, Rene Villanueva and Marcelo Cruz separation pay computed at one month per year of service in addition to one month pay as indemnification pay for lack of notice (Art. 283, Labor Code). 3. The Baliwag Mahogany Corporation is directed to pay Alex Ramos, Reynaldo Cruz, Renato Puertas, Hernando Legaspi separation pay computed at one (1) month per year of service in addition to backwages limited to six (6) months. 4. The Baliwag Mahogany Corporation is directed to reinstate but without backwages all Union members not found herein to have committed prohibited acts nor found to have accepted settlement from it nor have voluntarily left the Company for reasons of their own. 5. All other findings in the questioned Decision are affirmed. SO ORDERED. (Rollo, pp. 45-47)

Such decision prompted the company to file a motion for reconsideration substantially on the ground that public respondent seriously erred in not dismissing the employees particularly the union officers, who participated in the illegal strike. In its supplemental motion for reconsideration, the company contended that as a result of the strike, it failed to meet the purchase orders for the quarter valued at fifteen million pesos. Petitioners filed an opposition to the company's motion for reconsideration and subsequently a supplemental comment/opposition to motion for reconsideration. On December 13, 1990, the respondent Commission directed the Labor Arbiter to receive evidence on the issues raised in the motion for reconsideration and additional evidence on the issues already passed upon and to submit a report thereon. On July 8, 1991, the respondent Commission rendered a resolution affirming with modification the decision dated October 23, 1990, the dispositive portion of which provides as follows:
WHEREFORE, premises considered, the Decision of October 23, 1990 is hereby MODIFIED, to wit: 1. The strike staged on February 6, 1990 is hereby declared illegal and the Union officers/members

Hence, this present petition raising three (3) issues, to wit:


1. Whether or not there is legal basis for declaring the loss of employment status by petitioners on account of the strike in respondent Company. 2. Whether or not the dismissals of petitioners Cecile de Ocampo, Rene Villanueva, and Marcelo dela Cruz from their positions by the company on the ground of redundancy was done in good faith.

3. Whether or not respondent NLRC acted correctly in allowing respondent company to submit additional evidence in support of its Motion for Reconsideration and in giving credence to the said evidence despite the fact that the same were not newly-discovered evidence as defined under the Rules of Court. (Rollo, p. 11)

After a careful review of the records of this case, the Court finds the petition devoid of merit. Petitioners insist that there is no specific finding by the respondent commision regarding the particular participation of the individual petitioners in the supposed acts of violence or commission of prohibited acts during the strike such as denial of free ingress to the premises of the company and egress therefrom as well as illegal acts of coercion during the February, 1990 strike. The Solicitor General disagrees and claims that it is undisputed that the union resorted to illegal acts during the strike arguing that private respondent's personnel manager specifically identified the union officers and members who committed the prohibited acts and actively participated therein. Moreover, the Solicitor General maintains that the illegality of the strike likewise stems from the failure of the petitioners to honor the certification order and heed the return-to-work order issued by the Secretary of Labor. Answering this contention, the petitioners argued that their failure to immediately return to work was not impelled by any malicious or malevolent motive but rather, by their apprehension regarding their physical safety due to the presence of military men in the factory who might cause them harm. The law on the matter is Article 264 (a) of the Labor Code, to wit:
Article 264. (a) Prohibited activities. (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 consequence of an unlawful lockout shall be entitled to reinstatement with full backwages. Any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status: Provided, That mere participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his employment, even if a replacement had been hired by the employer during such lawful strike.

The clear mandate of the aforequoted article was stressed in the case of Union of Filipro Employees v. Nestle Philippines, Inc. (G.R. Nos. 88710-13, December 19, 1990, 192 SCRA 396, 411) where it was held that 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 and the Union officers and members, as a result, are deemed to have lost their employment status for having knowingly participated in an illegal act. Unrebutted evidence shows that the individual petitioners defied the return-to-work order of the Secretary of Labor issued on February 15, 1990. As a matter of fact, it was only on February 23, 1990 when the barricades were removed and the main gate of the company was opened. Hence, the termination of the services of the individual petitioners is justified on this ground alone. Anent the contention that the respondent Commission gravely abused its discretion when it allowed the presentation of additional evidence to prove the loss suffered by the company despite the fact that they were mere afterthoughts and just concocted by the company, time and again, We emphasize that "technical rules of evidence are not binding in labor cases. Labor officials should use every and reasonable means to ascertain the facts in each case speedily and objectively, without regard to technicalities of law or procedure, all in the interest of due process" (Philippine Telegraph and Telephone Corporation v. National Labor Relations Commission, G.R. No. 80600, March 21, 1990, 183 SCRA 451, 457). Turning to the legality of the termination of three (3) of the individual petitioners, petitioners contend that the company acted in bad faith when it terminated the services of the three mechanics because the positions held by them were not at all abolished but merely given to Gemac Machineries. On the contrary, the company stresses that when it contracted the services of Gemac Machineries for the maintenance and repair of its industrial machinery, it only adopted a cost saving and cost-consciousness program in order to improve production efficiency. We sustain respondent Commission's finding that petitioners' dismissal was justified by redundancy due to superfluity and hence legal. We believe that redundancy, for purposes of our Labor Code, exists where the services of an employee are in excess of what is reasonably demanded by the actual requirement of the enterprise. Succinctly put, a position is redundant where it is superfluous, and superfluity of a position or positions may be the outcome of a number of factors, such as over hiring of workers, decreased

volume of business, or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise. The employer had no legal obligation to keep in its payroll more employees, than are necessary for the operation of its business. (Wiltshire File Co., Inc. v. National Labor Relations Commission, G.R. No. 82249, February 7, 1991; 193 SCRA 665,672). The reduction of the number of workers in a company made necessary by the introduction of the services of Gemac Machineries in the maintenance and repair of its industrial machinery is justified. There can be no question as to the right of the company to contract the services of Gemac Machineries to replace the services rendered by the terminated mechanics with a view to effecting more economic and efficient methods of production. In the same case, We ruled that "(t)he characterization of (petitioners') services as no longer necessary or sustainable, and therefore properly terminable, was an exercise of business judgment on the part of (private respondent) company. The wisdom or soundness of such characterization or decision was not subject to discretionary review on the part of the Labor Arbiter nor of the NLRC so long, of course, as violation of law or merely arbitrary and malicious action is not shown" (ibid, p. 673). In contracting the services of Gemac Machineries, as part of the company's cost-saving program, the services rendered by the mechanics became redundant and superfluous, and therefore properly terminable. The company merely exercised its business judgment or management prerogative. And in the absence of any proof that the management abused its discretion or acted in a malicious or arbitrary manner, the court will not interfere with the exercise of such prerogative. Well-settled is the rule that the factual findings of administrative bodies are entitled to great weight, and these findings are accorded not only respect but even finality when supported by substantial evidence (Family Planning Organization of the Philippines, Inc. v. National Labor Relations Commission, G.R. No. 75987, March 23, 1992, p. 7 citing Asian Construction and Development Corporation v. National Labor Relations Commission, G.R. No. 85866, July 24, 1998, 187 SCRA 784, 787). Hence, the truth or the falsehood of alleged facts is not for this Court now to re-examine. In the light of the foregoing considerations, it is clear that the assailed resolution of the respondent Commission is not tainted with arbitrariness nor grave abuse of discretion. ACCORDINGLY, the petition is DISMISSED for lack of merit and the resolution of the respondent Commission dated July 8, 1991 is hereby AFFIRMED. SO ORDERED.

Cruz, Grio-Aquino and Bellosillo, JJ., concur. STA ROSA COCA-COLA PLANT EMPLOYEES UNION (union), ET AL V COCA-COLA BOTTLERS PHILS INC (company) 312 SCRA 437 CALLEJO, SR; January 24, 2007 NATURE This is a petition for review on certiorari of the Decision of the CA, which affirmed the ruling of the NLRC and the Labor Arbiter FACTS - The union is the sole and exclusive bargaining representative of the regular paid workers and the manthly paid nonccommission earning employees of the comopany. individual petitioners are union officers,directors and shop stewards. - The union and the company entered into a 3 year CBA. upon the expiration, the union told the company that they wanted to negotiate the terms. the union insisted that representatives from Alyansa ng mga Unyon ng Coca Cola be allowed to observe the CBA meetings. the company refused to allow alyansa to observe and an impasse ensued. union officers, directors and stewards filed a notice of strrice with NCMB based on deadlock on CBA and unfair labor practice arising from the company's refusal to bargain. the grounds were ammended to unfair labor practice for the company's refusal to bargain in good faith and interference with the exercise if their right to self-organization. - pending the notice to strike, the union decided to participate in a mass action by alyansa in front of the company's premises. operations would come to complete stops for insufficiency of contractual employees who would take over. after the mass strike (separate and distinct from the mass action), the company filed to declare strike illegal, to declare the officers of union and individual respondents to have lost their employment status, to declare the union, its officers and members guilty of unfair labor practice to violation of the CBA, and to award them damages. - the LA found the strike to be illegal such that the participants

lost their employment status. the CA affirmed the decision. ISSUE/S 1. WON the mass action wit Alyansa is actually a strike HELD 1. YES Ratio The factual findings and conclusions of tribunals, as long as based on substantial evidence, are conclusive on the SC. Reasoning The term strike2 encompasses not only concerted work stoppages, but also slowdowns, mass leaves, sitdowns, attempts to damage, destroy or sabotage plant equipment and facilities, and similar activities. Picketing involves merely the marching to and fro at the premises of the employer, usually accompanied by the display of placards and other signs making known the facts involved in a labor dispute. That there was a labor dispute between the parties is not an issue. Petitioners notified the respondent of their intention to stage a strike, and not merely to picket. Disposition Petition is denied for lack of merit. CA decision is affirmed.