[G.R. No. L-4758. May 30, 1953.

CALTEX [PHIL. ] INC., Petitioner, v. PHILIPPINE LABOR ORGANIZATIONS,

CALTEX CHAPTER, Respondent.

Ross, Selph, Carrascoso & Janda for Petitioner.

Baltazar M. Villanueva for Respondent.

SYLLABUS

1. EMPLOYEE AND LABORERS; STRIKES; DECISION OF COURT OF INDUSTRIAL

RELATIONS DECLARING STRIKE ILLEGAL; LABORERS NEW DEMANDS AND
CONSEQUENT STRIKE NOT A VIOLATION OF DECISION. If after the decision
of the Court of Industrial Relations declaring a strike illegal, new demands or
matters arise not connected with, or similar to, the demands in the former
case, and the laborers struck anew, the new strike cannot be held as a
violation of the decision.

2. ID.; ID.; ID.; MOTION FOR RECONSIDERATION MAKING NEW DAMAGES;

LACK OF SERVICE. Where the new demands or matters were brought
before the Court of Industrial Relations in a motion for reconsideration, the
court may entertain such motion as an application by an interested party for
the reopening of the question involved in the decision under section 17 of
Commonwealth Act No. 103 as amended, even if the motion for
reconsideration was not served upon the company, or if served there was no
proof of service.

3. ID.; ID.; ID.; REJECTION OF DEMANDS DOES NOT MAKE STRIKE ILLEGAL.
If the demands of the laborers cannot be granted for being unjust and
unreasonable, the only consequence should be rejection of the demands,
but not the illegality of the strike or the punishment of the workers who
presented them, for this would be in effect to outlaw altogether an effective
means for securing better working conditions.

DECISION

PARAS, C.J. :

In the course of the proceedings in Case No. 112-V of the Court of Industrial
Relations, involving an industrial dispute between the Philippine Labor
Organizations, Caltex Chapter, hereinafter referred to as the Union, and
Caltex (Philippines), Inc., hereinafter referred to as the Company, that court
issued an order on January 2, 1948 containing the following
directive:jgc:chanrobles.com.ph

"The laborers involved in these cases, pending the final determination of

same, are enjoined not to stage strike or walk out from their employment
without authority from and without first submitting their grievances to the
court. The respondent companies are likewise enjoined not to lay off,
dismiss, discharge or admit any employees or laborers in their employments
during the pendency of these cases without beforehand notifying and
obtaining the authority of the court. The controversial points involved in the
petitions will be heard separately by this court at the opportune
time."cralaw virtua1aw library

On February 13 and 15, 1950, the Union presented certain demands on the
Company which became the subject of negotiations between the parties. On
March 1, 1950, a strike was declared by the Union, a matter which the
Company submitted to the Court of Industrial Relations in Case No. 112V(10). After hearing, the Court of Industrial Relations, thru Presiding Judge
Arsenio C. Roldan, rendered a decision dated July 31, 1950, holding as
follows:jgc:chanrobles.com.ph

"1. The prohibition from declaring a strike during the determination of the
dispute, issued in a pending case before the Court, refers to a strike over
the same or similar demands or dispute or matters directly connected with
them in the pending case only, and a strike thus declared while there is
such order, is a violation of this injunction and, therefore, illegal;

"2. Prohibition not to declare strike during the determination of the dispute
in a pending case before the Court does not prohibit a strike for new
demands;

"3. The strike declared by the members of the petitioning union, workers of
the respondent company, on March 1, 1950, was not a violation of the order
given by the Court of Industrial Relations on January 2, 1948;

"4. The strike declared by the members of the petitioning union, workers of
the respondent company, on March 1, 1950, was illegal, not only because
the purpose was trivial, unjust or unreasonable but because there was no
good purpose at all.

"5. The company did not dismiss the laborers Concha, Silva, Algozo and
Punzal as they abandoned their work, and, therefore, the officials of the
management can not be held in contempt of Court; and

"6. As this strike was illegal, the Company is authorized to dismiss those
responsible therefor, and may rehire such of the striking employees and
laborers and/or new labor force as in its discretion it may see fit."cralaw
virtua1aw library

The Union filed a motion for reconsideration. Under date of January 31,
1951, the Court of Industrial Relations in banc issued a resolution reversing
the decision of Judge Roldan insofar as it declared the strike illegal and
insofar as it authorized the Company to discharge the workers responsible
for the strike. This resolution was by a three-to-two vote.

On March 20, 1951, the Company filed an urgent petition, followed on the
next day by an urgent amended petition, praying that the motion for
reconsideration filed against the decision dated July 31, 1950 of Judge
Roldan, be denied, because said decision had become final and
unappealable on August 17, 1950, in view of the fact that, although the
motion for reconsideration was filed by the Union on the last day of the
reglementary period, no copy thereof was served upon the adverse party
and no proof of service was shown. This amended urgent petition was
denied by the Court of Industrial Relations in banc in its unanimous order of
April 20, 1951. The Company has filed the present petition for review on
certiorari, praying that judgment be rendered:jgc:chanrobles.com.ph

"(a) reversing and setting aside the resolution of the Court of Industrial
Relations modifying the decision of July 31, 1950, the latter having become
final and unappealable;

"(b) but should this court be of the opinion that the decision had not
become final and unappealable, petitioner prays that this Honorable Court
render judgment reversing and setting aside the resolution of the Court of
Industrial Relations which modified the decision of July 31, 1950, and
affirming the said decision.

The contention of the Company that the decision of the Trial Judge of July
31, 1950 had become final and unappealable, is without merit. Assuming
that copy of the motion for reconsideration filed by the Union was not
served upon the Company, or if it was served no proof of service was
presented, the Court of Industrial Relations could entertain said motion for
reconsideration as an application by an interested party for the reopening of
a question involved in the decision under section 17 of Commonwealth Act
No. 103, as amended. (Goseco v. Court of Industrial Relations, 68 Phil. 444.)

There is neither merit in the companys contention that the strike staged by
the Union on March 1, 1950 was in violation of the directive of the Court of
Industrial Relations of January 2, 1948, hereinabove quoted. From the very
decision of July 31, 1950, it is clear that the strike was motivated by new
demands or matters not connected with or similar to the demands or
disputes involved in the case in which the order of January 2, 1948 were
issued, and therefore could not have been, as correctly held by Judge
Roldan, violative of the directive against strikes.

The important question that arises is whether the strike held on March 1,
1950, was illegal. On this we agree with the resolution of the Court of
Industrial Relations in banc. It is noteworthy that on February 13, 1950, the
Union sent a letter to the Company, containing fourteen demands referring
to wage differentials, retirement and insurance benefits, free medical
treatment and hospitalization with pay, Christmas bonus, bonus to drivers,
vacation and sick leave, overtime pay, reinstatement of certain employees,
gratuity to pre-war employees and backpay during the Japanese occupation.
It appears also that in the second letter of February 15, 1950, the Union
gave the manager of the Company forty-eight hours to decide on the
demands, with the admonition that the Union would declare a strike. The
resolution of the Court of Industrial Relations in banc of January 31, 1951

found that "among the factors that motivated the declaration of the strike
was the failure of the respondent to meet the petitioners demands." These
demands, if granted, would certainly tend to improve the conditions of the
laborers and employees affected, and cannot be said to be trivial, much less
illegal. But whether the same are unreasonable or unjust is a matter to be
decided after proper consideration. If said demands cannot be granted for
being unjust or unreasonable, the only consequence, in the appropriate
words of the Court of Industrial Relations in banc, should "be their rejection
and not the punishment of the workers who presented them." To make the
legality or illegality of strikes dependent solely on whether the demands of
laborers may or may not be granted, is in effect to outlaw altogether an
effective means for Securing better working conditions.

Wherefore, the decision of the Court of Industrial Relations now under

review is hereby affirmed, with costs against the petitioner. So ordered.

Feria, Pablo, Bengzon, Tuason, Jugo and Bautista Angelo, JJ., concur.

[G.R. No. L-4061. May 28, 1952.]

CENTRAL VEGETABLE OIL MANUFACTURING CO., INC., Petitioner-Appellant, v.

PHILIPPINE OIL INDUSTRY WORKERS UNION (CLO, C. V. C. LOCAL), ET AL.,
Respondents-Appellees.

Quisumbing, Sycip, Quisumbing & Salazar for Petitioner.

Amando C. Bugayong for respondent Court of Industrial Relations.

Carlos E. Santiago for respondent Union.

SYLLABUS

1. LABOR AND CAPITAL; STRIKE, WHEN NOT ILLEGAL. The strike prompted
by the refusal of the company to discuss the 14-point petition of the union
and to concede at least two working days a week, was legitimate. The plea
of the laborers for better conditions and for more working days cannot be

said to be trivial, unreasonable or unjust, much less illegal, because it is not

only the inherent right but the duty of all free men to improve their living
standard through honest work that pays a decent wage. The demands that
gave rise to the strike may not properly be granted but that fact should not
make the demands and the consequent strike illegal. The ability of the
company to grant the demands is one thing, and the right of the laborers to
make said demands is another thing. The latter should be kept inviolate.

DECISION

PARAS, C.J. :

In case No. 146-V of the Court of Industrial Relations between the Central
Vegetable Oil Manufacturing Company, Inc. and the Philippine Oil Industry
Workers Union, the parties entered on July 17, 1948, into an agreement
worded as follows:jgc:chanrobles.com.ph

"1. That pending the re-opening of the factory in all the

departments:jgc:chanrobles.com.ph

"(a) Alfonso de los Reyes will work in place of Primitivo Tan at P6 per day
and he and Jose Deogracias (the latter at P6.30 per day) will be working
regularly in the filling department;

"(b) Primitivo Soriano will be working as a helper electrician at P3.30 per

day;

"(c) Apolinario Roque will work as filterman at P6.12 per day;

"2. That, if the new machinery has not been installed upon the re-opening of
the factory in all its departments, the Company shall admit all the former
laborers of April 3, 1948; that, if the new machinery has then been installed
upon the re-opening of the factory in all its departments, the Company and

a duly authorized representative of the Union shall determine who among

the former laborers shall be hired for each kind of work it deemed capable
to do the same and any disagreement thereon will be submitted to the
Court of Industrial Relations for arbitration and decision; Provided, however,
that during the negotiation and the pendency of the matter before the Court
of Industrial Relations, the laborers called by the Company and the Union
members shall work and continue working to the end that the re-opening of
the factory shall not be delayed;

"3. That, upon the re-opening of the factory in all its departments, the
Company and a duly authorized representative of the Union shall fix wages
of the laborers at such scales similar to those of the Philippine Refining
Company, in as much as the same machines now being used by the said
Company are to be installed in the factory; and, in case of any
disagreement, the provisions in paragraph 2 of this agreement will apply;

"4. That all laborers of April 3, 1948, shall be given a loan of twenty (20)
days wages, except those who already received gratuity from the Company
as per attached list and those who will be working during the present period
pending the re-opening of the factory in all its departments, said loan being
without interest and payable at the rate of twenty (20%) per centum of each
laborers weekly wage; except, however, that those laborers who are
forcibly laid off shall have the right to keep their loan without obligation to
repay the same.

"The above-mentioned Union agrees to allow its affiliated laborers who were
working on June 10, 1948, to resume work immediately upon signing of this
agreement."cralaw virtua1aw library

This agreement, which was approved by the Court of Industrial Relations on

July 23, 1948, was supplemented in the sense that, in determining the
former laborers who shall be hired for each kind of work, the Company and
the duly constituted representatives of the Union shall not consider the reemployment of those who have already received gratuity before July 17,
1948, and severed their relations with the Company.

The arrangement embodied in the agreement was conceived by the parties

in contemplation of the installation of new machineries of the Company
which might necessitate the reorganization of its personnel. Accordingly,
there was a time when, while machineries were being installed in the new

oil mill, 24 laborers of the Union were laid off. However, upon demand of
said 24 laborers, the Company allowed them to work one day each week; so
that from June 27 to July 5, 1949, they continued to work on shifts of four
men a day, during which they were also granted a loan equivalent to one
days salary per week. From July 5 to August 6, 1949, when the super duos
were being tested, however, these 24 laborers were allowed to work on full
time basis. On or about August 6, 1949, a notice was posted on the bulletin
board of the Company by the plant superintendent to the effect that the oil
mill would stop operation at 7:00 a.m., Sunday, August 7, 1949, due to the
readjustment of the machineries until further notice, and that all shifts,
mechanics and assistants should report for work at 8:00 a.m., Monday,
August 8, 1949. On this latter date, while the three mechanics and three
assistants reported for work, the 24 laborers did not.

This gave rise to a petition dated August 13, 1949, which the Central
Vegetable Oil Manufacturing Company, Inc. filed with the Court of Industrial
Relations against the Philippine Oil Industry Workers Union, praying that the
laborers affiliated with the respondent Union be discharged on the ground
that they declared an illegal strike on August 8, 1949. After hearing, the
Court of Industrial Relations, thru Judge Arsenio C. Roldan, rendered a
decision on December 12, 1949, authorizing the Central Vegetable
Manufacturing Company, Inc. to dismiss the 24 laborers who failed to report
for work on August 8, 1949, and to replace them with new laborers, without
prejudice to other laborers of the Company who are members of the Union
and who had not gone on strike. Upon motion for reconsideration filed by
the Union, the Court of Industrial Relations ordered the reinstatement of the
laborers and the payment of their wages from the day work is resumed in
the Company. Judges V. Jimenez Yanson and Jose S. Bautista held that no
strike was stage by the 24 laborers, on the ground that, if they in fact
stopped working on August 8, 1949, it was because there was no work, as
announced in the following notice posted in the bulletin board of the
Company: "Oil mill will stop operation, August 6, 1949, until further notice.
All the three mechanics and three assistant mechanics must report to their
respective duty." Judge Juan L. Lanting concurred in the reinstatement of the
laborers, but held that, even admitting that there was a strike, the same
was not illegal. Judges Arsenio C. Roldan and Modesto Castillo dissented,
holding that there was an illegal strike because it was in violation of the
agreement of July 17, 1948, and that, at any rate, said laborers had
abandoned their work in violation of said agreement. The company has filed
the present petition for review on certiorari.

In our view of the case, we will assume that there was a strike on August 8,
1949. In this connection, it may be stated that on July 14, 1949, the

respondent Union presented to the Company the following 14-point

petition:jgc:chanrobles.com.ph

"1. That, in case of reparation periods all laborers who are members of the
Union be given other jobs in the company;

"2. That, all night shift workers covered from 6:00 p.m. to 6:00 a.m. be given
an additional compensation of fifty per cent (50%);

"3. That, sick leave up to complete recovery with full pay be provided the
laborers;

"4. That, free medicine, medical care, dental treatment and hospitalization
be provided all laborers;

"5. That, after one (1) month of service, any laborer be considered
permanent;

"6. That, the closed-shop system in hiring new employees be established;

"7. That, in case of disability, death, incurable disease, dismissal and/or

closing of the business, any laborer be given a compensation of two (2)
months pay for every year of service rendered;

"8. That, the amount of six pesos (P6.00) as the minimum wage for the
present be given the laborers;

"9. That, the following laborers be given their former daily wages such as
indicated hereinbelow:chanrob1es virtual 1aw library

a. Pricilo Sarmiento P12.00 a day;

b. Raymundo Dizon 9.60 a day; and

c. All foreman 9.00 a day.

"10. That, the check-off system in the collection of dues and other monetary
obligation of the union members be established;

"11. That, one (1) man be given the sole responsibility in the supervision of
all the works and operation of the whole factory;

"12. That, due to the present conditions of speedy and heavy pressure of
work in which the present laborers cant cope with due to their small
number, an expeller, two (2) copra bodega tendermen and one (1) copra
meal tenderman be employed in each shift;

"13. That, the regular mechanics be reinforced or employed additional

mechanics, and

"14. That, maternity leave of one (1) month before and one (1) month after
delivery with full pay be provided all the female laborers."cralaw virtua1aw
library

In addition, on August 8, 1949, the Union asked the Company to allow the
24 laborers in question to work for more than one day, or a minimum of two
days every week. This was turned down by the Company which also refused
to consider the 14-point petition and insisted that the Union should appoint
a representative who, with the Company, could fix the wages of the laborers
at scales similar to those of the Philippine Refining Company, as required by
the agreement of July 17, 1948.

In our opinion, the strike declared on August 8, 1949, undoubtedly prompted

by the refusal of the company to discuss the 14- point petition of the Union
and to concede at least two working days a week, was legitimate. The plea
of the laborers for better conditions and for more working days cannot be
said to be trivial, unreasonable or unjust, much less illegal, because it is not
only the inherent right but the duty of all free men to improve their living
standards through honest work that pays a decent wage. We cannot hope to
have a strong and progressive nation, as long as the laboring class (which
constitutes the great majority) remains under constant economic insecurity
and leads a life of misery. The demand for two working days a week, even

regardless of those for sick leave, maternity leave, medical treatment and
hospitalization, is the most legitimate that can be presented by any laborer,
for it affects his very right to live. We need not stretch our imagination or
power of reasoning to realize that the laborer who has to feed and clothe
himself and his family for seven days a week, cannot survive on one days
wage.

The demands that gave rise to the strike may not properly be granted under
the circumstances of this case, but that fact should not make said demands
and the consequent strike illegal. The ability of the Company to grant said
demands is one thing, and the right of the laborers to make said demands is
another thing. The latter should be kept inviolate. There are adequate
instrumentalities which may be resorted to in case of excesses. In this
connection, it may be mentioned that there is nothing in the agreement of
July 17, 1948, that may be interpreted as prohibiting the Union absolutely
from seeking more working days or better conditions for the laborers. And
such prohibition will be patently immoral if not illegal.

The Union is charged with having violated its agreement of July 17, 1948, by
refusing to name a representative for the purpose of fixing the scales of
salaries and wages in accordance with those of the Philippine Refining
Company, but, as Judge Lanting properly observes, said violation may be
negatived by the belief of the Union that the Company first violated the
agreement by employing extra laborers. The explanation of the Company to
the effect that extra laborers were hired, not to replace the regular laborers
but merely to do odd jobs, is not entirely plausible, because the 24 laborers
in question could have been as well employed to perform said odd jobs,
especially because as admitted by the appellant, "the twenty-four laborers
worked on rotation of four men a day so that each man worked one day a
week. They worked not in their regular work which had to do with the
operation of the duo expellers and which duo expellers were not then
operating but by doing odd jobs and helping at the installation of the new
machineries." At any rate, we think that the fixing of wages should be
subordinated to the more urgent and important matter of threshing out the
question of granting two working days to the laborers.

Wherefore, the appealed decision of the Court of Industrial Relations is

affirmed, and it is so ordered with costs against the petitioner.

Feria, Pablo, Bengzon, Tuason and Labrador, JJ., concur.

Separate Opinions

BAUTISTA ANGELO, J., dissenting:chanrob1es virtual 1aw library

I dissent from the opinion of the majority that the failure of the twenty-four
laborers to report for work on August 8, 1949, in line with the notice posted
by the oil company that the mill will be stopped due to some adjustments
until further notice, does not constitute an illegal strike or a sufficient
justification for their separation notwithstanding the previous commitments
they had with their employer.

It is an admitted fact that the company and the labor union entered into an
agreement on July 7, 1948, whereby the union agreed that, upon the
reopening of the factory after the installation of the new machineries, the
company and a duly authorized representative of the union shall determine
who shall be hired for each kind of work among the former laborers and
shall fix the wages they should receive similar to those of the laborers of the
Philippine Refining Company, and whereby the company agreed to pay to its
laborers a gratuity of twenty days wages repayable as a loan by those
laborers who shall be returned to work. This agreement was entered into in
contemplation of the installation by the company of six new super duo
expellers necessary to increase production and effect economy in the
management. This agreement was approved by the Court of Industrial
Relations. The Company faithfully complied with this agreement by paying
to the laborers their gratuity. While the six super duo expellers were being
installed, three duo expellers were operated and in this operation thirty men
were employed including the 24 laborers involved in this case. It developed
later that the installation of the new machineries interfered with the
operation of the three duo expellers. Consequently, the operation of these
three duo expellers were stopped with the result that the 24 laborers were
laid off. One week later, the union requested that these 24 laborers be given
work at least one day a week in line with the procedure adopted by the
Philippine Refining Company. The Company agreed and the 24 laborers
worked on rotation of four men a day so that each man worked one day a
week. They worked not in line with the work which was assigned to them in
the operation of the duo expellers but by doing odd jobs and helping in the
installation of the new machineries. When the installation terminated, the
testing of the new machineries started. This lasted one month or until
August 6, 1949. The testing was successful, but as the company needed to
make some adjustments before resuming the operation of the mill, on said
date, August 6, 1949, the company posted a notice saying that "the oil mill

will stop operation at 7:00 a. m. Sunday, on August 7, 1949, due to some

adjustments, until further notice." The notice also provided that "all shifts,
mechanics and assistants will report for work 8:00 a.m., Monday, August 8,
1949." But when the latter date arrived, the 24 laborers failed to report for
work. They went on strike.

Why did said laborers stage a strike? It appears that during the test
operation of the new machineries, when it became apparent to the union
that the installation was quite successful, the union realized that the
company would soon call a conference of the representatives of both parties
for the purpose of complying with their agreement concluded on July 7,
1948. The union knew that the company would enforce that portion of the
agreement which provided for a scale of wages similar to the wages paid by
the Philippine Refining Company. Finding that these wages were lower than
their prevailing wages, the union decided to break that agreement. They,
therefore, presented a petition containing 14 demands, among which is a
demand for increase of wages. A conference for a discussion of these
demands was arranged at which the union pressed for their approval. The
representative of the company showed reluctance to discuss those demands
unless they first discuss the question of wages which was very vital from the
point of view of the company. It was then that the union made known to the
company that it was not agreeable to the wages being paid by the
Philippine Refining Company because they were low in view of the absence
of a labor union in the said company, and demanded that these wages be
increased. The company insisted that the wages of the Philippine Refining
Company be followed, not only because there is an agreement to that
effect, but also because the Philippine Refining Company was in a better
financial condition because it has more super duos, bigger production and
bigger capital than it had. The union remained adamant in its demands and
nothing was accomplished in this conference. On August 7, 1949, another
conference was held at which the union persisted in its refusal to abide by
the agreement of July 7, 1948. This conference also broke up without the
parties reaching an understanding but not after the president of the union
had warned that, if the company should insist on following the wages paid
by the Philippine Refining Company, the laborers would be forced to declare
a strike. In effect, on August 8, 1949, said laborers went on strike on the
alleged claim that they cannot agree to working only one day a week during
the stoppage of operation of the oil mill contrary to the agreement they had
with the company that they were to work on rotation of four men a day
during the installation of the new machineries.

It is apparent that the impelling motive of the 24 laborers in declaring a

strike is the refusal of the company to agree to their demand not to follow
the wages paid by the Philippine Refining Company because they were low

in view of the absence of a labor union in the said company, let alone the
other thirteen demands that they included in the petition which the
company refused to discuss unless the question of wages has been settled,
and not precisely their avowed claim for more working days during the
stoppage of the operation of the oil mill. It is for this reason that I dissent
from the opinion of the majority because in my opinion the labor union must
know how to respect the sanctity of valid commitments. It is evident that
the purpose of the strike is merely to avoid and circumvent the agreement
entered into by the company and the union on July 7, 1948, the latter
knowing full well that said agreement was celebrated precisely in
contemplation of the installation of the new machineries. That agreement
received the sanction of the Court of Industrial Relations. It was still binding
and in full force. If the move of the union be tolerated, we would be allowing
a subversion of a contract freely entered into without any valid and
justifiable reason. Such act cannot be sanctioned in law or in equity as it is
in derogation of the principle underlying the freedom of contract and the
good faith that should exist in contractual relations (Manila Oriental Sawmill
Co. v. National Laborer Union, Et Al., supra, p. 28.) .

I agree with the majority that "it is not only the inherent right but the duty
of all free men to improve their living standard through honest work that
pays a decent wage." And I sympathize with the plight of the 24 laborers
when they were only allowed to work one day a week during the period of
the installation of the new machineries. But it should be observed that if
they were so allowed to work, it was only upon their express request
because they preferred to earn something than to have nothing when the
three super duos stopped operating. Moreover, the work they were
undertaking was only temporary in nature with the particularity that when
they staged a strike the company was already taking steps to resume the
operation of the oil mill as a result of the installation of the new
machineries. The remedy they have adopted for the redress of their
grievance is not in keeping with the law and the circumstances, because
they not only violated a commitment validly entered into but have shown
little or no regard for the interest of their employer. Undoubtedly, the strike
has caused unnecessary damage to their employer which could have been
averted had the laborers presented their claim through proper negotiations
and not by resorting to force. For these reasons, I dissent from the opinion
of the majority.

Montemayor, J., concurs.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-38258 November 19, 1982
LAKAS NG MANGGAGAWANG MAKABAYAN (LAKAS), petitioner,
vs.
MARCELO ENTERPRISES and MARCELO TIRE & RUBBER CORP.,
MARCELO RUBBER AND LATEX PRODUCTS, MARCELO STEEL,
CORPORATION, MARCELO CHEMICAL & PIGMENT CORP., POLARIS
MARKETING CORPORATION and THE COURT OF INDUSTRIAL
RELATIONS, respondents,
G.R. No. L-38260 November 19, 1982
MARCELO TIRE & RUBBER CORPORATION, MARCELO RUBBER &
LATEX PRODUCTS, INC., MARCELO STEEL CORPORATION, POLARIS
MARKETING CORPORATION, MARCELO CHEMICAL AND PIGMENT
CORP., MARCELO ENTERPRISES, under which name or style they are
also known, petitioners,
vs.
LAKAS NG MANGGAGAWANG MAKABAYAN (LAKAS) AND THE
HONORABLE COURT OF INDUSTRIAL RELATIONS, respondents.

GUERRERO, J.:
Separate appeals by certiorari from the Decision of the Court of Industrial
Relations (Manila) dated July 20, 1973, as well as the Resolution of the
court en banc dated January 24, 1974 denying the reconsideration thereof
rendered in ULP Case No. 4951 entitled, "Lakas ng Manggagawang
Makabayan, Petitioner, versus Marcelo Enterprises and Marcelo Tire and
Rubber Corporation, Marcelo Rubber and Latex Products, Marcelo Steel
Corporation, Polaris Marketing Corporation, and Marcelo Chemical and
Pigment Corporation, Respondents. "
The antecedent facts as found by the respondent Court of Industrial
Relations embodied in the appealed Decision are correct, supported as they
are by the evidence on record. Nevertheless, We find it necessary to make a
re-statement of the facts that are integrated and inter-related, drawn from
the voluminuous records of these cases which are herein jointly decided,
since it would only be from a statement of all the relevant facts of the cases
made in all fullness, collectively and comprehensively, can the intricate
issues posed in these appeals be completely and judiciously resolved.

It appears that prior to May 23, 1967, the date which may be stated as the
start of the labor dispute between Lakas ng Manggagawang Makabayan
(hereinafter referred to as complainant LAKAS) and the management of the
Marcelo Tire and Rubber Corporation, Marcelo Rubber and Latex Products,
Inc., Polaris Marketing Corporation, Marcelo Chemical and Pigment
Corporation, and the Marcelo Steel Corporation (Nail Plan) (hereinafter
referred to as respondent Marcelo Companies) the Marcelo Companies had
existing collective bargaining agreements (CBAs) with the local unions then
existing within the appropriate bargaining units, viz: (1) the respondent
Marcelo Tire and Rubber Corporation, with the Marcelo Camelback Tire and
Foam Union (MACATIFU); (2) the respondent Marcelo Rubber and Latex
Products, Inc., with the Marcelo Free Workers Union (MFWU); and (3) the
respondent Marcelo Steel Corporation with the United Nail Workers Union
(UNWU). These existing CBAs were entered into by and between the parties
while the aforestated local unions were then affiliated with a national
federation, the Philippine Social Security Labor Union (PSSLU).
It is well to note from the records that when the aforestated CBAs of the said
local unions were nearing their respective expiration dates (March 15,1967)
for MACATIFU and UNWU, and June 5, 1967 for MFWU), the general situation
within the ranks of labor was far from united. The MACATIFU in respondent
Marcelo Tire and Rubber Corporation, then headed by Augusto Carreon, did
not enjoy the undivided support of all the workers of the respondent
corporation, as there existed a rival union, the Marcelo United Employees
and Workers Association (MUEWA) whose president was then Paulino Lazaro.
As events would later develop, the members of the MACATIFU of Augusto
Carreon joined the MUEWA of Paulino Lazaro, after the latter filed a petition
for direct certification which was granted by the industrial court's Order of
July 5, 1967 recognizing and certifying MUEWA as the sole and exclusive
bargaining representative of all the regular workers of the respondent
corporation. The union rivalry between MACATIFU and MUEWA did not,
however, end with the Order of July 5. 1967, but more than ever developed
into a more pressing problem of union leadership because Augusto Carreon
also claimed to be the president of the MUEWA by virtue of the affiliation of
his MACATIFU members with MUEWA. The records also reveal that even the
ranks of MFWU in respondent Marcelo Rubber and Latex Products, Inc. was
divided between those supporting Ceferino Ramos and Cornelio Dizon who
both claimed the presidency in said union. Only the UNWU in respondent
Marcelo Steel Corporation was then enjoying relative peace as Jose Roque
was solely recognized as the union's president. The events that followed are
hereinafter stated in chronological order for a clearer understanding of the
present situation.
On March 14, 1967, the management of respondent Marcelo Steel
Corporation received a letter requesting the negotiation of a new CBA
together with a draft thereof, from the PSSLU president, Antonio Diaz, for

and in behalf of UNWU whose CBA was to expire the following day. Similar
letters and proposals were, likewise, sent to the management of respondent
Marcelo Tire and Rubber Corporation for and in behalf of MACATIFU, and to
respondent Marcelo Rubber and Latex Products for and in behalf of MFWU,
whose respective CBAs were both to expire on June 5, 1967.
However, on that very same day of March 14, 1967, the management of
respondent Marcelo Tire and Rubber Corporation received a letter from the
UNWU president, Jose Roque, disauthorizing the PSSLU from representing his
union.
Then, on April 14, 1967, Paulino Lazaro of MUEWA requested negotiation of
a new CBA with respondent Marcelo Tire and Rubber Corporation,
submitting therewith his union's own proposals.
Again, on May 3, 1967, the management of respondents Marcelo Tire and
Rubber Corporation and Marcelo Rubber and Latex Products, Inc., received
another letter requesting negotiation of new CBAs also for and in behalf of
the MACATIFU and the MFWU from J.C. Espinas & Associates.
Finally, on May 23, 1967, the management of all the respondent Marcelo
Companies received a letter from Prudencio Jalandoni, the alleged president
of the complainant LAKAS. In this letter of May 23, 1967, the complainant
LAKAS informed management of the affiliation of the Marcelo United Labor
Union (MULU) with it. Included therein was a 17-points demand for purposes
of the requested collective bargaining with management.
Confronted with a problem of whom to recognize as the bargaining
representative of all its workers, the management of all the respondent
Marcelo Companies understandably dealt with the problem in this wise, viz:
(1) it asked proof of authority to represent the MFWU and the MACATIFU
from J.C. Espinas & Associates; and (2) in a letter dated May 25, 1967, it
apprised PSSLU, Paulino Lazaro of MUEWA and complainant LAKAS of the
fact of the existing conflicting demands for recognition as the bargaining
representative in the appropriate units involved, consequently suggesting to
all to settle the question by filing a petition for certification election before
the Court of Industrial Relations, with an assurance that the management
will abide by whatever orders the industrial court may issue thereon.
PSSLU demurred to management's stand and informed them of its intention
to file an unfair labor practice case because of management's refusal to
bargain with it, pointedly stating that it was with the PSSLU that the existing
CBAs were entered into. Again, as events later developed, on or about the
middle of August 1981, PSSLU filed a Notice of Strike which became the
subject of conciliation with the respondent companies. In the case of
MUEWA, Paulino Lazaro threatened that his union will declare a strike
against respondent Marcelo Tire and Rubber Corporation. On the other

hand, complainant LAKAS for MULU filed on June 13, 1967 before the Bureau
of Labor Relations a Notice of Strike against all the respondent Marcelo
Companies, alleging as reasons therefore harrassment of union officers and
members due to union affiliation and refusal to bargain. This aforestated
Notice of Strike was, however, withdrawn on July 14, 1967.
In the meantime, as stated earlier in this Decision, the MUEWA filed a
petition for direct certification before the industrial court. There being no
other union or interested person appearing before the court except the
MUEWA, and finding that MUEWA represented more than the majority of the
workers in respondent Marcelo Tire and Rubber Corporation, the court
granted the petition and by Order of July 5, 1967, certified MUEWA of
Paulino Lazaro as the sole and exclusive bargaining representative of all the
regular workers in said respondent.
On July 11, 1967, Augusto Carreon of MACATIFU wrote the management of
respondent Marcelo Tire and Rubber Corporation expressly stating that no
one was yet authorized to submit proposals for and in behalf of the union for
the renewal of its CBA, adding that "(a)ny group representing our Union is
not authorized and should not be entertained."
On July 14, 1967, as earlier stated, the Notice of Strike filed by complainant
LAKAS was withdrawn pursuant to a Memorandum Agreement signed on the
same day by management and LAKAS.
Thereafter, or on July 20, 1967, letters of proposal for collective bargaining
were sent by Prudencio Jalandoni of LAKAS to all the respondent Marcelo
companies. In answer thereto, management wrote two (2) letters, both
dated July 24, 1967, addressed to Jalandoni, expressing their conformity to
sit down in conference on the points to be negotiated as soon as LAKAS can
present evidence of authority to represent the employees of respondent
corporations in said conference. The records disclose that it was in the
atmosphere of constant reservation on the part of management as to the
question of representation recognition that complainant LAKAS and
management sat down for CBA negotiations.
The first conference was held on August 14, 1967, followed by one on
August 16, 1967 whereby management, in formal reply to union's economic
demands, stated its willingness to give pay adjustments and suggested
renewal of other provisions of the old CBAs. A third conference was set
although no one from LAKAS or the local unions appeared. On August 29,
1967, the fourth conference was held where, from a letter dated August 30,
1967 from Jose Delfin of Management to Jose B. Roque of UNWU, can be
inferred that in the conference of August 29, 1967, the management with
respect to respondent Marcelo Steel Corporation, agreed to give pay
adjustments from P0.15 to P0.25 to meritorious cases only, and to increase
its contribution to the retirement fund from 1-1/2% to 3% provided the

employees' contribution will be increased from 1% to 2%. Management

likewise suggested the renewal of the other provisions of the existing CBA.
Management's offers were not accepted by complainant LAKAS who insisted
on the grant of all its economic demands and in all of the Marcelo
Companies.
As it would later appear during the trial of the ULP case below, and as found
as a fact by the respondent court, only the economic proposals of
complainant LAKAS were the matters taken up in all these CBA conferences.
Less than a week after the fourth CBA conference, or on September 4, 1967,
the complainant LAKAS declared a strike against all the respondent Marcelo
Companies. Acts of violence and vandalism attended the picketing. Ingress
and egress at the respondents' premises were successfully blocked. One
worker, Plaridel Tiangco, was manhandled by the strikers and was
hospitalized. Windows of the Chemical Plant were badly damaged. As a
consequence, ten (10) strikers were later charged before the Municipal
Court of Malabon, Rizal, four of whom were convicted while the others were
at large.
On September 13, 1967, the respondent Marcelo Companies obtained a writ
of preliminary injunction from the Court of First Instance of Rizal enjoining
the strikers from preventing the ingress and egress at the respondents'
premises. The following day, a "Return to Work Agreement" (Exhibit "A")
was executed by and among the management, represented by Jose P.
Marcelo and Jose A. Delfin, and the local unions, together with complainant
LAKAS, represented by Prudencio Jalandoni for LAKAS, Jose B. Roque for
UNWU, Cornelio Dizon for MFWU and Augusto Carreon for MUEWA, the
representations of the latter two, however, being expressly subjected by
management to non-recognition. Aside from providing for the immediate
lifting of the picket lines, the agreement, more pertinently provides, to wit,
4. The management agrees to accept all employees who struck
without discrimination or harassment consistent with an orderly
operation of its various plants, provided it is understood that
management has not waived and shall continue to exercise freely
its rights and prerogatives to punish, discipline and dismiss its
employees in accordance with law and existing rules and
regulations that cases filed in court will be allowed to take their
normal course.
By virtue of this agreement, the respondent Marcelo Companies resumed
operations and the strikers went back to work. As found by the respondent
court, all strikers were admitted back to work, except four (4) namely,
Wilfredo Jarquio, Leonardo Sakdalan, Jesus Lim and Arlington Glodeviza, who
chose not to report for work because of the criminal charges filed against
them before the municipal court of Malabon and because of the

administrative investigation conducted by management in connection with

the acts of violence and vandalism committed during the September 4
strike. Together with Jesus Lim, three other strikers who reported for work
and were admitted, namely, Jose Roque, Alfredo Cabel and Ramon
Bataycan, were convicted in said criminal case.
After the resumption of normal business, the management of the
respondent Marcelo Companies, the complainant LAKAS together with the
local unions resumed their bargaining negotiations subject to the conditions
earlier mentioned. On October 4, 1967, the parties met and discussed the
bargaining unit to be covered by the CBA in case one is entered into, union
shop arrangement, check-off, waiver of the employer of the notice
requirement in case of employees' separation, separation pay in cash
equivalent to 12-days pay for every year of service, retirement plan, and
one or two years duration of the CBA. It was also agreed in that meeting not
to negotiate with respect to respondent Marcelo Tire and Rubber
Corporation inasmuch as a CBA had already been entered into by
management with the MUEWA of Paulino Lazaro, the recently certified union
in said respondent.
Finally, on October 13, 1967, the negotiations reached its final stage when
the management of respondents Marcelo Rubber and Latex Products, Inc.
and Marcelo Steel Corporation gave the complainant LAKAS a copy of
management's drafts of the collective bargaining proposals for MFWU and
UNWU, respectively.
Unexpectedly and without filing a notice of strike, complainant LAKAS
declared another strike against the respondent Marcelo Companies on
November 7, 1967, resulting in the complete paralyzation of the business of
said respondents. Because of this second strike, conciliation conferences
were again set by the Conciliation Service Division of the Department of
Labor on November 8, November 23, and December 4, 1967. On the last
aforementioned date, however, neither complainant LAKAS nor the local
unions appeared.
Instead, on December 13, 1967, Prudencio Jalandoni of complainant LAKAS,
in behalf of the striking unions, coursed a letter (Exhibit "B") to Jose P.
Marcelo of management advising that, "on Monday, December 18, 1967, at
7:00 o'clock in the morning, all your striking workers and employees will
return to work under the same terms and conditions of employment before
the strike." The letter was attested to by Cornelio Dizon for MFWU, Jose
Roque for UNWU and Augusto Carreon for MUEWA. On December 15,1967,
the Bureau of Labor Relations was informed by the complainant LAKAS who
requested for the Bureau's representative to witness the return of the
strikers to their jobs.

The records reveal that in the meantime, prior to December 13, 1967, some
of the strikers started going back to work and were admitted; and that as
early as December 4, 1967, the management started posting notices at the
gates of the respective premises of the respondents for strikers to return
back to work, Similar notices were also posted on December 18 and
December 27, 1967.
Upon their return, the reporting strikers were requested to fill up a certain
form (Exhibit "49") wherein they were to indicate the date of their
availability for work in order that they may be scheduled. According to the
respondent Marcelo Companies, this requirement was asked of the strikers
for legitimate business reasons within management prerogative. Several of
the strikers filled up the required form and were accordingly scheduled for
work. The remaining others, led and supported by complainant LAKAS,
refused and insisted that they be all admitted back to work without
complying with the aforestated requirement, alleging that the same
constituted a "screening" of the striking workers. As matters stood,
Management refused to forego the requirement; on the other hand, the
remaining strikers demanded to be readmitted without filing up the form for
scheduling.
These then constitute the factual background when the complainant LAKAS,
represented by its counsel, Atty. Benjamin C. Pineda, on December 26, 1967
, filed before the respondent court a charge for unfair labor practice against
the respondent Marcelo Companies, alleging non-readmission of the striking
members of the three (3) affiliated local unions despite the unconditional
offer to return to work after the strike of November 7, 1967. Based on the
allegations of the foregoing charge and after a preliminary investigation
conducted by the acting Prosecutor of said respondent court, the acting
Chief Prosecutor, Atty. Antonio Tria Tirona, filed on February 12, 1968 the
instant complaint under authority of Section 5(b) of Republic Act 875,
otherwise known as the Industrial Peace Act.
The Complaint below alleges, among others, to wit:
1. That complainant is a legitimate labor organization, with its
affiliates, namely: Marcelo Free Workers Union, United Nail
Workers Union, and Marcelo United Employees Unions, whose
members listed in Annexes "A", "B", and "C" of this complaint are
considered employees of respondent within the meaning of the
Act;
2. ...
xxx xxx xxx
xxx xxx xxx

3. That individual complaints listed in Annexes "A", "B", and "C" of

this complaint are members of the Marcelo United Employees and
Workers Association, Marcelo Free Workers Union, and United Nail
Workers Union, respectively; that the members of the Marcelo
United Employees and Workers Union are workers of respondent
Marcelo Tire and Rubber Corporation; that the members of the
Marcelo Free Workers Union compose the workers of the Marcelo
Rubber and Latex Products, Polaris Marketing Corporation, and the
members of the United Nail Workers Union compose the workers
of the Marcelo Steel Corporation (Nail Plant);
4. That each of the aforesaid local unions, before their affiliation
with the complainant union LAKAS, had a collective bargaining
agreement with respondents; that after the expiration of the
collective bargaining agreement above-mentioned and after the
above-mentioned local unions affiliated with the complainant
LAKAS, the said federation sent to respondents' president, Jose P.
Marcelo, on May 23, 1967, a letter, requesting for a negotiation
for collective bargaining, together with union proposals thereof,
but respondents refused;
5. That after respondents knew of the affiliation of the
aforementioned local unions with the LAKAS, the said
respondents, thru their officers and agents began harassing the
union members, discriminated against them by transferring some
of its officers and members from one section to another in such a
way that their work was reduced to manual labor, and by
suspending them without justifiable cause. in spite of long years
of service with said respondents;
6. That as a result of the abovementioned unfair labor practice of
respondents, and after complainant sent communication thereto,
protesting against the acts of the above-mentioned, complainant
decided to stage a strike on September 4, 1967, after filing a
notice of strike with the Department of Labor;
7. That on September 14, 1967, however, Jose P. Marcelo, and
Jose A. Delfin, president and vice-president of the respondents,
respectively, on one hand and the presidents of the three local
unions above-mentioned and the national president of
complainant union on the other, entered into a Return-to-Work
Agreement. providing among others, as follows:
4. The management agrees to accept all employees
who struck without discrimination or harassment
consistent with an orderly operation of its various
plants provided it is understood that management has

not waived and shall continue to exercise freely its

rights and prerogatives to punish, discipline and dismiss
its employees in accordance with law and existing rules
and regulations and that cases filed in Court will be
allowed to take their normal course.
8. That, contrary to the above Return-to-Work agreement, and in
violation thereof, respondents refused to admit the members of
the three striking local unions; that in admitting union members
back to work, they were screened in spite of their long
employment with respondent, but respondents gave preference to
the casual employees;
9. That, because of the refusal of the respondents to accept some
union members, in violation of the above-mentioned Return-toWork agreement and refusal of respondents to bargain in good
faith with complainant, the latter, together with the members of
the three local unions above-mentioned, again staged a strike on
November 7, 1967;
10. That on December 13, 1967, complainant sent a letter to
respondents that the members of the striking unions
abovementioned offered to return to work on December 18, 1967
without any condition, but respondents likewise refused, and still
continue to refuse to reinstate them up to the present;
11. That here to attached are the list of names of the members of
the three local unions above-mentioned who were not admitted
back to work by respondents, marked as Annexes "A ", "B ", and
"C and made as an integral part of this complaint;
12. That the union members listed in Annexes "A", "B", and "C"
hereof were not able to secure substantial employment in spite of
diligent efforts exerted by them;
13. That the above unfair labor practice acts of respondents are in
violation of Section 4, subsections 1, 4 and 6 in relation to
Sections 13, 14 and 15 of Republic Act No. 875.
The complaint prayed "that after due hearing, judgment be rendered,
declaring respondents guilty of unfair labor practice, and
(a) Ordering respondents to cease and desist from further
committing the acts complained of;
(b) Ordering respondents to comply with the Return-to-Work
agreement dated September 14, 1967, and to admit back to work

the workers listed in annexes "A", "B " and "C" hereof, with back
wages, without loss of seniority rights and privileges thereof;
(c) Ordering respondents to bargain in good faith with
complainant union; and
(d) Granting complainant and its complaining members thereof
such other affirmative reliefs and remedies equitable and proper,
in order to effectuate the policies of the Industrial Peace Act.
On March 16, 1968, after an Urgent Motion for Extension of Time to File
Answer, the respondents filed their Answer denying the material allegations
of the Complaint and alleging as affirmative defenses,
I. That the Collective Bargaining Agreement between respondent
Marcelo Steel Corporation and the United Nail Workers Union
expired on March 15, 1967; The Collective Bargaining Agreement
between the United Rubber Workers Union (which eventually
became the Marcelo Free Workers Union) and the respondent
Marcelo Rubber and Latex Products, Inc., expired on June 5, 1967;
the Collective Bargaining Agreement between Marcelo Camelback
Tire and Foam Union and the Marcelo Tire and Rubber Corporation
expired on June 5, 1967;
II. That on May 23, 1967, one Mr. Prudencio Jalandoni of
complainant addressed a communication to Mr. Jose P. Marcelo of
respondents informing him of the alleged affiliation of the Marcelo
United Labor Union with complainant and submitting a set of
collective bargaining proposal to which counsel for respondents
replied suggesting that a petition for certification election be filed
with the Court of Industrial Relations in view of the several
demands for representation recognition;
III. That the transfers of workers from one job to another were
made in accordance with needs of the service. Respondents
afforded union officers and members affected by the transfers the
privilege to watch out for vacancies and select positions they
prefer to be in. No suspensions without justifiable cause were
made as alleged in the Complaint;
IV. That between May 23, 1967, the date of their first demand for
negotiations, and September 4, 1967, the start of the first strike,
proposals and counter-proposals were had. Respondents are not
aware of whether or not a notice of strike was filed with the Court
of Industrial Relations;
V. That Mr. Jose P. Marcelo is the President of Marcelo Rubber and
Latex Products, Inc., Marcelo Tire and Rubber Corporation, and

Marcelo Steel Corporation, while Mr. Jose A. Delfin is the acting

Personnel Manager of respondent Marcelo Rubber and Latex
Products, Inc., Marcelo Tire and Rubber Corporation, Marcelo Steel
Corporation and Marcelo Chemical and Pigment Corporation;
VI. That respondents did not refuse to admit members of the
striking union. Only four (4) workers who had criminal cases filed
against them voluntarily failed to report to the Personnel
Department for administrative investigation;
VII. That after September 14, 1967, all workers of the different
respondent corporations returned to work except the four
mentioned in the preceding paragraph hereof who have pending
criminal cases; between September 14, 1967, and November 7,
1967 another strike was declared without justifiable cause;
VIII. That on November 28, 1967, respondent obtained an
injunction from the Court of First Instance of Rizal, Caloocan City
Branch, against the illegal picketing of the local unions; in the first
week of December, 1967, the striking workers began returning to
work; on December 13, 1967, a letter was received from
complainant advising respondents that its striking workers were
calling off, lifting the picket line and returning to work, that from
the first week of December, 1967, respondents invited the striking
workers desiring to return to work to fill out an information sheet
stating therein their readiness to work and the exact dates they
were available so that proper scheduling could be done; a number
of workers showed no interest in reporting to work; management
posted in the Checkpoint, Bulletin Boards, and the gates notices
calling all workers to return to work but a number of workers
obviously were not interested in returning anymore;
IX. That respondents posted several times lists of names of
workers who had not returned to work with the invitation to return
to work, but they did not return to work;
X. That a number of workers in the list Annexes "A", "B" and "C"
have resigned after they found more profitable employment
elsewhere;
XI. That the local unions referred to in the Complaint if they ever
had affiliated with complainant union had subsequently
disaffiliated therefrom;
XII. That the strikes called and declared by the striking unions
were illegal;

XIII. That the local unions were bargaining in bad faith with
respondents,
and praying for the dismissal of the Complaint as well as for the declaration
of illegality of the two (2) strikes called by the striking unions.
Thereafter, the trial commenced. Then on October 24, 1968, a development
occurred which gave a peculiar aspect to the case at bar. A Manifestation
and Motion signed by the respective officers and members of the MUEWA,
headed by Paulino Lazaro, was filed by the said union, alleging, to wit,
l. That the above-entitled case purportedly shows that the
Marcelo United Employees and Workers Association is one of the
Complainants being represented by the Petitioner Lakas ng
Manggagawang Makabayan (LMM);
2. That it likewise appears in the above-entitled case that the
services of the herein Petitioner was sought by a certain Augusto
Carreon together with his cohorts who are not members of the
Marcelo United Employees and Workers Association much less
connected with the Marcelo Tire and Rubber Corporation wherein
the Marcelo United Employees and Workers Association has an
existing Collective Bargaining Agreement;
3. That to set the records of this Honorable Court straight, the
undersigned officers and members of the Marcelo United
Employees and Workers Association respectfully manliest that the
aforesaid organization has no complaint whatsoever against any
of the Marcelo Enterprises;
4. ...
5. ..., the Complaint filed by the Petitioner in the above-entitled
case in behalf of the Marcelo United Employees and Workers
Association is without authority from the latter and therefore the
officers and/or representatives of the petitioning labor
organization should be cited for Contempt of Court;
6. ...., the Complaint filed by the Petitioner in the above-entitled
case in behalf of the Marcelo United and Employees and Workers
Association should be considered as withdrawn;
xxx xxx xxx
This was followed by another Manifestation and Motion flied on November 6,
1968 and signed by the officers and members of the UNWU, headed by its
President, Juan Balgos, alleging, to wit,

1. That the above-entitled case purportedly shows that the United

Nail Workers Union is being represented by the Petitioner Lakas
ng Manggagawang Makabayan for the alleged reason that the
former is one of the affiliates of the latter;
2. That on January 15, 1968, all the Officers and members of the
United Nail Workers Union disaffiliated from the herein Petitioning
labor organization for the reason that Petitioning labor
organization could not serve the best interest of the Officers and
members of the United Nail Workers Union and as such is a
stumbling block to a harmonious labor- management relations
within all the Marcelo enterprises; ...
3. That the filing of the above-entitled case by the herein
Petitioning labor organization was made over and above the
objections of the officers and members of the United Nail Workers
Union;
4. That in view of all the foregoing, the Officers and members of
the United Nail Workers Union do hereby disauthorize the
Petitioner of the above-entitled case (Re:: Lakas ng
Manggagawang Makabayan) from further representing the United
Nail Workers Union in the above-entitled case;
5. That in view further of the fact that the filing of the aboveentitled case was made over and above the objections of the
Officers and members of the United Nail Workers Union, the latter
therefore manifest their intention to cease and desist as they
hereby ceased and desisted from further prosecuting the aboveentitled case in the interest of a harmonius labor-management
relation within the Marcelo Enterprises;
xxx xxx xxx
Likewise, a Manifestation and Motion signed by the Officers and members of
the MFWU, headed by its president, Benjamin Maaol, dated October 28,
1968 and filed November 6, 1968, stated the same allegations as the
Manifestation and Motion filed by the UNWU quoted above, except that the
disaffiliation of the MFWU from LAKAS was made effective January 25, 1968.
The Resolutions of Disaffiliation of both MFWU and UNWU were attached to
these Manifestations.
On November 19, 1968, complainant LAKAS filed an Opposition to these
Manifestations and Motions, materially alleging that, to wit:
1. That complainants respectfully stated that when Charge No.
2265 was filed on December 26, 1967 in this case, giving rise to

the instant complaint, the alleged officers of the union-movants

were not yet officers on the filing of said Charge No. 2265,...
2. That the alleged officers and members who signed the three (3)
Manifestations and Motions are the very employees who were
accepted back to work by the respondents during the strike by
the complainants on September 4, 1967 and November 7, 1967,
and the said alleged officers and members who signed the said
manifestations and motions are still working up to the present in
the establishments of the respondents.
3. That precisely because of the acceptance back to work of these
alleged officers and members of the union-movants, and the
refusal of respondents to accept back to work all the individual
complainants in this case mentioned in Annexes "A", "B" and "C"
of the instant complaint, inspite of the offer to return to work by
the complainants herein made to the respondents without any
conditions at the time of the strike, as per complainants' letter of
December 13, 1967 (Exh. "B", for the complainants), which fact
precisely gave rise to the filing of this case.
xxx xxx xxx
On January 31, 1969, after the submission of their respective Memoranda on
the motions asking for the dismissal and withdrawal of the complaint, the
Court of Industrial Relations issued an Order deferring the resolution of the
Motions until after the trial on the merits. To this Order, two separate
Motions for Reconsideration were filed by the respondent companies and
the movant-unions, which motions were, however, denied by the court en
banc by its Resolution dated March 5, 1969.
After the trial on the merits of the case, and after submission by the parties
of their respective memoranda, the respondent court rendered on July 20,
1973 the Decision subject of these petitions. On the motions for dismissal or
withdrawal of the complaint as prayed for by MUEWA, UNWU and MFWU, the
respondent court denied the same on the ground that the instant case was
filed by the Lakas ng Manggagawang Makabayan for and in behalf of the
individual employees concerned and not for the movants who were not
authorized by said individual complainants to ask for the dismissal. On the
merits of the case, while the Decision contained opinions to the effect that
the respondent Marcelo Companies were not remiss in their obligation to
bargain, and that the September 4, 1967 strike as well as the November 7,
1967 strike, were economic strikes, and were, therefore, illegal because of
lack of the required notices of strike before the strikes were declared in both
instances, the Decision, nevertheless, on the opinion that the "procedure of
scheduling adopted by the respondents was in effect a screening of those
who were to be readmitted," declared respondent Marcelo Companies guilty

of unfair labor practice in discriminating against the employees named in

Annexes "A", "B", and "C" by refusing to admit them back to work other
strikers were admitted back to work after the strike of November 7, 1967.
The dispositive portion of the appealed Decision states, to wit,
WHEREFORE, in view of all the foregoing, respondents should be,
as they are hereby, declared guilty of unfair labor practice only for
the discrimination on terms or conditions of employment as
hereinbefore discussed in connection with the return of the
strikers complainants back to work after the second strike, and,
therefore, ordered to pay the individual complainants appearing in
Annexes "A", "B" and "C" of the Complaint, except Arlington
Glodeviza, Jesus Lim, Wilfredo Jarquio, Leonardo Sakdalan, Jose
Roque, Alfredo Cabel, and those still working, were dismissed for
cause, whose contracts expired or who had resigned as above
indicated, their back wages from December l8, 1967but only up
to June 29, 1970 when this case was submitted for
decision, without reinstatement, minus their earnings
elsewhere for the same period.
As to those who died without having been re-employed, the back
wages shall be from December 18, 1967 up to the date of their
demise, as indicated in the body of this Decision, but not beyond
June 20, 1970, likewise less their earnings elsewhere.
The Chief Auditing Examiner of this Court, or his duly authorized
representative, is hereby directed to proceed to the premises of
respondent companies to examine their books, payrolls, vouchers
and other pertinent papers or documents as may be necessary to
compute the back wages due the individual complainant in line
with this Decision, and to submit his Report thereon not later than
twenty (20) days after completion of such examination for further
disposition of the Court.
SO ORDERED.
On August 9, 1973, counsel for respondent Marcelo Companies filed a
Motion for Reconsideration of the above Decision assigning as errors, to wit,
I. The trial court erred in not finding that complainant Lakas ng
Manggagawang Makabayan (Lakas) has no authority to file and/or
to prosecute the Complaint against respondents in representation
of the local unions and/or individual complainants and/or
members of local unions in their individual capacities and in not
dismissing the complaint on that ground upon motions of the local
unions concerned and/or their members.

II. The trial court erred in finding that respondent discriminated

against individual complainants who were not readmitted to work
after the November 7, 1967 strike while others were able to return
to their former employment and in holding that the procedure
adopted by respondents was in effect a screening of those who
were readmitted and in finding respondents guilty of unfair labor
practice by reason thereof. "
On August 14, 1973, the individual complainants who had earlier
disauthorized the counsel of record, Atty. Benjamin Pineda, from further
representing them and from amicably settling their claims, on their own
behalf filed their arguments in support of their Motion for Reconsideration,
through a newly retained counsel, Atty. Pablo B. Castillon. Assigned as errors
are, to wit,
I. The findings of the trial court excluding some of the employees
from the aforementioned Decision as well as from the benefits
resulting therefrom is not in accordance with law and the facts.
II. The findings of the trial court declaring the strikes of
September 4 and November 7, 1967 as illegal for being an
economic strike is not in accordance with law and the facts
adduced in this case.
III. The Honorable trial court in ordering the reduction of the back
wages, without reinstatement, appears to have departed from the
substantial evidence rule and established jurisprudence.
By Resolution of January 24, 1974, the Court en banc denied the two (2)
Motions for Reconsideration filed by both the respondent Marcelo
Companies and the individual complainants. On February 19, 1974 and on
February 20, 1974, both parties filed their respective Notices of Appeals.
Hence, these petitions.
In L-38258, the petition filed by complainant Lakas ng Manggagawang
Makabayan (LAKAS), the following were assigned as reversible errors, to wit,
I. The respondent court erred in finding the strikes of September 4
and November 7, 1967 to be economic strikes and declaring the
said strikes illegal for non-compliance with the procedural
requirement of Section 14(d) of Republic Act 875, although its
illegality was condoned or waived because of the Return-to-Work
agreement on the first strike, and the discriminatory rehiring of
the striking employees after the second strike.
II. The respondent court erred in denying reinstatement to the
striking complainants in Case No. 4951-ULP, and limiting the
computation of their backwages from December 18, 1967 to June

29, 1970 only, despite its findings of unfair labor practice against
private respondents herein as a consequence of the
discriminatory rehiring of the striking employees after the
November 7, 1967 strike.
III. The respondent court erred in excluding the other individual
complainants, except those who are still working, those who
resigned on or before December 18, 1967, and those whose
employment contract expired, and denying to these individual
complainants the benefits resulting therefrom.
On the other hand, in L-38260 which is the petition filed by respondents
Marcelo Enterprises, Marcelo Tire and Rubber Corporation, Marcelo Rubber &
Latex Products, Marcelo Steel Corporation, Marcelo Chemical & Pigment
Corporation, and Polaris Marketing Corporation, the following is the alleged
assignment of errors, to wit,
I. Respondent court erred in not finding that respondent Lakas ng
Manggagawang Makabayan (LAKAS) had no authority to file
and/or to prosecute the complaint against the petitioners herein
in representation of the local unions and/or individual
complainants and/or members of local unions in their individual
capacities and in not dismissing the complaint in Case No. 4951ULP of respondent court on that ground upon motions of the local
unions concerned and/or their officers and members.
II. Respondent court erred in finding that petitioners herein
discriminated against individual complainants in Case No. 4951ULP of respondent court who were not readmitted to work after
the November 7, 1967 strike, while others were able to return to
their former employment and in holding that the procedure
adopted by petitioners herein was in effect a screening of those
who were readmitted and in finding petitioners herein guilty of
unfair labor practice by reasons thereof.
III. Respondent court erred in rendering judgment ordering
petitioners herein to pay individual complainants in Case No.
4951-ULP of respondent court backwages from December 18,
1967, to June 29, 1970, minus their earnings elsewhere, except
those who have resigned, those who have been dismissed for
cause, those whose contracts have expired and those who are
already working.
IV. Respondent court erred in holding that petitioners herein have
waived their right to declare the strikes of September 4, 1967 and
November 7, 1967, illegal.

From the aforecited assignments of errors respectively made in both

petitions before Us, We find that there are only two basic issues posed for
Our resolution, viz: (1) whether or not the complaint filed by LAKAS against
the Marcelo Companies can be sustained, in view of the alleged fact that its
authority to file and prosecute the same has been squarely raised in issue at
the first instance before the respondent court; and (2) whether or not the
Marcelo Companies are guilty of unfair labor practice, for which they should
be made liable for backwages and be obliged to reinstate the employees
appearing in Annexes "A", "B", and "C " of the complaint, taking into
consideration the prayer of LAKAS anent the correct payment of said
backwages and the non-exclusion of some employees from the benefits
arising from the appealed Decision.
The first issue poses a procedural question which We shall dwell on after a
resolution of the second issue, this latter issue being of greater significance
to the correct determination of the rights- of all parties concerned as it
treats of the merits of the present petitions.
Hence, anent the second issue of whether or not the complaint for unfair
labor practice can be sustained, this Court rules in favor of the respondent
Marcelo Companies and consequently, the appealed Decision is reversed.
This reversal is inevitable after this Court has pored through the
voluminuous records of the case as well as after applying the established
jurisprudence and the law on the matters raised. We are not unmindful of
the plight of the employees in this case but We consider it oppressive to
grant their petition in G.R. No. L38258 for not only is there no evidence
which shows that the respondent Marcelo Companies were seeking for an
opportunity to discharge these employees for union activities, or to
discriminate against them because of such activities, but there is affirmative
evidence to establish the contrary conclusion.
The present controversy is a three-sided conflict, although focus has been
greatly placed upon an alleged labor dispute between complainant LAKAS
and the respondent Marcelo Companies. It would bear emphasizing,
however, that what had been patently disregarded by the respondent
industrial court and the parties alike, is the fact that LAKAS had never been
the bargaining representative of any and an of the local unions then existing
in the respondent Marcelo Companies.
Contrary to the pretensions of complainant LAKAS, the respondent Marcelo
Companies did not ignore the demand for collective bargaining contained in
its letter of June 20, 1967. Neither did the companies refuse to bargain at
all. What it did was to apprise LAKAS of the existing conflicting demands for
recognition as the bargaining representative in the appropriate units
involved, and suggested the settlement of the issue by means of the filing
of a petition for certification election before the Court of Industrial Relations.
This was not only the legally approved procedure but was dictated by the

fact that there was indeed a legitimate representation issue. PSSLU, with
whom the existing CBAs were entered into, was demanding of respondent
companies to collectively bargain with it; so was Paulino Lazaro of MUEWA,
J.C. Espinas & Associates for MACATIFU and the MFWU, and the complainant
LAKAS for MULU which we understand is the aggrupation of MACATIFU,
MFWU and UNWU. On top of all of these, Jose Roque of UNWU disauthorized
the PSSLU from representing his union; and similarly, Augusta Carreon of
MACATIFU itself informed management as late as July 11, 1967 or after the
demand of LAKAS that no group representing his Union "is not authorized
and should not be entertained. "
Indeed, what We said in Philippine Association of Free Labor Unions (PAFLU)
vs. The Bureau of Labor Relations,69 SCRA 132, applies as well to this case.
..., in a situation like this where the issue of legitimate
representation in dispute is viewed for not only by one legitimate
labor organization but two or more, there is every equitable
ground warranting the holding of a certification election. In this
way, the issue as to who is really the true bargaining
representative of all the employees may be firmly settled by the
simple expedient of an election.
The above-cited case gives the reason for the need of determining once and
for all the true choice of membership as to who should be their bargaining
representative, which is that, "(E)xperience teaches us, one of the root
causes of labor or industrial disputes is the problem arising from a
questionable bargaining representative entering into CBA concerning terms
and conditions of employment. "
Respecting the issue of representation and the right of the employer to
demand reasonable proof of majority representation on the part of the
supposed or putative bargaining agent, the commentaries in Rothenberg on
Labor Relations, pp. 42943 1, are forceful and persuasive, thus:
It is essential to the right of a putative bargaining agent to
represent the employees that it be the delegate of a majority of
the employees and, conversely, an employer is under duty to
bargain collectively only when the bargaining agent is
representative of the majority of the employees. A natural
consequence of these principles is that the employer has the right
to demand of the asserted bargaining agent proof of its
representation of its employees. Having the right to
demonstration of this fact, it is not an 'unfair labor practice' for an
employer to refuse to negotiate until the asserted bargaining
agent has presented reasonable proof of majority representation.
It is necessary however, that such demand be made in good faith

and not merely as a pretext or device for delay or evasion. The

employer's right is however to reasonable proof. ...
... Although an employer has the undoubted right to bargain with
a bargaining agent whose authority has been established, without
the requirement that the bargaining agent be officially certified by
the National Labor Relations Board as such, if the informally
presented evidence leaves a real doubt as to the issue, the
employer has a right to demand a certification and to refuse to
negotiate until such official certification is presented."
The clear facts of the case as hereinbefore restated indusputably show that
a legitimate representation issue confronted the respondent Marcelo
Companies. In the face of these facts and in conformity with the existing
jurisprudence.
We hold that there existed no duty to bargain collectively with The
complainant LAKAS on the part of said companies. And proceeding from this
basis, it follows that all acts instigated by complainant LAKAS such as the
filing of the Notice of strike on June 13, 1967 (although later withdrawn) and
the 'two strikes of September 4, 1967 and November 7, 1967 were
calculated , designed and intended to compel the respondent Marcelo
Companies to recognize or bargain with it notwithstanding that it was an
uncertified union, or in the case of respondent Marcelo Tire and Rubber
Corporation, to bargain with it despite the fact that the MUEWA of Paulino
Lazaro vas already certified as the sole bargaining agent in said respondent
company. These concerted activities executed and carried into effect at the
instigation and motivation of LAKAS ire all illegal and violative of the
employer's basic right to bargain collectively only with the representative
supported by the majority of its employees in each of the bargaining units.
This Court is not unaware of the present predicament of the employees
involved but much as We sympathize with those who have been misled and
so lost their jobs through hasty, ill-advised and precipitate moves, We rule
that the facts neither substantiate nor support the finding that the
respondent Marcelo Companies are guilty of unfair labor practice.
There are also other facts which this Court cannot ignore. the complaint of
LAKAS charge that after their first strike of September 4, 1967,
management and the striking employees entered into a Return-to-Work
Agreement but that it was violated by the respondent companies who
"refused to admit the members of the three striking local unions ... and gave
reference to the casual employees." (No. 8, Complaint). It is also alleged
that the strike of November 7, 1967 was staged "because of the refusal of
the respondents to accept some union members ... and refusal of
respondents to bargain in good faith with complainant" (No. 9, Complaint).
We find however, that in making these charges, complainant LAKAS lacked
candor, truth and fidelity towards the courts.

It is a fact found by the respondent court, and as revealed by he records of

the case, that the respondent Marcelo Companies did not violate the terms
of the Return-to-Work Agreement negotiated after the first strike. All of the
strikers were admitted back to work except four (4) who opted not to report
for work because of the administrative investigation conducted in
connection with the acts of violence perpetrated during the said strike.
It is also evident from the records that the charge of bargaining in bad faith
imputed to the respondent companies, is hardly credible. In fact, such
charge is valid as only against the complainant LAKAS. The parties had a
total of five (5) conferences for purposes of collective bargaining. It is worth
considering that the first strike of September 4, 1967 was staged less than a
week after the fourth CBA conference and without any benefit of any
previous strike notice. In this connection, it must be stated that the notice of
strike filed on June 13, 1967 could not have been the strike notice for the
first strike because it was already withdrawn on July 14, 1967. Thus, from
these stated facts can be seen that the first strike was held while the parties
were in the process of negotiating. Nor can it be sustained that the
respondent Marcelo Companies bargained in bad faith since there were
proposals offered by them, but the complainant LAKAS stood pat on its
position that all of their economic demands should be met and that all of
these demands should be granted in all of the respondent Marcelo
Companies. The companies' refusal to accede to the demands of LAKAS
appears to be justified since there is no showing that these companies were
in the same state of financial and economic affairs. There is reason to
believe that the first strike was staged only for the purpose of compelling
the respondent Marcelo Companies to accede to the inflexible demands of
the complainant LAKAS. The records further establish that after the
resumption of normal operations following the first strike and the
consequent Return-to-Work Agreement, the striking unions led by
complainant LAKAS and the management of the respondent Marcelo
Companies resumed their bargaining negotiations. And that on October 13,
1967, complainant LAKAS sent the final drafts of the collective bargaining
proposals for MFWU and UNWU. The second strike of November 7, 1967 was
then staged immediately after which strike, as before, was again lacking of
a strike notice. All of these facts show that it was complainant LAKAS, and
not the respondent Marcelo Companies, which refused to negotiate in the
pending collective bargaining process. AR that the facts show is that the
bargaining position of complainant LAKAS was inflexible and that it was in
line with this uncompromising attitude that the strikes were declared,
significantly after notice that management did not or could not meet all of
their 17-points demand.
Respondent court, upholding the contention of petitioner LAKAS that after
the second strike, the respondent Marcelo Companies, despite the strikers'
unconditional offer to return to work, refused to readmit them without

"screening" which LAKAS insists to be "discriminatory hiring of the striking

employees, " declared that although the two strikes were illegal, being
economic strikes held in violation of the strike notice requirement,
nevertheless held the Marcelo Companies guilty of unfair labor practice in
discriminating against the complaining employees by refusing to readmit
them while other strikers were admitted back to work. We do not agree.
It is the settled jurisprudence that it is an unfair labor practice for an
employer not to reinstate, or refuse re-employment of members of union
who abandon their strike and make unconditional offer to return to
work. 1 As indeed Exhibit "B" presents an unconditional offer of the striking
employees to return to work under the same terms and conditions of
employment before the strike, the question then confronting Us is whether
or not on the part of the respondent companies, there was refusal to
reinstate or re-employ the strikers.
We find as a fact that the respondent Marcelo Companies did not refuse to
reinstate or re-employ the strikers, as a consequence of which We overrule
the finding of unfair labor practice against said companies based on the
erroneous conclusion )f the respondent court. It is clear from the records
that even before the unconditional offer to return to work contained in ,
Exhibit "B" was made, the respondent Marcelo Companies had already
posted notices for the strikers to return back to work.
It is true that upon their return, the strikers were required to fill up a form
(Exhibit "49") wherein they were to indicate the date of their availability for
work. But We are more impressed and are persuaded to accept as true the
contention of the respondent Marcelo Companies that the aforestated
requirement was only for purposes of proper scheduling of the start of work
for each returning striker. It must be noted that as a consequence of the two
strikes which were both attended by widespread acts of violence and
vandalism, the businesses of the respondent companies were completely
paralyzed. It would hardly be justiciable to demand of the respondent
companies to readmit all the returning workers in one big force or as each
demanded readmission. There were machines that were not in operating
condition because of long disuse during the strikes. Some of the machines
needed more than one worker to operate them so that in the absence of the
needed team of workers, the start of work by one without his teammates
would necessarily be useless, and the company would be paying for his time
spent doing no work. Finally, We take judicial cognizance of the fact that
companies whose businesses were completely paralyzed by major strikes
cannot resume operations at once and in the same state or force as before
the strikes.
But what strikes Us most in lending credence to respondents' allegation that
Exhibit "49" was not meant to screen the strikers, is the fact that an of the
returning strikers who filled up the form were scheduled for work and

consequently started with their jobs. It is only those strikers who refused or
failed to fill-up the required form, like the herein complaining employees,
who were not scheduled for work and consequently have not been reemployed by the respondent Marcelo Companies. Even if there was a
sincere belief on their part that the requirement of Exhibit "49" was a ruse
at "screening" them, this fear would have been dispelled upon notice of the
fact that each and all of their co-strikers who rued up the required form
were in fact scheduled for work and started to work. The stoppage of their
work was not, therefore, the direct consequence of the respondent
companies' complained act, Hence, their economic loss should not be
shifted to the employer. 2
It was never the state policy nor Our judicial pronouncement that the
employees' right to self-organization and to engage in concerted activities
for mutual aid and protection, are absolute or be upheld under an
circumstances. Thus, in the case of Royal Interocean Lines, et al. vs.
CIR, 3 We cited these authorities giving adequate panoply to the rights of
employer, to wit:
The protection of workers' right to self-organization in no way
interfere with employer's freedom to enforce such rules and
orders as are necessary to proper conduct of his businesses, so
long as employer's supervision is not for the purpose of
intimidating or coercing his employees with respect to their selforganization and representation. (National Relations Board vs.
Hudson Motor Car Co., C.C.A., 1942, 123 F 2d. 528). "
It is the function of the court to see that the rights of selforganization and collective bargaining guaranteed by the Act are
amply secured to the employee, but in its effort to prevent the
prescribed unfair labor practice, the court must be mindful of the
welfare of the honest employer (Martel Mills Corp. vs. M.L.R.L.,
C.C.A., 1940,11471 F2d. 264)."
In Pagkakaisang Itinataguyod ng mga Manggagawa sa Ang Tibay (PIMA),
Eliseo Samson, et al., vs. Ang Tibay, Inc., et al., L-22273, May 16, 1967, 20
SCRA 45, We held that the exaction, by the employer, from the strikers
returning to work, of a promise not to destroy company property and not to
commit acts of reprisal against union members who did not participate in
the strike, cannot be considered an unfair labor practice because it was not
intended to discourage union membership. It was an act of a selfpreservation designed to insure peace and order in the employer's
premises. It was also held therein that what the Industrial Peace Act regards
as an unfair labor practice is the discrimination committed by the employer
in regard to tenure of employment for the purpose of encouraging or
discouraging union membership.

In the light of the above ruling and taking the facts and circumstances of the
case before Us in relation to the requirement by the respondent companies
in the filling up of Exhibit "49", We hold and rule that the requirement was
an act of self-preservation, designed to effect cost-savings as well as to
insure peace and order within their premises. Accordingly, the petition in G.
R. No. L-38258 should be dismissed, it having failed to prove, substantiate
and justify the unfair labor practice charges against the respondent Marcelo
Companies.
Now to the procedural question posed in the first issue brought about by the
respondent court's denial of the motions to withdraw the complaint
respectively filed by MUEWA, UNWU and MFWU. In their petition (G.R. L38260) the respondent Marcelo Companies maintain that the respondent
court erred in not dismissing the complaint even as it knew fully well that
the very authority of LAKAS to represent the labor unions who had precisely
disaffiliated from the LAKAS, was open to serious question and was being
ventilated before it. On the other hand, the respondent court rationalized
the denial of the aforestated motions to withdraw by holding that the
complaint was filed by LAKAS on behalf of the individual employees whose
names were attached to the complaint and hence, that the local unions who
were not so authorized by these individual employees, cannot withdraw the
said complaint. The lower court's opinion is erroneous.
Firstly, LAKAS cannot bring any action for and in behalf of the employees
who were members of MUEWA because, as intimated earlier in this Decision,
the said local union was never an affiliate of LAKAS. What appears clearly
from the records is that it was Augusto Carreon and his followers who joined
LAKAS, but then Augusto Carreon was not the recognized president of
MUEWA and neither he nor his followers can claim any legitimate
representation of MUEWA. Apparently, it is this split faction of MUEWA,
headed by Augusta Carreon, who is being sought to be represented by
LAKAS. However, it cannot do so because the members constituting this
split faction of MUEWA were still members of MUEWA which was on its own
right a duly registered labor union. Hence, any suit to be brought for and in
behalf of them can be made only by MUEWA, and not LAKAS. It appearing
then that Augusta Carreon and his cohorts did not disaffiliate from MUEWA
nor signed any individual affiliation with LAKAS, LAKAS bears no legal
interest in representing MUEWA or any of its members.
Nor will the lower court's opinion be availing with respect to the complaining
employees belonging to UNWU and MFWU. Although it is true, as alleged by
LAKAS, that when it filed the charge on December 26, 1967, the officers of
the movant unions were not yet then the officers thereof, nevertheless, the
moment MFWU and UNWU separated from and disaffiliated with 'LAKAS to
again exercise its rights as independent local unions, registered before as
such, they are no longer affiliates of LAKAS, as what transpired here.
Naturally, there would no longer be any reason or occasion for LAKAS to

continue representing them. Notable is the fact that the members

purportedly represented by LAKAS constitute the mere minority of the
movant unions, as may be inferred from the allegations of the movant
unions as well as the counter-allegations of LAKAS filed below. As such, they
cannot prevail or dictate upon the will of the greater majority of the unions
to which they still belong, it appearing that they never disaffiliated from
their unions; or stated in another way, they are bound by the action of the
greater majority.4
In NARIC Workers' Union vs. CIR, 5 We ruled that, "(a) labor union would go
beyond the limits of its legitimate purposes if it is given the unrestrained
liberty to prosecute any case even for employees who are not members of
any union at all. A suit brought by another in representation of a real party
in interest is defective." Under the uncontroverted facts obtaining herein,
the aforestated ruling is applicable, the only difference being that, here, a
labor federation seeks to represent members of a registered local union
never affiliated with it and members of registered local unions which, in the
course of the proceedings before the industrial court, disaffiliated from it.
This is not to say that the complaining employees were without any venue
for redress. Under the aforestated considerations, the respondent court
should have directed the amendment of the complaint by dropping LAKAS
as the complainant and allowing the suit to be further prosecuted in the
individual names of those who had grievances. A class suit under Rule 3,
Section 12 of the Rules of Court is authorized and should suffice for the
purpose.
In fairness to the complaining employees, however, We treated their Motion
for Reconsideration of the Decision subject of appeal as curing the defect of
the complaint as the said motion expressly manifested their collective
desire to pursue the complaint for and in their own behalves and
disauthorizing LAKAS' counsel from further representing them. And We have
also treated their petition before Us in the same manner, disregarding the
fact that LAKAS remained the petitioning party, as it appears from the
verification that the petition in L38258 was for and in behalf of the
complaining employees. The merits of their petition, however, fall short of
substantiating the charge of unfair labor practice against the respondent
Marcelo Companies. On the other hand, the appeal of the Marcelo
Companies in L-38260 must be upheld and sustained.
WHEREFORE, upon the foregoing considerations, the petition in L-38258 is
dismissed and the petition in L-38260 is granted. The decision of the Court
of Industrial Relations is hereby REVERSED and SET ASIDE and a new
judgment is rendered holding that the respondent Marcelo Companies are
not guilty of unfair labor practice.
No costs.

SO ORDERED.
Makasiar (Chairman), Concepcion, Jr., Abad Santos, De Castro and Escolin,
JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

July 21, 1955

G.R. No. L-7425

DAVID M. ALMEDA, ET AL., (Pepsi-Cola Labor Organization), petitioners,
vs.
THE COURT OF INDUSTRIAL RELATIONS and PEPSI-COLA BOTTLING
COMPANY, INC., respondents.

Cid, Rafael and Villaluz for petitioners.

Vicente J. Francisco for respondents.

MONTEMAYOR, J.:

The facts pertinent in the present petition for review by certiorari necessary
for its determination are those found and related in the order of May 16,
1952, issued by the Judge Jose S. Bautista of the Court of Industrial
Relations who heard the main case No. 697-V, which we accept as
conclusive upon its Tribunal and reproduce below for purposes of reference:

Pepsi-Cola Bottling Company, Inc. prays that the strike staged at 8:55 p.m.
on May 8, 1952, be declared illegal. At the hearing of this petition, the
respondents failed to appear although notices of said motion have been
served by the bailiff to them and to their counsel.

1. The facts are these:

2. On March 12, 1952, the respondents presented to the president of the

company, Mr. John P. Clarkin, certain demands (Exh. A).The latter, replying
that he would be glad to meet the respondents, invited them for a
conference (Exh. D), but they did not care to see the president, until Mr.
Clarkin left the Philippines on April 21. On April 23, the respondents
submitted to Mr. Jose Pascual, Treasurer of the company, new demands Exh.
C, giving the management two days to answer. Knowing that Mr. Pascual
had no power to act on their demands, they agreed to wait until April 28 for
the reply of Mr. Clarkin.

3. A conference was held on April 28 between Mr. Pascual and respondent

Antonio Ramos, as president of the Pepsi-Cola Labor Organization, who was
assisted by Attys. Cid and Rafael.

4. In the said conference, Mr. Pascual told the respondents that he cannot
grant their demands, especially the demand for collective bargaining for the
reason that neither the Pepsi-Cola Labor Organization has personality to
enter into such contract because it has not yet been registered in the
Department of Labor, nor Mr. Pascual has authority to act on the petition,
being a mere treasurer of the company. Hence, he promised to relay the
petition to Mr. Clarkin. In spite of this assurance, respondents threatened to
declare a strike.

5. On April 30, the company filed its petition praying that the respondents
be enjoined from declaring a strike. The Court summoned the respondents
for a preliminary conference. The summons was received by the persons
whose signatures appear in the list(pp. 16, 17 and 18 of the record) but the
rest refused to accept it, saying it was their president Ramos who was in
charge to appear before the Court. (Officer's return of service and bailiff's
testimony, t.s.n. p. 6, hearing of May 13, 1952).

6. A preliminary conference took place on April 30, and May 2, 1952,

between the company represented by its counsel, and the respondents by
Antonio Ramos, the president of the Pepsi-Cola Labor Organization. On April
30, Ramos asked that the preliminary hearing be postponed because he was
not able to study the petition and that he had no attorney and that his

lawyers Vicente A. Rafael and Cipriano Cid should be notified to appear in

Court. The conference was reset for May 2, at 9:00 a.m.

7. On this day, May 2, Antonio Ramos, appeared in company with his corespondents Juan Grizalba and Pedro Amante and he informed the Court
that Attys. Vicente A. Rafael and Cipriano Cid were the counsel for the
respondents but could not appear then as they were busy with the hearing
of other cases. In other words, Attys. Rafael and Cid failed to appear in said
conference, although there is evidence in the record that they were in this
building on the morning of May 2, when this case was called for hearing.
(Testimony of Jose Pascual, p. 22, hearing of May 13, 1952).

8. On that occasion, the undersigned, knowing from the minutes of the

meeting of the Board of Directors of the company (Exh. D)that Treasurer
Pascual had no authority to act on the respondent's demands, expressed
the opinion that Mr. Clarkin should be given an opportunity to act on said
demands; and consequently, the Court, upon agreement of both parties,
postponed the hearing of the case for May 15, at which time Mr. Pascual
would have received the answer of Mr. Clarkin. In said hearing, the Court
asked Antonio Ramos if he and his co-respondents would go on strike at
least not before May 15, and Ramos repeatedly assured the Court that they
will not declare a strike nor even had the intention of doing so. In view of
such assurances, the undersigned said the Court could issue the injunction
restraining the respondents from declaring a strike but because the Court
had been assured by the president Ramos and believing that the president
of the union would fulfill the promise, the Court viewed that the issuance of
an injunction would not be necessary.

9. On May 3, 1952, Antonio Ramos presented another petition to Mr. Jose

Pascual (Exh. E). This petition contained five (5) demands which were the
same demands 4, 7, 15, 16 and 18 of the petition of April 23, 1952, Exh. C.
In conformity with Exhibit E, Mr. Pascual transmitted to Mr. Clarkin said
second petition by telegram, copy of which was given to the officers of the
union.

10. On May 8, at 8:55 p.m. the respondents went on strike. The syrup, which
was usually prepared and placed in the tanks, from 5:00 to 11:00 p.m., was
spoiled when the workers left, because unless it is completely mixed, it
sours. The syrup was worth about P2,000.00.

11. On the morning of May 9, the respondents formed the picket line and
prevented, by means of threat, the other employees of the company and
the brokers, distributors and drivers to enter the premises of the company.
(Testimonies of Alberto Araullo, Jose Matias and William Yonan, t.s.n. pp. 3750, hearing of May 13,1952). Great amount of empty bottles belonging to
the company were unloaded in the streets and in a private lot, because the
trucks were not permitted to go into the company's compound. (Exhs. F, F-1
and F-2). Due to said strike and picketing the company has suffered
damages in the amount of P4,000 daily, up to the present.

Taking these facts into account, the Court finds that the strike was
unjustified and it is being carried out through unlawful means. Unjustified,
because all the strikers knew beforehand that Treasurer Pascual had no
authority to act on their demands, and consequently, they should have
waited for Clarkin's answer, before staging the strike. Unjustified, because it
was declared after the respondents, through their legitimate
representatives, have promised and assured the Court that they would not
go on strike before May 15. The picketing, which is the means employed in
carrying it on is illegal, because strikers resorted to threat and intimidation.

WHEREFORE, the Court hereby declares said strike unjustified and illegal
and orders the respondents to dissolve the picket line.

SO ORDERED.

Manila, May 16, 1952

(Sgd.) JOSE S. BAUTISTA

Associate Judge

We understand that said order was eventually appealed to this Tribunal but
that we refused to give it due course, thereby indirectly giving it our
sanction as to its correctness and validity and rendering it final (Rule 44,
Section 4, of the Rules of Court).

On May 16, 1952, after Jose Pascual, Treasurer of the Pepsi-Cola Company
who at the time was in charge of the same in the absence of Mr. Clarkin who
was then in the United States, learned of the order of May 16th declaring

the strike illegal, he invited the strikers to resume work on condition that
their employment was on a temporary basis, because it was only the
President of the company who had the authority to appoint permanent
employees, and he gave said strikers 48 hours within which to return to
work. On May 19th he posted notices on the main entrance of the
company's premises stating that those who wanted to be reinstated
temporarily should see the officer in charge not later than 4:00 p.m. on May
26,1952. Up to May 28th 50 of the strikers out of the 82 members of the
Pepsi-Cola Labor Organization returned to work, but 32 of the strikers
refused to work under a temporary basis and on May 19th advised the court
and the company that they were willing to resume work only under the
conditions existing before the strike on May 8,1952, in order to maintain the
status quo. These 32 strikers later filed a petition for reinstatement in
incidental case No. 697-V (1).

According to the findings of Judge Bautista contained in his order of June 12,
1953, of the 50 union members readmitted, 19 were later dismissed on
September 6, 1952 but together with this 19 dismissed union members the
company also dismissed 42 non-union members. After dismissing these 19
union members and the 42 non-union members, no replacements were
hired by the company. The said 19 dismissed union members later filed a
petition for reinstatement in incidental case No. 697-V (2). Judge Jose S.
Bautista heard and decided these two incidental cases 697-V (1) and 697-V
(2). With respect to Case No. 697-V (2), in his order of June 12, 1953, he
found that the said 19 union members readmitted on a temporary basis
were given the same salary, privileges and benefits given them before the
strike, the only difference being that their re-admission was on a temporary
basis; that it had to be on such basis because only the President of the
company Mr. Clarkin who had the authority to hire permanent employees,
was in the United States; that the terms and conditions of the contract of readmission signed by the 19 strikers were the same as those signed by the
non-strikers and non-unionists; that in August 1952, all the laborers hired in
May executed a second contract wherein they agreed to extend their
temporary status, which second contract confirmed the ratified the due
execution of the first contract; that upon their dismissal, they received one
month separation pay in lieu of one month advance notice, and they
accepted it without protest and even requested letters of recommendation
from Mr. Clarkin; that there was nothing in the contracts of re-employment
executed in May and August, 1952 which was contrary to law, morals or
public policy, and that said 19 laborers having been employed on temporary
basis, the company was justified in dismissing them. We agree to this
finding and holding of Judge Bautista.

Now, as regards Case No. 697-V (1), it was found that after the 32 strikers
refused to go back to work under a temporary basis, the company employed
68 newcomers non-unionists, the need for this larger number of laborers
being the extra work during the summer months. In his order of June 12,
1953, Judge Bautista held that although the strike was declared unjustified
and illegal, still the company had no power to dismiss the strikers or to hire
workers to take their place without court authority; and that even when a
strike is declared illegal, only those strikers who committed illegal acts lose
their right to continue working in the company. He therefore, in said order
directed the company to reinstate the said 32 laborers, but without
backpay, and to submit to the court he names of the strikers who
committed the illegal acts in furtherance of the strike, for proper action.

Both parties, the company and strikers moved for reconsideration of said
order of June 12, 1953. In a resolution dated January 4, 1954, penned by
Associate Judge Modesto Castillo and concured in by Presiding Judge Arsenio
C. Roldan and Associate Judge Juan E. Lanting, the majority reconsidered the
said order of June, 1953. Associate Judges Jose S. Bautista and V. Jimenez
Yanzon dissented in separate opinions voting to affirm the order of June 12,
1953. The strikers David M. Almeda, et al., have filed the present petition for
review by certiorari of the aforementioned resolution of the Court of
Industrial Relations of January 4, 1954 and "to issue an order to reinstate all
the strikers except those who in the judgment of the Court committed
specific unwarranted acts.".

In relation to Case No. 697-V (2), it is clear that there is no merit in the claim
for reinstatement of the 19 strikers who after the strike had been declared
illegal, had accepted re-employment under temporary basis and who were
later dismissed, accepted their dismissal including separation pay in lieu of
notice, and even asked for recommendations from the President of the
company. As Judge Bautista said they voluntarily entered into two contracts
of employment under a temporary basis, under which contract the company
had the right to dismiss them when their services were no longer needed
and were given their separation pay.

Case No. 697-V (1) requires a more serious consideration. The question
involved is the effect of an illegal and unjustified strike on the relation
between the company and the strikers. The majority in the industrial court
held that by staging an unjustified and an illegal strike the strikers
automatically forfeited their right to continue as employees and laborers of
the employer, while the dissenters equally claim that only those strikers
who had committed illegal acts such as employing force, coercion,
intimidation, etc., lose their jobs and that the rest of the strikers continue

their relations with the company and should be reinstated but without
backpay. This Tribunal has already ruled more than once upon this matter.

In the case of National Labor Union Incorporated, et al., vs. Philippine Match
Factory Co., and the Court of Industrial Relations, 70 Phil. 300, the Labor
Union demanded the immediate dismissal of one Pablo Pabalan, a factory
foreman for supposedly assaulting one named Dineros. Acting upon said
demand, the company indorsed the case to the City Fiscal's Office where it
was dropped for failure of the complainant to furnish the address of the
accused. In spite of the dropping of the case, the company itself thru its
attorney caused the case to be reopened in order to give the company and
the labor union the benefit of an impartial investigation. While the Fiscal was
investigating the case, and although he had announced that he would
release the result of his investigation on September 18, 1939, the members
of the union employed by the Match Company went on strike on September
16th or two days before. The strike was certified by the Secretary of Laborto
the Court of Industrial Relations on September 21, 1939. On October 11th
while the case was pending hearing 15 strikers representing themselves to
be duly authorized representatives of all the strikers addressed a letter to
the acting Manager seeking their admission for re-employment. The
Manager declined to take action while the dispute was pending adjudication
by the industrial court. Thereupon, the 15 strikers through counsel filed a
motion for an order to compel the company to re-admit the strikers. The
industrial court rendered judgment denying the petition to dismiss the
company's foreman as well as the petition for the re-admission of the
strikers to their employment. Against said judgment the Labor Union
appealed to this Tribunal. We held that the strike was clearly unjustified
because despite the attention given by the company to the laborers'
demand for the dismissal of its foreman for an alleged assault, the company
even asking the Fiscal to re-open the case after he had dropped it, the
laborers went on strike without awaiting the result of the Fiscal's
investigation of the case; and we said that as a consequence of such
unjustified strike, the strikers automatically ceased in their employment and
that the company may not be compelled to re-admit them. It will be noticed
that in said case, no acts of violence, coercion, intimidation or sabotage
were involved. The strike was found merely to be unjustified, and yet the
strikers were declared to have forfeited their status as workers of the
company. Judge Bautista in his dissenting opinion in the present case, to
support his stand that even in the case of an illegal strike, only those
strikers who committed illegal acts lose their jobs, states that "The Supreme
Court pointed out in the case of National Labor Union vs. Philippine Match
Co. (70 Phil., 303) that not all the strikers could be punished but only those
who commit specific unwarranted acts." We have carefully examined said
case of National Labor Union vs. Philippine Match Co, supra, but we failed to
find any support or basis for said statement.

The doctrine laid down in the case of National Labor Union vs. Philippine
Match Factory Co., supra, was affirmed and reiterated by this Court in the
case of Luzon Marine Department Union vs. Arsenio C. Roldan, Luzon
Stevedoring Co., et al., G. R. No. L-2660, May 30, 1950 (47 Off. Gaz. Supp.
No. 12, p. 136)[[*]]. In that case the labor union presented to the Luzon
Stevedoring Co., a petition containing 12 demands and later filed the
corresponding case with the Court of Industrial Relations praying that the
Stevedoring Company be directed to comply immediately with the
demands. After hearing the petition for dismissal and after receiving
evidence Judge Bautista of the CIR issued an order denying the motion to
dismiss and declaring that the court had jurisdiction over the case; but
before receipt of the notice of said order 65 alleged members of the
petitioning union went on strike without previously notifying the respondent
company. Thereafter, the union asked the CIR to issue a restraining order to
prevent the respondent company from employing strike breakers. Judge
Bautista issued an order enjoining the strikers to return to work and the
respondent company to reinstate them in the positions they were occupying
before the strike. On motion for reconsideration of this last order of Judge
Bautista the CIR en banc set aside said order on the ground that the strike
was unjustified and illegal. On appeal from that resolution of the CIR en
banc we affirmed said resolution and held that the right of an employee,
tenant or laborer to be continued in the service of the company for whom he
is working under the last terms and conditions existing before the dispute
arose, carries with it the corresponding obligation on his part not to strike or
to return to work if he has already done so, because if he goes on strike and
the courts later find said strike to be unjustified or illegal he has to suffer
the consequences, one of which, is the loss of his post or job in the
company. Reiterating the ruling laid down in the case of Philippine Match
Factory Co., supra, this Tribunal said:

. . . Conformably to these principles the Supreme Court, in the case of

National Labor Union, Inc. vs. Philippine Match Company (70 Phil., 300)
declared illegal and unjustified a strike motivated by an unreasonable
demand of the labor union for the dismissal of a factory foreman. In that
case the Court, speaking through Mr. Justice Moran, held that although
Commonwealth Act No. 103 recognizes, in a negative way, the laborers'
right to strike it also creates all the means by which a resort thereto may be
avoided, 'because a strike is a remedy essentially coercive in character and
general in its disturbing effects upon the social order and the public
interests'; that 'as the strike is an economic weapon at war with the policy
of the Constitution and the law, a resort thereto by laborers shall be deemed
to be a choice of a remedy peculiarly their own, and outside of the statute,
and, as such, the strikers must accept all the risks attendant upon their

choice'; and that when the petitioners declared a strike even before the
outcome of the investigation by the company of their complaint against the
factory foreman was announced, 'and without previously having resorted to
any of the pacific means provided by law, they acted unreasonably, and the
law cannot interpose its hand to protect them from the consequences of
their behavior. Their cessation from their employment as a result of such an
unjustified strike is one of such consequences which they must take by the
choice of a remedy of their own, outside of the statute."

This Court then concluded:

To summarize, the rulings of this Court in the cases herein abovecited are:

(1) The law does not look with favor upon strikes and lockouts because of
their disturbing and pernicious effects upon the social order and the public
interests; to prevent or avert them and to implement section 6, Article XIV
of the Constitution, the law has created several agencies, namely : the
Bureau of Labor, the Department of Labor, the Labor-Management Advisory
Board, and the Court of Industrial Relations. See Sec. 4, Commonwealth Act
No. 103; and Executive Order No. 158, dated July 28, 1948.)

(2) The law does not expressly ban strikes except when enjoined against by
the court; but if a strike is declared for a trivial, unjust or unreasonable
purpose, or if it is carried out through unlawful means, the law will not
sanction it and the court will declare it illegal, with the adverse
consequences to the strikers.

(3) If the laborers resort to a strike to enforce their demands, instead of

resorting first to the legal processes provided by law, they do so at their
own risk, because the dispute will necessarily reach the court and, if they
later should find that the strike was unjustified, the strikers would suffer the
adverse consequences.

The Court of Industrial Relations has merely applied to this case the settled
doctrines of this Court as above summarized. We reaffirm those doctrines
and must, consequently, sustain the resolution complained of.

It is not necessary for the purposes of this decision to rule upon acts of
illegality committed in the course of the strike and their effect on the status
of the strikers as employees of the company. We agree with the majority of
the CIR in this appealed resolution, that the strike in the present case was
clearly unjustified because the petitioners-appellants went on strike knowing
that their demands could not be acted upon by the Treasurer of the
company in the absence of its President who was then in the United States,
and they did not wait until their demands could be transmitted to said
President and acted upon by him. Not only this, but the strikers through
their representatives had misled, not to say deceived the trial court. Despite
the assurances given by them that they would not go on strike and did not
even have the intention of striking, they went on strike just the same. Said
strike may, in a way, even be regarded as equivalent to a violation or
disobedience of an order of the Industrial Court. When the Union
commenced these proceedings before the CIR the Union members
threatened to immediately go on strike. Sensing this attitude of the workers,
the Company petitioned the CIR to issue an order to prohibit the threatened
strike. Judge Bautista said that he was ready and was about to issue a writ
of injunction against the laborers and employees not to strike, and that the
only reason he did not issue the writ was because of the assurances given
to him by the Union, assurances which were not fulfilled. It should also be
stated that the strikers unanimously voted in favor of the strike. As a result
of the unjustified strike, the syrup daily prepared and placed in the tanks
valued at P2,000 soured and became a loss; and because the strikers by
means of threats, prevented the other employees, and the brokers,
distributors and drivers of the Company to enter its premises, the Company
suffered damages in the sum of P4,000 daily, up to May 16, 1952.

Under the doctrine laid down in the cases of the Philippine Match Factory
Co., and the Luzon Marine Department Union, supra, where no acts of
violence were involved and where the strikes were declared merely
unjustified, and yet the workers were held to have forfeited their status as
laborers of their employer, which doctrines we again reiterate and reaffirm,
we hold that by reason and as a consequence of the unjustified strike herein
staged, the relation of employer and employee between the company and
the strikers was severed and former may not be compelled to reinstate the
strikers as employees. The resolution appealed from is affirmed, with costs.

Bengzon, Acting C. J., Padilla, Reyes, A., Jugo, Bautista Angelo, and Labrador,
JJ., concur.
Concepcion and Reyes, J. B. L., JJ., concur in the result.

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-29217

May 11, 1978

MARIA CRISTINA FERTILIZER PLANT EMPLOYEES ASSOCIATION, VICENTE

DUMAGUENG, OLEGARIO SARMIENTO, ANDRES BELTRAN, DIONISIO TANDOC,
TOMAS MAPANAO, EUDOSIO ALCOVER, ALFONSO ALVAREZ, MAGDALENO
BAGUIO, ANASTACIO CAPANGPANGAN, JUSTINIANO IGNACIO and ANGEL
SANTIAGO, SR., petitioners,
vs.
HON. TEODULO C. TANDAYAG, MARIA CRISTINA FERTILIZER CORPORATION,
respondents.

G.R. No. L-33935

May 11, 1978

MARIA CRISTINA FERTILIZER PLANT EMPLOYEES ASSOCIATION-ALU, VICENTE

DUMAGUENG, OLEGARIO SARMIENTO. ANDRES BELTRAN, DIONISIO TANDOC,
TOMAS MAPANAO, EUDOSIO ALCOVER, ALFONSO ALVAREZ, MAGDALENO
BAGUIO, ANASTACIO CAPANGPANGAN, JUSTINIANO IGNACIO and ANGEL
SANTIAGO, petitioners,
vs.
MARIA CRISTINA FERTILIZER CORPORATION, JOSE MARCELO and COURT OF
INDUSTRIAL RELATIONS, respondents.

Juanario Seno for Maria Cristina Fertilizer Plant Employees Association, et al.

Florentino Capco for Maria Cristina Fertilizer Corporation.

AQUINO, J.:

These two cases have a common factual background. L-29217 is about the
jurisdiction of the Court of First Instance of Lanao del Norte to entertain an
action for damages arising from unfair labor practices and to issue an
injunction restraining the picketing concomitant with the strike. And L-33935
is a consolidation of two unfair labor practice cases originating from the
Court of Industrial Relations (CIR).

The first case was filed by the employer against the union in connection
with an alleged illegal strike and picketing. The second case was filed by the
union against the employer for the latter's alleged refusal to enter into a
collective bargaining agreement. The salient facts are as follows:

1.
Maria Cristina Fertilizer Corporation, a company engaged in the
manufacture of fertilizer and chemicals at its plant in Iligan City, had a
collective bargaining agreement (CBA) with the Maria Cristina Fertilizer Plant
Employees Association expiring on December 31, 1967. In September, 1967
the union submitted to the company a draft of a new CBA. The company
countered with the suggestion that the existing CBA be renewed for a fiveyear period.

2.
Believing that the company did not want to negotiate a new CBA, the
union on November 2, 1967 sent to the company a notice of strike. The
company clarified that it was not refusing to negotiate. It sent to the union
its own draft of a new CBA. In December, 1967 fruitless negotiations
regarding a new CBA were held on several occasions between the company
and the union.

3.
On January 5, 1968 the company proposed that all regular employees
would be given an increase of twenty pesos and that those whose monthly
salary was below P130 would be paid P150 a month. The union rejected the
proposal. On January 15, 1968 the company president sent a radiogram to
the union president, requesting the latter to specify the provisions in the
draft of the CBA, which were unacceptable, and appealing to the union
members to take into account the problems facing the company.

4.
The union in its letter of January 16, 1968 reminded the management
of its four major demands previous submitted to the company president.

The letter ended with this ominous warning: "Until midnight tonight, we beg
your understanding and acceptance." (Exh. M or 17). On that same day, the
company president sent a wire to the union president, suggesting mediation
and conciliation by the Department of Labor. The union president promised
to reply in the afternoon of the next day, January 17, after consultation with
the officers of the union.

5.
Without having made any reply, the union declared a strike in the
evening of January 17, 1968. The declaration of a strike. which was served
upon the plant manager at eleven-thirty in the evening, read as follows:

Please be informed that the Maria Cristina Fertilizer Plant Employees

Association is declaring a strike against the management of the Maria
Cristina Fertilizer Corporation at 10:47 p.m. on January 17, 1968 for the
following reasons:

1.
For the refusal of the Management to grant the reasonable Union
demands.

2.

For violation of the Minimum Wage Law by the management.

3.

For the anti-unionism attitude of the management.

4.

For various unfair labor practices.

Any negotiation the management wants will be coursed on the picket lines.

The Union will maintain a peaceful and lawful picket lines around the
premises of the Maria Cristina Fertilizer Plant Compound to effect its strike
until their grievances are given redress.

Yours truly, MC-Fertilizer Plant Employees Assn. (MCFPEA)

Vicente Dumagueng President

By: Sgd.

In view of the strike and the picketing, the, company's operations were
paralyzed,

6.
Two weeks after the strike was declared, or on January 30, 1968, the
company filed with the Court of First Instance of Lanao del Norte against the
union and its officers a complaint for damages with a petition for preliminary
injunction. The company alleged that the strike and picketing were illegal
and that it was suffering a loss of P39,000 daily as a result of the strike. The
union alleged in its answer that the lower court has no jurisdiction because
the case involves labor dispute which fails within the exclusive jurisdiction of
the CIR. The union opposed the issuance of an injunction on the ground that
the strike was lawful, peaceful and orderly. (Civil Case No. 1262).

7.
On February 8, 1968 the lower court issued an injunction restraining
the union and its agents and representatives from preventing the
employees, who are not members of the union, from entering the fertilizer
plant and performing their usual duties and from going out of the same and
from preventing the customers from loading the fertilizer and other products
purchased from the company.

8.
Not content with filing an action for injunction and damages, the
company on January 31, 1968 filed against the union and its officers a
charge of unfair labor practice with the CIR's regional office at Cagayan de
Oro City. After due investigation, the CIR's prosecution division on March 12,
1968 filed in behalf of the company a complaint for unfair labor practice
against the union and its officers for having declared an illegal strike and
resorted to unlawful picketing which were the same acts complained of in
Civil Case No. 1262. (CIR Case No. 109-ULP-ORO).

9.
On the other hand. the union on March 8, 1968 charged the company
and its president with unfair labor practice. After due investigation, the
prosecution division filed on October 30, 1968 in behalf of the union a
complaint for unfair labor practice against the company, its president and
personnel officer for having allegedly refused to enter Into a collective
bargaining agreement, for restraining the members of the union in
exercising their right to self-organization, and for discriminating against
them by not giving them the privileges enjoyed by non-union members (CIR
Case No. 111-ULP-ORO).

10. The strike was terminated on October 18, 1968 when the parties
entered into a collective bargaining agreement which took effect on the
following day. The picketing was lifted. But before that settlement was
made, or on July 9, 1968, the union filed in this Court the special civil
actions of certiorari and prohibition against the Court of First Instance of
Lanao del Norte and the company in order to nullify the injunction and to
secure a declaration that the lower court has no jurisdiction over Civil Case
No. 1262. On July 17, 1968, or after the petitioners had posted a bond in the
sum of P500, this Court issued a writ of preliminary injunction restraining
the lower court from further proceeding in Civil Case No. 1262 and from
enforcing the writ of preliminary injunction dated February 8, 1968. (L29217). Hence, Civil Case No. 12652 was frozen.

11. The two unfair labor practice cases were heard jointly, The CIR trial
judge in a decision dated May 4, 1970 held that the strike was illegal
because there was no notice of intention to strike, as contemplated in
section 14 of Republic Act No. 875, and because the picketing was highly
coercive in character. The officers and members of the union named as
respondents were declared to have lost their status as employees of the
company. A motion for the reconsideration of that decision was denied in
the CIR's resolution en banc dated May 14, 1971.

12. On August 19, 1971 the union filed in this Court a petition for the
review of that decision. The petition was given due course. (L-33935).

L-29217- Jurisdictional issue: Can the CFI enjoin on strike and award
damages arising from alleged unfair labor practices? We hold that the
Court of First Instance of Lanao del Norte has no jurisdiction over Civil Case
No. 1262 which is interwoven with the unfair labor practice case, CIR Case
No. 109-ULP-ORO. The two cases involve the legality of the strike and
picketing conducted by the union against the company.

An illegal strike, accompanied by violent or intimidatory picketing, may

constitute an unfair labor practice insofar as it amounts to a refusal on the
part of the union to bargain collectively with the employer (Sec. 4[b][3],
Industrial Peace Act, Art 249[c], Labor Code).

The Court of Industrial Relations used to have exclusive jurisdiction over the
prevention of unfair labor practices, a power which was not affected "by any
other means of adjustment or prevention that has been or may be

established by an agreement, code, law or otherwise" (Sec. 5, Industrial

Peace Act).

It is settled that where the plaintiff's cause of action for damages arose out
of, or was necessarily intertwined with the alleged unfair labor practice
committed by the union, the jurisdiction properly belonged to the Court of
Industrial Relations (Associated Labor Union vs. Central Azucarera de la
Carlota, L-25649, June 30, 1975, 64 SCRA 564; Progressive Labor
Association vs. Atlas Consolidated Mining and Development Corp.,
L-27585, May 29, 1970, 33 SCRA 349; Goodrich Employees Association vs.
Flores,
L-30211, October 5, 1976, 73 SCRA 297; Holganza vs. Apostol, L-32953,
March 31, 1977, 76 SCRA 190).

For the same reason, the lower court has no jurisdiction to issue the
injunction against the union. Where the issue in an action filed in the Court
of First Instance was tied up with an unfair labor practice case pending in
the Court of Industrial Relations, the. action was outside the jurisdiction of
the regular courts even if acts of violence, intimidation and coercion were
imputed to the union. The injunction should have been obtained from the
Industrial Court which was empowered to restrain such acts under the
Industrial Peace Act. That rule obviates multiplicity of suits. (BCI Employees
and Workers Union vs. Marcos, L-21016, July 30, 1965,14 SCRA 793).

Applying the above-cited rulings, we come to the unavoidable conclusion

that all the proceedings in Civil Case No. 1262 are void for lack of
jurisdiction. That case should be dismissed.

L-33935 Legality of the strike. The union and its officers, as appellants
in the unfair labor practice cases. contend that the Industrial Court erred in
not holding that the strike was staged against an unfair labor practice; in
finding that the ,strike was illegal because the requisite thirty-day notice
was not given; in holding that illegal acts were resorted to in the prosecution
of the strike, there being no substantial evidence to prove the alleged illegal
acts; in declaring that the individual petitioners had lost their status as
employees, notwithstanding their good faith in declaring a strike; in not
finding that the petitioners did not take part nor authorize the alleged illegal
acts, in not finding that the company and its president were estopped to
claim that the strike was illegal; in not declaring the company guilty of

unfair labor practices, and in not ordering the reinstatement of the

individual petitioners with back wages.

The union has not raised clear-cut pure legal issues. This Court may review
the CIR's decision in unfair labor practice cases only on questions of law.
The CIR's findings, if supported by substantial evidence, are conclusive (Sec.
6, Industrial Peace Act. See sec. 15 of Commonwealth Act No. 103 as
amended). The review is proper if the CIR has decided a question of
substance not heretofore determined by this Court or has decided it in a
way in accord with law or with this court's applicable decision (Sec. 3, Rule
43, Rules of Court).

The CIR's factual findings should be set aside if they are completely devoid
of basis and if it acted with grave abuse of discretion. Its factual findings are
final and binding when (1) the parties were given the opportunity to present
evidence; (2) the tribunal considered the evident, presented; (3) there is
something in the record to support the findings, and (4) the evidence
supporting the findings is substantial (Kaisahan ng mga Manggagawa sa La
Campana vs. Tantongco and CIR, 116 Phil. 883, 890).

Substantial evidence means evidence which is more than a mere scintilla. It

is relevant and credible evidence which a reasonable mind might accept as
adequate to support a conclusion (Ang Tibay vs. Court of Industrial
Relations, 69 Phil. 635).

In this case, the CIR on the basis of the evidence found (a) at no instance
did the company refuse to negotiate with the union on the terms of a new
collective bargaining agree that the company did not coerce the employees
to resign from the union on the promise of increased compensation and,
therefore, it did not interfere in the right of the employees to selforganization (c) that the company did not perpetrate acts of discrimination
against the members of the union, and (d) that the strike was staged
because of the company's refusal to grant the union's four demands
regarding the inclusion of foremen and casuals in the union, the increase of
the basic monthly pay to P180 and the increase to P240 a month of the
salaries of employees already receiving P180 a month, free medical and
dental treatment for the employees and their families, and gratuity pay.

The CIR found that the union struck in order to attain those demands and
not because of the alleged refusal to the company to enter into a new

collective bargaining agreement. The company had a pending suggestion

for mediation by the Department of Labor when the strike was declared.

Hence, the union should have filed with the Conciliation Service or with the
Director of Labor Relations thirty days prior to the strike a notice of its
intention to strike, as required by section 14(d) of the Industrial Peace Act.

The CIR also found that the upon resorted to unlawful acts in the conduct of
the strike. The picketing was highly coercive. The union prevented the plant
supervisor from checking the leak in the ammonia pipeline, threatened with
harm or violence a contractor dealing with the company, barred the
entrance into the company compound trucks loaded with pyrite, used a
human barricade to block the ingress of non-strikers and supervisors, and
displayed a placard with the words "Blast off Cahanap".

The lower court arrived at those factual conclusions after analyzing the
evidence presented by the parties at a full-dress hearing. Those findings are
supported by substantial evidence.

Specifically, we are bound by the finding that the alleged letter of November
2, 1967 was not the notice of intention to strike contemplated in section
14(d) of the industrial Peace Act, That 'letter was sent to the company and
not to the Conciliation Service or director of Labor Relations. The chief
conciliator of the Department of labor testified that his office did not receive
any notice of the impending strike. That testimony was given credence by
the CIR. We cannot reverse that finding.

Nor can we ignore the CIR's explicit finding that the strike was not
peacefully conducted and that the picketing was characterized by coercion
and intimidation. Only peaceful picketing is allowed (Republic Act No. 1167;
De Leon vs. National Labor Union, 100 Phil. 789).

As has been said, a strike is a legitimate weapon in the universal struggle

for existence. But to be lawful, a strike must be preceded by the requisite
notice of intention to strike. It should have a lawful purpose and it should be
executed through lawful means. (See sec. 264[b] of Labor Code).

Since the strike was found by the CIR to be illegal, we cannot say that it
gravely abused its discretion in declaring that the union officers and
members, who took part in the strike, authorized the unlawful acts,
committed them, or ratified them, had lost their status as employees. (See
Almeda vs. CIR and Pepsi-Cola Bottling Co., Phil. 306, 317.)

WHEREFORE, in L-29217 the order and writ of injunction issued by the Court
of First Instance of Lanao del Norte are set aside for lack of jurisdiction and
the writ of preliminary injunction issued by this Court is made permanent. In
L-33935 the CIR decision and resolution under appeal are affirmed. No
costs.

SO ORDERED.

Barredo, Antonio, Concepcion, Jr., and Santos, JJ., concur.

Separate Opinions

FERNANDO, J., concurring and dissenting:

It must conceded that from the perspective taken by the Court in these two
cases, Justice Aquino's opinion, distinguished, as is usually the case, by
thorough research and marked clarity, supplies a neat and logical solution to
the basic problem posed. Inasmuch as the decision in L-29217 reaffirms the
well-settled doctrine that an unfair labor practice controversy was within the
exclusive jurisdiction of the nowdefunct Court of Industrial Relations, there
can be no thought of dissent. It is a different matter as far as L-33935 is
concerned. I am no prepared to yield concurrence inasmuch as, to my mind,
there appears to be a retreat from the later trend discernible in recent
opinions of this Court, to be more specifically referred to, informed by a
spirit of leniency toward participants in an illegal strike. That approach, in

my opinion, reflects greater fidelity to the expanded constitutional principles

of social justice 1 and protection to labor, 2 dismissal being visited only on
those strikers found guilty of committing serious acts of violence.

1. he fundamental doctrine of the exclusive competence vested in the Court

of Industrial Relations had nowhere been more emphatically set forth than
in Associated Labor Union v. Gomez, 3 Justice Sanchez being the ponente, in
these words: "A rule buttressed upon statute and reason that [is] frequently
reiterated in jurisprudence is that labor cases involving unfair labor practice
are within the exclusive jurisdiction of the CIR. By now, this rule has ripened
into dogma. It thus commands adherence, not breach. 4 As noted in
Security Bank Employees Union-NATU v. Security Bank and Trust Co., 5 there
were from PAFLU v. Tan 6 to Bay View Hotel, Inc. v Manila Hotel Workers
Union 7 fourteen decisions of this Tribunal enunciating the principle of
exclusive jurisdiction of the Court of Industrial Relations over unfair labor
practice controversies. Three other cases, Associated Labor Union v.
Borromeo, 8 Veteran Security Free Workers Union v. Cloribel, 9 and Meralco
Workers Union v. Gaerlan, 10 were decided prior to Progressive Labor
Association v. Atlas Consolidated Mining and Development Corporation, 11
cited in the opinion of Justice Aquino. There were three other decisions
referred to therein, Associated Labor Union v. Central Azucarera de la
Carlota, 12 Goodrich Employees Association v. Flores, 13 and Holganza v.
Apostol. 14 To demonstrate how firmly committed this Court is to such a
ruling, in accordance with the letter and spirit of the Industrial Peace Act, 15
reference may be made to fourteen other cases from Lakas ng
Manggagawang Makabayan v. Abiera 16 to Holganza. 17

2.
To be more precise, insofar as the issue of damages is concerned, the
same leading case of Associated Labor Union stated the following:
"Jurisdiction then is exclusively vested in the Court of Industrial Relations.
For, explicit in Section 5(a) of the Industrial Peace Act is the precept that
The Court shall have jurisdiction over the prevention of unfair labor
practices and is empowered to prevent any person from engaging in any
unfair labor practice. This power shall be exclusive and shall not be affected
by any other means of adjustment prevention that has been or may be
established by an agreement, code, law or otherwise.' ... Nor will Sugeco's
averment below that it suffers damages by reason of the strike, work to
defeat the CIR's jurisdiction to hear the unfair labor practice charge. Reason
for this is that the right to damages 'would still have to depend on the
evidence in the unfair labor practice case' in the CIR. To hold otherwise is to
sanction split jurisdiction which is obnoxious to the orderly administration of
justice. 18

3.
Now as to the dissenting portion of this opinion. As set forth at the
outset, it is a different approach to the principle of governing strikes that
precludes me from according acceptance to the opinion of the Court in L33935. My starting point is the highly-persuasive ponencia of Justice Laurel
in the leading case of Rex Taxicab Co. v. Court of Industrial Relations: 19
"Independently of the right to organization and collective bargaining which,
according to some authorities, connotes the right to strike in the event that
such a course is deemed advisable by the employees for their mutual aid or
protection (see cases on Labor Law by Landis, pp. 632, 633),
Commonwealth Act. 103, for instance, provides that when any dispute has
been submitted to the Court of Industrial Relations for settlement or
abitration, and pending award or decision by the court of such dispute, the
employee, tenant, or laborer shall not strike or walk out of his employment
when so enjoined by the court after hearing and when public interest so
requires, and if he has already done so, he shall forthwith return to it, upon
order of the court, which shall be issued only after hearing when public
interest so requires or when the dispute cannot, in its opinion, be promptly
decided or settled. (Commonwealth Act No. 103, section 19, as amended by
Commonwealth Act No. 559.) In other words, the employee, tenant or
laborer is inhibited from striking or walking out of his employment only
when so enjoined by the Court of Industrial Relations and after a dispute has
been submitted thereto and pending award or decision by the court of such
dispute, It follows that, as in the present case. the employees or laborers
may strike before being ordered not to do so and before an industrial
dispute is submitted to the Court of Industrial Relations, subject to the
power of the latter, after hearing when public interest so requires or when
the dispute cannot, in its opinion, be promptly decided or settled, to order
them to return, with the consequence that if the strikers fail to return work,
when so ordered, the court may authorize the employer to accept other
employees or laborers. Furthermore, the jurisdiction of the Court of
Industrial Relations does not extend to cases where the number of
employees, laborers or tenant or farm-laborers involved does not exceed
thirty, and it is apparent that in any of these cases the prohibition against a
strike pending the determination of the dispute before the Court of
Industrial Relations cannot be invoked. We are here concerned with a
definite and well-marked policy of the legislature and not with the extent to
which the policy would go. If the legislature should decide to prohibit or
abolish strikes absolutely, as it has attempted to do in the past, this is
prerogative, not ours. In this case, we cannot supply what e might conceive
to be the defects of the law and interpolate into it what, in our opinion,
ought to have been put there by the lawmakers. We can neither mar nor
change a clear legislative policy." 20

4.
that was so under Commonwealth Act No. 103. At the most, it was
implicit. The Industrial Peace Act made explicit that a strike in a concerted

activity entitled to legal protection. 'it expressly recognizes the right to of

the employees "to self-organization and to form, join or assist labor
organizations of their own choosing for the purpose of collective bargaining
through representatives of their own choosing and to engage in concerted
activities for the purpose of collective bargaining and other mutual aid or
protection, 21 The above provision of law is taken from the Wagner Act. 22
Commenting on that section of the Wagner Act, Cox says: Although the
National labor Relations Act is primarily concerned with safeguarding
employees in their right to organize labor unions and bargain collectively, it
also confers important rights to engage in strikes, picketing and other forms
of economic pressure. Section 7 created 'the right to engage in concerted
activities for the purpose of collective bargaining or other mutual aid or
protection.' Section 8(a) (1) forbids an employer to interfere with, restrain or
coerce employees in the exercise of a right guaranteed by Section 7. When
a peaceful negotiations over wages or hours break down and the employees
resort to a peaceful strike, they are engaging in 'concerted activities. 23

5.
That the law should be thus ought not to occasion any surprise. For, in
the apt phrase of Justice J.B.L. Reyes, a strike is "an institutionalized factor
of democratic growth." 24 It is a logical corollary to the philosophy of the
Industrial Peace Act, embodying the policy of self-organization and collective
bargaining, that to the workers themselves should be left the determination
of whether or not to engage in such concerted activity as a strike. They are
free to select the means for attaining success in their disputes with
management. The requirement in the Act that before the employees may
strike, they must file with the Conciliation Service of the Department of
Labor a notice of such intention, should not be given an interpretation so
rigid in character as to render nugatory such a right. It would be, to my
mind, to the backward step.

6.
On a more specific level, it may be stated that a strike does not
automatically carry the stigma of illegality even if no unfair labor practice
were committed by the employer. It suffices if such a believe in good faith is
entertained by labor as the inducing factor for staging a strike. So it was
clearly stated by Chief Justice Concepcion, 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. 25

7.
It is to be admitted that a strike may be tainted by illegality if marked
by violence. What was within the protection of the Industrial Peace Act was
the concerted activity of cessation of work in order that a union's economic
demands may be granted or that an employer cease and desist from an
unfair labor practice. That was a right recognized by law, which certainly
could not approve of the utilization of force to attain either objective. It is a
truism to state that implicit in the concept of a legal order is the
maintenance of peaceful ways. It would follow then that if marred by
violence, a strike could be characterized as illegal. Nonetheless, as was
observed in Shell Oil Workers' Union v. Shell Company of the Philippines: 26
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 by
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. 27 While the Court held in this case that there was
no unfair labor practice, still, from my appraisal of the situation, there was
good faith in the belief of the strikers of its existence.

8.
According to the Court: "The CIR also found that the union resorted to
unlawful acts in the conduct of the strike, The picketing was highly coercive.
The union prevented the plant supervisor from checking the leak in the
ammonia pipeline, threatened with harm or violence a contractor dealing
with the company, barred the entrance into the company compound trucks
loaded with pyrite, used a human barricade to block the ingress of nonstrikers and supervisors, and displayed a placard with the words 'Blast off
Canahap. 28 There is relevance therefore to this excerpt from the Shell
opinion: "Except on those few days specified then, the Shell Company could
not allege that the strike was conducted in a manner other than peaceful.
Under the circumstances, it would be going too far to consider that it
thereby became illegal. This is not by any means to condone the utilization
of force by labor to attain its objectives. It is only to show awareness that in
labor conflicts, the tension that fills the air was well as the feeling of
frustration and bitterness could break out in sporadic acts of violence. ... It
is enough that individual liability be incurred by those guilty of such acts of
violence that calls for loss of employee status. 29

9.
It was realistically observed by retired Chief Justice Concepcion that a
strike is usually attended "the excitement, The heat and the passion of the
direct participants in the labor dispute, at the peak thereof ... 30 In Insular
Life Assurance Co., Ltd. Employees' Association v. Insular Life Assurance Co.,

Ltd., 31 there was the recognition by this Court, speaking through the then
Associate, now Chief Justice, Castro, of picketing as such being "inherently
explosive. 32 It is thus clear that not every form of violence suffices to affix
the seal of illegality on a strike or to cause the loss of employment by the
guilty party. As was held in the Shell Oil Workers' Union decision, only such
strikers who were proven to have committed "specific serious acts of
violence" could be penalized with loss of employment. 33

10. Why a mere finding of the illegality of a strike should not be

automatically followed by wholesale dismissal was once again stressed in
the recent case of Almira v. B. F. Goodrich Philippines, Inc. 34 in these
words: "It would imply at the very least that where a penalty less punitive
would suffice, whatever missteps may be committed by labor ought not to
be visited with a consequence so severe. It is not only because of the law's
concern for the workingman. There is, in addition, his family to consider.
Unemployment brings untold hardships and sorrows on those dependent on
the wage-earner. The misery and pain attendant on the loss of jobs then
could be avoided if there be acceptance of the view that under all the
circumstances of this case, petitioners should not be deprived of their
means of livelihood. Nor is this to condone what had been done by them.
For all this while, since private respondent considered them separated from
the service, they had not been paid. From the strictly juridical standpoint, it
cannot be too strongly stressed, to follow Davis in his masterly work,
Discretionary Justice, that where a decision may be made to rest on
informed judgment rather than rigid rules. all the equities of the case must
be accorded their due weight. Finally, labor law determinations, to quote
from Bultmann, should be not only secundum rationem but also secundum
caritatem. 35 This decision, it must be noted, was rendered after the
effectivity of the present Constitution.

Hence this dissent in L-33935, there being, to my mind, a failure to meet the
more exacting standard to justify dismissal of strikers, even on the
assumption that the strike could be declared illegal.

Separate Opinions

FERNANDO, J., concurring and dissenting:

It must conceded that from the perspective taken by the Court in these two
cases, Justice Aquino's opinion, distinguished, as is usually the case, by
thorough research and marked clarity, supplies a neat and logical solution to
the basic problem posed. Inasmuch as the decision in L-29217 reaffirms the
well-settled doctrine that an unfair labor practice controversy was within the
exclusive jurisdiction of the nowdefunct Court of Industrial Relations, there
can be no thought of dissent. It is a different matter as far as L-33935 is
concerned. I am no prepared to yield concurrence inasmuch as, to my mind,
there appears to be a retreat from the later trend discernible in recent
opinions of this Court, to be more specifically referred to, informed by a
spirit of leniency toward participants in an illegal strike. That approach, in
my opinion, reflects greater fidelity to the expanded constitutional principles
of social justice 1 and protection to labor, 2 dismissal being visited only on
those strikers found guilty of committing serious acts of violence.

1. he fundamental doctrine of the exclusive competence vested in the Court

of Industrial Relations had nowhere been more emphatically set forth than
in Associated Labor Union v. Gomez, 3 Justice Sanchez being the ponente, in
these words: "A rule buttressed upon statute and reason that [is] frequently
reiterated in jurisprudence is that labor cases involving unfair labor practice
are within the exclusive jurisdiction of the CIR. By now, this rule has ripened
into dogma. It thus commands adherence, not breach. 4 As noted in
Security Bank Employees Union-NATU v. Security Bank and Trust Co., 5 there
were from PAFLU v. Tan 6 to Bay View Hotel, Inc. v Manila Hotel Workers
Union 7 fourteen decisions of this Tribunal enunciating the principle of
exclusive jurisdiction of the Court of Industrial Relations over unfair labor
practice controversies. Three other cases, Veteran Security Free Workers
Union v. Cloribel, 9 and Meralco Workers Union v. Gaerlan, 10 were decided
prior to Progressive Labor Association v. Atlas Consolidated Mining and
Development Corporation, 11 cited in the opinion of Justice Aquino. There
were three other decisions referred to therein, Associated Labor Union v.
Central Azucarera de la Carlota, 12 Goodrich Employees Association v.
Flores, 13 and Holganza v. Apostol. 14 To demonstrate how firmly
committed this Court is to such a ruling, in accordance with the letter and
spirit of the Industrial Peace Act, 15 reference may be made to fourteen
other cases from Lakas ng Manggagawang Makabayan v. Abiera 16 to
Holganza. 17

2.
To be more precise, insofar as the issue of damages is concerned, the
same leading case of Associated Labor Union stated the following:
"Jurisdiction then is exclusively vested in the Court of Industrial Relations.

For, explicit in Section 5(a) of the Industrial Peace Act is the precept that
The Court shall have jurisdiction over the prevention of unfair labor
practices and is empowered to prevent any person from engaging in any
unfair labor practice. This power shall be exclusive and shall not be affected
by any other means of adjustment prevention that has been or may be
established by an agreement, code, law or otherwise.' ... Nor will Sugeco's
averment below that it suffers damages by reason of the strike, work to
defeat the CIR's jurisdiction to hear the unfair labor practice charge. Reason
for this is that the right to damages 'would still have to depend on the
evidence in the unfair labor practice case' in the CIR. To hold otherwise is to
sanction split jurisdiction which is obnoxious to the orderly administration of
justice. 18

3.
Now as to the dissenting portion of this opinion. As set forth at the
outset, it is a different approach to the principle of governing strikes that
precludes me from according acceptance to the opinion of the Court in L33935. My starting point is the highly-persuasive ponencia of Justice Laurel
in the leading case of Rex Taxicab Co. v. Court of Industrial Relations: 19
"Independently of the right to organization and collective bargaining which,
according to some authorities, connotes the right to strike in the event that
such a course is deemed advisable by the employees for their mutual aid or
protection (see cases on Labor Law by Landis, pp. 632, 633),
Commonwealth Act. 103, for instance, provides that when any dispute has
been submitted to the Court of Industrial Relations for settlement or
abitration, and pending award or decision by the court of such dispute, the
employee, tenant, or laborer shall not strike or walk out of his employment
when so enjoined by the court after hearing and when public interest so
requires, and if he has already done so, he shall forthwith return to it, upon
order of the court, which shall be issued only after hearing when public
interest so requires or when the dispute cannot, in its opinion, be promptly
decided or settled. (Commonwealth Act No. 103, section 19, as amended by
Commonwealth Act No. 559.) In other words, the employee, tenant or
laborer is inhibited from striking or walking out of his employment only
when so enjoined by the Court of Industrial Relations and after a dispute has
been submitted thereto and pending award or decision by the court of such
dispute, It follows that, as in the present case. the employees or laborers
may strike before being ordered not to do so and before an industrial
dispute is submitted to the Court of Industrial Relations, subject to the
power of the latter, after hearing when public interest so requires or when
the dispute cannot, in its opinion, be promptly decided or settled, to order
them to return, with the consequence that if the strikers fail to return work,
when so ordered, the court may authorize the employer to accept other
employees or laborers. Furthermore, the jurisdiction of the Court of
Industrial Relations does not extend to cases where the number of
employees, laborers or tenant or farm-laborers involved does not exceed

thirty, and it is apparent that in any of these cases the prohibition against a
strike pending the determination of the dispute before the Court of
Industrial Relations cannot be invoked. We are here concerned with a
definite and well-marked policy of the legislature and not with the extent to
which the policy would go. If the legislature should decide to prohibit or
abolish strikes absolutely, as it has attempted to do in the past, this is
prerogative, not ours. In this case, we cannot supply what e might conceive
to be the defects of the law and interpolate into it what, in our opinion,
ought to have been put there by the lawmakers. We can neither mar nor
change a clear legislative policy." 20

4.
that was so under Commonwealth Act No. 103. At the most, it was
implicit. The Industrial Peace Act made explicit that a strike in a concerted
activity entitled to legal protection. 'it expressly recognizes the right to of
the employees "to self-organization and to form, join or assist labor
organizations of their own choosing for the purpose of collective bargaining
through representatives of their own choosing and to engage in concerted
activities for the purpose of collective bargaining and other mutual aid or
protection, 21 The above provision of law is taken from the Wagner Act. 22
Commenting on that section of the Wagner Act, Cox says: Although the
National labor Relations Act is primarily concerned with safeguarding
employees in their right to organize labor unions and bargain collectively, it
also confers important rights to engage in strikes, picketing and other forms
of economic pressure. Section 7 created 'the right to engage in concerted
activities for the purpose of collective bargaining or other mutual aid or
protection.' Section 8(a) (1) forbids an employer to interfere with, restrain or
coerce employees in the exercise of a right guaranteed by Section 7. When
a peaceful negotiations over wages or hours break down and the employees
resort to a peaceful strike, they are engaging in 'concerted activities. 23

5.
That the law should be thus ought not to occasion any surprise. For, in
the apt phrase of Justice J.B.L. Reyes, a strike is "an institutionalized factor
of democratic growth." 24 It is a logical corollary to the philosophy of the
Industrial Peace Act, embodying the policy of self-organization and collective
bargaining, that to the workers themselves should be left the determination
of whether or not to engage in such concerted activity as a strike. They are
free to select the means for attaining success in their disputes with
management. The requirement in the Act that before the employees may
strike, they must file with the Conciliation Service of the Department of
Labor a notice of such intention, should not be given an interpretation so
rigid in character as to render nugatory such a right. It would be, to my
mind, to the backward step.

6.
On a more specific level, it may be stated that a strike does not
automatically carry the stigma of illegality even if no unfair labor practice
were committed by the employer. It suffices if such a believe in good faith is
entertained by labor as the inducing factor for staging a strike. So it was
clearly stated by Chief Justice Concepcion, 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. 25

7.
It is to be admitted that a strike may be tainted by illegality if marked
by violence. What was within the protection of the Industrial Peace Act was
the concerted activity of cessation of work in order that a union's economic
demands may be granted or that an employer cease and desist from an
unfair labor practice. That was a right recognized by law, which certainly
could not approve of the utilization of force to attain either objective. It is a
truism to state that implicit in the concept of a legal order is the
maintenance of peaceful ways. It would follow then that if marred by
violence, a strike could be characterized as illegal. Nonetheless, as was
observed in Shell Oil Workers' Union v. Shell Company of the Philippines: 26
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 by
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. 27 While the Court held in this case that there was
no unfair labor practice, still, from my appraisal of the situation, there was
good faith in the belief of the strikers of its existence.

8.
According to the Court: "The CIR also found that the union resorted to
unlawful acts in the conduct of the strike, The picketing was highly coercive.
The union prevented the plant supervisor from checking the leak in the
ammonia pipeline, threatened with harm or violence a contractor dealing
with the company, barred the entrance into the company compound trucks
loaded with pyrite, used a human barricade to block the ingress of nonstrikers and supervisors, and displayed a placard with the words 'Blast off
Canahap. 28 There is relevance therefore to this excerpt from the Shell
opinion: "Except on those few days specified then, the Shell Company could

not allege that the strike was conducted in a manner other than peaceful.
Under the circumstances, it would be going too far to consider that it
thereby became illegal. This is not by any means to condone the utilization
of force by labor to attain its objectives. It is only to show awareness that in
labor conflicts, the tension that fills the air was well as the feeling of
frustration and bitterness could break out in sporadic acts of violence. ... It
is enough that individual liability be incurred by those guilty of such acts of
violence that calls for loss of employee status. 29

9.
It was realistically observed by retired Chief Justice Concepcion that a
strike is usually attended "the excitement, The heat and the passion of the
direct participants in the labor dispute, at the peak thereof ... 30 In Insular
Life Assurance Co., Ltd. Employees' Association v. Insular Life Assurance Co.,
Ltd., 31 there was the recognition by this Court, speaking through the then
Associate, now Chief Justice, Castro, of picketing as such being "inherently
explosive. 32 It is thus clear that not every form of violence suffices to affix
the seal of illegality on a strike or to cause the loss of employment by the
guilty party. As was held in the Shell Oil Workers' Union decision, only such
strikers who were proven to have committed "specific serious acts of
violence" could be penalized with loss of employment. 33

10. Why a mere finding of the illegality of a strike should not be

automatically followed by wholesale dismissal was once again stressed in
the recent case of Almira v. B. F. Goodrich Philippines, Inc. 34 in these
words: "It would imply at the very least that where a penalty less punitive
would suffice, whatever missteps may be committed by labor ought not to
be visited with a consequence so severe. It is not only because of the law's
concern for the workingman. There is, in addition, his family to consider.
Unemployment brings untold hardships and sorrows on those dependent on
the wage-earner. The misery and pain attendant on the loss of jobs then
could be avoided if there be acceptance of the view that under all the
circumstances of this case, petitioners should not be deprived of their
means of livelihood. Nor is this to condone what had been done by them.
For all this while, since private respondent considered them separated from
the service, they had not been paid. From the strictly juridical standpoint, it
cannot be too strongly stressed, to follow Davis in his masterly work,
Discretionary Justice, that where a decision may be made to rest on
informed judgment rather than rigid rules. all the equities of the case must
be accorded their due weight. Finally, labor law determinations, to quote
from Bultmann, should be not only secundum rationem but also secundum
caritatem. 35 This decision, it must be noted, was rendered after the
effectivity of the present Constitution.

Hence this dissent in L-33935, there being, to my mind, a failure to meet the
more exacting standard to justify dismissal of strikers, even on the
assumption that the strike could be declared illegal.

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. Nos. 95494-97 September 7, 1995

LAPANDAY WORKERS UNION, ARQUILAO BACOLOD, JOSE ERAD, FERNANDO

HERNANDO, EDDIE ESTRELLA, CIRILO DAYAG, EDUARDO POQUITA, CARLITO
PEPITO, RENE ARAO, JUANITO GAHUM, EMILIANO MAGNO, PERLITO
LISONDRA, GREGORIO ALBARAN, ABRAHAM BAYLON, DIONESIO TRUCIO,
TOMAS BASCO AND ROSARIO SINDAY, pertitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION & DEVELOPMENT CORPORATION,
respondents.

G.R. Nos. 95494-97 September 7, 1995

LAPANDAY WORKERS UNION, ARQUILAO BACOLOD, ET AL., petitioners,

vs.
NATIONAL LABOR RELATIONS COMMISSION AND CADECO ARGO
DEVELOPMENT PHILS., INC. respondents.

G.R. Nos. 95494-97 September 7, 1995

LAPANDAY WORKERS UNION, ARQUILAO BACOLOD, ET AL., petitioners,

vs.
NATIONAL LABOR RELATIONS COMMISSION AND LAPANDAY AGRICULTURAL &
DEVELOPMENT CORPORATION, respondents.

G.R. Nos. 95494-97 September 7, 1995

LAPANDAY WORKERS UNION, TOMAS N. BASCO, ET AL., petitioners,

vs.
NATIONAL LABOR RELATIONS COMMISSION AND LAPANDAY AGRICULTURAL &
DEVELOPMENT CORPORATION, respondents.

PUNO, J.:

Petitioner Lapanday Agricultural Workers' Union (Union for brevity) and

petitioners-workers of Lapanday Agricultural and Development Corporation
and CADECO Agro Development Philippines, Inc., seek to reverse the
consolidated Decision dated August 29, 1990, 1rendered by public
respondent National Labor Relations Commision, declaring their strike illegal
and ordering the dismissal of their leaders.

The background of the case:

Private respondents are sister companies engaged in the production of

bananas. Their agricultural establishments are located in Davao City.

On the other hand, petitioner Lapanday Workers' Union (Union) is the duly
certified bargaining agent of the rank and file employees of private
respondents. The Union is affiliated with the KMU-ANGLO. The other
petitioners are all members of the Union.

The records show that petitioner Union has a collective bargaining

agreement with private respondents, covering the period from December 5,
1985 to November 30, 1988. A few months before the expiration of their
CBA, private respondents initiated certain management policies which
disrupted the relationship of the parties.

First, on August 1, 1988, private respondents contracted Philippine Eagle

Protectors and Security Agency, Inc., to provide security services for their
business premises located in Lapanday, Bandug, Callawa, Davao City, and
Guising, Davao Del Sur. Their contract also called for the protection of the
lives and limbs of private respondents' officers, employees and guests
within company premises. The Union branded the security guards posted
within the company premises as private respondents' "goons" and "special
forces." It also accused the guards of intimidating and harassing their
members.

Second, private respondents conducted seminars on Human Development

and Industrial Relations (HDIR) for their managerial and supervisory
employees and, later, the rank-and-filers, to promote their social education
and economic growth. Among the topics discussed in the seminar were the
mission statement of the company, corporate values, and the Philippine
political spectrum. The Union claimed that the module on the Philippine
political spectrum lumped the ANGLO (Alliance of Nationalist and Genuine
Labor Organization), with other outlawed labor organizations such as the
National Democratic Front or other leftist groups.

These issues were discussed during a labor-management meeting held on

August 2, 1988. The labor group was represented by the Union, through its
President, petitioner Arquilao Bacolod, and its legal counsel. After private
respondents explained the issues, the Union agreed to allow its members to
attend the HDIR seminar for the rank-and-filers. Nevertheless, on August 19
and 20, the Union directed its members not to attend the seminars
scheduled on said dates. Earlier on, or on August 6, 1988, the Union, led by
petitioners Arquilao Bacolod and Rene Arao, picketed the premises of the
Philippine Eagle Protectors to show their displeasure on the hiring of the
guards.

Worse still, the Union filed on August 25, 1988, a Notice of Strike with the
National Conciliation and Mediation Board (NCMB). It accused the company
of unfair labor practices consisting of coercion of employees, intimidation of
union members and union-busting. 2 These were the same issues raised by
the Union during the August 2, 1988 labor-management meeting.

On August 29, 1988, the NCMB called a conciliation conference. The

conference yielded the following agreement:

(1) Union officers, including the officials of KMU-ANGLO, and the Executive
Director of the NCMB would attend the HDIR seminar on September 5, 1988;
and

(2) A committee shall convene on September 10, 1989, to establish

guidelines governing the guards.

The Union officials did attend the September 5, 1988 seminar. While they no
longer objected to the continuation of the seminar, they reiterated their
demand for the deletion of the discussion pertaining to the KMU-ANGLO.

With the apparent settlement of their differences, private respondents

notified the NCMB that there were no more bases for the notice of strike.

An unfortunate event brake the peace of the parties. On September 8, 1988,

Danilo Martinez, a member of the Board of Directors of the Union, was
gunned down in his house in the presence of his wife and children. The
gunman was later identified as Eledio Samson, an alleged member of the
new security forces of private respondents.

On September 9, 1988, the day after the killing, most of the members of the
Union refused to report for work. They returned to work the following day
but they did not comply with the "quota system" adopted by the
management to bolster production output. Allegedly, the Union instructed
the workers to reduce their production to thirty per cent (30%). Private
respondents charged the Union with economic sabotage through slowdown.

On September 14, 1988, Private respondents filed separate charges against

the Union and its members for illegal strike, unfair labor practice and
damages, with prayer for injunction. These cases were docketed as Case
Nos. RAB-11-09-00612-888 and RAB No. 11-09-00613-88 before Labor
Arbiter Antonio Villanueva.

On September 17, 1988, petitioners skipped work to pay their last respect
to the slain Danilo Martinez who was laid to rest. Again, on September 23,
1988, petitioners did not report for work. Instead, they proceeded to private
respondents' office at Lanang, carrying placards and posters which called
for the removal of the security guards, the ouster of certain management
officials, and the approval of their mass leave application. Their mass action
did not succeed.

In a last ditch effort to settle the deteriorating dispute between the parties,
City Mayor Rodrigo Duterte intervened. Dialogues were held on September
27 and 29, 1988 at the City Mayor's Office. Again, the dialogues proved
fruitless as private respondents refused to withdraw the cases they earlier
filed with public respondent.

On October 3, 1988, a strike vote was canducted among the members of

the Union and those in favor of the strike won overwhelming support from
the workers. The result of the strike vote was then submitted to the NCMB
on October 10, 1988. Two days later, or on Ootober 12, 1988, the Union
struck.

On the bases of the foregoing facts, Labor Arbiter Antonio Villanueva ruled
that the Onion staged an illegal strike. The dispositlve portion of the
Decision, dated December 12, 1988, states:

COMFORMABLY WITH ALL THE FOREGOING, judgment is hereby rendered:

a)

Declaring the strike staged by respondents (petitioners) to be illegal;

b)
Declaring the employees listed as respondents in the complaint and
those mentioned in page 21 to have lost their employment status with
complainants Lapanday Agricultural and Development Corporation and
Cadeco Agro Development Philippines, Inc.; and

c)
Ordering respondents (petitioners in this case) to desist from further
committing an illegal strike.

Petitioners appealed the Villanueva decision to public respondent NLRC.

It also appears that on December 6, 1988, or before the promulgation of the

decision of Arbiter Villanueva, the Union, together with Tomas Basco and 25
other workers, filed a complaint for unfair labor practice and illegal
suspension against LADECO. The case was docketed as Case No. RAB-11-1200780-88. On even date, another complaint for unfair labor practice and
illegal dismissal was filed by the Union, together with Arquilao Bacolod and
58 other complainants. This was docketed as Case No. RAB-11-12-00779-88.
These two (2) cases were heard by Labor Arbiter Newton Sancho.

Before the NLRC could resolve the appeal taken on the Villanueva decision
in Case Nos. RAB-11-09-00612-88 and RAB-11-09-00613-88, Labor Arbiter
Sancho rendered a decision in the two (2) cases filed by the Union against
private respondents LADECO and CADECO (Case Nos. RAB-11-12-00779-88
and RAB-11-12-00780-88). The Sancho decision, dated October 18, 1989,
declared LADECO and CADECO guilty of unfair labor practices and illegal
dismissal and ordered the reinstatement of the dismissed employees of
private reapondents, with backwages and other benefits. Significantly, the
Sancho decision considered the refusal of the workers to report for work on
September 9, 1988, justified by the circumstance then prevailing, the killing
of Danilo Martinez on September 8,1988.

Private respondents appealed the Sancho decision, claiming, among others,

that labor arbiter Sancho erred in passing upon the legality of the strike
staged by petitioners since said issue had already been passed upon by the
Regional Arbitration Branch and was still on appeal before the NLRC.

Considering that the four (4) cases before it arose from the same set of facts
and involved substantially the same issues, the NLRC rendered a
consolidated decision, promulgated August 29, 1990, upholding the
Villanueva decision in Case Nos. RAB-11-09-00612-88 and RAB-11-0900613-88. The dispositive portion of the assailed NLRC decision states:

WHEREFORE, premises considered, a new judgment is entered in the four

consolidated and above-captioned cases as follows:

1.
The strike staged by the Lapanday Agricultural Workers Union is hereby
declared to be (sic) illegal;

2.
As a consequence thereof, the following employees-union officers are
declared to have lost their employment status with Lapanday Agricultural
Development Corporation and CADECO Agro Development Philippines, to
wit: Arguilao Bacolod, Jose Erad, Fernando Hernando, Eldie Estrella, Cerelo
Dayag, Lucino Magadan, Rene Arao, Eduardo Poquita, Juanito Gahum, Emilio
Magno, Perlito Lisondra, Gregorio Albaron, Abraham Baylon, Dionosio Trocio,
Tomas Basco and Rosario Sinday;

3.
However, the individual respondents (union members), being merely
rank-and-file employees and who merely joined the strike declared as
illegal, are ordered reinstated but without backwages, the period they were
out of work is deemed the penalty for the illegal strike they staged;

4.
Ordering Lapanday Workers' Union, its leaders and members, to desist
from further committing an illegal strike; and

5.
Dismissing the complaint for unfair labor practice, illegal suspension
and illegal dismissal filed by the Lapanday Workers Union (LWU)-ANGLO and
its members, for lack of merit.

SO ORDERED.

Petitioners fileds motion for reconsideration. It did not prosper. Hence, the
petition.

Petitioners now claim that public respondent NLRC gravely abused its
discretion in: a) declaring that their activities, from September 9, 1988 to
October 12, 1988, were strike activities; and b) declaring that the strike
staged on October 12, 1988 was illegal.

The critical issue is the legality of the strike held on October 12, 1988. The
applicable laws are Articles 263 and 264 of the Labor Code, as amended by
E.O. No. 111, dated December 24, 1986. 3

Paragraphs (c) and (f) of Article 263 of the Labor Code, as amended by E.O.
111, provides:

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

bargaining agent may file a notice of strike or the employer may file, notice
of lockout with the Ministry at least 30 days before the intended date
thereof. In cases of unfair labor practice, the notice shall be 15 days and in
the absence of a duly certified or recognized bargaining agent, the notice of
strike may be filed by any legitimate labor organization in behalf of its
members. However, in case of dismissal from employment of union officers
duly elected in accordance with the union constitution and by-laws, which
may constitute union busting where the existence of the union is
threatened, the 15-daycooling-off period shall not apply and the union may
take action immediately.

xxx xxx xxx

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

total union membership in the bargaining unit concerned, obtained by
secret ballot in meetings or referenda called for that purpose. A decision to
declare a lockout must be approved by a majority of the board of directors
of the corporation or association or of the partners in a partnership,
obtained by secret ballot in a meeting called for that purpose. The decision
shall be valid for the duration of the dispute based on substantially the
same grounds considered when the strike or lockout vote was taken. The
Ministry may, at its own initiative or upon the request of any affected party,
supervise the conduct of secret balloting. In every case, the union or the
employer shall furnish the Ministry the results of the voting at least seven
(7) days before the intended strike or lockout subject to the cooling-off
period herein provided.

Article 264 of the same Code reads:

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.

xxx xxx xxx

. . . . 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 ours).

A strike is "any temporary stoppage of work by the concerted action of

employees as a result of an industrial or labor dispute." 4 It is the most
preeminent of the economic weapons of workers which they unsheathe to
force management to agree to an equitable sharing of the joint product of
labor and capital. Undeniably, strikes exert some disquieting effects not only
on the relationship between labor and management but also on the general
peace and progress of society. Our laws thus regulate their exercise within
reasons by balancing the interests of labor and management together with
the overarching public interest.

Some of the limitations on the exercise of the right of strike are provided for
in paragraphs (c) and (f) of Article 263 of the Labor Code, as amended,
supra. They Provide for the procedural steps to be followed before staging a
strike filing of notice of strike, taking of strike vote, and reporting of the
strike vote result to the Department of Labor and Employment. In National
Federation of Sugar Workers (NFSW) vs. Overseas, et al., 5 we ruled that
these steps are mandatory in character, thus:

If only the filing of the strike notice and the strike-vote report would be
deemed mandatory, but not the waiting periods so specifically and
emphatically prescribed by law, the purposes (hereafter discussed) far
which the filing of the strike notice and strike-vote report is required cannot
be achieved. . . .

xxx xxx xxx

So too, the 7-day strike-vote report is not without a purpose. As pointed out
by the Solicitor General

. . . The submission of the report gives assurance that a strike vote has been
taken and that, if the report concerning it is false, the majority of the
members can take appropriate remedy before it is too late.

The seven (7) day waiting period is intended to give the Department of
Labor and Employment an opportunity to verify whether the projected strike
really carries the imprimatur of the majority of the union members. The
need for assurance that majority of the union members support the strike
cannot be gainsaid. Strike is usually the last weapon of labor to compel
capital to concede to its bargaining demands or to defend itself against
unfair labor practices of management. It is a weapon that can either breathe
life to or destroy the union and its members in their struggle with
management for a more equitable due of their labors. The decision to wield
the weapon of strike must, therefore, rest on a rational basis, free from
emotionalism, unswayed by the tempers and tantrums of a few hotheads,
and firmly focused on the legitimate interest of the union which should not,
however, be antithetical to the public welfare. Thus, our laws require the
decision to strike to be the consensus of the majority for while the majority
is not infallible, still, it is the best hedge against haste and error. In addition,
a majority vote assures the union it will go to war against management with
the strength derived from unity and hence, with better chance to succeed.
In Batangas Laguna Tayabas Bus Company vs. NLRC, 6 we held:

xxx xxx xxx

The right to strike is one of the rights recognized and guaranteed by the
Constitution as an instrument of labor for its protection against exploitation
by management. By virtue of this right, the workers are able to press their
demands for better terms of employment with more energy and
persuasiveness, poising the threat to strike as their reaction to employer's
intransigence. The strike is indeed a powerful weapon of the working class.
But precisely because of this, it must be handled carefully, like a sensitive
explosive, lest it blow up in the workers' own hands. Thus, it must be
declared only after the most thoughtful consultation among them,
conducted in the only way allowed, that is, peacefully, and in every case
conformably to reasonable regulation. Any violation of the legal
requirements and strictures, . . . will render the strike illegal, to the
detriment of the very workers it is supposed to protect.

Every war must be lawfully waged. A labor dispute demands no less

observance of the rules, for the benefit of all concerned.

Applying the law to the case at bar, we rule that strike conducted by the
union on October 12, 1988 is plainly illegal as it was held within th seven (7)
day waiting period provided for by paragraph (f), Article 263 of the Labor
Code, as amended. The haste in holding the strike prevented the
Department of Labor and Employment from verifying whether it carried the
approval of the majority of the union members. It set to naught an
important policy consideration of our law on strike. Considering this finding,
we need not exhaustively rule on the legality of the work stoppage
conducted by the union and some of their members on September 9 and
23, 1988. Suffice to state, that the ruling of the public respondent on the
matter is supported by substantial evidence.

We affirm the decision of the public respondent limiting the penalty of

dismissal only to the leaders of the illegal strike. especially the officers of
the union who served as its major players. They cannot claim good faith to
exculpate themselves. They admitted knowledge of the law on strike,
including its procedure. They cannot violate the law which ironically was
cast to promote their interest.

We, likewise, agree with the public respondent that the union members who
were merely instigated to participate in the illegal strike should be treated
differently from their leaders. Part of our benign consideration for labor is
the policy of reinstating rank-and-file workers who were merely misled in
supporting illegal strikes. Nonetheless, these reinstated workers shall not be
entitled to backwages as they should not be compensated for services
skipped during the illegal strike.

IN VIEW WHEREOF, the petition is dismissed for failure to show grave abuse
of discretion on the part of the public respondent. Costs against the
petitioners.

SO ORDERED.
FIRST DIVISION
[G.R. No. 107302 & 107306. June 10, 1997]

INDUSTRIAL TIMBER CORPORATION, petitioner, vs. NATIONAL LABOR

RELATIONS COMMISSION (5th Division), ITC BUTUAN LOGS LABOR UNIONWATU, OSCAR MONTEROSO and DODONG MORDENO, respondents.
[G.R. Nos. 108559-60. June 10, 1997]

INDUSTRIAL TIMBER CORPORATION, petitioner, vs. NATIONAL LABOR

RELATIONS COMMISSION (5th Division), ITC BUTUAN LOGS LABOR UNIONWATU, OSCAR MONTEROSO and DODONG MORDENO, respondents.
DECISION
KAPUNAN, J.:

Industrial Timber Corporation (ITC) is a corporation registered under

Philippine laws and is engaged in the business of manufacturing and
processing veneer and plywood products. It used to operate a veneer
processing plant known as the Butuan Logs Plant and a veneer and plywood
processing plant known as the Stanply Plant. Both plants occupied a single
compound with a common point for ingress and egress and were both
leased from Industrial Plywood Group Corporation. Both plants had also
two (2) distinct bargaining units represented by separate labor unions and
had separate collective bargaining agreements with their respective
principals. ITC Butuan Logs Workers Union-WATU (Union) represented the
rank and file employees of the Butuan Logs Plant.

Sometime in 1989, ITC decided to permanently stop and close its veneer
production at its Butuan Logs Plant due to impending heavy financial losses
resulting from high production costs, erratic supply of raw materials and
depressed prices and market conditions for its wood products.
Accordingly, on November 9, 1989, ITC served a written notice to all its
employees in the said plant and to the Butuan District Office of the
Department of Labor and Employment (DOLE) stating that effective
December 10, 1989 or thirty (30) days thereafter, it would cease operations
at said plant.

After receiving the notice, the employees therein, through their union
representative, filed a formal objection to the intended shutdown.
Consequently, conciliation proceedings were conducted at the DOLE District
Office pursuant to the provisions of the Collective Bargaining Agreement
(CBA) on grievances. The parties, however, failed to settle their differences.

On November 25, 1989, ITC formally notified the Union in a letter addressed
to Oscar Monteroso, Union president, of the availability for release of
separation pay and other CBA benefits consisting of the monetary value of
unused vacation and sick leave credits, house repair benefits and the
mandatory 13th month pay. Only sixty-three (63) employees availed of the
foregoing and subsequently received said separation pay and other CBA
benefits.

On November 29, 1989, the Union filed a notice of strike with the National
Conciliation and Mediation Board which conducted a conciliation meeting.
Again, conciliation failed. On December 17, 1989, the Union conducted a
strike vote. Sixty-two (62) of the one hundred seventy-three (173) members
voted in favor of staging a strike.

As scheduled, plant operations ceased on December 10, 1989 and it has not
resumed operations since then.

On January 14, 1990 or a few days thereafter, the Union staged a strike at
the common gate of the closed Butuan Logs Plant and the Stanply Plant
which, incidentally, has resumed operations after annual maintenance
servicing.

When the futility of their protest action dawned on them, the members of
the Union, sought judicial redress. On January 18, 1990, a complaint for
illegal shutdown against ITC was filed by the Union in representation of its
members with the Sub-Regional Arbitration Branch of the National Labor
Relations Commission (NLRC) at Butuan City, Branch X, where said case was
docketed as NLRC Case No. SRAB-10-01-00024-90. The Union sought its
members' reinstatement and recovery of backwages. It, likewise, charged
ITC with violation of Republic Act No. 6727 for non-payment of wage
increases. The complaint was subsequently amended to include claims for
payment of CBA benefits and recovery of damages and attorneys fees.

On February 6, 1990, ITC for its part filed a complaint for illegal strike with a
prayer for an award of damages against the union and its officers, likewise
with the Sub-Regional Arbitration Branch mentioned above. Said case was
docketed as NLRC Case No. SRAB-10-02-00067-90.

On March 29, 1990, the labor arbiter rendered a consolidated decision of the
two (2) cases, the dispositive portion of which reads:

WHEREFORE, in view of all the foregoing, judgment is hereby entered in

NLRC Case No. SRAB-10-01-00024-90 (Illegal shutdown, etc.) dismissing the
complaint for illegal shutdown and violation of R.A. 6727 but ordering
respondent Industrial Timber Corporation and the Manager Tomas Tangsoc,
Jr. to jointly and severally pay its employees who did not opt to receive
separation benefits, separation pay consisting of one-half (1/2) month salary
for every year of service, a period of at least six (6) months being
considered one year and all the CBA benefits namely:

1. monetary value of unused vacation and sick leave;

2. house repairs benefits and
3. 13th month pay
4. fiesta subsidy

All the rest of the claims in this case are dismissed for lack of merit.

In NLRC Case No. SRAB-10-02-00067-90, the strike staged by the Workers

Alliance Trade Union (WATU), ITC Butuan Logs Labor Union is hereby and so
declared illegal and the Union and its members are hereby ordered to desist
from conducting any strike or picket in the premises of both Stanply and
Butuan Logs Plants.

The rest of the claims in this case are dismissed for lack of merit.

SO ORDERED.[1]

Obviously aggrieved by the ruling, the Union appealed the decision of the
labor arbiter to the NLRC.

In a resolution dated August 30, 1991, the NLRC issued the assailed
resolution, the decretal portion of which reads:

WHEREFORE, the decision appealed from is Reversed and Set Aside and a
new one entered declaring respondent ITC Butuan Logs, Inc. guilty of illegal
shutdown while the strike staged by complainant union (ITC Butuan Logs
Workers Union-WATU) and members is hereby declared valid and lawful
exercise of their right to peaceful assembly and petition for redress of
grievances. Accordingly, respondent corporation (ITC Butuan Logs, Inc.) is
hereby ordered, through its corporate officers, to pay complainant workers
the following:

1. Backwages equivalent to six (6) months based on their last salary as

adjusted by R.A. 6727 and under the CBA effective December 11, 1989
without qualification or deduction;

2. Salary differential of P1.50 each effective July 1, 1989 up to December

10, 1989;

3. Separation pay equivalent to one (1) month salary each in lieu of

reinstatement for every year of service based on their adjusted salary as set
forth above plus all CBA fringe benefits; and

4. Assessed to pay attorneys fees fixed at the rate of ten (10%) percent
equivalent to the aggregate monetary award.

The rest of the claims are dismissed. With costs against respondent
corporation.

SO ORDERED.[2]

A motion for reconsideration of the said resolution was filed by ITC but the
same was denied for lack of merit in a Resolution dated August 25, 1992
which dispositively reads as follows:

WHEREFORE, the motion for reconsideration of respondent corporation is

Denied for lack of merit. The application of complainant union to pierce the
veil of corporate fiction of both respondent ITC and Industrial Plywood Group
Corporation is likewise Denied as well as the rest of the claims of the union
for lack of basis. The Acting Fiscal Examiner of this Commission is directed

to compute the monetary benefits in favor of the terminated workers who

are members of complainant union and to submit his report for approval.
This order is final and no further motion will be entertained, except with
respect to the manner of execution of the judgment of the Commission.

SO ORDERED.[3]

Hence, the instant petition for certiorari anchored on the following

assignment of errors attributed to the NLRC, thus:

5.1. The NLRC relied on mere conjectures and speculations absolutely

without support from the evidence on record in holding that the closure of
petitioners Butuan Logs Plant was illegal.

5.2. The NLRC grossly violated and disregarded the law and settled
jurisprudence upholding the inherent right of the employer to manage his
business in holding that the closure of the Butuan Logs Plant was illegal.

5.3. Assuming arguendo that the NLRC correctly found that the closure of
the Butuan Logs Plant was illegal and that petitioner violated R.A. 6727, the
NLRC seriously erred nonetheless in awarding money claims to all
complainants in general despite unrebutted evidence on record establishing
that 179 out of 189 complainants have voluntarily entered into an amicable
settlement with petitioner and accordingly withdrew from the case.

5.4. In refusing to declare the strike illegal, the NLRC ignored the fact that,
as incontrovertibly established by the evidence on record, the Union did not
comply with the legal requirements for a valid strike and the strikers, in
concert with one another, committed illegal acts during the strike in
furtherance of the objectives of the strike.

5.5. The NLRC erroneously applied Section 8, Chapter I of the Implementing

Rules of R.A 6727 in finding that petitioner is liable to pay the P1.50
difference between the wage increase granted in the CBA and the wage
increase legislated under R.A. 6727.[4]

In fine, this Court is presented with the following issues for consideration
and resolution, to wit: (a) whether or not petitioner ITC is guilty of illegal
shutdown of its Butuan Logs Plant; (b) whether or not respondent Union and
its members are guilty of staging an illegal strike; and (c) whether or not
money claims should be awarded to the Union members.

Petitioner corporation asseverates that the closure of the Butuan Logs Plant
was purely based on sound management decision arrived at after thorough
and considerable assessment and evaluation of the companys impending
economic predicament. The closure was the only remaining remedy
available to the petitioner in order to prevent imminent heavy losses on
account of high production costs, erratic supply of raw materials, depressed
prices and poor market conditions for its wood products. To justify and
substantiate its threatening economic difficulty, petitioner submitted a
certification executed by an independent certified public accountant
showing in detail the heavy losses petitioner would have to suffer should it
continue operating its business, thus:

TO WHOM IT MAY CONCERN:

This is to certify that the manufacturing cost incurred by INDUSTRIAL

TIMBER CORPORATION in producing plywood can be broken down as follows:

PER PANEL 5.00 MM

Logs used

P 43.45

Glue cost

24.92

Log preparation

1.52

Peeling

4.58

Drying

2.83

Dry veneer preparation

9.68

Gluing & pressing

1.83

Sizing/Finishing

2.14

Crating

1.30

Electrical power/allocation

4.98

Steam power/allocation

4.18

Shipping

6.54

_____

Total variable cost

P 107.95

Programmed

0.79

Committed

2.33

______

Total period cost

3.12

Administrative expenses

11.75

Other expenses (income)

0.00

11.75

______

______

TOTAL MANUFACTURING COST

P122.82

The current selling price of 5.00 mm is P110.00 per panel. The difference
between the manufacturing cost and selling price (P12.82), at 8,000 panels
per day production, or a net lost of P102,560.00 per day.

Based on the above premises and considering the fact of stoppage of

operation from time to time due to low supply of Raw Materials (Logs) the
Corporation will have to sustain additional expenses without any production.
Hence continuance of operation will mean more losses to the Corporation.
Thus closure of one plant is a wise move to save the Corporation.

(Sgd.)
VIRGINIA P. CANLAS
PTR No. 1123448
January 30, 1990
Mandaluyong, M.M.[5]

In addition, petitioner contends that the Butuan Logs Plant was merely a
veneering plant which produced veneer, an essential component of plywood
manufactured by the Stanply Plant which, incidentally, has also the capacity
and capability to produce veneer.

Respondent Union, on the other hand, claims that the closure of the plant
was just a smoke screen to mask the true intention of the petitioner which
was to bust the Union. It alleges that petitioners pretended avowals of
economic distress were negated by the latters good and robust economic
status at the time of the closure though it submitted no evidence to prove
its allegation. Concomitantly, respondent Union avers that the certification
executed by an independent public accountant showing the companys
impending financial debacle did not constitute as substantial proof sufficient
to discharge it of the burden of proving its plight as required by law. On its
part, respondent Union neither rebutted the contents of the certification nor
presented any evidence to the contrary.

The petition is impressed with merit.

At the outset, we reiterate the rule that in certiorari proceedings under Rule
65, this Court does not assess and weigh the sufficiency of evidence upon
which the labor arbiter and public respondent NLRC based their resolutions.
Our query is limited to the determination of whether or not public
respondent acted without or in excess of its jurisdiction or with grave abuse
of discretion in rendering the assailed resolutions.[6] However, where the
findings of the NLRC contradict those of the labor arbiter, this Court, in the
exercise of its equity jurisdiction, may look into the records of the case and
reexamine the questioned findings,[7] as in the case at bar.

Article 283 of the New Labor Code provides thusly:

ART. 283. Closure of establishment and reduction of personnel.- The

employer may also terminate the employment of any employee due to the
installation of labor saving devices, redundancy, retrenchment to prevent
losses or the closing or cessation of operation of the establishment or
undertaking unless the closing is for the purpose of circumventing the
provisions of this Title, by serving a written notice on the workers and the
Ministry of Labor and Employment at least one (1) month before the
intended date thereof. In case of termination due to the installation of labor
saving devices or redundancy, the worker affected thereby shall be entitled
to a separation pay equivalent to at least his one (1) month pay or to at
least one (1) month pay for every year of service, whichever is higher. In
case of retrenchment to prevent losses and in cases of closures or cessation
of operations of establishment or undertaking not due to serious business
losses or financial reverses, the separation pay shall be equivalent to one
(1) month pay or at least one-half (1/2) month pay for every year of service,
whichever is higher. A fraction of at least six (6) months shall be considered
as one (1) whole year.

The foregoing article clearly provides inter alia that the employer may
terminate the employment of his employees to prevent losses. Closure or
cessation of operations for economic reasons is, therefore, recognized as a
valid exercise of management prerogative. The determination to cease
operations is a prerogative of management which the State does not usually
interfere with, as no business or undertaking must be required to continue
operating at a loss simply because it has to maintain its workers in
employment. Such an act would be tantamount to a taking of property
without due process of law.[8]

However, the burden of proving that such closure is bona fide falls upon the
employer. In this case, petitioner corporation presented the analysis of an

independent certified public accountant,[9] showing in detail the imminent

losses it would suffer should it continue its operations. It is understandable
that no audited financial statements or other similar documents were
presented as the company is claiming impending future losses, not past or
actual ones. Moreover, the fact that petitioner company has ceased
operations and has not resumed to do so only reinforces its claim to a valid
closure, not to mention the other established fact that its Stanply Plant has
also the capacity and capability to produce veneer, the product it solely
manufactured in its now closed plant.

At any rate, we held in a recent case that an employer may close or cease
his business operations even if he were not suffering from business losses or
financial reverses, thus:

In any case, Article 283 of the Labor Code is clear that an employer may
close or cease his business operations or undertaking even if he is not
suffering from serious business losses or financial reverses, as long as he
pays his employees their termination pay in the amount corresponding to
their length of service. It would, indeed, be stretching the intent and spirit
of the law if we were to unjustly interfere in managements prerogative to
close or cease its business operations just because said business operation
or undertaking is not suffering from any loss. This Court, in the case of
Maya Farms Employees Organization, et al. v. NLRC, et al. held that:

The rule is well-settled that labor law discourage interference with an

employers judgment in the conduct of his business. Even as the law is
solicitous of the welfare of employees, it must also protect the right of an
employer to exercise what are clearly management prerogatives. As long
as the companys exercise of the same is in good faith to advance its
interest and not for the purpose of defeating or circumventing the rights of
employees under the laws or valid agreements, such exercise will be
upheld.

In Dangan v. NLRC, this Court had occasion to reiterate managements

prerogative to close or abolish a department or section of the employers
establishment for economic reasons. We reasoned out that since the
greater right to close the entire establishment and cease operations due to
adverse economic conditions is granted an employer, the closure of a part
thereof to minimize expenses and reduce capitalization should similarly be
recognized.

Likewise, this Court held in the case of Special Events & Central Shipping
Office Workers Union v. San Miguel Corp. that the determination of the
usefulness of a section, being a company prerogative, the closure may not
be questioned, specially in this case where it is impelled by economic
reasons due to the continuous losses sustained in its operation, coupled
with the lack of demand for the services of such section.[10]

The foregoing notwithstanding, petitioner corporation complied with the

requirements mandated by law to effectuate valid termination of
employment on account of closure. Under the law, for an employer to
validly terminate the service of his employees under the aforesaid ground,
he has to comply with two (2) requirements, namely: (a) serving a written
notice on the workers and the DOLE at least one (1) month before the
effective date of the closure and (b) payment of separation pay equivalent
to one (1) month pay or at least one-half (1/2) month pay for every year of
service, whichever is higher, with a fraction of at least six (6) months to be
considered one (1) whole year.

The records bear out that petitioner had sufficiently complied with the
aforecited requirements. It informed its employees and the DOLE District
Office at Butuan of the termination of service of the employees effective
December 10, 1989 in a Letter dated November 9, 1989. The employees
were, likewise, informed of the availability for release of the funds for their
separation pay and other CBA benefits. Unfortunately, only 63 employees
availed of the benefits. The rest chose to file the instant action.

Anent the issue of whether or not the strike staged within the premises of
the petitioner on January 14, 1990 was legal or not, we adopt the findings
and conclusions made by the labor arbiter, substantiated as they are by the
evidence on record, thus:

At first impression, this forum is readily tempted to opine that the issues of
illegal strike has become moot and academic. The records reveal that it has
become undisputed that the Union staged a strike only on January 15, 1990
and for a few days thereafter, as of now, the Union has disbanded and
appearances would indicate that whatever concerted action it took has
passed into the diplomatic and legal province, such that it is precisely why
this Branch is now called upon to compulsorily adjudicate on the issues.

The company in trying to obtain a judicial declaration that the strike

conducted by the Union on January 15, 1990 and for a few days thereafter
was illegal relies on two grounds namely:

1. That the Union failed to garner the majority vote requirements to sustain
a valid strike vote. At the time the notice of strike was filed, the rank and
file employees at Butuan Logs plant numbered 176. This notwithstanding
only 62 of the said employees voted on December 27, 1989, a number less
than the majority required by law.

2. That the Union by the use of intimidation, force of numbers, harassment

had successfully prevented the companys supervisory and administrative
personnel from reporting to work at its Stanply Plant Operation. Which had
resulted in the temporary stoppage of work at said plant. That the Union
had in fact barricaded the common gate of Stanply and Butuan Logs plants.
To substantiate this allegations, the company submitted in evidence as
annexes 6, 7, 8, 9 and 10 of its position paper, the affidavits of Romeo
Burdeous, and Hermilondo Paque, Stanply Plant Supervisors, Alejandra
Perlita P. Yayon, Quality Control Supervisor and Engr. Jaime C. Gacula, Plant
Engineer.

The company then states that it suffered losses amounting to 2 million

pesos daily owing to the fact that its Stanply plant remained nonoperational. These losses were incurred because the supervisory and
administrative personnel could not enter the Stanply working premises
thereby penalyzing the plant and in the process causing administrative
expenses.

The company then asks for the following reliefs and remedies, to wit:

WHEREFORE, it is most respectfully prayed of this Honorable Labor Arbiter

to issue an Order:

1. Declaring the strike staged by all the herein respondents as ILLEGAL;

2. Condemning all of them to pay IN SOLIDUM damages in the amount of P2

Million daily covering the periods that the Stanply operation had been nonoperational, as well as the administrative expenses which petitioner is

bound to pay to its workers at its Stanply operations who reported for work
but did not actually work; and

3. Declaring to have lost the employment status of all the strikers with
petitioners Butuan Logs plant.

The Union, brushing aside the allegations of the company in its

manifestations dated February 25, 1990 maintains that the strike vote
constituted a majority of the union members. It alleges that at the time the
strike vote was taken, the remaining work force numbered only 98 because
the others had opted to receive separation benefits. That 98 should
therefore be the basis for the determination of the majority and because 62
had voted yes the requirement of the law was therefore complied with.

The Union in assailing the allegations of the company of intimidation,

harassment and the putting up of barricade to prevent egress and ingress in
the stanply plant, likewise states that it did not really stage a strike in the
legal meaning of the word. What is really conducted was only a peaceful
exercise of the constitutional right of assembly and expression. To air their
grievance and announce their tragic plight. That actually a strike was an
exercise in futility because it could serve no purpose at all. The Butuan Logs
plant had already stopped operations and therefore a strike which has for its
purpose a temporary stoppage of work could not attain such as objective
considering that the establishment struck against was already closed. In a
Nutshell the Union says that whatever a strike could hope to accomplish
was already preempted by the company.

The Union, however, is steadfast in maintaining that the strike was

conducted in accordance with law and emphatically states that:

35. Let it be emphasized however that the concerted action staged by the
Union on January 15, 1990 was all within the bounds of law, propriety,
decency and public order as may be shown by the following:

a) Ingress and egress were observed and provided for as shown by Annexes
J to S;

b) The concerted action was peaceful and not marred by violence or

intimidation;

c) No injury to persons nor damage to property has been inflicted;

d) No violation of personal and property rights was committed;

e) No disturbance to public peace was made.

and to evidence such orderly, demonstration of public display of grievances

presented as evidence, Annex M, N, O, P, Q, R and S which are
photographs depicting the untrammelled and unblocked working place of
the company, particularly the gates thereof.

To summarize therefore, the Union contends that its concerted action which
was not really a strike in the real and legal meaning of the word was
nonetheless carried out with due observance of the law, both in the
formalities and its actual conduct.

Under the circumstances, what then is this Branch to do? The Union says
that it conducted a perfectly legal strike and in the same breath says that it
did not. That what it did while being a concerted action was only a public
display of grievances.

Be that as it may, this Branch finds and so holds that the strike was illegal.
It cannot agree to the contention of the Union that the majority of its
members voted yes to the strike. It must be borne in mind that there was
178 union members at the time the plant was still operating. The fact that
more than 60 of them opted to receive separation benefits did not
automatically sever their employee-employer relationship. While this is a
legal nicety, it is undisputed that the Union itself recognize this legal
propositions, as it in fact seeks the reinstatement of all its members. In
other words, the Union contending that the shutdown was illegal and that its
members were illegally dismissed cannot now say that the more than 60
members were legally dismissed. It cannot have its cake and eat it too. It
cannot say that in the illegal shutdown case, its members were illegally
dismissed but in the illegal strike case maintain that they were legally
dismissed so as to cause the non-appreciation of their votes or non-voting.

This intransigence and illogical culpability which is self-serving cannot be

tolerated by this Branch. In fine, consistency must be upheld in all the legal
ramifications of these cases and consequently, this Branch finds that no
majority vote as demanded by the law was obtained. 178 members divided
by 2 plus I equals 89 and this is the number which is the necessary majority
to give legality to the strike. This Branch also take note of the fact that this
inconsistent stand is also displayed by the Union in its notion of a strike.
After undergoing the rigorous formalities of a strike and defending its
legality, it suddenly contradicts itself by saying it did not strike. This Branch
cannot fathom nor countenance this legal somersaults.

There is no need therefore to belabor the issue as to whether the strike was
conducted in the manner delineated by law. The strike, whatever it was,
was illegal from its inception and the events thereafter cannot cure it from
its legal abnormality.[11]

In view of the foregoing, we find that respondent NLRC gravely abused its
discretion in issuing the challenged resolutions.

WHEREFORE, herein petitions are hereby GRANTED. The assailed

resolutions of respondent National Labor Relations Commission dated
August 30, 1991 and August 25, 1992 are hereby REVERSED and SET ASIDE
and the decision of the labor arbiter dated March 29, 1990 is hereby
REINSTATED.

The case is remanded to the NLRC to determine with reasonable dispatch

whether or not 179 out of 189 of herein complainants have voluntarily
executed quitclaims or waivers in favor of petitioner corporation and,
corollarily, who among the remaining employees are still entitled to
separation pay and other benefits granted in the decision of the labor
arbiter and, thereafter, make appropriate dispositions thereon.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-4330

March 24, 1952

MANILA ORIENTAL SAWMILL CO., petitioner,

vs.
NATIONAL LABOR UNION and COURT OF INDUSTRIAL RELATIONS,
respondents.

Eulogio Lerum for respondent National Labor Union.

Arsenio I. Martinez for Court of Industrial Relations.

BAUTISTA ANGELO, J.:

This is a petition for review of an order of the respondent court dated

September 8, 1950, declaring the strike staged by the members of the
respondent Union legal and setting the case for hearing for the
determination of the demands presented by said Union to petitioner.

On May 4, 1950, the United Employees Welfare Association, a union duly

registered in the Department of Labor and with members among the
employees of the petitioner, entered into an agreement of working
conditions with the petitioner pursuant to a settlement concluded in a case
No. 173-V of the Court of Industrial Relations. The said agreement was to
last for one year.

On August 14, 1950, thirty-six of the thirty-seven members of the said

United Employees Welfare Association tendered in their resignations from
the same union and joined the local chapter of the respondent National
Labor Union. There is no evidence that these resignations were made with
the approval of petitioner.

On August 15, 1950, the president of the respondent union sent a letter to
petitioner containing seven demands allegedly on behalf of the members of
its local chapter who are employed by the petitioner, to which the latter,
through its counsel, answered with another letter stating among other

things that the laborers on whose behalf the letter of August 15, 1950, has
been written were affiliated with the United Employees Welfare Association.

On August 22, 1950, the respondent union reiterated its demands. In reply,
counsel for petitioner sent a letter that a petitioner could not recognize the
alleged local chapter of the respondent union until and after the agreement
of May 4, 1950, entered into by the same employees concerned and
petitioner is declared null and void by the Court of Industrial Relations.

On August 28, 1950, the members of the respondent union struck.

On August 31, 1950, petitioner filed a petition in the Court of Industrial

Relations to declare the strike illegal.

On September 8, 1950, the Court of Industrial Relations, through its

Presiding Judge, Honorable Arsenio Roldan, issued an order denying
petitioner's prayer that said strike be declared illegal and setting the case
for hearing on the demands prayed for by respondent union.

On September 20, 1950, petitioner filed a motion for reconsideration of said

order, and on November 14, 1950, the court of Industrial Relations en banc
denied the motion for reconsideration. Hence this petition for review.

Petitioner claims that the order of the respondent court of September 8,

1950, is null and void because, in refusing to declare the strike staged by
the members of the respondents union illegal notwithstanding the
agreement entered into between the labor union to which the employees
who struck formerly belonged and petitioner which is still valid and
subsisting, it violated the constitutional precept underlying the freedom of
contract.

We find merit in this claim. The record shows that the local chapter of the
respondent union is composed entirely, except one, of members who made
up the total membership of the United Employees Welfare Association, a
registered union in the petitioner's company. To be exact, thirty-six of the
thirty-seven members of said association tendered their resignations and
joined the local chapter of the respondent union without first securing the
approval of their resignations. The new Union then sought to present a

seven-point demand of the very same employees to petitioner, which in

may respects differs from their previous demand. It is evident that the
purpose of their transfer is merely to disregard and circumvent the contract
entered into between the same employees and the petitioner on May 4,
1950, knowing full well that contract was effective for one year, and was
entered into with the sanction of the Court of industrial Relations. If this
move were allowed the result would be a subversion of a contract freely
entered into without any valid and justifiable reason. Such act cannot be
sanctioned in law or in equity as is it in derogation of the principle
underlying the freedom of contract and the good faith that should exist in
contractual relations.

A labor organization is wholesome if it serves its legitimate purpose of

settling labor disputes. That is why it is given personality and recognition in
concluding collective bargaining agreements. but if it is made use of as
asubterfuge, or as a means to subvert valid commitments, it outlives its
purpose for far from being an aid, it tends to undermine the harmonious
relations between management and labor. Such is the move undertaken by
the respondent union. Such a move cannot be considered lawful and cannot
receive the sanction of the Court. Hence, the strike it has staged is illegal.

The manifest object of the act is to prevent industrial strife, confusion and
unrest. Industrial peace is promoted by collective agreements obtained for
employees through the medium of their bona fide labor organizations or
other proper representatives, free from employer interference. . . . And this
is particularly so in the instance case, where the employer is a bus
company, operating a business affected with the public interest, under a
public franchise. I cannot conceive it to have been the intent of the
legislature to permit employees, where a valid existing contract is involved
and under the circumstances presented here, to substitute one bargaining
agency for another whenever it suits their purpose, or the purpose of the
rival labor organizations during the life of the contract. If employees, are to
enjoy actual liberty of contract through their labor organizations or other
bona fide representatives, and their contracts are to be effective, their
obligations may not be repudiated simply by the process of changing the
representatives, and in their own interest they should not seek to do so. The
contention that the mere holding of an election, in certification of new
representatives, would not in end of itself affect the contract or impair its
obligations is best answered by the board's own language in its amended
decision following the first representation proceeding herein: "In practice
the result might well be otherwise under the particular circumstances of the
case." (Triburo Coach Corp., 3 Labor Cases, 60,076). (Emphasis supplied.)

Wherefore the order appealed from is reversed, without pronouncement as

to costs.
Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-34948-49 May 15, 1979

PHILIPPINE METAL FOUNDRIES INC., petitioner,

vs.
COURT OF INDUSTRIAL RELATIONS, REGAL MANUFACTURING EMPLOYEES
ASSOCIATION REGEMAS and CELESTINO BAYLON, respondents.

V. E. del Rosario & A associates for petitioner.

Rufino B. Risma for private respondents.

ANTONIO, J.:

The Philippine Metal Foundries, Inc. (now dissolved and merged with Shriro
[Philippines] Inc.) is in this case a review of the decision of the Court of
Industrial Relations in Cases Nos. 3932-ULP and 3941-ULP .

Petitioner, in its complaint dated November 21, 1963 (Case No. 3941-ULP),
charged the Regal Manufacturing Employees Associations FTUP and its
members (herein private respondents), with unfair labor practice for
declaring a strike on October 5, 1963 and picketing the company's premises
without filing a notice of strike in spite of the existence of a no strike, no
lockout clause and grievance procedure in the collective bargaining
agreement entered into between the petitioner and the Union. In their

answer to this complaint, the Union and its members denied the charge
and, as affirmative defense, alleged that on October 3, 1963, the Union
requested the management for a grievance conference, stating in its
invitation the time and place of meeting, but the company, through its
General Manager, refused and instead handed the Union's President a
memorandum dismissing him from work and told the Union members not to
report for work, which is in violation of the no lockout and no strike clause of
the contract.

Upon the other hand, petitioner Philippine Metal Foundries, Inc. and its
General Manager, in Case No. 3932-ULP, were charged by private
respondents on July 21, 1964 with unfair labor practice for the dismissal of
Celestino Baylon, President of the Union, on October 3, 1963, allegedly due
to his union activities in representing and protecting the Union members in
their relations with the petitioner. To this complaint, petitioner and its
manager filed an answer denying the material allegations and alleged as
affirmative defenses, among others, that on October 3, 1963, the company
was constrained to terminate the services of Baylon by reason of the fact
that he had, in spite of repeated notices and warnings from the company,
frequently and repeatedly absented himself from his work as foundry worker
and by reason of said dismissal he, as President of the Union as well as an
officer of the FTUP encouraged and abetted the staging of a strike on
October 5, 1963, without prior notice to the company or any of the latter's
officials, in gross violation of a stipulation provided in their Collective
Bargain Agreement, establishing pickets and blocking ingress and egress to
and from the company's premises, causing interruption of the work and/or
business of the company to its serious damage and prejudice.

After holding joint trial on these two cases, the Court of Industrial Relations
rendered its decision, finding that Baylon, as Union President, was
discharged for his union activities and that the employees declared a strike
because they believed in good faith that the dismissal of their President was
an unfair labor practice. The Court declared respondents Philippine Metal
Foundries, Inc. and Leopoldo Relunia in Case No. 3932-ULP, guilty of unfair
labor practice in dismissing complainant Celestino Baylon; ordered
respondents to reinstate Celestino Baylon to his former position with all the
rights and privileges formerly appertaining thereto, with one (1) year back
wages computed from October 3, 1963; and dismissed the petitioner's
charge in Case No. 3941-ULP.

Its motion for reconsideration having been denied by the Court of Industrial
Relations en banc, petitioner filed the present petition which was considered
by this Court as submitted for decision without respondents' brief.

The issues raised are: (1) whether Celestino Baylon was dismissed due to
his absences or to his union activities as Union President; and (2) whether
the strike declared by the Union on October 5, 1963, is legal or not.

With respect to the first issue, it is argued by petitioner that according to

the Collective Bargaining Agreement between the Union and the company
"one absent for a period of one week who fails to give notice thereof shall
be dropped automatically" and under its Disciplinary Policies and
Procedures, dated and enforced since March 1, 1963, absence of an
employee without permission for a period of seven (7) consecutive calendar
days is a ground for immediate dismissal upon establishment of guilt; that
since the Court of Industrial Relations found that Baylon incurred numerous
absences from January to September 1963, broken dowm as follows: for the
month of January, one (1) unexcused absence; March one (1) unexcused
absence and twelve (12) consecutive absences without permission; April,
four (4) consecutive absences without permission; May, two (2) absences
without permission; and September, five (5) unexcused absences, the said
court erred in holding that in Case No. 3932-ULP, Baylon was dismissed not
because of his absences but rather due to his being Union President and
union activities.

In determining whether a discharge is discriminatory, the true reason for the

discharge must be established. It has been said that while union activity is
no bar to a discharge, the existence of a lawful cause for discharge is no
defense if the employee was actually discharged for union activity. There is
no question that Celestino Baylon incurred numerous absences from January
to September 1963. Had the company wanted to terminate his services on
the ground of absences, it could have done so, pursuant to Article V of the
Collective Bargaining Agreement as early as March 1963 when he incurred
twelve (12) consecutive absences without permission. Its failure to do so
shows that the infractions commited by Baylon were disregarded. The Court
of Industrial Relations found that Baylon went to the company on September
28, 1963, but did not work as he was very sleepy. When he reported for
work on October 1, 1963, he submitted a written explanation for his
absences which was received by the company. Two (2) days later, as
President of the Union, he invited the General Manager of the company for a
grievance conference to thresh out union problems at the D & E Restaurant
at 6:00 p.m. of October 5, 1963. The letter of invitation was received by the
company at almost 12:45 noon of October 3, 1963. At 2:45 p. m. of the
same day, Baylon was in turn handed his termination letter. Under the
attendant circumstances, We believe the Court of Industrial Relations was
justified in concluding that:

In 1963, Baylon had been a habitual absentee. His excused absences for
causes other than sickness, sick leave and vacation leave, total two (2) in
January; nine (9) in February; eleven (11) in April; ten (10) in May; nine (9)
in June; eleven (11) in July; and five (5) in August (Exhs. '5' and '5-A').

This record, plus his numerous tardiness and half-day work, and the
aforesaid unexcused absences, show how little work for the employer
Baylon had been doing as an employee (Exhs. 'EE' and '6-A'). His last
unexcused absence in September must have been just enough on the part
of the company to withdraw its special treatment of Baylon as union
president (Exh 'EE').

This Court believes, however, that it was the aforementioned letter of

invitation to a grievance conference sent by Baylon to the general manager
(Exhs. 'DD' and '7'), coming at the heels of his last unexcused absences,
that broke the proverbial camel's back. His dismissal under the foregoing
circumstances, being ultimately triggered by his union activity, is therefore
not without some taint of unfair labor practice.

The question of whether an employee was discharged because of his union

activities is essentially a question of fact as to which the findings of the
Court of Industrial Relations are conclusive and binding if supported by
substantial evidence considering the record as a whole. 1 This is so because
the Industrial Court is governed by the rule of substantial evidence, rather
than by the rule of preponderance of evidence as in any ordinary civil cases.
2 Substantial evidence has been defined as such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion. 3 It
means such evidence which affords a substantial basis from which the fact
in issue can be reasonably inferred. 4 Examining the evidence on hand on
this matter, We find the same to be substantially supported.

Although a man's motive, like his intent, is, in the words of Lord Justice
Bowen "as much a fact as the state of his digestion", evidence of such fact
may consist both direct testimony by one whose motive is in question and
of inferences of probability drawn from the totality of other facts. 5

It is admitted by petitioner that it accepted the invitation of Baylon for a

grievance conference on October 5, 1963. Yet, two hours after it accepted
the letter of invitation, it dismissed Baylon without prior notice and/or

investigation. Such dismissal is undoubtedly an unfair labor practice

committed by the company. Under these facts and circumstances, Baylon
and the members of the Union had valid reasons to ignore the schedule
grievance conference and declared a strike. When the Union declared a
strike in the belief that the dismissal of Baylon was due to union activities,
said strike was not illegal . 6 It 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. 7 The strike declared by the Union in this case cannot be considered
a violation of the "no strike" clause of the Collective Bargaining Agreement
because it was due to the unfair labor practice of the employer. Moreover, a
no strike clause prohibition in a Collective Bargaining Agreement is
applicable only to economic strikes. 8

The strike cannot be declared as illegal for lack of notice. In strikes arising
out of and against a company's unfair labor practice, a strike notice is not
necessary in view of the strike being founded on urgent necessity and
directed against practices condemned by public policy, such notice being
legally re. required only in cases of economic strikes. 9

On the contention of petitioner that the grievance conference which Baylon

requested to be held on October 5, 1963 was not for the purpose of
discussing union problems but of his dismissal, it is clearly shown in the
records that Baylon received his termination letter after he requested for a
grievance conference. It is, therefore, clear that when Baylon requested for
a grievance conference, he was not yet aware of his dismissal. Baylon could
not have requested for a grievance conference on October 5, 1963 if he did
not have demands to present on that date. The records disclose that, as
Union President, he used to make representations and protestations in
behalf of the members of the Union against unfair acts committed by the
company. As early as March 2, 1962, he reminded the company of an
agreement arrived at in a previous labor-management conference that was
violated when the management hired several casual workers without giving
preference to previously laid off employees and without notifying the Union
President (Exhibit "P"). On May 25, 1962, he complained of the poor
condition of the toilet facilities in one of the buildings of the company and
requested the management for its improvement (Exhibit "Q"). On August
18, 1962, he caged the attention of the management regarding the plight of
seventy-two (72) workers who were supposed to be temporarily laid off for a
period of two (2) months only as agreed upon between the Union and the
management, but were not re-hired after the lapse of the period so he
requested for the payment of their separation pay (Exhibit "R"). On
December 14, 1962, he requested for the payment of a claim for
compensation of a worker prior to the scheduled hearing of the same

(Exhibit " U "). On December 20, 1962, he worked for the payment of the
accrued vacation and sick leave of a terminated worker (Exh. exhibit "V").
On January 12, 1963, he interceded for the payment of the two months
separation pay of another terminated worker (Exhibit "W"). On April 25,
1963, he worked for the payment of separation pays of terminated workers
found to be physically unfit (Exhibit "AA"). And on September 2, 1963, he
invited the General Manager of the company for a grievance conference to
settle the complaints of several Union members regarding their vacation
leaves and other union problems (Exhibit "BB"). These exhibits show how
Baylon, as President of the Union, fought for the rights and protection of his
members. We are satisfied that the Court's finding, in the above regard, are
supported by substantial evidence on the record considered as a whole.

IN VIEW WHEREOF, the petition for certiorari is hereby DISMISSED.

Fernando, Concepcion, Jr., Santos and Abad Santos, JJ., concur.

Aquino, J., took no part.

Barredo, J., is on leave.

Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-17038

July 31, 1964

CONSOLIDATED LABOR ASSOCIATION OF THE PHILS., petitioner,

vs.
MARSMAN and CO., INC., and the COURT OF INDUSTRIAL RELATIONS,
respondents.

-----------------------------

G.R. No. L-17057

July 31, 1964

MARSMAN and Co., INC., petitioner,

vs.
CONSOLIDATED LABOR ASSOCIATION OF THE PHILIPPINES HON. JOSE S.
BAUTISTA HON. ARSENIO I. MARTINEZ, HON. BALTAZAR M. VILLANUEVA, and
HON. EMILIANO C. TABIGNE, respondents.

Salvador H. Laurel and Apolonio V. Santiago for petitioner.

Jose C. Espinas and Associates for respondent Consolidated Labor
Association of the Philippines.
CIR Legal Division for respondent Judges.

MAKALINTAL, J.:

In the Court of Industrial Relations, Marsman & Co., Inc., hereinafter referred
to as the Company, was charged with unfair labor practice committed
against sixty-nine officers and members of the Marsman & Company
Employees and Laborers Association (hereinafter referred to as MARCELA or
simply as the Union). The Court (Judge Jose S. Bautista), after hearing, found
the Company guilty of the charge and ordered it to reinstate 60 of the
aforementioned 69 complainants to their former positions or to similar ones
with the same rate of pay, without back wages. On motions for
reconsideration filed by the Union and by the Company, respectively, the
Court en banc affirmed the decision with Judge Arsenio I. Martinez
concurring in the result Judge Baltazar M. Villanueva also concurring in the
result in a special opinion; Judge Emiliano C. Tabigne filing a separate
concurring and dissenting opinion; and Judge Amando C. Bugayong taking
no part.

Both the Union and the Company appealed. The former claims that the 60
reinstated employees should be granted backpay (G.R. No. L-17038) while
the latter questions the Industrial Court's finding of unfair labor practice
(G.R. No. L-17057).

The facts, as found by the Industrial Court, are: The Company had in its
employ approximately 320 persons, about 140 of whom where members of
MARCELA and about 20 of the National Labor Union. On December 23, 1953
the Industrial Court named MARCELA as the employees' bargaining agent in
regard to rates of pay, terms and conditions of employment. At that time
MARCELA was affiliated with the Federation of Free Workers, or FFW, a
national labor organization. On March 17, 1954 MARCELA-FFW submitted to
the Company a set of proposals for collective bargaining, which the
Company answered on March 24, 1954. In spite of negotiations held
between the Company and the Union, they failed to reach In agreement; so
on April 8, 1954 the Union, failed a notice of strike with the Department of
Labor. Mediation by the Conciliation Service of that Department proved
fruitless.

Wherefore, the parties respectfully pray that the foregoing stipulation of

facts be admitted and approved by this Honorable Court, without prejudice
to the parties adducing other evidence to prove their case not covered by
this stipulation of facts. 1wph1.t

On June 4, 1954 the Union declared a strike and at the same time placed a
"round-the-clock" picket line around the Company's premises in Intramuros,
Manila. The tense situation in the strike zone prompted the Manila Police
Department to send policemen thereto to preserve peace. Meanwhile the
Labor Department's Conciliation Service continued to mediate between the
representatives of the Union and of the Company.

On July 21, 1954 some 50 employees, of whom nine were members of the
National Labor Union and one a member of MARCELA, entered the Company
premises under police escort in order to return to work.

On July 30, 1954, in a conference called by Eleuterio Adevoso, then

Secretary of Labor, the Union officials and members then present were
prevailed upon by Adevoso to accept the proposals of Antonio de las Alas,
Company vice-president, that they stop the strike and go back to work, and
that when they were already working the Company would discuss with them
their demands. Upon being informed to the Union's acceptance of the
proposal the strikers returned to work. The Company admitted back sixteen
picketing strikers on August 9, 1954 and later on, it also reemployed nonunion employees and a majority of the strikers. However, complainants
herein were refused admittance and were informed by Company officials
that they would not be reinstated unless they ceased to be active Union

members and that in any case the Company already had enough men for its
business operations.

As a result the strike and the picketing were resumed, because of which
employees who had been admitted to work since July 21, 1954 had to stay
inside the Company premises, where the Company furnished them food and
quarters up to October 1954. Nevertheless some of those employed could
go in and out after office hours to visit their families.

During the strike, some of the picketers and some non-strikers were
arrested within the strike zone for having committed unlawful acts, and
were duly charged therewith.

A petition for writ of injunction filed by the Company against MARCELA and
its president, Buenaventura Bacay, on the ground that the strike and picket
were being maintained illegally, was denied by the Court of First Instance of
Manila, which pointed out that proper criminal complaints should have been
filed against the individual strikers in the corresponding courts.

Because of the Company's consistent refusal to reinstate the 69

complainants even after repeated requests, the Confederation of Labor
Associations of the Philippines (CLAP), to which the Union had affiliated after
seceding from the FFW initiated the present charge for unfair labor practice.

Initially the strike staged by the Union was meant to compel the Company
to grant it certain economic benefits set forth in its proposal for collective
bargaining. The strike was an economic one,1 and the striking employees
would have a tight to be reinstated if, in the interim, the employer had not
hired other permanent workers to replace them. For it is recognized that
during the pendency of an economic strike an employer may take steps to
continue and protect his business by supplying places left vacant by the
strikers, and is not bound to discharge those hired for that purpose upon
election of the strikers to resume their employment.2 But the strike changed
its character from the time the Company refused to reinstate complainants
because of their union activities after it had offered to admit all the strikers
and in fact did readmit the others. It was then converted into an unfair labor
practice strike.

The Company disputes the Industrial Court's findings that (1) it offered to
reinstate all the strikers; (2) the complainants made a timely acceptance of
the offer; and (3) the Company's refusal to reinstate complainants was for
the purpose of discouraging union activities.

Substantial evidence supports the findings of fact of the Court of Industrial

Relations. Complainants Teodoro Bacalzo, Raymundo Mostoles-Cruz, Mariano
Bautista, and Godofredo Garcia testified thus: They were all present at the
July 30, 1954 conference called by then Labor Secretary Eleuterio Adevoso
in order to settle the differences between the Company and the Union. It
was during this conference that Antonio de las Alas, then the Company's
vice-president, offered to take back all the strikers if they would only stop
the strike and as further inducement promised that the Union's demands
would be discussed when the strikers were already working. Adevoso
convinced the Union officers and members who were present to accept De
las Alas' proposal.

The lower court's reasons, we think, amply answer the Company's

contention that De las Alas could not, by his offer, have bound the Company
because it was Velilla, and not he, who had the authority to deal with the
strikers:

The denial of respondent that Antonio de las Alas was not authorized by the
Company but Amando L. Velilla to deal with the union with respect to the
strike is not worthy of belief. First, because then De las Alas was an
executive Vice-President while Velilla was only the Secretary of the
Company; second, while respondent wants to impress this Court that
Velilla's authority to deal with the strikers was virtue of the Board resolution,
such document was not presented in Court and third not even De las Alas
was presented to make the denial.

The Company claims that the complainants applied for readmission only on
June 7, 1955, more than a year after the offer, when the CLAP, in their
behalf, wrote the Company asking for their reinstatement. Prior to said
letter, however, complainants had, by various means, sought readmission.
After De las Alas' invitation to return to work was accepted by the Union
officers and members, they informed all the other strikers accordingly.
Thereupon the strikers terminated the strike and presented themselves for
work at the Company's premises. Eighty one of the strikers were allowed to
come back. But the Company's security guards, upon instructions of the
Company officials, barred the entrance when complainants attempted to
enter, and informed them that they had to write individual letters of

application. So complainants complied with this requirement. It appears that

the applications were scrutinized by a committee of employees composed of
Salvador Bantique assistant accountant of the mines division; Mariano Lee,
purchasing agent; Juan de Vera, paymaster; and Regina Cruz, accountant.
Then the applications were further screened by a personnel committee
composed of Jan H. Marsman, Antonio de las Alas, Charles G. Herdman and
Amando Velilla. None of the sixty-nine applications met with favorable
action by either committee.

In addition to writing formal letters of application a number of complainants

phoned while others personally approached their respective chiefs of
department in the Company. Some also went to see Salvador Bantique,
chairman of the screening committee, and expressed their desire to work.
Bantique, however, upon learning that the strikers, among them Eulogio
Labrador, were still active union members, informed them that they should
first disaffiliate from the union in order to be reinstated. Furthermore,
Amando Velilla, when approached by a group of complainants, told the latter
that they had been away for a long time; that the Company had enough
employees and did not need additional help; that some of those whom he
had invited to return refused; and that by that time (August, 1954) it was
already too late for them to wish to return.

The Company alleges that it was economic reasons, i.e., its policy of
retrenchment, not labor discrimination, which prevented it from rehiring
complainants. This is disproved, however, by the fact that it not only
readmitted the other strikers, but also hired new employees and even
increased the salaries of its personnel by almost 50%. We are convinced
that it was not business exigency but a desire to discourage union activities
which prompted the Company to deny readmittance to complainants. This is
an indubitable case of unfair labor practice.

The strike was illegal of purpose, the Company insists, first, because it was
staged for a trifling reason; and second, the union demands, which had
precipitated the strikes, were already covered by an Industrial Court
judgment, for the alteration, modification or setting aside of which a certain
procedure has to be followed.

The Union began the strike because it believed in good faith that settlement
of their demands was at an impasse and that further negotiations would
only come to naught. It stopped the strike upon the belief they could go
back to work. Then it renewed the strike (or it started a new strike) as a

protest against the discrimination practiced by the Company. Both are valid
grounds for going on a strike.

It is true that on August 14, 1952 the Industrial Court promulgated a

decision in CIR Case No. 571-V, Marsman and Company Employees and
Labors Association (MARCELA-FFW) v. Marsman and Company, Inc.
However, except for the demand for general salary increases, the demands
in said labor case were different from the demands which the Union made
before it went on strike. For this reason, it did not have to ask modification
of the aforementioned judgment. It had only to give the proper strike notice,
as in fact it did.

The Company further argues that since the methods used by the strikers
were illegal, it had the right to refuse them readmission. Of the 69
complainants, nine, namely Alejandro Mojar, Manuel Mazo, Esteban Borja,
Cecilio Walo, Eugenio Valenzuela, Elias Matic, Marcos Buccat, Malisimo
Vargas and Ricardo Antonio, were charged with and convicted of various
crimes like coercion, malicious mischief, physical injuries, breach of the
peace, light threats, and damage to property, all committed during the
period from September 4, 1954 to October 12, 1954. Admittedly, the
Company could not have condoned these acts which were committed after
it had offered to reinstate the strikers. Nevertheless, as the lower court
reasoned out, it does not appear that the aforementioned individual acts
were authorized or even impliedly sanctioned by the Union. Hence, the
other strikers who were innocent of and did not participate in the illegal acts
should not be punished by being deprived of their right of reinstatement. It
is only those who had been found guilty who should be penalized by the loss
of the right.3

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

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

On the other hand, even after the court has made a finding of unfair labor
practice, it still has the discretion to determine whether or not to grant back
pay. Such discretion was not abused when it denied back wages to
complainants, considering the climate of violence which attended the strike

and picket that the complainants conducted. While the complainants

ordered reinstated did not actively take part in the acts of violence, their
minatory attitude towards the Company may be gathered from the fact that
from the very first day of the strike policemen had to patrol the strike zone
in order to preserve peace.

WHEREFORE, the judgment appealed from is affirmed, without costs.

Bengzon, C.J., Padilla, Bautista Angelo, Concepcion, Reyes, J.B.L., Paredes

and Regala, JJ., concur.

EN BANC

[G.R. No. L-10114. November 26, 1957.]

BISAYA LAND TRANSPORTATION CO., INC., Petitioner, v. COURT OF

INDUSTRIAL RELATIONS and PHILIPPINE MARINE RADIO OFFICERS
ASSOCIATION, Respondents.

Nicolas Belmonte & Silverio B. Rey for Petitioner.

Mariano B. Tuason for respondent CIR.

Villaluz, Viola & Associates for respondent Philippine Marine Radio Officers
Association.

SYLLABUS

1. EMPLOYER AND EMPLOYEE; STRIKE AND LOCKOUTS; RETURN OF

STRIKERS TO WORK NOT WAIVER OF DEMANDS. The PHILMAROA
presented its demands for the standardization and increase of salaries, sick
and vacation leaves, hospitalization, and closed shop agreement. Thereafter

notice of intention to strike was filed in the Conciliation Service Division of

the Department of Labor against the employer. Pending the resolution of the
dispute by the CIR of the Presidential Certification to it, of the said dispute,
two radio operators abandoned their ships by some weeks thereafter, they
returned to work and readmitted by the employer. The question is whether
the return of the radio officers was a waiver of the demands of the labor
Union, Held: that the strike in the case at bar was adopted by the union to
compel the employer to accede to its demands. The strike was but one of
the means employed to achieve its ends. When the radio officers returned
to work after the strike, such return did not imply the waiver of the original
demands. The fact that the radio operators returned to work and ended
their strike only meant that they desisted from the strike; such desistance is
a personal act of the strikers and cannot be used against the union and
interpreted as a waiver by it of its regional demands for which the strike was
adopted as a weapon.

2. ID.; UNION CRAFT HAS POWER TO BARGAIN COLLECTIVELY. A Union

craft, such as the one to which the radio operators belonged, is expressly
recognized in the Industrial Peace (section 9 (f), paragraphs 1 and 2,
Republic Act No. 875) and its right and power to bargain collectively is
recognized.

3. ID.; EMPLOYEES AFFILIATION WITH ANOTHER LABOR UNION; RIGHT TO

BARGAIN COLLECTIVELY. The contention that the PHILMAROA has no right
to bargain collectively for radio operators employed by the employer in the
case at bar, because these radio operators are affiliated with another local
labor union to which the union most of the employees of said employer are
affiliated is without merit. The PHILMAROA acted as representative of the
radio operators N and O as radio operators not as mere employees of the
employer. There is no prohibition in the law against employees affiliating
with a craft union as well as with an ordinary labor union. . As PHILMAROA
represented the interest of N and O as radio operators said union was fully
competent to represent them in the proceedings in said capacity.

4. ID.; PRESIDENTIAL CERTIFICATION OF LABOR DISPUTE; NOT LIMITED TO

PREVENT STRIKES AND LOCKOUTS. There is no reason or ground for the
contention that Presidential certification of labor dispute to the CIR is limited
to the prevention of strikes and lockouts. Even after a strike has been
declared where the President believes that public interest demands
arbitration and conciliation, the President may certify the case for that
purpose. The practice has been for the Court of Industrial Relations to order
the strikers to return to work , pending final determination of the union

demands that impelled the strike. There is nothing in the law to indicate
that this practice is abolished.

DECISION

LABRADOR, J.:

Appeal by certiorari instituted by petitioner against the decision of the Court

of Industrial Relations in its case No. 4 L-IPA entitled the Philippine Marine
Radio Officers Association v. Compaia Maritima, Et. Al.

This case is intimately related to G. R. No. L-10095 and G. R No. L-10115,

already resolved by Us in a decision promulgated last October 31, 1957.
Insofar as this appeal is concerned, it appears that the PHILMAROA
presented its demands for standardization and increase of salaries, sick and
vacation leaves, hospitalization, and closed shop agreement on September
26, 1953. On October 24, 1953, notice of intention to strike was filed in the
Conciliation Service Division of the Department of Labor against the
petitioners herein. Pending the resolution of the dispute by the Court of
Industrial Relations, by reason of the presidential certification to it of the
said dispute, Benjamin Nadanza and Arcadio Ouano abandoned their ships,
which belong to the petitioner, on November 30 and December 7, 1953,
respectively. But some weeks thereafter said radio operators came back
and, upon their request, were readmitted by the company. In the court
below the petitioner herein alleged that the strike was unlawful because no
notice of the strike was served directly to it. It was also contended that with
the reinstatement of the radio operators there was no longer any cause of
action against the Bisaya Land Transportation Co., petitioner herein. The
court a quo held that the illegality of the strike was waived by the Bisaya
Land Transportation Company when it accepted the striking radio operators.
As to the Absence of the cause of action against the petitioner herein, the
court a quo held that this defense is good as against the reinstatement and
backpay of the striking radio operators, but not as to the prosecution of the
demands contained in the original petition of the union.

On this appeal the petitioner assigns the following

errors:jgc:chanrobles.com.ph

"I. THE PETITIONER-UNION, NOW RESPONDENT, HAS NO CAUSE OF ACTION

AGAINST THE BISAYA LAND TRANSPORTATION CO., INC.

"II. THE PETITIONER-UNION BEING ONLY A CRAFT UNION HAS NO RIGHT OR

POWER TO BARGAIN COLLECTIVELY.

"III. THE PETITIONER-UNION HAS NO RIGHT OR POWER TO BARGAIN

COLLECTIVELY FOR RADIO OPERATORS NADANZA AND OUANO AS BOTH OF
THEM ARE AFFILIATED WITH ANOTHER LOCAL LABOR UNION IN CEBU, THE
PHILIPPINE MARINE & SHIPPING EMPLOYEES ASSOCIATION (PHILMASEA),
WITH WHICH THE GREAT MAJORITY OF THE EMPLOYEES OF THE BISAYA
LAND TRANSPORTATION CO., INC. ARE AFFILIATED.

"IV. THE STRIKE OR ABANDONING OF THEIR POSTS BY THE RADIO

OPERATORS WAS NOT LEGAL.

"V. THE CERTIFICATION OF THE CASE TO THE C.I.R. BY THE PRESIDENT OF

THE PHILIPPINES WAS NULL AND VOID. "VI. THE COURT OF INDUSTRIAL
RELATIONS HAD NO JURISDICTION OVER THE CASE."cralaw virtua1aw library

In support of the first assignment of error, it is claimed that when the radio
operators employed by the petitioner went back to work and the latter
reinstated them, the parties thereby waived any of the grounds that they
may have had for striking. There is absolutely no merit in this contention.
The strike in this case was adopted by the union to compel the respondent
shipping company to accede to its demands. The strike was but one of the
means employed to achieve its ends. When the radio officers returned back
to work after the strike, such return did not imply the waiver of the original
demands. The fact that the radio operators returned back to work and
ended their strike only meant that they desisted from the strike; such
desistance is a personal act of the strikers, and cannot be used against the
union and interpreted as a waiver by it of its original demands for which the
strike was adopted as weapon.

The second assignment of error is also without merit as held by the court
below. A union craft, such as the one to which the radio operators belonged,
is expressly recognized in the Industrial Peace Act (Sec. 9 [f], pars. 1 & 2
Rep. Act No. 875) and its right and power to bargain collectively is
recognized.

In third assignment of error it is claimed that the PHILMAROA has no right to

bargain collectively for the radio operators employed by the petitioner
Bisaya Land Transportation Company, because these radio operators are
affiliated with another local union to which union most of employees of the
petitioner union are affiliated. This contention is also without merit. The
PHILMAROA acted as representatives of the radio operators Nadanza and
Ouano, as radio operators, not as mere employees of the Bisaya Land
Transportation Company. There is no prohibition in the law against
employees affiliating with a craft union as well as with an ordinary labor
union. As the PHILMAROA represented the interest of Nadan and Ouano as
radio operators, said union was fully competent to represent them in the
proceedings in said capacity.

In the fourth assignment of error it is claimed that the strike was illegal.
Admitting for the sake of argument that the strike was illegal for being
premature, this defense was waived by the Bisaya Land Transportation
Company when it voluntarily agreed to reinstate the radio operators.

The fifth assignment of error refers to the supposed invalidity of the

presidential certification of the case to the Court of Industrial Relations. It is
argued that the real purpose of certification is to avoid or prevent strikes
and lockouts, but that since the strike in this case occurred before the
certification, the latter was null and void. There is no reason or ground for
the contention that presidential certification is limited to the prevention of
strikes and lockouts. Even after a strike has been declared, where the
President believes that public interest demands arbitration and conciliation,
the President may certify the case for that purpose. The practice has been
for the Court of Industrial Relations to order the strikers to return to work,
pending final determination of the union demands that impelled the strike.
There is nothing in the law to indicate that the practice is abolished.

The last assignment of error is so clearly unfounded as to deserve no

consideration on Our part other than a statement that it is without merit.

The petition is hereby denied and the resolution appealed from, affirmed.
With costs against petitioner.
FIRST DIVISION

[G.R. Nos. L-14023 & L-14135. January 30, 1960.]

TALISAY-SILAY MILLING CO., INC., Petitioner, v. COURT OF INDUSTRIAL

RELATIONS and TALISAY EMPLOYEES AND LABORERS ASSOCIATION (TELA),
Respondents.

Hilado & Hilado for Petitioner.

Martin Dolorico for respondent Court.

Melanio O. Lalisan for respondent Association.

SYLLABUS

1. COURT OF INDUSTRIAL RELATIONS; ENFORCEMENT OF DECISIONS;

EFFECT OF APPEAL; WHEN EXECUTION OF DECISION MAY BE STAYED
PENDING APPEAL. Under Section 14 of Commonwealth Act 103, as
amended by Commonwealth Act 559, a decision, award, or order of the
Court of Industrial Relations becomes self-executory 10 days after its
promulgation notwithstanding the institution of an appeal therefrom, unless
at the discretion of the court, the execution thereof is expressly ordered
suspended (1) for special reasons, and (2) upon the appellants depositing
in court either the amount of salaries or wages due the laborers or
employees under the order, decision or award appealed from, or a bond of
such amount that would insure its compliance.

2. ID.; SECTION 14, COMMONWEALTH ACT 103, AS AMENDED, IS

CONSTITUTIONAL. Section 14 of Commonwealth Act 103, as amended, is
similar to the provisions of the Rules of Court empowering the courts of first
instance to order the execution of their judgment pending the appeal if for

some special reasons such execution is warranted. This rule has been
applied in cases without number, and it has never been seriously contended
that it imposes a limitation upon the constitutional appellate jurisdiction of
the Supreme Court.

DECISION

BARRERA, J.:

These are two petitions for certiorari filed by the Talisay-Silay Milling Co.,
Inc. seeking to review and set aside the order of the Court of Industrial
Relations dated February 10, 1958 and the resolution of the court en banc
dated April 11, 1958 in CIR Case No. 788-V (G.R. No. L-14023), and the
orders of May 30, 1958 and July 17, 1958 in Case No. 83-ULP Cebu (G. R. No.
L-14135). The parties in both cases being the same, and the actions being
interrelated and arising out of the same incident, we will take them up
jointly and resolve the questions raised therein in a single decision.

On December 17, 1952, the employees and laborers of the Talisay- Silay
Milling Co., Inc., members of the Talisay Employees & Laborers Association,
hereinafter referred to as the Union, went on strike. On December 24 of the
same year, the Talisay-Silay Milling Co., Inc., henceforth to be called the
Company, filed with the Court of Industrial Relations a petition to declare
the strike illegal (Case No. 788-V). The Union filed its answer and the case
was duly heard. During the pendency of the case and by virtue of a
stipulation entered into by the parties on February 19, 1953, 400 of the
striking laborers and employees were reinstated.

On June 25, 1953, Judge Bautista, sustaining the Companys charge that the
strike was illegal, issued an order the dispositive part of which
reads:jgc:chanrobles.com.ph

"For the above considerations, the Court hereby orders that the rest of the
strikers who were excluded to return to work in accordance with the

stipulation submitted by the parties on February 19, 1953, be immediately

reinstated to their former positions in the company.

"The strikers who by virtue of said stipulation returned to their work on

February 19, 1953 and those who will return to their former works in the
company are not entitled to any compensation during said illegal strike."
(Emphasis supplied.)

The parties filed separate motions for reconsideration of said order, both of
which were denied by resolution of the court en banc on August 12, 1953.
The Company received copy of this order of denial on October 30, 1953.

On November 3, 1953, the Company filed notice to appeal to the Supreme

Court from that portion of the decision ordering reinstatement of the strikers
to their former positions, and the case was actually filed and docketed in
this Court as G. R. No. L-7228 * . The records show, however, that prior to
this appeal, that is, on October 7, 1953, the Company re-admitted to the
service 74 more of the laborers and employees who joined the strike.

On March 17, 1954, pending resolution by this Court of the matter on

appeal, the Union, invoking Section 14 of Commonwealth Act 103, as
amended, filed with the Court of Industrial Relations a motion for execution
of the order of June 25, 1953. The Company opposed this move and offered
"to file a bond in the amount (to be fixed by the court) sufficient to cover
the wages of the striking laborers who have not been re-admitted to their
work in the petitioner company." These motions, however, were not acted
upon by the Industrial Court. On November 29, 1955, this Court, holding
that the strike was not illegal, affirmed the order of reinstatement this
wise:jgc:chanrobles.com.ph

"We are therefore of the opinion that the respondent court, notwithstanding
our diverging point of view, did not err in ordering the reinstatement of the
strikers who were excluded by the management without back pay, and,
hence, we affirm the decision appealed from, without pronouncement as to
costs." (G. R. No. L-7228).

On January 16, 1956, the court issued a writ of execution by virtue of which,
of the 185 persons appearing in the list submitted by the Union, 70 were reinstated on January 27 and another group of 46 on January 30, 1956; 10

were refused admission allegedly for having been found unfit for work; 3
separated for cause; 15 were laid off but given separation pay; 3 were
already dead; 15 were found already working; 5 were non-strikers; 10 were
laid off even before the strike, and 8 were discovered not in the payroll.

On February 5, 1958, the Union represented by a new counsel, filed in the

Court of Industrial Relations an urgent ex-parte motion for immediate
execution of back wages, claiming that therein subject laborers were
entitled to back pay from June 25, 1953, when they were ordered reinstated,
up to January 30, 1956, when they were actually re-admitted to the service.
And over the Companys opposition thereto, the court in its order of
February 10, 1958, directed the Chief Examiner of the court to make the
necessary computation of the back wages due the laborers concerned,
preparatory to the issuance of the writ prayed for. The Company moved to
reconsider said order on the ground that it was not justified either by the
order of June 25, 1953 or of the decision of the Supreme Court in G. R. No. L7228, which motion was denied by resolution of April 11, 1958, although
following the ruling laid down by this Court in the case of Rizal Cement
Company v. Bautista, G. R. No. L-10312, promulgated July 26, 1957, the
order of February 10, 1958 was modified as to cover back wages due the
laborers only from November 10, 1953 (10 days after the Company received
notice of the denial of its motion for reconsideration of the order of June 25,
1953) up to the date of their actual reinstatement. The Company thus filed
with this Court a petition to review the aforesaid orders (G. R. No. L-14023).
Upon petitioners filing a bond in the sum of P10,000.00, this Court issued a
writ of preliminary injunction enjoining the respondent Court of Industrial
Relations from executing the orders of February 10 and April 11, 1958 in CIR
Case No. 788-V.

Upon the other hand, the records in G. R. No. L-14135 (CIR Case No. 83-ULPCebu) disclose that while the Company, in compliance with the writ of
execution issued by the lower court, reinstated strikers on January 27 and
30, 1956, these laborers were assigned not to their former positions but
were employed on "rotation basis." And a few days after their
reinstatement, 143 members of the Union that participated in the strike
each received written notice of separation, and in fact were actually
dismissed in March, 1956. These acts of the Company became the subject
of a new complaint for unfair labor practice lodged by the Union against the
Company in the Court of Industrial Relations, which was later docketed as
Case No. 83-ULP-Cebu.

In its answer to this complaint, the Company denied the charges of

discrimination and unfair labor practice, contending that the dismissal of the

complainants was brought about by economic necessity in the sense that

with their (the laborers) reinstatement, the Company became overmanned.
After due hearing, the court held on December 28,
1957:jgc:chanrobles.com.ph

"After due consideration of the evidence adduced by the parties, this Court
is convinced that the 143 individual complainants in this case were
discriminated against by reason of their membership in the complainant
union and the intended effect of their dismissal was to discourage their
continuous membership in the said union. It is clear from the said evidence
that respondents did not adopt reasonable bases for determining the
persons to be laid off assuming that there was an imperative necessity to do
so. Instead of apportioning proportionately among the members of the three
(3) unions, the employees to be laid off or taking into consideration seniority
and efficiency the respondent singled out all the members of the
complainant union. The uncontradicted evidence for the complainants also
shows that the majority of those laid off had been working for over ten (10)
or fifteen (15) years had been working for thirty (30) or thirty-five (35) years
(t.s.n., July 24, 1957, p. 61).

"WHEREFORE, to remedy effects of such unfair labor practice and to

effectuate the policies of Republic Act No. 875, the respondent is hereby
ordered to reinstate immediately the following 143 individual complainants
to their former positions without lose of seniority and other rights and
privileges with full back wages from the time of their actual dismissal up to
their actual reinstatement: . . ."cralaw virtua1aw library

The Company sought reconsideration of this order, but was denied. Then it
filed a petition in this Court to review the said order; the petition was
dismissed by resolution of this Court of March 18, 1958 for being factual and
for lack of merit (G. R. No. L-13576).

On March 31, 1958, the lower court directed the Chief Examiner of the Court
of Industrial Relations to proceed to the Company premises and make the
necessary computation of the back wages due the laborers, and on April 22,
1958, the Examiner submitted his report placing the Companys liability at
P298,956.74. The Company interposed an objection to this report, claiming
that the computation of back wages should have been based not on the
payrolls for 1951 and 1952, but those for 1956 and the years thereafter. It
was also alleged that the computation was excessive, because it included
wages allegedly due certain laborers named in the motion whose conditions
preclude the payment of such back salaries and, by computing the back

wages for the off-season period on the basis of 6 working days a week
instead of the actual practice of only 5 days a week. The Company,
therefore, prayed the Court to reject the report, or that it be modified to the
extent indicated in its objection.

As a consequence of this opposition, an amended report was submitted on

May 29, 1958, computing the amount due the laborers whose claims were
not objected to at P234,974.96, while those claims that were opposed
amounted to P41,291.84.

On May 30, 1958, upon motion of the Union, the court ordered the Company
to deposit in said court the sum of P234,974.96. The Company once again
moved to reconsider this order and prayed that the computation of the back
wages be referred to the Wage Administration Service of the Bureau of
Labor. This motion having been denied on July 17, 1958, the Company filed
in this Court a petition to review the aforementioned orders (of May 30 and
July 17, 1958, docketed as G. R. No. L-14135). As prayed for by petitioner,
this Court also issued a writ of preliminary injunction enjoining the
respondent court from carrying into effect the said orders.

It may well be remembered, before proceeding with the discussion of the

issues raised herein that the petitioner in these cases is seeking to review
only the orders of February 10, 1958 (computation of back wages) and April
11, 1958 (denying the motion for reconsideration in CIR Case No. 788-V),
and the orders of May 30, 1958 (requiring the Company to deposit in court
the sum of P234,974.96) and of July 17, 1958 (denying its motion for
reconsideration). Thus, the questions presented for our determination are:
(1) whether the strikers who were ordered reinstated on June 25, 1953 but
were actually returned to the service only on January 27 and 30, 1956 are
entitled to back wages for the duration of the appeal instituted by the
Company; (2) whether the Company has the right to dismiss these strikers,
reinstated by order of the court, because of a retrenchment policy adopted
by the Company and after complying with the 30-day notice of separation
required by Republic Act 1052; and (3) whether the Court of Industrial
Relations may lawfully order the Company to deposit the amount allegedly
due the striking laborers.

(1) Regarding the first question, that is, whether the laborers are entitled
to their wages from the time their immediate reinstatement to their former
positions was ordered up to their actual re-instatement in January, 1956,
after this Court affirmed the said order, the Company contends that neither
the order of June 25, 1953 nor the decision of this Court affirming the latter

order justified the payment of such back wages, because although the order
of June 25, 1953, as affirmed by this Court, specifically provides for the
immediate reinstatement of the laborers, yet no obligation on its part to pay
the laborers any such wages was created until the order of reinstatement
was affirmed by the Supreme Court. We find no merit in this contention.

Section 14 of Commonwealth Act 103, as amended by Commonwealth Act

559, provides:jgc:chanrobles.com.ph

"SEC. 14. Enforcement of awards, orders, and decisions. At the expiration of

ten days from the date of the award, order, or decision, in cases brought
under the provisions of section four hereof, judgment shall be entered in
accordance therewith, unless during said ten days an aggrieved party shall
appeal therefrom to the Supreme Court of the Philippines by writ of
certiorari as hereinafter provided. The institution of such an appeal shall not,
however, stay the execution of the award, order, or decision sought to be
reviewed, unless for special reasons the Court shall order that the execution
be stayed, in which event the Court in its discretion, may require the
appellant to deposit with the clerk of the Court such amount of salaries or
wages due the employees, laborers, tenants or farm laborers concerned
under the award, order, or decision appealed from or require him to give
bond in such form and of such amount as to insure compliance with the
award, order, or decision in case of the same is affirmed. The Court may
also require the appellant to deposit with the clerk of the Court every week,
on a day therein to be fixed by the Court, an amount equivalent to the
salaries or wages to be earned during the time of the appeal by the
employees or laborers, or tenants or farm laborers whose reinstatement in,
or readmission to, their employment has been decreed by the Court. The
failure to make such deposit shall vacate the order for stay of execution.
When writs of execution are so issued the proceeds thereof shall be kept by
the Clerk of the Court of Industrial Relations in his custody, pending decision
of the appeal, to be disposed of in conformity with the final judgment of the
Supreme Court. (Italics supplied.)

It is clear from the foregoing legal provision that a decision, award, or order
of the Court of Industrial Relations becomes self- executory 10 days after its
promulgation notwithstanding the institution of an appeal therefrom, unless
at the discretion of the court, the execution thereof is expressly ordered
suspended (1) for special reasons, and (2) upon the appellants depositing
in court either the amount of salaries or wages due the laborers or
employees under the order, decision or award appealed from, or a bond of
such amount that would insure its compliance. It must be for this purpose
that the Company, in opposing the execution of the order of reinstatement

during the pendency of the appeal, prayed for by the Union, offered to file a
bond in an amount sufficient to cover the wages of the striking laborers,
which bond, pursuant to Commonwealth Act 103, as amended, would
guarantee full satisfaction of the order appealed from in the event that the
same is affirmed by the appellate court. The petitioner Company at this
stage cannot, therefore, deny the existence of the laborers right to
reinstatement and compensation from the date such order became
executory because by offering to file a bond, it had in effect recognized the
existence of such right. And although it is true that the lower court failed to
act on the Unions motion, neither did it order the stay of the execution of
the order of reinstatement. Hence, 10 days after the Company was notified
of the resolution denying its (the Companys) motion for reconsideration of
the order of June 25, 1953, the laborers right to re-employment and wages
accrued. 1 Consequently, and by reason of its failure to abide by the
aforesaid order, the Company is liable for back wages due the laborers from
the date their right to reinstatement accrued up to the time they were
actually reinstated.

Petitioner Companys contention that the aforequoted Section 14 of

Commonwealth Act 103, as amended, is unconstitutional when it provides
that appeal of an award, order, or decision of the Court of Industrial
Relations to the Supreme Court shall not stay the execution of the award,
order, or decision unless the Court of Industrial Relations shall order such
execution stayed, because it infringes upon the Supreme Courts plenary
jurisdiction under the Constitution to review, revise, reverse, modify or
affirm on appeal, certiorari or writ of error, final judgments and decrees of
inferior courts, needs no serious consideration. The questioned section of
Commonwealth Act 103, as amended, is similar to the provisions of the
Rules of Court empowering the courts of first instance to order the execution
of their judgment pending the appeal if for some special reasons, such
execution is warranted. 2 This rule has been applied in cases without
number and to our knowledge it has never been seriously contended that it
imposes a limitation upon the constitutional appellate jurisdiction of the
Supreme Court.

(2) With respect to the subsequent separation of 143 of the striking

laborers after their reinstatement as ordered by the Court, the Company
claims that such action can not be considered as an unfair labor practice
because aside from the fact that the dismissal was brought about by
economic necessity, Republic Act 1052 allows such termination of
employment upon serving notice on the employee at least one month in
advance, which was complied with in these cases. This theory cannot be
sustained.

Passing upon the identical question of whether an employee who was

previously dismissed by the employer but was reinstated by court order
may again be dismissed under Republic Act 1052, this Court
said:jgc:chanrobles.com.ph

". . . While Republic Act No. 1052 authorizes a commercial establishment to

terminate the employment of its employee by serving notice on him one
month in advance, or, in the absence thereof, by paying him one month
compensation from the date of the termination of his employment, such Act
does not give to the employer a blanket authority to terminate the
employment regardless of the cause or purpose behind such termination.
Certainly, it cannot be made use of as a cloak to circumvent a final order of
the court or as a scheme to trample upon the right of an employee who has
been the victim of an unfair labor practice. In other words, the privilege
given by that Act to an employer cannot be resorted to if to do so would
infringe the law that Congress had enacted to protect labor as against the
abuses of capital. One of such abuses which our law condemns and which
has given rise to the many social problems which mar the relationship of
labor and capital is unfair labor practice, and this is the act of which said
petitioners were condemned. To allow them to take refuge under that Act
and obtain by indirect action what they had been expressly enjoined by an
express order of the court would be a mockery of law and a travesty of
justice. . . ." (Yu Ki Lam, Et. Al. v. Micaller, 99 Phil., 902; 52 Off. Gaz. (14),
6146.

Granting arguendo that the reinstatement of the strikers, as ordered by the

court, made the dismissal of a certain number of laborers imperative, the
fact that those who were laid off were precisely the reinstated strikers can
hardly be considered merely coincidental especially if we take into account
the finding of the lower court that petitioner Company did not adopt
reasonable bases to determine the persons to be so separated from the
service. That the notice of separation was furnished the laborers a few days
after their much delayed, much resisted reinstatement further supports the
finding that the dismissal was resorted to to rid the Company of the service
of these strikers. Certainly, such course of action contravenes the spirit of
the Industrial Peace Act, and the court a quo, therefore, committed no error
in declaring the same discriminatory and in ordering the reinstatement of
the laborers affected to their former positions without losing their seniority
and other privileges.

(3) The third issue raised is the correctness and validity of the courts
order approving the examiners computations of back salaries based on the
1951 and 1952 payrolls. The Company contends that as the laborers should
have been re-admitted in 1956, their back wages must be based on the
payroll for said year and thereafter.

In the first place, the laborers should have been reinstated since November
10, 1953, when the order of immediate reinstatement became executory.
Secondly, an order of reinstatement issued by the court after investigating a
complaint for unfair labor practice, includes not only back salaries but also
other rights and privileges prior to dismissal (Sec. 5-c, Rep. Act 875). The
working conditions in the Company in 1951 and 1952, i.e., before the
introduction of the so- called retrenchment policy, and wherein the laborers
worked on full time basis cannot be but looked at as a right and, therefore,
contemplated by the order of the court declaring the complainants entitled
not only to reinstatement but to "other rights and privileges with full back
wages from the time of their actual dismissal up to their reinstatement."

Furthermore, it may be observed that in the stipulation entered into by the

parties on February 19, 1953, the Company even obligated itself to reinstate
strikers to "their salaries and their status should be the same as that which
they enjoyed before the strike." This means not only reinstatement to their
formal status but also to the salaries that they enjoyed before the strike 3
was declared that is, before the so-called retrenchment policy was
implemented by the Company. As the respondent Industrial Court observed,
the computation undertaken by the Court Examiner was in consonance with
the leading doctrine in American jurisprudence, thus:jgc:chanrobles.com.ph

"In determining the rate of pay to be used in computing the award, where
there is no fixed wage, or where the work is seasonal or part time, the Board
customarily uses as the criterion the employees average pay in a given
period prior to his improper discharge." (Rothenberg on Labor Relations, p.
583, citing authorities).

Anent the validity of the retrenchment system, introduced by the Company

after the Court of Industrial Relations took cognizance of the dispute (CIR
Case No. 788-V), the record reveals that it was never sanctioned nor
authorized by said court. Such action contravenes Section 19,
Commonwealth Act No. 103, as amended by Commonwealth Acts Nos. 335
and 559, which provides that during the pendency of a dispute between the
employer and employee, the employer or landlord shall refrain from
accepting other employees, and shall permit the continuation in the service

of his employees under the last terms and conditions existing before the
dispute arose, unless expressly authorized by the court, otherwise the same
shall constitute contempt of the Court of Industrial Relations.

In view of all the foregoing, and finding no error in the appealed orders of
the Court of Industrial Relations, the same are hereby affirmed, and the
writs of preliminary injunction heretofore issued are dissolved, with costs
against the petitioner in both cases. So ordered.

Paras, C.J., Bengzon, Padilla, Bautista Angelo, Labrador, Concepcin, Reyes,

J. B. L., Endencia and Gutirrez David, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

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 (NMFNFL), 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 (NMNFL) 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 selforganization. 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

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

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 . . .

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.

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.

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.

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.

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)

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 sevenday 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

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 7-day 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) cooling-off period. "It
must be stressed that the requirements of cooling-off period and 7-day
strike ban must both be complied with, although the labor union may take a
strike vote and report the same within the statutory cooling-off period.

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 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. L31504, 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

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

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. .
.

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;

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 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:

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 seven-day 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.

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 92009 February 17, 1993

MASTER IRON LABOR UNION (MILU), WILFREDO ABULENCIA, ROGELIO

CABANA, LOPITO SARANILLA, JESUS MOISES, BASILIO DELA CRUZ, EDGAR
ARANES, ELY BORROMEO, DANIEL BACOLON, MATIAS PAJIMULA, RESTITUTO
PAYABYAB, MELCHOR BOSE, TEOFILO ANTOLIN, ROBERT ASPURIA, JUSTINO
BOTOR, ALFREDO FABROS, AGAPITO TABIOS, BENARDO ALFON, BENIGNO
BARCENA, BERNARDO NAVARRO, MOISES LABRADOR, ERNESTO DELA CRUZ,
EDUARDO ESPIRITU, IGNACIO PAGTAMA, BAYANI PEREZ, SIMPLICIO PUASO,
EDWIN VELARDE, BEATO ABOGADO, DANILO SAN ANTONIO, BERMESI
BORROMEO, and JOSE BORROMEO, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and MASTER IRON WORKS AND
CONSTRUCTION CORPORATION, respondents.

Banzuela, Flores, Mirrales, Raeses, Sy, Taquio and Associates for

petitioners.

Carlos L. Galarrita for private respondent.

MELO, J.:

The petition for certiorari before us seeks to annul and to set aside the
decision of the National Labor Relations Commission (Second Division)
dated July 12, 1986 which affirmed that of Labor Arbiter Fernando V. Cinco
declaring illegal the strike staged by petitioners and terminating the
employment of the individual petitioners.

The Master Iron Works Construction Corporation (Corporation for brevity) is

a duly organized corporate entity engaged in steel fabrication and other
related business activities. Sometime in February 1987, the Master Iron
Labor Union (MILU) entered into a collective barganing agreement (CBA)
with the Corporation for the three-year period between December 1, 1986
and November 30, 1989 (Rollo, p. 7). Pertinent provisions of the CBA state:

Sec. 1.
That there shall be no strike and no lockout, stoppage or
shutdown of work, or any other interference with any of the operation of the

COMPANY during the term of this AGREEMENT, unless allowed and

permitted by law.

Sec. 2.
Service Allowance The COMPANY agrees to continue the
granting of service allowance of workers assigned to work outside the
company plant, in addition to his daily salary, as follows:

(a) For those assigned to work outside the plant within Metro Manila, the
service allowance shall be P12.00;

(b) For those assigned to work outside Metro Manila, the service allowance
shall be P25.00/day;

(c) The present practice of conveying to and from jobsites of workers

assigned to work outside of the company plant shall be maintained.

Right after the signing of the CBA, the Corporation subcontracted outside
workers to do the usual jobs done by its regular workers including those
done outside of the company plant. As a result, the regular workers were
scheduled by the management to work on a rotation basis allegedly to
prevent financial losses thereby allowing the workers only ten (10) working
days a month (Rollo, p. 8). Thus, MILU requested implementation of the
grievance procedure which had also been agreed upon in the CBA, but the
Corporation ignored the request.

Consequently, on April 8, 1987, MILU filed a notice of strike (Rollo,

p. 54) with the Department of Labor and Employment. Upon the
intervention of the DOLE, through one Atty. Bobot Hernandez, the
Corporation and MILU reached an agreement whereby the Corporation
acceded to give back the usual work to its regular employees who are
members of MILU (Rollo, p. 55).

Notwithstanding said agreement, the Corporation continued the practice of

hiring outside workers. When the MILU president, Wilfredo Abulencia,
insisted in doing his regular work of cutting steel bars which was being done
by casual workers, a supervisor reprimanded him, charged him with
insubordination and suspended him for three (3) days (Rollo, pp. 9 & 51-52).
Upon the request of MILU, Francisco Jose of the DOLE called for conciliation

conferences. The Corporation, however, insisted that the hiring of casual

workers was a management prerogative. It later ignored subsequent
scheduled conciliation conferences (Rollo, pp. 51-52 & 57-58).

Hence, on July 9, 1987, MILU filed a notice of strike on the following grounds:
(a) violation of CBA; (b) discrimination; (c) unreasonable suspension of union
officials; and (d) unreasonable refusal to entertain grievance (Rollo,
p. 9). On July 24, 1987, MILU staged the strike, maintaining picket lines on
the road leading to the Corporation's plant entrance and premises.

At about 11 o'clock in the morning of July 28, 1987, CAPCOM soldiers, who
had been summoned by the Corporation's counsel, came and arrested the
picketers. They were brought to Camp Karingal and, the following day, to
the Caloocan City jail. Charges for illegal possession of firearms and deadly
weapons were lodged against them. Later, however, those charges were
dismissed for failure of the arresting CAPCOM soldiers to appear at the
investigation (Rollo, p. 10). The dispersal of the picketlines by the CAPCOM
also resulted in the temporary lifting of the strike.

On August 4, 1987, the Corporation filed with the NLRC National Capital
Region arbitration branch a petition to declare the strike illegal (Rollo,
p. 40). On September 7, 1987, MILU, with the assistance of the Alyansa ng
Manggagawa sa Valenzuela (AMVA), re-staged the strike. Consequently, the
Corporation filed a petition for injunction before the NLRC which, on
September 24, 1987, issued an order directing the workers to remove the
barricades and other obstructions which prevented ingress to and egress
from the company premises. The workers obliged on October 1, 1987 (Rollo,
p. 25). On October 22, 1987, through its president, MILU offered to return to
work in a letter which states:

22 Okt. 1987

Mr. Elieze Hao

Master Iron Works & Construction Corp.

790 Bagbagin, Caloocan City

Dear Sir:

Ang unyon, sa pamamagitan ng nakalagda sa ibaba, ay nagmumungkahi,

nagsusuhestiyon o nag-oofer sa inyong pangasiwaan ng aming kahilingan
na bumalik na sa trabaho dahilan din lang sa kalagayan na tuloy tuloy ang
ating pag-uusap para sa ikatitiwasay ng ating relasyon. Gusto naming
manatili ang ating magandang pagtitinginan bilang magkasangga para sa
ika-uunlad ng ating kumpanya. Sana ay unawain niyo kami dahil kailangan
namin ng trabaho.

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 counter-complaint, the workers charged the
Corporation with unfair labor practice for subcontracting work that was
normally done by its regular workers thereby causing the reduction of the
latter's workdays; illegal suspension of Abulencia without any investigation;
discrimination for hiring casual workers in violation of the CBA, and illegal
dispersal of the picket lines by CAPCOM agents (Rollo, pp. 26-27).

In due course, a decision dated March 16, 1988 was rendered by Labor
Arbiter Fernando Cinco declaring illegal the strike staged by MILU. The
dispositive portion of the decision reads:

WHEREFORE, in the light of the foregoing premises, judgment is hereby

rendered, as follows:

1.

Declaring the strike by the respondents illegal and unlawful;

2.
Ordering the cancellation of the registered permit of respondent union
MILU for having committed an illegal strike;

3.
Ordering the termination of employment status of the individual
respondents, including the forfeiture of whatever benefits are due them
under the law, for having actively participated in an illegal strike, namely:
Wilfredo Abulencia, President; Rogelio Cabana, Vice-President; Lopito
Saranilla, Secretary; Jesus Moises, Treasurer; Basilio dela Cruz, Auditor; as
Members of the Board: Edgar Aranes, Melchor Bose, Restituto Payabyab,
Matias Pajimula, Daniel Bacolon, and Ely Borromeo, as Members of the
Union: Teofilo Antolin, Robert Aspuria, Justino Botor, Alfredo Fabros, Agapito
Tabios, Bernardo Alfon, Benigno Barcena, Bernardo Navaro, Moises
Labrador, Ernesto dela Cruz, Eduardo Espiritu, Ignacio Pagtama, Bayani
Perez, Simplicio Puaso, Edwin Velarde, Beato Abogado, Danila San Antonio,
Bermes Borromeo and Jose Borromeo.

The respondents as appearing in Annex "A" of the Petition, but not included
as among those whose employment status were not terminated as 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.)

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 noneconomic in nature. They assert that the NLRC abused its discretion in
holding that there was "failure to exhaust the provision on grievance
procedure" in view of the fact that they themselves sought grievance
meetings but the Corporation ignored such requests. They charge the NLRC
with bias in failing to give weight to the fact that the criminal charges
against the individual petitioners were dismissed for failure of the CAPCOM

soldiers to testify while the same individual strikers boldly faced the charges
against them. Lastly, they aver that the NLRC abused its discretion in
holding that the workers' offer to return to work was conditional.

In holding that the strike was illegal, the NLRC relied solely on the no-strike
no-lockout provision of the CBA aforequoted. As this Court has held in
Philippine Metal Foundries, Inc. vs. CIR (90 SCRA 135 [1979]), a no-strike
clause in a CBA is applicable only to economic strikes. Corollarily, if the
strike is founded on an unfair labor practice of the employer, a strike
declared by the union cannot be considered a violation of the no-strike
clause.

An economic strike is defined as one which is to force wage or other

concessions from the employer which he is not required by law to grant
(Consolidated Labor Association of the Philippines vs. Marsman & Co., Inc.,
11 SCRA 589 [1964]). In this case, petitioners enumerated in their notice of
strike the following grounds: violation of the CBA or the Corporation's
practice of subcontracting workers; discrimination; coercion of employees;
unreasonable suspension of union officials, and unreasonable refusal to
entertain grievance.

Private respondent contends that petitioner's clamor for the implementation

of Section 2, Article VIII of the CBA on service allowances granted to workers
who are assigned outside the company premises is an economic issue
(Rollo, p. 70). On the contrary, petitioners decry the violation of the CBA,
specifically the provision granting them service allowances. Petitioners are
not, therefore, already asking for an economic benefit not already agreed
upon, but are merely asking for the implementation of the same. They aver
that the Corporation's practice of hiring subcontractors to do jobs outside of
the company premises was a way "to dodge paying service allowance to the
workers" (Rollo, pp. 61 & 70).

Much more than an economic issue, the said practice of the Corporation was
a blatant violation of the CBA and unfair labor practice on the part of the
employer under Article 248(i) of the Labor Code. Although the end result,
should the Corporation be required to observe the CBA, may be economic in
nature because the workers would then be given their regular working hours
and therefore their just pay, not one of the said grounds is an economic
demand within the meaning of the law on labor strikes. Professor Perfecto
Fernandez, in his book Law on Strikes, Picketing and Lockouts (1981 edition,
pp. 144-145), states that an economic strike involves issues relating to
demands for higher wages, higher pension or overtime rates, pensions,

profit sharing, shorter working hours, fewer work days for the same pay,
elimination of night work, lower retirement age, more healthful working
conditions, better health services, better sanitation and more safety
appliances. The demands of the petitioners, being covered by the CBA, are
definitely within the power of the Corporation to grant and therefore the
strike was not an economic strike.

The other grounds, i.e., discrimination, unreasonable suspension of union

officials and unreasonable refusal to entertain grievance, had been
ventilated before the Labor Arbiter. They are clearly unfair labor practices as
defined in Article 248 of the Labor Code. 2 The subsequent withdrawal of
petitioners' complaint for unfair labor practice (NLRC-NCR Case No. 00-1104132-87) 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 E8". These strikers were jailed for sometime until they were ordered release
after putting up the required bail bond. Other strikers were also arrested and
brought to Camp Tomas Karingal, and after proper investigation as to their
involvement in the offense charged, they were released for lack of prima
facie evidence. They were Edwin Velarde, Bayani Perez, Daniel Bacolon,
Jesus Moises, Robert Aspurias and Benigno Barcena.

After the strikers who were arrested were brought to Camp Tomas Karingal
on 28 July 1987, the rest of the strikers removed voluntarily their human
and material barricades which were placed and posted at the road leading
to the premises of the Company. (Rollo, p. 32)

The bringing in of CAPCOM soldiers to the peaceful picket lines without any
reported outbreak of violence, was clearly in violation of the following
prohibited activity under Article 264 of the Labor Code:

(d) No public official or employee, including officers and personnel of the

New Armed Forces of the Philippines or the Integrated National Police, or
armed person, shall bring in, introduce or escort in any manner any
individual who seeks to replace strikers in entering or leaving the premises
of a strike area, or work in place of the strikers. The police force shall keep
out of the picket lines unless actual violence or other criminal acts occur
therein; Provided, That nothing herein shall be interpreted to prevent any
public officer from taking any measure necessary to maintain peace and
order, protect life and property, and/or enforce the law and legal order.
(Emphasis supplied.)

As the Labor Arbiter himself found, no pervasive or widespread coercion or

violence were perpetrated by the petitioners as to warrant the presence of
the CAPCOM soldiers in the picket lines. In this regard, worth quoting is the
following excerpt of the decision in Shell Oil Workers' Union vs. Shell
Company of the Philippines, Ltd., 39 SCRA 276 [1971], which was decided
by the Court under the old Industrial Peace Act but which excerpt still holds
true:

. . . What is clearly within the law is the concerted activity of cessation of

work in order that . . . employer cease and desist from an unfair labor
practice. That the law recognizes as a right. There is though a disapproval of
the utilization of force to attain such an objective. For implicit in the very
concept of the legal order is the maintenance of peaceful ways. A strike
otherwise valid, if violent in character, may be placed beyond the pale. Care
is to be taken, however, especially where an unfair labor practice is
involved, to avoid stamping it with illegality just because it is tainted with
such acts. To avoid rendering illusory the recognition of the right to strike,
responsibility in such a case should be individual and not collective. A
different conclusion would be called for, of course, if the existence of force
while the strike lasts is pervasive and widespread, consistently and
deliberately resorted to as a matter of policy. It could be reasonably

concluded then that even if justified as to ends, it becomes illegal because

of the means employed. (at p. 292.)

All told, the strike staged by the petitioners was a legal one even though it
may have been called to offset what the strikers believed in good faith to be
unfair labor practices on the part of the employer (Ferrer, et al. vs. Court of
Industrial Relations, et al., 17 SCRA 352 [1966]). Verily, such presumption of
legality prevails even if the allegations of unfair labor practices are
subsequently found out to be untrue (People's Industrial and Commercial
Employees and Workers Org. [FFW] vs. People's Industrial and Commercial
Corporation, 112 SCRA 440 [1982]). Consonant with these jurisprudential
pronouncements, is Article 263 of the Labor Code which clearly states "the
policy of the State to encourage free trade unionism and free collective
bargaining". Paragraph (b) of the same article guarantees the workers'
"right to engage in concerted activities for purposes of collective bargaining
or for their mutual benefit and protection" and recognizes the "right of
legitimate labor organizations to strike and picket and of employers to
lockout" so long as these actions are "consistent with the national interest"
and the grounds therefor do not involve inter-union and intra-union
disputes.

The strike being legal, the NLRC gravely abused its discretion in terminating
the employment of the individual petitioners, who, by operation of law, are
entitled to reinstatement with three years backwages. Republic Act No.
6715 which amended Art. 279 of the Labor Code by giving "full backwages
inclusive of allowances" to reinstated employees, took effect fifteen days
from the publication of the law on March 21, 1989. The decision of the Labor
Arbiter having been promulgated on March 16, 1988, the law is not
applicable in this case.

WHEREFORE, the questioned decision and resolution of the NLRC as well as

the decision of the Labor Arbiter are hereby SET ASIDE and the individual
petitioners are reinstated to their positions, with three years backwages and
without loss of seniority rights and other privileges. Further, respondent
corporation is ordered to desist from subcontracting work usually performed
by its regular workers.

SO ORDERED.

Feliciano, Bidin, Davide, Jr. and Romero, JJ., concur.

Gutierrez, Jr., J., is on leave.

# Footnotes

1
The Solicitor General at first refused to file a comment on the petition
in view of his stand which is contrary to that of the NLRC (Rollo, p. 81).
Hence, the NLRC itself was directed to file comment on the petition in the
Resolution of June 20, 1990 (Rollo, p. 83). The NLRC's Legal Division filed
two motions for extension of time to file comment (Rollo, pp. 86 & 90).
However, in the Resolution of November 14, 1990 (Rollo, p. 110), the Court
noted the private respondent's manifestation and motion "pending filing of
comment by the Solicitor General on the petition." The NLRC Legal Division
having failed to file comment within the extended period to file the same, in
the Resolution of December 10, 1990, the Court dispensed with the filing of
the NLRC's comment. On December 14, 1990, the Solicitor General, taking
note of the Resolution of November 14, 1990, requested a new period within
which to file comment for the NLRC. On January 21, 1991, he filed said
comment praying that the NLRC decision be set aside and instead judgment
be rendered directing the reinstatement of the individual petitioners with
backwages and without loss of seniority rights and other employment
privileges and enjoining the private respondent from subcontracting work
regularly within the functions of petitioners (Rollo, p. 122).

2
Art. 248. Unfair labor practices of employers. It shall be unlawful for
an employer to commit any of the following unfair labor practice:

(a) To interfere with, restrain or coerce employees in the exercise of their

right to self-organization;

(b) To require as a condition of employment that a person or an employee

shall not join a labor organization or shall withdraw from one to which he
belongs;

(c) To contract out services or functions being performed by union

members when such will interfere with, restrain or coerce employees in the
exercise of their right to self-organization;

(d) To initiate, dominate, assist or otherwise interfere with the formation or

administration of any labor organization, including the giving of financial or
other support to it or its organizations or supporters;

(e) To discriminate in regard to wages, hours of work, and other terms and
conditions of employment in order to encourage or discourage membership
in any labor organization. Nothing in this Code or in any other law shall stop
the parties from requiring membership in a recognized collective bargaining
agent as a condition of employment, except those employees who are
already members of another union at the time of the signing of the
collective bargaining agreement. Employees of an appropriate collective
bargaining agent may be assessed a reasonable fee equivalent to the dues
and other fees paid by members of the recognized collective bargaining
agent, if such non-union members accept the benefits under the collective
agreement: Provided, that the individual authorization required under Article
242, paragraph (o) of this Code shall not apply to the non-members of the
recognized collective bargaining agent;

(f) To dismiss, discharge, or otherwise prejudice or discriminate against an

employee for having given or being about to give testimony under this
Code;

(g) To violate the duty to bargain collectively as prescribed by this Code;

(h) To pay negotiation or attorney's fees to the union or its officers or

agents as part of the settlement of any issue in collective bargaining or any
other dispute; or

(i)

To violate a collective bargaining agreement.

The provisions of the preceding paragraph notwithstanding, only the officers

and agents of corporations, associations or partnerships who have actually
participated in, authorized or ratified under unfair labor practices shall be
held criminally liable.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-28607

May 31, 1971

SHELL OIL WORKERS' UNION, petitioner,

vs.
SHELL COMPANY OF THE PHILIPPINES, LTD., and THE COURT OF INDUSTRIAL
RELATIONS, respondents.

J.C. Espinas, B. C. Pineda, J. J. de la Rosa & Associates for petitioner.

Siguion Reyna, Montecillo, Belo & Ongsiako for respondent Company.

FERNANDO, J.:

The insistence on the part of respondent Shell Company of the Philippines to

dissolve its security guard section, stationed at its Pandacan Installation
notwithstanding its being embraced in, and its continuance as such thus
assured by an existing collective bargaining contract, resulted in a strike
called by petitioner Shell Oil Workers' Union, hereinafter to be designated as
the Union, certified a month later on June 27, 1967 by the President to
respondent Court of Industrial Relations. Against its decision declaring the
strike illegal primarily on the ground that such dissolution was a valid
exercise of a management prerogative, this appeal is taken. With due
Recognition that the system of industrial democracy fostered in the regime

of unionization and collective bargaining leaves room for the free exercise of
management rights, but unable to close our eyes to the violation of a
contract still in force implicit in such dissolution thus giving rise to an unfair
labor practice, we cannot sustain respondent Court of Industrial Relations.
Consequently, the harsh and unwarranted sanction imposed, the dismissal
of the security guards and the officers of the Union, cannot stand. Insofar,
however, as individual liability is deemed incurred for serious acts of
violence, whether committed by a leader or member of the Union, we leave
things as adjudged.

The deep-rooted differences between the parties that led to the subsequent
strike were made clear in the presidential certification. As set forth in the
opening paragraph of the decision now on appeal: "Before this Court for
resolution is the labor dispute between the petitioner Shell Oil Workers'
Union, Union for brevity, and the respondent Shell Company of the
Philippines Limited, Company for short, which was certified to this Court on
June 27, 1967 by the Office of the President of the Republic of the
Philippines pursuant to the provision of Section 10 of Republic Act No. 875.
Said dispute ... 'was a result of the transfer by the Company of the eighteen
(18) security guards to its other department and the consequent hiring of a
private security agency to undertake the work of said security guards.'" 1

The respective contentions of the parties were then taken up. Petitioner
"filed the petition on July 7, 1967 alleging, among others, that the eighteen
(18) security guards affected are part of the bargaining unit and covered by
the existing collective bargaining contract, and as such, their transfers and
eventual dismissals are illegal being done in violation of the existing
contract. It, therefore, prayed that said security guards be reinstated with
full back wages from the time of their dismissal up to the time of their
actual reinstatement." 2 Then came a summary of the stand Of Shell
Company: "For hours hereafter, respondent Company filed its Answer [to]
the material allegations in the Union's petition and adverted that the issues
in this case are: (1) whether or not the Company commits unfair labor
practice in contracting out its security service to an independent
professional security agency and assigning the 18 guards to other sections
of the Company; (2) whether or not the dismissal of the 18 security guards
are justified; and (3) whether or not (the strike called by the Union on May
25, 1967 is legal. As special and affirmative defenses, the Company
maintained that in contracting out the security service and redeploying the
18 security guards affected, it was merely performing its legitimate
prerogative to adopt the most efficient and economical method of
operation; that said guards were transferred to other sections with increase,
except for four (4) guards, in rates of pay and with transfer bonus; the said
action was motivated by business consideration in line with past established

practice and made after notice to and discussion with the Union; that the 18
guards concerned were dismiss for wilfully refusing to obey the transfer
order; and that the strike staged by the Union on May 25, 1967 is illegal.
Primarily, Company prayed, among others, for the dismissal of the Union's
petition and the said Union's strike be declared illegal followed by the
termination of the employee status of those responsible and who
participated in said illegal strike." 3

The move for the dissolution of the security section by reassigning the
guards to other positions and contracting out such service to an outside
security agency had its origins as far back as 1964. A study made by the
Shell Company for the purpose of improving the productivity, organization
and efficiency of its Pandacan Installation recommended its dissolution. If an
outside agency to perform such service were to be hired, there would be a
savings of P96,000.00 annually in addition to further economy consequent
on the elimination to overtime an administration expenses. Its
implementation was scheduled for 1965. 4 There was then, in July 1966, a
joint consultation by the Union and management on the matter. At that
stage, it would appear that there was no serious opposition to such a move
provided it be done gradually and in close consultation with the Union.
There was even an offer if cooperation as long as a scheme for retirement of
the security guards affected or their redeployment would be followed. 5

The tentative character of such proposed dissolution was made evident by

the fact however that on August 26, 1966, a collective bargaining contract
was executed between the Union and the Shell Company effective from the
first of the month of that year to December 31, 1969. It contained the usual
grievance procedure and no strike clauses. 6 More relevant to the case
before this Court, however, was the inclusion of the category of the security
guards in such collective bargaining contract. This was stressed in the brief
for the petitioner where specific mention is made of the agreement covering
rank and file personnel regularly employed by the Company, included in
which is the work area covered by the Pandacan Installation. 7 There was
likewise specific reference to such positions in the wage schedule for hourlyrated categories appearing in an appendix thereof. 8 Mention was expressly
made in another appendix of the regular remuneration as well as premium
pay and night compensation. 9 Nonetheless, Shell Company was bent on
doing away with the security guard section, to be replaced by an outside
security agency. That was communicated to the Union in a panel to panel
meeting on May 3, 1967. A counter-offer on the part of the Union to reduce
the working days per week of the guards from six to five was rejected by
Shell Company on the ground of its being unusual and impracticable. Two
days later, there was a meeting of the Union where a majority of the
members made clear that should there be such a replacement of the

company guards by a private security agency, there would be a strike. It

was noted in the decision that when the strike vote was taken, of 243
members, 226 were for the approval of a motion to that effect. 10 On the
afternoon of May 24, 1967, a notice of reassignment effective at 8:00
o'clock the next morning was handed to the guards affected. At 10:00
o'clock that evening, there was a meeting by the Union attended by ten
officers and a majority of the members wherein it was agreed viva voce that
if there would be an implementation of the circular dissolving the security
section to be replaced by guards from an outside agency, the Union would
go on strike immediately. 11 The strike was declared at half-past 7:00
o'clock in the morning of May 25, 1967 when security guards from an
outside agency were trying to pass the main gate of the Shell Company to
their work. With the picket line established, they were unable to enter.
Efforts were made by the Conciliation Service of the Department of Labor to
settle the matter, but they were unsuccessful. 12 It was not until June 27,
1967, however, that the Presidential certification came. 13 There was a
return to work order on July 6, 1967 by respondent Court, by virtue of which
pending the resolution of the case, the Shell Company was not to lockout
the employees involved and the employees in turn were not to strike.

The decision of respondent Court was rendered on August 5, 1967. It

declared that no unfair labor practice was committed by Shell Company in
dissolving its security guards from an outside agency, as such a step was
well within management prerogative. Hence for it, the strike was illegal,
there being no compliance with the statutory requisites before an economic
strike could be staged. Respondent Court sought to reinforce such a
conclusion by a finding that its purpose was not justifiable and that it was
moreover carried out with violence. There was thus a failure on its part to
accord due weight to the terms of an existing collective bargaining
agreement. Accordingly as was made clear in the opening paragraph of this
opinion we view matters differently. The strike cannot be declared illegal,
there being a violation of the collective bargaining agreement by Shell
Company. Even if it were otherwise, however, this Court cannot lend
sanction of its approval to the outright dismissal of all union officers, a move
that certainly would have the effect of considerably weakening a labor
organization, and thus in effect frustrate the policy of the Industrial Peace
Act to encourage unionization. To the extent, however, that the serious acts
of violence occurring in the course of the strike could be made the basis for
holding responsible a leader or a member of the Union guilty of their
commission, what was decided by respondent Court should not be
disturbed.

1.
It is the contention of Shell Company, sustained by respondent Court,
that the dissolution of the security guard section to be replaced by an

outside agency is a management prerogative. The Union argues otherwise,

relying on the assurance of the continued existence of a security guard
section at least during the lifetime of the collective bargaining agreement.
The second, third and fourth assignment of errors, while they could have
been more felicitously worded, did attack the conclusion reached by
respondent Court as contrary to and in violation of the existing contract. It is
to be admitted that the stand of Shell Company as to the scope of
management prerogative is not devoid of plausibility if it were not bound by
what was stipulated. The growth of industrial democracy fostered by the
institution of collective bargaining with the workers entitled to be
represented by a union of their choice, has no doubt contracted the sphere
of what appertains solely to the employer. It would be going too far to
assert, however, that a decision on each and every aspect of the productive
process must be reached jointly by an agreement between labor and
management. Essentially, the freedom to manage the business remains
with management. It still has plenty of elbow room for making its wishes
prevail. In much the same way that labor unions may be expected to resist
to the utmost what they consider to be an unwelcome intrusion into their
exclusive domain, they cannot justly object to management equally being
jealous of its prerogatives.

More specifically, it cannot be denied the faculty of promoting efficiency and

attaining economy by a study of what units are essential for its operation. To
it belongs the ultimate determination of whether services should be
performed by its personnel or contracted to outside agencies. it is the
opinion of the Court, that while management has the final say on such
matter, the labor union is not to be completely left out. What was done by
Shell Company in informing the Union as to the step it was intending to take
on the proposed dissolution of the security guard section to be replaced by
an outside agency is praise-worthy. There should be mutual consultation
eventually deference is to be paid to what management decides. Thereby,
in the words of Chief Justice Warren, there is likely to be achieved "peaceful
accommodation of conflicting interest." 14 In this particular case though,
what was stipulated in an existing collective bargaining contract certainly
precluded Shell Company from carrying out what otherwise would have
been within its prerogative if to do so would be violative thereof.

2.
The crucial question thus is whether the then existing collective
bargaining contract running for three years from August 1, 1966 to
December 31, 1969 constituted a bar to such a decision reached by
management? The answer must be in the affirmative. As correctly stressed
in the brief for the petitioner, there was specific coverage concerning the
security guard section in the collective bargaining contract. It is found not
only in the body thereof but in the two appendices concerning the wage

schedules as well as the premium pay and the night compensation to which
the personnel in such section were entitled. 15 It was thus an assurance of
security of tenure, at least, during the lifetime of the agreement. Nor is it a
sufficient answer, as set forth in the decision of respondent Court, that while
such a section would be abolished, the guards would not be unemployed as
they would be transferred to another position with an increase in pay and
with a transfer bonus. For what is involved is the integrity of the agreement
reached, the terms of which should be binding of both parties. One of them
may be released, but only with the consent of the other. The right to object
belongs to the latter, and if exercised, must be respected. Such a state of
affairs should continue during the existence of the contract. Only thus may
there be compliance with and fulfillment of the covenants in a valid
subsisting agreement.

What renders the stand of Shell Company even more vulnerable is the fact
that as set forth in its brief and as found by respondent Court as far back as
1964, it had already been studying the matter of dissolving the security
guard section and contracting out such service to an outside agency.
Apparently, it had reached a decision to that effect for implementation the
next year. In July 1966, there was a joint consultation between it and the
Union on the matter. Nonetheless on August 26, 1966, a collective
bargaining contract was entered into which, as indicated above, did assure
the continued existence of the security guard section. The Shell Company
did not have to agree to such a stipulation. Or it could have reserved the
right to effect a dissolution and reassign the guards. It did not do so.
Instead, when it decided to take such a step resulting in the strike, it would
rely primarily on provisions in the collective bargaining contract couched in
general terms, merely declaratory of certain management prerogatives.
Considering the circumstances of record, there can be no justification then
for Shell Company's insistence on pushing through its project of such
dissolution without thereby incurring a violation of the collective bargaining
agreement.

3.
The Shell Company, in failing to manifest fealty to what was stipulated
in an existing collective bargaining contract, was thus guilty of an unfair
labor practice. Such a doctrine first found expression in Republic Savings
Bank v. Court of Industrial Relations, 16 the opinion of the Court being
penned by Justice Castro. There was a reiteration of such a view in Security
Bank Employees Union v. Security Bank and Trust Company. 17 Thus: "It
being expressly provided in the industrial Peace Act that [an] unfair labor
practice is committed by a labor union or its agent by its refusal 'to bargain
collectively with the employer' and this Court having decided in the Republic
Savings Bank case that collective bargaining does not end with the
execution of an agreement, being a continuous process, the duty to bargain

necessarily imposing on the parties the obligation to live up to the terms of

such a collective bargaining agreement if entered into, it is undeniable that
non-compliance therewith constitutes an unfair labor practice." 18

4.
Accordingly, the unfair labor practice strike called by the Union did
have the impress of validity. Rightly labor is justified in making use of such a
weapon in its arsenal to counteract what is clearly outlawed by the
Industrial Peace Act. That would be one way to assure that the objectives of
unionization and collective bargaining would not be thwarted. It could, of
course, file an unfair labor practice case before the Court of Industrial
Relations. It is not precluded, however, from relying on its own resources to
frustrate such an effort on the part of employer. So we have consistently
held and for the soundest of reasons. 19

There is this categorial pronouncement from the present Chief Justice:

"Again, the legality of the strike follows as a corollary to the finding of fact,
made in the decision appealed from which is supported by substantial
evidence to the effect that the strike had triggered by the Company's
failure to abide by the terms and conditions of its collective bargaining
agreement with the Union, by the discrimination, resorted to by the
company, with regard to hire and tenure of employment, and the dismissal
of employees due to union activities, as well as the refusal of the company
to bargain collectively in good faith." 20 As a matter of fact, this Court has
gone even further. It 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." 21

5.
It would thus appear that the decision now on appeal did not reflect
sufficient awareness of authoritative pronouncements coming from this
Court. What is worse, certain portions thereof yield the impression that an
attitude decidedly unsympathetic to labors resort to strike is evident. Such
should not be the case. The right to self-organization so sedulously guarded
by the Industrial Peace Act explicitly includes the right "to engage in
concerted activities for the purpose of collective bargaining and to the
mutual aid or protection." 22 From and after June 17, 1953 then, there

cannot be the least doubt that a strike as form of concerted activity has the
stamp of legitimacy. As a matter of law, even under the regime of
compulsary arbitration under the Court of Industrial Relations Act, 23 a
strike was by no means a forbidden weapon. Such is the thought embodied
in the opinion of Justice Laurel in Rex Taxicab Company v. Court of Industrial
Relations. 24 Thus: "In other words, the employee, tenant or laborer is
inhibited from striking or walking out of his employment only when so
enjoined by the Court of Industrial Relations and after a dispute has been
submitted thereto and pending award or decision by the court of such
dispute. It follows that, as in the present case, the employees or laborers
may strike before being ordered not to do so and before an industrial
dispute is submitted to the Court of Industrial Relations, subject to the
power of the latter, after hearing when public interest so requires or when
the dispute cannot, in its opinion, be promptly decided or settled, to order
them to return, with the consequence that if the strikers fail to return to
work, when so ordered, the court may authorize the employer to accept
other employees or laborers." 25 Former Chief Justice Paras, in a case not
too long before enactment of the Industrial Peace Act, had occasion to
repeat such a view. Thus: "As a matter of fact, a strike may not be staged
only when, during the pendency of an industrial dispute, the Court of
industrial Relations has issued the proper injunction against the laborers
(section 19, Commonwealth Act No. 103, as amended). Capital need not,
however, be apprehensive about the recurrence of strikes in view of the
system of compulsory arbitration by the Court of Industrial Relations." 26

A strike then, in the apt phrase of Justice J.B.L. Reyes, is "an institutionalized
factor of democratic growth." 27 This is to foster industrial democracy.
Implicit in such a concept is the recognization that concerning the ends
which labor considers worth while, its wishes are ordinarily entitled to
respect. Necessarily so, the choice as to when such an objective may be
attained by striking likewise belongs to it. There is the rejection of the
concept that an outside authority, even if governmental, should make the
decisions for it as to ends which are desirable and how they may be
achieved. The assumption is that labor can be trusted to determine for itself
when the right to strike may be availed of in order to attain a successful
fruition in their disputes with management. It is true that there is a
requirement, in the Act that before the employees may do so, they must file
with the Conciliation Service of the Department of Labor a notice of their
intention to strike. 28 Such a requisite however, as has been repeatedly
declared by this Court, does not have to be complied with in case of unfair
labor practice strike, which certainly is entitled to greater judicial protection
if the Industrial Peace Act is to be rendered meaningful. What has been said
thus far would demonstrate the unwarranted deviation of the decision now
on appeal from what is indicated by the law and authoritative decisions.

6.
Respondent Court was likewise impelled to consider the strike illegal
because of the violence that attended it. What is clearly within the law is the
concerted activity of cessation of work in order that a union's economic
demands may be granted or that an 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 a 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 by
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.

Respondent Court must have unduly impressed by the evidence submitted

by the Shell Company to the effect that the strike was marred by acts of
force, intimidation and violence on the evening of June 14 and twice in the
mornings of June 15 and 16, 1967 in Manila. Attention was likewise called to
the fact that even on the following day, with police officials stationed at the
strike-bound area, molotov bombs did explode and the streets were
obstructed with wooden planks containing protruding nails. Moreover, in the
branches of the Shell Company in Iloilo City as well as in Bacolod, on dates
unspecified, physical injuries appeared to have been inflicted on
management personnel. Respondent Court in the appealed decision did
penalize with loss of employment the ten individuals responsible for such
acts. Nor is it to be lost sight of that before the certification on June 27,
1967, one month had elapsed during which the Union was on strike. Except
on those few days specified then, the Shell Company could not allege that
the strike was conducted in a manner other than peaceful. Under the
circumstances, it would be going too far to consider that it thereby became
illegal. This is not by any means to condone the utilization of force by labor
to attain its objectives. It is only to show awareness that is labor conflicts,
the tension that fills the air as well as the feeling of frustration and
bitterness could break out in sporadic acts of violence. If there be in this
case a weighing of interests in the balance, the ban the law imposes on
unfair labor practices by management that could provoke a strike and its
requirement that it be conducted peaceably, it would be, to repeat,
unjustified, considering all the facts disclosed, to stamp the strike with

illegality. It is enough that individual liability be incurred by those guilty of

such acts of violence that call for loss of employee status.

Such an approach is reflected in our recent decisions. As was realistically

observed by the present Chief Justice, it is usually attended by "the
excitement, the heat and the passion of the direct participants in the labor
dispute, at the peak thereof ...." 29 Barely four months ago, in Insular Life
Assurance Co., Ltd. Employees Association v. Insular life Assurance Co., Ltd.,
30 there is the recognition by this Court, speaking through Justice Castro, of
picketing as such being "inherently explosive." 31 It is thus clear that not
every form of violence suffices to affix the seal of illegality on a strike or to
cause the loss of employment by the guilty party.

7.
In the light of the foregoing, there being a valid unfair labor practice
strike, the loss of employment decreed by respondent Court on all the Union
officers cannot stand. The premise on which such penalty was decreed was
the illegality of the strike. We rule differently. Hence, its imposition is
unwarranted. It is to be made clear, however, that because of the
commission of specific serious acts of violence, the Union's President,
Gregorio Bacsa, as well as its Assistant Auditor, Conrado Pea, did incur
such a
penalty. 32

On this point, it may be observed further that even if there was a mistake in
good faith by the Union that an unfair labor practice was committed by the
Shell Company when such was not the case, still the wholesale termination
of employee status of all the officers of the Union, decreed by respondent
Court, hardly commends itself for approval. Such a drastic blow to a labor
organization, leaving it leaderless, has serious repercussions. The
immediate effect is to weaken the Union. New leaders may of course
emerge. It would not be unlikely, under the circumstances, that they would
be less than vigorous in the prosecution of labor's claims. They may be
prove to fall victims to counsels of timidity and apprehension. At the
forefront of their consciousness must be an awareness that a mistaken
move could well mean their discharge from employment. That would be to
render the right to self-organization illusory. The plain and unqualified
constitutional command of protection to labor should not be lost sight of. 33
The State is thus under obligation to lend its aid and its succor to the efforts
of its labor elements to improve their economic condition. It is now
generally accepted that unionization is a means to such an end. It should be
encouraged. Thereby, labor's strength, what there is of it, becomes
solidified. It can bargain as a collectivity. Management then will not always

have the upper hand nor be in a position to ignore its just demands. That, at
any rate, is the policy behind the Industrial Peace Act. The judiciary and
administrative agencies in consrtruing it must ever be conscious of its
implications. Only thus may there be fidelity to what is ordained by the
fundamental law. For if it were otherwise, instead of protection, there would
be neglect or disregard. That is ito negate the fundamental principle that
the Constitution is the supreme law.

WHEREFORE, the decision of respondent Court of Industrial Relations of

August 5, 1967 is reversed, the finding of illegality of the strike declared by
the Shell Oil Workers' Union on May 25, 1967 not being in accordance with
law. Accordingly, the dismissal by the Shell Company on May 27, 1967 of
the eighteen security guards, 34 with the exception of Ernesto Crisostomo,
who was found guilty of committing a serious act of violence is set aside
and they are declared reinstated. The continuance of their status such is,
however, dependent on whether or not a security guard section is provided
for in the collective bargaining contract entered into after the expiration of
the contract that expired on December 31, 1969. The loss of employee
status of the officers of the Union, 35 decreed by respondent Court in its
decision, is likewise set aside, except as to Gregorio Bacsa and Conrado
Pena, both of whom did commit serious acts of violence. The termination of
the employment status of Nestor Samson, Jose Rey, Romeo Rosales, Antonio
Labrador and Sesinando Romero, who committed acts of violence not
serious in character, is also set aside, but while allowed to be reinstated,
they are not entitled to back pay. Ricardo Pagsibigan and Daniel Barraquel,
along with the aforesaid Gregorio Baesa, Conrado Pea and Ernesto
Crisostomo, were legally penalized with dismissal because of the serious
acts of violence committed by them in the course of the strike. The rest of
the employees laid off should be reinstated with back pay to be counted
from the date they were separated by virtue of the appealed decision, from
which should be deducted whatever earnings may have been received by
such employees during such period. The case is hereby remanded to
respondent Court for the implementation of this decision. In ascertaining the
back wages to which the security guards are entitled, it must likewise be
ascertained whether or not the security guard section is continued after
December 31, 1969. Without costs.

Concepcion, C.J., Zaldivar, Teehankee, Villamor and Makasiar, JJ., concur.

Castro, J., took no part.

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 100167

March 2, 1995

ISALAMA MACHINE WORKS CORPORATION, petitioner,

vs.
HON. LABOR RELATIONS COMMISSION, FIFTH DIVISION and ISALAMA
MACHINE WORKS CORPORATION LABOR UNION-WORKERS ALLIANCE TRADE
UNION AND/OR HENRY BAYGAN, NATHAN PURACAN, GREGORIO LAYSON, JR.,
NANDY VIRTUDAZO, JIMMY SACRO, CHARITO ESTRERA, DENISON AMBOAYEN,
BIENVENIDO CABIL, MELCHOR MARTINEZ, FLORIDAN BILAR, NOEL LAYSON,
EDISON ALMORADES, MA. CELESTINA CLEMEN, LEONCIO CUIZON, VENNIE
OPORTO, RODOLFO IGNACIO and ALMIRANTE ZAGADO, respondents.

VITUG, J.:

This petition for certiorari assails the Decision, 1 dated 09 June 1989, of the
National Labor Relations Commission ("NLRC"), Fifth Division, Cagayan de
Oro City, ordering the reinstatement, without back salaries, of private
respondents, with the exception of Henry Baygan, and the Resolution 2 of
30 April 1991 of the same division denying the motion for reconsideration
and, consistent with the decision, requiring petitioner corporation to pay
private respondents, in case the latter have not been reinstated actually or
by payroll, back salaries, without qualification or deductions, from 25 July
1989 until their reinstatement (RABX Case No. 10-02-00107-88).

On 25 March 1987, petitioner Isalama Machine Works Corporation and

private respondent Isalama Machine Works Corporation Labor Union-

Workers Alliance Trade Union entered into a collective bargaining agreement

("CBA") covering the period from 01 November 1986 to 03 October 1989.
Following the signing of the CBA, the union made repeated demands on the
corporation, allegedly to no avail, for it to comply with the CBA provisions,
i.e., to furnish the workers with safety shoes and free company laminated
IDs and, in general, to improve the employees' working conditions.

On 21 December 1987, the corporation paid the workers the 13th month
pay based on the average number of days actually worked during the year.
The union, through its president, private respondent Henry Baygan,
demanded that the 13th month pay should, instead, be made on the basis
of a full one month basic salary. The corporation countered that its own
computation of the 13th month pay accorded with the CBA provisions and
Presidential Decree No. 851.

On 05 January 1988, the union filed a notice of strike with the Department
of Labor and Employment, Region X, Cagayan de Oro, alleging the
commission of unfair labor practice and CBA violation by the corporation.
After several conferences, the National Conciliation and Mediation Board
("NCMB") succeeded in having the dispute amicably settled except for the
13th month pay differential which remained in contention. The union
insisted that the failure of the corporation to implement fully the 13th
month pay provision of the CBA amounted to unfair labor practice. The
corporation argued that the 13th month pay was a mere money claim and
therefore not a "strikeable issue." The case was ultimately indorsed to the
NLRC for compulsory arbitration.

The above notwithstanding, the union still went on strike on 15 February

1988. The wide publicity accorded the strike, according to petitioner, had
caused a dearth of work orders and withdrawal of existing job orders that
forced it to adopt a rotation system of work. On 22 February 1988, it also
filed with the Regional Arbitration Branch 10 of the NLRC a petition charging
the union with conducting an illegal strike and engaging in an unfair labor
practice (RABX Case No. 10-02-00107-88).

On 16 May 1988, the Executive Labor Arbiter rendered a decision holding

the strike to be illegal and declaring Baygan and the "participating" union
members 3 to have thereby lost their employment status. The dismissed
employees appealed the decision of the Executive Labor Arbiter to the NLRC
which, on 09 June 1989, promulgated its herein questioned decision
ordering, except for Baygan, the reinstatement, without back salaries, of the
dismissed union members.

The corporation filed a motion for reconsideration of the NLRC decision. On

30 April 1991, the NLRC resolved said motion thusly:

ACCORDINGLY, the Motion for Reconsideration is DENIED for lack of merit.

No further motion for reconsideration shall henceforth be entertained.

Consistent with the disposition in the challenged resolution of June 9, 1989,

the immediate reinstatement without backwages of the 16 afore-named
respondents to their former positions sans loss of seniority rights is hereby
ordered. The cut-off date for the forbearance in the payment of backwages
is up to July 24, 1989 which on record is the date of receipt of said disputed
Resolution. Henceforth, in the event the afore-named respondents have not
been reinstated actually or by payroll, appellee is directed to pay
backwages without qualifications or deductions from July 25, 1989 until they
are reinstated.

SO ORDERED. 4

On 23 May 1991, the union filed with the NLRC a motion for execution of the
judgment, asserting additionally that the corporation was operating under
the new trade name, "Golden Engineering," owned and managed by the
same family, of which change neither the employees nor the NLRC had been
formally notified.

On 03 June 1991, before the motion for execution could be acted upon by
the NLRC, the corporation filed the instant petition. The Court issued, on 01
July 1991, a temporary restraining order enjoining respondent NLRC from
implementing its 09 June 1989 decision and 30 April 1991 resolution.

Petitioner submits that private respondents cannot claim good faith in

staging their strike since the attention of both parties had been called by
the conciliator at the hearings before the NCMB to the "non-strikeable"
character of the 13th month pay. Private respondents continue to claim,
however, that the questioned 13th month pay should be considered a
"strikeable issue." They have averred that the illegal work rotation scheme
employed by petitioner has pushed them to the honest belief that the latter
has, once again, perpetrated an unfair labor practice.

Section 3 of the "Omnibus Rules and Regulations Implementing Presidential

Decree No. 851" generally states that all employees (subject to its
exclusionary clauses) shall be entitled to the 13th month pay. Its Section 4
provides that employees "who are receiving not more than P1,000.00 a
month" shall enjoy the 13th month pay "regardless of their position,
designation or employment status, and irrespective of the method by which
their wages are paid, provided that they have worked for at least one month
during the calendar year." If an employee has worked for an employer for
less than a year, he may still be entitled to the full 13th month pay provided
his monthly wage is P1,000.00 or less and he has worked for the employer
for at least one month.

The CBA contains, among other things, a "no strike" clause; thus

During the term of this Agreement, the Company stipulates and agrees that
there shall be no lockouts, and the Union in turn, as well as its officers and
agents, stipulate and agree that there shall be no strike or will they
authorize, instigate or engage in any work stoppage slowdown or any other
form of interruption of work by the employees and laborers that may
hamper or impede the operations of the business of the Company. 5

Parenthetically, the CBA likewise specifies that the company "agrees to

grant one (1) month basic salary to all employees-workers as Christmas
bonus" in compliance with Presidential Decree No. 851 but that a violation
thereof will not constitute an unfair labor practice by an employer.

Article 248 of the Labor Code, in turn, provides:

Art. 248. Unfair labor practices of employers. It shall be unlawful for an

employer to commit any of the following unfair labor practice:

xxx xxx xxx

(i)

To violate a collective bargaining agreement.

The above provision, however, must be read together with Article 261 of the
Labor Code; viz.:

Art. 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary

Arbitrators. The Voluntary Arbitrator or panel of Voluntary Arbitrators shall
have original and exclusive jurisdiction to hear and decide all unresolved
grievances arising from the interpretation or implementation of the
Collective Bargaining Agreement and those arising from the interpretation
or enforcement of company personnel policies referred to in the
immediately preceding article. Accordingly, violations of a Collective
Bargaining Agreement, except those which are gross in character, shall no
longer be treated as unfair labor practice and shall be resolved as
grievances under the Collective Bargaining Agreement. For purposes of this
article, gross violations of Collective Bargaining Agreement shall mean
flagrant and/or malicious refusal to comply with the other economic
provisions of such agreement. (Emphasis supplied.)

Hence, Section 1, Rule XIII, Book V, of the Omnibus Rules Implementing the
Labor Code expresses:

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 unfair labor practice and shall not be strikeable. . . .

In this case, the real reason for the strike is clearly traceable to the
unresolved dispute between the parties on 13th month pay differentials
under Presidential Decree No. 851, i.e., the proper manner of its application
and computation. The Court does not see this issue, given the aforequoted
provisions of the law and its implementing rules, to be constitutive of unfair
labor practice. Section 9 of Rules and Regulations Implementing Presidential
Decree No. 851, in fact, specifically states that "(n)onpayment of the
thirteenth-month pay provided by the Decree and (the) rules shall be
treated as money claims cases and shall be processed in accordance with
the Rules Implementing the Labor Code of the Philippines and the Rules of
the National Labor Relations Commission."

Private respondents, indeed, showed little prudence, if at all, in their

precipitate and ill-considered strike. The NLRC likewise found private

respondents to have violated Art. 264 (e) 6 of the Labor Code when they
blocked and barricaded the entrance of petitioner's premises preventing
free ingress and egress. Unfortunately for petitioner, however, the identity
of those who committed those illegal acts during the strike, except for
Baygan, had not been adequately established. Specifically, the NLRC said
that no sufficient evidence could be found "to pin down the afore-named 16
respondents as having committed illegal acts during the strike," 7 that could
warrant a loss of their employment status. 8 The dismissal of Baygan,
however, was warranted. Being the union president and leader of the strike,
his liability was greater than that of mere members, 9 and he had the
responsibility to ensure that his followers respected the law. 10

Petitioner tells us that it can no longer accept the strikers due to its decision
to close down its operations on account of damages and losses it has
incurred because of the strike, and that Golden Engineering, which has
taken over the business, is presently owned by one Alfredo Chan and not
Charlie Chan of petitioner corporation. 11 This claim raises factual issues
which evidently are still awaiting resolution by the NLRC in the motion for
execution now pending before it. It is there, not here, where these issues
can be finally resolved.

This case arose in 1988 or prior to the effectivity of Republic Act No. 6715;
accordingly, the back salaries of the dismissed employee should be limited
to three years, without deduction or qualification, following the rule in
Maranaw Hotels and Resorts Corporation vs. Court of Appeals. 12

WHEREFORE, the questioned decision and resolution of the NLRC are

AFFIRMED subject to the MODIFICATION that the back salaries ordered to be
paid should be limited, without deduction or qualification, to only three (3)
years. No costs.

SO ORDERED.

Feliciano, Romero, Melo and Francisco, JJ., concur.