NS COMMISSION and EDILBERTO M.

AL
VAREZ G.R. No. 106370, September 8, 1994

FACTS:

Alvarez having recovered from a work-

related accident, failed to report to work for a total of eighteen (18) working days with three (3) d
ays off. Under petitioner’s company rules, employees who incur unauthorized absences of six (6)
days or more are subject to dismissal. After the fourth warning, he was then terminated. Private r
espondent filed his complaint for illegal dismissal and the labor arbiter rendered a decision holdi
ng private respondent’s termination from employment as valid and justified.On appeal, NLRC, r
eserved and set aside the decision of the Labor Arbiter. Petitioner was ordered to reinstate Edilbe
rto M. Alvarez to his former position without loss of seniority rights but without backwages.

ISSUE:

Whether or not NLRC abused its discretion and acted beyond its jurisdiction by entertaining an a
ppeal that was filed out of time.

HELD:

On the issue of whether or not the appeal from the decision of the labor arbiter to the NLRC was
filed within the ten (10) day reglementary period, it is undisputed that private respondent receive
d a copy of the labor arbiter’s decision on 5 September 1991. Alvarez thus had up to 15 Septemb
er 1991 to perfect his appeal. Since this last mentioned date was a Sunday, private respondent ha
d to file his appeal on the next business day, 16 September 1991. Petitioner contends that the app
eal was filed only on 20 September 1991. Respondent NLRC however found that private respond
ent filed his appeal by registered mail on 16 September 1991, the same day that petitioner’s coun
sel was furnished copies of said appeal.

The contention that even assuming arguendo that the appeal was filed on time, the appeal fee wa
s paid four (4) days late (and, therefore, the appeal to the NLRC should be dismissed) likewise fa
ils to entirely empress us. In C.W. Tan Manufacturing v. NLRC, we held that “the broader intere
st of justice and the desired objective of deciding the case on the merits demand that the appeal b
e given due course.”

Saturday, December 15, 2012

BUENVIAJE et.al vs CA Case Digest

[G.R. No. 147806. November 12, 2002]

NERISSA BUENVIAJE, SONIA FLORES, BELMA OLIVIO, GENALYN PELOBELLO, MARY JANE
MENOR, JOSIE RAQUERO, ESTRELITA MANAHAN, REBECCA EBOL, and ERLINDA ARGA,
petitioners, vs. THE HONORABLE COURT OF APPEALS

FACTS

Petitioners were former employees of Cottonway Marketing Corp. (Cottonway), hired as promo girls
for their garment products. In October, 1994, after their services were terminated as the company
was allegedly suffering business losses, petitioners filed with the National Labor Relations
Commission (NLRC) a complaint for illegal dismissal, underpayment of salary, and non-payment of
premium pay for rest day, service incentive leave pay and thirteenth month pay against Cottonway
Marketing Corp. and Network Fashion Inc./JCT International Trading.

On December 19, 1995, Labor Arbiter Romulus S. Protasio issued a Decision finding petitioners'
retrenchment valid and ordering Cottonway to pay petitioners' separation pay and their proportionate
thirteenth month pay.

On appeal, the NLRC, in its Decision dated March 26, 1996, reversed the Decision of the Labor
Arbiter and ordered the reinstatement of petitioners without loss of seniority rights and other
privileges. Cottonway filed a motion for reconsideration which was denied by the Commission in a
Resolution dated July 31, 1996.

On August 30, 1996, Cottonway filed with the NLRC a manifestation stating that they have complied
with the order of reinstatement by sending notices dated June 5, 1996 requiring the petitioners to
return to work, but to no avail; and consequently, they sent letters to petitioners dated August 1,
1996 informing them that they have lost their employment for failure to comply with the return to
work order. Cottonway also filed a petition for certiorari with the Supreme Court which was
dismissed on October 14, 1996.

On November 6, 1997, petitioners filed with the NLRC a motion for execution of its Decision on the
ground that it had become final and executory. Meanwhile, Cottonway filed a motion for
reconsideration of the Supreme Court Resolution of October 14, 1996 dismissing the petition for
certiorari. The motion for reconsideration was denied with finality on January 13, 1997.

On March 4, 1997, Cottonway filed a manifestation with the NLRC reiterating their allegations in their
manifestation dated August 30, 1996, and further alleging that petitioners have already found
employment elsewhere. The Commission ruled that its Decision dated March 26, 1996 has become
final and executory and it is the ministerial duty of the Labor Arbiter to issue the corresponding writ of
execution to effect full and unqualified implementation of said decision.

Cottonway filed a petition for certiorari with the Court of Appeals seeking the reversal of the ruling of
the NLRC and the reinstatement. The appellate court granted the petition in its Decision dated
March 13, 2000. It ruled that petitioners' reinstatement was no longer possible as they deliberately
refused to return to work despite the notice given by Cottonway. The Court of Appeals thus held that
the amount of backwages due them should be computed only up to the time they received their
notice of termination.

ISSUE
Whether or not the Court of Appeals acted with grave abuse of discretion when it set aside the
Decision of the NLRC reinstating the petitioners and ordering the payment of backwages and other
benefits.

HELD

The decision of the NLRC dated March 26, 1996 has become final and executory upon the dismissal
by this Court of Cottonway’s petition for certiorari assailing said decision and the denial of its motion
for reconsideration. Said judgment may no longer be disturbed or modified by any court or tribunal. It
is a fundamental rule that when a judgment becomes final and executory, it becomes immutable and
unalterable, and any amendment or alteration which substantially affects a final and executory
judgment is void, including the entire proceedings held for that purpose. Once a judgment becomes
final and executory, the prevailing party can have it executed as a matter of right, and the issuance
of a writ of execution becomes a ministerial duty of the court. A decision that has attained finality
becomes the law of the case regardless of any claim that it is erroneous. The writ of execution must
therefore conform to the judgment to be executed and adhere strictly to the very essential
particulars.

To justify the modification of the final and executory decision of the NLRC dated March 26, 1996, the
Court of Appeals cited the existence of a supervening event, that is, the valid termination of
petitioners' employment due to their refusal to return to work despite notice from respondents
reinstating them to their former position.

We cannot concur with said ruling. Petitioners' alleged failure to return to work cannot be made the
basis for their termination. Such failure does not amount to abandonment which would justify the
severance of their employment. To warrant a valid dismissal on the ground of abandonment, the
employer must prove the concurrence of two elements: (1) the failure to report for work or absence
without valid or justifiable reason, and (2) a clear intention to sever the employer-employee
relationship.

We note that Cottonway, before finally deciding to dispense with their services, did not give the
petitioners the opportunity to explain why they were not able to report to work. The records also do
not bear any proof that all the petitioners received a copy of the letters. Cottonway merely claimed
that some of them have left the country and some have found other employment. This, however,
does not necessarily mean that petitioners were no longer interested in resuming their employment
at Cottonway as it has not been shown that their employment in the other companies was
permanent. It should be expected that petitioners would seek other means of income to tide them
over during the time that the legality of their termination is under litigation. Furthermore, petitioners
never abandoned their suit against Cottonway.

It appears that the supposed notice sent by Cottonway to the petitioners demanding that they report
back to work immediately was only a scheme to remove the petitioners for good. Petitioners’ failure
to instantaneously abide by the directive gave them a convenient reason to dispense with their
services. This the Court cannot allow. Cottonway cited Article 223 of the Labor Code providing that
the decision ordering the reinstatement of an illegally dismissed employee is immediately executory
even pending appeal as basis for its decision to terminate the employment of petitioners.

The foregoing provision is intended for the benefit of the employee and cannot be used to defeat
their own interest. The law mandates the employer to either admit the dismissed employee back to
work under the same terms and conditions prevailing prior to his dismissal or to reinstate him in the
payroll to abate further loss of income on the part of the employee during the pendency of the
appeal. But we cannot stretch the language of the law as to give the employer the right to remove an
employee who fails to immediately comply with the reinstatement order, especially when there is
reasonable explanation for the failure. If Cottonway were really sincere in its offer to immediately
reinstate petitioners to their former positions, it should have given them reasonable time to wind up
their current preoccupation or at least to explain why they could not return to work at Cottonway at
once. Cottonway did not do either. Instead, it gave them only five days to report to their posts and
when the petitioners failed to do so, it lost no time in serving them their individual notices of
termination.
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MARY ABIGAILS FOOD SERVICES INC vs CA Case Digest

[G.R. No. 140294. May 9, 2005]

MARY ABIGAILS FOOD SERVICES, INC., MARY RESURRECCION T. PUNO, petitioners, vs.
COURT OF APPEALS and PERLA B. BOLANDO, respondents.

FACTS

Sometime in September, 1997, private respondent Perla B. Bolando was hired by petitioner Mary
Abigail’s Food Services, Inc. (Abigail’s for brevity), to work as a counter-girl at its branch at the Rizal
Technological College. Bolando’s work schedule was from 10:00 o’clock a.m. to 8:00 o’clock p.m.,
except on Saturdays when she works from 9:00 o’clock a.m. to 4:00 o’clock p.m. She likewise works
on Sundays when required by management. Bolando receives a daily wage of P 180.00 with two (2)
complete meal allowances of P40.00.

On February 10, 1998, Bolando was given a memorandum by management terminating her services
due to excessive tardiness and falsification of time record.

Contending that her dismissal by reason of tardiness is unjust, harsh and unreasonable, and that
she was denied due process as she was not given an opportunity to be heard, Bolando filed with the
arbitration branch of the NLRC, National Capital Region, a complaint for illegal dismissal.

In a decision dated November 12, 1998, the Labor Arbiter rendered judgment for Bolando.

Petitioners received, thru counsel, their copy of the aforementioned decision of the Labor Arbiter on
December 23, 1998. As such, the last day of the 10-day period for them to take an appeal therefrom
to the NLRC under the Labor Code would be on January 2, 1999. Because January 2, 1999 was a
Saturday, petitioners filed their Notice of Appeal and Memorandum of Partial Appeal on the following
business day, January 4, 1999, a Monday, and subsequently posted a surety bond only on January
7, 1999.

In a Resolution dated February 26, 1999, the NLRC’s Third Division, finding that the required bond
was posted three (3) days beyond the 10-day reglementary period for perfecting an appeal,
dismissed petitioners’ appeal “for failure to perfect the same within the reglementary period”.

Petitioners moved for a reconsideration, asseverating that their late filing of the required bond should
not prejudice the perfection of their appeal considering the timely filing of their Notice of Appeal and
Memorandum of Partial

Appeal, and the liberal interpretation given to the provisions of the Labor Code in the matter of
appeal bond in cases involving monetary awards, as in the instant case. Such was denied by the
NLRC
Therefrom, petitioners went to the Court of Appeals on a petition for certiorari under Rule 65
maintaining that the NLRC should have relaxed the time-requirement for the posting of appeal bond,
additionally claiming that the long holiday (Christmas season) which followed their receipt on
December 23, 1998 of the Labor Arbiter’s decision rendered the timely filing of the required bond an
impossibility. The same was dismissed by the Court of Appeals and accordingly affirmed the
assailed decision of the NLRC.

ISSUE

Whether or not petitioners’ appeal with the NLRC was correctly dismissed for failure to perfect the
same by not posting the required bond within the reglementary period provided for by law.

HELD

The posting of a cash or surety bond is a requirement sine qua non for the perfection of an appeal
from the labor arbiter’s monetary award. Notably, the perfection of an appeal within the period and in
the manner prescribed by law is jurisdictional and non-compliance with the requirements therefore is
fatal and has the effect of rendering the judgment sought to be appealed final and executory. Such
requirement cannot be trifled with.

Here, while it is true that petitioners seasonably filed their notice of appeal and memorandum of
partial appeal, they admittedly posted the required bond three (3) days late. Hence, their appeal from
the decision of the Labor Arbiter to the NLRC was never perfected.

It is of no moment that petitioners’ notice of appeal and memorandum of partial appeal were timely
filed. We need

not stress that Article 223 of the Labor Code, as amended, is explicit that “an appeal by the
employer may be perfected only upon the posting of a cash or surety bond”.

The intention of the lawmakers to make the bond an indispensable requisite for the perfection of an
appeal by the employer is clearly limned in the provision that an appeal by the employer may be
perfected “only upon the posting of a cash or surety bond”. The word ‘only’ makes it perfectly clear,
that the lawmakers intended that the posting of a cash or surety bond by the employer to be the
exclusive means by which an employer's appeal may be perfected.

With the reality that herein petitioners failed to perfect their appeal by the non-payment of the appeal
bond within the ten-day period provided for by law, it follows that the judgment of the labor arbiter
has passed to the realm of finality. Neither, therefore, the NLRC nor the Court of Appeals may be
faulted for ruling against petitioners.

On a final note, it bears stressing that the right to appeal is merely statutory and one who seeks to
avail of it must comply with the statute or rules. The requirements for perfecting an appeal within the
reglementary period specified in the law must be strictly followed as they are considered
indispensable interdictions against needless delays.

G.R. No. 140753. April 30, 2003]

BENJAMIN S. SANTOS, petitioner, vs. ELENA VELARDE, TERESITA
GUTIERREZ, LAURA FIGUEROA, CONCHITA TRINIDAD,
CARMEN BALIDOY, GINA RAZ, ENGRACIA AMPONIN, JESUSA
BUDIONGAN, MAGDALENA CONDESA, NADIA OJANO and
EMILY MACAYAON, respondents.

DECISION
CORONA, J.:

This is a petition for review on certiorari of the Decision of the Court of

[1]

Appeals in CA-G.R. SP No. 52577 annulling the resolution dated July 9, 1997
of the National Labor Relations Commission (NLRC) and finding that
petitioner Benjamin S. Santos failed to perfect his appeal from the Labor
Arbiters Decision in NLRC NCR Case No. 00-11-07591-95 which found him
jointly and solidarily liable with Fordien Garments Ltd. Co. for the backwages,
allowances and other benefits due to certain illegally dismissed workers,
herein respondents. The dispositive portion of the assailed Decision of the [2]

Court of Appeals read:

WHEREFORE, the Resolution dated July 9, 1997, of respondent NLRC is hereby

ANNULLED and SET ASIDE.Consequently, the Decision dated October 3, 1996 of
Labor Arbiter Francisco S. Canizares, Jr., is REINSTATED.

SO ORDERED.

The facts of the case were succinctly summarized by the Court of

Appeals: [3]

Petitioners are among the forty (40) complainants in a complaint for illegal dismissal
filed against Fordien Garments Ltd. Co. and/or Benjamin Santos and docketed as
NLRC-NCR Case No. 00-11-07591-95.

Respondent Santos moved for the dismissal of the complaint, insofar as he is

concerned, on the ground of lack of cause of action, claiming that he is neither a
partner nor an officer of respondent Fordien Garments. His motion to dismiss was
denied on March 8, 1996, by the Labor Arbiter who forthwith required the parties to
submit their respective position papers.

In a Manifestation dated March 28, 1996, respondent Santos adopted his Motion to
Dismiss as his position paper.

Respondent partnership did not file any position paper.

Complainants complied on April 15, 1996. In their position paper, they narrate the
circumstances pertinent to their dismissal, thus:

1. Complainants Elena Velarde and 39 other persons, a list of which is attached hereto
as ANNEX A were employed by Respondent company Fordien Garments Ltd. As
factory sewers in the latters business. Complainants have been working with the
respondent company for approximately three years from June 15, 1992 to October 15,
1995 when they were illegally terminated therefrom;

2. Complainants were just surprised that upon arriving at work on October 15, 1995,
they were not allowed to enter the premises anymore. The representative of
Respondent told them that the business had already closed down and thus, it was
forced to terminate the services of the Complainants;

3. Complainants have not received any prior notice as to the intended closure of
Respondents business nor have they been given an opportunity to question and look
into the validity of their consequent dismissal, in violation of their rights to security of
tenure and to due process;

4. As a result of their termination from Respondents company, Complainants filed a

complaint with the Arbitration Branch of the NLRC on November 23, 1995 alleging
that they were illegally dismissed and pray for reinstatement or separation pay in lieu
of reinstatement. Complainants also alleged that they had been underpaid of their
salaries, they have not (sic) given their service incentive leave and 13th month pay,
and have not been reported to the SSS by respondent company;

5. It is important to note that Complainants learned soon after they were dismissed
that Respondent has continued its garment business in Bataan under a different name
employing an entirely new and different set of factory workers.

On October 3, 1996, the Labor Arbiter rendered a decision, the dispositive portion of
which reads:

WHEREFORE, the respondents are jointly and solidarily hereby ordered to reinstate
the complainants with full backwages, inclusive of allowances, and to their other
benefits or their monetary equivalent computed from the time their compensation
were (sic) withheld from them up to the time of their actual reinstatement.

The complainants backwages up to the date of this Decision as computed by Ms.

Julieta C. Nicolas, Labor Arbitration Associate of the Commissions NCR Arbitration
Branch are the following: (Please see attached xerox copy of the computation).
The respondents are also ordered to pay the complainants 10% of the monetary
awards as attorneys fee.

In lieu of reinstatement, the complainants may opt for payment of separation pay, in
which case, the respondents shall pay them their separation pay equivalent to one-half
month pay for every year of service, a fraction of 6 months being considered one year.

Article 223 of the Labor Code in part provides that, In any event, the decision of the
Labor Arbiter reinstating a dismissed or separated employee, insofar as the
reinstatement aspect is concerned, shall immediately be executory, even pending
appeal.The employee shall either be admitted back to work under the same terms and
conditions prevailing prior to his dismissal or separation or, at the option of the
employer, merely reinstated in the payroll. The posting of a bond by the employer
shall not stay the execution for reinstatement provided herein. Consequently, the
respondents are further directed to reinstate the complainants when they report for
work by virtue of this Decision.

SO ORDERED.

Petitioner appealed the Labor Arbiters decision and filed his Appeal
Memorandum with the NLRC within the reglementary period but did not pay
the bond on the ground that [T]he appeal is made by one who is not an
employer, hence there is no need for the posting of a cash or surety
bond. The NLRC treated this solitary statement as a motion seek[ing]
[4]

exemption from posting the requisite bond and denied the same. Petitioner
was then ordered to pay a cash or surety bond within 10 days from the receipt
of the decision. Thereafter, petitioner filed a Motion for Reduction of Surety or
[5]

Cash Bond and Admission of Reduced Bond which was unacted upon; thus,
[6]

petitioner filed a Motion to Admit Surety Bond on April 24, 1997. The NLRC
[7]

gave due course to the appeal and affirmed the decision of the Labor Arbiter,
with the modification that petitioner Santos be deleted as a party respondent.
The dispositive portion read:
[8]

Wherefore, prescinding from the foregoing considerations, the appeal is hereby given
due course.

Accordingly, the complaint as against respondent Santos is hereby dismissed and the
decision appealed from is AFFIRMED with MODIFICATION deleting respondent
Santos as party respondent.
 After respondents motion for reconsideration was denied, they filed a
petition for certiorari with this Court but the same was referred to the Court of
Appeals which rendered the assailed decision.
In this Petition for review, petitioner submits the following issues:

I. WHETHER OR NOT PETITIONERS APPEAL WAS DULY

PERFECTED IN SUCH A MANNER AS TO PREVENT THE DECISION
OF THE LABOR ARBITER FROM BECOMING FINAL AND
EXECUTORY;

II. WHETHER OR NOT THE PETITIONERS APPEAL, THE BELATED

POSTING OF THE BOND NOTWITHSTANDING, SHOULD BE GIVEN
DUE COURSE IN THE INTEREST OF SUBSTANTIAL JUSTICE.

The petition is without merit. The Court finds that petitioner failed to perfect
his appeal by the non-payment of the appeal bond within the 10-day period
provided by law. Thus, the decision of the Labor Arbiter became final and
executory upon the expiration of the reglementary period.
Article 223 of the Labor Code provides that:

Art. 223. Appeal

Decisions, awards, or orders of the Labor arbiter are final and executory unless
appealed to the Commission by any or both parties within ten (10) calendar days from
the receipt of such decisions, awards, or orders. xxx

xxx xxx xxx

In case of a judgment involving a monetary award, an appeal by the employer may be

perfected only upon the posting of a cash or surety bond issued by a reputable
bonding company duly accredited by the Commission in the amount equivalent to the
monetary award in the judgment appealed from.

xxx xxx xxx

This Court has repeatedly ruled that the posting of a cash or surety bond
is a requirement sine qua non for the perfection of an appeal from the labor
arbiters monetary award. The posting of a bond within the period provided by
[9]

law is not merely mandatory but jurisdictional. Failure to perfect an appeal has
the effect of rendering the judgment final and executory. [10]
 There have been instances when this Court allowed the belated filing of
the appeal bond. In Quiambao vs. NLRC, this Court had occasion to cite
[11]

cases where the belated filing of the appeal bond was justified:

Thus, in Rada vs. NLRC the bond was paid although belatedly (because the labor
arbiters Decision did not state the amount awarded as back wages and overtime pay).
On the other hand, in the case of Blancaflor v. NLRC the failure to give a bond was in
part due to the failure of the Labor Arbiter to state the exact amount of backwages and
separation pay due. There was therefore no basis for determining the amount of the
bond to be filed by private respondents therein. xxx xxx xxx

In Your Bus Line vs. NLRC, the petitioner was excused for its failure to give the bond
because it was misled by the notice of the decision which, stating the requirements for
perfecting an appeal, did not mention that a bond must be filed. The lawyer for
petitioner relied on such notice, and this Court, considering the circumstance as an
excusable mistake, allowed petitioner to file the bond and appeal from the decision of
the Labor Arbiter. xxx xxx xxx

It should be noted, however, that, in these cases, delayed payment was

allowed because the failure to pay was due to the excusable oversight or error
of a third party, that is, the failure of the labor arbiter to state in the notice of
decision the amount of award and the inclusion of the bond as among the
requirements for perfecting an appeal. In the case at bar, petitioners failure to
post a bond was due to his own negligent and mistaken belief that he was
exempt. The Labor Arbiters decision stated the exact award of backwages to
be paid by petitioner Santos. There was nothing in the decision which could
have given petitioner the impression that the bond was not necessary or that
he was excused from paying it.
In the aforecited case of Quiambao vs. NLRC, the Court pointed out that,
in the cases where belated posting of a bond was allowed, there was
substantial compliance with the rule. Thus, technical considerations had to
give way to considerations of equity and justice. In the present case, no
similar justifications exist. The eventual posting of the bond by petitioner
cannot be considered by this Court as substantial compliance warranting the
relaxation of the rules in the interest of justice. In the instances where the
Court acknowledged substantial compliance, the appellants, at the very least,
exhibited willingness to pay by posting a partial bond or filing a motion for
[12]

reduction of bond within the 10-day period provided by law. In the present
[13]

case, no such willingness was exhibited by petitioner. Petitioners failure to pay

the bond was due simply to his own mistaken conclusion that he was exempt
from paying because he was not the employer of respondents herein and thus
was not liable to them. His statement that [T]he appeal is made by one who is
not an employer, hence there is no need for the posting of a cash or surety
bond, was a reckless conclusion since there was no circumstance which
would have warranted such a belief.
The rule on perfection of appeals cannot be classified as a difficult
question of law which excused petitioners mistaken conclusion. Petitioner was
just too presumptuous in assuming that mere denial of his status as employer
exempted him from paying the appeal bond. The Court is reminded of Peftok
Integrated Services, Inc. vs. NLRC where the appellant also relied on his
[14]

erroneous belief that a surety bond was not required to perfect an appeal.He
therefore failed to put up a surety bond which resulted in the dismissal of his
appeal.
In view of the foregoing, the NLRC erred in giving due course to the
appeal despite the non-payment of the appeal bond within the reglementary
period. Treating the one-sentence declaration of petitioner as a motion for
exemption to pay bond and allowing him to post it well beyond the 10-day
period was tantamount to extending such period. This is not allowed under the
NLRC Rules of Procedure. In Lamzon vs. NLRC, petitioner filed a motion
[15] [16]

for extension to file the bond within the 10-day period but posted bond only on
the 13th day from receipt of the decision. This Court ruled that: [17]

xxx. Considering that the motion for extension to file appeal bond remained unacted
upon, petitioner, pursuant to the NLRC rules, should have seasonably filed the appeal
bond within the ten (10) day reglementary period following the receipt of the order,
resolution or decision of the NLRC to forestall the finality of such order, resolution or
decision. xxx The motion filed by petitioner in this case is tantamount to an extension
of the period for perfecting an appeal. As payment of the appeal bond is an
indispensable and jurisdictional requirement and not a mere technicality of law or
procedure, we find the challenged NLRC Resolution of October 26, 1993 and Order
dated January 11, 1994 in accordance with law.

In Lamzon, there was a proper motion filed which was not even for
exemption but merely for extension of time. Nevertheless, we ruled that
petitioner should have paid within the 10-day period, notwithstanding the
pendency of the motion, to forestall the finality of the decision appealed from.
The Court is aware that the NLRC is not bound by the technical rules of
procedure and is allowed to be liberal in the interpretation of rules in deciding
labor cases. However, such liberality should not be applied in the instant case
as it would render futile the very purpose for which the principle of liberality is
adopted. The liberal interpretation in favor of labor stems from the mandate
that the workingmans welfare should be the primordial and paramount
consideration. Validating petitioners unilateral act of declaring his exemption
[18]

from posting a bond will set a dangerous precedent since such act will only
serve to delay the case. From the decision of the Labor Arbiter, it took the
NLRC four months to rule on the motion for exemption to pay bond and
another four months to decide the merits of the case. This Court has
repeatedly ruled that delay in the settlement of labor cases cannot be
countenanced. Not only does it involve the survival of an employee and his
loved ones who are dependent on him for food, shelter, clothing, medicine
and education, it also wears down the meager resources of the workers to
[19]

the point that, not infrequently, they either give up or compromise for less than
what is due them. Also, in Favila vs. NLRC, we ruled that:
[20] [21]

While it is true that the NLRC Rules must be liberally construed and that the NLRC is
not bound by the technicalities of law and procedure, the NLRC itself must not be the
first to arbitrarily disregard specific provisions of the Rules which are precisely
intended to assist the parties in obtaining just, expeditious and inexpensive settlement
of labor disputes. In short, the rule on liberal construction is not a license to disregard
the rules of procedure. Rules of Procedure exist for a purpose, and to disregard such
rules in the guise of Liberal Construction would be to defeat such purpose. xxx.

WHEREFORE, the Court of Appeals Decision, dated August 4, 1999,

nullifying the resolution of the NLRC, dated July 9, 1997, and affirming the
Labor Arbiters decision, dated October 3, 1996, is hereby AFFIRMED.
SO ORDERED.
Rosewood Processing, Inc. vs National Labor Relations Commission
A Summary of a Decision of the Supreme Court of the Philippines

G.R. Nos. 116476-84 May 21, 1998

ROSEWOOD PROCESSING, INC., petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, NAPOLEON C. MAMON, ARSENIO GAZZINGAN, ROMEO C. VELASCO,
ARMANDO L. BALLON, VICTOR E. ALDEZA, JOSE L. CABRERA, VETERANS PHILIPPINE SCOUT SECURITY AGENCY,
and/or ENGR. SERGIO JAMILA IV, respondents.

Facts of the case:

Private respondents were security guards of Veterans Philippine Scout Security Agency. Some were assigned
to other companies and detailed to Rosewood, while others are re-assigned to other companies from
Rosewood, and still others were put on “floating” status without assignment. Most were underpaid or their
wages were never paid. All these circumstances led to the filing of a complaint for illegal dismissal,
underpayment of wages, and for nonpayment of overtime pay, legal holiday pay, premium pay for holiday
and rest day, thirteenth month pay, cash bond deposit, unpaid wages and damages was filed against
Veterans Philippine Scout Security Agency and/or Sergio Jamila IV (collectively referred to as the "security
agency," for brevity). Thereafter, petitioner Rosewood Processing, Inc. was impleaded as a third-party
respondent by the security agency. In due course, Labor Arbiter Ricardo C. Nora rendered a consolidated
Decision dated March 26, 1993 finding the security agency and Rosewood as solidarily liable to pay the
monetary benefits due the security guards.

Issue:

Whether or not petitioner Rosewood was solidarily liable with the security agency for the non-payment of
wages, as provided in Articles 106, 107 and 109 of the Labor Code.

Ruling:

The Supreme Court held that while it is undisputable that by operation of the provisions of Articles 106, 107
and 109, the Employer which is Rosewood has solidary liability for payment of wage differentials, such
liability however should only be to the extent of the period when the respondent guards were under its
employment. For the periods where said guards were assigned somewhere else, the Supreme Court held that
Rosewood cannot be liable. The Supreme Court further held that since there was no evidence presented
pointing to the fact that Rosewood conspired with the security agency in illegally dismissing the guards, it
cannot be made liable to pay back wages as provided in Article 109. Finally, since an order to pay back
wages and separation pay is invested with a punitive character, such that an indirect employer should not be
made liable without a finding that it had committed or conspired in the illegal dismissal, then Rosewood,
which was no longer the employer of the guards when they were dismissed, should not be compelled to pay
since it was clear that it took no part in the illegal dismissal.

Ong v. CA
Facts:

Petitioner Jaime Ong, on the one hand, and respondent spouses Miguel K.
Robles and Alejandra Robles, on the other hand, executed an "Agreement of
Purchase and Sale" respecting two parcels of land situated at Barrio Puri, San
Antonio, Quezon. On May 15, 1983, petitioner Ong took possession of the
subject parcels of land together with the piggery, building, ricemill, residential
house and other improvements thereon.

For failure of the vendee to pay the price as agreed upon, a complaint for
rescission of contract and recovery of properties with damages. Later, while
the case was still pending with the trial court, petitioner introduced major
improvements on the subject properties. These prompted the respondent
spouses to ask for a writ of preliminary injunction. The trial court granted the
application and enjoined petitioner from introducing improvements on the
properties except for repairs. Eventually, the trial court ordered the rescission
of the contract.

Issues:

(1) whether the contract entered into by the parties may be validly rescinded
under Article 1191 of the New Civil Code
(2) whether the parties had novated their original contract as to the time and
manner of payment

Held:

Article 1191 of the New Civil Code refers to rescission applicable to reciprocal
obligations. Reciprocal obligations are those which arise from the same cause,
and in which each party is a debtor and a creditor of the other, such that the
obligation of one is dependent upon the obligation of the other. They are to be
performed simultaneously such that the performance of one is conditioned
upon the simultaneous fulfillment of the other.

A careful reading of the parties' "Agreement of Purchase and Sale" shows that
it is in the nature of a contract to sell, as distinguished from a contract of sale.
In a contract of sale, the title to the property passes to the vendee upon the
delivery of the thing sold; while in a contract to sell, ownership is, by
agreement, reserved in the vendor and is not to pass to the vendee until full
payment of the purchase price. In a contract to sell, the payment of the
purchase price is a positive suspensive condition, the failure of which is not a
breach, casual or serious, but a situation that prevents the obligation of the
vendor to convey title from acquiring an obligatory force. The non-fulfillment
of the condition of full payment rendered the contract to sell ineffective and
without force and effect. It must be stressed that the breach contemplated in
Article 1191 of the New Civil Code is the obligor's failure to comply with an
obligation. Failure to pay, in this instance, is not even a breach but merely an
event which prevents the vendor's obligation to convey title from acquiring
binding force. Hence, the agreement of the parties in the case at bench may be
set aside, but not because of a breach on the part of petitioner for failure to
complete payment of the purchase price. Rather, his failure to do so brought
about a situation which prevented the obligation of respondent spouses to
convey title from acquiring an obligatory force.

Novation is never presumed, it must be proven as a fact either by express

stipulation of the parties or by implication derived from an irreconcilable
incompatibility between the old and the new obligation. In order for novation
to take place, the concurrence of the following requisites is indispensable: (1)
there must be a previous valid obligation; (2) there must be an agreement of
the parties concerned to a new contract; (3) there must be the extinguishment
of the old contract; and (4) there must be the validity of the new contract. The
aforesaid requisites are not found in the case at bench. The subsequent acts of
the parties hardly demonstrate their intent to dissolve the old obligation as a
consideration for the emergence of the new one.
as appellant to post the necessary appeal bond.

It allowing the withdrawal of the bond, the NLRC relied on the provision of Sec. 6 of Rule 6 of the
New Rules of Procedure which states that it is the employer who should post the cash or surety
bond. It stated that in the present case, it was the wife of Roehr who posted the cash bond, which
was contrary to the rules. In the Resolution of 6 March 1995, petitioners were also directed for the
last time to post the requisite appeal bond within ten (10) days from notice with a final warning that
the non-posting of the bond would eventually cause the dismissal of the appeal. Petitioners did not
file a motion for reconsideration.

On 5 June 1995 the NLRC issued the assailed resolution dismissing the appeal for petitioners'
failure to post the required bond. 6 The records showed that the Resolution of 6 March 1995 was
received by counsel for petitioners on 7 March 1995. 7 However, petitioners opted not to comply with the
Resolution. As a consequence, the NLRC considered the appealed decision as affirmed and thus had
become final and executory.

Petitioners moved for reconsideration contending that the "NLRC should not have allowed Rodriguez
to withdraw the cash bond because the money used in the posting of the cash bond belonged to
Roehr and that the order of the NLRC directing petitioners to post another appeal bond would not
only be off-tangent but certainly oppressive and confiscatory." 8 Their motion having been denied,
petitioners sought the present recourse by imputing grave abuse of discretion to the NLRC.

We must first examine the consequence of petitioners' inaction after the receipt by their counsel on 7
March 1995 of the NLRC Resolution of 6 March 1995. This Resolution allowed the withdrawal of the
cash bond by Ms. Carmen Rodriguez and ordered petitioners for the fourth time to post the requisite
appeal bond. As found by the NLRC and reflected in the records, there was no dispute that counsel
for petitioners had indeed received the Resolution. The failure to file a motion for reconsideration on
the pretext that he did not receive the Resolution was fatal and thus rendered it final and executory.

We have ruled that the implementing rules of respondent NLRC are unequivocal in requiring that a
motion for reconsideration of the order, resolution or decision of respondent Commission should be
seasonably filed as a precondition for pursuing any further or subsequent recourse, otherwise, the
order, resolution or decision would become final and executory after ten (10) calendar days from
receipt thereof. 9 Obviously, the rationale therefor is that the law intends to afford the NLRC an
opportunity to rectify such errors or mistakes it may have committed before resort to courts of justice can
be had. This merely adopts the rule that the function of a motion for reconsideration is to point out to the
court the error it may have committed and to give it a chance to correct itself. Subsequent issuance by the
NLRC of the questioned Resolution dated 5 June 1995 was, therefore, a mere surplusage sought only to
formalize the finality of the order. On the other hand, the motion for reconsideration thereon by petitioners
was futile and belated as there was already a final judgment.

But a far more compelling factor militates against petitioners which convinces us that the instant
petition is devoid of merit. It is obvious that since no appeal bond was posted by petitioners, no
appeal was perfected from the decision of the Labor Arbiter, for which reason the decision sought to
be appealed to the NLRC had in the meantime become final and executory and therefore immutable.

Appeals from decisions of the Labor Arbiter are governed by the following provisions of Rule VI of
the New Rules of Procedure of the NLRC —

Sec. 1. Period Appeal. — Decisions, awards, or orders of the Labor Arbiter and the
POEA are final and excutory unless appealed to the Commission by any or both
parties within ten (10) calendar days from receipt of such decision, awards or orders
 of the Labor Arbiter or the Administrator, and in case of a decision of the Regional
Director or his duly authorized Hearing Officer, within five (5) calendar days from
receipt of such decisions, awards or orders. . . .

Sec. 3. Requisites for Perfection of Appeal. — The appeal shall be filed within the
reglementary period as provided in Sec. 1 of this Rule; shall be under oath with proof
of payment of the required appeal fee and the posting of a cash or surety bond as
provided in Sec. 5 of this Rule; shall be accompanied by memorandum of appeal. . . .

Sec. 6. Bond. — In case the decision of a Labor Arbiter involves a monetary award,
an appeal by the employer shall be perfected only upon the posting of a cash or
surety bond issued by a reputable bonding company duly accredited by the
Commission or the Supreme Court in the amount equivalent to the monetary award.

Thus it is clear that the appeal from any decision, award or order of the Labor Arbiter to the NLRC
shall be made within ten (10) calendar days from receipt of such decision, award or order, and must
be under oath, with proof of payment of the required appeal fee accompanied by a memorandum of
appeal. In case the decision of the Labor Arbiter involves a monetary award, the appeal is deemed
perfected only upon the posting of a cash or surety bond also within ten (10) calendar days from
receipt of such decision in an amount equivalent to the monetary award. The mandatory filing of a
bond for the perfection of an appeal is evident from the aforequoted provision that the appeal may
be perfected only upon the posting of cash or surety bond. It is not an excuse that the over P2
million award is too much for a small business enterprise, like the petitioner company, to shoulder.
The law does not require its outright payment, but only the posting of a bond to ensure that the
award will be eventually paid should the appeal fail. What petitioners have to pay is a moderate and
reasonable sum for the premium for such bond. 10

BIOGENERICS filed its "Memorandum of Appeal" and "Motion to Reduce Appeal Bond" with the NLRC
on 13 June 1994 or exactly on the tenth day of the reglementary period. Having failed to adduce a valid
justification for the reduction of the appeal bond to overcome the mandatory nature of the requirement,
the NLRC denied its motion but granted petitioners a new period of ten (10) days within which to post the
bond. But, again, petitioners failed to post the bond; instead, they moved for reconsideration. On this
score alone, the appeal of BIOGENERICS should have been dismissed outright for not having been
perfected on time. That the NLRC entertained the motion for reconsideration and even went to the extent
of further granting petitioners three (3) extensions, or a total of thirty (30) days including the first
extension, within which to post the appeal bond, indicated its over-leniency to disregard the Labor Code
as well as its own Rules to favor petitioners. Worse, petitioners gravely abused the liberality extended by
the Labor Tribunal when they persistently failed and refused to post the bond despite the extensions
given them.

Finally, in an attempt to provide their petition a semblance of merit, petitioners maintain that the
NLRC should have not allowed Ms. Carmen Rodriguez to withdraw the appeal bond as the money
used for the purpose allegedly belonged to petitioner Roehr. This last-ditch effort to thwart the claim
of private respondent Panganiban deserves scant consideration. Petitioners failed to substantiate
this claim.

WHEREFORE, the petition is dismissed. The assailed Resolution of the National Labor Relations
Commission dated 5 June 1995, respectively, and 24 October 1995 are AFFIRMED. 1âwphi1.nêt

SO ORDERED.
11,2003; P NO, !."FACTS FSFI) FILIPINAS SYSTEMS, INC. VS. NLRC;
G. R. NO. 153859; DECEMBER "
A complaint for illegal dismissal and monetary claims were filed by
private respondentsagainst their employer, Filipinas Systems, Inc. (Filsystems for
brevity). Filsystems failed to filei t s p o s i t i o n p a p e r i n s p i t e o f t h e o r d e r o f
t h e L a b o r A r b i t e r p r o m p t i n g t h e L a b o r A r b i t e r t o decide in favor of
respondents in the illegal dismissal complaints and awarded their
monetary claims. Filsystems appealed to the NL ! s"bmitting for the first
time evidence showing thatrespondents were pro#ect employees whose
dismissal was d"e to the discontin"ation of thep r o # e c t t h e y w e r e a s s i g n e d .
e s p o n d e n t s $ " e s t i o n e d t h e # " r i s d i c t i o n o f t h e N L ! o v e r t h e appeal
as petitioner belatedly file the appeal bond however, the NL ! ass"med #"risdiction
andr e m a n d e d t h e c a s e t o t h e L a b o r A r b i t e r f o r f " r t h e r p r o c e e d i n g s .
espondents
‟
motion forreconsideration was denied so they appeal to the !A via a %etition
for !ertiorari. &he !A r"ledthat the NL ! lac's #"risdiction over the appeal for late
filing of the appeal bond and reinstatedthe Labor Arbiter
‟
s decision. %eitioner
‟
s motion for reconsideration was denied.
ISS E"
hether or not the NL ! ac$"ired #"risdiction over petitioners appeal
R LING" NO.
Art. **+ of the Labor !ode and Section of the NL ! "les of %roced"re provide a
ten( -) day period from receipt of the decision of the Arbiter to file an
appeal together with
ana p p e a l b o n d i f t h e d e c i s i o n i n v o l v e s a m o n e t a r y a w a r d . ecords sh
o w e d t h a t p e t i t i o n e r s received a copy of the Arbiters decision on /ctober + . &heir
memorand"m of appeal was datedNovember 0, b"t their appeal bond was
e1ec"ted only on November 23 no partial payment of the bond was made
within the reglementary period nor did they s"bmit an e1planation for itslate
filing. &hereof, the late filing of the bond divested the NL ! of its #"risdiction to
entertainpetitioner
‟
s appeal. F"rther, petitioners failed to s"bmit their evidence to the Labor
Arbiter inspite of the opport"nities given them and s"bmit the evidence
instead to the NL ! when thedecision became adverse to them. &he !o"rt
dismissed the petition3 the decision of the Labor Arbiter was reinstated with the
modification that if reinstatement of respondents is not feasible,petitioner sho"ld pay

their separation pay in accordance with law .

G.R. No. 163786 February 16, 2005

TIMES TRANSPORTATION COMPANY, INC., petitioner,

vs.
SANTOS SOTELO, CONRADO B. SALONGA, SAMSON C. SOLIVEN, BIENVENIDO F. MALANA,
JR., JOVITO V. ALCAUSIN, EFREN A. RAMOS, RODRIGO P. CABUSAO, JR., EDGAR G.
PONCE, RONALD ALLAN PARINAS, RODEL PALO, REYNALDO R. RAGUCOS, MARIO T.
TOLEDO, BERNARDINO PADUA, DOMINGO P. BILAN, ARNEL VALLEDORES, RAMON
RETUTA, JR., PANTALEON TABANGIN, ALBERTO PANDO, VIRGILIO E. OBAR, EULOGIO D.
DIGA, SR., DANIEL LLADO, RONILO BALTAZAR, MARITO PANDO, LEOPOLDO FUNTILA,
GERRY B. CARRIDO, WILLIAM A. TABUCOL, ANTONIO L. RAMOS, SR., PABLO P. PADRE,
HENRY B. GANIR, TEOTIMO R. REQUILMAN, CIPRIANO ULPINDO, ROGER BABIDA, SAMUEL
PERALTA, BONIFACIO TUMALIP, EDGAR ABLOG, EFREN ABELLA, RODRIGO RABOY,
RENATO SILVA, GEORGE PERALTA, RONILO BARBOSA, JULIAN BUENAFE, FLORENCIO
CARIÑO, BERNIE TUMBAGA, RODRIGO CABAÑERO, ELMER TAMO, LEOPOLDO NANA,
NELIE BOSE, DEMETRIO HERRERA, RODOLFO ABELLA, ALVIN ELEFANTE, REDENTOR
GARCIA, JERRY PALACPAC, JOSE PAET, ARTHUR IBEA, ELIZER BORJA, EDMUNDO
ASPIRAS, JOSE V. PESCADOR, WILLIAM GARCIA, ERNESTO P. MANGULABNAN, BENJAMIN
B. BLAZA, JOSELITO P. CACABELOS, LEON R. GALANTA, JR., MARIANO P. TEJADA,
PEDRITO C. ORTIZ, JR., NESTOR E. BALCITA, FLOR BURBANO, HERNANDO A. PIMENTEL,
ALEX A. GOMEZ, ARNALDO P. BOSE, NAPOLEON BALDERAS, CARLINO V. RULLODA, JR.,
RANDY R. AMODO, CORNELIO R. RAGUINI, ROBERT CERIA, JUANITO U. UGALDE,
ALBERTO PAJO, ALFREDO VALOROSO, RUFINO ADRIATICO, BARTOLOME C.
EDROSOLAN, JR., REYNANTE A. ALCAIN, NOELITO SUSA and VICENTE NAVA, respondents.

DECISION

YNARES-SANTIAGO, J.:

This petition for review on certiorari assails the decision of the Court of Appeals dated January 30,
2004 in CA-G.R. SP No. 75291,1 which set aside the decision and resolution of the National Labor
Relations Commission, and its resolution dated May 24, 20042 denying reconsideration thereof.

Petitioner Times Transportation Company, Inc. (Times) is a corporation engaged in the business of
land transportation. Prior to its closure in 1997, the Times Employees Union (TEU) was formed and
issued a certificate of union registration. Times challenged the legitimacy of TEU by filing a petition
for the cancellation of its union registration.

On March 3, 1997, TEU held a strike in response to Times’ alleged attempt to form a rival union and
its dismissal of the employees identified to be active union members. Upon petition by Times, then
Labor Secretary, and now Associate Justice of this Court, Leonardo A. Quisumbing, assumed
jurisdiction over the case and referred the matter to the NLRC for compulsory arbitration. The case
was docketed as NLRC NCR CC-000134-97. A return-to-work order was likewise issued on March
10, 1997.

In a certification election held on July 1, 1997, TEU was certified as the sole and exclusive collective
bargaining agent in Times. Consequently, TEU’s president wrote the management of Times and
requested for collective bargaining. Times refused on the ground that the decision of the Med-Arbiter
upholding the validity of the certification election was not yet final and executory.

TEU filed a Notice of Strike on August 8, 1997. Another conciliation/mediation proceeding was
conducted for the purpose of settling the brewing dispute. In the meantime, Times’ management
implemented a retrenchment program and notices of retrenchment dated September 16, 1997 were
sent to some of its employees, including the respondents herein, informing them of their
retrenchment effective 30 days thereafter.

On October 17, 1997, TEU held a strike vote on grounds of unfair labor practice on the part of
Times. For alleged participation in what it deemed was an illegal strike, Times terminated all the 123
striking employees by virtue of two notices dated October 26, 1997 and November 24, 1997.3 On
November 17, 1997, then DOLE Secretary Quisumbing issued the second return-to-work order
certifying the dispute to the NLRC. While the strike was ended, the employees were no longer
admitted back to work.

In the meantime, by December 12, 1997, Mencorp Transport Systems, Inc. (Mencorp) had acquired
ownership over Times’ Certificates of Public Convenience and a number of its bus units by virtue of
several deeds of sale.4 Mencorp is controlled and operated by Mrs. Virginia Mendoza, daughter of
Santiago Rondaris, the majority stockholder of Times.

On May 21, 1998, the NLRC rendered a decision5 in the cases certified to it by the DOLE, the
dispositive portion of which read:

WHEREFORE, the respondents’ first strike, conducted from March 3, 1997 to March 12, 1997, is
hereby declared LEGAL; its second strike, which commenced on October 17, 1997, is hereby
declared ILLEGAL. Consequently, those … 23 persons who participated in the illegal strike … are
deemed to have lost their employment status and were therefore validly dismissed from
employment: …

The respondents’ "Motion to Implead Mencorp Transport Systems, Inc. and/or Virginia Mendoza
and/or Santiago Rondaris" is hereby DENIED for lack of merit.

SO ORDERED.6

Times and TEU both appealed the decision of the NLRC, which the Court of Appeals affirmed on
November 17, 2000.7 Upon denial of its motion for reconsideration, Times filed a petition for review
on certiorari,8 docketed as G.R. Nos. 148500-01, now pending with the Third Division of this Court.
TEU likewise appealed but its petition was denied due course.

In 1998, and after the closure of Times, the retrenched employees, including practically all the
respondents herein, filed cases for illegal dismissal, money claims and unfair labor practices against
Times before the Regional Arbitration Branch in San Fernando City, La Union. Times filed a Motion
to Dismiss but on October 30, 1998, the arbitration branch ordered the archiving of the cases
pending resolution of G.R. Nos. 148500-01.9

The dismissed employees did not interpose an appeal from said Order. Instead, they withdrew their
complaints with leave of court and filed a new set of cases before the National Capital Region
Arbitration Branch. This time, they impleaded Mencorp and the Spouses Reynaldo and Virginia
Mendoza. Times sought the dismissal of these cases on the ground of litis pendencia and forum
shopping. On January 31, 2002, Labor Arbiter Renaldo O. Hernandez rendered a decision stating:

WHEREFORE, premises considered, judgment is hereby entered FINDING that the dismissals of
complainants, excluding the expunged ones, by respondent Times Transit (sic) Company, Inc.
effected, participated in, authorized or ratified by respondent Santiago Rondaris constituted the
prohibited act of unfair labor practice under Article 248(a) and (e) of the Labor Code, as amended
and hence, illegal and that the sale of said respondent company to respondents Mencorp Transport
Systems Company (sic), Inc. and/or Virginia Mendoza and Reynaldo Mendoza was simulated and/or
effected in bad faith, ORDERING:

1. respondents Times Transit (sic) Company, Inc. and Santiago Rondaris as the officer
administratively held liable of the unfair labor practice herein to CEASE AND DESIST
therefore (sic);

2. respondents Times Transit (sic) Company, Inc. and/or Santiago Rondaris and Mencorp
Transport Systems Company, Inc. and/or Virginia Mendoza and Reynaldo Mendoza to cause
the reinstatement therein of complainants to their former positions without loss of seniority
rights and benefits and to pay jointly and severally said complainants full back wages
reckoned from their respective dates of illegal dismissal as above-indicated, until actually
reinstated or in lieu of such reinstatement, at the option of said complainants, payment of
their separation pay of one (1) month pay per year of service, reckoned from their date of
hire as above-indicated, until actual payment and/or finality of this decision;

3. and finally for respondents Times Transit (sic) Company, Inc. and/or Santiago Rondaris to
pay jointly and severally said complainants as moral and exemplary damages the combined
amount of P75,000.00 and 5% of the total award as attorney’s fees.

All other claims of complainants are dismissed for lack of merit.

….

SO ORDERED.10

The monetary award amounted to P43,347,341.69. On March 4, 2002, Times, Mencorp and the
Spouses Mendoza submitted their respective memorandum of appeal to the NLRC with motions to
reduce the bond. Mencorp posted a P5 million bond issued by Security Pacific Assurance Corp.
(SPAC). On April 30, 2002, the NLRC issued an order disposing of the said motion, thus:

WHEREFORE, premises considered, the Urgent Motion for Reduction of Bond is denied for lack of
merit. Respondents are hereby ordered to complete the bond equivalent to the monetary award in
the Labor Arbiter’s Decision, within an unextendible period of ten (10) days from receipt hereof,
otherwise, the appeal shall be dismissed for non-perfection thereof.

SO ORDERED.11

On May 18, 2002, Times moved to reconsider said order arguing mainly that it did not have sufficient
funds to put up the required bond. On July 26, 2002, Mencorp and the Spouses Mendoza posted an
additional P10 million appeal bond. Thus far, the total amount of bond posted was P15 million. On
August 7, 2002, the NLRC granted the Motion for Reduction of Bond and approved the P10 million
additional appeal bond.12

On September 17, 2002, the NLRC rendered its decision, stating:

WHEREFORE, the foregoing premises duly considered, the decision appealed from is hereby
VACATED. The records of these consolidated cases are hereby ordered REMANDED to the
Arbitration Branch of origin for disposition and for the conduct of appropriate proceedings for a
decision to be rendered with dispatch.
SO ORDERED.13

Reconsideration thereof was denied by the NLRC on October 30, 2002. Thus, the respondents
appealed to the Court of Appeals by way of a petition for certiorari, attributing grave abuse of
discretion on the NLRC for: (1) not dismissing the appeals of Times, Mencorp and the Spouses
Mendoza despite their failure to post the required bond; (2) remanding the case for further
proceedings despite the sufficiency of the evidence presented by the parties; (3) not sustaining the
labor arbiter’s ruling that they were illegally dismissed; (4) not affirming the labor arbiter’s ruling that
there was no litis pendencia; and (5) not ruling that Times and Mencorp are one and the same
entity.
1ªv vphi1.nét

On January 30, 2004, the Court of Appeals rendered the decision now assailed in this petition, the
decretal portion of which states:

WHEREFORE, based on the foregoing, the instant petition is hereby GRANTED. The assailed
Decision and Resolution of the NLRC are hereby SET ASIDE. The Decision of the Labor Arbiter
dated January 31, 2002 is hereby REINSTATED.

SO ORDERED.14

Times, Mencorp and the Spouses Mendoza filed Motions for Reconsideration, which were denied in
a resolution promulgated on May 24, 2004. Hence, this petition for review based on the following
grounds:

I. Petitioner respectfully maintains that the Honorable Court a quo, in not dismissing the
complaints against the petitioner on the ground of lis pendens, decided the matter in a way
not in accord with existing laws and applicable decisions of this Honorable Court.

II. Petitioner, further, respectfully maintains that the Honorable Court a quo, in determining
that herein petitioners hitherto lost their right to appeal to the NLRC on account of their
purported failure to post an adequate appeal bond, radically departed from the accepted and
usual course of judicial proceedings, not to mention resolved said issue in a manner and
fashion antithetical to existing jurisprudence.

III. Petitioner, furthermore, respectfully maintains that the Honorable Court a quo, in applying
wholesale the doctrine of piercing the veil of corporate fiction and finding Times’ co-
petitioners liable for the former’s obligations, resolved the matter in a manner contradictory to
existing applicable laws and dispositions of this Honorable Court, and departed from the
accepted and usual course of judicial proceedings with regard to admitting evidence to
sustain the application of such principle.15

The petition lacks merit.

As to the first issue, Times argues that there exists an identity of issues, rights asserted, relief
sought and causes of action between the present case and the one concerning the legality of the
second strike, which is now pending with the Third Division of this Court. As such, the Court of
Appeals erred in not dismissing the case at bar on the ground of litis pendencia.

Litis pendencia as a ground for dismissal of an action refers to that situation wherein another action
is pending between the same parties for the same cause of action and the second action becomes
unnecessary and vexatious.16 We agree with the findings of the Court of Appeals that there is no litis
pendencia as the two cases involve dissimilar causes of action. The first case, now pending with the
Third Division, pertains to the alleged error of the NLRC in not upholding the dismissal of all the
striking employees (not only of the 23 strikers so declared to have lost their employment) in spite of
the latter’s ruling that the second strike was illegal. None of the respondents herein were among
those deemed terminated by virtue of the NLRC decision.

In the instant case, the issue is the validity of the retrenchment implemented by Times prior to the
second strike and the subsequent dismissal of the striking employees. As such, there can be no
question that respondents were still employees of Times when they were retrenched. In short, the
outcome of this case does not hinge on the legality of the second strike or the validity of the
dismissal of the striking employees, which issues are yet to be resolved in G.R. Nos. 148500-01.
Consequently, litis pendencia does not arise.

Anent the issue on whether Times perfected its appeal to the NLRC, the right to appeal is a statutory
right and one who seeks to avail of the right must comply with the statute or rules. The rules for
perfecting an appeal must be strictly followed as they are considered indispensable interdictions
against needless delays and for orderly discharge of judicial business.17 Section 3(a), Rule VI of the
NLRC Rules of Procedure outlines the requisites for perfecting an appeal, to wit:

SECTION 3. Requisites for Perfection of Appeal. — a) The Appeal shall be filed within the
reglementary period as provided in Section 1 of this Rule and shall be under oath with proof of
payment of the required appeal fee and the posting of a cash or surety bond as provided in Section
6 of this Rule; shall be accompanied by memorandum of appeal which shall state the grounds relied
upon and the arguments in support thereof; the relief prayed for and a statement of the date when
the appellant received the appealed decision, order or award and proof of service on the other party
of such appeal.

A mere notice of appeal without complying with the other requisites aforestated shall not stop the
running of the period for perfecting an appeal. (Emphasis supplied)

Article 223 of the Labor Code provides that in case of a judgment involving a monetary award, an
appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a
reputable bonding company duly accredited by the NLRC in the amount equivalent to the monetary
award in the judgment appealed from. The perfection of an appeal in the manner and within the
period prescribed by law is not only mandatory but also jurisdictional, and failure to perfect an appeal
has the effect of making the judgment final and executory.18 However, in several cases, we have
relaxed the rules regarding the appeal bond especially where it must necessarily yield to the broader
interest of substantial justice.19 The Rules of Procedure of the NLRC allows for the reduction of the
appeal bond upon motion of the appellant and on meritorious grounds.20 It is required however that
such motion is filed within the reglementary period to appeal.

The records reveal that Times, Mencorp and the Spouses Mendoza’s motion to reduce the bond
was denied and the NLRC ordered them to post the required amount within an unextendible period
of ten (10) days.21 However, instead of complying with the directive, Times filed another motion for
reconsideration of the order of denial. Several weeks later, Mencorp posted an additional bond,
which was still less than the required amount. Three (3) months after the filing of the motion for
reconsideration, the NLRC reversed its previous order and granted the motion for reduction of
bond.1awphi1.nét

We agree with the Court of Appeals that the foregoing constitutes grave abuse of discretion on the
part of the NLRC. By delaying the resolution of Times’ motion for reconsideration, it has
unnecessarily prolonged the period of appeal. We have held that to extend the period of appeal is to
prolong the resolution of the case, a circumstance which would give the employer the opportunity to
wear out the energy and meager resources of the workers to the point that they would be
constrained to give up for less than what they deserve in law.22 The NLRC is well to take notice of our
pronouncement in Santos v. Velarde:23

The Court is aware that the NLRC is not bound by the technical rules of procedure and is allowed to
be liberal in the interpretation of rules in deciding labor cases. However, such liberality should not be
applied in the instant case as it would render futile the very purpose for which the principle of
liberality is adopted. … From the decision of the Labor Arbiter, it took the NLRC four months to rule
on the "motion" for exemption to pay bond and another four months to decide the merits of the case.
This Court has repeatedly ruled that delay in the settlement of labor cases cannot be countenanced.
Not only does it involve the survival of an employee and his loved ones who are dependent on
him…, it also wears down the meager resources of the workers...24 (Emphasis supplied)

The NLRC’s reversal of its previous order of denial lacks basis. In the first motion, Mencorp and
Spouses Mendoza moved for the reduction of the appeal bond on the ground that the computation of
the monetary award was highly suspicious and anomalous. In their motion for reconsideration of the
NLRC’s denial, Mencorp and the Spouses Mendoza cited financial difficulties in completing the
appeal bond. Neither ground is well-taken.

Times and Mencorp failed to substantiate their allegations of errors in the computation of the
monetary award. They merely asserted "inaccuracies" without specifying which aspect of the
computation was inaccurate. If Times and Mencorp truly believed that there were errors in the
computation, they could have presented their own computation for comparison. As to the claim of
financial difficulties, suffice it to say that the law does not require outright payment of the total
monetary award, but only the posting of a bond to ensure that the award will be eventually paid
should the appeal fail. What Times has to pay is a moderate and reasonable sum for the premium
l^vvphi1.net

for such bond.25 The impression thus created was that Times, Mencorp and the Spouses Mendoza
were clearly circumventing, if not altogether dodging, the rules on the posting of appeal bonds.

On the propriety of the piercing of the corporate veil, Times claims that "to drag Mencorp, [Spouses]
Mendoza and Rondaris into the picture on the purported ground that a fictitious sale of Times’ assets
in their favor was consummated with the end in view of frustrating the ends of justice and for
purposes of evading compliance with the judgment is … the height of judicial arrogance."26 The Court
of Appeals believes otherwise and reckons that Times and Mencorp failed to adduce evidence to
refute allegations of collusion between them.

We have held that piercing the corporate veil is warranted only in cases when the separate legal
entity is used to defeat public convenience, justify wrong, protect fraud, or defend crime, such that in
the case of two corporations, the law will regard the corporations as merged into one.27 It may be
allowed only if the following elements concur: (1) control—not mere stock control, but complete
domination—not only of finances, but of policy and business practice in respect to the transaction
attacked; (2) such control must have been used to commit a fraud or a wrong to perpetuate the
violation of a statutory or other positive legal duty, or a dishonest and an unjust act in contravention
of a legal right; and (3) the said control and breach of duty must have proximately caused the injury
or unjust loss complained of.28

The following findings of the Labor Arbiter, which were cited and affirmed by the Court of Appeals,
have not been refuted by Times, to wit:
 1. The sale was transferred to a corporation controlled by V. Mendoza, the daughter of
respondent S. Rondaris of [Times] where she is/was also a director, as proven by the articles
of incorporation of [Mencorp];

2. All of the stockholders/incorporators of [Mencorp]: Reynaldo M. Mendoza, Virginia R.

Mendoza, Vernon Gerard R. Mendoza, Vivian Charity R. Mendoza, Vevey Rosario R.
Mendoza are all relatives of respondent S. Rondaris;

3. The timing of the sale evidently was to negate the employees/complainants/members’

right to organization as it was effected when their union (TEU) was just organized/requesting
[Times] to bargain;

5. [Mencorp] never obtained a franchise since its supposed incorporation in 10 May 1994 but
at present, all the buses of [Times] are already being run/operated by respondent [Mencorp],
the franchise of [Times] having been transferred to it.29

We uphold the findings of the labor arbiter and the Court of Appeals. The sale of Times’ franchise as
well as most of its bus units to a company owned by Rondaris’ daughter and family members, right
in the middle of a labor dispute, is highly suspicious. It is evident that the transaction was made in
order to remove Times’ remaining assets from the reach of any judgment that may be rendered in
the unfair labor practice cases filed against it.

WHEREFORE, premises considered, the petition is DENIED. The decision of the Court of Appeals
in CA-G.R. SP No. 75291 dated January 30, 2004 and its resolution dated May 24, 2004, are hereby
AFFIRMED in toto.

G.R. No. 150147. January 20, 2004]

LYDIA BUENAOBRA, JOSIELYN FIEL, MARGIE MADRID, ROWENA

MIRANDA, JUVY ENDAYA, JUDY CARONAN, JOSEPHINE
BARTOLOME, LITA MACALINAO, MARLITA AMBIL, RIZA AMBIL,
ANENCIA RECANA, LORENA REYES, JULIO BALAGTAS,
SALVACION FELISMENA, GINA SINLAO, MARITA CHAVEZ,
JIMENA DRADA, YOLANDA ROLDAN, RAFAELA OLICIA,
ANGELEO FUENTES, EUFROCINA ALMERA, FELICISIMA DE
GUZMAN, ADELINA CALIM, SUSANITA SULAPAS, LOLITA
MALICDEM, TERESITA BORLAZA, ESTER OVERIO, IMELDA
AGUIRRE, MARIBEL BELTRAN, MYLENE TAMAYO, ANNIE
GREGORIO, TERESA CLARINO, TERESA VILLANUEVA,
MARIETTA ARCAYA, MILAGROS DAGDAGAN, PAULINO
PREALDE, MONINA VALLEJO, RITA MAGSINO, SOLIDAD
LABAY, MARIA BINARAO, MELCHORA DELA CRUZ, SUSAN
BITAS, EMELY CAYETANO, EMILY DELA CRUZ, ZENAIDA
SALAS, BITUIN VALDEZ, AFRICA GUEVARRA, NELIA
MORALES, ELOISA REYES, AIDA CAYETANO, BENITA
CAMPOSANO, ADELIA IGNACIO, NENITA SARCIA, VIOLETA
RONCAL, DOROTEA ALASKA, BLISELDA GALONGAN, SHIRLEY
JOCSON, MARITES VELOZ, ROGELIO CAPUZ, MARDIOLINA
ALIOC, MARIETTA MADRID, LOURDES MERCADO, ARACELLY
CERDENOLA, REMEDIOS TAGNONG, MARISSA SANTOS,
JOSEFINA CANALDA, ZENAIDA DAMANDANTE, CONCHITA
BELARMINO, MARIVIC TRINIDAD, MARGARITA GUMBAN,
ANGELES FERNANDEZ, MARIA BERNAL, MORALINDA
DUARTE, IMELDA TUNGOL, ALONA INNOCENCIO, MA. TERESA
CRUZ, ANALIZA GABRIEL, MELODIEN CARANDANG,
CRESENCIA ACEBO, MARILYN CASIM, HERMINIA PINEDA,
NORIE TORINO, ERLINDA TADEO, CECILIA LLAVORE, ANA
GINA GALMAN, IMELDA SALARDA, LUISA SAROL, LOLITA
MALICSE, AILEEN PAPANIO, EDITHA GANAL, RESTIE VISTAL,
LUCELYN QUISOY, ESTELA PABIO BRIONES, AUREA TUBIS,
SAMUEL MALICSE, AURORA MISSION, ANALYN CALICA,
LEILANI ALEJAGA, LILIA BRIZUELA, ROSITA FACTOR,
MERCEDES MENDOZA, WARLITO COLOMA, PERLEEN MUI,
JOSEPHINE BALDRES, ELENA MAGDANGAL, IRMA BENGCO,
CRISTITA GERALDEZ, ROMEO PANDO, ESTRELLITA ZILMAR,
ANGELITA SANDIG, NENITA LARIOSA, MARITA PANTI,
AURORA HERNANDEZ, DINNA SILVA, EVANGELINE CASIM,
LUISA SOLAYAO, ANNABELLE SY, MARINA REBLENCA,
MARITESS GERANDOY, ELENA AGUDA, PERCY GARCIA,
GERARDO TAPIT, AMADOR HADE, MYRA BORJA, ELVIRA
ALBAY, LELIOSA MORANO, VERONICA GUINDAY, JULIETA
ALMAYDA, VILMA SALDO, MAY ANN REPAYO, GLENDA
SARAO, NELLY CARAGA, JOSEPHINE TAQUIQUI, TRINIDAD
BARROCA, DULCE ENDAYA, RIZA TADLIP, NENITA
LAGAMAYO, EUFRENCINA ROLDAN, ELENA VELASQUEZ,
MARIVIC DEPANTI, MONINA LOCSIN, ANA RAMOS, ANICIA
LEUTIEJA, JOSEFINA MANUEL, AMALIA DAEP, JULIE
MANGANAAN, ROWENA ANYAYA, LUNINGNING ANYAYA,
CARMENCITA ANYAYA, ROWENA FIEL, VENAMEL BEA, NIDA
PABLO, LOLITA BLANCO, ROSEMARIE MORALES, NATIVIDAD
CANETE, CORAZON GOROSPE, MADONNA RAGONOT, GEMMA
 DACAL, and CLARITA MENDOZA, petitioners, vs. LIM KING
GUAN, JOHNNY LIM, NGO CHAP, CRISTINA NGO, GILBERTO
LIM, CHENG SEN WANG, HUNG PANG CHING, CHEN HSIU
TSUNG as corporate officers of UNIX INTERNATIONAL EXPORT
CORPORATION, and CHEN HSIU TSUNG, LIM KING GUAN,
HUNG PANG CHING, WANG CHENG SEN, JOHNNY LIM,
GILBERTO LIM, NGO CHIAP, CRISTINA NGO, KATLEEN LIM,
MARIE SOLEDAD CLEMENTE, ROSALINA N. LO, KIM PO
GONZALES, and AMELIA NGA as stockholders of record of
UNIX INTERNATIONAL EXPORT CORPORATION, and FUJI
ZIPPER MANUFACTURING CORPORATION, respondents.

DECISION
CORONA, J.:

This is a petition for review seeking for the reversal of the decision of the
[1]

Court of Appeals dated May 29, 2001, dismissing the petition for certiorari of
Lydia Buenaobra, et. al. and affirming the orders of the National Labor
Relations Commission (NLRC), Third Division, dated November 27, 1998 and
February 15, 1999, which respectively directed private respondents to post a
cash or surety bond and dismissed petitioners motion for reconsideration.
The facts follow.
Petitioners were employees of private respondent Unix International
Export Corporation (UNIX), a corporation engaged in the business of
manufacturing bags, wallets and the like.
Sometime in 1991 and 1992, petitioners filed several cases against UNIX
and its incorporators and officers for unfair labor practice, illegal
lockout/dismissal, underpayment of wages, holiday pay, proportionate
13th month pay, unpaid wages, interest, moral and exemplary damages and
attorneys fees.
The cases were consolidated and tried jointly. On February 23, 1993,
labor arbiter Jose S. de Vera rendered a decision:

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

rendered ordering respondent Unix Export Corporation to pay complainants, as
follows:

1. P5,821,838.40 as backwages;
2. P1,484,912.00 as separation pay;

3. P527,748.00 as wage differentials;

4. P33,830.00 as regular holiday pay differentials; and

5. P365,551.95 as proportionate 13th month pay for 1990.

All other claims of the complainants are hereby dismissed for lack of merit.
Likewise, the complaint of Angelina Dimasin is dismissed with prejudice.
There being no appeal by respondents or petitioners, the decision of labor
arbiter de Vera eventually became final and executory. However, petitioners
complained that the decision could not be executed because UNIX allegedly
diverted, invested and transferred all its money, assets and properties to
respondent Fuji Zipper Manufacturing Corporation (FUJI) whose stockholders
and officers were also those of UNIX.
Thus, on March 25, 1997, petitioners filed another complaint against
respondents UNIX, its corporate officers and stockholders of record, and
FUJI. Petitioners mainly prayed that respondents UNIX and FUJI be held
jointly and severally held liable for the payment of the monetary awards
ordered by labor arbiter de Vera.
On May 31, 1998, labor arbiter Felipe Pati rendered a decision on the
second complaint:

WHEREFORE, judgment is hereby rendered piercing the veil of corporate fiction of

the two respondent sister corporations which by virtue of this Decision are now
considered as mere associations of persons jointly and severally pay the subject
amount of P8,233,880.30 out of the properties and unpaid subscription on subscribed
Capital Stock of the Board of Directors, Corporate Officers, Incorporators and
Stockholders of said respondent corporations, plus the amount of P3,000,000.00
and P1,000,000.00 in the form of moral and exemplary damages, respectively, as well
as 10% attorneys fees from any recoverable amounts.

Other claims are hereby dismissed for lack of merit.

On July 30, 1998, private respondents FUJI, its officers and stockholders
filed a memorandum on appeal and a motion to dispense with the posting of a
cash or surety appeal bond on the ground that they were not the employers of
petitioners. They alleged that they could not be held responsible for petitioners
claims and to require them to post the bond would be unjust and unfair, and
not sanctioned by law.
 On November 27, 1998, the NLRC, Third Division rendered the first
assailed order : [2]

PREMISES CONSIDERED, instant motion to exempt from filing appeal bond is

hereby DENIED for lack of merit. Respondents are hereby directed to post cash or
surety bond in the amount of P8,233,880.30 within an unextendible period of ten (10)
days upon receipt. Otherwise the appeal shall be dismissed.

Petitioners moved for reconsideration of the said order, arguing that the
timely posting of an appeal bond is mandatory for the perfection of an appeal
and should be complied with.
On February 15, 1999, the NLRC, Third Division rendered the second
assailed order:

WHEREFORE, premises considered, complainants Motion for Reconsideration is

hereby DISMISSED for lack of merit. Respondents Supplemental Memorandum of
Appeal is admitted. Respondents and counsel are likewise hereby directed to submit a
joint declaration under oath within five (5) days upon receipt. Otherwise the appeal
shall be dismissed.

Petitioners filed a petition in the Court of Appeals imputing grave abuse of

discretion to the NLRC, Third Division when it allowed private respondents to
post the mandated cash or surety bond four months after the filing of their
memorandum on appeal.
On May 29, 2001, the Court of Appeals dismissed the petition for lack of
merit. Hence, this petition under Rule 45 of the Rules of Court, seeking to set
aside the decision of the Court of Appeals and praying that the orders dated
February 15, 1999 and November 27, 1998 of the NLRC, Third Division be set
aside for having been issued without or in excess of its jurisdiction and with
grave abuse of discretion.
The petition has no merit.
The provision of Article 223 of the Labor Code requiring the posting of
bond on appeals involving monetary awards must be given liberal
interpretation in line with the desired objective of resolving controversies on
the merits. If only to achieve substantial justice, strict observance of the
[3]

reglementary periods may be relaxed if warranted. The NLRC, Third Division

could not be said to have abused its discretion in requiring the posting of bond
after it denied private respondents motion to be exempted therefrom.
 It is true that the perfection of an appeal in the manner and within the
period prescribed by law is not only mandatory but jurisdictional, and failure to
perfect an appeal has the effect of making the judgment final and
executory. However, technicality should not be allowed to stand in the way of
equitably and completely resolving the rights and obligations of the
parties. We have allowed appeals from the decisions of the labor arbiter to
[4]

the NLRC, even if filed beyond the reglementary period, in the interest of
justice. The facts and circumstances of the instant case warrant liberality
considering the amount involved and the fact that petitioners already obtained
a favorable judgment on February 23, 1993 against their employer UNIX.
In the same decision which has already become final and executory, labor
arbiter de Vera held:

This Branch upholds and maintains in the absence of substantial evidence to the
contrary that both respondent corporations have legitimate distinct
and separate juridical personalities. Thus, respondent Fuji Zipper Manufacturing, Inc.
has been erroneously impleaded in this case. [5]

It is only fair and just that respondent FUJI be afforded the opportunity to
be heard on appeal before the NLRC, specially in the light of labor arbiter
Patis later decision holding FUJI jointly and severally liable with UNIX in the
payment of the monetary awards adjudged by labor arbiter de Vera against
UNIX.
In the absence of any showing that the NLRC committed grave abuse of
discretion, or otherwise acted without or in excess of jurisdiction, this Court is
bound by its findings. Furthermore, the Court of Appeals upheld the assailed
orders of the said Commission.
WHEREFORE, the petition is hereby DENIED.
SO ORDERED.
SO ORDERED.

G.R. No. 91086 May 8, 1990

VIRGILIO S. CARIÑO petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, HARRISON INDUSTRIAL CORPORATION and
HARRISON INDUSTRIAL WORKERS' UNION, respondents.

Federico C. Leynes for petitioner.

Banzuela, Flores, Miralles, Rañeses Sy, Taquio & Associates for respondent Union.
Armando V. Ampil for respondent Harrison.

RESOLUTION

FELICIANO, J.:

Petitioner asks the Court to declare null and void a Decision dated 26 May 1989 of the National Labor Relations Commission (NLRC) in
NLRC Case No. NCR-00-09-03225-87 and to reinstate the Decision of the Labor Arbiter which the NLRC had modified.

Petitioner Cariño was the former President of private respondent Harrison Industrial Workers' Union
("Union"). Because he was widely believed to have grossly mismanaged Union affairs, the other
officers of the Union formed an investigating committee and several times invited petitioner Cariño to
answer the complaints and charges against him. These charges were, principally:

1. Conspiring with the company during the negotiation of the CBA, resulting in, among other things,
Article 22 entitled "Retirement" which provided for retirement pay of one (1) day's basic salary for
every year of service.

2. Paying attorney's fees to Atty. Federico Leynes, Union counsel, out of Union funds without
obtaining corresponding receipts therefor.

3. Unilaterally increasing the membership dues by an additional P17.00 per member in order to pay
increased attorney's fees.

4. Concealing the CBA, failure to present and to explain the provisions of the same prior to
ratification by the union membership.

5. Refusal to turn over the custody and management of Union funds to the Union treasurer.

Petitioner Cariño, however, failed to respond to the calls or invitations made by the investigating
committee. Finally, the investigation committee caged a general membership meeting on 11 June
1987. At this general membership meeting, the charges against petitioner were presented and
discussed and the Union decided to file a petition for special election of its officers.

On 16 June 1987, a petition for special election of officers was filed by the Union with the Bureau of
Labor Relations, Department of Labor and Employment. Several hearings were field at the BLR
always with due notice to petitioner Cariño petitioner, however, failed to appear even once.

On 5 August 1987, a general Union membership meeting was held for the impeachment of Cariño.
The general membership found Cariño guilty of the above-mentioned charges and decided to expel
him from the Union and to recommend his termination from employment. Atty. Federico Leynes also
ceased to be counsel for the Union.

The Union accordingly informed private respondent Harrison Industrial Corporation ("Company") of
the expulsion of petitioner Cariño from the Union and demanded application of the Union Security
Clause of the then existing Collective Bargaining Agreement (CBA) on 15 September 1987.
Petitioner Cariño received a letter of termination from the Company, effective the next day.
Petitioner Cariño, now represented by Atty. Leynes, the former lawyer of the Union, filed a complaint
for illegal dismissal with the Labor Arbiter.

In a Decision dated 7 October, 1988, the Labor Arbiter held that there was no just cause for the
dismissal of petitioner Cariño, none of the causes for suspension or dismissal of Union members
enumerated in the Union's Constitution and By-Laws being applicable to petitioner's situation. The
Labor Arbiter also held that the manner of petitioner's dismissal had been in disregard of the
requirements of notice and hearing laid down in the Labor Code. The Labor Arbiter ordered
petitioner's reinstatement with full backwages and payment of attorney's fees, the monetary liability
to be borne solidarily by the Company and the Union.

The Company and the Union went on appeal before the public respondent National Labor Relations
Commission (NLRC). The NLRC, in a Decision promulgated on 26 May 1989, reversed the Labor
Arbiter's award. The NLRC noted that petitioner Cariño had merely denied the serious charges of
mismanagement preferred against him, as set out in the affidavit of Dante Maroya, the incumbent
President of the Union, which affidavit had been adopted by the Union as its position paper in the
proceedings before the Labor Arbiter. The NLRC held Cariño's silence as "tantamount to [an]
admission of guilt" and as constituting the ultimate cause for his dismissal. However, the NLRC
agreed with the Labor Arbiter's finding that the manner of petitioner Cariño's dismissal was
inconsistent with the requirements of due process. The NLRC accordingly found the Company and
the Union solidarily liable, "by way of penalty and financial assistance", to petitioner Cariño for
payment of separation pay, at the rate of one-half (1/2) month's salary for each year of service.

In the instant Petition for Certiorari, petitioner Cariño basically seeks reinstatement of the Decision of
the Labor Arbiter.

1. Petitioner Cariño contended that the NLRC had erred in taking cognizance of the Union's
admittedly late appeal. We agree, however, with the Solicitor General that it is a settled principle of
remedial law that reversal of a judgment obtained by a party appealing from it also benefits a co-
party who had not appealed, or who had appealed out of time, where the rights and liabilities of both
parties under the modified decision are so interwoven and inter-dependent as to be substantively
inseparable. 1

In the instant case, the NLRC could take cognizance of the late appeal of the Union, considering that
the lawfulness of petitioner Cariño's dismissal by the Company could be determined only after
ascertaining, among other things, the validity of the Union's act of expelling Cariño from its
membership. In other words, the Company having seasonably appealed the Labor Arbiter's Decision
and the Company's and the Union's liability being closely intertwined the NLRC could properly take
account of the Union's appeal even though not seasonably filed.

2. The NLRC in effect held that there had been just cause for petitioner Cariño's dismissal. The
Court considers that the NLRC was correct in so holding, considering the following documentary
provisions:

a) Article II, Sections 4 and 5 of the Collective Bargaining Agreement between the Company and the
Union provided as follows:

Sec. 4. Any employee or worker obliged to join the UNION and/or maintain
membership therein under the foregoing sections who fails to do so and/or maintain
such membership shall be dismiss without pay upon formal request of the UNION.

Sec. 5. Any UNION member may be suspended and/or expelled by the UNION for:
 a) Non-payment of dues or special assessment to the UNION.

b) Organizing or joining another UNION or affiliating with a labor federation.

c) Commission of a crime as defined by the Revised Penal Code against any UNION
officer in relation to activities for and in behalf of the UNION.

d) Participation in an unfair labor practice or any derogatory act against the UNION
or any of its officers or members; and

e) Involvement in any violation of this Agreement or the UNION's Constitution and

By-Laws.

The UNION assumes full and complete responsibility for all dismiss of any worker/employee effected
by the UNION and conceded in turn, by the COMPANY pursuant to the provisions hereof.

The UNION shall defend and hold the COMPANY free and harmless against any and all claims the
dismissed worker/employee might bring and/or obtain from the Company for such
dismissal. 2 (Emphasis supplied)

b) The Constitution of the Union contains the following provisions:

(i) Article X Section 5 reads:

ARTICLE X-FEES, DUES SPECIAL ASSESSMENTS, FINES AND OTHER

PAYMENTS

xxx xxx xxx

Sec. 5. Special assessments or other extraordinary fees such as for payment of

attorney's fees shall be made only upon a resolution duly ratified by the general
membership by secret balloting.

xxx xxx xxx

(Emphasis supplied.)

(ii) Article XV entitled "Discipline" provides in Section I thereof that:

Sec. 1. Any individual union members and/or union officer may be disciplined or
expelled from the UNION by the Executive Board if the latter should find the former
guilty of charges, based on the following grounds preferred officially against him:

a) Non-payment of dues and other assessments for two (2) months;

b) Culpable violation of the Constitution and By Laws;

c) Deliberate refusal to implement policies, rules and regulations decisions and/or

support the programs or projects of the UNION as laid down by its governing organs
or its officers; and
 d) Any act inimical to the interest of the UNION and/or its officers, such as but not
limited to rumor mongering which tends to discredit the name and integrity of the
UNION and/or its officers and creating or causing to create dissension among the
UNION members thereof. 4 (Emphasis supplied.)

Article XVI entitled "Impeachment and Recall" specified, in Section 1 thereof, the grounds for
impeachment or recall of the President and other Union officers, in the following terms:

a) Committing or causing the commission directly or indirectly of acts against the

interest and welfare of the UNION;

b) Malicious attack against the UNION, its officers or against a fellow UNION officer
or member;

c) Failure to comply with the obligation to turn over and return to the UNION
Treasurer within three (3) days are [sic] unexpected sum or sum of money received
an authorized UNION purpose;

d) Gross misconduct unbecoming of a UNION officer;

e) Misappropriation of UNION funds and property. This is without prejudice to the

filing of an appropriate criminal or civil action against the responsible officer or
officers by any interested party

f) Willful violation of any provisions on this Constitution or rules, regulations,

measures, resolution and decisions of the UNION. 5 (Emphasis supplied.)

It appears to the Court that the particular charges raised against petitioner Cariño, set out earlier,
reasonably fall within the underscored provisions of the foregoing documents. The NLRC impliedly
recognized this when it described the charges of mismanagement against Carino as serious.

The Labor Arbiter, however, also held that petitioner Cariño had been deprived of procedural due
process on the union level in view of alleged failure to comply with the required procedure, governing
impeachment and recall proceedings set out in Article XVI, Section 2, of the Constitution of the
Union. Article XVI, Section 2 reads as follows:

a) Impeachment or recall proceedings shall be initiated by a formal petition or

resolution signed by at least thirty (30%) percent of all bona fide members of the
UNION and addressed to the Chairman of the Executive board.

b) The Board Chairman shall then convene a general membership fee to consider
the impeachment or recall of an officer or a group of officers, whether elective or
appointive

c) UNION officers against whom impeachment or recall charges have been filed shall
be given ample opportunity to defend themselves before any impeachment or recall
vote is finally taken.

d) A majority of all members of the UNION shall be required to impeach or recall

UNION officers.
 e) The UNION officers impeached shall ipso facto be considered resigned or ousted
from office and shall no longer be elected nor appointed to any position in the
UNION.

f) The decision of the general membership on the impeachment or recall charge shall
be final and executory. 6

The NLRC, for its part, noted that while the prescribed procedural steps had not all been followed or
complied with, still,

Be that as it may, the general membership of the Union had spoken and decided to
expel complainant as Union President and member and ultimately, requested the
company to terminate his services per CBA prescription. It is worthy to note that the
charges aired by Mr. Dante Maroya are serious enough for complainant to
specifically respond and explain his side at the arbitral proceedings below. While it
appears that due process was lacking at the plant level, this was cured by the
arbitration process conducted by the Labor Arbiter. Despite the ample opportunity to
explain his side, complainant failed to do so and instead, relied completely on alleged
denial of due process. Complainant's silence in this respect is tantamount to [an]
admission of guilt. 7 (Emphasis supplied.)

It is true that the impeachment of Cariño had not been initiated by a formal petition or resolution
signed by at least thirty percent (30%) of an the bona fide members of the Union. A general meeting
had, however, been called to take up the charges against petitioner Carino who had been given
multiple opportunities to defend himself before the investigating committee of the Union officers and
before the general Union members as well as before the Bureau of Labor Relations. Petitioner
Cariño, however, chose to disregard all calls for him to appear and defend himself. At the general
membership meeting, therefore, petitioner Cariño was impeached and ordered recalled
by unanimous vote of the membership. Under these circumstances, failure to comply literally with
step (a) of Article XVI Section 2 of the Union's Constitution must be regarded as non-material: the
prescribed impeachment and recall proceeding had been more than substantially complied with.

4. Turning now to the involvement of the Company in the dismissal of petitioner Cariño we note that
the Company upon being formally advised in writing of the expulsion of petitioner Carino from the
Union, in turn simply issued a termination letter to Cariño, the termination being made effective the
very next day. We believe that the Company should have given petitioner Carino an opportunity to
explain his side of the controversy with the Union. Notwithstanding the Unions Security Clause in the
CBA, the Company should have reasonably satisfied itself by its own inquiry that the Union had not
been merely acting arbitrarily and capriciously in impeaching and expelling petitioner Cariño. From
what was already discussed above, it is quite clear that had the Company taken the trouble to
investigate the acts and proceedings of the Union, it could have very easily determined that the
Union had not acted arbitrarily in impeaching and expelling from its ranks petitioner Cariño. The
Company offered the excuse that the Union had threatened to go on strike if its request had not
been forthwith granted. Assuming that such a threat had in fact been made, if a strike was in fact
subsequently called because the Company had insisted on conducting its own inquiry, the Court
considers that such would have been prima facie an illegal strike. The Company also pleaded that
for it to inquire into the lawfulness of the acts of the Union in this regard would constitute interference
by the Company in the administration of Union affairs. We do not believe so.

In Liberty Cotton Mills Worker's Union, et al. v. Liberty Cotton Mills, et al. 8 the Court held respondent
company to have acted in bad faith in dismissing the petitioner workers without giving them an
opportunity to present their side in their controversy with their own union.
 xxx xxx xxx

It is OUR considered view that respondent company is equally liable for the payment
of backwages for having acted in bad faith in effecting the dismissal of the individual
petitioners. Bad faith on the part of respondent company may be gleaned from the
fact that the petitioner workers were dismissed hastily and summarily. At best, it was
guilty of a tortious act, for which it must assume solidary liability, since it apparently
chose to summarily dismiss the workers at the union's instance secure in the union's
contractual undertaking that the union would hold it "free from any liability" arising
from such dismissal.

xxx xxx xxx

While respondent company, under the Maintenance of Membership prevision of the

Collective Bargaining Agreement, is bound to dismiss any employee expelled by
PAFLU for disloyalty, upon its written request, this undertaking should not be done
hastily and summarily. The company acted in bad faith in dismissing petitioner
workers without giving them the benefit of a hearing. It did not even bother to inquire
from the workers concerned and from PAFLU itself about the cause of the expulsion
of the petitioner workers. Instead, the company immediately dismissed the workers
on May 29, 1964 — in a span of only one day — stating that it had no alternative but
to comply with its obligation under the Security Agreement in the Collective
Bargaining Agreement thereby disregarding the right of the workers to due process,
self-organization and security of tenure.

xxx xxx xxx

The power to dismiss is a normal prerogative of the employer. However, this is not
without limitations. The employer is bound to exercise caution in terminating the
services of his employee especially so when it is made upon the request of a labor
union pursuant to the Collective Bargaining Agreement, as in the instant
case. Dismissals must not be arbitrary and capricious. Due process must be
observed in dismissing an employee because it affects not only his position but also
his means of livelihood. Employers should therefore respect and protect the rights of
their employees, which include the right to labor. . . .

xxx xxx xxx

(Emphasis supplied.)

In Manila Cordage Company v. Court of industrial Relations, et al., 10 the Court stressed the
requirement of good faith on the part of the company in dismissing the complainant and in effect held
that precipitate action in dismissing the complainant is indication of lack of good faith.

xxx xxx xxx

The contention of the petitioners that they acted in good faith in dismissing the
complainants and, therefore, should not be held liable to pay their back wages has
no merit. The dismissal of the complainants by the petitioners was precipitate and
done with undue haste. Considering that the so-called "maintainance of membership"
clause did not clearly give the petitioners the right to dismiss the complainants if said
complainants did not maintain their membership in the Manco Labor Union, the
 petitioners should have raised the issue before the Court of industrial Relations in a
petition for permission to dismiss the complainants.

xxx xxx xxx

(Emphasis supplied.)

5. We conclude that the Company had failed to accord to petitioner Cariño the latter's right to
procedural due process. The right of an employee to be informed of the charges against him and to
reasonable opportunity to present his side in a controversy with either the Company or his own
Union, is not wiped away by a Union Security Clause or a Union Shop Clause in a CBA. An
employee is entitled to be protected not only from a company which disregards his rights but also
from his own Union the leadership of which could yield to the temptation of swift and arbitrary
expulsion from membership and hence dismissal from his job.

The Court does not believe, however, that the grant of separation pay to petitioner Cariño was an
appropriate response (there having been just cause for the dismissal) to the failure of the Company
to accord him his full measure of due process. Since petitioner Cariño had clearly disdained
answering the charges preferred against him within the Union, there was no reason to suppose that
if the Company had held formal proceedings before dismissing him, he would have appeared in a
Company investigation and pleaded his defenses, if he had any, against the charges against him.
There was no indication that the Company had in fact conspired with the Union to bring about the
expulsion and dismissal of petitioner Cariño indeed, the Union membership believed it was Cariño
who had conspired with the company in the course of negotiating the CBA. Considering all the
circumstances of this case, and considering especially the nature of the charges brought against
petitioner Cariño before his own Union, the Court believes that a penalty of P5,000 payable to
petitioner Carino should be quite adequate, the penalty to be borne by the Company and the Union
solidarily The Court also considers that because the charges raised against petitioner and
unanswered by him have marked overtones of dishonesty, this is not a case where "financial
(humanitarian) assistance" to the dismissed employee is warranted. 12

WHEREFORE, the Court DISMISSED the Petition for certiorari for lack of merit but MODIFIED the
Decision of the public respondent National Labor Relations Commission dated 26 May 1989 by
eliminating the grant of separation pay and in lieu thereof imposing a penalty of P5,000.00 payable
to the petitioner to be borne solidarily by the Company and the Union. No pronouncement as to
costs.

Malayang Samahan ng mga

Manggagawa sa M. Greenfield vs
Cresencio Ramos
January 15, 2014
In February 1990, M. Greenfield, Inc. (MGI), through its officers Saul Tawil, Carlos
Javelosa, and Renato Puangco began terminating employees. The corporation closed down
one of their plants and so they said they have to retrench the number of employees.
Consequently, the Malayang Samahan ng mga Manggagawa sa M. Greenfield (MSMG-
UWP) filed an illegal dismissal case against MGI. The National Labor Relations
Commission, chaired by Cresencio Ramos, ruled against the union. But on appeal, the
decision of the NLRC was reversed and the corporation was ordered, among others, to pay
the employees’ backwages. The union further appealed as they contend that the officers of
the corporation should be held solidarily liable.
ISSUE: Whether or not the officers of the corporation should be held solidarily liable.
HELD: No. A corporation is a juridical entity with legal personality separate and distinct from
those acting for and in its behalf and, in general from the people comprising it. The rule is
that obligations incurred by the corporation, acting through its directors, officers and
employees are its sole liabilities. There is no question that MGI is guilty of illegal dismissal
but the officers cannot be held solidarily liable.
It’s true that there’s a plethora of illegal dismissal cases where the SC made corporate
officers personally liable but these cases usually involve corporate officers who acted in bad
faith in illegally dismissing employees. Corporate directors and officers may be solidarily
liable with the corporation for the termination of employment of corporate employees if the
same is done with malice or in bad faith.

ALABANG COUNTRY CLUB, INC., G.R. No. 170287

Petitioner,
Present:
- versus -
QUISUMBING, J., Chairperson,
CARPIO MORALES,
NATIONAL LABOR RELATIONS AZCUNA,
COMMISSION, ALABANG TINGA, and
COUNTRY CLUB INDEPENDENT VELASCO, JR., JJ.
EMPLOYEES UNION,
CHRISTOPHER PIZARRO,
MICHAEL BRAZA, and Promulgated:
NOLASCO CASTUERAS,
Respondents. February 14, 2008
x-----------------------------------------------------------------------------------------x

DECISION

VELASCO, JR., J.:

Petitioner Alabang Country Club, Inc. (Club) is a domestic non-profit corporation
with principal office at Country Club Drive, Ayala Alabang, Muntinlupa City.
Respondent Alabang Country Club Independent Employees Union (Union) is the
exclusive bargaining agent of the Clubs rank-and-file employees. In April 1996,
respondents Christopher Pizarro, Michael Braza, and Nolasco Castueras were
elected Union President, Vice-President, and Treasurer, respectively.

On June 21, 1999, the Club and the Union entered into a Collective Bargaining
Agreement (CBA), which provided for a Union shop and maintenance of
membership shop.

The pertinent parts of the CBA included in Article II on Union Security

read, as follows:
ARTICLE II
UNION SECURITY

SECTION 1. CONDITION OF EMPLOYMENT. All regular

rank-and-file employees, who are members or subsequently become
members of the UNION shall maintain their membership in good
standing as a condition for their continued employment by the CLUB
during the lifetime of this Agreement or any extension thereof.

SECTION 2. [COMPULSORY] UNION MEMBERSHIP FOR

NEW REGULAR RANK-AND-FILE EMPLOYEES

a) New regular rank-and-file employees of the Club shall join

the UNION within five (5) days from the date of their appointment as
regular employees as a condition for their continued employment
during the lifetime of this Agreement, otherwise, their failure to do so
shall be a ground for dismissal from the CLUB upon demand by
the UNION.
b) The Club agrees to furnish the UNION the names of all new
probationary and regular employees covered by this Agreement not
later than three (3) days from the date of regular appointment
showing the positions and dates of hiring.

xxxx
 SECTION 4. TERMINATION UPON UNION DEMAND. Upon
written demand of the UNION and after observing due process, the Club
shall dismiss a regular rank-and-file employee on any of the following
grounds:

(a) Failure to join the UNION within five (5) days from the
time of regularization;
(b) Resignation from the UNION, except within the period
allowed by law;
(c) Conviction of a crime involving moral turpitude;
(d) Non-payment of UNION dues, fees, and assessments;
(e) Joining another UNION except within the period allowed
by law;
(f) Malversation of union funds;
(g) Actively campaigning to discourage membership in
the UNION; and
(h) Inflicting harm or injury to any member or officer of
the UNION.

It is understood that the UNION shall hold the CLUB free and
harmless [sic] from any liability or damage whatsoever which may be
imposed upon it by any competent judicial or quasi-judicial authority as
a result of such dismissal and the UNION shall reimburse the CLUB for
any and all liability or damage it may be adjudged.[1] (Emphasis
supplied.)

Subsequently, in July 2001, an election was held and a new set of officers
was elected. Soon thereafter, the new officers conducted an audit of the Union
funds. They discovered some irregularly recorded entries, unaccounted expenses
and disbursements, and uncollected loans from the Union funds. The Union
notified respondents Pizarro, Braza, and Castueras of the audit results and asked
them to explain the discrepancies in writing.[2]

Thereafter, on October 6, 2001, in a meeting called by the Union,

respondents Pizarro, Braza, and Castueras explained their side. Braza denied any
wrongdoing and instead asked that the investigation be addressed to Castueras,
who was the Union Treasurer at that time. With regard to his unpaid loans, Braza
claimed he had been paying through monthly salary deductions and said the Union
could continue to deduct from his salary until full payment of his loans, provided
he would be reimbursed should the result of the initial audit be proven wrong by a
licensed auditor. With regard to the Union expenses which were without receipts,
Braza explained that these were legitimate expenses for which receipts were not
issued, e.g. transportation fares, food purchases from small eateries, and food and
transportation allowances given to Union members with pending complaints with
the Department of Labor and Employment, the National Labor Relations
Commission (NLRC), and the fiscals office. He explained that though there were
no receipts for these expenses, these were supported by vouchers and itemized as
expenses. Regarding his unpaid and unliquidated cash advances amounting to
almost PhP 20,000, Braza explained that these were not actual cash advances but
payments to a certain Ricardo Ricafrente who had loaned PhP 200,000 to
the Union.[3]

Pizarro, for his part, blamed Castueras for his unpaid and uncollected loan
and cash advances. He claimed his salaries were regularly deducted to pay his loan
and he did not know why these remained unpaid in the records. Nonetheless, he
likewise agreed to continuous salary deductions until all his accountabilities were
paid.[4]

Castueras also denied any wrongdoing and claimed that the irregular entries
in the records were unintentional and were due to inadvertence because of his
voluminous work load. He offered that his unpaid personal loan of PhP 27,500 also
be deducted from his salary until the loans were fully paid. Without admitting any
fault on his part, Castueras suggested that his salary be deducted until the
unaccounted difference between the loans and the amount collected amounting to a
total of PhP 22,000 is paid.[5]

Despite their explanations, respondents Pizarro, Braza, and Castueras were

expelled from the Union, and, on October 16, 2001, were furnished individual
letters of expulsion for malversation of Union funds.[6]Attached to the letters were
copies of the Panawagan ng mga Opisyales ng Unyon signed by 37 out of 63
Union members and officers, and a Board of Directors Resolution[7] expelling them
from the Union.
In a letter dated October 18, 2001, the Union, invoking the Security Clause of the
CBA, demanded that the Club dismiss respondents Pizarro, Braza, and Castueras
in view of their expulsion from the Union.[8] The Club required the three
respondents to show cause in writing within 48 hours from notice why they should
not be dismissed. Pizarro and Castueras submitted their respective written
explanations on October 20, 2001, while Braza submitted his explanation the
following day.

During the last week of October 2001, the Clubs general manager called
respondents Pizarro, Braza, and Castueras for an informal conference inquiring
about the charges against them. Said respondents gave their explanation and
asserted that the Union funds allegedly malversed by them were even over the total
amount collected during their tenure as Union officersPhP 120,000 for Braza, PhP
57,000 for Castueras, and PhP 10,840 for Pizarro, as against the total collection
from April 1996 to December 2001 of only PhP 102,000.They claimed the charges
are baseless. The general manager announced he would conduct a formal
investigation.

Nonetheless, after weighing the verbal and written explanations of the three
respondents, the Club concluded that said respondents failed to refute the validity
of their expulsion from the Union. Thus, it was constrained to terminate the
employment of said respondents. On December 26, 2001, said respondents
received their notices of termination from the Club.[9]

Respondents Pizarro, Braza, and Castueras challenged their dismissal from the
Club in an illegal dismissal complaint docketed as NLRC-NCR Case No. 30-01-
00130-02 filed with the NLRC, National Capital Region Arbitration Branch. In his
January 27, 2003 Decision,[10] the Labor Arbiter ruled in favor of the Club, and
found that there was justifiable cause in terminating said respondents. He
dismissed the complaint for lack of merit.

On February 21, 2003, respondents Pizarro, Braza, and Castueras filed an Appeal
docketed as NLRC NCR CA No. 034601-03 with the NLRC.

On February 26, 2004, the NLRC rendered a Decision[11] granting the

appeal, the fallo of which reads:
 WHEREFORE, finding merit in the Appeal, judgment is hereby
rendered declaring the dismissal of the complainants illegal. x x x
Alabang Country Club, Inc. and Alabang Country Club Independent
Union are hereby ordered to reinstate complainants Christopher Pizarro,
Nolasco Castueras and Michael Braza to their former positions without
loss of seniority rights and other privileges with full backwages from the
time they were dismissed up to their actual reinstatement.

SO ORDERED.

The NLRC ruled that there was no justifiable cause for the termination of
respondents Pizarro, Braza, and Castueras. The commissioners relied heavily on
Section 2, Rule XVIII of the Rules Implementing Book V of the Labor Code. Sec.
2 provides:
SEC. 2. Actions arising from Article 241 of the Code. Any action arising
from the administration or accounting of union funds shall be filed and disposed
of as an intra-union dispute in accordance with Rule XIV of this Book.

In case of violation, the Regional or Bureau Director shall order the

responsible officer to render an accounting of funds before the general
membership and may, where circumstances warrant, mete the appropriate penalty
to the erring officer/s, including suspension or expulsion from the union.[12]

According to the NLRC, said respondents expulsion from the Union was illegal
since the DOLE had not yet made any definitive ruling on their liability regarding
the administration of the Unions funds.

The Club then filed a motion for reconsideration which the NLRC denied in its
June 20, 2004 Resolution.[13]

Aggrieved by the Decision and Resolution of the NLRC, the Club filed a Petition
for Certiorari which was docketed as CA-G.R. SP No. 86171 with the Court of
Appeals (CA).
The CA Upheld the NLRC Ruling
that the Three Respondents were Deprived Due Process
On July 5, 2005, the appellate court rendered a Decision,[14] denying the petition
and upholding the Decision of the NLRC. The CAs Decision focused mainly on
the Clubs perceived failure to afford due process to the three respondents. It found
that said respondents were not given the opportunity to be heard in a separate
hearing as required by Sec. 2(b), Rule XXIII, Book V of the Omnibus Rules
Implementing the Labor Code, as follows:

SEC. 2. Standards of due process; requirements of notice.In all cases

of termination of employment, the following standards of due process
shall be substantially observed:

For termination of employment based on just causes as defined in Article

282 of the Code:

xxxx

(b) A hearing or conference during which the employee concerned, with

the assistance of counsel if the employee so desires, is given opportunity
to respond to the charge, present his evidence or rebut the evidence
presented against him.

The CA also said the dismissal of the three respondents was contrary to the
doctrine laid down in Malayang Samahan ng mga Manggagawa sa M. Greenfield
v. Ramos (Malayang Samahan), where this Court ruled that even on the
assumption that the union had valid grounds to expel the local union officers, due
process requires that the union officers be accorded a separate hearing by the
employer company.[15]

In a Resolution[16] dated October 20, 2005, the CA denied the Clubs motion for
reconsideration.

The Club now comes before this Court with these issues for our resolution,
summarized as follows:
1. Whether there was just cause to dismiss private respondents, and
whether they were afforded due process in accordance with the
standards provided for by the Labor Code and its Implementing
Rules.
 2. Whether or not the CA erred in not finding that the NLRC
committed grave abuse of discretion amounting to lack or excess
of jurisdiction when it ruled that respondents Pizarro, Braza, and
Castueras were illegally expelled from the Union.

3. Whether the case of Agabon vs. NLRC[17] should be applied to

this case.

4. Whether that in the absence of bad faith and malice on the part of
the Club, the Union is solely liable for the termination from
employment of said respondents.

The main issue is whether the three respondents were illegally dismissed and
whether they were afforded due process.

The Club avers that the dismissal of the three respondents was in accordance with
the Union security provisions in their CBA. The Club also claims that the three
respondents were afforded due process, since the Club conducted an investigation
separate and independent from that conducted by the Union.

Respondents Pizarro, Braza, and Castueras, on the other hand, contend that the
Club failed to conduct a separate hearing as prescribed by Sec. 2(b), Rule XXIII,
Book V of the implementing rules of the Code.

First, we resolve the legality of the three respondents dismissal from the Club.

Valid Grounds for Termination

Under the Labor Code, an employee may be validly terminated on the following
grounds: (1) just causes under Art. 282; (2) authorized causes under Art. 283; (3)
termination due to disease under Art. 284; and (4) termination by the employee or
resignation under Art. 285.
 Another cause for termination is dismissal from employment due to the
enforcement of the union security clause in the CBA. Here, Art. II of the CBA on
Union security contains the provisions on the Union shop and maintenance of
membership shop. There is union shop when all new regular employees are
required to join the union within a certain period as a condition for their continued
employment. There is maintenance of membership shop when employees who are
union members as of the effective date of the agreement, or who thereafter become
members, must maintain union membership as a condition for continued
employment until they are promoted or transferred out of the bargaining unit or the
agreement is terminated.[18] Termination of employment by virtue of a union
security clause embodied in a CBA is recognized and accepted in our
jurisdiction.[19] This practice strengthens the union and prevents disunity in the
bargaining unit within the duration of the CBA. By preventing member
disaffiliation with the threat of expulsion from the union and the consequent
termination of employment, the authorized bargaining representative gains more
numbers and strengthens its position as against other unions which may want to
claim majority representation.

In terminating the employment of an employee by enforcing the union

security clause, the employer needs only to determine and prove that: (1) the union
security clause is applicable; (2) the union is requesting for the enforcement of the
union security provision in the CBA; and (3) there is sufficient evidence to support
the unions decision to expel the employee from the union. These requisites
constitute just cause for terminating an employee based on the CBAs union
security provision.

The language of Art. II of the CBA that the Union members must maintain
their membership in good standing as a condition sine qua non for their continued
employment with the Club is unequivocal. It is also clear that upon demand by
the Union and after due process, the Club shall terminate the employment of a
regular rank-and-file employee who may be found liable for a number of offenses,
one of which is malversation of Union funds.[20]

Below is the letter sent to respondents Pizarro, Braza, and Castueras,

informing them of their termination:
 On October 18, 2001, the Club received a letter from the Board of
Directors of the Alabang Country Club Independent
Employees Union (Union) demanding your dismissal from service by
reason of your alleged commission of act of dishonesty, specifically
malversation of union funds. In support thereof, the Club was furnished
copies of the following documents:

1. A letter under the subject Result of Audit dated September 14,

2001 (receipt of which was duly acknowledged from your
end), which required you to explain in writing the charges
against you (copy attached);

2. The Unions Board of Directors Resolution dated October 2,

2001, which explained that the Unionafforded you an
opportunity to explain your side to the charges;

3. Minutes of the meeting of the Unions Board of Directors

wherein an administrative investigation of the case was
conducted last October 6, 2001; and

4. The Unions Board of Directors Resolution dated October 15,

2001 which resolved your expulsion from the Union for acts of
dishonesty and malversation of union funds, which was duly
approved by the general membership.

After a careful evaluation of the evidence on hand vis--vis a thorough

assessment of your defenses presented in your letter-explanation dated
October 6, 2001 of which you also expressed that you waived your right
to be present during the administrative investigation conducted by the
Unions Board of Directors on October 6, 2001, Management has reached
the conclusion that there are overwhelming reasons to consider that you
have violated Section 4(f) of the CBA, particularly on the grounds of
malversation of union funds. The Club has determined that you were
sufficiently afforded due process under the circumstances.

Inasmuch as the Club is duty-bound to comply with its obligation

under Section 4(f) of the CBA, it is unfortunate that Management is left
with no other recourse but to consider your termination from service
effective upon your receipt thereof. We wish to thank you for your
services during your employment with the Company. It would be more
 prudent that we just move on independently if only to maintain industrial
peace in the workplace.

Be guided accordingly.[21]

Gleaned from the above, the three respondents were expelled from and by
the Union after due investigation for acts of dishonesty and malversation of Union
funds. In accordance with the CBA, the Union properly requested the Club,
through the October 18, 2001 letter[22] signed by Mario Orense, the Union
President, and addressed to Cynthia Figueroa, the Clubs HRD Manager, to enforce
the Union security provision in their CBA and terminate said respondents. Then, in
compliance with the Unions request, the Club reviewed the documents submitted
by the Union, requested said respondents to submit written explanations, and
thereafter afforded them reasonable opportunity to present their side. After it had
determined that there was sufficient evidence that said respondents malversed
Union funds, the Club dismissed them from their employment conformably with
Sec. 4(f) of the CBA.

Considering the foregoing circumstances, we are constrained to rule that there is

sufficient cause for the three respondents termination from employment.

Were respondents Pizarro, Braza, and Castueras accorded due process before their
employments were terminated?

We rule that the Club substantially complied with the due process
requirements before it dismissed the three respondents.

The three respondents aver that the Club violated their rights to due process
as enunciated in Malayang Samahan,[23] when it failed to conduct an independent
and separate hearing before they were dismissed from service.

The CA, in dismissing the Clubs petition and affirming the Decision of the NLRC,
also relied on the same case. We explained in Malayang Samahan:

x x x Although this Court has ruled that union security clauses

embodied in the collective bargaining agreement may be validly
 enforced and that dismissals pursuant thereto may likewise be valid, this
does not erode the fundamental requirements of due process. The reason
behind the enforcement of union security clauses which is the sanctity
and inviolability of contracts cannot override ones right to due
process.[24]

In the above case, we pronounced that while the company, under a

maintenance of membership provision of the CBA, is bound to dismiss any
employee expelled by the union for disloyalty upon its written request, this
undertaking should not be done hastily and summarily. The company acts in bad
faith in dismissing a worker without giving him the benefit of a hearing. [25] We
cautioned in the same case that the power to dismiss is a normal prerogative of the
employer; however, this power has a limitation. The employer is bound to exercise
caution in terminating the services of the employees especially so when it is made
upon the request of a labor union pursuant to the CBA. Dismissals must not be
arbitrary and capricious. Due process must be observed in dismissing employees
because the dismissal affects not only their positions but also their means of
livelihood. Employers should respect and protect the rights of their employees,
which include the right to labor.[26]

The CA and the three respondents err in relying on Malayang Samahan, as

its ruling has no application to this case. In Malayang Samahan, the union
members were expelled from the union and were immediately dismissed from the
company without any semblance of due process. Both the union and the company
did not conduct administrative hearings to give the employees a chance to explain
themselves. In the present case, the Club has substantially complied with due
process. The three respondents were notified that their dismissal was being
requested by the Union, and their explanations were heard. Then, the Club, through
its President, conferred with said respondents during the last week of October
2001. The three respondents were dismissed only after the Club reviewed and
considered the documents submitted by the Union vis--vis the written explanations
submitted by said respondents. Under these circumstances, we find that the Club
had afforded the three respondents a reasonable opportunity to be heard and defend
themselves.
 On the applicability of Agabon, the Club points out that the CA ruled that
the three respondents were illegally dismissed primarily because they were not
afforded due process. We are not unaware of the doctrine enunciated
in Agabon that when there is just cause for the dismissal of an employee, the lack
of statutory due process should not nullify the dismissal, or render it illegal or
ineffectual, and the employer should indemnify the employee for the violation of
his statutory rights.[27] However, we find that we could not apply Agabon to this
case as we have found that the three respondents were validly dismissed and were
actually afforded due process.

Finally, the issue that since there was no bad faith on the part of the Club,
the Union is solely liable for the termination from employment of the three
respondents, has been mooted by our finding that their dismissal is valid.

WHEREFORE, premises considered, the Decision dated July 5, 2005 of

the CA and the Decision dated February 26, 2004 of the NLRC are
hereby REVERSED and SET ASIDE. The Decision dated January 27, 2003 of
the Labor Arbiter in NLRC-NCR Case No. 30-01-00130-02 is
hereby REINSTATED.

STANDARD CHARTERED BANK EMPLOYEES UNION

(NUBE)vs. The Honorable MA. NIEVES R. CONFESOR, in her
capacity as SECRETARY OF LABOR AND EMPLOYMENT; and the
STANDARD CHARTERED BANK

G.R. No. 114974 June 16, 2004

FACTS: Before the commencement of the negotiation for the new CBA
between the bank and the Union, the Union, through Divinagracia, suggested
to the Bank’s Human Resource Manager and head of the negotiating panel,
Cielito Diokno, that the bank lawyers should be excluded from the negotiating
team. The Bank acceded. Meanwhile, Diokno(head of the negotiating
team for the bank) suggested to Divinagracia that Jose P. Umali,
Jr., the President of the National Union of Bank Employees
(NUBE), the federation to which the Union was affiliated, be
excluded from the Union’s negotiating panel. However, Umali was
retained as a member thereof.
There was deadlock in the negotiations. Both parties alleged ULP. Bank alleged
that the Union violated its no strike- no lockout clause by filing a notice of
strike before the NCMB. Considering that the filing of notice of strike was an
illegal act, the Union officers should be dismissed. Union alleged unfair
labor practice when the bank allegedly interfered with the Union’s
choice of negotiator. It argued that, Diokno’s suggestion that the
negotiation be limited as a “family affair” was tantamount to
suggesting that Federation President Jose Umali, Jr. be excluded from
the Union’s negotiating panel. It further argued that, damage or injury to the
public interest need not be present in order for unfair labor practice to
prosper. The Union also contended that the Bank merely went through the
motions of collective bargaining without the intent to reach an agreement
ISSUE:

1. WON there was interference

2. WON the bank committed “surface bargaining”
HELD:

1. NONE
Article 248(a) of the Labor Code, considers it an unfair labor practice when an
employer interferes, restrains or coerces employees in the exercise of their
right to self-organization or the right to form association. The right to self-
organization necessarily includes the right to collective bargaining.
Parenthetically, if an employer interferes in the selection of its negotiators or
coerces the Union to exclude from its panel of negotiators a representative of
the Union, and if it can be inferred that the employer adopted the said act to
yield adverse effects on the free exercise to right to self-organization or on the
right to collective bargaining of the employees, ULP under Article 248(a) in
connection with Article 243 of the Labor Code is committed.

In order to show that the employer committed ULP under the Labor Code,
substantial evidence is required to support the claim. Substantial
evidence has been defined as such relevant evidence as a
reasonable mind might accept as adequate to support a
conclusion. In the case at bar, the Union bases its claim of
interference on the alleged suggestions of Diokno to exclude Umali
from the Union’s negotiating panel.

The circumstances that occurred during the negotiation do not show that the
suggestion made by Diokno to Divinagracia is an anti-union conduct from
which it can be inferred that the Bank consciously adopted such act to yield
adverse effects on the free exercise of the right to self-organization and
collective bargaining of the employees, especially considering that such was
undertaken previous to the commencement of the negotiation and
simultaneously with Divinagracia’s suggestion that the bank lawyers be
excluded from its negotiating panel.

The records show that after the initiation of the collective bargaining process,
with the inclusion of Umali in the Union’s negotiating panel, the negotiations
pushed through. The complaint was made only on August 16, 1993 after a
deadlock was declared by the Union on June 15, 1993.

It is clear that such ULP charge was merely an afterthought. The accusation
occurred after the arguments and differences over the economic provisions
became heated and the parties had become frustrated. It happened after the
parties started to involve personalities. As the public respondent noted,
passions may rise, and as a result, suggestions given under less adversarial
situations may be colored with unintended meanings. Such is what appears to
have happened in this case.
1. NO. Surface bargaining is defined as “going through the motions of negotiating”
without any legal intent to reach an agreement.”
The Union alleges that the Bank violated its duty to bargain; hence, committed
ULP under Article 248(g) when it engaged in surface bargaining. It alleged
that the Bank just went through the motions of bargaining without any intent
of reaching an agreement, as evident in the Bank’s counter-proposals. It
explained that of the 34 economic provisions it made, the Bank only made 6
economic counterproposals. Further, as borne by the minutes of the meetings,
the Bank, after indicating the economic provisions it had rejected, accepted,
retained or were open for discussion, refused to make a list of items it agreed
to include in the economic package.

The minutes of meetings from March 12, 1993 to June 15, 1993 do not show
that the Bank had any intention of violating its duty to bargain with the Union.
Records show that after the Union sent its proposal to the Bank on February
17, 1993, the latter replied with a list of its counter-proposals on February 24,
1993. Thereafter, meetings were set for the settlement of their differences. The
minutes of the meetings show that both the Bank and the Union exchanged
economic and non-economic proposals and counter-proposals.
The Union has not been able to show that the Bank had done acts,
both at and away from the bargaining table, which tend to show
that it did not want to reach an agreement with the Union or to
settle the differences between it and the Union. Admittedly, the parties
were not able to agree and reached a deadlock. However, it is herein
emphasized that the duty to bargain “does not compel either party
to agree to a proposal or require the making of a concession.”

Hence, the parties’ failure to agree did not amount to ULP under Article
248(g) for violation of the duty to bargain.

NOTE: (on the allegation of the bank’s refusal to give certain information) The
Union, did not, as the Labor Code requires, send a written request for the
issuance of a copy of the data about the Bank’s rank and file employees.
Moreover, as alleged by the Union, the fact that the Bank made use of the
aforesaid guestimates, amounts to a validation of the data it had used in its
presentation.

From Atty. Renes^^

ENERAL MILLING CORPORATION vs HON. COURT OF APPEALS,

GENERAL MILLING CORPORATION INDEPENDENT LABOR
UNION (GMC-ILU), and RITO MANGUBAT

G.R. No. 146728 February 11, 2004

FACTS: In its two plants located at Cebu City and Lapu-Lapu City, petitioner
General Milling Corporation (GMC) employed 190 workers. They were all
members of private respondent General Milling Corporation Independent
Labor Union. On April 28, 1989, GMC and the union concluded a collective
bargaining agreement (CBA) which included the issue of representation
effective for a term of three years. The day before the expiration of the CBA,
the union sent GMC a proposed CBA, with a request that a counter-proposal
be submitted within ten (10) days. However, GMC had received collective and
individual letters from workers who stated that they had withdrawn from their
union membership, on grounds of religious affiliation and personal
differences. Believing that the union no longer had standing to negotiate a
CBA, GMC did not send any counter-proposal.
On December 16, 1991, GMC wrote a letter to the union’s officers, Rito
Mangubat and Victor Lastimoso. The letter stated that it felt there was no
basis to negotiate with a union which no longer existed, but that management
was nonetheless always willing to dialogue with them on matters of common
concern and was open to suggestions on how the company may improve its
operations. In answer, the union officers wrote a letter dated December 19,
1991 disclaiming any massive disaffiliation or resignation from the union and
submitted a manifesto, signed by its members, stating that they had not
withdrawn from the union.

NLRC held that the action of GMC in not negotiating was ULP.

ISSUE: WON the company (GMC) should have entered into collective
bargaining with the union

HELD: The law mandates that the representation provision of a

CBA should last for five years. The relation between labor and
management should be undisturbed until the last 60 days of the fifth
year. Hence, it is indisputable that when the union requested for a
renegotiation of the economic terms of the CBA on November 29, 1991, it was
still the certified collective bargaining agent of the workers, because it was
seeking said renegotiation within five (5) years from the date of
effectivity of the CBA on December 1, 1988. The union’s proposal
was also submitted within the prescribed 3-year period from the
date of effectivity of the CBA, albeit just before the last day of said
period. It was obvious that GMC had no valid reason to refuse to negotiate in
good faith with the union. For refusing to send a counter-proposal to the union
and to bargain anew on the economic terms of the CBA, the company
committed an unfair labor practice under Article 248 of the Labor Code.
ART. 253-A. Terms of a collective bargaining agreement. – Any
Collective Bargaining Agreement that the parties may enter into shall, insofar
as the representation aspect is concerned, be for a term of five (5) years. No
petition questioning the majority status of the incumbent bargaining agent
shall be entertained and no certification election shall be conducted by the
Department of Labor and Employment outside of the sixty-day period
immediately before the date of expiry of such five year term of the Collective
Bargaining Agreement. All other provisions of the Collective Bargaining
Agreement shall be renegotiated not later than three (3) years after its
execution….
ART. 248. Unfair labor practices of employers. – It shall be unlawful
for an employer to commit any of the following unfair labor practice:
(g) To violate the duty to bargain collectively as prescribed by this Code;

Under Article 252 abovecited, both parties are required to perform their
mutual obligation to meet and convene promptly and expeditiously in good
faith for the purpose of negotiating an agreement. The union lived up to this
obligation when it presented proposals for a new CBA to GMC within three (3)
years from the effectivity of the original CBA. But GMC failed in its duty under
Article 252. What it did was to devise a flimsy excuse, by questioning the
existence of the union and the status of its membership to prevent any
negotiation.

ART. 250. Procedure in collective bargaining. – The following

procedures shall be observed in collective bargaining:

(a) When a party desires to negotiate an agreement, it shall serve a written

notice upon the other party with a statement of its proposals. The other
party shall make a reply thereto not later than ten (10) calendar days from receipt of
such notice.
GMC’s failure to make a timely reply to the proposals presented by the union
is indicative of its utter lack of interest in bargaining with the union. Its excuse
that it felt the union no longer represented the workers, was mainly dilatory as
it turned out to be utterly baseless.

Failing to comply with the mandatory obligation to submit a reply to the

union’s proposals, GMC violated its duty to bargain collectively, making it
liable for unfair labor practice.

From Atty. Renes^^

[G.R. No. 149440. January 28, 2003]

HACIENDA FATIMA and/or PATRICIO VILLEGAS, ALFONSO VILLEGAS and CRISTINE

SEGURA, petitioners, vs. NATIONAL FEDERATION OF SUGARCANE WORKERS-FOOD AND
GENERAL TRADE, respondents.

FACTS: In the course of a labor dispute between the petitioner and respondent union, the union
members were not given work for more than one month. In protest, complainants staged a strike
which was however settled upon the signing of a Memorandum of Agreement. A conciliation meeting
was conducted wherein Luisa Rombo, Ramona Rombo, Bobong Abrega, and Boboy Silva were not
considered by the company as employees, and thus may not be members of the union. It was also
agreed that a number of other employees will be reinstated. When respondents again reneged on its
commitment, complainants filed the present complaint. It is alleged by the petitioners that the above
employees are mere seasonal employees.
ISSUE: Whether or not the seasonal employees have become regular employees.

HELD: The SC held that for respondents to be excluded from those classified as regular employees,
it is not enough that they perform work or services that are seasonal in nature. They must have also
been employed only for the duration of one season. The evidence proves the existence of the first,
but not of the second, condition. The fact that respondents -- with the exception of Luisa Rombo,
Ramona Rombo, Bobong Abriga and Boboy Silva -- repeatedly worked as sugarcane workers for
petitioners for several years is not denied by the latter. Evidently, petitioners employed respondents
for more than one season. Therefore, the general rule of regular employment is applicable.

The primary standard of determining regular employment is the reasonable connection between the
particular activity performed by the employee in relation to the usual trade or business of the
employer. The test is whether the former is usually necessary or desirable in the usual trade or
business of the employer. The connection can be determined by considering the nature of the work
performed and its relation to the scheme of the particular business or trade in its entirety. Also if the
employee has been performing the job for at least a year, even if the performance is not continuous
and merely intermittent, the law deems repeated and continuing need for its performance as
sufficient evidence of the necessity if not indispensability of that activity to the business. Hence, the
employment is considered regular, but only with respect to such activity and while such activity
exists.

Petition is denied.
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De Leon et al. v. NLRC

Posted: May 1, 2015 in case digests, labor relations
Tags: case digests, De Leon et al. v. NLRC, LABOR RELATIONS

0
De Leon et al. v. NLRC

2001 May 30

Facts: Petitioners are security guards assigned in the premises of Fortune Tobacco Services, Inc. (FTC) pursuant to a contract for

security services with Fortune Integrated Services Inc. (FISI). Sometime after, FISI stockholders executed a “Deed of Sale of

Shares of Stock” in favor of a group of new stockholders, it also amended its Articles of Incorporation changing its name to

Magnum Integrated Services, Inc. (MISI). FTC terminated the contract with FISI which resulted in the displacement of some 582

security guards assigned to FTC, including petitioners herein.

FTC Labor Union which is an affiliate of NAFLU, sent a Notice of Strike which resulted in the picketing of the premises of FTC,

however, RTC of Pasig, issued a writ of injunction to enjoin the picket. Petitioners then filed the instant case to the Arbitration

branch of the NLRC.

Petitioners that they were regular employees of FTC which was also using the corporate names FISI and MISI, averring that they

work under the control and supervision of FTC’s security supervisors, and that, they were dismissed without just cause and due

process. They also claimed that their dismissal was the design of their employer to bust their newly organized union. Respondent

FTC, on the other hand, maintained that there was no EE-ER relationship, that petitioners were employee of MISI a separate and

distinct corporation from FTC.

LA ruled for respondents. NLRC reversed.

Issue: WON respondents are guilty of ULP.

Held: Yes, respondents are guilty of ULP.

Ratio: Respondents were guilty of interfering with the right of petitioners to self-

organization which constitutes unfair labor practice under Article 248 of the Labor Code. Petitioners have been employed

with FISI since the 1980s and have since been posted at the premises of FTC (main factory plant, tobacco re-drying plant and

warehouse). FISI, while having its own corporate identity, was a mere instrumentality of FTC, tasked to provide

protection and security in the company premises. The 2 corporations had identical stockholders and the same business

address. FISI also had no other clients except FTC and other companies belonging to the Lucio Tan group of

companies. Moreover, the early payslips of petitioners show that their salaries were initially paid by FTC. To enforce their

rightful benefits under the laws on Labor Standards, petitioners formed a union which was

later certified as bargaining agent of all the security guards. On February 1, 1991, the

stockholders of FISI sold all their participations in the corporation to a new set of stockholders which renamed the

corporation Magnum Integrated Services, Inc. On October 15, 1991, FTC, without any reason, pre-terminated its contract of

security services with MISI and contracted 2 other agencies to provide security services for its premises. This resulted in the

displacement of petitioners. As MISI had no other clients, it failed to give new assignments to petitioners. Petitioners
have remained unemployed since then. All these facts indicate a concerted effort on the part of respondents to remove

petitioners from the company and thus abate the growth of the union and block its actions to enforce their demands in

accordance with the Labor Standards laws.

The test of whether an employer has interfered with and coerced employees

within the meaning of section (a) (1) is whether the employer has engaged in conduct

which it may reasonably be said tends to interfere with the free exercise of employees’ rights under section 3 of the Act,

and it is not necessary that there be direct evidence that any employee was in fact intimidated or coerced by statements of threats

of the employer if there is a reasonable inference that anti-union conduct of the employer does have an adverse effect on

self-organization and collective bargaining.”

A corporation is an entity separate and distinct from its stockholders and from other corporations to which it is

connected. However, when the concept of separate legal entity is used to defeat public convenience, justify wrong, protect fraud

or defend crime, the law will regard the corporation as an association of persons, or in case of two corporations, merge them into

one. The separate juridical personality of a corporation may also be

disregarded when such corporation is a mere alter ego or business conduit of another person. FISI was a mere adjunct of

FTC. FISI, by virtue of a contract for security services, provided FTC with security guards to safeguard its premises. However,

records show that FISI and FTC have the same owners and business address, and FISI provided security services only to

FTC and other companies belonging to the Lucio Tan group of companies. The purported sale of the shares of the

former stockholders to a new set of stockholders who changed the name of the corporation to Magnum Integrated Services,

Inc. appears to be part of a scheme to terminate the services of FISI’s security guards posted at the premises of FTC and

bust their newly-organized union which was then beginning to become

active in demanding the company’s compliance with Labor Standards laws. Under these

circumstances, the Court cannot allow FTC to use its separate corporate personality to shield itself from liability for

illegal acts committed against its employees.

IN VIEW WHEREOF, petition is GRANTED. The assailed resolutions of the NLRC are SET ASIDE. Respondents are hereby

ordered to pay petitioners their full backwages, and to reinstate them to their former position without loss of seniority rights and

privileges, or to award them separation pay in case reinstatement is no longer possible.

LABREL CASE DIGEST POOL / ATTORNEY JHONELLE ESTRADA / MONDAYS / 5:30 PM TO
8:30 PM / NEW ERA UNIVERSITY COLLEGE OF LAW

Case Digest: COLEGIO DE SAN JUAN DE

LETRAN vs. ASSOCIATION OF EMPLOYEES
AND FACULTIES OF LETRAN and ELEONOR
AMBAS
G.R. No. 141471. September 18, 2000

Facts:

During the renegotiation of the respondent unions Collective Bargaining Agreement

with the petitioner, Eleonor Ambas emerged as the newly elected President of the union.
Ambas wanted to continue the renegotiation of the CBA but petitioner, through Fr.
Edwin Lao, claimed that the CBA was already prepared for signing by the parties.
However, the union members rejected the said CBA. Thereafter, petitioner accused the
union officers of bargaining in bad faith before the NLRC. The Labor Arbiter decided in
favor of the petitioner. This decision was reversed on appeal with the NLRC.

The parties later agreed to disregard the unsigned CBA and to start negotiation on new
five-year CBA. During the pendency of approval of proposals, Ambas was informed that
her work schedule was being changed. Ambas protested and requested management to
submit the issue to a grievance machinery under the old CBA.

After the petitioner’s inaction on the CBA, the union filed a notice to strike. After
meeting with the NCMB to discuss the ground rules for renegotiation, Ambas received a
letter dismissing her for alleged insubordination. The petitioner then ceased
negotiations when it received news that another labor organization had filed a petition
for certification.

The union finally struck, but the Secretary of Labor and Employment ordered them to
return to work and for petitioner to accept them back. The Secretary of Labor and
Employment later rendered judgement that the petitioner had been guilty of unfair
labor practice. The Court of Appeals affirmed the findings of the former.

Issue(s):
1. Whether petitioner is guilty of unfair labor practice by refusing to bargain
with the union when it unilaterally suspended the ongoing negotiations for a new
CBA; and
2. Whether the termination of the union president amounts to an
interference of the employees’ right to self-organization.
Held:

The Supreme Court found the petition unmeritorious.

1. The petitioner’s failure to act upon the submitted CBA proposal within the
ten-day period exemplified in Article 250 of the Labor Code is a clear violation of
the governing procedure of collective bargaining. As the Court has held in Kiok
Loy vs. NLRC, the company’s refusal to make counter-proposal to the union’s
proposed CBA is an indication of bad faith. Moreover, the succeeding events are
obvious signs that the petitioner had merely been employing delaying tactics to
the passage of the proposed CBA. Moreover, in order to allow the employer to
validly suspend the bargaining process, there must be a valid petition for
certification election raising a legitimate representation issue. Hence, the mere
filing of a petition for certification election does not ipso facto justify the
suspension of negotiation by the employer.
2. The factual backdrop of the termination of Ambas led the Court to no
other conclusion that she was dismissed in order to strip the union of a leader
who would fight for the right of her co-workers in the bargaining table. While the
Court recognizes the right of the employer to terminate the services of an
employee for a just or authorized cause, nevertheless, the dismissal of employees
must be made within the parameters of aw and pursuant to the tenets of equity
and fair play. Even assuming arguendo that Ambas was guilty of
insubordination, such disobedience was not a valid ground to terminate her
employment. When the exercise of the management to discipline its employees
tends to interfere with the employees’ right to self-organization, it amounts to
union-busting and is therefore a prohibited act.

CATHAY PACIFIC STEEL CORPORATION, BENJAMIN CHUA JR.,

VIRGILIO AGERO, and LEONARDO VISORRO, JR. vs. CA,
CAPASCO UNION OF SUPERVISORY EMPLOYEES (CUSE) and
ENRIQUE TAMONDONG III

G.R. No. 164561 August 30, 2006

FACTS: Sometime in June 1996, the supervisory personnel of CAPASCO

launched a move to organize a union among their ranks, later known as
private respondent CUSE. Private respondent Tamondong actively involved
himself in the formation of the union and was even elected as one of its
officers after its creation. Consequently, petitioner CAPASCO sent a memo to
private respondent Tamondong requiring him to explain and to discontinue
from his union activities, with a warning that a continuance thereof shall
adversely affect his employment in the company. Private respondent
Tamondong ignored said warning and made a reply letter invoking his right as
a supervisory employee to join and organize a labor union. In view of that, on
6 February 1997, petitioner CAPASCO through a memo terminated the
employment of private respondent Tamondong on the ground of loss of trust
and confidence, citing his union activities as acts constituting serious
disloyalty to the company.

Private respondent Tamondong challenged his dismissal for being illegal and
as an act involving unfair labor practice by filing a Complaint for Illegal
Dismissal and Unfair Labor Practice before the NLRC, Regional Arbitration
Branch IV. According to him, there was no just cause for his dismissal and it
was anchored solely on his involvement and active participation in the
organization of the union of supervisory personnel in CAPASCO. Though
private respondent Tamondong admitted his active role in the formation of a
union composed of supervisory personnel in the company, he claimed that
such was not a valid ground to terminate his employment because it was a
legitimate exercise of his constitutionally guaranteed right to self-
organization.

In contrast, petitioner CAPASCO contended that by virtue of private

respondent Tamondong’s position as Personnel Superintendent and the
functions actually performed by him in the company, he was considered as a
managerial employee, thus, under the law he was prohibited from joining a
union as well as from being elected as one of its officers. Accordingly,
petitioners maintained their argument that the dismissal of private
respondent Tamondong was perfectly valid based on loss of trust and
confidence because of the latter’s active participation in the affairs of the
union.

ISSUE: WON the dismissal of Tamondong was valid

HELD: INVALID

[Private respondent] Tamondong may have possessed enormous powers and

was performing important functions that goes with the position of Personnel
Superintendent, nevertheless, there was no clear showing that he is at liberty,
by using his own discretion and disposition, to lay down and execute major
business and operational policies for and in behalf of CAPASCO. [Petitioner]
CAPASCO miserably failed to establish that [private respondent] Tamondong
was authorized to act in the interest of the company using his independent
judgment. x x x. Withal, [private respondent] Tamondong may have been
exercising certain important powers, such as control and supervision over
erring rank-and-file employees, however, x x x he does not possess the power
to hire, transfer, terminate, or discipline erring employees of the company. At
the most, the record merely showed that [private respondent] Tamondong
informed and warned rank-and-file employees with respect to their violations
of CAPASCO’s rules and regulations. x x x. [Also, the functions performed by
private respondent such as] issuance of warning to employees with irregular
attendance and unauthorized leave of absences and requiring employees to
explain regarding charges of abandonment of work, are normally performed
by a mere supervisor, and not by a manager.

Being a supervisory employee of CAPASCO, he cannot be prohibited

from joining or participating in the union activities of private respondent
CUSE, and in making such a conclusion, the Court of Appeals did not act
whimsically, capriciously or in a despotic manner, rather, it was guided by the
evidence submitted before it. Thus, given the foregoing findings of the
Court of Appeals that private respondent is a supervisory
employee, it is indeed an unfair labor practice on the part of
petitioner CAPASCO to dismiss him on account of his union
activities, thereby curtailing

FIRST DIVISION

ST. JOHN COLLEGES, INC., G.R. No. 167892

Petitioner,
Present:
Panganiban, C.J. (Chairperson),
- versus - Ynares-Santiago,
Austria-Martinez,
Callejo, Sr., and
Chico-Nazario, JJ.
ST. JOHN ACADEMY FACULTY
AND EMPLOYEES UNION, Promulgated:
Respondent.
October 27, 2006
x ---------------------------------------------------------------------------------------- x
 DECISION
YNARES-SANTIAGO, J.:

This petition for review on certiorari assails the April 22, 2004
Decision[1] of the Court of Appeals in CA-G.R. SP No. 74519, which affirmed with
modifications the June 28, 2002 Resolution[2] of the National Labor Relations
Commission (NLRC) in NLRC CN RAB IV 5-10035-98-1, and its April 15, 2005
Resolution[3] denying petitioners motion for reconsideration.

Petitioner St. John Colleges, Inc. (SJCI) is a domestic corporation which

owns and operates the St. Johns Academy (later renamed St. John Colleges) in
Calamba, Laguna. Prior to 1998, the Academy offered a secondary course
only. The high school then employed about 80 teaching and non-teaching
personnel who were members of the St. John Academy Faculty & Employees
Union (Union).

The Collective Bargaining Agreement (CBA) between SJCI and

the Union was set to expire on May 31, 1997. During the ensuing collective
bargaining negotiations, SJCI rejected all the proposals of the Unionfor an increase
in workers benefits. This resulted to a bargaining deadlock which led to the
holding of a valid strike by the Union on November 10, 1997. In order to end the
strike, on November 27, 1997, SJCI and the Union, through the efforts of the
National Conciliation and Mediation Board (NCMB), agreed to refer the labor
dispute to the Secretary of Labor and Employment (SOLE) for assumption of
jurisdiction:

AGREEMENT AND JOINT PETITION FOR ASSUMPTION OF

JURISDICTION

Both parties agree as follows:

1. That the issue raised by the Union shall be referred to the Honorable
Secretary of Labor by way of Assumption of Jurisdiction. Note
this will serve as a joint petition for Assumption of Jurisdiction.
 2. Parties shall submit their respective position paper within 10 days
upon the signing of this agreement and to be decided within two
months.

3. That management shall grant the employees cash advance of

P1,800.00 each to be given on or before December 5,
1997 deductible after two months payable in two installments
starting January 31, 1998. The decision re: assumption [of]
jurisdiction has not been resolved.

4. Union shall lift the picket immediately and remove all obstruction and
return to work on Monday, December 1, 1997.

5. No retaliatory action shall be undertaken by either party against each

other in relation to the strike.[4]

After which, the strike ended and classes resumed. Subsequently, the SOLE issued
an Order dated January 19, 1998 assuming jurisdiction over the labor dispute
pursuant to Article 263 of the Labor Code. The parties were required to submit
their respective position papers within ten (10) days from receipt of said Order.

Pending resolution of the labor dispute before the SOLE, the Board of
Directors of SJCI approved on February 22, 1998 a resolution recommending the
closure of the high school which was approved by the stockholders on even
date. The Minutes[5] of the stockholders meeting stated the reasons therefor, to wit:

98-3 CLOSURE OF THE SCHOOL

The President, Mr. Rivera, informed the stockholders that the

Board at its meeting on February 15, 1998 unanimously approved to
recommend to the stockholders the closure of the school because of the
irreconcilable differences between the school management and the
Academys Union particularly the safety of our students and the financial
aspect of the ongoing CBA negotiations.

After due deliberations, and upon motion of Dr. Jose O. Juliano

seconded by Miss Eva Escalano, it was unanimously resolved, as it is
hereby resolved, that the Board of St. John Colleges, Inc. be authorized
 to decide on the terms and conditions of closure, if such decision is
made, to the best interest of the stockholders, parents and students.[6]

Thereafter, SJCI informed the Department of Labor and Employment (DOLE),

Department of Education, Culture and Sports (DECS), parents, students and
the Union of the impending closure of the high school which took effect on March
31, 1998.

Subsequently, some teaching and non-teaching personnel of the high school agreed
to the closure. On April 2, 1998, SJCI informed the DOLE that as of March 31,
1998, 51 employees had received their separation compensation package while 25
employees refused to accept the same.

On May 4, 1998, the aforementioned 25 employees conducted a protest action

within the perimeter of the high school. The Union filed a notice of strike with the
NCMB only on May 7, 1998.

On May 19, 1998, SJCI filed a petition to declare the strike illegal before the
NLRC which was docketed as NLRC Case No. RAB-IV-5-10035-98-L. It claimed
that the strike was conducted in violation of the procedural requirements for
holding a valid strike under the Labor Code.

On May 21, 1998, the 25 employees filed a complaint for unfair labor
practice (ULP), illegal dismissal and non-payment of monetary benefits against
SJCI before the NLRC which was docketed as RAB-IV-5-10039-98-L. The Union
members alleged that the closure of the high school was done in bad faith in order
to get rid of the Union and render useless any decision of the SOLE on the CBA
deadlocked issues.

These two cases were then consolidated. On January 8, 1999, Labor Arbiter
Antonio R. Macam rendered a Decision[7] dismissing the Unions complaint for
ULP and illegal dismissal while granting SJCIs petition to declare the strike illegal
coupled with a declaration of loss of employment status of the 25 Union members
involved in the strike.
 Meanwhile, in the proceedings before the SOLE, the Union filed a
manifestation[8] to maintain the status quo on March 30, 1998 praying that SJCI be
enjoined from closing the high school. It claimed that the decision of SJCI to close
the high school violated the SOLEs assumption order and the agreement of the
parties not to take any retaliatory action against the other. For its part, SJCI filed a
motion to dismiss with entry of appearance[9] on October 14, 1998 claiming that
the closure of the high school rendered the CBA deadlocked issues moot. Upon
receipt of the Labor Arbiters decision in the aforesaid consolidated cases, SJCI
filed a second motion to dismiss[10] on February 1, 1999 arguing that the case had
already been resolved.

Moreover, after the favorable decision of the Labor Arbiter, SJCI resolved to
reopen the high school for school year 1999-2000. However, it did not restore the
high school teaching and non-teaching employees it earlier terminated. That same
school year SJCI opened an elementary and college department.

On July 23, 1999, the SOLE denied SJCIs motions to dismiss and certified
the CBA deadlock case to the NLRC. It ordered the consolidation of the CBA
deadlock case with the ULP, illegal dismissal, and illegal strike cases which were
then pending appeal before the NLRC.

On June 28, 2002, the NLRC rendered judgment reversing the decision of
the Labor Arbiter. It found SJCI guilty of ULP and illegal dismissal and ordered it
to reinstate the 25 employees to their former positions without loss of seniority
rights and other benefits, and with full backwages. It also required SJCI to pay
moral and exemplary damages, attorneys fees, and two (2) months
summer/vacation pay. Moreover, it ruled that the mass actions conducted by the 25
employees on May 4, 1998 could not be considered as a strike since, by then, the
employer-employee relationship had already been terminated due to the closure of
the high school. Finally, it dismissed, without prejudice, the certified case on the
CBA deadlocked issues for failure of the parties to substantiate their respective
positions.

On appeal, the Court of Appeals, in its Decision dated April 22, 2004,
affirmed with modification the decision of the NLRC:
 WHEREFORE, in light of the preceding discussions, the decision
subject of the instant petition is hereby affirmed with a modification that
in the computation of backwages, the two month unworked summer
vacation should excluded.

SO ORDERED.[11]

With the denial of its motion for reconsideration, SJCI interposed the instant
petition essentially raising two issues: (1) whether it is liable for ULP and illegal
dismissal when it closed down the high school on March 31, 1998 and (2) whether
the Union is liable for illegal strike due to the protest actions which its 25 members
undertook within the high schools perimeter on May 4, 1998.

The petition lacks merit.

Under Article 283 of the Labor Code, the following requisites must concur
for a valid closure of the business: (1) serving a written notice on the workers at
least one (1) month before the intended date thereof; (2) serving a notice with the
DOLE one month before the taking effect of the closure; (3) payment of separation
pay equivalent to one (1) month 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 as a whole year; and (4) cessation of the operation must be bona
fide.[12] It is not disputed that the first two requisites were satisfied. The third
requisite would have been satisfied were it not for the refusal of the herein private
respondents to accept the separation compensation package. The instant case, thus,
revolves around the fourth requisite, i.e., whether SJCI closed the high school in
good faith.

Whether or not the closure of the high school was done in good faith is a
question of fact and is not reviewable by this Court in a petition for review
on certiorari save for exceptional circumstances. In fine, the finding of the NLRC,
which was affirmed by the Court of Appeals, that SJCI closed the high school in
bad faith is supported by substantial evidence and is, thus, binding on this
Court. Consequently, SJCI is liable for ULP and illegal dismissal.
 The determination of whether SJCI acted in bad faith depends on the
particular facts as established by the evidence on record. Bad faith is, after all, an
inference which must be drawn from the peculiar circumstances of a case. The two
decisive factors in determining whether SJCI acted in bad faith are (1) the timing
of, and reasons for the closure of the high school, and (2) the timing of, and the
reasons for the subsequent opening of a college and elementary department, and,
ultimately, the reopening of the high school department by SJCI after only one
year from its closure.

Prior to the closure of the high school by SJCI, the parties agreed to refer the 1997
CBA deadlock to the SOLE for assumption of jurisdiction under Article 263 of the
Labor Code. As a result, the strike ended and classes resumed. After the SOLE
assumed jurisdiction, it required the parties to submit their respective position
papers. However, instead of filing its position paper, SJCI closed its high school,
allegedly because of the irreconcilable differences between the school management
and the Academys Union particularly the safety of our students and the financial
aspect of the ongoing CBA negotiations. Thereafter, SJCI moved to dismiss the
pending labor dispute with the SOLE contending that it had become moot because
of the closure. Nevertheless, a year after said closure, SJCI reopened its high
school and did not rehire the previously terminated employees.

Under these circumstances, it is not difficult to discern that the closure was done to
defeat the parties agreement to refer the labor dispute to the SOLE; to unilaterally
end the bargaining deadlock; to render nugatory any decision of the SOLE; and to
circumvent the Unions right to collective bargaining and its members right to
security of tenure. By admitting that the closure was due to irreconcilable
differences between the Union and school management, specifically, the financial
aspect of the ongoing CBA negotiations, SJCI in effect admitted that it wanted to
end the bargaining deadlock and eliminate the problem of dealing with the
demands of the Union. This is precisely what the Labor Code abhors and
punishes as unfair labor practice since the net effect is to defeat the Unions
right to collective bargaining.

However, SJCI contends that these circumstances do not establish its bad
faith in closing down the high school. Rather, it claims that it was forced to close
down the high school due to alleged difficult labor problems that it encountered
while dealing with the Union since 1995, specifically, the Unions illegal demands
in violation of R.A. 6728 or the Government Assistance to Students and Teachers
in Private Education Act. Under R.A. 6728, the income from tuition fee increase is
to be used as follows: (a) 70% of the tuition fee shall go to the payment of salaries,
wages, allowances, and other benefits of teaching and non-teaching personnel, and
(b) 20% of the tuition fee increase shall go to the improvement or modernization of
the buildings, equipment, and other facilities as well as payment of the cost of
operations. However, sometime in 1995, SJCI claims that it was forced to give-in
to the demands of the Union by allocating 100% of the tuition fee increase for
teachers benefits even though the same was in violation of R.A. 6728 in order to
end the on-going strike of the Union and avoid prolonged disturbances of
classes. Subsequently or during the school year 1996-1997, SJCI claims that it
obtained an approval from the DECS for a 30% tuition fee increase, however, only
10% was implemented. Despite this, the Union persisted in making illegal
demands by filing a complaint before the DOLE claiming that they were entitled to
the unimplemented 20% tuition fee increase. Finally, during the collective
bargaining negotiations in 1997, the Union again made economic demands in
excess of the 70% of the tuition fee increase under R.A. 6728. As a result, SJCI
claims it had no choice but to refuse the Unions demands which thereafter led to
the holding of a strike on November 10, 1998. It argues that the Unions alleged
illegal demands was a valid justification for the closure of the high school
considering that it was financially incapable of meeting said demands and that it
would violate R.A. 6728 if it gave in to said demands which carried corresponding
penalties to be imposed by the DECS.

We are not persuaded.

These alleged difficult labor problems merely show that SJCI and
the Union had disagreements regarding workers benefits which is normal in any
business establishment. That SJCI agreed to appropriate 100% of the tuition fee
increase to the workers benefits sometime in 1995 does not mean that it was
helpless in the face of the Unions demands because neither party is obligated to
precipitately give in to the proposal of the other party during collective
bargaining.[13] If SJCI found the Unions demands excessive, its remedy under the
law is to refer the matter for voluntary or compulsory dispute resolution. Besides,
this incident which occurred in 1995, could hardly establish the good faith of SJCI
or justify the high schools closure in 1998.

Anent the Unions claim for the unimplemented 20% tuition fee increase in
1996, suffice it to say that it is erroneous to rule on said issue since the same was
submitted before the Voluntary Arbitrator[14] and is not on appeal before this
Court.[15] Besides, by referring the labor dispute to the Voluntary Arbitrator, the
parties themselves acknowledged that there is a sufficient mechanism to resolve
the said dispute. Again, we fail to see how this alleged labor problem in 1996
shows the good faith of SJCI in closing the high school in 1998.

With respect to SJCIs claim that during the 1997 CBA negotiations the
Union made illegal demands because they exceeded the 70% limitation set by R.A.
No. 6728, it is important to note that the alleged illegality or excessiveness of the
Unions demands were the issues to be resolved by the SOLE after the parties
agreed to refer the said labor dispute to the latter for assumption of jurisdiction. As
previously mentioned, the SOLE certified the case to the NLRC, which on June 28,
2002, rendered a decision finding that there was insufficient evidence to
determine the reasonableness of the Unions proposals. The NLRC found that SJCI
failed to establish that the Unions demands were illegal or excessive. A review of
the records clearly shows that the Union submitted a position paper detailing its
demands in actual monetary terms. However, SJCI failed to establish how and why
these demands were in excess of the limitation set by R.A. 6728. Up to this point in
the proceedings, it has merely relied on its self-serving statements that the Unions
demands were illegal and excessive. There is no basis, therefore, to hold that
the Union ever made illegal or excessive demands.

At any rate, even assuming that the Unions demands were illegal or
excessive, the important and crucial point is that these alleged illegal or excessive
demands did not justify the closure of the high school and do not, in any way,
establish SJCIs good faith. The employer cannot unilaterally close its
establishment on the pretext that the demands of its employees are excessive. As
already discussed, neither party is obliged to give-in to the others excessive or
unreasonable demands during collective bargaining, and the remedy in such case is
to refer the dispute to the proper tribunal for resolution. This was what SJCI and
the Union did when they referred the 1997 CBA bargaining deadlock to the SOLE;
however, SJCI pre-empted the resolution of the dispute by closing the high
school. SJCI disregarded the whole dispute resolution mechanism and undermined
the Unions right to collective bargaining when it closed down the high school
while the dispute was still pending with the SOLE.

The Labor Code does not authorize the employer to close down the
establishment on the ground of illegal or excessive demands of the Union. Instead,
aside from the remedy of submitting the dispute for voluntary or compulsory
arbitration, the employer may file a complaint for ULP against the Union for
bargaining in bad faith. If found guilty, this gives rise to civil and criminal
liabilities and allows the employer to implement a lock out, but not the closure of
the establishment resulting to the permanent loss of employment of the whole
workforce.

In fine, SJCI undermined the Labor Codes system of dispute resolution by

closing down the high school while the 1997 CBA negotiations deadlock issues
were pending resolution before the SOLE. The closure was done in bad faith for
the purpose of defeating the Unions right to collective bargaining. Besides, as
found by the NLRC, the alleged illegality and excessiveness of the Unions
demands were not sufficiently proved by SJCI. Even on the assumption that
the Unions demands were illegal or excessive, SJCIs remedy was to await the
resolution by the SOLE and to file a ULP case against the Union. However, SJCI
did not have the power to take matters into its own hands by closing down the
school in order to get rid of the Union.

SJCI next argues that the Union unduly endangered the safety and well-
being of the students who joined the valid strike held on November 10, 1997, thus
it closed down the high school on March 31, 1998.It claims that the Union coerced
the students to join the protest actions to pressure SJCI to give-in to the demands of
the Union.

However, SJCI provided no evidence to substantiate these claims except for

its self-serving statements in its position paper before the Labor Arbiter and
pictures belatedly attached to the instant petition before this Court. However, the
pictures were never authenticated and, on its face, only show that some students
watched the Union members while they conducted their protest actions. More
importantly, it is not true, as SJCI claims, that the Union admitted that it coerced
the students to join the protest actions and recklessly placed the students in harms
way. In its Reply[16] to SJCIs position paper before the Labor Arbiter,
the Union categorically denied that it put the students in harms way or pressured
them to join the protest actions. Given this denial by the Union, it was incumbent
upon SJCI to prove that the students were actually harmed or put in harms way
and that the Union coerced them to join the protest actions. The reason for this is
that the employer carries the burden of proof to establish that the closure of the
business was done in good faith. In the instant case, SJCI had the burden of
proving that, indeed, the closure of the school was necessary to uphold the safety
and well-being of the students.

SJCI presented no evidence to show that the protest actions turned violent;
that the parents did not give their consent to their children who allegedly joined the
protest actions; that the Union did not take the necessary steps to protect some of
the students who allegedly joined the same; or that the Union forced or pressured
the said students to join the protest actions. Moreover, if the problem was the
endangerment of the students well-being due to the protest actions by the Union,
then the natural response would have been to immediately go after the Union
members who allegedly coerced the students to join the protest actions and thereby
endangered the students safety. But no such action appears to have been
undertaken by SJCI. There is even no showing that it prohibited its students from
joining the protest actions or informed the parents of the activities of the students
who allegedly joined the protest actions. This raises serious doubts as to whether
SJCI was really looking after the welfare of its students or merely using them as a
scapegoat to justify the closure of the school and thereby get rid of the Union.

Even assuming arguendo that the safety and well-being of some of the
students who allegedly joined the protest actions were compromised, still, the
closure was done in bad faith because it was done long after the strike had
ended. Thus, there is no more danger to the students well-being posed by the strike
to speak of. It bears stressing that the closure was implemented on March 31,
1998 but the risk to the safety of the students had long ceased to exist as early
as November 28, 1997 when the parties agreed to refer the labor dispute to the
SOLE, thus, betraying SJCIs claim that it wanted to safeguard the interest of the
students.
Furthermore, if SJCI was after the interests of the students, then it should not have
closed the school because the parents and the students were vehemently opposed to
the same, as shown by the letter dated March 9, 1998 written by Mr. Teofilo G.
Mamplata, President of the Parents Association, and addressed to the Secretary of
DECS, to wit:

As per letters sent recently by the school Management to the teachers

and parents, notifying of its closure on March 31, 1998, as decided upon
by its Board of Trustees and Stockholders on February 22, 1998 no
reasons were stated to justify said decision and action which will
definitely affect adversely and to the detriment of the plight of parents,
teachers, students and other personnel of the school.

In this connection and due to the urgency of the matter, we hereby

reiterate our appeal with our prayer that the management and Board of
Trustees of St. John Academy of Calamba, Laguna, be stopped from
pursuing their most sudden, unfair, unfavorable and detrimental decision
and action, and if warranted, sanctions be imposed against the erring
party.[17] (Italics supplied)

Along the same vein, the parents voiced out their strong objections to the proposed
closure of the school, to wit:

PAHAYAG NG PAGTUTOL

Kami, mga magulang, mag-aaral, guro, propesyonal, manggagawa at iba

pang sector ng pamayanan sa bayan ng Calamba, Laguna ay
nagpapahayag ng pagtutol sa hindi makatarungang pagsasara ng
paaralang SAINT JOHN ACADEMY. Ang kagyat na pagsasara nito ay
nagdulot ng malaking suliranin sa 2,300 estudyante (incoming 2nd year
4th year), kagaya ng mga sumusunod:

1. Kakaunti ang bilang ng paaralan sa Calamba;

2. Walang paaralan na basta tatanggap sa 700 incoming third
year at 800 incoming fourth year;
3. Ang lahat ng HONOR STUDENTS ay mababaliwala ang
kanilang pinagsikapan;
 4. Negatibo ang epekto sa moral ng mga batang estudyante
ang pagkakaroon ng physical and moral displacement dahil
sa biglaang pagsasara nito;
5. Hindi lahat ng magulang ay kakayaning bumayad ng
mataas na tuition fee sa ibang paaralan;
6. Ang mataas na kalidad ng turo ng mga guro sa paaralang
ito ay mahirap pantayan; at
7. HIGIT NA LIGTAS SA SAKUNA ANG AMING MGA
ANAK sa nasabing paaralan.

Bilang pagtutol sa pagsasara ng SAINT JOHN ACADEMY ay

inilalagda namin ang aming pangalan sa libis nito. (56 signatures
follow)[18] [Italics supplied]

Worth noting is the belief of the parents that the safety of their children was
properly secured in said high school. This was obviously in response to the claim
of SJCI that the school was being closed, inter alia, for the safety and well-being
of the students. As correctly observed by the CA:

The petitioner urges this Court to believe that they closed down
the school out of their sheer concern for the students, some of whom
have started to sympathize and participate in the unions cause.

As intimated by the private respondent, however, the petitioner

itself said that the closing down of the school was, inter alia, because of
irreconcilable differences between the school management and the
Academys Union. Indeed, this translates into an admission that the
cessation of business was neither due to any patrician nor noble
objective of protecting the studentry but because the administration no
longer wished to deal with respondent Union.

We are further tempted to doubt the verity of the petitioners claim

that in deciding to shut down the school, it only had the welfare of its
students in mind. There is evidence on record which hints otherwise.
Apparently, the parents of the students were vehemently against the idea
of closing down the academy as this would be, as it later did prove, more
detrimental to the studentry. No less than Mr. Teofilo Mamplata,
President of St. John Academy Parents Association of Calamba
expressed the groups aversion against such move and even wrote a letter
to the then Secretary of the Department of Education seeking immediate
 intervention to enjoin the school from closing. This is an indication that
the parents were unanimous in their sentiment that the shutdown would
result in inconvenience and displacement of the students who had
already been halfway through elementary school and high school. It
turned out some were even forced to pay higher tuition fees just so they
would be admitted in other academies.[19] (Italics supplied)

To recapitulate, there is insufficient evidence to hold that the safety and

well-being of the students were endangered and/or compromised, and that
the Union was responsible therefor. Even assuming arguendo that the students
safety and well-being were jeopardized by the said protest actions, the alleged
threat to the students safety and well-being had long ceased by the time the high
school was closed.Moreover, the parents were vehemently opposed to the closure
of the school because there was no basis to claim that the students safety was at
risk. Taken together, these circumstances lead to the inescapable conclusion that
SJCI merely used the alleged safety and well-being of the students as a subterfuge
to justify its actions.

SJCI next contends that the subsequent reopening of the high school after
only one year from its closure did not show that the previous decision to close the
high school was tainted with bad faith because the reopening was done due to the
clamor of the high schools former students and their parents. It claims that its
former students complained about the cramped classrooms in the schools where
they transferred.

The contention is untenable.

First, the fact that after one year from the time it closed its high school, SJCI
opened a college and elementary department, and reopened its high school
department showed that it never intended to cease operating as an educational
institution. Second, there is evidence on record contesting the alleged reason of
SJCI for reopening the high school, i.e., that its former students and their parents
allegedly clamored for the reopening of the high school. In a
letter[20] dated December 15, 2000 addressed to the NLRC, which has never been
rebutted by SJCI, Mr. Mamplata, stated that
 Para po sa inyong kabatiran xxx isinara nila ang paaralang ito dahil sa
mga nag-alsang guro.

Sa ganitong kalagayan kaming pamunuan at kasapi ng PTA ay nakipag-

usap sa pamunuan ng paaralang ito na huwag naming isara dahil
malaking epekto ito sa aming mga anak dahil noon ay kalagitnaan pa
lamang ng pasukan. Sa kabila ng pakiusap naming ito ay hindi kami
pinakinggan at sa halip ay tuluyang isinara. Sa kanilang ginawang ito
marami sa mga bata ang hindi nakapasok sa ibang paaralan at ang iba
naman ay nadoble ang pinagbayaran sa matrikula. Sa kabuuan nito ay
malaking paghirap ang ginawa nila sa aming mga magulang at anak na
nag-aaral sa paaralang ito dahil lamang sa panggigipit sa mga gurong
walang tanging hangarin kundi bayaran sila ng naaayon sa itinakda ng
batas.

Sa taong 1999-2000 ay muling binuksan ang paaralang ito na sabi nila ay

sa kahilingan ng PTA. Alin kayang PTA ang tinutukoy nila. Paanong
magkakaroon ng PTA samantalang ito ay nakasara at kami ang PTA
bago ito isinara.

Kaya po pinaabot naming sa inyong kaalaman na kaming PTA ng

paaralang (St. John Academy) ito ay hindi kailanman humiling sa kanila
na pamuling buksan ito.[21] (Italics supplied)

Finally, when SJCI reopened its high school, it did not rehire the Union
members. Evidently, the closure had achieved its purpose, that is, to get rid of the
Union members.

Clearly, these pieces of evidence regarding the subsequent reopening of the

high school after only one year from its closure further show that the high schools
closure was done in bad faith.

Lastly, SJCI asserts that the strike conducted by the 25 employees on May 4,
1998 was illegal for failure to take the necessary strike vote and give a notice of
strike. However, we agree with the findings of the NLRC and CA that the protest
actions of the Union cannot be considered a strike because, by then, the employer-
employee relationship has long ceased to exist because of the previous closure of
the high school on March 31, 1998.
In sum, the timing of, and the reasons for the closure of the high school and its
reopening after only one year from the time it was closed down, show that the
closure was done in bad faith for the purpose of circumventing the Unions right to
collective bargaining and its members right to security of tenure. Consequently,
SJCI is liable for ULP and illegal dismissal.

WHEREFORE, the petition is DENIED. The April 22, 2004 Decision

and April 15, 2005Resolution of the Court Appeals in CA-G.R. SP No. 74519
are AFFIRMED.

SO ORDERED.
Purefoods vs. Nagkakaisang Samahang
Manggagawa ng Purefoods GR. No. 150896,
August 28, 2008

Facts:
Three labor organizations and a federation are
respondents in this case NAGSAMA-Purefoods, the
exclusive bargaining agent of the rank-and-file workers of
Purefoods, STFWU, (Sto. Tomas, Batangas); and PGFWU
(Sta. Rosa, Laguna). These organizations were affiliates of
the respondent federation, Purefoods Unified Labor
Organization (PULO). The three labor organizations
manifested their desire to re-negotiate the collective
bargaining agreement, submitting their respective
demands and proposals and authorizing a negotiating
panel which included among others a PULO
representative. While Purefoods formally acknowledged
receipt of the union’s proposals, but refused to negotiate
with the unions should a PULO representative be in the
panel which resulted in a deadlock. However, the
petitioner company concluded a new CBA with another
union in its farm in Malvar, Batangas and terminated the
service of regular rank-and file workers in Sto Tomas. The
farm manager, supervisors and electrical workers of the
Sto. Tomas farm, who were members of another union,
were nevertheless retained by the company in its employ.
The 4 respondent labor organizations jointly instated a
complaint for Unfair Labor Practice, illegal
lockout/dismissal and damages.
Issue:
WON the refusal of Purefoods to recognized PULO as a
labor organizations’ affiliation constituted undue
interference in, and restraint on the exercise of the
employees’ right to self-organization and free collective
bargaining
Held:
Yes! It is crystal clear that the closure of the Sto. Tomas
farm was made in bad faith. Badges of bad faith are
evident from the following acts of the petitioner: it
unjustifiably refused to recognize the STFWU’s and the
other unions’ affiliation with PULO; it concluded a new
CBA with another union in another farm during the agreed
indefinite suspension of the collective bargaining
negotiations; it surreptitiously transferred and continued
its business in a less hostile environment; and it suddenly
terminated the STFWU members, but retained and
brought the non-members to the Malvar farm. Petitioner
presented no evidence to support the contention that it
was incurring losses or that the subject farm’s lease
agreement was pre-terminated. Ineluctably, the closure of
the Sto. Tomas farm circumvented the labor organization’s
right to collective bargaining and violated the members’
right to security of tenure.
Posted by mabaitnamanakoah at 7:32 PM
is constitutionally guaranteed right to self-organization.

De La Salle University v. De La Salle University Employees Association (DLSUEA-

NAFTEU)
G.R. No. 177283, April 7, 2009
Facts :
In 2001, a splinter group of respondent filed a petition for conduct of elections with
the DOLE alleging thatthe then incumbent officers of respondent had failed to call
for a regular election since 1985. Respondent’s officersclaimed that by virtue of
RA 6715, which amended the Labor Code, the term of office of its officers
was extended tofive years or until 1992 during which a general assembly
was held affirming their hold-over tenure until thetermination of collective
bargaining negotiations.Acting on the petitioner, the DOLE-NCR held that the
holdover authority of respondent’s incumbent set of officers had been extinguished
by virtue of the execution of the CBA and ordered the conduct of elections subject
to pre-election conferences.Respondent wrote a letter to DLSU President to put on
escrow all union dues/agency fees and
whatever money considerations deducted from salaries of concerned co-
academic personnel until the election of unionofficials has been scheduled
and been held. Petitioner in response, to do the following: (1) establish
a savingsaccount for the Union where all collected union dues and agency
will be deposited and held in trust; and (2)discontinue normal relations with
any group within the Union including the incumbent set of officers.Respondents
filed a complaint against petitioner for Unfair Labor Practice (ULP) claiming that
petitioner unduly interfered with its internal affairs. During the pendency of this
complaint, respondent file a notice of strike.LA dismissed the respondent
ULP complaint. On appeal, NLRC affirmed the decision of LA. On
respondent’s petition for certiorari before the CA, the Court set aside the decision
of NLRC. Hence, petitioner’s petition for review on certiorari.
Issue:
Whether the NLRC gravely abuse its discretion when it held that
petitioner were not guilty of ULPconsidering that the temporary measures
implemented by the University were undertaken in good faith and only tomaintain
its neutrality amid the intra-union dispute.
Ruling:
It bears noting that at the time petitioners’ questioned moves were adopted, a valid
and existing CBA had been entered between the parties. It thus behooved
petitioners to observe the terms and conditions thereof bearingon union dues and
representation. It is axiomatic in labor relations that a CBA entered into by a
legitimate labor organization and an employer become the law between the parties,
compliance with which is mandated by express policy of the law.

URES LABOR UNION (SSVLU) AND DIR. HANS LEO CACDAC, IN HIS
CAPACITY AS DIRECTOR OF THE BUREAU OF LABOR RELATIONS
(BLR), RESPONDENTS.
G.R. No. 161690, July 23, 2008
FACTS:
Petitioner S.S. Ventures International, Inc. (Ventures), a PEZA- registered
export firm with principal place of business at Phase I-PEZA- Bataan Export
Zone, Mariveles, Bataan, is in the business of manufacturing sports shoes.
Respondent S.S. Ventures Labor Union (Union) is a labor organization
registered with the DOLE.

March 21, 2000, the Union filed with DOLE-Region III a petition for
certification election in behalf of the rank-and-file employees

August 21, 2000, Ventures filed a Petition to cancel the Union’s certificate of
registration alleging that the Union deliberately and maliciously included the
names of more or less 82 former employees no longer connected with
Ventures in its list of members who attended the organizational meeting and
in the adoption/ratification of its constitution and by-laws; that No
organizational meeting and ratification actually took place; and the Union’s
application for registration was not supported by at least 20% of the rank-and-
file employees of Ventures.

Regional Director of DOLE- Region III favored Ventures and resolved to

Cancel the Certificate of the union. On appeal, the BLR Director granted the
Union’s appeal and reversing the decision of RD. Ventures went to the CA. The
CA dismissed Ventures’ petition as well as the MR. Hence, this petition for
review

ISSUE:
Whether the registration of the Union must be cancelled.
RULING:
NO. The right to form, join, or assist a union is specifically protected by Art.
XIII, Section 3 of the Constitution and such right, according to Art. III, Sec. 8
of the Constitution and Art. 246 of the Labor Code, shall not be abridged.
Once registered with the DOLE, a union is considered a legitimate labor
organization endowed with the right and privileges granted by law to such
organization. While a certificate of registration confers a union with legitimacy
with the concomitant right to participate in or ask for certification election in a
bargaining unit, the registration may be canceled or the union may be
decertified as the bargaining unit, in which case the union is divested of the
status of a legitimate labor organization. Among the grounds for cancellation
is the commission of any of the acts enumerated in Art. 239(a) of the Labor
Code, such as fraud and misrepresentation in connection with the adoption or
ratification of the union’s constitution and like documents. The Court, has in
previous cases, said that to decertify a union, it is not enough to show that the
union includes ineligible employees in its membership. It must also be shown
that there was misrepresentation, false statement, or fraud in connection with
the application for registration and the supporting documents, such as the
adoption or ratification of the constitution and by-laws or amendments
thereto and the minutes of ratification of the constitution or by-laws, among
other documents.
The evidence presented by Ventures consist mostly of separate hand-written
statements of 82 employees who alleged that they were unwilling or harassed
signatories to the attendance sheet of the organizational meeting. However
these evidence was presented seven months after the union filed its petition
for cancellation of registration. Hence these statements partake of the nature
of withdrawal of union membership executed after the Union’s filing of a
petition for certification election on March 21, 2000. We have said that the
employees’ withdrawal from a labor union made before the filing of the
petition for certification election is presumed voluntary, while withdrawal
after the filing of such petition is considered to be involuntary and does not
affect the same. Now then, if a withdrawal from union membership done after
a petition for certification election has been filed does not vitiate such petition,
it is but logical to assume that such withdrawal cannot work to nullify the
registration of the union. The Court is inclined to agree with the CA that the
BLR did not abuse its discretion nor gravely err when it concluded that the
affidavits of retraction of the 82 members had no evidentiary weight.

The registration or the recognition of a labor union after it has submitted the
corresponding papers is not ministerial on the part of the BLR. It becomes
mandatory for the BLR to check if the requirements under Art. 234 of the
Labor Code have been sedulously complied with. If the union’s application is
infected by falsification and like serious irregularities, especially those
appearing on the face of the application and its attachments, a union should
be denied recognition as a legitimate labor organization. The issuance to the
Union of Certificate of Registration, in the case at bar, necessarily implies that
its application for registration and the supporting documents thereof are
prima facie free from any vitiating irregularities.

The relevance of the 82 individuals’ active participation in the Union’s

organizational meeting and the signing ceremonies thereafter comes in only
for purposes of determining whether or not the Union, even without the 82,
would still meet what Art. 234(c) of the Labor Code requires to be submitted,
requiring that the union applicant must file the names of all its members
comprising at least twenty percent (20%) of all the employees in the
bargaining unit where it seeks to operate.

In its union records on file with this Bureau, respondent union submitted the
names of 542 members. This number easily complied with the 20%
requirement, be it 1,928 or 2,202 employees in the establishment. Even
subtracting the 82 employees from 542 leaves 460 union members, still within
440 or 20% of the maximum total of 2,202 rank-and-file employees of the
employer Venture.

Whatever misgivings the petitioner may have with regard to the 82 dismissed
employees is better addressed in the inclusion-exclusion proceedings during a
pre-election conference. The issue surrounding the involvement of the 82
employees is a matter of membership or voter eligibility. It is not a ground to
cancel union registration.

For fraud and misrepresentation to be grounds for cancellation of union

registration under Article 239, the nature of the fraud and misrepresentation
must be grave and compelling enough to vitiate the consent of a majority of
union members.

WHEREFORE, the petition is DENIED

[G.R. No. 157146. April 29, 2005]

LAGUNA AUTOPARTS MANUFACTURING CORPORATION, petitioner,
vs. OFFICE OF THE SECRETARY, DEPARTMENT OF LABOR
AND EMPLOYMENT (DOLE) and LAGUNA AUTOPARTS
MANUFACTURING CORPORATION OBRERO PILIPINO-LAMCOR
CHAPTER, respondents.

DECISION
CALLEJO, SR., J.:

This is a petition for review of the Decision of the Court of Appeals (CA) in
[1]

CA-G.R. SP No. 67424 dated September 13, 2002, and the Resolution dated
February 5, 2003 denying the motion for reconsideration thereof. The assailed
decision affirmed in toto the decision of the Secretary of Labor and
Employment, granting the petition for certification election filed by respondent
Laguna Autoparts Manufacturing Corporation Obrero Pilipino-LAMCOR
Chapter.
On May 3, 1999, the respondent union filed a petition for certification
election before the Department of Labor and Employment (DOLE), Regional
Office No. IV, Calamba, Laguna. In its petition, the respondent union alleged
that Obrero Pilipino was a legitimate labor organization under Registration
Certificate No. NCR-LF-11-04-92 issued by DOLE on November 11, 1992 and
that its chapter affiliate, LAMCOR Chapter, had been assigned Control No.
RO400-9807-CC-030 dated March 23, 1999. A copy of the respondent unions
Certificate of Creation was attached to the petition. The petition further alleged
that the bargaining unit sought to be represented was composed of all the
rank-and-file employees in the petitioner company, more or less, 160
employees. It averred that the said bargaining unit is unorganized and that
there has been no certification election conducted for the past 12 months prior
to the filing of the petition.
[2]

The petitioner company moved to dismiss the petition for certification

election. It claimed that the respondent union was not a legitimate labor
organization for failure to show that it had complied with the registration
requirements, such as the submission of the following requirements to the
Regional Office or the Bureau of Labor Relations (BLR):
a) Proof of payment of registration fee;
b) List of officers and their addresses, and the address of the principal place of
business of the union;
c) Minutes of the organizational meeting and the list of workers who
participated in the said meeting;
 d) Names of the members comprising at least twenty percent (20%) of all the
employees in the bargaining unit where the union seeks to operate;
e) Copies of financial reports or books of accounts; and
f) Copies of petitioners constitution and by-laws, minutes of its adoption or
ratification, and list of members who participated in it.
[3]

The petitioner company further asserted in the said motion that even if the
respondent union was issued a certificate of registration, it could not file a
petition for certification election since its legal personality was at question. [4]

On October 24, 2000, Med-Arbiter Anastasio L. Bactin dismissed the

petition for certification election for the respondent unions lack of legal
personality. The Med-Arbiter found that the respondent union had not yet
attained the status of a legitimate labor organization because it failed to
indicate its principal office on the documents it submitted to the Regional
Office. He opined that this was a fatal defect tantamount to failure to submit
the complete requirements, which warranted the dismissal of the petition for
certification election.[5]

The respondent union appealed the case to the Secretary of Labor and
Employment, Patricia A. Sto. Tomas, who ruled as follows:

WHEREFORE, the appeal is GRANTED. The order dated 24 October 2000 of the
Med-Arbiter is REVERSED and SET ASIDE. Accordingly, let the entire records of
this case be remanded to the regional office of origin for the immediate conduct of a
certification election, subject to the usual pre-election conference, among the rank-
and-file employees of Laguna Auto Parts Manufacturing Corporation (LAMCOR),
with the following choices:

1. Obrero Pilipino LAMCOR Chapter; and

2. No Union

Pursuant to Section 11.1, Rule XI of the New Implementing Rules, the employer is
hereby directed to submit to the regional office of origin the certified list of current
employees in the bargaining unit for the last three months prior to the issuance of this
decision.

SO DECIDED. [6]

Finding no cogent reason to alter her decision, the Secretary of Labor and
Employment denied the motion for reconsideration thereof. [7]
 Not convinced, the petitioner filed a petition for certiorari with the CA on
the following grounds:
I. PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION IN
FINDING THAT PRIVATE RESPONDENT HAS COMPLIED WITH ALL
REQUIREMENTS FOR REGISTRATION;
II. THE PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION IN
FINDING THAT PRIVATE RESPONDENT IS A LEGITIMATE LABOR UNION
DESPITE LACK OF REGISTRATION AS SUCH.[8]
On September 13, 2002, the CA rendered a Decision in favor of the
respondent union, thus:

WHEREFORE, the instant petition is hereby DENIED and the assailed decision of
the Secretary of Labor and Employment is AFFIRMED in toto.

SO ORDERED. [9]

The CA stressed that a local or chapter need not be registered to become

a legitimate labor organization. It pointed out that a local or chapter acquires
legal personality as a labor organization from the date of filing of the complete
documents enumerated in Section 1 of Rule VI of the Implementing Rules of
[10]

Book V (as amended by Department Order [D.O.] No. 9). The CA held that the
findings of the Labor Secretary was amply supported by the records; such
findings would not be reversed since she is considered to have acquired
expertise as her jurisdiction is confined to specific matters. The CA, citing the
case of Pagpalain Haulers, Inc. vs. Trajano, also upheld the validity of D.O.
[11]

No. 9 since the petitioner failed to show that it was contrary to law or the
Constitution.
Finally, the CA noted that it was the employer which offered the most
tenacious resistance to the holding of a certification election among its regular
rank-and-file employees. It opined that this must not be so for the choice of a
collective bargaining agent was the sole concern of the employees, and the
employer should be a mere bystander. [12]

The petitioner filed a motion for reconsideration of the CA decision, but the
same was likewise denied in a Resolution dated February 5, 2003.
Hence, this petition for review wherein the petitioner relies on the sole
ground

WITH DUE RESPECT, THE HON. COURT OF APPEALS COMMITTED

REVERSIBLE ERRORS OF FACTS AND LAW WHEN IT AFFIRMED THE
DECISION DATED JULY 5, 2001 OF THE HON. SECRETARY PATRICIA STO.
TOMAS IN THE CASE IN RE: PETITION FOR CERTIFICATION ELECTION
AMONG THE RANK- AND-FILE EMPLOYEES OF LAGUNA AUTO PARTS
MFTG. CORP. CASE NO. RO400-9905-RU-001 WHEN IT RENDERED ITS
DECISION DATED SEPTEMBER 13, 2002. [13]

The issues are the following: (a) whether or not the respondent union is a
legitimate labor organization; (b) whether or not a chapters legal personality
may be collaterally attacked in a petition for certification election; and (c)
whether or not the petitioner, as the employer, has the legal standing to
oppose the petition for certification election.
The petitioner submits that there is no law prohibiting it from questioning
and impugning the status of the respondent union even in a petition for
certification election. It stresses that the right to file a petition for certification
election is a mere statutory right and, to enjoy such right, the respondent
union must comply with the requirements provided under the law, particularly
the requirement that the applicant must be a legitimate labor organization. In
this case, the Med-Arbiter found that the respondent union, which is a local or
chapter, had not yet attained the status of a legitimate labor organization for
failure to indicate its principal office on the list of officers it submitted to the
Regional Office. The petitioner insists that substantial compliance with the
requirements is not sufficient; as such, even if such address was indicated in
the other documents submitted to the Regional Office, the requirement would
still not be considered fulfilled. The petitioner concludes that the respondent
union, therefore, does not have the right to file a petition for certification
election.
The petitioner further postulates that in order to be considered legitimate,
a labor organization must be issued a certificate of registration. It contends
that D.O. No. 9, insofar as it requires that the mere submission of
documentary requirements as sufficient to give legitimate personality to a
labor organization, is ultra vires. The petitioner avers that the said Department
Order could not amend Article 234 of the Labor Code which clearly states that
the registration of a union is the operative act that imbues it with legitimate
personality.
The petitioner then argues that since the mere submission of documents
does not vest legitimate status on a local or chapter, it follows that such status
may be questioned collaterally in a petition for certification election. It adds
that the issue of whether or not the respondent union has the legal personality
must first be resolved before the petition for certification election should be
granted.
 Finally, the petitioner maintains that in a number of cases, the employer
[14]

was allowed to question the status of the union-applicant in a petition for

certification election. [15]

For its part, the respondent union avers that the petitioners active
participation in the representation proceedings was an act of intervention of
the employees right to self-organization. It asserts that the CA was correct in
finding that the petitioner did not observe a strictly hands-off policy in the
representation proceedings, in violation of established jurisprudence. It argues
that the petitioners alleged violation of the requirements of D.O. No. 9, for
failure to indicate its principal address, has already been resolved by the
decision of the Secretary of Labor and Employment. [16]

The petition is unmeritorious.

In a petition for review on certiorari as a mode of appeal under Rule 45 of
the Rules of Court, a petitioner can raise only questions of law the Supreme
Court is not the proper venue to consider a factual issue as it is not a trier of
facts. Findings of fact of administrative agencies and quasi-judicial bodies,
[17]

which have acquired expertise because their jurisdiction is confined to specific

matters, are generally accorded not only great respect but even finality. This [18]

is particularly true where the CA affirms such findings of fact. In this case, the
CA affirmed the finding of the Secretary of Labor and Employment that the
respondent union is a legitimate labor organization.
Indeed, a local or chapter need not be independently registered to acquire
legal personality. Section 3, Rule VI of the Implementing Rules of Book V, as
amended by D.O. No. 9 clearly states

SEC. 3. Acquisition of legal personality by local/chapter. A local/chapter

constituted in accordance with Section 1 of this Rule shall acquire legal
personality from the date of filing of the complete documents enumerated therein.
Upon compliance with all documentary requirements, the Regional Office or Bureau
shall issue in favor of the local/chapter a certificate indicating that it is included in the
roster of legitimate labor organizations. [19]

As gleaned from the said provision, the task of determining whether the
local or chapter has submitted the complete documentary requirements is
lodged with the Regional Office or the BLR, as the case may be. The records
of the case show that the respondent union submitted the said documents to
Regional Office No. IV and was subsequently issued the following certificate:

CERTIFICATE OF CREATION OF LOCAL/ CHAPTER NO.

This certifies that as of July 16, 1998 the OBRERO PILIPINO-LAMCOR submitted
to this Office Charter Certificate No. 07-98 issued by OBRERO PILIPINO with
complete supporting documents. From said date, it has acquired legal personality as a
labor organization. It shall have the right to represent its members for all purposes not
contrary to law or applicable regulations and to its constitution and by-laws.

The legitimate personality of OBRERO PILIPINO-LAMCOR CHAPTER is without

prejudice to whatever grounds for revocation or cancellation as may be prescribed by
applicable laws and regulations.

March 23, 1999

Date

By:

(SGD.)
RAYMUNDO G. AGRAVANTE
Labor Relations Division Chief [20]

Hence, the Regional Office, through the Labor Relations Division Chief,
has determined that the respondent union complied with the requirements
under the law. It, therefore, declared that the respondent union has acquired
legal personality as a labor organization. Absent any pronouncement to the
contrary, such determination of the Labor Relations Division Chief will stand,
on the presumption that the duty of determining whether the respondent union
submitted the complete documentary requirements has been regularly
performed.
We rule, however, that such legal personality may not be subject to a
collateral attack but only through a separate action instituted particularly for
the purpose of assailing it. This is categorically prescribed by Section 5, Rule
V of the Implementing Rules of Book V, which states as follows:

SEC. 5. Effect of registration. The labor organization or workers association shall be

deemed registered and vested with legal personality on the date of issuance of its
certificate of registration. Such legal personality cannot thereafter be subject to
collateral attack but may be questioned only in an independent petition for
cancellation in accordance with these Rules. [21]

Hence, to raise the issue of the respondent unions legal personality is not
proper in this case. The pronouncement of the Labor Relations Division Chief,
that the respondent union acquired a legal personality with the submission of
the complete documentary requirement, cannot be challenged in a petition for
certification election.
The discussion of the Secretary of Labor and Employment on this point is
also enlightening, thus:

Section 5, Rule V of D.O. 9 is instructive on the matter. It provides that the legal
personality of a union cannot be the subject of collateral attack in a petition for
certification election, but may be questioned only in an independent petition for
cancellation of union registration. This has been the rule since NUBE v. Minister of
Labor, 110 SCRA 274 (1981). What applies in this case is the principle that once a
union acquires legitimate status as a labor organization, it continues as such until its
certificate of registration is cancelled or revoked in an independent action for
cancellation.

Equally important is Section 11, Paragraph II, Rule IX of D.O. 9, which provides for
the dismissal of a petition for certification election based on the lack of legal
personality of a labor organization only in the following instances: (1) appellant is not
listed by the Regional Office or the BLR in its registry of legitimate labor
organizations; or (2) appellants legal personality has been revoked or cancelled with
finality. Since appellant is listed in the registry of legitimate labor organizations, and
its legitimacy has not been revoked or cancelled with finality, the granting of its
petition for certification election is proper.
[22]

Finally, on the issue of whether the petitioner has the legal standing to
oppose the petition for certification election, we rule in the negative. Our ruling
in San Miguel Foods, Inc.-Cebu B-Meg Feed Plant v. Laguesma is still [23]

sound, thus:

In any case, this Court notes that it is petitioner, the employer, which has offered the
most tenacious resistance to the holding of a certification election among its monthly-
paid rank-and-file employees. This must not be so, for the choice of a collective
bargaining agent is the sole concern of the employees. The only exception to this rule
is where the employer has to file the petition for certification election pursuant to
Article 258 of the Labor Code because it was requested to bargain collectively, which
exception finds no application in the case before us. Its role in a certification election
has aptly been described in Trade Unions of the Philippines and Allied Services
(TUPAS) v. Trajano, as that of a mere bystander. It has no legal standing in a
certification election as it cannot oppose the petition or appeal the Med-Arbiters
orders related thereto.[24]
 In conclusion, we find no reversible error in the CAs decision dismissing
the petition for certiorari for the nullification of the decision of the Secretary of
Labor and Employment. It should be stressed that certiorari will issue only to
correct errors of jurisdiction and not to correct errors of judgment or mistakes
in the tribunals findings and conclusions. The petitioner failed to demonstrate
[25]

any grave abuse of discretion on the part of the Secretary of Labor and
Employment in granting the petition for certification election.
WHEREFORE, premises considered, the petition is DENIED DUE
COURSE. The Decision of the Court of Appeals in CA-G.R. SP No. 67424
and the Resolution dated February 5, 2003 are AFFIRMED.
SO ORDERED.

Topic: Union Registration Requirements

QUICKIE SUMMARY: SM Packing Employees Union is a LOCAL or

CHAPTER of PDMP which seeks to be an INDEPENDENT LABOR
ORGANIZATION. For its registration AS A CHAPTER, the applicable law to
them is the D.O. No. 9 which no longer requires the submission of the
names of at least 20% of all its employees in the bargaining unit. San Mig
Corp Union claims that SM Packing failed to meet the requirements set
forth by Art 234 of the Labor Code which mandates the submission of the
20% names and that the Implementing Rules of D.O. No. 9 is violative of
Art 234 of the Labor Code because it provides a less stringent rule (which
does not require the submission of the 20% names). SC ruled that the
requirements for the registration of an INDEPENDENT LABOR UNION and
the requirements for the creation of a LOCAL or CHAPTER are different.
Since SM Packing seeks to be a legitimate labor organization, D.O No. 9 is
not the one applicable, but Art 234 of the Labor Code.

FACTS:

Petitioner is the incumbent bargaining agent for the bargaining unit

comprised of the regular monthly-paid rank and file employees of the three
divisions of San Miguel Corporation namely San Miguel Corporate Staff
Unit (SMCSU), San Miguel Brewing Philippines (SMBP), and the San
Miguel Packaging Products (SMPP)
 Respondent is registered as a chapter of Pambansang Diwa ng
Manggagawang Pilipino.Thereafter, respondent filed three separate
petitions for certification election to represent SMPP, SMCSU, and SMBP.
All three petitions were dismissed, on the ground that the separate petitions
fragmented a single bargaining unit.

Petitioner filed with the DOLE-NCR a petition seeking the cancellation of

respondent’s registration and its dropping from the rolls of legitimate labor
organizations. Petitioner accused respondent of committing fraud and
falsification, and non-compliance with registration requirements in obtaining
its certificate of registration. It raised allegations that respondent violated
Articles 239(a), (b) and (c) and 234(c) of the Labor Code.

DOLE-NCR Regional Director Maximo B. Lim found that respondent did not
comply with the 20% membership requirement and, thus, ordered the
cancellation of its certificate of registration and removal from the rolls of
legitimate labor organizations

Bureau of Labor Relations: Reversed DOLE NCR and declared that SM

Packing Employees shall hereby remain in the roster of legitimate labor
organizations

CA affirmed BLR

 Petitioner’s contention: Petitioner posits that respondent is required to

submit a list of members comprising at least 20% of the employees in the
bargaining unit before it may acquire legitimacy, citing Article 234(c) of the
Labor Code. Petitioner also insists that the 20% requirement for registration
of respondent must be based not on the number of employees of a single
division, but in all three divisions of the company in all the offices and
plants of SMC since they are all part of one bargaining unit. Petitioner thus
maintains that respondent, in any case, failed to meet this 20%
membership requirement since it based its membership on the number of
employees of a single division only, namely, the SMPP.

ISSUE: W/N SM Packing Employees met the requirements and thus, must
remain a legitimate labor organization
RULING: NO, SM Packing Employees failed to meet the requirement.
Hence, they cannot be declared as a legitimate labor organization

RATIO: A perusal of the records reveals that respondent is registered

with the BLR as a local or chapter of PDMP. The applicable
Implementing Rules (Department Order No. 9) enunciates a two-fold
procedure for the creation of a chapter or a local. The first involves the
affiliation of an independent union with a federation or national union or
industry union. The second, finding application in the instant petition,
involves the direct creation of a local or a chapter through the process of
chartering. The Implementing Rules stipulate that a local or chapter may be
directly created by a federation or national union.

Petitioner insists that Section 3 of the Implementing Rules, as amended by

Department Order No. 9, violated Article 234 of the Labor Code when it
provided for less stringent requirements for the creation of a chapter or
local. Article 234 of the Labor Code provides that an independent labor
organization acquires legitimacy only upon its registration with the BLR: xxx
3) The names of all its members comprising at least twenty percent (20%)
of all the employees in the bargaining unit where it seeks to operate; xxx

It is emphasized that the foregoing pertains to the registration of an

independent labor organization, association or group of unions or workers.

However, the creation of a branch, local or chapter is treated differently.

This Court, in the landmark case of Progressive Development Corporation
v. Secretary, Department of Labor and Employment, declared that when
an unregistered union becomes a branch, local or chapter, some of
the aforementioned requirements for registration are no longer
necessary or compulsory. Whereas an applicant for registration of an
independent union is mandated to submit, among other things, the
number of employees and names of all its members comprising at
least 20% of the employees in the bargaining unit where it seeks to
operate, as provided under Article 234 of the Labor Code and Section 2 of
Rule III, Book V of the Implementing Rules, the same is no longer
required of a branch, local or chapter. The intent of the law in imposing
less requirements in the case of a branch or local of a registered federation
or national union is to encourage the affiliation of a local union with a
federation or national union in order to increase the local unions bargaining
powers respecting terms and conditions of labor.
DISPOSITIVE: San Miguel Corp Union won. The Certificate of Registration
of San Miguel Packaging Union is ORDERED CANCELLED, and
DROPPED from the rolls of legitimate labor organizations.

DOCTRINE: When an unregistered union becomes a branch, local or

chapter, some of the requirements for registration are no longer necessary
or compulsory. Whereas an applicant for registration of an independent
union is mandated to submit, among other things, the number of
employees and names of all its members comprising at least 20% of the
employees in the bargaining unit where it seeks to operate.
Posted by Michelle Vale Cruz at Monday, December 19, 2016
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Labels: Labor Relations

G.R. No. 115180. November 16, 1999]

FILIPINO PIPE AND FOUNDRY CORPORATION, petitioner,

vs. NATIONAL LABOR RELATIONS COMMISSION, NATIONAL
LABOR UNION TUCP, and EULOGIO LERUM, respondents.

DECISION
PURISIMA, J.:

At bar is a Petition for Certiorari under Rule 65 of the Revised Rules of Court
seeking to annul and set aside the Decision[1] of the National Labor Relations
Commission,[2] dated September 29, 1993, in NLRC NCR CA No. 003806-92, which
reversed the Decision[3] of the Labor Arbiter,[4] dated August 31, 1992, in NLRC Case
No. 4-1309-86, disposing thus:

WHEREFORE, premises considered, the appeal of complainant corporation is hereby

dismissed for lack of merit; the appeal of Atty. Lerum and NLU is hereby granted, and
the Decision dated August 31, 1992 is hereby annulled and set side, and a new
judgment is hereby entered declaring the complaint below dismissed for lack of merit
insofar as respondent NLU and Atty. Lerum are concerned.
SO ORDERED.[5]

The antecedent facts can be culled as follows:

On February 10, 1986, respondent National Labor Union-Trade Union Congress
of the Philippines (NLU-TUCP), a national federation of labor unions, filed with the
then Ministry of Labor and Employment, in behalf of its local chapter, the Filipino
Pipe Workers Union-National Labor Union (FPWU-NLU, hereinafter referred to as
Union), a notice of strike signed by its national president, Atty. Eulogio R. Lerum,
against the petitioner, Filipino Pipe and Foundry Corporation, alleging as grounds
therefor union busting and non-implementation of the Collective Bargaining
Agreement.[6]
The initial conciliation conference was set on February 24, 1986 but due to lack of
notice thereof to petitioner company, as well as the failure of FPWU-NLU to furnish
the latter a copy of the notice of strike, the initial conciliation conference was re-set to
March 3, 1986.
In the early morning of March 3, 1986, however, without waiting for the outcome
of the conciliation conference scheduled on said date, the FPWU-NLU staged the
strike in question which lasted until June 13, 1986, when a return to work agreement
was reached by the union and petitioner company.[7]
On April 8, 1986, petitioner company interposed before the Arbitration Branch of
the then Ministry of Labor and Employment, a petition to declare the strike illegal
with prayer for damages against FPWU-NLU, NLU-TUCP and its national president,
Atty. Eulogio Lerum.
On December 23, 1988, petitioner company moved for the partial dismissal of the
Complaint against forty-three (43) officers and members of FPWU-NLU, but
maintained the action against the NLU-TUCP and Atty. Eulogio Lerum.[8]
On August 31, 1992, the Labor Arbiter came out with a decision for petitioner
company, ruling as follows:

WHEREFORE, judgment is hereby rendered declaring that the strike staged by

respondents from March 3, 1986 to June 13, 1986 was ILLEGAL. Accordingly and in
conformity with the Return-to-Work Agreement, respondent National Labor Union-
TUCP is hereby directed to pay the complainant company the following:

a) Actual damages in the form of loss of revenue during the duration of the strike
which lasted for 100 days or in the amount of ONE MILLION PESOS
(P1,000,000.00);
b) Damages to the good business standing and commercial credit of the company in
the amount of THREE HUNDRED FIFTY THOUSAND PESOS (P350,000.00); and

c) Exemplary damages to deter others similarly inclined from committing similar acts
and to serve as an example for the public good, in the amount of TWO HUNDRED
FIFTY THOUSAND PESOS (P250,000.00).

Further, respondent NLU is hereby directed to pay the attorneys fees equivalent to
10% of the actual damages, or the amount of ONE HUNDRED THOUSAND PESOS
(P100, 000.00).

For lack of showing that respondent Lerum acted in his personal capacity, he is
hereby ABSOLVED from any liability.

Pursuant to the Agreement, the complaint against all the other individual respondents
are hereby DISMISSED.

SO ORDERED.[9]

Therefrom, both parties appealed to the NLRC which on September 29, 1993,
rendered the assailed decision. Dissatisfied therewith, the petitioner company found
its way to this Court via the present petition; theorizing that:
I

PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION

ERRED IN LAW, CAPRICIOUSLY AND WHIMSICALLY DISREGARDED THE
EVIDENCE SUBMITTED IN THE CASE AND GRAVELY ABUSED ITS
DISCRETION AMOUNTING TO LACK AND/OR EXCESS OF JURISDICTION
WHEN IT HELD THAT PRIVATE RESPONDENTS NATIONAL LABOR UNION
(NLU)-TUCP AND ATTY. EULOGIO LERUM ARE NOT PRIMARILY
RESPONSIBLE AND, THEREFORE, NOT LIABLE FOR DAMAGES SUFFERED
BY PETITIONER ON ACCOUNT OF THE ILLEGAL STRIKE THEY HAD
DIRECTLY AIDED, ASSISTED, ABETTED AND PARTICIPATED IN.
II

PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION

GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK AND/OR
EXCESS OF JURISDICTION AND ACTED CAPRICIOUSLY AND
WHIMSICALLY IN TOTAL DISREGARD OF THE EVIDENCE PRESENTED IN
THE CASE WHEN IT HELD THAT PRIVATE RESPONDENTS MERELY
ASSISTED THE LOCAL CHAPTER AND ITS MEMBERS IN STAGING A
STRIKE AGAINST PETITIONER AND THAT SUCH ASSISTANCE WAS NOT
THE CAUSE NOR WAS IT AN INDESPENSABLE ELEMENT OF THE STRIKE.
III

PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION

GRAVELY ERRED IN LAW AND GRAVELY ABUSED ITS DISCRETION
AMOUNTING TO LACK AND/OR EXCESS OF JURISDICTION WHEN IT
CONCLUDED THAT PETITIONER LOST ITS CAUSE OF ACTION AGAINST
PRIVATE RESPONDENTS AFTER THE LOCAL UNION HIRED A NEW
COUNSEL AND PETITIONER MOVED FOR PARTIAL DISMISSAL OF ITS
COMPLAINT AGAINST THE STRIKING WORKERS INASMUCH AS PRIVATE
RESPONDENTS ARE MERE THIRD PARTIES.[10]

Rule XXII, Book V, of the Rules Implementing the Labor Code, provides:

Section 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. No strike or lockout may be declared on grounds involving inter-union and
intra-union disputes or on issues brought to voluntary or compulsory arbitration.

xxx xxx xxx

Section 3. Notice of strike or lockout.- In cases of bargaining deadlocks, a notice of

strike or lockout shall be filed with the regional branch of the Board at least thirty (30)
days before the intended date thereof, a copy of said notice having been served on the
other party concerned. x x x"

xxx xxx xxx

"Section 6. Conciliation. - Upon receipt of the notice, the regional branch of the
Board shall exert all efforts at mediation and conciliation to enable the parties to
settle the dispute amicably. The regional branch of the Board may, upon consultation,
recommend to the parties to submit the dispute to voluntary arbitration.

During the proceedings, the parties shall not do any act which may disrupt or impede
the early settlement of the dispute. They are obliged as part of the duty to bargain
collectively in good faith, to participate fully and promptly in the conciliation
meetings called by the regional branch of the board. The regional branch of the
Board shall have the power to issue subpoenas requiring the attendance of the parties
to the meetings. xxx"

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

A thorough sifting of the pertinent records discloses that the alleged union busting
was not substantiated and the supposed non-implementation of the collective
bargaining agreement was groundless because the demands of FPWU-NLU, at the
time the notice of strike was filed and at the time the union actually struck, were the
subject of a pending application for a writ of execution filed by the union in Case No.
AB-7933-80 (NCR-CA-8-674-80), which application was granted on April 4, 1986 by
the Labor Arbiter.[12] Verily, the strike staged by FPWU-NLU was baseless since it
was still pre-mature then for the union to insist on the implementation of the adverted
provision of the collective bargaining agreement, which was the subject of a pending
writ of execution.
Then too, the failure of the union to serve petitioner company a copy of the notice
of strike is a clear violation of Section 3 of the aforestated Rules. The constitutional
precepts of due process mandate that the other party be notified of the adverse action
of the opposing party. So also, the same Section provides for a mandatory thirty (30)
day cooling-off period which the union ignored when it struck on March 3, 1986,
before the 30th day from the time the notice of strike was filed on February 10, 1986.
What is more, the same strike blatantly disregarded the prohibition on the doing of
any act which may impede or disrupt the conciliation proceedings, when the union
staged the strike in the early morning of March 3, 1986, the very same day the
conciliation conference was scheduled by the former Ministry of Labor.
In light of the foregoing, it is beyond cavil that subject strike staged by the union
was illegal.
Anent the responsibility for the damages allegedly sustained by petitioner
company on account of the illegal strike, the latter theorized that the liability therefor
should be borne by NLU-TUCP and its national president, Atty. Eulogio Lerum, for
having directly participated in aiding and abetting the illegal strike. It is argued that
FPWU-NLU is a mere agent of respondent NLU-TUCP, because FPWU-NLU, which
was formed by respondent NLU-TUCP is not registered as a local unit or chapter but
directly affiliated with the latter and therefore, could not have acted on its
own. Otherwise stated, petitioner is of the view that FPWU-NLU, a local union,
cannot act as the principal of respondent NLU-TUCP, a mother federation, because it
is not a legitimate labor organization.[13] In support of this stance, petitioner cited the
following letter of Atty. Lerum to the company, to wit:

G.R. No. 127374 January 31, 2002

PHILIPPINE SKYLANDERS, INC., MARILES C. ROMULO and FRANCISCO DAKILA, petitioners,

vs.
NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER EMERSON TUMANON,
PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS (PAFLU) SEPTEMBER (now UNIFIED
PAFLU) and SERAFIN AYROSO, respondents.

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

G.R. No. 127431 January 31, 2002

PHILIPPINE SKYLANDERS AND WORKERS ASSOCIATION-NCW, MACARIO CABANIAS,

PEPITO RODILLAS, SHARON CASTILLO, DANILO CARBONEL, MANUEL EDA, ROLANDO
FELIX, JOCELYN FRONDA, RICARDO LUMBA, JOSEPH MARISOL, NERISA MORTEL,
TEOFILO QUIRONG, LEONARDO REYES, MANUEL CADIENTE and HERMINIA
RIOSA, petitioners,
vs.
PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS (PAFLU) SEPTEMBER (now UNIFIED
PAFLU) and NATIONAL LABOR RELATIONS COMMISSION, SECOND DIVISION, respondents.

BELLOSILLO, J.:

This is a petition for certiorari1 seeking to set aside the 31 July 1996 Decision2 of the National Labor
Relations Commission affirming the 30 June 1995 Decision of the Labor Arbiter holding petitioners
Philippine Skylanders, Inc., Mariles C. Romulo3 and Francisco Dakila as well as the elected officers
of the Philippine Skylanders Employees and Workers Association-PAFLU4 guilty of unfair labor
practice and ordering them to pay private respondent Philippine Association of Free Labor Union
(PAFLU) September5 ₱150,000.00 as damages. Petitioners likewise seek the reversal of the 31
October 1996 Resolution of the NLRC denying their Motion for Reconsideration.

In November 1993 the Philippine Skylanders Employees Association (PSEA), a local labor union
affiliated with the Philippine Association of Free Labor Unions (PAFLU) September (PAFLU), won in
the certification election conducted among the rank and file employees of Philippine Skylanders, Inc.
(PSI). Its rival union, Philippine Skylanders Employees Association-WATU (PSEA-WATU)
immediately protested the result of the election before the Secretary of Labor.

Several months later, pending settlement of the controversy, PSEA sent PAFLU a notice of
disaffiliation citing as reason PAFLU's supposed deliberate and habitual dereliction of duty toward its
members. Attached to the notice was a copy of the resolution adopted and signed by the officers
and members of PSEA authorizing their local union to disaffiliate from its mother federation.
PSEA subsequently affiliated itself with the National Congress of Workers (NCW), changed its name
to Philippine Skylanders Employees Association - National Congress of Workers (PSEA-NCW), and
to maintain continuity within the organization, allowed the former officers of PSEA-PAFLU to
continue occupying their positions as elected officers in the newly-forged PSEA-NCW.

On 17 March 1994 PSEA-NCW entered into a collective bargaining agreement with PSI which was
immediately registered with the Department of Labor and Employment.

Meanwhile, apparently oblivious to PSEA's shift of allegiance, PAFLU Secretary General Serafin
Ayroso wrote Mariles C. Romulo requesting a copy of PSI's audited financial statement. Ayroso
explained that with the dismissal of PSEA-WATU's election protest the time was ripe for the parties
to enter into a collective bargaining agreement.

On 30 July 1994 PSI through its personnel manager Francisco Dakila denied the request citing as
reason PSEA's disaffiliation from PAFLU and its subsequent affiliation with NCW.

Agitated by PSI's recognition of PSEA-NCW, PAFLU through Serafin Ayroso filed a complaint for
unfair labor practice against PSI, its president Mariles Romulo and personnel manager Francisco
Dakila. PAFLU alleged that aside from PSI's refusal to bargain collectively with its workers, the
company through its president and personnel manager, was also liable for interfering with its
employees' union activities.6

Two (2) days later or on 6 October 1994 Ayroso filed another complaint in behalf of PAFLU for unfair
labor practice against Francisco Dakila. Through Ayroso PAFLU claimed that Dakila was present in
PSEA's organizational meeting thereby confirming his illicit participation in union activities. Ayroso
added that the members of the local union had unwittingly fallen into the manipulative machinations
of PSI and were lured into endorsing a collective bargaining agreement which was detrimental to
their interests.7 The two (2) complaints were thereafter consolidated.

On 1 February 1995 PAFLU amended its complaint by including the elected officers of PSEA-
PAFLU as additional party respondents. PAFLU averred that the local officers of PSEA-PAFLU,
namely Macario Cabanias, Pepito Rodillas, Sharon Castillo, Danilo Carbonel, Manuel Eda, Rolando
Felix, Jocelyn Fronda, Ricardo Lumba, Joseph Mirasol, Nerisa Mortel, Teofilo Quirong, Leonardo
Reyes, Manuel Cadiente, and Herminia Riosa, were equally guilty of unfair labor practice since they
brazenly allowed themselves to be manipulated and influenced by petitioner Francisco Dakila.8

PSI, its president Mariles C. Romulo, and its personnel manager Dakila moved for the dismissal of
the complaint on the ground that the issue of disaffiliation was an inter-union conflict which lay
beyond the jurisdiction of the Labor Arbiter. On the other hand, PSEA-NCW took the cudgels for its
officers who were being sued in their capacities as former officers of PSEA-PAFLU and asserted
that since PSEA was no longer affiliated with PAFLU, Ayroso or PAFLU for that matter had no
personality to file the instant complaint. In support of this assertion, PSEA-NCW submitted in
evidence a Katunayan signed by 111 out of 120 rank and file employees of PSI disauthorizing
Ayroso or PAFLU from instituting any action in their behalf.9

In a Decision rendered on 30 June 1995 the Labor Arbiter declared PSEA's disaffiliation from PAFLU
invalid and held PSI, PSEA-PAFLU and their respective officers guilty of unfair labor practice. The
Decision explained that despite PSEA-PAFLU's status as the sole and exclusive bargaining agent of
PSI's rank and file employees, the company knowingly sanctioned and confederated with Dakila in
actively assisting a rival union. This, according to the Labor Arbiter, was a classic case of
interference for which PSI could be held responsible. As PSEA-NCW's personality was not accorded
recognition, its collective bargaining agreement with PSI was struck down for being invalid. Ayroso's
legal personality to file the complaint was sustained on the ratiocination that under the Labor Code
no petition questioning the majority status of the incumbent bargaining agent shall be entertained
outside of the sixty (60)-day period immediately before the expiry date of such five (5)-year term of
the collective bargaining agreement that the parties may enter into. Accordingly, judgment was
rendered ordering PSI, PSEA-PAFLU and their officers to pay PAFLU ₱150,000.00 in damages.10

PSI, PSEA and their respective officers appealed to the National Labor Relations Commission
(NLRC). But the NLRC upheld the Decision of the Labor Arbiter and conjectured that since an
election protest questioning PSEA-PAFLU's certification as the sole and exclusive bargaining agent
was pending resolution before the Secretary of Labor, PSEA could not validly separate from PAFLU,
join another national federation and subsequently enter into a collective bargaining agreement with
its employer-company.11

Petitioners separately moved for reconsideration but both motions were denied. Hence, these
petitions for certiorari filed by PSI and PSEA-NCW together with their respective officers pleading for
a reversal of the NLRC's Decision which they claimed to have been rendered in excess of
jurisdiction. In due time, both petitions were consolidated.

In these petitions, petitioner PSEA together with its officers argued that by virtue of their disaffiliation
PAFLU as a mere agent had no authority to represent them before any proceedings. They further
asserted that being an independent labor union PSEA may freely serve the interest of all its
members and readily disaffiliate from its mother federation when circumstances so warrant. This
right, they averred, was consistent with the constitutional guarantee of freedom of association.12

For their part, petitioners PSI, Romulo and Dakila alleged that their decision to bargain collectively
with PSEA-NCW was actuated, to a large extent, by PAFLU's behavior. Having heard no objections
or protestations from PAFLU relative to PSEA's disaffiliation, they reckoned that PSEA's subsequent
association with NSW was done bona fide.13

The Solicitor General filed a Manifestation in Lieu of Comment recommending that both petitions be
granted. In his Manifestation, the Solicitor General argued against the Labor Arbiter's assumption of
jurisdiction citing the following as reasons: first, there was no employer-employee relationship
between complainant Ayroso and PSI over which the Labor Arbiter could rightfully assert his
jurisdiction; second, since the case involved a dispute between PAFLU as mother federation and
PSEA as local union, the controversy fell within the jurisdiction of the Bureau of Labor Relations;
and lastly, the relationship of principal-agent between PAFLU and PSEA had been severed by the
local union through the lawful exercise of its right of disaffiliation.14

Stripped of non-essentials, the fundamental issue tapers down to the legitimacy of PSEA's
disaffiliation. To be more precise, may PSEA, which is an independent and separate local union,
validly disaffiliate from PAFLU pending the settlement of an election protest questioning its status as
the sole and exclusive bargaining agent of PSI's rank and file employees?

At the outset, let it be noted that the issue of disaffiliation is an inter-union conflict the jurisdiction of
which properly lies with the Bureau of Labor Relations (BLR) and not with the Labor
Arbiter.15 Nonetheless, with due recognition of this fact, we deem it proper to settle the controversy at
this instance since to remand the case to the BLR would only mean intolerable delay for the parties.

The right of a local union to disaffiliate from its mother federation is not a novel thesis unillumined by
case law. In the landmark case of Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills,
Inc.16 we upheld the right of local unions to separate from their mother federation on the ground that
as separate and voluntary associations, local unions do not owe their creation and existence to the
national federation to which they are affiliated but, instead, to the will of their members. The sole
essence of affiliation is to increase, by collective action, the common bargaining power of local
unions for the effective enhancement and protection of their interests. Admittedly, there are times
when without succor and support local unions may find it hard, unaided by other support groups, to
secure justice for themselves.

Yet the local unions remain the basic units of association, free to serve their own interests subject to
the restraints imposed by the constitution and by-laws of the national federation, and free also to
renounce the affiliation upon the terms laid down in the agreement which brought such affiliation into
existence.

Such dictum has been punctiliously followed since then.17

Upon an application of the aforecited principle to the issue at hand, the impropriety of the questioned
Decisions becomes clearly apparent. There is nothing shown in the records nor is it claimed by
PAFLU that the local union was expressly forbidden to disaffiliate from the federation nor were there
any conditions imposed for a valid breakaway. As such, the pendency of an election protest
involving both the mother federation and the local union did not constitute a bar to a valid
disaffiliation. Neither was it disputed by PAFLU that 111 signatories out of the 120 members of the
local union, or an equivalent of 92.5% of the total union membership supported the claim of
disaffiliation and had in fact disauthorized PAFLU from instituting any complaint in their behalf.
Surely, this is not a case where one (1) or two (2) members of the local union decided to disaffiliate
from the mother federation, but it is a case where almost all local union members decided to
disaffiliate.

It was entirely reasonable then for PSI to enter into a collective bargaining agreement with PSEA-
NCW. As PSEA had validly severed itself from PAFLU, there would be no restrictions which could
validly hinder it from subsequently affiliating with NCW and entering into a collective bargaining
agreement in behalf of its members.

There is a further consideration that likewise argues for the granting of the petitions. It stands
unchallenged that PAFLU instituted the complaint for unfair labor practice against the wishes of
workers whose interests it was supposedly protecting. The mere act of disaffiliation did not divest
PSEA of its own personality; neither did it give PAFLU the license to act independently of the local
union. Recreant to its mission, PAFLU cannot simply ignore the demands of the local chapter and
decide for its welfare. PAFLU might have forgotten that as an agent it could only act in
representation of and in accordance with the interests of the local union. The complaint then for
unfair labor practice lodged by PAFLU against PSI, PSEA and their respective officers, having been
filed by a party which has no legal personality to institute the complaint, should have been dismissed
at the first instance for failure to state a cause of action.

Policy considerations dictate that in weighing the claims of a local union as against those of a
national federation, those of the former must be preferred. Parenthetically though, the desires of the
mother federation to protect its locals are not altogether to be shunned. It will however be to err
greatly against the Constitution if the desires of the federation would be favored over those of its
members. That, at any rate, is the policy of the law. For if it were otherwise, instead of protection,
there would be disregard and neglect of the lowly workingmen.

WHEREFORE, the petitions of Philippine Skylanders, Inc. and of Philippine Skylanders and Workers
Association-NCW, together with their respective officers, are GRANTED. The Decision of the
National Labor Relations Commission of 31 July 1996 affirming the Decision of the Labor Arbiter of
30 June 1995 holding petitioners Philippine Skylanders and Workers Association-NCW, Philippine
Skylanders, Inc. and their respective officers, guilty of unfair labor practice and ordering them to pay
damages to private respondent Philippine Association of Free Labor Unions (PAFLU) September
(now UNIFIED PAFLU) as well as the Resolution of 31 October 1996 denying reconsideration
is REVERSED and SET ASIDE. No costs.

SO ORDERED.

TROPICAL HUT EMPLOYEES’ UNION-CGW et al vs.TROPICAL

HUT FOOD MARKET, INC., et al
G.R. No. L-43495-99

January 20, 1990

FACTS: The rank and file workers of the Tropical Hut Food Market Incorporated
(respondent company) organized a local union called the Tropical Hut Employees
Union (THEU) and immediately sought affiliation with the National Association of
Trade Unions (NATU). The NATU accepted the THEU application for affiliation.
The CBA between respondent company and THEU-NATU contains a union security
clause:
xx
Union Membership and Union Check-off
Sec. 1 —. . . Employees who are already members of the UNION at the time of the
signing of this Agreement or who become so thereafter shall be required to maintain
their membership therein as a condition of continued employment.
Xx
Attached to the Agreement is a check-off Authorization Form, the terms of which are
as follows:
We, the undersigned, hereby designate the NATU, of which the THEU is an affiliate
as sole collective bargaining agent in all matters relating to salary rates, hours of work
and other terms and conditions of employment in the Tropical Hut Food Market,
Inc…xx
Later on, NATU received a letter jointly signed by the incumbent officers of the local
union informing the NATU that THEU was disaffiliating from the NATU
federation. The employees were dismissed because, as respondent company
contended, they violated the union security clause.
ISSUE: Was the disaffiliation of the local union from the national federation
valid?
HELD: YES
The right of a local union to disaffiliate from its mother federation is well-settled. A
local union, being a separate and voluntary association, is free to serve the interest of
all its members including the freedom to disaffiliate when circumstances warrant. This
right is consistent with the constitutional guarantee of freedom of association
The inclusion of the word NATU after the name of the local union THEU in the
registration with the Department of Labor is merely to stress that the THEU is
NATU’s affiliate at the time of the registration. It does not mean that the said local
union cannot stand on its own. Neither can it be interpreted to mean that it cannot
pursue its own interests independently of the federation. A local union owes its
creation and continued existence to the will of its members and not to the federation to
which it belongs.
Further, there is no merit in the contention of the respondents that the act of
disaffiliation violated the union security clause of the CBA and that their dismissal as
a consequence thereof is valid. A perusal of the CBAs shows that the THEU-NATU,
and not the NATU federation, was recognized as the sole and exclusive collective
bargaining agent for all its workers and employees in all matters concerning wages,
hours of work and other terms and conditions of employment. Although NATU was
designated as the sole bargaining agent in the check-off authorization form attached to
the CBA, this simply means it was acting only for and in behalf of its
affiliate. The NATU possessed the status of an agent while the local union remained
the basic principal union which entered into contract with the respondent company.
When the THEU disaffiliated from its mother federation, the former did not lose its
legal personality as the bargaining union under the CBA. Moreover, the union security
clause embodied in the agreements cannot be used to justify the dismissals meted to
petitioners since it is not applicable to the circumstances obtaining in this case. The
CBA imposes dismissal only in case an employee is expelled from the union for
joining another federation or for forming another union or who fails or refuses to
maintain membership therein. The case at bar does notinvolve the withdrawal of
merely some employees from the union but of the whole THEU itself from its
federation. Clearly, since there is no violation of the union security provision in the
CBA, there was no sufficient ground to terminate the employment of petitioners.
SAN MIGUEL CORPORATION G.R. No. 171153
EMPLOYEES UNIONPHILIPPINE
TRANSPORT AND GENERAL Present:
WORKERS ORGANIZATION
(SMCEUPTGWO), YNARES-SANTIAGO, J.,
Petitioner, Chairperson,
AUSTRIA-MARTINEZ,
- versus - CHICO-NAZARIO,
NACHURA, and
SAN MIGUEL PACKAGING REYES, JJ.
PRODUCTS EMPLOYEES
UNIONPAMBANSANG DIWA NG Promulgated:
MANGGAGAWANG
PILIPINO(SMPPEUPDMP),
Respondent. [ 1 ] September 12, 2007
x-------------------------------------------------x

DECISION

CHICO-NAZARIO, J.:

In this Petition for Review on Certiorari under Rule 45 of the Revised Rules of
Court, petitioner SAN MIGUEL CORPORATION EMPLOYEES UNION-
PHILIPPINE TRANSPORT AND GENERAL WORKERS ORGANIZATION
(SMCEU-PTGWO) prays that this Court reverse and set aside the (a)
Decision[2] dated 9 March 2005 of the Court of Appeals in CA-G.R. SP No. 66200,
affirming the Decision[3] dated 19 February 2001 of the Bureau of Labor Relations
(BLR) of the Department of Labor and Employment (DOLE) which upheld the
Certificate of Registration of respondent SAN MIGUEL PACKAGING
PRODUCTS EMPLOYEES UNIONPAMBANSANG DIWA NG
MANGGAGAWANG PILIPINO (SMPPEUPDMP); and (b)
[4]
the Resolution dated 16 January 2006 of the Court of Appeals in the same case,
denying petitioners Motion for Reconsideration of the aforementioned Decision.

The following are the antecedent facts:

Petitioner is the incumbent bargaining agent for the bargaining unit comprised of
the regular monthly-paid rank and file employees of the three divisions of San
Miguel Corporation (SMC), namely, the San Miguel Corporate Staff Unit
(SMCSU), San Miguel Brewing Philippines (SMBP), and the San Miguel
Packaging Products (SMPP), in all offices and plants of SMC, including the Metal
Closure and Lithography Plant in Laguna. It had been the certified bargaining
agent for 20 years from 1987 to 1997.

Respondent is registered as a chapter of Pambansang Diwa ng Manggagawang

Pilipino (PDMP). PDMP issued Charter Certificate No. 112 to respondent on 15
June 1999.[5] In compliance with registration requirements, respondent submitted
the requisite documents to the BLR for the purpose of acquiring legal
personality.[6] Upon submission of its charter certificate and other documents,
respondent was issued Certificate of Creation of Local or Chapter PDMP-01 by the
BLR on 6 July 1999.[7] Thereafter, respondent filed with the Med-Arbiter of the
DOLE Regional Officer in the National Capital Region (DOLE-NCR),three
separate petitions for certification election to represent SMPP, SMCSU, and
SMBP.[8] All three petitions were dismissed, on the ground that the separate
petitions fragmented a single bargaining unit.[9]

On 17 August 1999, petitioner filed with the DOLE-NCR a petition seeking the
cancellation of respondents registration and its dropping from the rolls of
legitimate labor organizations. In its petition, petitioner accused respondent of
committing fraud and falsification, and non-compliance with registration
requirements in obtaining its certificate of registration. It raised allegations that
respondent violated Articles 239(a), (b) and (c)[10] and 234(c)[11] of the Labor
Code. Moreover, petitioner claimed that PDMP is not a legitimate labor
organization, but a trade union center, hence, it cannot directly create a local or
chapter. The petition was docketed as Case No. NCR-OD-9908-007-IRD.[12]
On 14 July 2000, DOLE-NCR Regional Director Maximo B. Lim issued an Order
dismissing the allegations of fraud and misrepresentation, and irregularity in the
submission of documents by respondent. Regional Director Lim further ruled that
respondent is allowed to directly create a local or chapter. However, he found that
respondent did not comply with the 20% membership requirement and, thus,
ordered the cancellation of its certificate of registration and removal from the rolls
of legitimate labor organizations.[13] Respondent appealed to the BLR. In a
Decision dated 19 February 2001, it declared:

As a chartered local union, appellant is not required to submit the

number of employees and names of all its members comprising at least
20% of the employees in the bargaining unit where it seeks to operate.
Thus, the revocation of its registration based on non-compliance with the
20% membership requirement does not have any basis in the rules.

Further, although PDMP is considered as a trade union center, it is a

holder of Registration Certificate No. FED-11558-LC issued by the BLR
on 14 February 1991, which bestowed upon it the status of a legitimate
labor organization with all the rights and privileges to act as
representative of its members for purposes of collective bargaining
 agreement. On this basis, PDMP can charter or create a local, in
accordance with the provisions of Department Order No. 9.

WHEREFORE, the appeal is hereby GRANTED. Accordingly, the

decision of the Regional Director dated July 14, 2000, canceling the
registration of appellant San Miguel Packaging Products Employees
Union-Pambansang Diwa ng Manggagawang Pilipino (SMPPEU-
PDMP) is REVERSED and SET ASIDE. Appellant shall hereby remain
in the roster of legitimate labor organizations.[14]
While the BLR agreed with the findings of the DOLE Regional Director
dismissing the allegations of fraud and misrepresentation, and in upholding that
PDMP can directly create a local or a chapter, it reversed the Regional Directors
ruling that the 20% membership is a requirement for respondent to attain legal
personality as a labor organization. Petitioner thereafter filed a Motion for
Reconsideration with the BLR. In a Resolution rendered on 19 June 2001 in BLR-
A-C-64-05-9-00 (NCR-OD-9908-007-IRD), the BLR denied the Motion for
Reconsideration and affirmed its Decision dated 19 February 2001.[15]

Invoking the power of the appellate court to review decisions of quasi-judicial

agencies, petitioner filed with the Court of Appeals a Petition for Certiorari under
Rule 65 of the 1997 Rules of Civil Procedure docketed as CA-G.R. SP No.
66200. The Court of Appeals, in a Decision dated 9 March 2005, dismissed the
petition and affirmed the Decision of the BLR, ruling as follows:
In Department Order No. 9, a registered federation or national union may
directly create a local by submitting to the BLR copies of the charter
certificate, the locals constitution and by-laws, the principal office address
of the local, and the names of its officers and their addresses. Upon
complying with the documentary requirements, the local shall be issued a
certificate and included in the roster of legitimate labor organizations. The
[herein respondent] is an affiliate of a registered federation PDMP, having
been issued a charter certificate. Under the rules we have reviewed, there is
no need for SMPPEU to show a membership of 20% of the employees of
the bargaining unit in order to be recognized as a legitimate labor union.

xxxx

In view of the foregoing, the assailed decision and resolution of the BLR
are AFFIRMED, and the petition is DISMISSED.[16]
 Subsequently, in a Resolution dated 16 January 2006, the Court of Appeals
denied petitioners Motion for Reconsideration of the aforementioned Decision.

Hence, this Petition for Certiorari under Rule 45 of the Revised Rules of
Court where petitioner raises the sole issue of:

WHETHER OR NOT THE HONORABLE COURT OF APPEALS

COMMITTED REVERSIBLE ERROR IN RULING THAT
PRIVATE RESPONDENT IS NOT REQUIRED TO SUBMIT THE
NUMBER OF EMPLOYEES AND NAMES OF ALL ITS MEMBERS
COMPRISING AT LEAST 20% OF THE EMPLOYEES IN THE
BARGAINING UNIT WHERE IT SEEKS TO OPERATE.

The present petition questions the legal personality of respondent as a

legitimate labor organization.

Petitioner posits that respondent is required to submit a list of members

comprising at least 20% of the employees in the bargaining unit before it may
acquire legitimacy, citing Article 234(c) of the Labor Code which stipulates that
any applicant labor organization, association or group of unions or workers shall
acquire legal personality and shall be entitled to the rights and privileges granted
by law to legitimate labor organizations upon issuance of the certificate of
registration based on the following requirements:

a. Fifty pesos (P50.00) registration fee;

b. The names of its officers, their addresses, the principal address of the
labor organization, the minutes of the organizational meetings and the
list of the workers who participated in such meetings;
c. The names of all its members comprising at least twenty percent
(20%) of all the employees in the bargaining unit where it seeks to
operate;
d. If the applicant union has been in existence for one or more years,
copies of its annual financial reports; and
e. Four (4) copies of the constitution and by-laws of the applicant
union, minutes of its adoption or ratification and the list of the
members who participated in it.[17]
 Petitioner also insists that the 20% requirement for registration of respondent
must be based not on the number of employees of a single division, but in all three
divisions of the company in all the offices and plants of SMC since they are all part
of one bargaining unit. Petitioner refers to Section 1, Article 1 of the Collective
Bargaining Agreement (CBA),[18] quoted hereunder:

ARTICLE 1
SCOPE

Section 1. Appropriate Bargaining Unit. The appropriate bargaining

unit covered by this Agreement consists of all regular rank and file
employees paid on the basis of fixed salary per month and employed by
the COMPANY in its Corporate Staff Units (CSU), San Miguel Brewing
Products (SMBP) and San Miguel Packaging Products (SMPP) and in
different operations existing in the City of Manila and suburbs, including
Metal Closure and Lithography Plant located at Canlubang, Laguna
subject to the provisions of Article XV of this Agreement provided
however, that if during the term of this Agreement, a plant within the
territory covered by this Agreement is transferred outside but within a
radius of fifty (50) kilometers from the Rizal Monument, Rizal Park,
Metro Manila, the employees in the transferred plant shall remain in the
bargaining unit covered by this Agreement. (Emphasis supplied.)

Petitioner thus maintains that respondent, in any case, failed to meet this
20% membership requirement since it based its membership on the number of
employees of a single division only, namely, the SMPP.

There is merit in petitioners contentions.

A legitimate labor organization[19] is defined as any labor organization duly

registered with the Department of Labor and Employment, and includes any
branch or local thereof.[20] The mandate of the Labor Code is to ensure strict
compliance with the requirements on registration because a legitimate labor
organization is entitled to specific rights under the Labor Code,[21] and are involved
in activities directly affecting matters of public interest. Registration requirements
are intended to afford a measure of protection to unsuspecting employees who may
be lured into joining unscrupulous or fly-by-night unions whose sole purpose is to
control union funds or use the labor organization for illegitimate
ends.[22] Legitimate labor organizations have exclusive rights under the law which
cannot be exercised by non-legitimate unions, one of which is the right to be
certified as the exclusive representative[23] of all the employees in an appropriate
collective bargaining unit for purposes of collective bargaining.[24] The acquisition
of rights by any union or labor organization, particularly the right to file a petition
for certification election, first and foremost, depends on whether or not the labor
organization has attained the status of a legitimate labor organization.[25]

A perusal of the records reveals that respondent is registered with the BLR as a
local or chapter of PDMP and was issued Charter Certificate No. 112 on 15 June
1999. Hence, respondent was directly chartered by PDMP.

The procedure for registration of a local or chapter of a labor organization is

provided in Book V of the Implementing Rules of the Labor Code, as amended by
Department Order No. 9 which took effect on 21 June 1997, and again by
Department Order No. 40 dated 17 February 2003. The Implementing Rules as
amended by D.O. No. 9 should govern the resolution of the petition at bar since
respondents petition for certification election was filed with the BLR in 1999; and
that of petitioner on 17 August 1999.[26]

The applicable Implementing Rules enunciates a two-fold procedure for the

creation of a chapter or a local. The first involves the affiliation of an independent
union with a federation or national union or industry union. The second, finding
application in the instant petition, involves the direct creation of a local or a
chapter through the process of chartering.[27]

A duly registered federation or national union may directly create a local or

chapter by submitting to the DOLE Regional Office or to the BLR two copies of
the following:

(a) A charter certificate issued by the federation or national union

indicating the creation or establishment of the local/chapter;

(b) The names of the local/chapters officers, their addresses, and the
principal office of the local/chapter; and
 (c) The local/chapters constitution and by-laws; Provided, That where
the local/chapters constitution and by-laws is the same as that of the
federation or national union, this fact shall be indicated accordingly.

All the foregoing supporting requirements shall be certified under oath

by the Secretary or the Treasurer of the local/chapter and attested to by
its President.[28]

The Implementing Rules stipulate that a local or chapter may be directly

created by a federation or national union. A duly constituted local or chapter
created in accordance with the foregoing shall acquire legal personality from the
date of filing of the complete documents with the BLR.[29] The issuance of the
certificate of registration by the BLR or the DOLE Regional Office is not the
operative act that vests legal personality upon a local or a chapter under
Department Order No. 9. Such legal personality is acquired from the filing of the
complete documentary requirements enumerated in Section 1, Rule VI.[30]

Petitioner insists that Section 3 of the Implementing Rules, as amended by

Department Order No. 9, violated Article 234 of the Labor Code when it provided
for less stringent requirements for the creation of a chapter or local. This Court
disagrees.

Article 234 of the Labor Code provides that an independent labor

organization acquires legitimacy only upon its registration with the BLR:

Any applicant labor organization, association or group of unions or

workers shall acquire legal personality and shall be entitled to the rights
and privileges granted by law to legitimate labor organizations upon
issuance of the certificate of registration based on the following
requirements:

(a) Fifty pesos (P50.00) registration fee;

(b) The names of its officers, their addresses, the principal address of the
labor organization, the minutes of the organizational meetings and the
list of the workers who participated in such meetings;
 (c) The names of all its members comprising at least twenty
percent (20%) of all the employees in the bargaining unit where it
seeks to operate;

(d) If the applicant union has been in existence for one or more years,
copies of its annual financial reports; and

(e) Four (4) copies of the constitution and by-laws of the applicant
union, minutes of its adoption or ratification, and the list of the members
who participated in it. (Italics supplied.)

It is emphasized that the foregoing pertains to the registration of

an independent labor organization, association or group of unions or workers.

However, the creation of a branch, local or chapter is treated

differently. This Court, in the landmark case of Progressive Development
Corporation v. Secretary, Department of Labor and Employment,[31]declared that
when an unregistered union becomes a branch, local or chapter, some of the
aforementioned requirements for registration are no longer necessary or
compulsory. Whereas an applicant for registration of an independent union is
mandated to submit, among other things, the number of employees and names of
all its members comprising at least 20% of the employees in the bargaining unit
where it seeks to operate, as provided under Article 234 of the Labor Code and
Section 2 of Rule III, Book V of the Implementing Rules, the same is no longer
required of a branch, local or chapter.[32] The intent of the law in imposing less
requirements in the case of a branch or local of a registered federation or national
union is to encourage the affiliation of a local union with a federation or national
union in order to increase the local unions bargaining powers respecting terms and
conditions of labor.[33]

Subsequently, in Pagpalain Haulers, Inc. v. Trajano[34] where the validity of

Department Order No. 9 was directly put in issue, this Court was unequivocal in
finding that there is no inconsistency between the Labor Code and Department
Order No. 9.
As to petitioners claims that respondent obtained its Certificate of Registration
through fraud and misrepresentation, this Court finds that the imputations are not
impressed with merit. In the instant case, proof to declare that respondent
committed fraud and misrepresentation remains wanting. This Court had, indeed,
on several occasions, pronounced that registration based on false and fraudulent
statements and documents confer no legitimacy upon a labor organization
irregularly recognized, which, at best, holds on to a mere scrap of paper. Under
such circumstances, the labor organization, not being a legitimate labor
organization, acquires no rights.[35]

This Court emphasizes, however, that a direct challenge to the legitimacy of a

labor organization based on fraud and misrepresentation in securing its certificate
of registration is a serious allegation which deserves careful scrutiny. Allegations
thereof should be compounded with supporting circumstances and evidence.The
records of the case are devoid of such evidence. Furthermore, this Court is not a
trier of facts, and this doctrine applies with greater force in labor cases. Findings
of fact of administrative agencies and quasi-judicial bodies, such as the BLR,
which have acquired expertise because their jurisdiction is confined to specific
matters, are generally accorded not only great respect but even finality.[36]

Still, petitioner postulates that respondent was not validly and legitimately created,
for PDMP cannot create a local or chapter as it is not a legitimate labor
organization, it being a trade union center.

Petitioners argument creates a predicament as it hinges on the legitimacy of PDMP

as a labor organization. Firstly, this line of reasoning attempts to predicate that a
trade union center is not a legitimate labor organization. In the process, the
legitimacy of PDMP is being impugned, albeit indirectly. Secondly, the same
contention premises that a trade union center cannot directly create a local or
chapter through the process of chartering.

Anent the foregoing, as has been held in a long line of cases, the legal
personality of a legitimate labor organization, such as PDMP, cannot be subject to
a collateral attack. The law is very clear on this matter. Article 212 (h) of the Labor
Code, as amended, defines a legitimate labor organization[37] as any labor
organization duly registered with the DOLE, and includes any branch or local
thereof.[38] On the other hand, a trade union center is any group of registered
national unions or federations organized for the mutual aid and protection of its
members; for assisting such members in collective bargaining; or for participating
in the formulation of social and employment policies, standards, and programs, and
is duly registered with the DOLE in accordance with Rule III, Section 2 of the
Implementing Rules.[39]

The Implementing Rules stipulate that a labor organization shall be deemed

registered and vested with legal personality on the date of issuance of its certificate
of registration. Once a certificate of registration is issued to a union, its legal
personality cannot be subject to collateral attack.[40] It may be questioned only in
an independent petition for cancellation in accordance with Section 5 of Rule V,
Book V of the Implementing Rules. The aforementioned provision is enunciated in
the following:

Sec. 5. Effect of registration. The labor organization or workers

association shall be deemed registered and vested with legal personality
on the date of issuance of its certificate of registration. Such legal
personality cannot thereafter be subject to collateral attack, but may be
questioned only in an independent petition for cancellation in accordance
with these Rules.

PDMP was registered as a trade union center and issued Registration Certificate
No. FED-11558-LC by the BLR on 14 February 1991. Until the certificate of
registration of PDMP is cancelled, its legal personality as a legitimate labor
organization subsists. Once a union acquires legitimate status as a labor
organization, it continues to be recognized as such until its certificate of
registration is cancelled or revoked in an independent action for cancellation.[41] It
bears to emphasize that what is being directly challenged is the personality of
respondent as a legitimate labor organization and not that of PDMP. This being a
collateral attack, this Court is without jurisdiction to entertain questions indirectly
impugning the legitimacy of PDMP.

Corollarily, PDMP is granted all the rights and privileges appurtenant to a

legitimate labor organization,[42] and continues to be recognized as such until its
certificate of registration is successfully impugned and thereafter cancelled or
revoked in an independent action for cancellation.
We now proceed to the contention that PDMP cannot directly create a local or a
chapter, it being a trade union center.
 This Court reverses the finding of the appellate court and BLR on this
ground, and rules that PDMP cannot directly create a local or chapter.

After an exhaustive study of the governing labor law provisions, both

statutory and regulatory,[43] we find no legal justification to support the conclusion
that a trade union center is allowed to directly create a local or chapter through
chartering. Apropos, we take this occasion to reiterate the first and fundamental
duty of this Court, which is to apply the law. The solemn power and duty of the
Court to interpret and apply the law does not include the power to correct by
reading into the law what is not written therein.[44]

Presidential Decree No. 442, better known as the Labor Code, was enacted
in 1972. Being a legislation on social justice,[45] the provisions of the Labor Code
and the Implementing Rules have been subject to several amendments, and they
continue to evolve, considering that labor plays a major role as a socio-economic
force. The Labor Code was first amended by Republic Act No. 6715, and recently,
by Republic Act No. 9481. Incidentally, the term trade union center was never
mentioned under Presidential Decree No. 442, even as it was amended by Republic
Act No. 6715. The term trade union center was first adopted in the Implementing
Rules, under Department Order No. 9.

Culling from its definition as provided by Department Order No. 9, a trade

union center is any group of registered national unions or federations organized for
the mutual aid and protection of its members; for assisting such members in
collective bargaining; or for participating in the formulation of social and
employment policies, standards, and programs, and is duly registered with the
DOLE in accordance with Rule III, Section 2 of the Implementing Rules.[46] The
same rule provides that the application for registration of an industry or trade union
center shall be supported by the following:

(a) The list of its member organizations and their respective

presidents and, in the case of an industry union, the industry
where the union seeks to operate;
 (b) The resolution of membership of each member organization,
approved by the Board of Directors of such union;

(c) The name and principal address of the applicant, the names
of its officers and their addresses, the minutes of its
organizational meeting/s, and the list of member organizations
and their representatives who attended such meeting/s; and

(d) A copy of its constitution and by-laws and minutes of its

ratification by a majority of the presidents of the member
organizations, provided that where the ratification was done
simultaneously with the organizational meeting, it shall be
sufficient that the fact of ratification be included in the
minutes of the organizational meeting.[47]

Evidently, while a national union or federation is a labor organization with at

least ten locals or chapters or affiliates, each of which must be a duly certified or
recognized collective bargaining agent;[48] a trade union center, on the other hand,
is composed of a group of registered national unions or federations.[49]

The Implementing Rules, as amended by Department Order No. 9, provide

that a duly registered federation or national union may directly create a local or
chapter. The provision reads:

Section 1. Chartering and creation of a local/chapter. A duly registered

federation or national union may directly create a local/chapter by
submitting to the Regional Office or to the Bureau two (2) copies of the
following:

(a) A charter certificate issued by the federation or national union

indicating the creation or establishment of the local/chapter;

(b) The names of the local/chapters officers, their addresses, and the
principal office of the local/chapter; and

(c) The local/chapters constitution and by-laws; provided that where the
local/chapters constitution and by-laws is the same as that of the
federation or national union, this fact shall be indicated accordingly.
 All the foregoing supporting requirements shall be certified under oath
by the Secretary or the Treasurer of the local/chapter and attested to by
its President.[50]

Department Order No. 9 mentions two labor organizations either of which is

allowed to directly create a local or chapter through chartering a duly
registered federation or a national union. Department Order No. 9 defines a
"chartered local" as a labor organization in the private sector operating at the
enterprise level that acquired legal personality through a charter certificate, issued
by a duly registered federation or national union and reported to the Regional
Office in accordance with Rule III, Section 2-E of these Rules.[51]

Republic Act No. 9481 or An Act Strengthening the Workers Constitutional

Right to Self-Organization, Amending for the Purpose Presidential Decree No.
442, As Amended, Otherwise Known as the Labor Code of
the Philippines lapsed[52] into law on 25 May 2007 and became effective on 14
June 2007.[53] This law further amends the Labor Code provisions on Labor
Relations.

Pertinent amendments read as follows:

SECTION 1. Article 234 of Presidential Decree No. 442, as amended,

otherwise known as the Labor Code of the Philippines, is hereby further
amended to read as follows:

ART. 234. Requirements of Registration. A federation,

national union or industry or trade union center or an
independent union shall acquire legal personality and shall
be entitled to the rights and privileges granted by law to
legitimate labor organizations upon issuance of the
certificate of registration based on the following
requirements:

(a) Fifty pesos (P50.00) registration fee;

(b) The names of its officers, their addresses, the principal

address of the labor organization, the minutes of the
 organizational meetings and the list of the workers who
participated in such meetings;

(c) In case the applicant is an independent union, the names

of all its members comprising at least twenty percent (20%)
of all the employees in the bargaining unit where it seeks to
operate;

(d) If the applicant union has been in existence for one or

more years, copies of its annual financial reports; and

(e) Four copies of the constitution and by-laws of the

applicant union, minutes of its adoption or ratification, and
the list of the members who participated in it.

SECTION 2. A new provision is hereby inserted into the Labor Code as

Article 234-A to read as follows:

ART. 234-A. Chartering and Creation of a Local Chapter.

A duly registered federation or national union may directly
create a local chapter by issuing a charter certificate
indicating the establishment of the local chapter. The
chapter shall acquire legal personality only for purposes of
filing a petition for certification election from the date it
was issued a charter certificate.

The chapter shall be entitled to all other rights and

privileges of a legitimate labor organization only upon the
submission of the following documents in addition to its
charter certificate:

(a) The names of the chapter's officers, their addresses, and

the principal office of the chapter; and

(b) The chapter's constitution and by-laws: Provided, That

where the chapter's constitution and by-laws are the same
as that of the federation or the national union, this fact shall
be indicated accordingly.
The additional supporting requirements shall be certified
under oath by the secretary or treasurer of the chapter and
attested by its president. (Emphasis ours.)
Article 234 now includes the term trade union center, but interestingly, the
provision indicating the procedure for chartering or creating a local or chapter,
namely Article 234-A, still makes no mention of a trade union center.

Also worth emphasizing is that even in the most recent amendment of the
implementing rules,[54]there was no mention of a trade union center as being among
the labor organizations allowed to charter.

This Court deems it proper to apply the Latin maxim expressio unius est
exclusio alterius. Under this maxim of statutory interpretation, the expression of
one thing is the exclusion of another. When certain persons or things are specified
in a law, contract, or will, an intention to exclude all others from its operation may
be inferred. If a statute specifies one exception to a general rule or assumes to
specify the effects of a certain provision, other exceptions or effects are
excluded.[55] Where the terms are expressly limited to certain matters, it may not,
by interpretation or construction, be extended to other matters.[56] Such is the case
here. If its intent were otherwise, the law could have so easily and conveniently
included trade union centers in identifying the labor organizations allowed to
charter a chapter or local. Anything that is not included in the enumeration is
excluded therefrom, and a meaning that does not appear nor is intended or
reflected in the very language of the statute cannot be placed therein.[57] The rule is
restrictive in the sense that it proceeds from the premise that the legislating body
would not have made specific enumerations in a statute if it had the intention not to
restrict its meaning and confine its terms to those expressly
mentioned.[58] Expressium facit cessare tacitum.[59] What is expressed puts an end
to what is implied. Casus omissus pro omisso habendus est. A person, object or
thing omitted must have been omitted intentionally.
Therefore, since under the pertinent status and applicable implementing rules, the
power granted to labor organizations to directly create a chapter or local through
chartering is given to a federation or national union, then a trade union center is
without authority to charter directly.

The ruling of this Court in the instant case is not a departure from the policy
of the law to foster the free and voluntary organization of a strong and united labor
movement,[60] and thus assure the rights of workers to self-organization.[61] The
mandate of the Labor Code in ensuring strict compliance with the procedural
requirements for registration is not without reason. It has been observed that the
formation of a local or chapter becomes a handy tool for the circumvention of
union registration requirements. Absent the institution of safeguards, it becomes a
convenient device for a small group of employees to foist a not-so-desirable
federation or union on unsuspecting co-workers and pare the need for
wholehearted voluntariness, which is basic to free unionism.[62] As a legitimate
labor organization is entitled to specific rights under the Labor Code and involved
in activities directly affecting public interest, it is necessary that the law afford
utmost protection to the parties affected.[63] However, as this Court has enunciated
in Progressive Development Corporation v. Secretary of Department of Labor and
Employment, it is not this Court's function to augment the requirements prescribed
by law. Our only recourse, as previously discussed, is to exact strict compliance
with what the law provides as requisites for local or chapter formation.[64]

In sum, although PDMP as a trade union center is a legitimate labor organization,

it has no power to directly create a local or chapter. Thus, SMPPEU-PDMP cannot
be created under the more lenient requirements for chartering, but must have
complied with the more stringent rules for creation and registration of an
independent union, including the 20% membership requirement.

WHEREFORE, the instant Petition is GRANTED. The Decision dated 09 March

2005 of the Court of Appeals in CA-GR SP No. 66200 is REVERSED and SET
ASIDE. The Certificate of Registration of San Miguel Packaging Products
Employees UnionPambansang Diwa ng Manggagawang Pilipino is ORDERED
CANCELLED, and SMPPEU-PDMP DROPPED from the rolls of legitimate
labor organizations.

Costs against petitioner.

AN MIGUEL UNION VS. LAGUESMA

NOVEMBER 13, 2013 ~ VBDIAZ

G.R. No. 110399 August 15, 1997

SAN MIGUEL CORPORATION SUPERVISORS AND EXEMPT UNION AND
ERNESTO L. PONCE, President V. HONORABLE BIENVENIDO E.
LAGUESMA IN HIS CAPACITY AS UNDERSECRETARY OF LABOR AND
EMPLOYMENT, HONORABLE DANILO L. REYNANTE IN HIS CAPACITY
AS MED-ARBITER AND SAN MIGUEL CORPORATION
FACTS: Petitioner union filed before DOLE a Petition for Direct Certification or
Certification Election among the supervisors and exempt employees of the SMC
Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis.
Med-Arbiter Danilo L. Reynante issued an Order ordering the conduct of certification
election among the abovementioned employees of the different plants as one
bargaining unit.

San Miguel Corporation filed a Notice of Appeal with Memorandum on Appeal,

pointing out, among others, the Med-Arbiter’s error in grouping together all three (3)
separate plants, into one bargaining unit, and in including supervisory levels 3 and
above whose positions are confidential in nature.

The public respondent, Undersecretary Laguesma, granted respondent company’s

Appeal and ordered the remand of the case to the Med-Arbiter of origin for
determination of the true classification of each of the employees sought to be included
in the appropriate bargaining unit.

Upon petitioner-union’s motion, Undersecretary Laguesma granted the

reconsideration prayed for and directed the conduct of separate certification elections
among the supervisors ranked as supervisory levels 1 to 4 (S1 to S4) and the exempt
employees in each of the three plants at Cabuyao, San Fernando and Otis.

ISSUE:
1. Whether Supervisory employees 3 and 4 and the exempt employees of the company
are considered confidential employees, hence ineligible from joining a union.

2. If they are not confidential employees, do the employees of the three plants
constitute an appropriate single bargaining unit.
RULING:
(1) On the first issue, this Court rules that said employees do not fall within the term
“confidential employees” who may be prohibited from joining a union.

They are not qualified to be classified as managerial employees who, under Article
245 of the Labor Code, are not eligible to join, assist or form any labor organization.
In the very same provision, they are not allowed membership in a labor organization
of the rank-and-file employees but may join, assist or form separate labor
organizations of their own.

Confidential employees are those who (1) assist or act in a confidential capacity, (2)
to persons who formulate, determine, and effectuate management policies in the field
of labor relations. The two criteria are cumulative, and both must be met if an
employee is to be considered a confidential employee — that is, the confidential
relationship must exist between the employee and his supervisor, and the supervisor
must handle the prescribed responsibilities relating to labor relations.

The exclusion from bargaining units of employees who, in the normal course of their
duties, become aware of management policies relating to labor relations is a principal
objective sought to be accomplished by the ”confidential employee rule.” The broad
rationale behind this rule is that employees should not be placed in a position
involving a potential conflict of interests. “Management should not be required to
handle labor relations matters through employees who are represented by the union
with which the company is required to deal and who in the normal performance of
their duties may obtain advance information of the company’s position with regard to
contract negotiations, the disposition of grievances, or other labor relations matters.”

The Court held that “if these managerial employees would belong to or be affiliated
with a Union, the latter might not be assured of their loyalty to the Union in view of
evident conflict of interest. The Union can also become company-dominated with the
presence of managerial employees in Union membership.”
An important element of the “confidential employee rule” is the employee’s need to
use labor relations information. Thus, in determining the confidentiality of certain
employees, a key question frequently considered is the employee’s necessary access
to confidential labor relations information.

(2) The fact that the three plants are located in three different places, namely, in
Cabuyao, Laguna, in Otis, Pandacan, Metro Manila, and in San Fernando, Pampanga
is immaterial. Geographical location can be completely disregarded if the communal
or mutual interests of the employees are not sacrificed.

An appropriate bargaining unit may be defined as “a group of employees of a given

employer, comprised of all or less than all of the entire body of employees, which the
collective interest of all the employees, consistent with equity to the employer,
indicate to be best suited to serve the reciprocal rights and duties of the parties under
the collective bargaining provisions of the law.”

A unit to be appropriate must effect a grouping of employees who have substantial,

mutual interests in wages, hours, working conditions and other subjects of collective
bargaining

G.R. No. 118915 February 4, 1997

CAPITOL MEDICAL CENTER OF CONCERNED EMPLOYEES-UNIFIED FILIPINO SERVICE

WORKERS, (CMC-ACE-UFSW), petitioners,
vs.
HON. BIENVENIDO E. LAGUESMA, Undersecretary of the Department of Labor and
Employment; CAPITOL MEDICAL CENTER EMPLOYEES ASSOCIATION-ALLIANCE OF
FILIPINO WORKERS AND CAPITOL MEDICAL CENTER INCORPORATED AND DRA. THELMA
CLEMENTE, President, respondents.

HERMOSISIMA, JR., J.:

This petition for certiorari and prohibition seeks to reserves and set aside the Order dated November
18, 1994 of public respondent Bienvenido E. Laguesma, Undersecretary of the Department of Labor
and Employment in Case No. OS.-A-136-94 1 which dismissed the petition for certification election
filed by petitioner for lack of merit and further directed private respondent hospital to negotiate a
collective bargaining agreement with respondent union, Capitol Medical Center Employees
Association-Alliance of Filipino Workers.

The antecedent facts are undisputed.

On February 17, 1992, Med-Arbiter Rasidali C. Abdullah issued an Order which granted respondent
union's petition for certification election among the rank-and-file employees of the Capitol Medical
Center.2 Respondent CMC appealed the Order to the Office of the Secretary by questioning the legal
status of respondent union's affiliation with the Alliance of Filipino Workers (AFW). To correct any
supposed infirmity in its legal status, respondent union registered itself independently and withdrew
the petition which had earlier been granted. Thereafter, it filed another petition for certification
election.

On May 29, 1992, Med-Arbiter Manases T. Cruz issued an order granting the petition for certification
election.3Respondent CMC again appealed to the Office of the Secretary which affirmed4 the Order
of the Med-Arbiter granting the certification election.

On December 9, 1992, elections were finally held with respondent union garnering 204 votes, 168 in
favor of no union and 8 spoiled ballots out of a total of 380 votes cast. Thereafter, on January 4,
1993, Med-Arbiter Cruz issued an Order certifying respondent union as the sole and exclusive
bargaining representative of the rank and file employees at CMC. 5

Unsatisfied with the outcome of the elections, respondent CMC again appealed to the Office of the
Secretary of Labor which appeal was denied on February 26, 1993.6 A subsequent motion for
reconsideration filed by respondent CMC was likewise denied on March 23, 1993.7

Respondent CMC's basic contention was the supposed pendency of its petition for cancellation of
respondent union's certificate of registration in Case No. NCR-OD-M-92211-028. In the said case,
Med-Arbiter Paterno Adap issued an Order dated February 4, 1993 which declared respondent
union's certificate of registration as null and void.8 However, this order was reversed on appeal by
the Officer-in-Charge of the Bureau of Labor Relations in her Order issued on April 13, 1993. The
said Order dismissed the motion for cancellation of the certificate of registration of respondent union
and declared that it was not only a bona fide affiliate or local of a federation (AFW), but a duly
registered union as well. Subsequently, this case reached this Court in Capitol Medical Center,
Inc. v. Hon. Perlita Velasco, G.R. No. 110718, where we issued a Resolution dated December 13,
1993, dismissing the petition of CMC for failure to sufficiently show that public respondent committed
grave abuse of discretion.9 The motion for reconsideration filed by CMC was likewise denied in our
Resolution dated February 2, 1994. 10 Thereafter, on March 23, 1994, we issued an entry of
judgment certifying that the Resolution dated December 13, 1993 has become final and executory. 11

Respondent union, after being declared as the certified bargaining agent of the rank-and-file
employees of respondent CMC by Med-Arbiter Cruz, presented economic proposals for the
negotiation of a collective bargaining agreement (CBA). However, respondent CMC contended that
CBA negotiations should be suspended in view of the Order issued on February 4, 1993 by Med-
Arbiter Adap declaring the registration of respondent union as null and void. In spite of the refusal of
respondent CMC, respondent union still persisted in its demand for CBA negotiations, claiming that it
has already been declared as the sole and exclusive bargaining agent of the rank-and-file
employees of the hospital.

Due to respondent CMC's refusal to bargain collectively, respondent union filed a notice of strike on
March 1, 1993. After complying with the other legal requirements, respondent union staged a strike
on April 15, 1993. On April 16, 1993, the Secretary of Labor assumed jurisdiction over the case and
issued an order certifying the same to the National Labor Relations Commission for compulsory
arbitration where the said case is still pending. 12

It is at this juncture that petitioner union, on March 24, 1994, filed a petition for certification election
among the regular rank-and-file employees of the Capitol Medical Center Inc. It alleged in its petition
that: 1) three hundred thirty one (331) out of the four hundred (400) total rank-and-file employees of
respondent CMC signed a petition to conduct a certification election; and 2) that the said employees
are withdrawing their authorization for the said union to represent them as they have joined and
formed the union Capitol Medical Center Alliance of Concerned Employees (CMC-ACE). They also
alleged that a certification election can now be conducted as more that 12 months have lapsed since
the last certification election was held. Moreover, no certification election was conducted during the
twelve (12) months prior to the petition, and no collective bargaining agreement has as yet been
concluded between respondent union and respondent CMC despite the lapse of twelve months from
the time the said union was voted as the collective bargaining representative.

On April 12, 1994, respondent union opposed the petition and moved for its dismissal. It contended
that it is the certified bargaining agent of the rank-and-file employees of the Hospital, which was
confirmed by the Secretary of Labor and Employment and by this Court. It also alleged that it was
not remiss in asserting its right as the certified bargaining agent for it continuously demanded the
negotiation of a CBA with the hospital despite the latter's avoidance to bargain collectively.
Respondent union was even constrained to strike on April 15, 1993, where the Secretary of Labor
intervened and certified the dispute for compulsory arbitration. Furthermore, it alleged that majority
of the signatories who supported the petition were managerial and confidential employees and not
members of the rank-and-file, and that there was no valid disaffiliation of its members, contrary to
petitioner's allegations.

Petitioner, in its rejoinder, claimed that there is no legal impediment to the conduct of a certification
election as more than twelve (12) months had lapsed since respondent union was certified as the
exclusive bargaining agent and no CBA was as yet concluded. It also claimed that the other issues
raised could only be resolved by conducting another certification election.

In its surrejoinder, respondent union alleged that the petition to conduct a certification election was
improper, immoral and in manifest disregard of the decisions rendered by the Secretary of Labor and
by this Court. It claimed that CMC employed "legal obstructionism's" in order to let twelve months
pass without a CBA having been concluded between them so as to pave the way for the entry of
petitioner union.

On May 12, 1994, Med-Arbiter Brigida Fadrigon, issued an Order granting the petition for
certification election among the rank and file
employees. 13 It ruled that the issue was the majority status of respondent union. Since no
certification election was held within one year from the date of issuance of a final certification
election result and there was no bargaining deadlock between respondent union and the employees
that had been submitted to conciliation or had become the subject of a valid notice of strike or lock
out, there is no bar to the holding of a certification election. 14

Respondent union appeared from the said Order, alleging that the Med-Arbiter erred in granting the
petition for certification election and in holding that this case falls under Section 3, Rule V Book V of
the Rules Implementing the Labor Code. 15 It also prayed that the said provision must not be applied
strictly in view of the facts in this case.

Petitioner union did not file any opposition to the appeal.

On November 18, 1994, public respondent rendered a Resolution granting the appeal. 16 He
ratiocinated that while the petition was indeed filed after the lapse of one year form the time of
declaration of a final certification result, and that no bargaining deadlock had been submitted for
conciliation or arbitration, respondent union was not remiss on its right to enter into a CBA for it was
the CMC which refused to bargain collectively. 17

CMC and petitioner union separately filed motions for reconsideration of the said Order.

CMC contended that in certification election proceedings, the employer cannot be ordered to bargain
collectively with a union since the only issue involved is the determination of the bargaining agent of
the employees.

Petitioner union claimed that to completely disregard the will of the 331 rank-and-file employees for a
certification election would result in the denial of their substantial rights and interests. Moreover,it
contended that public respondent's "indictment" that petitioner "capitalize (sic) on the ensuing delay
which was caused by the Hospital, . . ." was unsupported by the facts and the records.

On January 11, 1995, public respondent issued a Resolution which denied the two motions for
reconsideration hence this petition. 18

The pivotal issue in this case is whether or not public respondent committed grave abuse of
discretion in dismissing the petition for certification election, and in directing the hospital to negotiate
a collective bargaining agreement with the said respondent union.

Petitioner alleges that public respondent Undersecretary Laguesma denied it due process when it
ruled against the holding of a certification election. It further claims that the denial of due process
can be gleaned from the manner by which the assailed resolution was written, i.e., instead of the
correct name of the mother federation UNIFIED, it was referred to as UNITED; and that the
respondent union's name CMCEA-AFW was referred to as CMCEA-AFLO. Petitioner maintains that
such errors indicate that the assailed resolution was prepared with "indecent haste."

We do not subscribe to petitioner's contention.

The errors pointed to by petitioner can be classified as mere typographical errors which cannot
materially alter the substance and merit of the assailed resolution.

Petitioner cannot merely anchor its position on the aforementioned erroneous' names just to attain a
reversal of the questioned resolution. As correctly observed by the Solicitor General, petitioner is
merely "nit-picking vainly trying to make a monumental issue out of a negligible error of the public
respondent." 19

Petitioner also assails public respondents' findings that the former "capitalize (sic) on the ensuing
delay which was caused by the hospital and which resulted in the non-conclusion of a CBA within
the certification year.'' 20 It further argues that the denial of its motion fro a fair hearing was clear case
of denial of its right to due process.

Such contention of petitioner deserves scant consideration.

A perusal of the record shows that petitioner failed to file its opposition to oppose the grounds for
respondent union's appeal.
It was given an opportunity to be heard but lost it when it refused to file an appellee's memorandum.

Petitioner insists that the circumstances prescribed in Section 3, Rule V, Book V Of the Rules
Implementing the Labor Code where a certification election should be conducted, viz: (1) that one
year had lapsed since the issuance of a final certification result; and (2) that there is no bargaining
deadlock to which the incumbent or certified bargaining agent is a party has been submitted to
conciliation or arbitration, or had become the subject of a valid notice of strike or lockout, are present
in this case. It further claims that since there is no evidence on record that there exists a CBA
deadlock, the law allowing the conduct of a certification election after twelve months must be given
effect in the interest of the right of the workers to freely choose their sole and exclusive bargaining
agent.

While it is true that, in the case at bench, one year had lapsed since the time of declaration of a final
certification result, and that there is no collective bargaining deadlock, public respondent did not
commit grave abuse of discretion when it ruled in respondent union's favor since the delay in the
forging of the CBA could not be attributed to the fault of the latter.

A scrutiny of the records will further reveal that after respondent union was certified as the
bargaining agent of CMC, it invited the employer hospital to the bargaining table by submitting its
economic proposal for a CBA. However, CMC refused to negotiate with respondent union and
instead challenged the latter's legal personality through a petition for cancellation of the certificate of
registration which eventually reached this Court. The decision affirming the legal status of
respondent union should have left CMC with no other recourse but to bargain collectively; but still it
did not. Respondent union was left with no other recourse but to file a notice of strike against CMC
for unfair labor practice with the National Conciliation and Mediation Board. This eventually led to a
strike on April 15, 1993.

Petitioner union on the other hand, after this Court issued an entry of judgment on March 23, 1994,
filed the subject petition for certification election on March 24, 1994, claiming that twelve months had
lapsed since the last certification election.

Was there a bargaining deadlock between CMC and respondent union, before the filing of petitioner
of a petition for certification election, which had been submitted to conciliation or had become the
subject of a valid notice of strike or lockout?

In the case of Divine Word University of Tacloban v. Secretary of Labor and Employment, 21 we had
the occasion to define what a deadlock is, viz:\

A "deadlock" is . . . the counteraction of things producing entire stoppage; . . . . There

is a deadlock when there is a complete blocking or stoppage resulting from the action
of equal and opposed forces . . . . The word is synonymous with the word impasse,
which . . "presupposes reasonable effort at good faith bargaining which, despite
noble intentions, does not conclude in agreement between the parties."

Although there is no "deadlock" in its strict sense as there is no "counteraction" of forces present in
this case nor "reasonable effort at good faith bargaining," such can be attributed to CMC's fault as
the bargaining proposals of respondent union were never answered by CMC. In fact, what happened
in this case is worse than a bargaining deadlock for CMC employed all legal means to block the
certification of respondent union as the bargaining agent of the rank-and-file; and use it as its
leverage for its failure to bargain with respondent union. Thus, we can only conclude that CMC was
unwilling to negotiate and reach an agreement with respondent union. CMC has not at any instance
shown willingness to discuss the economic proposals given by respondent union. 22
As correctly ratiocinated by public respondent, to wit:

For herein petitioner to capitalize on the ensuing delay which was caused by the
hospital and which resulted in the non-conclusion of a CBA within the certification
year, would be to negate and render a mockery of the proceedings undertaken
before this Department and to put an unjustified premium on the failure of the
respondent hospital to perform its duty to bargain collectively as mandated in Article
252 of the Labor Code, as amended, which states".

"Article 252. Meaning of duty to bargain collectively — the duty to

bargain collectively means the performance of a mutual obligation to
meet and convene promptly and expeditiously in good faith for the
purpose of negotiating an agreement with respect to wages, hours of
work and all other terms and conditions of employment including
proposals for adjusting any grievance or questions arising under such
agreement and executing a contract incorporating such agreements if
requested by either party but such duty does not compel any party to
agree to a proposal or to make any concession."

The duly certified bargaining agent, CMCEA-AFW, should not be made to further
bear the brunt flowing from the respondent hospital's reluctance and thinly disguised
refusal to bargain. 23

If the law proscribes the conduct of a certification election when there is a bargaining deadlock
submitted to conciliation or arbitration, with more reason should it not be conducted if, despite
attempts to bring an employer to the negotiation table by the "no reasonable effort in good faith" on
the employer certified bargaining agent, there was to bargain collectively.

In the case of Kaisahan ng Manggagawang Pilipino vs. Trajano 201 SCRA 453 (1991), penned by
Chief Justice Andres R. Narvasa, the factual milieu of which is similar to this case, this Court allowed
the holding of a certification election and ruled that the one year period known as the "certification
year" has long since expired. We also ruled, that:

. . . prior to the filing of the petition for election in this case, there was no such
"bargaining deadlock . . (which) had been submitted to conciliation or arbitration or
had become the subject of a valid notice of strike or lockout." To be sure, there are in
the record assertions by NAFLU that its attempts to bring VIRON to the negotiation
table had been unsuccessful because of the latter's recalcitrance, and unfulfilled
promises to bargain collectively; but there is no proof that it had taken tiny action to
legally coerce VIRON to comply with its statutory duty to bargain collectively. It could
have charged VIRON with unfair labor practice; but it did not. It could have gone on a
legitimate strike in protest against VIRON's refusal to bargain collectively and compel
it to do so; but it did not. There are assertions by NAFLU, too, that its attempts to
bargain collectively had been delayed by continuing challenges to the resolution
pronouncing it the sole bargaining representative in VIRON; but there is no adequate
substantiation thereof, or of how it did in fact prevent initiation of the bargaining
process between it and VIRON. 24

Although the statements pertinent to this case are merely obiter, still the fact remains that in
the Kaisahan case, NAFLU was counselled by this Court on the steps that it should have undertaken
to protect its interest, but which it failed to do so.
This is what is strikingly different between the Kaisahan case and the case at bench for in the latter
case, there was proof that the certified bargaining agent, respondent union, had taken an action to
legally coerce the employer to comply with its statutory duty to bargain collectively, i.e., charging the
employer with unfair labor practice and conducting a strike in protest against the employer's refusal
to bargain. 25 It is only just and equitable that the circumstances in this case should be considered as
similar in nature to a "bargaining deadlock" when no certification election could be held. This is also
to make sure that no floodgates will be opened for the circumvention of the law by unscrupulous
employers to prevent any certified bargaining agent from negotiating a CBA. Thus, Section 3, Rule
V, Book V of the Implement Rules should be interpreted liberally so as to include a
circumstance, e.g. where a CBA could not be concluded due to the failure of one party to willingly
perform its duty to bargain collectively.

The order for the hospital to bargain is based on its failure to bargain collectively with respondent
union.

WHEREFORE, the Resolution dated November 18, 1994 of public respondent Laguesma is
AFFIRMED and the instant petition is hereby DISMISSED.

SO ORDERED

Rivera vs Espiritu

GR 135547

Facts:

PAL was suffering from a difficult financial situation in 1998. It was faced with
bankruptcy and was forced to adopt a rehabilitation plan and downsized its labor force
by more than 1/3. PALEA (PAL Employees Association) went on a four-day strike to
protest retrenchment measures in July 1998. PAL ceased operations on Sep 23, 1998.

PALEA board again wrote the President on Sep 28, 1998. Among others, it proposed
the suspension of the PAL-PALEA CBA for a period of ten years, subject to certain
conditions. PALEA members accepted such terms through a referendum on Oct 2,
1998. PAL resumed domestic operations on Oct 7, 1998.

Seven officers and members of PALEA filed instant petition to annul the Sep 27,
1998 agreement entered into between PAL and PALEA.

Issue: WON negotiations may be suspended for 10 years.

Held:
YES. CBA negotiations may be suspended for 10 years.

The assailed PAL-PALEA agreement was the result of voluntary collective bargaining
negotiations undertaken in the light of the severe financial situation faced by the
employer, with the peculiar and unique intention of not merely promoting industrial
peace at PAL, but preventing the latter’s closure.

There is no conflict between said agreement and Article 253-A of the Labor
Code. CBA under Article 253-A of the Labor Code has a two-fold purpose. One is to
promote industrial stability and predictability. Inasmuch as the agreement sought to
promote industrial peace, at the PAL during its rehabilitation, said agreement satisfied
the first purpose of said article. The other purpose is to assign specific timetable,
wherein negotiations become a matter of right and requirement. Nothing in Article
253-A prohibits the parties from waiving or suspending the mandatory timetable and
agreeing on the remedies to enforce the same.

LMG CHEMICALS CORP, LMG CHEMICALS CORP vs.THE

SECRETARY OF THE DEPARTMENT OF LABOR AND
EMPLOYMENT, THE HON. LEONARDO A. QUISUMBING, and
CHEMICAL WORKER’S UNION

G.R. No. 127422 April 17, 2001

FACTS: LMG Chemicals Corp, (petitioner) is a domestic corp engaged in the

manufacture and sale of various kinds of chemical substances, including
aluminum sulfate which is essential in purifying water, and technical grade
sulfuric acid used in thermal power plants. Petitioner has three divisions,
namely: the Organic Division, Inorganic Division and the Pinamucan Bulk
Carriers. There are two unions within petitioner’s Inorganic Division. One
union represents the daily paid employees and the other union represents the
monthly paid employees. Chemical Workers Union, respondent, is a duly
registered labor organization acting as the collective bargaining agent of all the
daily paid employees of petitioner’s Inorganic Division.

Sometime in December 1995, the petitioner and the respondent started

negotiation for a new CBA as their old CBA was about to expire. They were
able to agree on the political provisions of the new CBA, but no agreement was
reached on the issue of wage increase. The economic issues were not also
settled.

With the CBA negotiations at a deadlock (Strike…Secretary assumed

jurisdiction)

Secretary of Labor and Employment granted an increase of P140 (higher than

the offer of petitioner-company of P135). Also, as to the effectivity of the new
CBA…Sec held:

3. Effectivity of the new CBA

Article 253-A of the Labor Code, as amended, provides that when

no new CBA is signed during a period of six months from the
expiry date of the old CBA, the retroactivity period shall be
according to the parties’ agreement, Inasmuch as the parties
could not agree on this issue and since this Office has assumed
jurisdiction, then this matter now lies at the discretion of the
Secretary of labor and Employment. Thus the new Collective
Bargaining Agreement which the parties will sign pursuant to
this Order shall retroact to January 1, 1996.

petitioner contends that public respondent committed grave abuse of discretion

when he ordered that the new CBA which the parties will sign shall retroact to
January 1, 1996
ISSUE: Whether or not the new CBA shall retroact?

HELD:

Petitioner insists that public respondent’s discretion on the issue of the date of
the effectivity of the new CBA is limited to either: (1) leaving the matter of the
date of effectivity of the new CBA is limited to either: (1) leaving the matter of
the date of effectivity of the new CBA to the agreement of the parties or (2)
ordering that the terms of the new CBA be prospectively applied.

It must be emphasized that respondent Secretary assumed jurisdiction over

the dispute because it is impressed with national interest. As noted by the
Secretary, “the petitioner corp was then supplying the sulfate requirements of
MWSS as well as the sulfuric acid of NAPOCOR, and consequently, the
continuation of the strike would seriously affect the water supply of Metro
Manila and the power supply of the Luzon Grid.” Such authority of the
Secretary to assume jurisdiction carries with it the power to determine the
retroactivity of the parties’ CBA.

It is well settled in our jurisprudence that the authority of the

Secretary of Labor to assume jurisdiction over a labor dispute
causing or likely to cause a strike or lockout in an industry
indispensable to national interest includes and extends to all
questions and controversies arising therefrom. The power is plenary and
discretionary in nature to enable him to effectively and efficiently dispose of the
primary dispute.
This Court held in St. Luke’s Medical Center, Inc. vs. Torres:

Therefore in the absence of the specific provision of law

prohibiting retroactivity of the effectivity of the arbitral awards
issued by the Secretary of Labor pursuant to Article 263(g) of the
Labor Code, such as herein involved, public respondent is deemed
vested with plenary powers to determine the effectivity thereof.”

PETITION DENIED.

FrSanta Rosa Coca Cola Plant Employee Union vs Coca Cola Bottlers Phil
GR 164302-03
Facts:
The Sta. Rosa Coca-Cola Plant Employees Union (Union) is the sole and
exclusive bargaining representative of the regular daily paid workers and the
monthly paid non-commission-earning employees of the Coca-Cola Bottlers
Philippines, Inc. (Company) in its Sta. Rosa, Laguna plant.

Upon the expiration of the CBA, the Union informed the Company of its desire
to renegotiate its terms. The CBA meetings commenced on July 26, 1999,
where the Union and the Company discussed the ground rules of the
negotiations. The Union insisted that representatives from the Alyansa ng mga
Unyon sa Coca-Cola be allowed to sit down as observers in the
CBA meetings. The Union officers and members also insisted that their wages
be based on their work shift rates. For its part, the Company was of the view
that the members of the Alyansa were not members of the bargaining unit.
The Alyansa was a mere aggregate of employees of the Company in its various
plants; and is not a registered labor organization. Thus, an impasse ensued.
On August 30, 1999, the Union, its officers, directors and six shop stewards
filed a “Notice of Strike” with the NCMB.

The Union decided to participate in a mass action organized by the Alyansa in

front of the Company’s premises. Thus, the Union officers and members held a
picket along the front perimeter of the plant on September 21, 1999. As a
result, all of the 14 personnel of the Engineering Section of the Company did
not report for work, and 71 production personnel were also absent. As a result,
only one of the three bottling lines operated during the day shift. All the three
lines were operated during the night shift with cumulative downtime of five
(5) hours due
to lack of manning, complement and skills requirement. The volume of
production for the day was short by 60,000 physical cases versus budget.

On October 13, 1999, the Company filed a “Petition to Declare Strike Illegal”

Issue: WON the strike, dubbed by petitioner as picketing, is illegal.

Held:
Article 212(o) of the Labor Code defines strike as a temporary stoppage of
work by the concerted action of employees as a result of an industrial or labor
dispute. In Bangalisan v. CA, the Court ruled that “the fact that the
conventional term ‘strike’ was not used by the striking employees to describe
their common course of action is inconsequential, since the substance of the
situation, and not its appearance, will be deemed to be controlling.”

Picketing involves merely the marching to and fro at the premises of the
employer, usually accompanied by the display of placards and other signs
making known the facts involved in a labor dispute. As applied to a labor
dispute, to picket means the stationing of one or more

persons to observe and attempt to observe. The purpose of pickets is said to be

a means of peaceable persuasion.

The basic elements of a strike are present in this case. They marched to and
fro in front of the company’s premises during working hours. Thus, petitioners
engaged in a concerted activity which already affected the company’s
operations. The mass concerted activity constituted a
strike.
For a strike to be valid, the following procedural requisites provided by Art
263 of the Labor Code must be observed: (a) a notice of strike filed with the
DOLE 30 days before the intended date thereof, or 15 days in case of unfair
labor practice; (b) strike vote approved by a majority of the total union
membership in the bargaining unit concerned obtained by secret ballot in
a meeting called for that purpose, (c) notice given to the DOLE of the results of
the voting at least seven days before the intended strike. These requirements
are mandatory and the failure of a union to comply therewith renders the
strike illegal. It is clear in this case that petitioners totally ignored the
statutory requirements and embarked on their illegal strike.

Petition denied.

Santa Rosa Coca Cola Plant Employee Union vs Coca Cola Bottlers Phil
GR 164302-03
Facts:
The Sta. Rosa Coca-Cola Plant Employees Union (Union) is the sole and
exclusive bargaining representative of the regular daily paid workers and the
monthly paid non-commission-earning employees of the Coca-Cola Bottlers
Philippines, Inc. (Company) in its Sta. Rosa, Laguna plant.

Upon the expiration of the CBA, the Union informed the Company of its desire
to renegotiate its terms. The CBA meetings commenced on July 26, 1999,
where the Union and the Company discussed the ground rules of the
negotiations. The Union insisted that representatives from the Alyansa ng mga
Unyon sa Coca-Cola be allowed to sit down as observers in the
CBA meetings. The Union officers and members also insisted that their wages
be based on their work shift rates. For its part, the Company was of the view
that the members of the Alyansa were not members of the bargaining unit.
The Alyansa was a mere aggregate of employees of the Company in its various
plants; and is not a registered labor organization. Thus, an impasse ensued.

On August 30, 1999, the Union, its officers, directors and six shop stewards
filed a “Notice of Strike” with the NCMB.

The Union decided to participate in a mass action organized by the Alyansa in

front of the Company’s premises. Thus, the Union officers and members held a
picket along the front perimeter of the plant on September 21, 1999. As a
result, all of the 14 personnel of the Engineering Section of the Company did
not report for work, and 71 production personnel were also absent. As a result,
only one of the three bottling lines operated during the day shift. All the three
lines were operated during the night shift with cumulative downtime of five
(5) hours due
to lack of manning, complement and skills requirement. The volume of
production for the day was short by 60,000 physical cases versus budget.

On October 13, 1999, the Company filed a “Petition to Declare Strike Illegal”

Issue: WON the strike, dubbed by petitioner as picketing, is illegal.

Held:
Article 212(o) of the Labor Code defines strike as a temporary stoppage of
work by the concerted action of employees as a result of an industrial or labor
dispute. In Bangalisan v. CA, the Court ruled that “the fact that the
conventional term ‘strike’ was not used by the striking employees to describe
their common course of action is inconsequential, since the substance of the
situation, and not its appearance, will be deemed to be controlling.”

Picketing involves merely the marching to and fro at the premises of the
employer, usually accompanied by the display of placards and other signs
making known the facts involved in a labor dispute. As applied to a labor
dispute, to picket means the stationing of one or more

persons to observe and attempt to observe. The purpose of pickets is said to be

a means of peaceable persuasion.

The basic elements of a strike are present in this case. They marched to and
fro in front of the company’s premises during working hours. Thus, petitioners
engaged in a concerted activity which already affected the company’s
operations. The mass concerted activity constituted a
strike.

For a strike to be valid, the following procedural requisites provided by Art

263 of the Labor Code must be observed: (a) a notice of strike filed with the
DOLE 30 days before the intended date thereof, or 15 days in case of unfair
labor practice; (b) strike vote approved by a majority of the total union
membership in the bargaining unit concerned obtained by secret ballot in
a meeting called for that purpose, (c) notice given to the DOLE of the results of
the voting at least seven days before the intended strike. These requirements
are mandatory and the failure of a union to comply therewith renders the
strike illegal. It is clear in this case that petitioners totally ignored the
statutory requirements and embarked on their illegal strike.

Petition denied.

G.R. No. 147080. April 26, 2005]

CAPITOL MEDICAL CENTER, INC., petitioner, vs. NATIONAL LABOR

RELATIONS COMMISSION, JAIME IBABAO, JOSE
BALLESTEROS, RONALD CENTENO, NARCISO SARMIENTO,
EDUARDO CANAVERAL, SHERLITO DELA CRUZ, SOFRONIO
COMANDAO, MARIANO GALICIA, RAMON MOLOD,
CARMENCITA SARMIENTO, HELEN MOLOD, ROSA
COMANDAO, ANGELITO CUIZON, ALEX MARASIGAN, JESUS
CEDRO, ENRICO ROQUE, JAY PERILLA, HELEN MENDOZA,
MARY GLADYS GEMPEROSO, NINI BAUTISTA, ELENA
MACARUBBO, MUSTIOLA SALVACION DAPITO, ALEXANDER
MANABE, MICHAEL EUSTAQUIO, ROSE AZARES, FERNANDO
MANZANO, HENRY VERA CRUZ, CHITO MENDOZA, FREDELITA
TOMAYAO, ISABEL BRUCAL, MAHALKO LAYACAN, RAINIER
MANACSA, KAREN VILLARENTE, FRANCES ACACIO,
LAMBERTO CONTI, LORENA BEACH, JUDILAH RAVALO,
DEBORAH NAVE, MARILEN CABALQUINTO, EMILIANA RIVERA,
MA. ROSARIO URBANO, ROWENA ARILLA, CAPITOL MEDICAL
CENTER EMPLOYEES ASSOCIATION-AFW, GREGORIO DEL
PRADO, ARIEL ARAJA, and JESUS STA. BARBARA,
JR., respondents.

DECISION
CALLEJO, SR., J.:

This is a petition for review of the Decision[1] of the Court of Appeals (CA)
in CA-G.R. SP No. 57500 and its Resolution denying the motion for
reconsideration thereof.

The Antecedents[2]
 Whether the respondent Capitol Medical Center Employees Association-
Alliance of Filipino Workers (the Union, for brevity) was the exclusive
bargaining agent of the rank-and-file employees of the petitioner Capitol
Medical Center, Inc. had been the bone of contention between the Union and
the petitioner. The petitioners refusal to negotiate for a collective bargaining
agreement (CBA) resulted in a union-led strike on April 15, 1993.
The Union had to contend with another union the Capitol Medical Center
Alliance of Concerned Employees (CMC-ACE) which demanded for a
certification election among the rank-and-file employees of the petitioner.
Med-Arbiter Brigida Fadrigon granted the petition, and the matter was
appealed to the Secretary of Labor and Employment (SOLE). Undersecretary
Bienvenido E. Laguesma rendered a Resolution on November 18, 1994
granting the appeal. He, likewise, denied the motion filed by the petitioner and
the CMC-ACE. The latter thereafter brought the matter to the Court which
rendered judgment on February 4, 1997 affirming the resolution of
Undersecretary Laguesma, thus:

1. Dismissing the petition for certification election filed by the Capitol Medical Center
Alliance of Concerned Employees-United Filipino Services Workers for lack of merit;
and

2. Directing the management of the Capitol Medical Center to negotiate a CBA with
the Capitol Medical Center Employees Association-Alliance of Filipino Workers, the
certified bargaining agent of the rank-and-file employees.[3]

The decision of the Court became final and executory. Thereafter, in a

Letter dated October 3, 1997 addressed to Dr. Thelma N. Clemente, the
President and Director of the petitioner, the Union requested for a meeting to
discuss matters pertaining to a negotiation for a CBA, conformably with the
decision of the Court.[4]However, in a Letter to the Union dated October 10,
1997, Dr. Clemente rejected the proposed meeting, on her claim that it was a
violation of Republic Act No. 6713 and that the Union was not a legitimate
one. On October 15, 1997, the petitioner filed a Petition for the Cancellation of
the Unions Certificate of Registration with the Department of Labor and
Employment (DOLE) on the following grounds:

3) Respondent has failed for several years to submit annually its annual financial
statements and other documents as required by law. For this reason, respondent has
long lost its legal personality as a union.
4) Respondent also engaged in a strike which has been declared illegal by the National
Labor Relations Commission.[5]

Apparently unaware of the petition, the Union reiterated its proposal for
CBA negotiations in a Letter dated October 16, 1997 and suggested the date,
time and place of the initial meeting. The Union further reiterated its plea in
another Letter[6] dated October 28, 1997, to no avail.
Instead of filing a motion with the SOLE for the enforcement of the
resolutions of Undersecretary Laguesma as affirmed by this Court, the Union
filed a Notice of Strike on October 29, 1997 with the National Conciliation and
Mediation Board (NCMB), serving a copy thereof to the petitioner. The Union
alleged as grounds for the projected strike the following acts of the petitioner:
(a) refusal to bargain; (b) coercion on employees; and (c) interference/
restraint to self-organization.[7]
A series of conferences was conducted before the NCMB (National
Capital Region), but no agreement was reached. On November 6, 1997, the
petitioner even filed a Letter with the Board requesting that the notice of strike
be dismissed;[8] the Union had apparently failed to furnish the Regional Branch
of the NCMB with a copy of a notice of the meeting where the strike vote was
conducted.
On November 20, 1997, the Union submitted to the NCMB the minutes[9] of
the alleged strike vote purportedly held on November 10, 1997 at the parking
lot in front of the petitioners premises, at the corner of Scout Magbanua Street
and Panay Avenue, Quezon City. It appears that 178 out of the 300 union
members participated therein, and the results were as follows: 156 members
voted to strike; 14 members cast negative votes; and eight votes were
spoiled.[10]
On November 28, 1997, the officers and members of the Union staged a
strike. Subsequently, on December 1, 1997, the Union filed an ex
parte motion with the DOLE, praying for its assumption of jurisdiction over the
dispute. The Union likewise prayed for the imposition of appropriate legal
sanctions, not limited to contempt and other penalties, against the hospital
director/president and other responsible corporate officers for their continuous
refusal, in bad faith, to bargain collectively with the Union, to adjudge the
same hospital director/president and other corporate officers guilty of unfair
labor practices, and for other just, equitable and expeditious reliefs in the
premises.[11]
On December 4, 1997, the SOLE issued an Order, assuming jurisdiction
over the ongoing labor dispute. The decretal portion of the order reads:
WHEREFORE, this Office now assumes jurisdiction over the labor disputes at
Capitol Medical Center pursuant to Article 263(g) of the Labor Code, as amended.
Consequently, all striking workers are directed to return to work within twenty-four
(24) hours from the receipt of this Order and the management to resume normal
operations and accept back all striking workers under the same terms and conditions
prevailing before the strike. Further, parties are directed to cease and desist from
committing any act that may exacerbate the situation.

Moreover, parties are hereby directed to submit within 10 days from receipt of this
Order proposals and counter-proposals leading to the conclusion of the collective
bargaining agreements in compliance with aforementioned Resolution of the Office as
affirmed by the Supreme Court.

SO ORDERED.[12]

In obedience to the order of the SOLE, the officers and members of the
Union stopped their strike and returned to work.
For its part, the petitioner filed a petition[13] to declare the strike illegal with
the National Labor Relations Commission (NLRC), docketed as NLRC NCR
Case No. 00-12-08644-97. In its position paper, the petitioner appended the
affidavit of Erwin Barbacena, the overseer of the property across the hospital
which was being used as a parking lot, at the corner of Scout Magbanua
Street and Panay Avenue, Quezon City. Also included were the affidavits of
Simon J. Tingzon and Reggie B. Barawid, the petitioners security guards
assigned in front of the hospital premises. They attested to the fact that no
secret balloting took place at the said parking lot from 6:00 a.m. to 7:00 p.m.
of November 10, 1997.[14] The petitioner also appended the affidavit of Henry
V. Vera Cruz, who alleged that he was a member of the Union and had
discovered that signatures on the Statements of Cash Receipt Over
Disbursement submitted by the Union to the DOLE purporting to be his were
not his genuine signatures;[15] the affidavits of 17 of its employees, who
declared that no formal voting was held by the members of the Union on the
said date, were also submitted. The latter employees also declared that they
were not members of any union, and yet were asked to sign documents
purporting to be a strike vote attendance and unnumbered strike vote ballots
on different dates from November 8 to 11, 1997.
In their position paper, the respondents appended the joint affidavit of the
Union president and those members who alleged that they had cast their
votes during the strike vote held on November 10, 1997.[16]
 In the meantime, on September 30, 1998, the Regional Director of the
DOLE rendered a Decision denying the petition for the cancellation of the
respondent Unions certificate of registration. The decision was affirmed by the
Director of the Bureau of Labor Relations on December 29, 1998.
In a parallel development, Labor Arbiter Facundo L. Leda rendered a
Decision on December 23, 1998 in NLRC NCR Case No. 00-12-08644-97 in
favor of the petitioner, and declared the strike staged by the respondents
illegal. The fallo of the decision reads:

1. Declaring as illegal the strike staged by the respondents from November 28, 1997
to December 5, 1997;

2. Declaring respondent Jaime Ibabao, in his capacity as union president, the other
union officers, and respondents Ronald Q. Centeno, Michael Eustaquio and Henry
Vera Cruz to have lost their employment status with petitioner; and

3. Ordering the above respondents to pay, jointly and severally, petitioner the amount
of Two Hundred Thousand Pesos (P200,000.00) by way of damages.[17]

The Labor Arbiter ruled that no voting had taken place on November 10,
1997; moreover, no notice of such voting was furnished to the NCMB at least
twenty-four (24) hours prior to the intended holding of the strike vote.
According to the Labor Arbiter, the affidavits of the petitioners 17 employees
who alleged that no strike vote was taken, and supported by the affidavit of
the overseer of the parking lot and the security guards, must prevail as
against the minutes of the strike vote presented by the respondents. The
Labor Arbiter also held that in light of Article 263(9) of the Labor Code, the
respondent Union should have filed a motion for a writ of execution of the
resolution of Undersecretary Laguesma which was affirmed by this Court
instead of staging a strike.
The respondents appealed the decision to the NLRC which rendered a
Decision[18] on June 14, 1999, granting their appeal and reversing the decision
of the Labor Arbiter. The NLRC also denied the petitioners petition to declare
the strike illegal. In resolving the issue of whether the union members held a
strike vote on November 10, 1997, the NLRC ruled as follows:

We find untenable the Labor Arbiters finding that no actual strike voting took place
on November 10, 1997, claiming that this is supported by the affidavit of Erwin
Barbacena, the overseer of the parking lot across the hospital, and the sworn
statements of nineteen (19) (sic) union members. While it is true that no strike voting
took place in the parking lot which he is overseeing, it does not mean that no strike
voting ever took place at all because the same was conducted in the parking lot
immediately/directly fronting, not across, the hospital building (Annexes 1-J, 1-K to
1-K-6). Further, it is apparent that the nineteen (19) (sic) hospital employees, who
recanted their participation in the strike voting, did so involuntarily for fear of loss of
employment, considering that their Affidavits are uniform and pro forma (Annexes H-
2 to H-19).[19]

The NLRC ruled that under Section 7, Rule XXII of DOLE Order No. 9,
Series of 1997, absent a showing that the NCMB decided to supervise the
conduct of a secret balloting and informed the union of the said decision, or
that any such request was made by any of the parties who would be affected
by the secret balloting and to which the NCMB agreed, the respondents were
not mandated to furnish the NCMB with such notice before the strike vote was
conducted.[20]
The petitioner filed a motion for the reconsideration of the decision, but the
NLRC denied the said motion on September 30, 1999.[21]
The petitioner filed a petition for certiorari with the CA assailing the
decision and resolution of the NLRC on the following allegation:

PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION

(NLRC) COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO
LACK OR EXCESS OF JURISDICTION, ACTED CAPRICIOUSLY, AND
CONTRAVENED THE LAW AND ESTABLISHED JURISPRUDENCE IN
REVERSING THE LABOR ARBITERS DECISION DATED DECEMBER 23, 1998
(ANNEX E) AND IN UPHOLDING THE LEGALITY OF THE STRIKE STAGED
BY PRIVATE RESPONDENTS FROM NOVEMBER 28, 1997 TO DECEMBER 5,
1997.[22]

On September 29, 2000, the CA rendered judgment dismissing the

petition and affirming the assailed decision and resolution of the NLRC.
The petitioner filed the instant petition for review on certiorari under Rule
45 of the Rules of Court on the following ground:

THE COURT OF APPEALS GRAVELY ERRED IN UPHOLDING THE NLRCS

FINDING THAT RESPONDENTS COMPLIED WITH THE LEGAL
REQUIREMENTS FOR STAGING THE SUBJECT STRIKE.[23]

The petitioner asserts that the NLRC and the CA erred in holding that the
submission of a notice of a strike vote to the Regional Branch of the NCMB as
required by Section 7, Rule XXII of the Omnibus Rules Implementing the
Labor Code, is merely directory and not mandatory. The use of the word shall
in the rules, the petitioner avers, indubitably indicates the mandatory nature of
the respondent Unions duty to submit the said notice of strike vote.
The petitioner contends that the CA erred in affirming the decision of the
NLRC which declared that the respondents complied with all the requirements
for a lawful strike. The petitioner insists that, as gleaned from the affidavits of
the 17 union members and that of the overseer, and contrary to the joint
affidavit of the officers and some union members, no meeting was held and no
secret balloting was conducted on November 10, 1997.
The petitioner faults the CA and the NLRC for holding that a meeting for a
strike vote was held on the said date by the respondents, despite the fact that
the NLRC did not conduct an ocular inspection of the area where the
respondents members allegedly held the voting. The petitioner also points out
that it adduced documentary evidence in the form of affidavits executed by 17
members of the respondent union which remained unrebutted. The petitioner
also posits that the CA and the NLRC erred in reversing the finding of the
Labor Arbiter; furthermore, there was no need for the respondent union to
stage a strike on November 28, 1997 because it had filed an urgent motion
with the DOLE for the enforcement and execution of the decision of this Court
in G.R. No. 118915.
The petition is meritorious.
We agree with the petitioner that the respondent Union failed to comply
with the second paragraph of Section 10, Rule XXII of the Omnibus Rules of
the NLRC which reads:

Section 10. Strike or lockout vote. 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 the purpose. A decision to declare a
lockout must be approved by a majority of the Board of Directors of the employer,
corporation or association or the partners obtained by a secret ballot in a meeting
called for the purpose.

The regional branch of the Board may, at its own initiative or upon the request of any
affected party, supervise the conduct of the secret balloting. In every case, the union
or the employer shall furnish the regional branch of the Board and notice of meetings
referred to in the preceding paragraph at least twenty-four (24) hours before such
meetings as well as the results of the voting at least seven (7) days before the intended
strike or lockout, subject to the cooling-off period provided in this Rule.
 Although the second paragraph of Section 10 of the said Rule is not
provided in the Labor Code of the Philippines, nevertheless, the same was
incorporated in the Omnibus Rules Implementing the Labor Code and has the
force and effect of law.[24]
Aside from the mandatory notices embedded in Article 263, paragraphs (c)
and (f) of the Labor Code, a union intending to stage a strike is mandated to
notify the NCMB of the meeting for the conduct of strike vote, at least twenty-
four (24) hours prior to such meeting. Unless the NCMB is notified of the date,
place and time of the meeting of the union members for the conduct of a strike
vote, the NCMB would be unable to supervise the holding of the same, if and
when it decides to exercise its power of supervision. In National Federation of
Labor v. NLRC,[25] the Court enumerated the notices required by Article 263 of
the Labor Code and the Implementing Rules, which include the 24-hour prior
notice to the NCMB:

1) A notice of strike, with the required contents, should be filed with the DOLE,
specifically the Regional Branch of the NCMB, copy furnished the employer of the
union;

2) A cooling-off period must be observed between the filing of notice and the actual
execution of the strike thirty (30) days in case of bargaining deadlock and fifteen (15)
days in case of unfair labor practice. However, in the case of union busting where the
unions existence is threatened, the cooling-off period need not be observed.

4) Before a strike is actually commenced, a strike vote should be taken by secret

balloting, with a 24-hour prior notice to NCMB. The decision to declare a strike
requires the secret-ballot approval of majority of the total union membership in the
bargaining unit concerned.

5) The result of the strike vote should be reported to the NCMB at least seven (7) days
before the intended strike or lockout, subject to the cooling-off period.

A union is mandated to notify the NCMB of an impending dispute in a

particular bargaining unit via a notice of strike. Thereafter, the NCMB, through
its conciliator-mediators, shall call the parties to a conference at the soonest
possible time in order to actively assist them in exploring all possibilities for
amicable settlement. In the event of the failure in the conciliation/mediation
proceedings, the parties shall be encouraged to submit their dispute for
voluntary arbitration. However, if the parties refuse, the union may hold a
strike vote, and if the requisite number of votes is obtained, a strike may
ensue. The purpose of the strike vote is to ensure that the decision to strike
broadly rests with the majority of the union members in general and not with a
mere minority, and at the same time, discourage wildcat strikes, union
bossism and even corruption.[26] A strike vote report submitted to the NCMB at
least seven days prior to the intended date of strike ensures that a strike vote
was, indeed, taken. In the event that the report is false, the seven-day period
affords the members an opportunity to take the appropriate remedy before it is
too late.[27] The 15 to 30 day cooling-off period is designed to afford the parties
the opportunity to amicably resolve the dispute with the assistance of the
NCMB conciliator/mediator,[28] while the seven-day strike ban is intended to
give the DOLE an opportunity to verify whether the projected strike really
carries the imprimatur of the majority of the union members.[29]
The requirement of giving notice of the conduct of a strike vote to the
NCMB at least 24 hours before the meeting for the said purpose is designed
to (a) inform the NCMB of the intent of the union to conduct a strike vote; (b)
give the NCMB ample time to decide on whether or not there is a need to
supervise the conduct of the strike vote to prevent any acts of violence and/or
irregularities attendant thereto; and (c) should the NCMB decide on its own
initiative or upon the request of an interested party including the employer, to
supervise the strike vote, to give it ample time to prepare for the deployment
of the requisite personnel, including peace officers if need be. Unless and until
the NCMB is notified at least 24 hours of the unions decision to conduct a
strike vote, and the date, place, and time thereof, the NCMB cannot determine
for itself whether to supervise a strike vote meeting or not and insure its
peaceful and regular conduct. The failure of a union to comply with the
requirement of the giving of notice to the NCMB at least 24 hours prior to the
holding of a strike vote meeting will render the subsequent strike staged by
the union illegal.
In this case, the respondent Union failed to comply with the 24-hour prior
notice requirement to the NCMB before it conducted the alleged strike vote
meeting on November 10, 1997. As a result, the petitioner complained that no
strike vote meeting ever took place and averred that the strike staged by the
respondent union was illegal.
Conformably to Article 264 of the Labor Code of the Philippines[30] and
Section 7, Rule XXII of the Omnibus Rules Implementing the Labor
Code,[31] no labor organization shall declare a strike unless supported by a
majority vote of the members of the union obtained by secret ballot in a
meeting called for that purpose. The requirement is mandatory and the failure
of a union to comply therewith renders the strike illegal.[32] The union is thus
mandated to allege and prove compliance with the requirements of the law.
 In the present case, there is a divergence between the factual findings of
the Labor Arbiter, on the one hand, and the NLRC and the CA, on the other, in
that the Labor Arbiter found and declared in his decision that no secret voting
ever took place in the parking lot fronting the hospital on November 10, 1997
by and among the 300 members of the respondent Union. Erwin Barbacena,
the overseer of the only parking lot fronting the hospital, and security guards
Simon Tingzon and Reggie Barawid, declared in their respective affidavits that
no secret voting ever took place on November 10, 1997; 17 employees of the
petitioner also denied in their respective statements that they were not
members of the respondent Union, and were asked to merely sign attendance
papers and unnumbered votes. The NLRC and the CA declared in their
respective decisions that the affidavits of the petitioners 17 employees had no
probative weight because the said employees merely executed their affidavits
out of fear of losing their jobs. The NLRC and the CA anchored their
conclusion on their finding that the affidavits of the employees were uniform
and pro forma.
We agree with the finding of the Labor Arbiter that no secret balloting to
strike was conducted by the respondent Union on November 10, 1997 at the
parking lot in front of the hospital, at the corner of Scout Magbanua Street and
Panay Avenue, Quezon City. This can be gleaned from the affidavit of
Barbacena and the joint affidavit of Tingzon and Barawid, respectively:

1. That I am working as an overseer of a parking lot owned by Mrs. Madelaine

Dionisio and located right in front of the Capitol Medical Center, specifically at the
corner of Scout Magbanua Street and Panay Avenue, Quezon City;

2. That on November 10, 1997, during my entire tour of duty from 6:00 a.m. to 6:00
p.m., no voting or election was conducted in the aforementioned parking space for
employees of the Capitol Medical Center and/or their guests, or by any other group
for that matter.[33]

1. That I, Simon J. Tingzon, am a security officer of Veterans Philippine Scout

Security Agency (hereinafter referred to as VPSSA), assigned, since July 1997 up to
the present, as Security Detachment Commander at Capitol Medical Center
(hereinafter referred to as CMC) located at Scout Magbanua corner Panay Avenue,
Quezon City;

2. That my (Tingzon) functions as such include over-all in charge of security of all

buildings and properties of CMC, and roving in the entire premises including the
parking lots of all the buildings of CMC;
3. That I, Reggie B. Barawid, am a security guard of VPSSA, assigned, since June
1997 up to the present, as security guard at CMC;

4. That my (Barawid) functions as such include access control of all persons coming
in and out of CMCs buildings and properties. I also sometimes guard the parking
areas of CMC;

5. That on November 10, 1997, both of us were on duty at CMC from 7:00 a.m. to
7:00 p.m., with me (Barawid) assigned at the main door of the CMCs Main Building
along Scout Magbanua St.;

6. That on said date, during our entire tour of duty, there was no voting or election
conducted in any of the four parking spaces for CMC personnel and guests. [34]

The allegations in the foregoing affidavits belie the claim of the

respondents and the finding of the NLRC that a secret balloting took place on
November 10, 1997 in front of the hospital at the corner of Scout Magbanua
Street and Panay Avenue, Quezon City. The respondents failed to prove the
existence of a parking lot in front of the hospital other than the parking lot
across from it. Indeed, 17 of those who purportedly voted in a secret voting
executed their separate affidavits that no secret balloting took place on
November 10, 1997, and that even if they were not members of the
respondent Union, were asked to vote and to sign attendance papers. The
respondents failed to adduce substantial evidence that the said affiants were
coerced into executing the said affidavits. The bare fact that some portions of
the said affidavits are similarly worded does not constitute substantial
evidence that the petitioner forced, intimidated or coerced the affiants to
execute the same.
IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The
Decisions of the Court of Appeals and NLRC are SET ASIDE AND
REVERSED. The Decision of the Labor Arbiter is REINSTATED. No costs.
SO ORDERED.
Interphil Laboratories Ee Union vs Interphil Laboratories
GR 142824
Facts:
Petitioner is the sole and exclusive bargaining agent of the rank-and-file
employees of Respondent. They had a CBA.

Prior to the expiration of the CBA, respondent company was approached by

the petitioner, through its officers. The Union inquired about the stand of the
company regarding the duration of the CBA which was set to expire in a few
months. Salazar told the union officers that the matter could be best discussed
during the formal negotiations which would start soon.

All the rank-and-file employees of the company refused to follow their regular
two-shift work schedule. The employees stopped working and left their
workplace without sealing the containers and securing the raw materials they
were working on.

To minimize the damage the overtime boycott was causing the company,
Salazar immediately asked for a meeting with the union officers. In the
meeting, Enrico Gonzales, a union director, told Salazar that the employees
would only return to their normal work schedule if the company would agree
to their demands as to the effectivity and duration of the new CBA. Salazar
again told the union officers that the matter could be better discussed during
the formal renegotiations of the CBA. Since the union was apparently
unsatisfied with the answer of the company, the
overtime boycott continued. In addition, the employees started to engage in a
work slowdown campaign during the time they were working, thus
substantially delaying the production of the company.

Respondent company filed with the National NLRC a petition to declare illegal
petitioner union’s “overtime boycott” and “work slowdown” which, according
to respondent company, amounted to illegal strike. It also filed with Office
Secretary of Labor a petition for assumption
of jurisdiction. Secretary of Labor Nieves Confesor issued an assumption order
over the labor dispute.

Labor Arbiter Caday submitted his recommendation to the then Secretary of

Labor Leonardo A. Quisumbing. Then Secretary Quisumbing approved and
adopted the report in his Order, finding illegal strike on the part of petitioner
Union.

Issue: WON the Labor Secretary has jurisdiction to rule over an illegal strike.
Held:
On the matter of the authority and jurisdiction of the Secretary of Labor and
Employment to rule on the illegal strike committed by petitioner union, it
cannot be denied that the issues of “overtime boycott” and “work slowdown”
amounting to illegal strike before Labor Arbiter
Caday are intertwined with the labor dispute before the Labor Secretary.
The appellate court also correctly held that the question of the Secretary of
Labor and Employment’s jurisdiction over labor-related disputes was already
settled in International Pharmaceutical, Inc. vs. Hon. Secretary of Labor and
Associated Labor Union (ALU) where the Court declared:

In the present case, the Secretary was explicitly granted by Article 263(g) of
the Labor Code the authority to assume jurisdiction over a labor dispute
causing or likely to cause a strike or lockout in an industry indispensable to
the national interest, and decide the same accordingly. Necessarily, this
authority to assume jurisdiction over the said labor dispute must include and
extend to all questions and controversies arising therefrom, including cases
over which the labor arbiter has exclusive jurisdiction.

Moreover, Article 217 of the Labor Code is not without, but contemplates,
exceptions thereto. This is evident from the opening proviso therein reading
‘(e)xcept as otherwise provided under this Code x x x.’ Plainly, Article 263(g)
of the Labor Code was meant to make both the Secretary (or the various
regional directors) and the labor arbiters share jurisdiction,
subject to certain conditions. Otherwise, the Secretary would not be able to
effectively and efficiently dispose of the primary dispute. To hold the contrary
may even lead to the absurd and undesirable result wherein the Secretary and
the labor arbiter concerned may have diametrically
opposed rulings. As we have said, ‘it is fundamental that a statute is to be read
in a manner that would breathe life into it, rather than defeat it.

In fine, the issuance of the assailed orders is within the province of the
Secretary as authorized by Article 263(g) of the Labor Code and Article 217(a)
and (5) of the same Code, taken conjointly and rationally construed to
subserve the objective of the jurisdiction vested in the
Secretary.

PeSTAMFORD MARKETING CORP., GSP MANUFACTURING CORP.,

GIORGIO ANTONIO MARKETING CORP., CLEMENTINE
MARKETING CORP., ULTIMATE CONCEPTS PHILIPPINES, INC.,
and ROSARIO G. APACIBLE, petitioners, vs. JOSEPHINE
JULIAN, LEONOR AMBROSIO, MARILYN AQUINO, PURITA
BARRO, ROSARIO BASADA, HERMINIA BERGUELLES,
ERLINDA CANARIA, SALVACION CIRUELOS, MARITESS
BALISARIO, JULIETA DOLONTAP, JOSEFINA DOMINGO, GLORIA
FLORENDO, AMELITA GRANDE, SIMONA MALUNES, CORAZON
 MARASIGAN, SUSANA OBNAMIA, LUCY PEREZ, GINALYN
PIDOY, CAROLINA REYNOSO, LETICIA SARMIENTO, ARCELY
VILLEZA, MARIA SANCHO LABIT, IMELDA RIVERA, ROWENA
ALVARADO, VIOLETA ARRIOLA, VIRGINIA DE VERA, GIRLIE
DISCAYA, ADELAIDA LOMOD, MARILOU RABANAL, JOCELYN
RUFILA, ELENA SUEDE, JACINTA TEJADA, MELBA
TOLOSA, LEZILDA CARANTO, JECINA BURABOD, LUCITA CASERO,
MONICA CRUZ, GLENDA MIRANDA, YOLANDA PANCHO, MYRNA
RAGASA, FILOMENA MORALES, FELIPA VALENCIA, CORAZON VIRTUZ,
MARICEL BOLANGA, SONIA ANTILLA, LEONITA BINAL, GLORIA
LARIOSA, LIZABETH LUANGCO and JULIETA
LEANO, respondents.

DECISION
QUISUMBING, J.:

For review on certiorari is the Court of Appeals Decision, dated April 26,
[1]

2000, in CA-G.R. SP No. 53169, as well as its Resolution, dated October 11,
[2]

2000, denying the petitioners Motion for Reconsideration. The Court of

Appeals modified the Resolution, dated August 27, 1998, of the National
[3]

Labor Relations Commission (NLRC)-First Division which, in turn, dismissed

the petitioners appeal from the decision of Labor Arbiter Ramon Valentin
C.Reyes in three (3) consolidated cases, namely:
(1) Josephine Julian, et al. vs. Stamford Marketing Corp. (NLRC NCR
Case No. 00-11-08124-94);
(2) Philippine Agricultural, Commercial and Industrial Workers Union, et al.
vs. GSP Manufacturing Corp., et al. (NLRC NCR Case No. 00-03-02114-95);
and
(3) Lucita Casero, et al. vs. GSP Manufacturing Corp., et al. (NLRC NCR
Case No. 00-01-10437-95).
The instant controversy stemmed from a letter sent by Zoilo V. De La
Cruz, Jr., president of the Philippine Agricultural, Commercial and Industrial
Workers Union (PACIWU-TUCP), on November 2, 1994, to Rosario A.
Apacible, the treasurer and general manager of herein petitioners Stamford
Marketing Corporation, GSP Manufacturing Corporation, Giorgio Antonio
Marketing Corporation, Clementine Marketing Corporation, and Ultimate
Concept Phils., Inc. Said letter advised Apacible that the rank-and-file
employees of the aforementioned companies had formed the Apacible
Enterprise Employees Union-PACIWU-TUCP. The union demanded that
management recognize its existence. Shortly thereafter, discord reared its
ugly head, and rancor came hard on its wake.

Josephine Julian, et al. vs. Stamford Marketing Corp.

NLRC NCR Case No. 00-11-08124-94

On November 9, 1994, or just a day after Apacible received the letter of

PACIWU-TUCP, herein private respondents Josephine Julian, president of the
newly organized labor union; Jacinta Tejada, and Jecina Burabod, board
member and member of the said union, respectively, were effectively
dismissed from employment.
Without further ado, the three dismissed employees filed suit with the
Labor Arbiter. In their Complaint, the three dismissed employees alleged that
petitioners had not paid them their overtime pay, holiday pay/premiums, rest
day premium, 13th month pay for the year 1994, salaries for services actually
rendered, and that illegal deduction had been made without their consent from
their salaries for a cash bond.
For its part, herein petitioner Stamford alleged that private respondent
Julian was a supervising employee at the Patricks Boutique at Shoemart (SM)
Northmall. In October 1994, when she was four (4) to five (5) months
pregnant, the management of SM Northmall asked her to go on maternity
leave, pursuant to company policy.Julian was then directed to report
at Stamfords Head Office for reassignment. She was also asked to submit a
medical certificate to enable the company to approximate her delivery
date. Julian, however, allegedly failed to comply with these directives and
instead, ceased to report for work without having given notice. Stamford then
allegedly asked Tejada to take over Julians position, but the former
inexplicably refused to comply with the management directive. Instead, like
Julian, she abandoned her work with nary a notice or an explanation.
As to Burabod, petitioner Giorgio Antonio Boutique (Giorgio) averred that
she was employed as one of its sales clerks at its SM Northmall branch.
When directed to report to the Giorgio branch at Robinsons Galleria, she
defiantly questioned the validity of the directive and refused to comply. Like
Julian and Tejada, she then ceased to report for work without giving notice.

Philippine Agricultural, Commercial and

Industrial Workers Union, et al. vs. GSP Manufacturing Corp.
NLRC NCR Case No. 00-03-02114-95
 On March 17, 1995, PACIWU-TUCP, filed on behalf of fifty (50)
employees allegedly illegally dismissed for union membership by the
petitioners, a Complaint before the Arbitration Branch of NLRC, Metro
Manila. PACIWU-TUCP charged petitioners herein with unfair labor practice.
The Complaint alleged that when Apacible received the letter of PACIWU-
TUCP, management began to harass the members of the local chapter, a
move which culminated in their outright dismissal from employment, without
any just or lawful cause. It was a clear case of union-busting, averred
PACIWU-TUCP.
GSP Manufacturing Corporation (GSP) denied the unions averments. It
claimed that it had verified with the Bureau of Labor Relations (BLR) whether
a labor organization with the name Apacible Enterprises
Employees Union was duly registered. It was informed that no such labor
organization was registered either as a local chapter of PACIWU or of the
Trade Union Congress of the Philippines (TUCP). GSP claimed that after
unsuccessfully misrepresenting themselves, herein private respondents then
started making unjustified demands, abandoned their work, and staged an
illegal strike from November 1994 up to the filing of the Complaints.
Petitioners then asked the private respondents to lift their picket and return to
work, but were only met with a cold refusal.

Lucita Casero, et al. vs. GSP Manufacturing Corp., et al.

NLRC NCR Case No. 00-01-10437-95

This separate case was also filed by the dismissed union members
(complainants in NLRC NCR Case No. 00-03-02114-95), against the
petitioners herein for payment of their monetary claims. The dismissed
employees demanded the payment of (1) salary differentials due to
underpayment of wages; (2) unpaid salaries/wages for work actually
rendered; (3) 13th month pay for 1994; (4) cash equivalent of the service
incentive leave; and (5) illegal deductions from their salaries for cash bonds.
Petitioner corporations, however, maintained that they have been paying
complainants the wages/salaries mandated by law and that the complaint
should be dismissed in view of the execution of quitclaims and waivers by the
private respondents.
The Labor Arbiter ordered the three cases consolidated as the issues
were interrelated and the respondent corporations were under one
management.
 After due proceedings, Labor Arbiter Ramon Valentin C. Reyes rendered a
decision, the decretal portion of which reads as follows:

WHEREFORE, premises all considered, judgment is hereby rendered in the

respective cases as follows:

A. NLRC NCR CASE NO. 00-11-08124-94

1. Holding the respondent guilty of unfair labor practice, and declaring

complainants dismissals illegal;

2. Ordering respondent to reinstate complainants to their former positions

without loss of seniority rights and other benefits;

3. Ordering the respondent to pay complainants their backwages from the date
of their termination up to the date of this decision;

4. Ordering the respondent to pay complainants their unpaid salaries, overtime

pay, holiday and rest day premium, unpaid 13th month pay and
reimbursement of the cash deposit deducted by the respondent from the
salaries of complainants.

B. NLRC NCR CASE NO. 00-03-02114-95

1. Declaring the strike conducted by complainants to be illegal;

2. Declaring the officers of the union to have lost their employment status, and
thus terminating their employment with respondent companies;

3. Ordering the reinstatement of the complainants who are only members of

the union to their former positions with respondent companies, without
backwages, except individual complainants Cristeta De Luna,
Luzviminda Recones, Eden Revilla, and Jinky Dellosa.

C. NLRC NCR CASE NO. 00-01-10431 -95 [4]

1. Ordering respondents to pay individual complainants:

a. salary differentials resulting from underpayment of wages

b. unpaid salaries/wages for work actually rendered;

c. 13th month pay for the year 1994;

d. cash equivalent of the service incentive leave;

e. illegal deductions in the form of cash deposits

all in accordance with the computation submitted by the individual

complainants.

2. Dismissing the complaint with regard to complainants Cristeta De Luna,

Luzviminda Recones, Eden Revilla, and Jinky Dellosa.

All other claims are dismissed for lack of merit.

The Research and Information Division, this Commission, is hereby directed to effect
the necessary computation which shall form part of this Decision.

SO ORDERED. [5]

Labor Arbiter Reyes ruled the reassignment and transfer of complainants

in NLRC NCR Case No. 00-11-08124-94 as unfair labor practice, it being
management interference in the complainants formation and membership of
union. He held that the protested reassignments and transfers were highly
suspicious, having been made right after management was informed about
the formation of the union. Such timing could not have been pure coincidence.
The Labor Arbiter also found that petitioners herein failed to substantiate their
claim that private respondents had abandoned their employment. He pointed
out that the complainants filing of a case immediately after their alleged
dismissal militated against any claim of abandonment. Moreover, petitioners
did not furnish complainants with written notices of dismissal. As to the unpaid
wages and other monetary benefits claimed by private respondents herein,
the Labor Arbiter ruled that as petitioners herein did not present proof of their
payment, there is presumption of non-payment. Finally, Labor Arbiter Reyes
found the cash deposit of P2,000.00 unauthorized and illegal, without any
showing that the same was necessary and recognized in the business.
In NLRC NCR Case No. 00-03-02114-95, it was duly established that the
employees union was not registered with the Bureau of Labor Relations.
Hence, private respondents had engaged in an illegal strike since the right to
strike maybe availed of only by a legitimate labor organization. Labor Arbiter
Reyes upheld the dismissal of the union officers for leading and participating
in an illegal strike, but ruled the dismissal of the union members to be
improper since they acted in good faith in the belief that their actions were
within the bounds of law.
 In NLRC NCR Case No. 00-01-10437-95, the Labor Arbiter found
petitioners liable for salary differentials and other monetary claims for
petitioners failure to sufficiently prove that it had paid the same to
complainants as required by law. He likewise ordered the return of the cash
deposits to complainants, citing the same reasons as in NLRC NCR Case No.
00-11-08124-94.
Petitioners herein seasonably appealed the decision of Labor Arbiter
Reyes. Subsequently, the NLRC affirmed the decision in NLRC NCR Case
Nos. 00-11-08124-94 and 00-01-10437-95. However, the NLRC set aside the
judgment with respect to NLRC NCR Case No. 00-03-02114-95 and ordered
the remand of the case for further proceedings, in view of the various factual
issues involved. The NLRC ruling reads:

WHEREFORE, finding the appeal unmeritorious, the same is hereby DISMISSED.

ACCORDINGLY, we hereby set aside the ruling in NLRC NCR CASE NO. 00-03-
02114-95 as we order the same remanded for further proceedings in view of the nature
of the issues involved being purely factual in character. The awards in NLRC NCR
CASE NO. 00-11-08-08124-94 and NLRC NCR CASE NO. 00-01-10437-95 are
hereby AFFIRMED.

SO ORDERED. [6]

Meanwhile, on May 14, 1996, petitioners herein filed a Petition to Declare

the Strike Illegal against their striking employees, docketed as NLRC NCR
Case No. 05-03064-96 and raffled off to Labor Arbiter Arthur L. Amansec.
On September 2, 1998, Labor Arbiter Amansec decided NLRC NCR Case
No. 05-03064-96, as follows:

WHEREFORE, judgment is hereby made finding the strike conducted by the

respondents from December 1, 1994 up to May 14, 1996 illegal and concomitantly,
ordering respondents who are established to have knowingly participated to have
committed an illegal act to have lost their employment status.

Other claims for lack of merit are ordered DISMISSED.

SO ORDERED. [7]

In declaring the strike illegal, Labor Arbiter Amansec noted that: (1) no
prior notice to strike had been filed; (2) no strike vote had been taken among
the union members; and (3) the issue involved was non-strikeable, i.e., a
demand for salary increases.
Petitioners then moved for reconsideration of the NLRC ruling, citing the
ruling in NLRC NCR Case No. 05-03064-96 to support their position that
respondents herein had conducted an illegal strike and were liable for
unlawful acts.
On March 12, 1999, the NLRC resolved to partly grant the Motion for
Reconsideration, thus:

WHEREFORE, prescinding from the foregoing premises, the Motion for

Reconsideration is partly given due course, in that the issues raised in NLRC NCR
CASE No. 00-03-02114-95 is hereby declared to have been rendered academic.

The rest of the dispositions in the questioned resolution remains.

SO ORDERED. [8]

Unwilling to let the matter rest there, petitioners then filed a special civil
action for certiorari with the Court of Appeals, docketed as CA-G.R. SP No.
53169. The Court of Appeals considered the following issues in resolving the
petition, to wit: (a) the validity of the respondents dismissal and entitlement to
backwages, (b) the validity of the Release, waiver and quitclaim executed by
some of the respondents, and (c) the validity of the claims for non-payment of
salaries, overtime pay, holiday pay, premium pay, etc.
On April 26, 2000, the appellate court disposed of CA-G.R. SP No. 53169
as follows:

WHEREFORE, premises studiedly considered, the Petition is partly given due course
as the 12 March 1999 Resolution of the NLRC is hereby modified as follows:

1. In lieu of reinstatement, private respondents Josephine Julian, Jacinta Tejada,

and the rest of the officers of the Union shall be given separation pay at the
rate of one month pay for every year of service, with a fraction of at least six
months of service considered as one year, computed from the time they were
first employed until December 10, 1994;

2. Ordering petitioner corporations to reinstate, without loss of seniority, Jacina

Burabod and the rest of the Union members; plus payment of backwages;

The rest of the dispositions in the two (2) challenged resolutions remains.
SO ORDERED. [9]

The appellate court brushed aside petitioners theory that the illegality of
strike makes the respondents dismissal legal. It stressed that while the strike
was illegal, marked as it was with violence and for non-compliance with the
requirements of the Labor Code, nonetheless, Julian, Tejada, and Burabod
(complainants in NLRC NCR Case No. 00-11-08124-94) were dismissed prior
to the staging of the strike. Said dismissal constitutes unfair labor
practice. Moreover, said dismissal was done without valid cause and due
process. Thus, the complainants in NLRC NCR Case No. 00-11-08124-94 are
entitled to reinstatement and backwages, although separation pay may be
given in lieu of reinstatement due to strained relations with petitioners. The
appellate court also ruled that the quitclaims relied upon by petitioners herein
are void, having been executed under duress. Finally, the Court of Appeals
affirmed the finding of the NLRC that petitioners had failed to support their
claim of having paid herein respondents their money claims, because belated
evidence presented by petitioners is bereft of any probative value.
Petitioners timely moved for reconsideration, but the appellate court
denied said motion.
Hence, this petition alleging that the Court of Appeals committed palpable
and reversible errorS of law when:

I IT ORDERED THE RESPONDENTS, WHO ARE UNION MEMBERS, BE

REINSTATED AND BE PAID BACKWAGES, DESPITE THE FACT
THAT IT CATEGORICALLY HELD THAT UNLAWFUL ACTS
ATTENDED THE STAGING OF THE ILLEGAL STRIKE IN
CONTRAVENTION OF THE CLEAR MANDATE OF ARTICLE 264(a)
OF THE LABOR CODE.

II IT AWARDED BACKWAGES TO THE RESPONDENTS, WHO ARE

UNION MEMBERS, DESPITE THE FACT THAT THE ISSUE OF
WHETHER OR NOT THE SAID UNION MEMBERS ARE ENTITTLED
TO BACKWAGES HAVE BEEN ANSWERED IN THE NEGATIVE BY
THE DECISION DATED 15 APRIL 1996, PROMULGATED BY THE
HONORABLE LABOR ARBITER A QUO VALENTIN C. REYES AND
SUCH RULING HAD ATTAINED FINALITY.

III IT AWARDED SEPARATION PAY AND BACKWAGES TO THE

RESPONDENTS WHO ARE OFFICERS OF THE UNION, NAMELY:
ADELAIDA LUMOD, LUCITA CASERO, MYRNA RAGASA, FELY
MORALES, ELEN SUEDE, FELY VALENCIA AND VIOLETA
 ARRIOLA, DESPITE THE FACT THAT IT WAS HELD IN THE
DECISION DATED 15 APRIL 1996 PROMULGATED BY THE
HONORABLE LABOR ARBITER A QUOVALENTIN C. REYES THAT
THE AFORENAMED UNION OFFICERS HAVE LOST THEIR
EMPLOYMENT STATUS BY STAGING AN ILLEGAL STRIKE AND
SUCH RULING HAD ATTAINED FINALITY.

IV IT HELD THAT RESPONDENTS JULIAN, TEJADA AND BURABOD

WERE ILLEGALLY DISMISSED.

V IT FAILED TO UPHOLD THE VALIDITY OF THE RELEASE, WAIVER

AND QUITCLAIM EXECUTED BY THE RESPONDENTS CONCERNED.

VI IT REFUSED TO GIVE PROBATIVE VALUE ON THE VOLUMINOUS

DOCUMENTARY EVIDENCE SUBMITTED BY HEREIN
PETITIONERS. [10]

In our view, considering the assigned errors, the following are the relevant
issues for our resolution:
1. Whether the respondents union officers and members were validly and
legally dismissed from employment considering the illegality of the strike;
2. Whether the respondents union officers and members are entitled to
backwages, separation pay and reinstatement, respectively.
On the first issue, petitioners argue that respondents were legally
dismissed, pursuant to Article 264 of the Labor Code in view of the
[11]

determination by the Labor Arbiter that the strike conducted by respondents

are illegal and that illegal acts attended the mass action. The respondents
counter that the determination of the illegality of strike is inconsequential as
the conclusion by the appellate court on the illegality of dismissal was based
on the petitioners non-compliance with the due process requirements on
terminating employees, which had nothing to do with the legality of the strike.
Some elaboration on the legality of the strike is needed, though briefly. In
ruling the strike illegal, the NLRC observed that:

While the right to strike is specifically granted by law, it is a remedy which can only
be availed of by a legitimate labor organization. Absent a showing as to the legitimate
status of the labor organization, said strike would have to be considered as illegal.

A review of the records of this case does not show that the local union to which
complainants belong to has complied with these basic requirements necessary to
clothe the union with a legitimate status. In fact, and as respondents claim, there is no
record with the BLR that the union complainants belong to have complied with the
aforementioned requirements. This Office then has no recourse but to consider the
union of complainants as not being a legitimate labor organization. It then follows that
the strike conducted by complainants on respondent companies is illegal, as the right
to strike is afforded only to a legitimate labor organization.
[12]

Indeed, the right to strike, while constitutionally recognized, is not without

legal restrictions. The Labor Code regulates the exercise of said right by
[13]

balancing the interests of labor and management in the light of the

overarching public interest. Thus, paragraphs (c) and (f) of Article
263 mandate the following procedural steps to be followed before a strike
[14]

may be staged: filing of notice of strike, taking of strike vote, and reporting of
the strike vote result to the Department of Labor and Employment. It bears [15]

stressing that these requirements are mandatory, meaning, non-compliance

therewith makes the strike illegal. The evident intention of the law in requiring
the strike notice and strike-vote report is to reasonably regulate the right to
strike, which is essential to the attainment of legitimate policy objectives
embodied in the law. [16]

In the instant case, we find no reason to disagree with the findings of the
NLRC that the strike conducted by the respondent union is illegal. First, it has
not been shown to the satisfaction of this Court that said union is a legitimate
labor organization, entitled under Article 263 (c) to file a notice of strike on
behalf of its members. Second, the other requirements under Article 263 (c)
and (f) were not complied with by the striking union. On this matter, the record
is bare of any showing to the contrary. Hence, what is left for this Court to do
is to determine the effects of the illegality of the strike on respondents union
officers and members, specifically (a) whether such would justify their
dismissal from employment, and (b) whether they ceased to be entitled to the
monetary awards and other appropriate reliefs and remedies.
Article 264 of the Labor Code, in providing for the consequences of an
illegal strike, makes a distinction between union officers and members who
participated thereon. Thus, knowingly participating in an illegal strike is a valid
ground for termination from employment of a union officer. The law, however,
treats differently mere union members. Mere participation in an illegal strike is
not a sufficient ground for termination of the services of the union
members. The Labor Code protects an ordinary, rank-and-file union member
who participated in such a strike from losing his job, provided that he did not
commit an illegal act during the strike. Thus, absent any clear, substantial
[17]
and convincing proof of illegal acts committed during an illegal strike, an
ordinary striking worker or employee may not be terminated from work. [18]

Recourse to the records show that the following respondents were the
officers of the union, namely: Josephine C. Julian (President), Adelaida
Lomod (Vice President), Lucita Casero (Secretary), Myrna Ragasa
(Treasurer), Filomena Morales (Auditor), Elena Suede (Board Member),
Jacinta Tejada (Board Member), Felipa Valencia (Board Member) and Violeta
Arriola (P.R.O.). Before us, petitioners insist that these employees were
[19]

legally terminated for their participation in an illegal strike and moreover,

Julian and Tejada were validly dismissed for abandoning their jobs after
refusing to comply with transfer and reassignment orders.
While holding the strike illegal, the Court of Appeals nonetheless still ruled
that the union officers and members were illegally dismissed for non-
observance of due process requirements and union busting by management.
It likewise gave no credence to the charge of abandonment against Julian and
Tejada. Thus, it awarded separation pay in lieu of reinstatement to all union
officers including respondents Julian and Tejada and affirmed all other
monetary awards by the Labor Arbiter including backwages.
On this point, we affirm the findings of the appellate court that Julian and
Tejada did not abandon their employment. Petitioners utterly failed to show
proof that Julian and Tejada had the intent to abandon their work and sever
their employment relationship with petitioners. It is established that an
employee who forthwith takes steps to protest his layoff cannot be said to
have abandoned his work. However, we cannot sustain the appellate courts
[20]

ruling that the dismissal of Julian and Tejada was tantamount to unfair labor
practice. There is simply nothing on record to show that Julian and Tejada
were discouraged or prohibited from joining any union. Hence, the petitioners
cannot be held liable for unfair labor practice.
With respect to union officers, however, there is no dispute they could be
dismissed for participating in an illegal strike. Union officers are duty- bound to
guide their members to respect the law. Nonetheless, as in other termination
[21]

cases, union officers must be given the required notices for terminating an
employment, i.e., notice of hearing to enable them to present their side, and
notice of termination, should their explanation prove unsatisfactory. Nothing in
Article 264 of the Labor Code authorizes an immediate dismissal of a union
officer for participating in an illegal strike. The act of dismissal is not intended
to happen ipso facto but rather as an option that can be exercised by the
employer and after compliance with the notice requirements for terminating an
employee. In this case, petitioners did not give the required notices to the
union officers.
We must stress, however, the dismissals per se are not invalid but
only ineffectual in accordance with Serrano v. National Labor Relations
Commission. In said case, we held that (1) the employers failure to comply
[22]

with the notice requirement does not constitute denial of due process, but
mere failure to observe a procedure for termination of employment which
makes the termination merely ineffectual, and (2) the dismissal shall be
[23]

upheld but the employer must be sanctioned for non-compliance with the
prescribed procedure. As to the reliefs to be afforded, Serrano decreed that:
[24]

In sum, we hold that if in proceedings for reinstatement under Art. 283, it is shown
that the termination of employment was due to an authorized cause, then the employee
concerned should not be ordered reinstated even though there is failure to comply
with the 30-day notice requirement. Instead, he must be granted separation pay in
accordance with Art. 283

If the employees separation is without cause, instead of being given separation pay, he
should be reinstated. In either case, whether he is reinstated or only granted separation
pay, he should be paid full backwages if he has been laid off without written notice at
least 30 days in advance.

On the other hand, with respect to dismissals for cause under Art. 282, if it is shown
that the employee was dismissed for any of the just causes mentioned in said Art. 282,
then, in accordance with that article, he should not be reinstated. However, he must be
paid backwages from the time his employment was terminated until it is determined
that the termination of employment is for a just cause because the failure to hear him
before he is dismissed renders the termination of his employment without legal
effect.
[25]

Admittedly, Serrano does not touch on the termination of an employee

who is a mere union member, due to participation in an illegal strike. But it is
settled that an employee who is a mere union member does not lose his
employment status by mere participation allegedly in an illegal strike. If he is
terminated, he is entitled to reinstatement. Moreover, where the employee,
whether a union member or officer, is not given any notice for termination
such as in this case, he is entitled to be paid backwages from the date of his
invalid termination until the final judgment of the case.
In the present case, we affirm the appellate courts ruling that the union
members who are parties herein were illegally dismissed and thus, entitled to
reinstatement and payment of backwages for lack of sufficient evidence that
they engaged in illegal acts during the strike. They were in good faith in
believing that their actions were within the bounds of the law, since such were
meant only to secure economic benefits for themselves so as to improve their
standard of living. Besides, it is not the business of this Court to determine
whether the acts committed by them are illegal, for review of factual issues is
not proper in this petition. Review of labor cases elevated to this Court on a
petition for review on certiorari is confined merely to questions of law, and not
of fact, as factual findings generally are conclusive on this Court.[26]

For the same reasons, we likewise affirm the Court of Appeals in

upholding the findings of both the NLRC and the Labor Arbiter regarding the
validity or invalidity of quitclaims and the award of other monetary claims.
Questions on whether the quitclaims were voluntarily executed or not are
factual in nature. Thus, petitioners appeal for us to re-examine certain pieces
of documentary evidence concerning monetary claims cannot now be
entertained. Factual findings of labor officials, who are deemed to have
acquired expertise in matters within their respective jurisdiction, are generally
accorded not only respect but even finality, and bind us when supported by
substantial evidence. It is not our function to assess and evaluate the
evidence all over again, particularly where the findings of both the Arbiter and
the Court of Appeals coincide. [27]

WHEREFORE, the assailed Decision of the Court of Appeals, dated April

26, 2000 and its Resolution of October 11, 2000, in CA-G.R. SP No. 53169
are AFFIRMED with MODIFICATION. Dismissal of the union officers is
declared NOT INVALID, and the award of separation pay to said union
officers is hereby DELETED. However, as a sanction for non-compliance with
notice requirements for lawful termination by the petitioners, backwages are
AWARDED to the union officers computed from the time they were dismissed
until the final entry of judgment of this case. The rest of the dispositions of the
Court of Appeals in its Decision of April 26, 2000, in CA-G.R. SP No. 53169,
are hereby AFFIRMED. No pronouncement as to costs.
SO ORDERED.
tition denied.

TOYOTA MOTOR PHILS. CORP. WORKERS ASSOC. (TMPCWA)

NLRC, TOYOTA MOTOR PHIL CORP et al

G.R. Nos. 158786 & 158789

October 19, 2007

FACTS: The Union filed a petition for certification election among the
Toyota rank and file employees with the National Conciliation and Mediation Board
(NCMB). The Med-Arbiter denied the petition, but, on appeal, the DOLE
Secretary granted the Union’s prayer, and, through an Order, directed the
immediate holding of the certification election.
After Toyota’s plea for reconsideration was denied, the certification election was
conducted. The Med-Arbiter’s Order certified the Union as the sole and exclusive
bargaining agent of all the Toyota rank and file employees. Toyota challenged
said Order via an appeal to the DOLE Secretary.
-STRIKE-

In the meantime, the Union submitted its CBA proposals to Toyota, but the latter
refused to negotiate in view of its pending appeal. Consequently, the
Union filed a notice of strike with the NCMB based on Toyota’s refusal to
bargain. In connection with Toyota’s appeal, Toyota and the Union were required to
attend a hearing on before the Bureau of Labor Relations (BLR). The February 21,
2001 hearing was cancelled and reset to February 22.
STRIKE 1: On February 21, 135 Union officers and members failed to render the
required overtime work, and instead marched to and staged a picket in front of the
BLR office. The Union, in a letter of the same date, also requested that its
members be allowed to be absent on February 22 to attend the hearing and instead
work on their next scheduled rest day. This request however was denied by Toyota.
Despite denial of the Union’s request, more than 200 employees staged mass
actions on February 22 and 23 in front of the BLR and the DOLE offices, to protest
the partisan and anti-union stance of Toyota. Due to the deliberate absence of a
considerable number of employees on February 22 to 23, Toyota experienced acute
lack of manpower in its manufacturing and production lines, and was unable to meet
its production goals resulting in huge losses.
On February 27, Toyota sent individual letters to some 360 employees requiring them
to explain within 24 hours why they should not be dismissed for their obstinate
defiance of the company’s directive to render overtime work on February 21, for their
failure to report for work on February 22 and 23, and for their participation in the
concerted actions which severely disrupted and paralyzed the plant’s operations.
These letters specifically cited Section D, paragraph 6 of the Company’s Code of
Conduct, to wit:
xx
Inciting or participating in riots, disorders, alleged strikes, or concerted actions
detrimental to [Toyota’s] interest.
1st offense – dismissal.11
xx
On the next day, the Union filed with the NCMB another notice of strike for
union busting amounting to unfair labor practice.
On March 1, the Union nonetheless submitted an explanation in compliance with the
February 27 notices sent by Toyota to the erring employees. Consequently, on March
2 and 5, Toyota issued 2 memoranda to the concerned employees to clarify whether or
not they are adopting the March 1, 2001 Union’s explanation as their own. The
employees were also required to attend an investigative interview, but they refused to
do so.
On March 16, Toyota terminated the employment of 227 employees for
participation in concerted actions in violation of its Code of Conduct and for
misconduct under Article 282 of the Labor Code.
STRIKE 2: In reaction to the dismissal of its union members and officers, the Union
went on strike on March 17. Subsequently, from March 28 to April 12, the Union
intensified its strike by barricading the gates of Toyota’s Bicutan and Sta. Rosa plants.
The strikers prevented workers who reported for work from entering the plants.
On March 29, Toyota filed a petition for injunction with a prayer for the issuance of a
TRO with the NLRC. It sought free ingress to and egress from its Bicutan and Sta.
Rosa manufacturing plants. Acting on said petition, the NLRC issued a TRO against
the Union, ordering its leaders and members as well as its sympathizers to remove
their barricades and all forms of obstruction to ensure free ingress to and egress from
the company’s premises.
Meanwhile, Toyota filed a petition to declare the strike illegal with the NLRC
arbitration branch, , and prayed that the erring Union officers, directors, and members
be dismissed.
On April 10, the DOLE Secretary assumed jurisdiction over the
labor dispute and issued an Order certifying the labor dispute to
the NLRC. In said Order, the DOLE Secretary directed all striking workers
to return to work at their regular shifts by April 16. On the other hand, it ordered
Toyota to accept the returning employees under the same terms and conditions
obtaining prior to the strike or at its option, put them under payroll
reinstatement. The parties were also enjoined from committing acts
that may worsen the situation.
The Union ended the strike on April 12. The union members and officers tried to
return to work on April 16 but were told that Toyota opted for payroll-reinstatement
authorized by the Order of the DOLE Secretary.
STRIKE 3: Meanwhile, on May 23, despite the issuance of the DOLE
Secretary’s certification Order, several payroll-reinstated members of the
Union staged a protest rally in front of Toyota’s Bicutan Plant bearing placards
and streamers in defiance of the April 10 Order. Then, on May 28, around
Union members staged another protest action in front of the Bicutan Plant. At the
same time, some payroll-reinstated employees picketed in front of the Santa Rosa
Plant’s main entrance, and were later joined by other Union members.
On June 5, notwithstanding the certification Order, the Union filed another notice of
strike.
—
In the meantime, the NLRC ordered both parties to submit their respective position
papers on June 8. The union, however, requested for abeyance of the proceedings
considering that there is a pending petition for certiorari with the CA
assailing the validity of the DOLE Secretary’s Assumption of
Jurisdiction Order.
Thereafter, on June 19, the NLRC issued an Order, reiterating its previous order for
both parties to submit their respective position papers on or before June 2, 2001. Only
Toyota submitted its position paper. During the August 3, 2001 hearing, the Union,
despite several accommodations, still failed to submit its position paper. Later that
day, the Union claimed it filed its position paper by registered mail.
NLRC decision
Subsequently, the NLRC, in its August 9 Decision, declared the strikes staged by the
Union on February 21 to 23 (as the Union failed to comply with the procedural
requirements of a valid strike under Art. 263 of the Labor Code) and May 23 and
28 as illegal and Declared that the dismissal of the 227 who participated in the
illegal strike on February 21-23 is legal. Lastly, award of severance compensation
was given to the dismissed Union members
After the DOLE Secretary assumed jurisdiction over the Toyota dispute on April 10,
the Union again staged strikes on May 23 and 28. The NLRC found the strikes
illegal as they violated Art. 264 of the Labor Code which proscribes any strike or
lockout after jurisdiction is assumed over the dispute by the President or the
DOLE Secretary.
The NLRC held that both parties must have maintained the status quo after the DOLE
Secretary issued the assumption/certification Order, and ruled that the Union did not
respect the DOLE Secretary’s directive.
Accordingly, both Toyota and the Union filed MRs, which the NLRC denied.
Consequently, both parties questioned the Resolutions of the NLRC in separate
petitions for certiorari filed with the CA. The CA then consolidated the petitions.
[In its February 27, 2003 Decision, the CA ruled that the Union’s petition is defective
in form for its failure to append a proper verification and certificate of non-forum
shopping, given that, out of the 227 petitioners, only 159 signed the verification and
certificate of non-forum shopping. Despite the flaw, the CA proceeded to resolve the
petitions on the merits and affirmed the assailed NLRC Decision and Resolution with
a modification, however, of deleting the award of severance compensation to the
dismissed Union members.
However, in its June 20, 2003 Resolution, the CA modified its February 27, 2003
Decision by reinstating severance compensation to the dismissed employees based on
social justice.]
ISSUE:

(1) Whether the mass actions committed by the Union on different occasions are
illegal strikes; and
(2) Whether separation pay should be awarded to the Union members who
participated in the illegal strikes.
HELD: WHEREFORE, the petitions in G.R. Nos. 158786 and 158789 are DENIED
while those in G.R. Nos. 158798-99 are GRANTED.
The June 20, 2003 CA Resolution restoring the grant of severance compensation is
ANNULLED and SET ASIDE.
The February 27, 2003 CA Decision which affirmed the August 9, 2001 Decision of
the NLRC but deleted the grant of severance compensation, is REINSTATED and
AFFIRMED.
1. YES, THERE IS ILLEGAL STRIKE
A strike means any temporary stoppage of work by the concerted
action of employees as a result of an industrial or labor dispute. A
labor dispute, in turn, includes any controversy or matter
concerning terms or conditions of employment or the association
or representation of persons in negotiating, fixing, maintaining,
changing, or arranging the terms and conditions of employment,
regardless of whether the disputants stand in the proximate
relation of the employer and the employee

Noted authority on labor law, Ludwig Teller, lists six (6) categories of an illegal
strike, viz:
(1) [when it] is contrary to a specific prohibition of law, such as strike by employees
performing governmental functions; or
(2) [when it] violates a specific requirement of law[, such as Article 263 of the Labor
Code on the requisites of a valid strike]; or
(3) [when it] is declared for an unlawful purpose, such as inducing the employer to
commit an unfair labor practice against non-union employees; or
(4) [when it] employs unlawful means in the pursuit of its objective, such as a
widespread terrorism of non-strikers [for example, prohibited acts under Art. 264(e)
of the Labor Code]; or
(5) [when it] is declared in violation of an existing injunction[, such as injunction,
prohibition, or order issued by the DOLE Secretary and the NLRC under Art. 263 of
the Labor Code]; or
(6) [when it] is contrary to an existing agreement, such as a no-strike clause or
conclusive arbitration clause
Petitioner Union contends that the protests or rallies conducted on February 21 and 23
are not within the ambit of strikes as defined in the Labor Code, since they were
legitimate exercises of their right to peaceably assemble and petition the government
for redress of grievances. The Union’s position fails to convince us.
Applying pertinent legal provisions and jurisprudence, we rule that the protest actions
undertaken by the Union officials and members on February 21 to 23 are not valid
and proper exercises of their right to assemble and ask government for redress of their
complaints, but are illegal strikes in breach of the Labor Code. The Union’s position is
weakened by the lack of permit from the City of Manila to hold “rallies.” Shrouded as
demonstrations, they were in reality temporary stoppages of work perpetrated through
the concerted action of the employees who deliberately failed to report for work on
the convenient excuse that they will hold a rally at the BLR and DOLE offices on
February 21 to 23. The purported reason for these protest actions was to safeguard
their rights against any abuse which the med-arbiter may commit against their cause.
However, the Union failed to advance convincing proof that the med-arbiter was
biased against them. The acts of the med-arbiter in the performance of his duties are
presumed regular. Sans ample evidence to the contrary, the Union was unable to
justify the February 2001 mass actions. What comes to the fore is that the decision not
to work for two days was designed and calculated to cripple the
manufacturing arm of Toyota. It becomes obvious that the real and ultimate
goal of the Union is to coerce Toyota to finally acknowledge the Union as the sole
bargaining agent of the company. This is not a legal and valid exercise of the right of
assembly and to demand redress of grievance.
It is obvious that the February 21 to 23 concerted actions were undertaken
without satisfying the prerequisites for a valid strike under Art. 263 of
the Labor Code. The Union failed to comply with the following requirements:
(1) a notice of strike filed with the DOLE 30 days before the intended date of strike,
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; and
(3) notice given to the DOLE of the results of the voting at least seven days before the
intended strike. These requirements are mandatory and the failure of a union to
comply with them renders the strike illegal.
The evident intention of the law in requiring the strike notice and the strike-vote
report is to reasonably regulate the right to strike, which is essential to the attainment
of legitimate policy objectives embodied in the law. As they failed to conform to the
law, the strikes on February 21, 22, and 23 (STRIKE 1) were illegal.
With respect to the strikes committed from March 17 to April 12 (STRIKE 2), those
were initially legal as the legal requirements were met. However, on March 28 to
April 12, the Union barricaded the gates of the Bicutan and Sta. Rosa plants and
blocked the free ingress to and egress from the company premises. Toyota employees,
customers, and other people having business with the company were intimidated and
were refused entry to the plants. As earlier explained, these strikes were illegal
because unlawful means were employed. The acts of the Union officers and members
are in palpable violation of Art. 264(e), which proscribes acts of violence, coercion, or
intimidation, or which obstruct the free ingress to and egress from the company
premises. Undeniably, the strikes from March 28 to April 12 (STRIKE 2)
were illegal.
Petitioner Union also posits that strikes were not committed on May 23 and 28
(STRIKE 3). The Union asserts that the rallies held on May 23 and 28 could not be
considered strikes, as the participants were the dismissed employees who were on
payroll reinstatement. It concludes that there was no work stoppage.
This contention has no basis. It is clear that once the DOLE Secretary assumes
jurisdiction over the labor dispute and certifies the case for compulsory arbitration
with the NLRC, the parties have to revert to the status quo ante (the state of things as
it was before).
This was not heeded by the Union and the individual respondents who staged illegal
concerted actions on May 23 and 28, in contravention of the Order of the DOLE
Secretary that no acts should be undertaken by them to aggravate the “already
deteriorated situation.”
2. Anent the grant of severance compensation to legally dismissed union members:
The general rule is that when just causes for terminating the services of an employee
under Art. 282 of the Labor Code exist, the employee is not entitled to separation
pay.
As in any rule, there are exceptions. One exception where separation pay is given
even though an employee is validly dismissed is when the court finds justification in
applying the principle of social justice well entrenched in the 1987 Constitution. In
one case, the Court laid down the rule that severance compensation shall be
allowed only when the cause of the dismissal is other than serious misconduct or
that which reflects adversely on the employee’s moral character.
Explicit in PLDT ase are two exceptions when the NLRC or the courts should not
grant separation pay based on social justice:
1. serious misconduct (which is the first ground for dismissal under Art. 282) or
2. acts that reflect on the moral character of the employee.
Considering that the dismissal of the employees was due to their participation in the
illegal strikes as well as violation of the Code of Conduct of the company, the same
constitutes serious misconduct. A serious misconduct is a transgression of some
established and definite rule of action, a forbidden act, a dereliction of duty, willful in
character, and implies wrongful intent and not mere error in judgment.
Based on existing jurisprudence, the award of separation pay to the Union officials
and members in the instant petitions cannot be sustained.
NOTES:

1. The Union contends that the NLRC violated its right to due process when it
disregarded its position paper in deciding Toyota’s petition to declare the strike
illegal.
We rule otherwise.
It is entirely the Union’s fault that its position paper was not considered by the NLRC.
Records readily reveal that the NLRC was even too generous in affording due process
to the Union. It issued no less than 3 orders for the parties to submit its position
papers, which the Union ignored until the last minute. No sufficient justification was
offered why the Union belatedly filed its position paper. In Datu Eduardo Ampo v.
The Hon. Court of Appeals, it was explained that a party cannot complain of
deprivation of due process if he was afforded an opportunity to participate in the
proceedings but failed to do so. If he does not avail himself of the chance to be heard,
then it is deemed waived or forfeited without violating the constitutional guarantee.
Thus, there was no violation of the Union’s right to due process on the part of the
NLRC.
2. CIVIL PROCEDURE GUYS! HEHE
On a procedural aspect, the Union faults the CA for treating its petition as an unsigned
pleading and posits that the verification signed by 159 out of the 227 petitioners has
already substantially complied with and satisfied the requirements under Secs. 4 and 5
of Rule 7 of the ROC.
The Union’s proposition is partly correct.
Sec. 4 of Rule 7 of the ROC states:
Sec. 4. Verification.—Except when otherwise specifically required by law or rule,
pleadings need not be under oath, verified or accompanied by affidavit.
A pleading is verified by an affidavit that the affiant has read the pleading and that the
allegations therein are true and correct of his personal knowledge or based on
authentic records.
A pleading required to be verified which contains a verification based on “information
and belief” or upon “knowledge, information and belief,” or lacks a proper
verification, shall be treated as an unsigned pleading.
The verification requirement is significant, as it is intended to secure an assurance that
the allegations in the pleading are true and correct and not the product of the
imagination or a matter of speculation.30 This requirement is simply a condition
affecting the form of pleadings, and noncompliance with the requirement does not
necessarily render it fatally defective. Indeed, verification is only a formal and not a
jurisdictional requirement.
In this case, the problem is not the absence but the adequacy of the Union’s
verification, since only 159 out of the 227 petitioners executed the verification.
Undeniably, the petition meets the requirement on the verification with respect to the
159 petitioners who executed the verification, attesting that they have sufficient
knowledge of the truth and correctness of the allegations of the petition. However,
their signatures cannot be considered as verification of the petition by the other 68
named petitioners unless the latter gave written authorization to the 159 petitioners to
sign the verification on their behalf. Thus, in Loquias v. Office of the Ombudsman,
we ruled that the petition satisfies the formal requirements only with regard to the
petitioner who signed the petition but not his co-petitioner who did not sign nor
authorize the other petitioner to sign it on his behalf. The proper ruling in this
situation is to consider the petition as compliant with the formal requirements with
respect to the parties who signed it and, therefore, can be given due course only with
regard to them. The other petitioners who did not sign the verification and certificate
against forum shopping cannot be recognized as petitioners have no legal standing
before the Court. The petition should be dismissed outright with respect to the non-
conforming petitioners.
In the case at bench, however, the CA, in the exercise of sound discretion,
did not strictly apply the ruling in Loquias and instead proceeded to decide the case
on the merits.
3. Union officers are liable for unlawful strikes or illegal acts during a strike. Art.
264(a) sanctions the dismissal of a union officer who knowingly participates in an
illegal strike or who knowingly participates in the commission of illegal acts
during a lawful strike.
4. The rule is well entrenched in this jurisdiction that factual findings of the labor
tribunal, when affirmed by the appellate court, are generally accorded great
respect, even finality
5. Member’s liability depends on participation in illegal acts. Art. 264(a) of the
Labor Code provides that a member is liable when he knowingly participates in
an illegal act “during a strike.” While the provision is silent on whether the strike
is legal or illegal, we find that the same is irrelevant.
Now, what are considered “illegal acts” under Art. 264(a)?
No precise meaning was given to the phrase “illegal acts.” It may encompass a
number of acts that violate existing labor or criminal laws, such as the following:
(1) Violation of Art. 264(e) of the Labor Code which provides that “[n]o person
engaged in picketing shall commit any act of violence, coercion or intimidation or
obstruct the free ingress to or egress from the employer’s premises for lawful
purposes, or obstruct public thoroughfares”;
(2) Commission of crimes and other unlawful acts in carrying out the strike;54 and
(3) Violation of any order, prohibition, or injunction issued by the DOLE Secretary or
NLRC in connection with the assumption of jurisdiction/certification Order under Art.
263(g) of the Labor Code.
As earlier explained, this enumeration is not exclusive and it may cover other
breaches of existing laws.
However, There must be proof that he committed illegal acts during the strike and the
striker who participated in the commission of illegal act[s] must be identified. But
proof beyond reasonable doubt is not required. Substantial evidence available under
the circumstances, which may justify the imposition of the penalty of dismissal, may
suffice.
6. Noted labor law expert, Professor Cesario A. Azucena, Jr., traced the history
relating to the liability of a union member in an illegal strike, starting with the
“rule of vicarious liability,” thus:
Under [the rule of vicarious liability], mere membership in a labor union serves as
basis of liability for acts of individuals, or for a labor activity, done on behalf of the
union. The union member is made liable on the theory that all the members are
engaged in a general conspiracy, and the unlawful acts of the particular members are
viewed as necessary incidents of the conspiracy. It has been said that in the absence of
statute providing otherwise, the rule of vicarious liability applies.
Even the Industrial Peace Act, however, which was in effect from 1953 to 1974,
did not adopt the vicarious liability concept. It expressly provided that:
No officer or member of any association or organization, and no association or
organization participating or interested in a labor dispute shall be held responsible or
liable for the unlawful acts of individual officers, members, or agents, except upon
proof of actual participation in, or actual authorization of, such acts or of ratifying of
such acts after actual knowledge thereof.
Replacing the Industrial Peace Act, the Labor Code has not adopted the vicarious
liability rule
G.R. No. 155679 December 19, 2006
BIFLEX PHILS. INC. LABOR UNION (NAFLU), PATRICIA VILLANUEVA, EMILIA
BANDOLA, RAQUEL CRUZ, DELIA RELATO, REGINA CASTILLO, LOLITA DELOS
ANGELES, MARISSA VILLORIA, MARITA ANTONIO, LOLITA LINDIO, ELIZA
CARAULLIA, LIZA SUA, and FILFLEX INDUSTRIAL AND MANUFACTURING LABOR
UNION (NAFLU), MYRNA DELA TORRE, AVELINA AÑONUEVO, BERNICE BORCELO,
NARLIE YAGIN, EVELYN SANTILLAN, LEONY SERDONCILO, TRINIDAD CUYA,
ANDREA LUMIBAO, GYNIE ARNEO, ELIZABETH CAPELLAN, JOSEPHINE DETOSIL,
ZENAIDA FRANCISCO, and FLORENCIA ANAGO, petitioners,
vs.
FILFLEX INDUSTRIAL AND MANUFACTURING CORPORATION and BIFLEX (PHILS.),
INC., respondents.
 DECISION
CARPIO MORALES, J.:
Assailed via Petition for Review on Certiorari is the Court of Appeals Decision1 of May 28,
2002 setting aside the National Labor Relations Commission (NLRC) Resolution2 of August
14, 1995 which reversed the December 15, 1992 Decision3 of the Labor Arbiter.
Petitioners Patricia Villanueva, Emilia Bandola, Raquel Cruz, Delia Relato, Regina Castillo,
Lolita delos Angeles, Marissa Villoria, Marita Antonio, Lolita Lindio, Eliza Caraulia, and Liza
Sua were officers of Biflex (Phils.) Inc. Labor Union.
Petitioners Myrna dela Torre, Avelina Añonuevo, Bernice Borcelo, Narlie Yagin, Evelyn
Santillan, Leony Serdoncilo, Trinidad Cuya, Andrea Lumibao, Gynie Arneo, Elizabeth
Capellan, Josephine Detosil, Zenaida Francisco, and Florencia Anago were officers of
Filflex Industrial and Manufacturing Labor Union.
The two petitioner-unions, which are affiliated with National Federation of Labor Unions
(NAFLU), are the respective collective bargaining agents of the employees of corporations.
Respondents Biflex (Phils.) Inc. and Filflex Industrial and Manufacturing Corporation
(respondents) are sister companies engaged in the garment business. Situated in one big
compound along with another sister company, General Garments Corporation (GGC), they
have a common entrance.
On October 24, 1990, the labor sector staged a welga ng bayan to protest the accelerating
prices of oil. On even date, petitioner-unions, led by their officers, herein petitioners, staged
a work stoppage which lasted for several days, prompting respondents to file on October
31, 1990 a petition to declare the work stoppage illegal for failure to comply with procedural
requirements.4
On November 13, 1990, respondents resumed their operations.5 Petitioners, claiming that
they were illegally locked out by respondents, assert that aside from the fact that the welga
ng bayan rendered it difficult to get a ride and the apprehension that violence would erupt
between those participating in the welga and the authorities, respondents’ workers were
prevented from reporting for work.
Petitioners further assert that respondents were “slighted” by the workers’ no-show, and as
a punishment, the workers as well as petitioners were barred from entering the company
premises.
On their putting up of tents, tables and chairs in front of the main gate of respondents’
premises, petitioners, who claim that they filed a notice of strike on October 31,
1990,6 explain that those were for the convenience of union members who reported every
morning to check if the management would allow them to report for work.
Respondents, on the other hand, maintain that the work stoppage was illegal since the
following requirements for the staging of a valid strike were not complied with: (1) filing of
notice of strike; (2) securing a strike vote, and (3) submission of a report of the strike vote to
the Department of Labor and Employment.7
The Labor Arbiter, by Decision of December 15, 1992, finding for respondents, held that the
strike was illegal.8 The decretal text of its decision reads:
WHEREFORE, judgment is hereby rendered declaring the respondents guilty of an illegal
strike. Consequently, their following officers are declared to have lost their employment
status:
BIFLEX LABOR UNION (NAFLU)

1. Reynaldo
President
Santos

2. Patricia
Vice President
Villanueva

3. Emilia Bandola Secretary

4. Raquel Cruz Treasurer

5. Delia Relato Auditor

6. Regina Castillo Board Member

7. Lolita delos
Board Member
Angeles

8. Marissa Villoria Board Member

9. Marita Antonio Board Member

10. Lolita Lindio Board Member

11. Eliza Caranlia Board Member

12. Liza Sua Board Member

FIFLEX INDUSTRIAL AND MANUFACTURING LABOR UNION (NAFLU)

1. Myrna dela
President
Torre

2. Avelina
Vice President
Anonuevo

3. Barnice Borcelo Secretary

4. Nerlie Yagin Treasurer

5. Evelyn Santillan Auditor

6. Leony
Director
Serdoncilo

7. Trinidad Cuga Director

8. Andrea
Director
Lumibao

9. Gynie Arneo Director

10. Elizabeth
Director
Capellar

11. Josephine
Director
Detosil

12. Zenaida
Director
Francisco

13. Florencia
Director
Anago

SO ORDERED.9
Respondents thereupon terminated the employment of petitioners.
On appeal, the National Labor Relations Commission (NLRC) reversed the ruling of the
Labor Arbiter, it holding that there was no strike to speak of as no labor or industrial dispute
existed between the parties.10 It accordingly ordered respondents to reinstate petitioners to
their former positions, without loss of seniority rights, and with full backwages from the date
of their termination. 11
On respondents’ petition for certiorari, the Court of Appeals, by Decision of May 28, 2002,
reversed that of the NLRC and reinstated that of the Labor Arbiter.
In finding for respondents, the appellate court discredited petitioners’ claim of having been
illegally locked out, given their failure to even file a letter of protest or complaint with the
management,12 and their failure to comply with the legal requirements of a valid strike.13
The appellate court further noted that while petitioners claimed that they filed a notice of
strike on October 31, 1990, no copy thereof was ever produced before the Labor Arbiter. 14
Hence, the instant petition which faults the appellate court to have:
I
. . . ERRED IN INTERPRETING ART. 264 (A) OF THE LABOR CODE TO BE
MANDATORY AND CALLING FOR THE AUTOMATIC DISMISSAL OF THE PETITIONERS
FOR HAVING ENGAGED IN AN ILLEGAL STRIKE.
II
. . . ERR[ED] IN NOT RULING THAT RESPONDENTS ERRED IN IMMEDIATELY
IMPLEMENTING THE DECISION OF THE LABOR ARBITER . . . DISMISSING
PETITIONERS FROM WORK DESPITE THE FACT THAT THE SAID DECISION HAS NOT
YET BECOME FINAL AND EXECUTORY.
III
. . . ERRED IN DECLARING THAT PETITIONERS WERE GUILTY OF HOLDING AN
ILLEGAL STRIKE WHEN CIRCUMSTANCES SHOWED THAT RESPONDENTS WERE
THE ONES WHO WERE GUILTY OF AN ILLEGAL LOCKOUT.
The petition fails.
That petitioners staged a work stoppage on October 24, 1990 in conjunction with the welga
ng bayan organized by the labor sector to protest the accelerating prices of oil, it is not
disputed.
Stoppage of work due to welga ng bayan is in the nature of a general strike, an extended
sympathy strike. It affects numerous employers including those who do not have a dispute
with their employees regarding their terms and conditions of employment.15
Employees who have no labor dispute with their employer but who, on a day they are
scheduled to work, refuse to work and instead join a welga ng bayan commit an illegal work
stoppage.16
Even if petitioners’ joining the welga ng bayan were considered merely as an exercise of
their freedom of expression, freedom of assembly or freedom to petition the government for
redress of grievances, the exercise of such rights is not absolute.17 For the protection of
other significant state interests such as the “right of enterprises to reasonable returns on
investments, and to expansion and growth”18 enshrined in the 1987 Constitution must also
be considered, otherwise, oppression or self-destruction of capital in order to promote the
interests of labor would be sanctioned. And it would give imprimatur to workers’ joining
demonstrations/rallies even before affording the employer an opportunity to make the
necessary arrangements to counteract the implications of the work stoppage on the
business, and ignore the novel “principle of shared responsibility between workers and
employers”19 aimed at fostering industrial peace.
There being no showing that petitioners notified respondents of their intention, or that they
were allowed by respondents, to join the welga ng bayan on October 24, 1990, their work
stoppage is beyond legal protection.
Petitioners, nonetheless, assert that when they returned to work the day following the welga
ng bayan on October 24, 1990, they were refused entry by the management, allegedly as
punishment for their joining the welga. Hence, they claim that they were illegally locked out
by respondents.
If there was illegal lockout, why, indeed, did not petitioners file a protest with the
management or a complaint therefor against respondents? As the Labor Arbiter observed,
“[t]he inaction of [petitioners] betrays the weakness of their contention for normally a locked-
out union will immediately bring management before the bar of justice.”20
Even assuming arguendo that in staging the strike, petitioners had complied with legal
formalities, the strike would just the same be illegal, for by blocking the free ingress to and
egress from the company premises, they violated Article 264(e) of the Labor Code which
provides that “[n]o person engaged in picketing shall … obstruct the free ingress to or
egress from the employer’s premises for lawful purposes, or obstruct public thoroughfares.”
Even the NLRC, which ordered their reinstatement, took note of petitioners’ act of
“physically blocking and preventing the entry of complainant’s customers, supplies and even
other employees who were not on strike.”21
In fine, the legality of a strike is determined not only by compliance with its legal formalities
but also by the means by which it is carried out.
Petitioners, being union officers, should thus bear the consequences of their acts of
knowingly participating in an illegal strike, conformably with the third paragraph of Article
264 (a) of the Labor Code which provides:
. . . 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 and underscoring supplied)
In Gold City Integrated Port Service, Inc. v. National Labor Relations Commission,22 this
Court, passing on the use of the word “may” in the immediately quoted provision, held that
“[t]he law . . . grants the employer the option of declaring a union officer who participated in
an illegal strike as having lost his employment.” Reinstatement of a striker or retention of his
employment, despite his participation in an illegal strike, is a management prerogative
which this Court may not supplant.
Costs against petitioners.
WHEREFORE, the petition is DENIED.
SO ORDERED.

Comprehensive Digest: University of

Immaculate Concepcion,. Inc. v. Sec.
of Labor [G.R. No. 151379, January
14, 2005]

University of the Immaculate Conception vs Sec of Labor

GR 151379
Facts:
This case stemmed from the collective bargaining negotiations between
petitioner University of Immaculate Concepcion, Inc. (UNIVERSITY) and
respondent The UIC Teaching and Non- Teaching Personnel and Employees
Union (UNION). The UNION, as the certified bargaining
agent of all rank and file employees of the UNIVERSITY, submitted its
collective bargaining proposals to the latter on February 16, 1994. However,
one item was left unresolved and this was the inclusion or exclusion of some
positions in the scope of the bargaining unit.

The UNION it filed a notice of strike on the grounds of bargaining deadlock

and ULP. During the thirty (30) day cooling-off period, two union members
were dismissed by petitioner. Consequently, the UNION went on strike.

On January 23, 1995, the then Secretary of Labor, Ma. Nieves R. Confessor,
issued an Order assuming jurisdiction over the labor dispute.

On March 10, 1995, the UNION filed another notice of strike, this time citing
as a reason the UNIVERSITY’s termination of the individual respondents. The
UNION alleged that the UNIVERSITY’s act of terminating the individual
respondents is in violation of the Order of the Secretary of Labor.

On March 28, 1995, the Secretary of Labor issued another Order reiterating
the directives contained in the January 23, 1995 Order. Hence, the
UNIVERSITY was directed to reinstate the individual respondents under the
same terms and conditions prevailing prior to the labor dispute.

The UNIVERSITY filed a MR. In the Order dated August 18, 1995, then Acting
Secretary Jose S. Brilliantes denied the MR, but modified the two previous
Orders by adding:

Anent the Union’s Motion, we find that superseding circumstances would

not warrant the physical reinstatement of the twelve (12) terminated
employees.

Hence, they are hereby ordered placed under payroll reinstatement until
thevalidity of their termination is finally resolved.

Issue: WON payroll reinstatement, instead of actual reinstatement, is proper.

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

In ordering payroll reinstatement in lieu of actual reinstatement, then Acting

Secretary of Labor Jose S. Brillantes said:

Anent the Union’s Motion, we find that superseding circumstances would not
warrant the physical reinstatement of the twelve (12) terminated employees.
Hence, they are hereby ordered placed under payroll reinstatement until the
validity of their termination is finally resolved.

As an exception to the rule, payroll reinstatement must rest on special

circumstances that render actual reinstatement impracticable or otherwise not
conducive to attaining the purposes of the law.
The “superseding circumstances” mentioned by the Acting Secretary of Labor
no doubt refer to the final decision of the panel of arbitrators as to the
confidential nature of the positions of the twelve private respondents, thereby
rendering their actual and physical reinstatement impracticable and more
likely to exacerbate the situation. The payroll reinstatement in lieu of actual
reinstatement ordered in these cases, therefore, appears justified as an
exception to the rule until the validity of their termination is finally resolved.
This Court sees no grave abuse of discretion on the part of the Acting Secretary
of Labor in ordering the same. Furthermore, the issue has not been raised by
any party in this case.

PetG.R. No. 151379 January 14, 2005

UNIVERSITY of IMMACULATE, CONCEPCION, INC., petitioner,

vs.
The HONORABLE SECRETARY OF LABOR, THE UIC TEACHING and NON-TEACHING
PERSONNEL AND EMPLOYEES UNION, LELIAN CONCON, MARY ANN DE RAMOS, JOVITA
MAMBURAM, ANGELINA ABADILLA, MELANIE DE LA ROSA, ZENAIDA CANOY, ALMA
VILLACARLOS, JOSIE BOSTON, PAULINA PALMA GIL, GEMMA GALOPE, LEAH CRUZA,
DELFA DIAPUEZ, respondent.

DECISION

AZCUNA, J.:

This is a petition for review of a decision of the Court of Appeals and the resolution denying
reconsideration thereof. The principal issue to be resolved in this recourse is whether or not the
Secretary of Labor, after assuming jurisdiction over a labor dispute involving an employer and the
certified bargaining agent of a group of employees in the workplace, may legally order said employer
to reinstate employees terminated by the employer even if those terminated employees are not part
of the bargaining unit.

This case stemmed from the collective bargaining negotiations between petitioner University of
Immaculate Concepcion, Inc. (UNIVERSITY) and respondent The UIC Teaching and Non-Teaching
Personnel and Employees Union (UNION). The UNION, as the certified bargaining agent of all rank
and file employees of the UNIVERSITY, submitted its collective bargaining proposals to the latter on
February 16, 1994. However, one item was left unresolved and this was the inclusion or exclusion of
the following positions in the scope of the bargaining unit:

a. Secretaries

b. Registrars

c. Accounting Personnel

d. Guidance Counselors 1
This matter was submitted for voluntary arbitration. On November 8, 1994, the panel of voluntary
arbitrators rendered a decision, the dispositive portion of which states:

WHEREFORE, premises considered, the Panel hereby resolves to exclude the above-mentioned
secretaries, registrars, chief of the accounting department, cashiers and guidance counselors from
the coverage of the bargaining unit. The accounting clerks and the accounting staff member are
hereby ordered included in the bargaining unit.2

The UNION moved for the reconsideration of the above decision. Pending, however, the resolution
of its motion, on December 9, 1994, it filed a notice of strike with the National Conciliation and
Mediation Board (NCMB) of Davao City, on the grounds of bargaining deadlock and unfair labor
practice. During the thirty (30) day cooling-off period, two union members were dismissed by
petitioner. Consequently, the UNION went on strike on January 20, 1995.

On January 23, 1995, the then Secretary of Labor, Ma. Nieves R. Confessor, issued an Order
assuming jurisdiction over the labor dispute. The dispositive portion of the said Order states:

WHEREFORE, ABOVE PREMISES CONSIDERED, and pursuant to Article 263 (g) of the Labor
Code, as amended, this Office hereby assumes jurisdiction over the entire labor dispute at the
University of the Immaculate Concepcion College.

Accordingly, all workers are directed to return to work within twenty-four (24) hours upon receipt of
this Order and for Management to accept them back under the same terms and conditions prevailing
prior to the strike.

Parties are further directed to cease and desist from committing any or all acts that might exacerbate
the situation.

Finally, the parties are hereby directed to submit their respective position papers within ten (10) days
from receipt hereof.

SO ORDERED.3

On February 8, 1995, the panel of voluntary arbitrators denied the motion for reconsideration filed by
the UNION. The UNIVERSITY then furnished copies of the panel’s denial of the motion for
reconsideration and the Decision dated November 8, 1995 to the individual respondents herein:

1. Lelian Concon – Grade School Guidance Counselor

2. Mary Ann de Ramos – High School Guidance Counselor

3. Jovita Mamburam – Secretary to [the] Vice President for Academic Affairs/ Dean of
College

4. Angelina Abadilla – Secretary to [the] Vice President for Academic Affairs/ Dean of
College

5. Melanie de la Rosa – Secretary to [the] Dean of [the] College of Pharmacy/ Academic

Affairs/ Dean of College

6. Zenaida Canoy – Secretary to [the] Vice President for Academic Affairs/ Dean of College
 7. Alma Villacarlos – Guidance Counselor (College)

8. Josie Boston – Grade School Psychometrician

9. Paulina Palma Gil – Cashier

10. Gemma Galope – High School Registrar

11. Leah Cruza – Guidance Counselor (College)

12. Delfa Diapuez – High School Psychometrician 4

Thereafter, the UNIVERSITY gave the abovementioned individual respondents two choices: to
resign from the UNION and remain employed as confidential employees or resign from their
confidential positions and remain members of the UNION. The UNIVERSITY relayed to these
employees that they could not remain as confidential employees and at the same time as members
or officers of the Union. However, the individual respondents remained steadfast in their claim that
they could still retain their confidential positions while being members or officers of the Union.
Hence, on February 21, 1995, the UNIVERSITY sent notices of termination to the individual
respondents. 1a\^/phi 1.net

On March 10, 1995, the UNION filed another notice of strike, this time citing as a reason the
UNIVERSITY’s termination of the individual respondents. The UNION alleged that the
UNIVERSITY’s act of terminating the individual respondents is in violation of the Order of the
Secretary of Labor dated January 23, 1995.

On March 28, 1995, the Secretary of Labor issued another Order reiterating the directives contained
in the January 23, 1995 Order. The Secretary also stated therein that the effects of the termination
from employment of these individual respondents be suspended pending the determination of the
legality thereof. Hence, the UNIVERSITY was directed to reinstate the individual respondents under
the same terms and conditions prevailing prior to the labor dispute.

The UNIVERSITY, thereafter, moved to reconsider the aforesaid Order on March 28, 1995. It argued
that the Secretary’s Order directing the reinstatement of the individual respondents would render
nugatory the decision of the panel of voluntary arbitrators to exclude them from the collective
bargaining unit. The UNIVERSITY’s motion was denied by the Secretary in an Order dated June 16,
1995, wherein the Secretary declared that the decision of the panel of voluntary arbitrators to
exclude the individual respondents from the collective bargaining unit did not authorize the
UNIVERSITY to terminate their employment. The UNIVERSITY filed a second motion for
reconsideration, which was again denied in an Order dated July 19, 1995. Undeterred, the
UNIVERSITY filed a third motion for reconsideration. In the Order dated August 18, 1995, then
Acting Secretary Jose S. Brilliantes denied the third motion for reconsideration, but modified the two
previous Orders by adding:

xxx

Anent the Union’s Motion, we find that superseding circumstances would not warrant the physical
reinstatement of the twelve (12) terminated employees. Hence, they are hereby ordered placed
under payroll reinstatement until the validity of their termination is finally resolved.5

xxx
Still unsatisfied with the Order of the Secretary of Labor, the UNIVERSITY filed a petition
for certiorari with this Court on September 15, 1995. However, its petition was referred to the Court
of Appeals, following the ruling in St. Martin Funeral Homes v. Court of Appeals . 6

On October 8, 2001, the Court of Appeals promulgated its Decision, affirming the questioned Orders
of the Secretary of Labor. The dispositive portion of the Decision states:

WHEREFORE, the instant petition is DISMISSED for lack of merit.7

The UNIVERSITY then moved for the reconsideration of the abovementioned Decision,8 but on
January 10, 2002, the Court of Appeals denied the motion on the ground that no new matters were
raised therein that would warrant a reconsideration.9

Hence, this petition.

The UNIVERSITY assigns the following error:

THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN AFFIRMING THE ORDERS

OF THE SECRETARY OF LABOR THAT SUSPENDED THE EFFECTS OF THE TERMINATION
OF TWELVE EMPLOYEES WHO WERE NOT PART OF THE BARGAINING UNIT INVOLVED IN A
LABOR DISPUTE OVER WHICH THE SECRETARY OF LABOR ASSUMED JURISDICTION. 10

The Court of Appeals relied upon the doctrine in St. Scholastica’s College v. Torres.11 In the case
therein, this Court, citing International Pharmaceuticals Incorporated v. the Secretary of
Labor,12 declared that:

x x x [T]he Secretary was explicitly granted by Article 263(g) of the Labor Code the authority to
assume jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an industry
indispensable to the national interest, and decide the same accordingly. Necessarily, the authority to
assume jurisdiction over the said labor dispute must include and extend to all questions and
controversies arising therefrom, including cases over which the Labor Arbiter has exclusive
jurisdiction.

The UNIVERSITY contends that the Secretary cannot take cognizance of an issue involving
employees who are not part of the bargaining unit. It insists that since the individual respondents had
already been excluded from the bargaining unit by a final and executory order by the panel of
voluntary arbitrators, then they cannot be covered by the Secretary’s assumption order.

This Court finds no merit in the UNIVERSITY’s contention. In Metrolab Industries, Inc. v. Roldan-
Confessor ,13 this Court declared that it recognizes the exercise of management prerogatives and it
often declines to interfere with the legitimate business decisions of the employer. This is in keeping
with the general principle embodied in Article XIII, Section 3 of the Constitution,14 which is further
echoed in Article 211 of the Labor Code.15 However, as expressed in PAL v. National Labor
Relations Commission,16 this privilege is not absolute, but subject to exceptions. One of these
exceptions is when the Secretary of Labor assumes jurisdiction over labor disputes involving
industries indispensable to the national interest under Article 263(g) of the Labor Code. This
provision states:

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

When the Secretary of Labor ordered the UNIVERSITY to suspend the effect of the termination of
the individual respondents, the Secretary did not exceed her jurisdiction, nor did the Secretary
gravely abuse the same. It must be pointed out that one of the substantive evils which Article 263(g)
of the Labor Code seeks to curb is the exacerbation of a labor dispute to the further detriment of the
national interest. In her Order dated March 28, 1995, the Secretary of Labor rightly held:

It is well to remind both parties herein that the main reason or rationale for the exercise of the
Secretary of Labor and Employment’s power under Article 263(g) of the Labor Code, as amended, is
the maintenance and upholding of the status quo while the dispute is being adjudicated. Hence, the
directive to the parties to refrain from performing acts that will exacerbate the situation is intended to
ensure that the dispute does not get out of hand, thereby negating the direct intervention of this
office.
l^vvphi1.net

The University’s act of suspending and terminating union members and the Union’s act of filing
another Notice of Strike after this Office has assumed jurisdiction are certainly in conflict with the
status quo ante. By any standards[,] these acts will not in any way help in the early resolution of the
labor dispute. It is clear that the actions of both parties merely served to complicate and aggravate
the already strained labor-management relations.17

Indeed, it is clear that the act of the UNIVERSITY of dismissing the individual respondents from their
employment became the impetus for the UNION to declare a second notice of strike. It is not a
question anymore of whether or not the terminated employees, the individual respondents herein,
are part of the bargaining unit. Any act committed during the pendency of the dispute that tends to
give rise to further contentious issues or increase the tensions between the parties should be
considered an act of exacerbation and should not be allowed.

With respect to the Secretary’s Order allowing payroll reinstatement instead of actual reinstatement
for the individual respondents herein, an amendment to the previous Orders issued by her office, the
same is usually not allowed. Article 263(g) of the Labor Code aforementioned states that all workers
must immediately return to work and all employers must readmit all of them under the same terms
and conditions prevailing before the strike or lockout. The phrase "under the same terms and
l^vvphi1.net

conditions" makes it clear that the norm is actual reinstatement. This is consistent with the idea that
any work stoppage or slowdown in that particular industry can be detrimental to the national interest.

In ordering payroll reinstatement in lieu of actual reinstatement, then Acting Secretary of Labor Jose
S. Brillantes said:

Anent the Union’s Motion, we find that superseding circumstances would not warrant the physical
reinstatement of the twelve (12) terminated employees. Hence, they are hereby ordered placed
under payroll reinstatement until the validity of their termination is finally resolved.18

As an exception to the rule, payroll reinstatement must rest on special circumstances that render
actual reinstatement impracticable or otherwise not conducive to attaining the purposes of the law.19
The "superseding circumstances" mentioned by the Acting Secretary of Labor no doubt refer to the
final decision of the panel of arbitrators as to the confidential nature of the positions of the twelve
private respondents, thereby rendering their actual and physical reinstatement impracticable and
more likely to exacerbate the situation. The payroll reinstatement in lieu of actual reinstatement
ordered in these cases, therefore, appears justified as an exception to the rule until the validity of
their termination is finally resolved. This Court sees no grave abuse of discretion on the part of the
Acting Secretary of Labor in ordering the same. Furthermore, the issue has not been raised by any
party in this case.

WHEREFORE, the Decision of the Court of Appeals dated October 8, 2001 and its Resolution dated
January 10, 2002 in CA-G.R. SP No. 61693 are AFFIRMED.

No costs.

SO ORDERED

[G.R. No. 143341. May 28, 2004]

SAN JUAN DE DIOS EDUCATIONAL FOUNDATION EMPLOYEES

UNION-ALLIANCE OF FILIPINO WORKERS; MA. CONSUELO
MAQUILING, LEONARDO MARTINEZ, ANDRES AYALA,
VIRGINIA ARLANTE, ROGELIO BELMONTE, MA. ELENA GARCIA
and RODOLFO CALUCIN, JR., petitioners, vs. SAN JUAN DE
DIOS EDUCATIONAL FOUNDATION, INC. (HOSPITAL) and
NATIONAL LABOR RELATIONS COMMISSION, respondents.

DECISION
CALLEJO, SR., J.:

This is a petition for review on certiorari of the Decision of the Court of [1]

Appeals in CA-G.R. SP No. 53768, affirming with modification the Decision of

the National Labor Relations Commission (NLRC) in NCMB-NCR-NS-08-397-
94 (NLRC-NCR-CC-000089-94); NLRC-NCR-00-09-07117-94 and NLRC-
NCR-09-06557-95 and its Resolution denying the motion for reconsideration
of the said decision.

The Antecedents

San Juan de Dios Educational Foundation, Inc. (hereinafter referred to as

the Foundation) is a domestic foundation operating as a college and hospital
with a two hundred bed capacity, complemented by four hundred hospital
personnel, more or less. It retains approximately seventy medical consultants
specializing in various fields of applied medicine and medical research. The
Foundation rendered medical and nursing services to indigents
from Pasay City, Las Pias, Paraaque, Muntinlupa and Cavite. [2]

San Juan de Dios Educational Foundation Employees Union-Alliance of

Filipino Workers (hereinafter referred to as the Union), is the sole and
exclusive bargaining representative of the rank-and-file employees in the
Foundation.
Rodolfo Calucin, Jr., then Executive Secretary of the Union, had been
employed at the Foundation as a medical clerk for almost twelve years. In a
Letter dated January 14, 1994, the Foundation, through its Personnel Officer
Teresita D. Doringo, informed him that, per its records, he had incurred five
(5) sets of tardiness for 1993, in addition to the two other sets he had
[3]

incurred in the year 1992, and that such tardiness had affected his
efficiency. He was required to explain, in writing, within seventy-two hours
from receipt of the letter, why his services should not be terminated for gross
and habitual neglect of his duties, under Article 282 of the Labor Code of
the Philippines. [4]

Calucin, Jr. expressed surprise over Doringos directive. In his reply, he

claimed that he had already served the maximum suspension of one week,
from October 11 to 17, 1993, for his past tardiness. He furthered that he had
not incurred tardiness for the past four months. Moreover, his superior had
given him a performance rating of FAIR, as of October 1993. [5]

On July 27, 1994, the Foundation, through then Acting Vice-President for
Health Services Sister Lourdes S. Sabidong, wrote Calucin, Jr. informing the
latter that his employment had been terminated as of the month of March for
gross and habitual neglect of duties under Article 282 (b) of the Labor Code. [6]

Calucin, Jr. filed a Complaint for Illegal Dismissal on August 1,

1994 before the National Arbitration Branch of the National Labor Relations
Commission. On the same date, the Union filed a Notice of Strike before the
[7]

National Conciliation and Mediation Board (NCMB), docketed as NCMB NCR-

NS-08-397-94 (certified as NLRC-NCR-CC-000089-94), grounded on the
following: (a) illegal dismissal of Calucin, Jr., a union officer; (b) discrimination;
(c) union busting; (d) harsh enforcement of the companys code of discipline;
and, (e) violation of CBA provisions. Officers and employees who were also
[8]

members of the Union staged a strike.

 The Foundation, through counsel, filed a motion for bill of particulars,
anent the basis of the notice of strike filed by the Union. The Union specified
the following as its basis for the said notice:
(a) illegal dismissal of Rodolfo Calucin, Jr., executive secretary of the Union;
(b) discriminations arising from the favorable actions of the Foundation to Editha H.
Unlao who was not dismissed despite incurring similar number of absences as
Calucin;
(c) Union busting arising from contracting out regular services performed by union
members, forcing Rodolfo Cachuela, an active union member, to resign for no
apparent reason; forced resignation from the union by Francis Rellevo, Nestor
Centeno, Nemia Abregoso and Grace Isidro upon the insistence of the sisters who
recruited them to work at the Foundation; harsh enforcement of the company code
of discipline motivated by the desire to persecute militant union members especially
on Fe Calucin (for being a wife of Rodolfo Calucin, [Jr.] a union officer), Joan
Balucos (assigned heavy workload), Edgar Bas (saddled with extra work),
suspending employees who became pregnant before marriage for five to seven
months even after getting married or until delivery;
(d) violation of the CBA arising from the non-observance of friendly negotiations before
enforcing management actions, refusal to activate grievance committee, refusal or
failure to continue recreational activities.[9]
On August 26, 1994, then Department of Labor and Employment (DOLE)
Secretary Ma. Nieves R. Confesor issued an Order certifying the case to the
[10]

NLRC, directing the striking employees to go to work, and directing the

Foundation to accept all employees under the same terms and conditions
prevailing before the strike.
Per the return of Sheriff Alfredo C. Antonio, copies of the order were
served on the officers and striking members of the Union and its counsel. [11]

Nevertheless, the officers and striking members of the Union defied the
order of the DOLE and continued with their strike.
In the meantime, the Foundation filed a petition before the NCMB to
declare the strike illegal. The petition was certified to the NLRC and was re-
docketed as NLRC Case No. 00-09-07117-94. The Foundation alleged therein
that the Union and its officers committed prohibited acts during the strike
staged on August 26 to 31, 1994. [12]

Since the members of the Union had not heeded the Return-To-Work
Order (RTWO), the Secretary of Labor and Employment (SOLE) issued
another RTWO on August 29, 1994. [13]

The Foundation and the Union entered into an agreement on August 30,
1994, on the following matters: (a) the propriety and legality of the dismissal of
Calucin, Jr. and the hiring of agency employees shall be submitted to a
voluntary arbitrator chosen by the parties in accordance with the CBA; (b) the
Union shall lift its picket line immediately after the signing of the agreement
and report to work not later than August 31, 1994, except for Calucin, Jr.; (c)
the Foundation would waive any legal action relating to the illegal strike and
the illegal acts committed by the officers and members of the Union. [14]

In a Letter dated August 31, 1994, the Union, through its President, Ma.
[15]

Consuelo P. Maquiling, informed the Foundation that the night-shift duty

(10:00 p.m. to 6:00 a.m.) would be reporting back to work. However, she
requested that those whose duties fell on the 6:00 a.m. to 2:00 p.m., 8:00 a.m.
to 5:00 p.m., and the 2:00 p.m. to 10 p.m. shifts, be required to return to work
on September 1, 1994, considering that they had been in the picket line for
the past few days.
The Foundation denied the Unions request. The twenty-seven employees
who worked the said shifts were not allowed to go back to work. In response
to the manifestations and motions filed by the Union, the SOLE, on
September 14 and 21 of 1994, ordered the Foundation to accept the said
employees. The Foundation refused.
On October 5, 1994, the SOLE issued an Order directing the Foundation
[16]

to comply with her September 14 and 21, 1994 directives. The dispositive
portion of the order reads:

WHEREFORE, premises considered, the San Juan de Dios Hospital, Inc. is strictly
enjoined to fully and faithfully comply with the return-to-work Orders dated 14
and 21 September 1994. More specifically, the Hospital is ordered to accept back to
work the employees who were scheduled to report for work on 31 August 1994 and
belonging to the 2:00 10:00 and 3:00 11:00 p.m. shifts without any condition or
qualification under the same terms prevailing prior to the strike.

Sheriff Alfredo C. Antonio, this Department, is hereby directed to implement this

Order without further delay. If necessary, he may seek the assistance of the Pasay City
Philippine National Police which is hereby deputized to assist in the peaceful and
orderly implementation of this Order.

The Foundation filed a petition with this Court assailing the October 5,
1994 Order of the SOLE. The petition was docketed as G.R. No. 117226. In
the meantime, the Foundation allowed the payroll reinstatement of the twenty-
seven (27) employees, effective only on October 10, 1994, subject to the
outcome of its petition filed with this Court in G.R. No. 117226.
The Union agreed with this arrangement. [17]
 On March 27, 1995, the Court, issued a Resolution, ruling that the SOLE
[18]

did not act with grave abuse of discretion and affirmed her October 5,
1994 Order. The decretal portion of the resolution reads, viz:

ACCORDINGLY, finding that the public respondent has not committed grave abuse
of discretion in issuing the order dated October 5, 1994, the same is hereby
AFFIRMED, and the instant petition for certiorari with prayer for the issuance of a
restraining order is hereby DISMISSED.

However, the Court held that, by voluntarily reinstating the striking

employees in the payroll after they were deemed to have lost their
employment status, the Foundation can no longer rely on the ruling in St.
Scholasticas College v. Torres, where it was held that employees who
[19]

refused to go to work after the issuance of a return-to-work order were

deemed to have abandoned their employment. The Court also made it clear
that the reinstatement of the affected employees was only to maintain
the status quo until the final determination of the pivotal issues were submitted
before the NLRC. [20]

In the meantime, the Foundation accepted the twenty-seven employees,

subject to the resolution of its motion for reconsideration. The Court denied[21]

the said motion on March 27, 1995. Nevertheless, the Foundation refused to
give the twenty-seven employees the equivalent of their salaries for the period
they were refused reinstatement. This prompted the employees, through
the Union, to file a complaint against the Foundation before the NLRC,
docketed as NLRC-NCR-00-09-06557-95.
On motion of the parties, NCMB-NCR-NS-08-397-94 (NLRC-NCR-CC-
000089-94); NLRC-NCR-00-09-07117-94 and NLRC-NCR-09-06557-95 were
consolidated. [22]

In its position paper, the Union alleged that the Foundation was guilty of
(a) illegal dismissal of Union officers; (b) discrimination; and, (c) union-
busting. It also alleged that its strike was legal and was conducted in a
peaceful and orderly manner.
On February 9, 1999, the NLRC rendered a Decision, the dispositive
portion of which is herein quoted:

WHEREFORE, premises considered, this Commission rules as follows:

(a) The Petition to declare the strike illegal is hereby granted, and the following officers
of the union are deemed to have lost their employment status, to wit:
I. Ma. Consuelo Maquiling - President
 II Leonardo O. Martinez - Vice-President,
External Affairs
III Andres Ayala - Vice-President,
Internal Affairs
IV Virginia Arlante - Secretary
V Tita Inovio - Treasurer
VI Rogelio Belmonte - P. R. O.
VII Ma. Elena Garcia - P. R. O.
(b) The dismissal of Rodolfo Calucin [Jr.] is declared valid and all charges of the union
of unfair labor practice are likewise dismissed for lack of merit;
(c) The complaint for payment of the money claims of the 27 employees subject of the
third captioned case is dismissed for lack of merit.[23]

The Commission held that the strike staged by the Union from August 26,
1994 to August 31, 1994 was, at its inception, legal and peaceful. However,
the striking employees defiance of the August 26, 1994 RTWO of the SOLE
rendered the strike illegal. Consequently, under Article 264 (a) paragraph 2 of
the Labor Code, the officers and members of the Union who refused to
[24]

return to work after the issuance of the certification/RTWO were deemed to

have lost their employment status. It was also held that considering that the
Union members did not know the consequences of their refusal to return to
work, only the ranking officers of the Union, i.e., the president, vice-president,
secretary, treasurer and PROs, should be deemed to have lost their
employment status.
The NLRC dismissed the claim of unfair labor practice arising from the
illegal dismissal of Rogelio Calucin, Jr.It ruled that Calucin, Jr.s dismissal was
based on his continued tardiness for the year 1992 to 1993, which affected his
efficiency as reflected by his performance rating and, therefore, sanctioned by
Article 282(b) of the Labor Code.
The NLRC found that the Unions claim of discrimination amounting to
unfair labor practice was unsubstantiated, particularly on the following
matters: a) the treatment in the tardiness of union and non-union members; b)
the meal break of dietary personnel; c) the hazard pay of midwives; d) the
dismissal of Cachuela; and, e) the forced resignation of Francisco Rellevo,
Nestor Centeno, Nemia Abregoso and Grace Isidro from the Union. It also
found the explanation of the Foundation meritorious. The Commission also
ruled in favor of the Foundation on the Unions claim of the harsh enforcement
of the Company Code of Discipline on Fe Calucin, Joan Balucos, Edgar Bas,
Victor Estuya, the suspension of unmarried pregnant women, and the charge
of violation of the CBA for failure to activate the grievance committee.
However, the Commission found the Foundations refusal to continue to
sustain the recreational activities of the Union invalid.
As regards the Foundations refusal to pay the money claims of the twenty-
seven employees, the NLRC ruled that the same was sanctioned by law,
considering that the aforesaid employees refused to return to work even after
the SOLE already issued a RTWO effective August 31, 1994. [25]

The Union filed a motion for reconsideration from the said decision. The
NLRC denied the motion on April 30, 1999. [26]

On June 18, 1999, the Union, represented by its president, Ma. Consuelo
Maquiling, filed an Amended Notice of Strike before the NCMB, docketed as
[27]

NCMB-06-221-99, citing the following as grounds therefor: (a) bargaining

deadlock on economic issues, arising from disagreements in wage increase,
signing bonus, meal allowance, uniform allowance, hospital uniform, hazard
pay, longevity pay, and retirement pay; (b) bargaining deadlock on non-
economic issues arising from union shop; and, (c) unfair labor practice arising
from discrimination and contracting out of jobs performed by union members.
Dissatisfied with the decision and resolution of the NLRC, the Union and
its officers filed a petition for certiorari before the Court of Appeals on July 16,
1999, docketed as CA-G.R. SP No. 53768 alleging as follows:
I.
RESPONDENT NLRC GRAVELY ABUSED ITS DISCRETION IN RULING FOR
THE VALIDITY OF SERVICE OF THE CERTIFICATION ORDER OF THE
HONORABLE SECRETARY OF LABOR AND EMPLOYMENT DATED AUGUST
26, 1994.
II
RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION IN
HOLDING PETITIONER-UNIONS STRIKE ILLEGAL WITH THE EXTREME
SANCTION OF THE LOSS OF EMPLOYMENT OF THE FIVE (5) INDIVIDUAL
PETITIONERS NAMED IN THE ABOVE-CAPTIONED CASE.
III.
RESPONDENT NLRC TOTALLY DISREGARDED THE LAW, GRAVELY ABUSED
ITS DISCRETION AND ACTED CAPRICIOUSLY AND WITH MANIFEST
PARTIALITY IN ADJUDGING THE TERMINATION OF PETITIONER CALUCIN
[JR.] FROM EMPLOYMENT LEGAL.
IV.
RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION IN
DISMISSING ALL CHARGES OF PETITIONER-UNION OF UNFAIR LABOR
 PRACTICE AGAINST THE RESPONDENT FOUNDATION IN UTTER DISREGARD
OF SUBSTANTIAL EVIDENCE ON RECORD.
V.
RESPONDENT NLRC GRAVELY ABUSED ITS DISCRETION OR ACTED IN
EXCESS OF JURISDICTION IN DENYING THE MONEY CLAIMS OF THE
TWENTY-SEVEN (27) STRIKING EMPLOYEE-UNION MEMBERS FOR PAYMENT
OF THEIR WITHHELD SALARIES FOR THE PERIODS SEPTEMBER 2, 1994
OCTOBER 9, 1994 AND APRIL 6, 1995 JUNE 30, 1995.[28]
The Court of Appeals issued a Resolution directing the respondents to file
their Comment on the Petition.
In the meantime, the Foundation and the Union executed a new
CBA. Among the conditions for its approval was that the termination of the
Union officers as adjudged by the NLRC would not be enforced. However, the
Foundation reneged on this agreement and terminated the services of the
Union officers immediately after the new CBA was signed and approved
on August 12, 1999. [29]

On November 25, 1999, the CA rendered a Decision in CA-G.R. SP No.

53768, partially granting the petition, in that the money claims of the twenty-
seven employees were granted. The decretal portion of the decision reads:

WHEREFORE, FOREGOING PREMISES CONSIDERED, this petition is partially

granted and the assailed Decision released on February 9, 1994 and the Order
promulgated on April 30, 1994 are hereby MODIFIED in the sense that the
complaint for the payment of the money claims of the 27 employees are granted and
private respondent is hereby ordered to pay the money claims of the twenty-seven
(27) employees for the period covering September 2, 1994 to October 9, 1994 and
April 6, 1995 to June 30, 1995 while the rest of the assailed decision is affirmed in all
other respects. No pronouncement as to cost. [30]

The CA held that there was a valid service of the August 26, 1994 RTWO
of the SOLE on the petitioners and their counsel, Atty. Alfredo Bentulan, as
gleaned from the report of Sheriff Alfredo C. Antonio. It also ruled that for the
Union officers and members failure to return to work as ordered, the strike
was rendered illegal. Consequently, the said union officers and members
were deemed to have lost their employment status.
The CA ruled that the petitioners failed to prove the allegation of unfair
labor practice ascribed to the Foundation. It also declared that the evidence
on record shows that Calucin, Jr. was dismissed for gross and habitual
neglect of duties for his continued tardiness and inefficiency.
 However, the appellate court ruled that the August 30, 1994 Letter of the
petitioner, Ma. Consuelo Maquiling requesting that the 2:00-10:00
p.m. and 3:00-11:00 p.m. shifts be made to report on September 1, 1994 was
justified; hence, the refusal of the respondent Foundation to pay the money
claims of the twenty-seven employees was unjust and unfair.
Dissatisfied, the petitioners filed a motion for reconsideration of the
decision of the CA. For its part, the respondent Foundation filed a partial
motion for reconsideration of the decision, on the grant of the money claims of
the twenty-seven employees. On May 11, 2000, the appellate court resolved
to deny both motions.[31]

The Issues

On June 23, 2000, the petitioners filed a Petition for Review on certiorari
under Rule 45 of the Rules of Civil Procedure assailing the decision and
resolution of the CA, on the following grounds:
I
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING
THAT THERE WAS AN EFFECTIVE AND VALID SERVICE OF THE AUGUST 26,
1994 CERTIFICATION ORDER OF THE SECRETARY OF LABOR AND
EMPLOYMENT;
II
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN DECLARING
PETITIONER-UNION[S] STRIKE ILLEGAL WITH THE SUPREME PENALTY OF
THE LOSS OF EMPLOYMENT STATUS OF THE SIX (6) INDIVIDUAL
PETITIONERS WHICH WAS TAINTED WITH BAD FAITH OR MALICE
COMMITTED BY THE RESPONDENT FOUNDATION;
III
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN DISMISSING
THE CHARGES OF UNFAIR LABOR PRACTICE AGAINST THE RESPONDENT
FOUNDATION IN THE PRESENCE OF SUBSTANTIAL EVIDENCE ON THE SAID
CHARGES ON RECORD;
IV
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT RULING
THAT UNLAWFUL DISCRIMINATION TAINTED PETITIONER CALUCINS
TERMINATION FROM EMPLOYMENT.[32]

The issues for resolution are the following: (a) whether or not the
petitioners were validly served with copies of the return to work order of the
Secretary of the Department of Labor and Employment; (b) whether or not the
strike staged by the officers and members of the Union was illegal; (c)
whether the petitioner Unions officers were legally dismissed; and, (d) whether
or not the respondent Foundation committed an unfair labor practice when it
terminated the employment of petitioner Calucin, Jr.

The Courts Ruling

The petition is bereft of merit.

At the outset, we must stress that only errors of law are generally reviewed
by this Court in petitions for review on certiorari of CA decisions. Questions
[33]

of fact are not entertained. After all, this Court is not a trier of facts and, in
[34]

labor cases, this doctrine applies with greater force. Factual questions are for
labor tribunals to resolve. The findings of fact of quasi-judicial bodies like the
[35]

NLRC, are accorded with respect, even finality, if supported by substantial

evidence. Particularly when passed upon and upheld by the Court of Appeals,
they are binding and conclusive upon the Supreme Court and will not normally
be disturbed. [36]

Even then, we have meticulously reviewed the records and find no

reversible error committed by the Court of Appeals on the merits of the
petition.
On the first, second, and third issues, the petitioners assert that the
respondent Foundation failed to prove that the petitioners and their counsel
were served with copies of the August 26, 1994 Return-to-Work Order issued
by the Secretary of Labor and Employment and that, consequently, they could
not have defied the same.Hence, they insist they were illegally dismissed by
the respondent Foundation.
We do not agree. The return of Sheriff Alfredo C. Antonio irrefragably
shows that copies of the Order were served on the striking employees and the
petitioners. As gleaned from the Sheriffs Return, viz:

On 26 August 1994, the undersigned served copies of the Order issued in the above
captioned case to both parties. The Hospital thru Counsel received a copy of the Order
on 26 August 1994. On the other hand, the striking employees of the Hospital refused
to acknowledge receipt of the copies of the said Order necessitating the distribution of
the same to the striking workers at the picket line. [37]

A copy of the Order was served to Consuelo Maquiling at exactly 7:55 p.m. of 26
August 1994 but refused to receive officially. However, eight (8) copies of the Order
was (sic) distributed by the undersigned to the officers and members of the striking
workers.[38]

A copy of the order was also served on the petitioners counsel, Atty.
Alfredo Bentulan, but the latter refused to receive the same. This can be
gleaned from the following notation made by the sheriff:

Served at his office at 11:05 a.m. of 27 August 1994 but his staff refused to receive
the Order. A copy of the order was left by the undersigned to his staff.
[39]

It bears stressing that the sheriffs report is an official statement by him of

his acts under the writs and processes issued by the court in obedience to its
directive and in conformity with law. In the absence of contrary evidence, a
[40]

presumption exists that a sheriff has regularly performed his official duty. To [41]

controvert the presumption arising therefrom, there must be clear and

convincing evidence. In this case, the petitioners failed to adduce clear and
[42]

convincing evidence to overcome the presumption. The bare denial by the

petitioners of receiving copies of the order will not suffice.
The petitioners bare denial is even belied by their admission in their
position paper before the NLRC and their motion for reconsideration of the
decision of the NLRC, that while the sheriff served copies of the order on
them, they refused to receive the same because they thought it was a fake
order. In such case, it behooved the petitioners to verify its validity from the
Office of the Secretary of Labor and Employment. They failed to do so. The
petitioners cannot, thus, feign ignorance of the said order.
Despite the receipt of an order from then SOLE to return to their
respective jobs, the Union officers and members refused to do so and defied
the same. Consequently, then, the strike staged by the Union is a prohibited
activity under Article 264 of the Labor Code. Hence, the dismissal of its
officers is in order. The respondent Foundation was, thus, justified in
[43]

terminating the employment of the petitioner Unions officers.

On the last issue, the petitioners failed to prove their claim that the
respondent Foundation committed unfair labor practices and discrimination of
its employees. We agree with the following discerning findings and
encompassing disquisitions of the Court of Appeals on this issue:

However, the records of this case do not show any hint that Calucins [Jr.s] dismissal is
due to his trade union activities. On the other hand, per findings of the public
respondent, the Foundation was able to support with documents how Calucin [Jr.]
declared himself irrelevant in the Foundation through his tardiness and shallow
excuses such as fetching the water, cooking breakfast, seeing to it that his kids took
breakfast before going to school, preparing packed lunch for himself and even the
diversions from the usual route of jeepneys that he rode in on these days that he was
absent are all lame excuses that amount to lack of interest in his work. His lackluster
work attitude reached his highest point when he filed for a leave of absence of three
months to join his brothers business venture. Furthermore, it is not true that his
attendance improved in 1993 because the records show that in 1993, his tardiness
worsened to the point that his repeated tardiness went beyond the maximum
contemplated in the Foundations Code of Discipline.

For the foregoing reasons, Calucin, Jr.s dismissal is valid. (Meralco

Workers Union vs. Meralco, G.R. No. L-11896, May 29, 1959; Laguna
Transportation Employees Union versus Laguna Transport Co., Inc., G.R. No. L-
23266, April 25, 1968; Cando v. NLRC, G.R. [No.] 91344, September 14, 1990).

The rest of the charges on discrimination amounting to unfair labor practice acts
specifically those affecting the alleged tardiness of Edith Unlao, the meal breaks of
the dietary personnel, hazard pay for midwives, the salary of Carmen Herrera
including hiring through agency, the resignation of Cachuela, Francisco Rellevo,
Nestor Centeno, Nemia Abregoso and Grace Isidro are all dismissed on the ground
that the explanation of the Foundation per records of this case were found to be
meritorious.

The same holds true as regard the charges of unfair labor practice through alleged
harsh enforcement of the Code of Discipline, affecting Fe Calucin, Joan Balucos,
Edgar Bas, Victor Estuya and the suspension of unmarried pregnant women; including
the alleged violation of CBA provisions such as paying employees through BPI,
refusal to activate grievance committee and failure to maintain recreational activities.

The Foundation was able to explain and exculpate itself from the charges of unfair
labor practice and discrimination as shown in their written replies to these charges
which are all in the records of this case. Consequently, all the charges of unfair labor
practice acts are dismissed.

Thus, in the case of Castillo vs. NLRC, et al., L-104319, June 17, 1999, the Supreme
Court ruled:

As earlier pointed out, findings of the NLRC are practically conclusive on this
Court. It is only when the NLRCs findings are bereft of any substantial support from
the records that the Court may step in and proceed to make its own independent
evaluation of the facts. The Court has found none. [44]
 IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. The
Decision of the Court of Appeals in CA-G.R. SP No. 53768 is
AFFIRMED. Costs against the petitioners.
SO ORDERED.

[G.R. No. 123375. February 28, 2005]

GENARO BAUTISTA, petitioner, vs. HON. COURT OF APPEALS and

THE OFFICIALS AND BOARD OF DIRECTORS OF KAISAHAN AT
KAPATIRAN NG MGA MANGGAGAWA AT KAWANI SA
METROPOLITAN WATERWORKS AND SEWERAGE SYSTEM
UNION, REPRESENTED BY ITS PRESIDENT, PRUDENCIO
CRUZ, respondents.

DECISION
CHICO-NAZARIO, J.:

Before us is a petition for review on certiorari under Rule 45 of the 1997

Rules of Civil Procedure, assailing the Decision[1] and Resolution[2] of the
Court of Appeals, dated 09 October 1995 and 08 January 1996, respectively.
The court a quo, in said Decision, held that the jurisdiction to determine the
proper representative of employees in the Metropolitan Waterworks and
Sewerage System pertains to the Department of Labor and Employment,
more particularly to the Bureau of Labor Relations.

The Facts

On 07 May 1993, after a petition for election of officers of Kaisahan at

Kapatiran ng mga Manggagawa at Kawani sa Metropolitan Waterworks and
Sewerage System (KKMK-MWSS) was filed by Bonifacio De Guzman, former
auditor of KKMK-MWSS, a Resolution was issued by Perlita Bathan-Velasco,
in her capacity as Director of the Bureau of Labor Relations (BLR), the
decretal portion of which states:

Wherefore, the instant petition is hereby granted and the Kaisahan at Kapatiran ng
mga Manggagawa at Kawani sa Metropolitan Waterworks and Sewerage System
(KKMK-MWSS) is hereby directed to immediately conduct an election of the
following union officers: 1. President, 2. 1st Vice President, 3. 2nd Vice President, 4.
Executive Secretary, 5. Assistant Executive Secretary, 6. Treasurer, 7. Assistant
Treasurer, 8. Auditor, 9. Assistant Auditor, 10. Public Relations Officer, 11. Twenty
Three (23) Directors, 12. Four Sergeants at Arms, and 13. Business Manager, after the
usual pre-election conferences.

The Labor Organizations Division, this Bureau, shall supervise the conduct of said
election.[3]

A Motion for Reconsideration was filed by the incumbent officers of KKMK-

MWSS, led by its President, Genaro Bautista, with the BLR, but was denied
by Perlita Bathan-Velasco on 08 July 1993.
An appeal was filed with the Office of the Secretary of Labor and
Employment where the order of the BLR was assailed as having been issued
with grave abuse of discretion and without jurisdiction.[4]
On 24 August 1993, an Order was issued by the Office of the Secretary of
Labor and Employment, through Undersecretary Bienvenido Laguesma, part
of which reads:

Records clearly show that the subject of the present controversy is an intra union
conflict involving an employees organization in the public sector created and
registered pursuant to Executive Order No. 180. Consequently, this office (referring to
the Secretary of Labor and Employment) has no other recourse but to dismiss the
appeal for lack of jurisdiction.

...

Wherefore, the instant appeal is hereby dismissed for lack of jurisdiction.

Accordingly, let the entire records of this case be returned to the Bureau of Labor
Relations, for appropriate action.[5]

The then incumbent officers of KKMK-MWSS, represented by its

President, Genaro C. Bautista, filed a special civil action for certiorari which
was, however, dismissed. The Court, on 20 September 1993, issued the
following Resolution:

G.R. No. 111635 (Incumbent Officers of KKMK-MWSS represented by its President

Genaro C. Bautista v. Hon. Bienvenido E. Laguesma, in his capacity as
Undersecretary of Labor and Employment, Hon. Perlita Bathan-Velasco, in her
capacity as Officer-In-Charge of the Bureau of Labor Relations, Bonifacio De
Guzman and 544 other members of KKMK-MWSS). Acting on the special civil
action for certiorari, with prayer for the issuance of a temporary restraining order, the
Court Resolved to DISMISS the petition for being insufficient in form and substance,
and for want of a genuine justiciable issue.

Petitioners claim to be incumbent officers of the Kaisahan at Kapatiran ng mga

Manggagawa sa Metropolitan Waterworks and Sewerage System (KKMK-MWSS).
However, they are not individually named in the petition.

In the main, the petition argues that public respondents have no jurisdiction over an
intra-union dispute among government employees, hence, cannot order a new election
of officers. A cursory reading of the Order of 24 August 1993 issued by respondent
Undersecretary reveals that he agrees with this view. Thus

Records clearly show that the subject of the present

controversy is an intra-union conflict involving an employees
organization in the public sector created and registered
pursuant to Executive Order No. 180. Consequently, this
Office (referring to the Secretary of Labor and Employment)
has no other recourse but to dismiss the appeal for lack of
jurisdiction.
There is no valid issue therefore to be resolved in the
instant petition.[6]
This Resolution of the Court became final and executory on 27 October
1994 and was recorded in the Book of Entries of Judgments.[7]
Earlier, or on 25 November 1993, a Petition for Prohibition with Prayer for
a Temporary Restraining Order/Injunction[8] was filed by Genaro Bautista, et
al., against Perlita Bathan-Velasco, Director, Eugenia Fernandez, Med-
Arbiter, and Johnny P. Garcia, Chief, Labor Organizations Division, all of the
BLR, before the Regional Trial Court (RTC), Quezon City, Branch 87. The
petition sought to enjoin the herein respondents from proceeding with the
election of officers of KKMK-MWSS scheduled on 02 December 1993, and to
permanently prohibit them from exercising jurisdiction over the conduct of
election of the officers of the KKMK-MWSS.
On 26 November 1993, the RTC, Quezon City, Branch 87, through Judge
Elsie Ligot Telan, issued a temporary restraining order, quoted as follows:

A verified petition for prohibition with prayer for a temporary restraining

order/injunction has been filed by the plaintiffs. The petition being sufficient in form
and substance, and so as not to render the issues raised moot and academic, the
defendants are hereby ordered to temporarily refrain from proceeding with the
election of officers of the KKMK-MWSS scheduled on December 2, 1993, until
further orders from the Court.

Let the prayer for issuance of injunction be set for hearing on December 7, 1993 at
8:30 a.m., at which date and time, defendants may show cause why the same should
not be granted.

Let summons together with copies of the complaint be served upon the defendants.[9]

Copies of this Order were served upon the defendants therein on 29

November 1993.[10]
On 02 December 1993, the election of the officers of KKMK-MWSS
pushed through despite the issuance of the temporary restraining order.
Another Order was issued by Branch 87 on the same date, hereunder quoted:

Counsel for petitioners appeared today with an urgent ex-parte manifestation stating
that despite the order of this Court, dated November 26, 1993, restraining the
defendants temporarily from proceeding with the election of officers of the KKMK-
MWSS scheduled for today, until further orders, and that the officials of the MWSS
had been served copy of this order, the election is now being held in utter defiance
and disobedience of the said order of this Court.

To substantiate the above manifestation report are affidavits attached thereto executed
by Angelito Ignacio, alleged incumbent Asst. Treasurer of the KKMK-MWSS and
Mario Perez, incumbent assistant auditor, respectively, swearing to the truth that the
prohibited elections are now being held at the compounds of the MWSS, Balara,
Quezon City, and at Arroceros, Manila.

The defendants in this case together with Teofilo Asuncion and Gregorio Garcia, who
were furnished copy of the order and such other persons who are involved in
conducting [of] the election and/or sanctioning the same are hereby given up to 4:30
oclock this afternoon to explain why they should not be punished for contempt in
defying the order of this Court dated November 26, 1993.

The Court hereby reiterates its order restraining the defendants, their agents, assigns
and representatives, and any or all persons having to do with such elections,
specifically the management of the MWSS and all others acting in cooperation with
them or acting on their behalf or direction, from conducting or continuing or tolerating
the elections scheduled today.[11]

On 07 December 1993, another Order was issued by the RTC, Quezon

City, Branch 87, part of which reads:
. . . [T]he defendants, as well as all their agents, assigns, representatives and any or all
persons having to do with the elections, scheduled on December 2, 1993, including
the BLR officials and the management of the Metropolitan Waterworks and Sewerage
System, and all others cooperating with them, or acting on their behalf and direction,
are hereby restrained from continuing or tolerating the election process in question at
any stage thereof, and if already accomplished in defiance of the orders of this Court,
the said defendants are ordered to refrain from giving effect to the election by
ratifying and registering the same and recognizing the persons supposedly elected.
Further, the persons allegedly elected in said elections are hereby ordered to refrain
from assuming office and acting as officers of the KKMK-MWSS.[12]

On 28 December 1993, an order for the issuance of a writ of preliminary

injunction was issued by Branch 87.[13] A day later, or on 29 December 1993,
a Writ of Preliminary Injunction was issued by the RTC, the pertinent portion
of which reads:

NOW THEREFORE, you the respondents, your agents and representatives,

particularly the officers concerned ordering them until further orders of this Court to
refrain from giving any effect to the elections above adverted to by ratifying and
registering the same, and recognizing as officers the persons supposedly elected; and
for the latter to refrain from assuming office and acting as officers of the KKMK-
MWSS.[14]

After the case was re-raffled to Branch 220, RTC, Quezon City,[15] presided
by Judge Prudencio Altre Castillo, Jr., the respondents, on 20 June 1994, filed
a Reiteration of Motion to Dismiss and Motion to Lift Writ of Preliminary
Injunction,[16] on the ground of lack of jurisdiction and that the injunction does
not anymore serve its purpose.[17] Branch 220 issued an Order dated 01 July
1994, dismissing the case, the decretal portion of which states:

WHEREFORE, the instant case is dismissed. The Writ is ordered quashed and
Petitioners are hereby ordered to show cause why their injunction bond should not be
confiscated in favor of the respondents.[18]

A motion for reconsideration was filed by Bautista, et al., dated 16 July

1994, alleging among other things, that the RTC has jurisdiction considering
that the case before it was an action for prohibition, which was cognizable by
it.[19] As a result of which Branch 220 issued another Order[20] dated 27
December 1994 reinstating the Writ of Preliminary Injunction and injunction
bond.
 A motion for reconsideration was filed by the private respondents but was
denied by Branch 220 in its order dated 27 April 1995.[21]
On 18 May 1995, a petition for certiorari, prohibition and mandamus with
prayer for Preliminary Injunction and/or Restraining Order was filed before the
Court of Appeals by private respondents herein.[22] In it, the orders of Branch
220 dated 27 December 1994 and 27 April 1995 were assailed for having
been issued with grave abuse of discretion.
On 09 October 1995, a Decision was rendered by the Court of Appeals
finding for the private respondents, upholding that the BLR had jurisdiction
over an intra-union dispute, the dispositive portion of which reads:

IN VIEW OF THE FOREGOING PREMISES, the instant petition for certiorari,

prohibition and mandamus is hereby GRANTED. The assailed orders of December
27, 1994 and April 27, 1995 are hereby SET ASIDE and NULLIFIED for reasons
above-stated. No costs.[23]

Petitioner then filed a motion for reconsideration dated 27 October

1995,[24] but was denied by the court a quo in its Resolution dated 08 January
1996, which is quoted hereunder:

This Court hereby resolves the following:

(1) to DENY the motion for the issuance of temporary restraining order of the
petitioners, considering that the instant case has already been decided on
October 9, 1995;

(2) to DENY the motion for reconsideration of the respondents, it appearing

that there are no new issues raised which would warrant the reversal or
modification of Our decision.[25]

On 13 February 1996, a petition for review on certiorari was filed before

this Court by Genaro Bautista[26]seeking the reversal and setting aside of the
Decision and Resolution of the Court of Appeals cited earlier.
Meanwhile, on 28 May 1996, a petition for mandamus was filed by Genaro
Bautista, as President, and by the other officers [27] and members of the
board[28] of KKMK-MWSS against Angel L. Lazaro III, Administrator, MWSS,
and the Board of Trustees of MWSS, before the RTC, Quezon City, raffled
again to Branch 220, docketed as Sp. Proc. No. Q-96-27586.[29] In this
petition, it was prayed, among other things, that Angel Lazaro III and the
Board of Trustees of MWSS give due recognition to Genaro Bautista, et al., as
officers of KKMK-MWSS, and that the union dues be released to the latter.
On 27 June 1996, an Urgent Motion for Issuance of Temporary
Restraining Order[30] was filed before this Court by the private respondents
praying that Regional Trial Court Judge Prudencio Altre Castillo be enjoined
from hearing the mandamus case.
Then Associate Justice Teodoro R. Padilla, as Chairman of the First
Division, issued a Temporary Restraining Order on 08 July 1996, a portion of
which reads:

NOW, THEREFORE, you (respondents), your officers, agents, representatives, and/or

persons acting upon your orders or, in your place or stead, are hereby ENJOINED to
desist from hearing the case in SP Case No. Q-96-27586 entitled Genaro Bautista, et
al. vs. Angel L. Lazaro, Administrator, Metropolitan Waterworks and Sewerage
System (MWSS), Board of Trustees (MWSS).

A Motion to Lift Temporary Restraining Order[31] and a Supplemental

Motion[32] thereto were later filed by Genaro Bautista, et al.
Thereafter, petitioner Genaro Bautista filed an urgent motion to declare the
administrator, Angel L. Lazaro III, and manager, Erlich V. Barraquias, of the
Legal Department of the MWSS in indirect contempt of court.[33] The petitioner,
in this motion, alleged that Lazaro and Barraquias both failed to follow the
opinions rendered by the Office of the Government Corporate Counsel
(OGCC) to the effect that the petitioner and his set of officers are still the
rightful parties with whom MWSS management has to deal with in all union
matters as they continue to be the incumbent officers.[34] The Court issued a
Resolution[35] dated 18 June 1997 requiring the said administrator and
manager to comment on the motion. A joint comment was thereafter filed by
Lazaro and Barraquias dated 28 July 1997. In it, they contended that the first
two opinions rendered by the OGCC were overtaken by the Decision and
Resolution of the Court of Appeals, now the subjects of this petition for review
on certiorari, wherein it declared that the regular courts have no jurisdiction to
prohibit the holding of the election of the officers and members of the board of
KKMK-MWSS, as it is lodged with the BLR. When they again sought the
guidance of the OGCC as to the effect of the aforementioned Decision of the
Court of Appeals, another opinion was issued by the OGCC which, they said,
did not resolve that question but instead merely reiterated its previous
opinions deviant to the conclusions of the Court of Appeals.[36]
 THE ISSUE AND PENDING INCIDENTS

The bombardment of cases filed before several fora notwithstanding, the

solitary question raised by the petitioner is simply whether or not the RTC has
jurisdiction over a case involving an intra-union dispute (election of officers) of
an employees organization in the public sector (MWSS).[37]
Stated in another way, does the BLR have jurisdiction to call for and
conduct the election of officers of an employees association in the public
sector?
Pending resolution in the instant case are the motions to lift the temporary
restraining order in the mandamuscase before the lower court and to declare
the administrator and the manager of the Legal Department of the MWSS in
indirect contempt of court.

THE COURTS RULINGS

The decision of the Court of Appeals relied on our earlier ruling in the case
of Association of Court of Appeals Employees (ACAE) v. Ferrer-Calleja.[38] In
this case, we held that the BLR has the jurisdiction to call for and supervise
the conduct of certification elections in the public sector, viz:

. . . In the same way that CSC validly conducts competitive examinations to grant
requisite eligibilities to court employees, we see no constitutional objection to DOLE
handling the certification process in the Court of Appeals, considering its expertise,
machinery, and experience in this particular activity. Executive Order No. 180
requires organizations of government employees to register with both CSC and
DOLE. This ambivalence notwithstanding, the CSC has no facilities, personnel, or
experience in the conduct of certification elections. The BLR has to do the job.

Executive Order No. 180 states that certificates of registration of the legitimate
employee representatives must be jointly approved by the CSC Chairman and the
DOLE Secretary. Executive Order No. 180 is not too helpful in determining whose
opinion shall prevail if the CSC Chairman and the DOLE Secretary arrive at different
conclusions. At any rate, we shall deal with that problem when it occurs. Insofar as
power to call for and supervise the conduct of certification elections is concerned,
we rule against the petitioner.[39]

The petitioner contends that the aforecited case finds no application in the
case at bar for the following reasons.
 First, the ACAE case involved a conflict between two government unions
in the Court of Appeals, a situation not obtaining in the instant case because
what is involved here is only one and the same employees organization, the
KKMK-MWSS.[40]
Second, the ACAE case concerned a certification election, i.e., which
between the two government unions should be considered as the bargaining
unit before the Court of Appeals, while the present case embraces the issue
of who among the members of the organization shall be elected as officers
and members of the board.[41]
The petitioner likewise advances the theory that the power of the BLR, as
found in Executive Order No. 180, is limited only to the registration of a union
in a government corporation, and to call for a certification election.[42]
Moreover, the petitioner assails the ruling of the court a quo to the effect
that his group participated in the questioned elections and submitted
themselves to the jurisdiction of the BLR. According to him, the records will
readily show that they did not in any way join in it.[43]
We disagree in petitioners assertions, hence, the petition must fail.
It may be true that the ACAE case involved a certification election between
two unions in a government entity. However, this does not mean that our
previous ruling cannot apply in the instant case.
The authority of the BLR in assuming jurisdiction over a certification
election, or any inter-union or intra-union conflicts, is found in Article 226 of
the Labor Code of the Philippines, which reads:

ART. 226. BUREAU OF LABOR RELATIONS. The Bureau of Labor Relations and
the Labor Relations Division in the regional offices of the Department of Labor shall
have original and exclusive authority to act, at their own initiative or upon request of
either or both parties, on all inter-union and intra-union conflicts, and all disputes,
grievances or problems arising from or affecting labor-management relations in all
workplaces whether agricultural or nonagricultural, except those arising from the
implementation or interpretation of collective bargaining agreements which shall be
the subject of grievance procedure and/or voluntary arbitration.

The Bureau shall have fifteen (15) working days to act on labor cases before it,
subject to extension by agreement of the parties.

It is quite clear from this provision that BLR has the original and exclusive
jurisdiction on all inter-union and intra-union conflicts. An intra-union conflict
would refer to a conflict within or inside a labor union, and an inter-union
controversy or dispute, one occurring or carried on between or among
unions.[44] The subject of the case at bar, which is the election of the officers
and members of the board of KMKK-MWSS, is, clearly, an intra-union conflict,
being within or inside a labor union. It is well within the powers of the BLR to
act upon. The petitioner is asking us to make an illogical edict by declaring
that our ruling in the ACAE case, considering that it involved an inter-union
conflict, should not apply to the instant case for the reason that the latter
involves an intra-union conflict. This, we cannot do because the law is very
clear on this matter.
Executive Order No. 180 (1987),[45] particularly Section 16 thereof, is
completely lucid as to the settlement of disputes involving government
employees, viz:

SEC. 16. The Civil Service and labor laws and procedures, whenever applicable,
shall be followed in the resolution of complaints, grievances and cases involving
government employees.[46]

Since Article 226 of the Labor Code has declared that the BLR shall have
original and exclusive authority to act on all inter-union and intra-union
conflicts, then there should be no more doubt as to its jurisdiction.
We likewise find bereft of merit petitioners claim that his group did not in
any way participate in the subject elections, and therefore, the principle of
estoppel cannot apply.
In the Order of the RTC dated 01 July 1994, it appears that the petitioner,
indeed, participated in the election. A portion of the Order states:

Candidate Votes

Genaro C. Bautista 288

Prudencio Cruz 1080
Bonifacio De Guzman 1081[47]

The petitioner was, undoubtedly, a candidate in the election. The 288

votes for him were counted in his favor.
Further, the petitioner and his group submitted a list of candidates before
the BLR dated 04 October 1993[48], which included the name of petitioner
himself.
WHEREFORE, in view of all the foregoing, the assailed Decision and
Resolution of the Court of Appeals being in accord with law, are hereby
AFFIRMED. Accordingly, the Urgent Motion to Declare the Administrator and
Manager, Legal Department, MWSS, in indirect contempt of court is DENIED,
and the temporary restraining order earlier issued is hereby made permanent.
Costs against the petitioner.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.
ition denied.

[G.R. No. 142297. June 15, 2004]

HOME DEVELOPMENT MUTUAL FUND, petitioner, vs. COMMISSION

ON AUDIT, respondent.

DECISION
AZCUNA, J.:

Before us is a petition for certiorari under Rule 65 of the Rules of Court

alleging that the Commission on Audit acted in excess of its jurisdiction or with
grave abuse of discretion amounting to lack of jurisdiction in issuing
Resolution No. 2000-086 dated March 7, 2000, which affirmed COA Decision
No. 98-245 dated June 16, 1998.COA Decision No. 98-245 affirmed the audit
disallowance of payment of productivity incentive bonus by petitioner Home
Development Mutual Fund (HDMF) to its personnel pursuant to Republic Act
No. 6971, otherwise known as the Productivity Incentives Act of 1990.
The facts are as follows:
Republic Act No. 6971, An Act to Encourage Productivity and Maintain
Industrial Peace by Providing Incentives to Both Labor and Capital, was
approved on November 22, 1990, and took effect on December 9, 1990.
Section 3 of said Act states:

Sec. 3. Coverage.-- This Act shall apply to all business enterprises with or without
existing and duly recognized or certified labor organizations, including government-
owned and controlled corporations performing proprietary functions. It shall cover all
employees and workers including casual, regular, supervisory and managerial
employees.
 The Secretary of Labor and Employment and the Secretary of Finance
promulgated the Rules Implementing Republic Act No. 6971 on June 4, [1]

1991. Rule II of said implementing rules provides:

Section 1. Coverage. These Rules shall apply to:

(a) All business enterprises with or without existing duly recognized or

certified labor organizations, including government-owned and
controlled corporations performing proprietary functions;

(b) All employees and workers including casual, regular, rank-and-file,

supervisory and managerial employees.

On November 21, 1991, petitioner HDMF granted Productivity Incentive

Bonus equivalent to one month salary plus allowance to all its personnel
pursuant to Republic Act No. 6971, and its Implementing Rules. [2]

The HDMF granted said bonus despite the advice on August 26, 1991 of
Undersecretary Salvador Enriquez of the Department of Budget and
Management (DBM) to all government-owned and controlled corporations
(GOCCs) and government financial institutions (GFIs) with original charters
performing proprietary functions to defer payment of the productivity incentive
bonus to their employees, pending the issuance of a definite ruling by the
Office of the President on the matter. [3]

On December 27, 1991, the Department of Labor and Employment and

the Department of Finance issued the Supplemental Rules Implementing
Republic Act No. 6971, which provides, thus:

Section 1.Paragraph (a) Section 1, Rule II of the Rules Implementing RA 6971, shall
be amended to read as follows:

Coverage. These Rules shall apply to:

(a) All business enterprises with or without existing duly certified labor organizations
including government-owned and controlled corporations performing proprietary
functions which are established solely for business or profit or gain and
accordingly excluding those created, maintained or acquired in pursuance of a
policy of the state, enunciated in the constitution or by law, and those whose
officers and employees are covered by the Civil Service. (Emphasis supplied.)

On November 29, 1996, the grant of productivity incentive bonus to the

HDMF personnel in the total amount of P5,136,710.91 was disallowed in audit
under Notice of Disallowance No. 96-006-101 (91). The disallowance was
[4]

based on COA Decision No. 96-288, dated June 4, 1996, stating that Republic
Act No. 6971 does not apply to government-owned or controlled corporations
or to government financial institutions with original charters performing
proprietary functions, such as the HDMF. [5]

In a letter-request dated May 28, 1997, HDMF, through its President and
Chief Executive Officer, Zorayda Amelia C. Alonzo, requested for the lifting of
the disallowance. Alonzo argued that Republic Act No. 6971 applies to the
[6]

employees of HDMF since the coverage of the said law includes government-
owned and controlled corporations performing proprietary functions, and the
supplemental rules excluding it from coverage was issued after the HDMF had
already granted the productivity incentive bonus to its employees.
In its Decision No. 98-245 dated June 16, 1998, the Commission on Audit
[7]

affirmed the audit disallowance. It ruled, thus:

xxxxxxxxx

Appellant (petitioner herein) further averred that while the Supplemental Rules
Implementing R.A. No. 6971 issued by the Department of Labor and Employment
and the Department of Finance dated December 27, 1991, exclude from the coverage
of R.A. No. 6971 GOCCs whose officers and employees are covered by the Civil
Service Law (like the HDMF), payment of the incentive bonus have been effected
prior to the issuance of the said supplemental rules. Simply stated, it is the position of
the appellant that the supplemental rules should not be given retroactive effect.

The Commission finds the appellants arguments untenable. It must be noted that the
grant of the Productivity Incentive Bonus was made on November 21, 1991 or after
receipt of the advice of the Department of Budget and Management Undersecretary
dated August 26, 1991 to defer payment of Productivity Incentive Bonus to all
GOCCs/GFIs with original charters performing proprietary functions, pending
definite ruling of the Office of the President. Despite the said notice, management
proceeded with the payment.

Likewise, the issue as to whether or not GOCCs/GFIs with original charters which are
performing proprietary functions are covered by R.A. No. 6971 had been resolved by
the Secretary of Justice in his letter dated November 8, 1995, stating that GOCCs with
original charter, being covered by the Civil Service Law, and not by the labor laws,
are clearly outside the ambit of R.A. No. 6971.

Verily, the grant of the incentive bonus is contrary to the Supplemental Rules
Implementing R.A. No. 6971 issued by the Department of Labor and Employment
and the Department of Finance dated December 27, 1991, portion of which pertinently
reads as follows:

All business enterprises x x x established solely for business of profit or gain and
accordingly, excluding those created, maintained or acquired in pursuance of a policy
of the state, enunciated in the constitution or by law, and those whose officers and
employees are covered by the Civil Service (underscoring supplied).

Moreover, the issue raised by the appellant that the supplemental rules excluding
GOCCs/GFIs from the coverage of R.A. No. 6971 should not be given retroactive
effect is not tenable since the HDMF from the very beginning is not covered by the
aforesaid law.

Premises considered, the audit disallowance is hereby affirmed, and the refund of the
amount of P5,136,710.91 granted as Productivity Incentive Bonus to HDMF
personnel based on the provisions of R.A. No. 6971 shall be enforced accordingly.

HDMF filed a motion for reconsideration that was denied by the

Commission on Audit in Resolution No. 2000-086 dated March 7, 2000. [8]

Hence, this petition.

Petitioner raises three issues: [9]

1. What is the applicable rule at the time of the grant of the Productivity Incentive
Bonus?
2. Whether the Memorandum from the Department of Finance signed by Secretary
Jesus P. Estanislao dated January 16, 1992 constitutes appropriate authorization
for the grant of Productivity Incentive Allowance for 1991.
3. Whether the Supplemental Implementing Rules are valid? If so, whether it may be
given retroactive effect?

Petitioner contends that when it granted the productivity incentive bonus to

its personnel on November 21, 1991, no other rule but the Implementing
Rules of Republic Act No. 6971 dated June 4, 1991 was in existence.Said
Rule includes in its coverage government-owned and controlled corporations
performing proprietary functions, without any qualification. The Supplementary
Rules, which excluded petitioner from coverage, was issued only after it had
already granted the productivity incentive bonus to its personnel. Hence, the
employees already acquired a vested right over the productivity incentive
bonus.
The contention is without merit.
 Association of Dedicated Employees of the Philippine Tourism Authority
(ADEPT) v. Commission on Audit, held that the legislature intended Republic
[10]

Act No. 6971 to cover only government-owned and controlled corporations

incorporated under the general corporation law, thus:

Petitioner cites an entry in the journal of the House of Representatives to buttress its
submission that PTA is within the coverage of RA 6971, to wit:

Chairman Veloso: The intent of including government-owned and controlled

corporations within the coverage of the Act is the recognition of the principle that
when government goes into business, it (divests) itself of its immunity from suit and
goes down to the level of ordinary private enterprises and subjects itself to the
ordinary laws of the land just like ordinary private enterprises. Now, when people
work therefore in government-owned or controlled corporations, it is as if they are
also, just like in the private sector, entitled to all the benefits of all laws that apply to
workers in the private sector. In my view, even including the right to organize,
bargain VELOSO (Bicameral Conference committee on Labor and Employment, pp.
15-16).

After a careful study, the Court is of the view, and so holds, that contrary to
petitioners interpretation, the government-owned and controlled corporations Mr.
Chairman Veloso had in mind were government-owned and controlled corporations
incorporated under the general corporation law. This is so because only workers in
private corporations and government-owned and controlled corporations, incorporated
under the general corporation law, have the right to bargain (collectively). Those in
government corporations with special charter, which are subject to Civil Service
Laws, have no right to bargain (collectively), except where the terms and conditions
of employment are not fixed by law. Their rights and duties are not comparable with
those in the private sector. (Emphasis supplied.)

xxxxxxxxx

The legislative intent to place only government-owned and controlled corporations

performing proprietary functions under the coverage of RA 6971 is gleanable from the
other provisions of the law. For instance, section 2 of said law envisions industrial
peace and harmony and to provide corresponding incentives to both labor and capital;
section 4 refers to representatives of labor and management, section 5 mentions of
collective bargaining agent(s) of the bargaining unit(s); section 6 relates to existing
collective bargaining agreements, and labor and management; section 7 speaks of
strike or lockout; and section 9 purports to seek the assistance of the
National Conciliation and Mediation Board of the Department of Labor and
Employment and include the name(s) of the voluntary arbitrator or panel of voluntary
arbitrators. All the aforecited provisions of law apply only to private corporations
and government-owned and controlled corporations organized under the general
corporation law. Only they have collective bargaining agents, collective bargaining
units, collective bargaining agreements, and the right to strike or lockout. (Emphasis
supplied.)

To repeat, employees of government corporations created by special charters have

neither the right to strike nor the right to bargain collectively, as defined in the Labor
Code. The case of Social Security System Employees Association indicates the
following remedy of government workers not allowed to strike or bargain collectively,
to wit:

Government employees may, therefore, through their unions or associations, either

petition the Congress for the betterment of the terms and conditions of employment
which are within the ambit of legislation or negotiate with the appropriate
government agencies for the improvement of those which are not fixed by law. If there
be any unresolved grievances, the dispute may be referred to the Public Sector Labor-
Management Council for appropriate action. But employees in the civil service may
not resort to strikes, walkouts and other temporary work stoppages, like workers in the
private sector, to pressure the Government to accede to their demands. (supra,
footnote 14, p. 698; italics ours)

It is a rule in statutory construction that every part of the statute must be interpreted
with reference to the context, i.e., that every part of the statute must be considered
together with the other parts, and kept subservient to the general intent of the whole
enactment. The provisions of RA 6971, taken together, reveal the legislative intent to
include only government-owned and controlled corporations performing proprietary
functions within its coverage.

Petitioner is a government-owned and controlled corporation performing

proprietary functions with original charter or created by special law,
specifically Presidential Decree (PD) No. 1752, amending PD No. 1530. As
[11]

such, petitioner HDMF is covered by the Civil Service pursuant to Article IX,
Section 2(1) of the 1987 Constitution, and, therefore, excluded from the
[12]

coverage of Republic Act No. 6971.

Since Republic Act No. 6971 intended to cover only government-owned
and controlled corporations incorporated under the general corporation law,
the power of administrative officials to promulgate rules in the implementation
of the statute is necessarily limited to what is intended and provided for in the
legislative enactment. Hence, the Supplemental Rules clarified that
[13]

government-owned and controlled corporations performing proprietary

functions which are created, maintained or acquired in pursuance of a policy
of the state, enunciated in the constitution or by law, and those whose officers
and employees are covered by the Civil Service are excluded from the
coverage of Republic Act No. 6971.
Therefore, even if petitioner HDMF granted the Productivity Incentive
Bonus before the Supplemental Rules were issued clarifying that petitioner
was excluded from the coverage of Republic Act No. 6971, the employees of
HDMF did not acquire a vested right over said bonus because they were not
entitled to it under Republic Act No. 6971.
Moreover, the DBM advised petitioner herein, HDMF, on August 26, 1991,
to defer payment of the productivity incentive bonus to their employees,
pending the issuance of a definite ruling by the Office of the President on the
matter. Despite said advice, the Board of Trustees of HDMF opted to grant the
said bonus on a voluntary basis as stated in its Resolution No. 91-549, Series
of 1991. It expressed its concern over the welfare of the officers and
[14]

employees of the Fund rather than adhering to the stringent technicality of the
law. The Board, therefore, was aware that possibly HDMF may not be
covered by Republic Act No. 6971. It should have exercised prudence by
awaiting the definite ruling on the coverage to prevent legal problems.
Regarding the validity of the Supplemental Rules Implementing Republic
Act No. 6971, ADEPT v.Commission on Audit held that said rules issued by
the Secretary of Labor and Employment and the Secretary of Finance were in
accord with the intendment and provisions of Republic Act No. 6971. [15]

Petitioner further claims that it is covered by a memorandum, dated [16]

January 16, 1992, which was allegedly issued by Secretary Jesus P.

Estanislao, Department of Finance, stating that [a]s authorized by the
President, the GFIs are to pay the traditional PIA at the year-end 1991,
following the standard formulas that have been observed by the GFIs over the
years. Petitioner raises as an issue whether or not said memorandum
constitutes appropriate authorization for its grant of productivity incentive
allowance for 1991.
Parenthetically, the decision of the Commission on Audit subject of the
petition herein, never discussed the aforesaid memorandum. The same, in
any case, cannot prevail over the law.
Petitioner finally asserts that its payment of the productivity incentive
bonus to its personnel and the latters acceptance of the same was in good
faith and cites ADEPT v. Commission on Audit as precedent against a refund
of said bonus.
 In ADEPT v. Commission on Audit, docketed as G.R. No. 119597, the
Court sustained the decision of the Commission on Audit affirming the
disallowance by the Corporate Auditor of the productivity incentive bonus
granted to ADEPT (an association of employees of the Philippine Tourism
Authority) for calendar year 1992 pursuant to Republic Act No. 6971. ADEPT
v. Commission on Audit was consolidated with four other cases, which did not
involve the application of Republic Act No. 6971. It was in the other cases,
docketed as G.R. Nos. 109406, 110642, 111494 and 112056, that the Court
enjoined further deductions from the salaries and allowances of petitioners
therein.
In view of the foregoing, the respondent Commission on Audit did not
commit grave abuse of discretion amounting to lack of jurisdiction in affirming
the audit disallowance.
WHEREFORE, the petition is DISMISSED. Respondent Commission on
Audits Resolution No. 2000-086, dated March 7, 2000, which affirmed COA
Decision No. 98-245, dated June 16, 1998, is hereby AFFIRMED.
Costs de oficio.
SO ORDERED
.R. No. 170132 December 6, 2006

GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS) and

WINSTON F. GARCIA, in his capacity as GSIS President & General
Manager, petitioners,
vs.
KAPISANAN NG MGA MANGGAGAWA SA GSIS, respondents.
FACTS: Forming a huge part of the October 4 to October 7, 2004 mass action
participants were GSIS personnel, among them members of the herein respondent
Kapisanan Ng Mga Manggagawa sa GSIS (“KMG” or the “Union”), a public sector
union of GSIS rank-and-file employees.
On or about October 10, 2004, the manager of the GSIS Investigating Unit issued a
memorandum directing 131 union and non-union members to show cause why they
should not be charged administratively for their participation in said rally. In reaction,
KMG’s counsel, Atty. Manuel Molina, sought reconsideration of said directive on the
ground, among others, that the subject employees resumed work on October 8, 2004
in obedience to the return-to-work order thus issued. The plea for reconsideration was,
however, effectively denied by the filing, on October 25, 2004, of administrative
charges against some 110 KMG members for grave misconduct and
conduct prejudicial to the best interest of the service.
KMG filed a petition for prohibition with the CA against these charges. The CA
granted the petition and enjoined the GSIS from implementing the issued formal
charges and from issuing other formal charges arising from the same facts and events.
CA equated the right to form associations with the right to engage in strike and similar
activities available to workers in the private sector. In the concrete, the appellate court
concluded that inasmuch as GSIS employees are not barred from forming, joining or
assisting employees’ organization, petitioner Garcia could not validly initiate charges
against GSIS employees waging or joining rallies and demonstrations notwithstanding
the service-disruptive effect of such mass action.
ISSUE: WON the strike conducted by the GSIS employees were valid
HELD: NO
The 1987 Constitution expressly guaranteeing, for the first time, the right of
government personnel to self-organization to complement the provision according
workers the right to engage in “peaceful concerted activities, including the right to
strike in accordance with law.”. It was against the backdrop of the aforesaid
provisions of the 1987 Constitution that the Court resolved Bangalisan v. Court of
Appeals. In it, we held, citing MPSTA v. Laguio, Jr., that employees in the
public service may not engage in strikes or in concerted and
unauthorized stoppage of work; that the right of government
employees to organize is limited to the formation of unions or
associations, without including the right to strike.
Specifically, the right of civil servants to organize themselves was positively
recognized in Association of Court of Appeals Employees vs. Ferrer-Caleja. But, as in
the exercise of the rights of free expression and of assembly, there are standards
for allowable limitations such as the legitimacy of the purpose of the
association, [and] the overriding considerations of national security.
As regards the right to strike, the Constitution itself qualifies its exercise with the
provision “in accordance with law.” This is a clear manifestation that the state may,
by law, regulate the use of this right, or even deny certain sectors such right.
Executive Order 180 which provides guidelines for the exercise of the right of
government workers to organize, for instance, implicitly endorsed an earlier CSC
circular which “enjoins under pain of administrative sanctions, all government
officers and employees from staging strikes, demonstrations, mass leaves, walkouts
and other forms of mass action which will result in temporary stoppage or disruption
of public service” by stating that the Civil Service law and rules governing concerted
activities and strikes in government service shall be observed.
Public employees going on disruptive unauthorized absences to join concerted mass
actions may be held liable for conduct prejudicial to the best interest of the service.
With the view we take of the events that transpired on October 4-7, 2004, what
respondent’s members launched or participated in during that time partook of a strike
or, what contextually amounts to the same thing, a prohibited concerted activity. The
phrase “prohibited concerted activity” refers to any collective activity undertaken by
government employees, by themselves or through their employees’ organization, with
the intent of effecting work stoppage or service disruption in order to realize their
demands or force concessions, economic or otherwise; it includes mass leaves,
walkouts, pickets and acts of similar nature. Indeed, for four straight days,
participating KMG members and other GSIS employees staged a walk out and waged
or participated in a mass protest or demonstration right at the very doorstep of the
GSIS main office building. The record of attendance for the period material shows
that, on the first day of the protest, 851 employees, or forty eight per cent (48%) of the
total number of employees in the main office (1,756) took to the streets during office
hours, from 6 a.m. to 2 p.m.,leaving the other employees to fend for themselves in an
office where a host of transactions take place every business day. On the second day,
707 employees left their respective work stations, while 538 participated in the mass
action on the third day. A smaller number, i.e., 306 employees, but by no means an
insignificant few, joined the fourth day activity.
In whatever name respondent desires to call the four-day mass action in October 2004,
the stubborn fact remains that the erring employees, instead of exploring non-
crippling activities during their free time, had taken a disruptive approach to attain
whatever it was they were specifically after. As events evolved, they assembled in
front of the GSIS main office building during office hours and staged rallies and
protests, and even tried to convince others to join their cause, thus provoking work
stoppage and service-delivery disruption, the very evil sought to be forestalled by the
prohibition against strikes by government personnel.
To petitioner Garcia, as President and General Manager of GSIS, rests the authority
and responsibility, under Section 45 of Republic Act No. 8291, the GSIS Act of 1997,
to remove, suspend or otherwise discipline GSIS personnel for cause. At bottom then,
petitioner Garcia, by filing or causing the filing of administrative charges against the
absenting participants of the October 4-7, 2004 mass action, merely performed a duty
expected of him and enjoined by law. Regardless of the mood petitioner Garcia was in
when he signed the charge sheet, his act can easily be sustained as legally correct and
doubtless within his jurisdiction.
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