[Labor 2] | [Certification of Designated Majority Union] 1
[Digest maker]
Philippine Diamond Hotel v Manila
Diamond Hotel Employees Union
[GR NO. 158075] | [30 June 2006] | [Carpio-Morales, J.]
Petitioner: Philippine Diamond Hotel and Resort, Inc. (Manila
Diamond Hotel)
Respondent: Manila Diamond Hotel Employees Union
FACTS
 The union, registered before DOLE, filed a petition for
certification election before DOLE NCR seeking certification
as the exclusive bargaining representative of its members.
 DOLE-NCR denied the petition
 Union failed to comply with legal requirements and
was seen to fragment the employees of petitioner
 The union, through president Kimpo, later notified petitioner of
its intention to negotiate, by Notice to Bargain, a CBA for its
members
 HRD Manager Mary Anne Mangalindan advised
the union that it could not bargain because it
was not certified by the DOLE as the exclusive
bargaining agent
 Union clarified that it sought to bargain for its
members only and that the Hotel’s refusal to
bargain would prompt the union to engage in
concerted activities to protect and assert its rights
under the Labor Code.
 By Notice to its members, the union announced that its
executive officers and directors would go on strike in view of
the management’s refusal to bargain collectively.
 They called for the taking of strike vote.
 Petitioner then issued a Final Reminder and Warning to
respondent against continuing misinformation campaign and
activities which confused the employees and disturbed their
work performance.
 Notice of Strike was filed with the NCMB for unfair labor
practice
 Hotel’s refusal to bargain and that the rank-and-file
employees were being harassed and prevented
from joining
 Conciliation conferences were conducted by NCMB
during which, the union insisted on the adoption of a
CBA for its members
 In one of the conferences (Nov 20, 1997), the union
demanded the holding of a consent election. Hotel
did not object, merely requested that the election be
held in Jan 1998
 (Nov. 29) Union suddenly went on strike.
 National Union of Workers in the Hotel, Restaurant
and Allied Industries (NUWHRAIN) joined the strike
and openly extended its support
 Hotel supervisors Vicente Agustin, Rowena Junio
and Mary Grace de Leon participated in the strike
as such, they failed to report for work
 A petition for injunction was filed by petitioner before the
NLRC to enjoin the strikers
 Mary Grace, when directed to explain, alleged that
she was trying to pacify the group, but this was
belied by an eye witness; she was terminated which
prompted her to file an illegal dismissal case
 Agustin and Rowena also filed a similar complaint
after being terminated.
 NLRC representative, who conducted an ocular inspection of
the Hotel premises confirmed that the strikers obstructed the
free ingress to and egress from the Hotel.
  NLRC issued a TRO, directing the strikers to immediately
cease and desist from obstructing the way to the Hotel
premises.
 Petitioner filed a petition to declare the strike illegal
 SOLE Trajano’s attempts to conciliate the parties
failed. Order was issued certifying the dispute to the
NLRC for compulsory arbitration, upon union’s
petition for assumption of jurisdiction
 Striking officers and members were directed to
return to work within 24 hours and the Hotel to
accept them under the same terms and conditions
before the strike
 Petitioner filed an MR. Then DOLE Acting Sec.
Jose Espanol modified Trajano’s Order by directing
the Hotel to reinstate the strikers to its payroll and
ordering that all cases between them arising out of
labor disputes before Labor Arbiters be
consolidated with the NLRC case for compulsory
arbitration.
 (Nov. 19, 1999) NLRC declared the strike illegal
 The union officers and members who were
reinstated to the Hotel’s payroll were deemed to
have lost their employment status. Illegal dismissal
complaints as well as ULP case dismissed.
 CA affirmed the NLRC resolution that the strike is illegal and
the illegal dismissal complaints is correctly dismissed but it
modified the NLRC resolution by ordering the reinstatement
with backwages of union members.
ISSUE
1. WON the strike was legal NO.
2. WON petitioner’s refusal to bargain with respondent can
be considered a ULP to justify the strike  NO.
3. WON those ordered reinstated are entitled to backwages
NO.
RATIO
1. WON the strike was legal  NO.
a. Petitioner argues that NLRC already declared that the
union officers and members have lost their employment
as a consequence of their illegal strike. In the event
NLRC’s decision is not upheld insofar as the union
members’ termination is concerned, petitioner should
not be held liable to pay their backwages.
b. On the other hand, respondent prays for the dismissal
of the petition, arguing that the strike was legal and
done in good faith; that even assuming arguendo that
the strike started as an illegal strike, it became legal
after the hotel committed ULP during the strike. Even
assuming arguendo, that the strike was illegal,
jurisprudence and LC 264 directs the reinstatement
and payment of full backwages.
c. SC finds the strike illegal. As provided by Art 255, (now
267), only the labor organization designated or
selected by the majority of the employees in an
appropriate collective bargaining unit is the exclusive
representative of the employees in such unit for
collective bargaining. Respondent union is not the
exclusive representative of the majority of the
employees hence, it could not demand the right to
bargain collectively.
d. Respondent’s reliance on Art 242 (now 251), in arguing
that it could bargain in behalf of its members is
misplaced. Art 242 is a general provision on the rights
of legitimate labor organization. It must be read in
relation to Art 255.
e. If the union is allowed to bargain on behalf of its
members, it would only fragment the employees of
petitioner, dividing the rank-and file members from
other workers. Those who are not members would be
at a serious disadvantage for they cannot be able to
negotiate their terms and conditions. This would defeat
the very essence and reason of collective bargaining –

so safeguard against the evil schemes of employers in
terms and conditions of work.
2. WON petitioner’s refusal to bargain with respondent can
be considered a ULP to justify the strike  NO.
a. The burden of proof is on the union to prove its
allegations by substantial evidence. What is stated in
their petition are only general allegations.
b. While the union continues to accuse the Hotel of
violating the former’s constitutional right to organize by
busting the union, the Court noted that the facts and
evidence failed to establish a rational basis for the
union to stage a strike when the union could have
substantiated it during the conciliatory meeting.
c. The Union’s principal ground for the strike was the
refusal of the Hotel Management to bargain
collectively with the Union for the benefit of the
latter’s members. Petitioner Union is not a certified
bargaining unit to negotiate a CBA.
d. Respondent violated Art 264 which proscribes the
staging of a strike on the ground of ULP during the
pendency of cases involving the same grounds for the
strike.
e. The exercise of the right of private sector employees to
strike is not absolute. It is qualified in Sec 3 of Art XIII
of the Constitution that it be in accordance with law.
f. Appellate court was correct in holding that the union
officers should be dismissed for staging and
participating in the illegal strike. Art 264(a) paragraph 3
provides that ". . .[a]ny union officer who knowingly
participates in an illegal strike and any worker or union officer
who knowingly participates in the commission of illegal acts
during strike may be declared to have lost his employment
status . . ."
g. An ordinary striking worker cannot be dismissed for
mere participation in an illegal strike. It must be proven
[Labor 2] | [Certification of Designated Majority Union] 3
[Digest maker]
that he committed illegal acts. On the other hand, a
union officer may be dismissed by merely participating
in an illegal strike.
h. In the case at hand, photographs show that some of
the workers-strikers who joined the strike committed
illegal acts – blocking the entrance and exit of the
Hotel, holding noise barrage; but because the list failed
to specifically identify the ones who actually committed
illegal acts, the case should be remanded to the LA
through the NLRC to determine the respective liabilities
of the strikers.
3. WON those ordered reinstated are entitled to backwages
 NO.
a. The general rule is that backwages shall not be
awarded in an economic strike on the principle that “a
fair day’s wage” accrues only for a “fair day’s labor.”
b. [JP Heilbronn Co v National Labor Union] If there is no
work performed by the employee, there can be no
wage or pay, unless the laborer was able, willing and
ready to work but was illegally locked out, dismissed or
suspended. But for this exception to apply, the strike
must first be legal.
DECISION
 CA decision affirmed with modification: only those union
members who did not commit illegal acts during the course of
the illegal strike should be reinstated. No backwages.
 Case remanded to LA through NLRC to identify members who
did not commit such illegal acts. If reinstatement is no longer
feasible, separation pay at the rate of 1 month pay for every
year of service shall be awarded.
APPENDIX
DIGESTER’S NOTES / TABLES/ ILLUSTRATIONS

Art 255 (now Art 267). EXCLUSIVE BARGAINING

REPRESENTATION AND WORKERS’ PARTICIPATION IN POLICY
AND DECISION-MAKING

The labor organization designated or selected by the majority of the

employees in an appropriate collective bargaining unit shall be
the exclusive representative of the employees in such unit for the
purpose of collective bargaining. However, an individual employee or
group of employees shall have the right at any time to present
grievances to their employer.

Any provision of law to the contrary notwithstanding, workers shall

have the right, subject to such rules and regulations as the Secretary
of Labor and Employment may promulgate, to participate in policy
and decision-making process of the establishment where they are
employed insofar as said processes will directly affect their rights,
benefits and welfare. For this purpose, workers and employers may
form labor-management councils: Provided, That the representatives
of the workers in such labor management councils shall be elected
by at least the majority of all employees in said establishment.