Gold city Integrated Port Srvices vs NLRC As regards the six private respondents who were union officers,
respondents who were union officers, the
Should separation pay and backwages be awarded by public
respondent NLRC to participants of an illegal strike? This is the core
issue to be decided in these two petitions.
Gold City Integrated Port Service, Inc. (INPORT) filed a petition
for certiorari against the National Labor Relations Commission (NLRC)
assailing the latter's decision in "Gold City Integrated Port Services, Inc.
v. Adelo Ebuna, et al." (NLRC RAB X Case No. 5-0405-85) with twenty-
seven private respondents (G.R. No. 103599).1 This petition has been
consolidated with G.R. No. 103599 where the petitioners are the private
respondents in instant case and the private respondent is INPORT. For
the sake of clarity, INPORT shall be denominated in the case at bench
as the petitioner and the employees as private respondents.
Instant case arose from the following facts:
Early in the morning of April 30, 1985, petitioner's employees stopped
working and gathered in a mass action to express their grievances
regarding wages, thirteenth month pay and hazard pay. Said employees
were all members of the Macajalar Labor Union — Federation of Free
Workers (MLU-FFW) with whom petitioner had an existing collective
bargaining agreement.
Petitioner was engaged in stevedoring and arrastre services at the port
of Cagayan de Oro. The strike paralyzed operations at said port.
On the same morning, the strikers filed individual notices of strike
("Kaugalingon nga Declarasyon sa Pag-Welga") with the then Ministry
of Labor and Employment.
With the failure of conciliation conferences between petitioner and the
strikers, INPORT filed a complaint before the Labor Arbiter for Illegal
Strike with prayer for a restraining order/preliminary injunction.
On May 7, 1985, the National Labor Relations Commission issued a
temporary restraining order. Thereafter, majority of the strikers returned
to work, leaving herein private respondents who continued their protest.2
Counsel for private respondents filed a manifestation that petitioner
required prior screening conducted by the MLU-FFW before the
remaining strikers could be accepted back to work.
Meanwhile, counsel for the Macajalar Labor Union (MLU-FFW) filed a
"Motion to Drop Most of the Party Respondents From the Above Entitled
Case." The 278 employees on whose behalf the motion was filed,
claimed that they were duped or tricked into signing the individual
notices of strike. After discovering this deception and verifying that the
strike was staged by a minority of the union officers and members and
without the approval of, or consultation with, majority of the union
members, they immediately withdrew their notice of strike and returned
to work.
The petitioner INPORT, not having interposed any objection, the Labor
Arbiter, in his decision dated July 23, 1985, granted their prayer to be
excluded as respondents in the complaint for illegal strike. Moreover,
petitioner's complaint was directed against the 31 respondents who did
not return to work and continued with the strike.
For not having complied with the formal requirements in Article 264 of
the Labor Code,3 the strike staged by petitioner's workers on April 30,
1985 was found by the Labor Arbiter to be illegal. 4 The workers who
participated in the illegal strike did not, however, lose their employment,
since there was no evidence that they participated in illegal acts. After
noting that petitioner accepted the other striking employees back to
work, the Labor Arbiter held that the private respondents should similarly
be allowed to return to work without having to undergo the required
screening to be undertaken by their union (MLU-FFW).
Labor Arbiter ruled that they could not have possibly been "duped or
tricked" into signing the strike notice for they were active participants in
the conciliation meetings and were thus fully aware of what was going
on. Hence, said union officers should be accepted back to work after
seeking reconsideration from herein petitioner.5
The dispositive portion of the decision reads:
IN VIEW OF THE FOREGOING, it is hereby ordered that the
strike undertaken by the officers and majority union members
of Macajalar Labor Union-FFW is ILLEGAL contrary to Article
264 of the Labor Code, as amended. Our conclusion on the
employment status of the illegal strikers is subject to our
discussion above.6
Both petitioner and private respondents filed motions for
reconsideration, which public respondent NLRC treated as appeals.7
On January 14, 1991, the NLRC affirmed with modification8 the Arbiter's
decision. It held that the concerted action by the workers was more of a
"protest action" than a strike. Private respondents, including the six
union officers, should also be allowed to work unconditionally to avoid
discrimination. However, in view of the strained relations between the
parties, separation pay was awarded in lieu of reinstatement. The
decretal portion of the Resolution reads:
WHEREFORE, the decision appealed from is Affirmed with
modification in accordance with the foregoing resolution.
Complainant INPORT is hereby ordered, in lieu of
reinstatement, to pay respondents the equivalent of twelve
(12) months salaries each as separation pay. Complainant is
further ordered to pay respondents two (2) years backwages
based on their last salaries, without qualification or deduction.
The appeal of complainant INPORT is Dismissed for lack of
merit.9
Upon petitioner's motion for reconsideration, public respondent modified
the above resolution on December 12, 1991. 10
The Commission ruled that since private respondents were not actually
terminated from service, there was no basis for reinstatement. However,
it awarded six months' salary as separation pay or financial assistance
in the nature of "equitable relief." The award for backwages was also
deleted for lack of factual and legal basis. In lieu of backwages,
compensation equivalent to P1,000.00 was given.
The dispositive portion of the assailed Resolution reads:
WHEREFORE, the resolution of January 14, 1991
is Modified reducing the award for separation pay to six (6)
months each in favor of respondents, inclusive of lawful
benefits as well as those granted under the CBA, if any, based
on the latest salary of respondents, as and by way of financial
assistance while the award for backwages is Deleted and Set
Aside. In lieu thereof, respondents are granted compensation
for their sudden loss of employment in the sum of P1,000.00
each. The motion of respondents to implead PPA as third-
party respondent is Noted. Except for this modification the rest
of the decision sought to be reconsidered shall stand. 11
In the instant petitions for certiorari, petitioner alleges that public
respondent Commission committed grave abuse of discretion in
awarding private respondents separation pay and backwages despite
the declaration that the strike was illegal.
On the other hand, private respondents, in their petition, assail the
reduction of separation pay and deletion of backwages by the NLRC as
constituting grave abuse of discretion.
They also allege that the Resolution of January 14, 1991 could not be
reconsidered after the unreasonable length of time of eleven months.
Before proceeding with the principal issues raised by the parties, it is
necessary to clarify public respondent's statements concerning the
strike staged by INPORT's employees.
In its resolution dated January 14, 1991, the NLRC held that the facts
prevailing in the case at bench require a relaxation of the rule that the
formal requisites for a declaration of a strike are mandatory.
Furthermore, what the employees engaged in was more of a
spontaneous protest action than a strike. 12
Nevertheless, the Commission affirmed the Labor Arbiter's decision
which declared the strike illegal.
A strike, considered as the most effective weapon of labor, 13 is defined
as any temporary stoppage of work by the concerted action of
employees as a result of an industrial or labor dispute. 14 A labor dispute
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 or not the disputants
stand in the proximate relation of employers and employees. 15
Private respondents and their co-workers stopped working and held the
mass action on April 30, 1985 to press for their wages and other benefits.
What transpired then was clearly a strike, for the cessation of work by
concerted action resulted from a labor dispute.
The complaint before the Labor Arbiter involved the legality of said strike.
The Arbiter correctly ruled that the strike was illegal for failure to comply
with the requirements of Article 264 (now Article 263) paragraphs (c) and
(f) of the Labor Code. 16
The individual notices of strike filed by the workers did not conform to
the notice required by the law to be filed since they were represented by
a union (MLU-FFW) which even had an existing collective bargaining
agreement with INPORT.
Neither did the striking workers observe the strike vote by secret ballot,
cooling-off period and reporting requirements.
As we stated in the case of National Federation of Sugar Workers v.
Ovejera, 17 the language of the law leaves no room for doubt that the
cooling-off period and the seven-day strike ban after the strike-vote
report were intended to be mandatory. 18
Article 265 of the Labor Code reads, inter alia:
(i)t SHALL be unlawful for any labor organization . . . to declare
a strike . . . without first having filed the notice required in the
preceding Article or without the necessary strike vote first
having been obtained and reported to the Ministry. (Emphasis
ours)
In explaining the above provision, we said:
In requiring a strike notice and a cooling-off period,
the avowed intent of the law is to provide an
opportunity for mediation and conciliation. It thus
directs the MOLE to exert all efforts at mediation
and conciliation to effect a voluntary settlement'
during the cooling-off period. . . .
xxx xxx xxx
The cooling-off period and the 7-day strike ban after
the filing of a strike-vote report, as prescribed in Art.
264 of the Labor Code, are reasonable restrictions
and their imposition is essential to attain the
legitimate policy objectives embodied in the law.
We hold that they constitute a valid exercise of the
police power of the state. 19
From the foregoing, it is patent that the strike on April 30, 1985
was illegal for failure to comply with the requirements of the
law.
The effects of such illegal strikes, outlined in Article 265 (now
Article 264) of the Labor Code, make a distinction between
workers and union officers who participate therein.
A 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 their employment status. 20 An ordinary striking
worker cannot be terminated for mere participation in an illegal
strike. There must be proof that he committed illegal acts
during a strike. A union officer, on the other hand, may be
terminated from work when he knowingly participates in an
illegal strike, and like other workers, when he commits an
illegal act during a strike.
In the case at bench, INPORT accepted the majority of the
striking workers, including union officers, back to work. Private
respondents were left to continue with the strike after they
refused to submit to the "screening" required by the
company. 21
The question to be resolved now is what these remaining
strikers, considering the circumstances of the case, are
entitled to receive under the law, if any.
Are they entitled, as they claim, to reinstatement or separation
pay and backwages?
In his decision, the Labor Arbiter ordered INPORT to
reinstate/accept the remaining workers as well as to accept
the remaining union officers after the latter sought
reconsideration from INPORT. 22
The NLRC on January 14, 1991, modified the above decision
by ordering INPORT to pay private respondents the
equivalent of twelve months in salary as separation pay in lieu
of reinstatement and two years' backwages. 23
On reconsideration, public respondent modified its original
award and reduced the separation pay to six months, deleted
the award for backwages and instead awarded P1,000.00 as
compensation for their sudden loss of employment. 24
Under the law, an employee is entitled to reinstatement and
to his full backwages when he is unjustly dismissed. 25
Reinstatement means restoration to a state or condition from
which one had been removed or separated. Reinstatement
and backwages are separate and distinct reliefs given to an
illegally dismissed employee. 26
Separation pay is awarded when reinstatement is not
possible, due, for instance, to strained relations between
employer and employee.
It is also given as a form of financial assistance when a worker
is dismissed in cases such as the installation of labor saving
devices, redundancy, retrenchment to prevent losses, closing
or cessation of operation of the establishment, or in case the
employee was found to have been suffering from a disease
such that his continued employment is prohibited by law. 27
Separation pay is a statutory right defined as the amount that
an employee receives at the time of his severance from the
service and is designed to provide the employee with the
wherewithal during the period that he is looking for another
employment. 28 It is oriented towards the immediate future,
the transitional period the dismissed employee must undergo
before locating a replacement job. 29
Hence, an employee dismissed for causes other than those
cited above is not entitled to separation pay. 30 Well-settled is
it that separation pay shall be allowed only in those instances
where the employee is validly dismissed
for causes other than serious misconduct or those reflecting
on his moral character. 31
Backwages, on the other hand, is a form of relief that restores
the income that was lost by reason of unlawful dismissal. 32
It is clear from the foregoing summary of legal provisions and
jurisprudence that there must generally be unjust or illegal
dismissal from work, before reinstatement and backwages
may be granted. And in cases where reinstatement is not
possible or when dismissal is due to valid causes, separation
pay may be granted.
Private respondents contend that they were terminated for
failure to submit to the controversial "screening" requirement.
Public respondent Commission took the opposite view and
held:
As the evidence on record will show, respondents
were not actually terminated from the service. They
were merely made to submit to a screening
committee as a prerequisite for readmission to
work. While this condition was found not wholly
justified, the fact remains that respondents who are
resistant to such procedure are partly responsible
for the delay in their readmission back to work.
Thus, We find justifiable basis in further modifying
our resolution of January 14, 1991 in accordance
with the equities of the case.
We shall therefore recall the award for backwages
for lack of factual and legal basis. The award for
separation pay shall likewise (be) reasonably
reduced. Normally, severance benefit is granted as
an alternative remedy to reinstatement. And since
there is no dismissal to speak of, there is no basis
for awarding reinstatement as a legal remedy. In
lieu thereof, We shall grant herein respondents
separation pay as and by way of financial
assistance in the nature of an "equitable relief". 33
We find that private respondents were indeed dismissed when
INPORT refused to accept them back to work after the former
refused to submit to the "screening" process.
Applying the law (Article 264 of the Labor Code) which makes
a distinction, we differentiate between the union members and
the union officers among private respondents in granting the
reliefs prayed for.
Under Article 264 of the Labor Code, a worker merely
participating in an illegal strike may not be terminated from his
employment. It is only when he commits illegal acts during a
strike that he may be declared to have lost his employment
status. Since there appears no proof that these union
members committed illegal acts during the strike, they cannot
be dismissed. The striking union members among private
respondents are thus entitled to reinstatement, there being no
just cause for their dismissal.
However, considering that a decade has already lapsed from
the time the disputed strike occurred, we find that to award
separation pay in lieu of reinstatement would be more
practical and appropriate.
No backwages will be awarded to private respondent-union
members as a penalty for their participation in the illegal strike.
Their continued participation in said strike, even after most of
their co-workers had returned to work, can hardly be rewarded
by such an award.
The fate of private respondent-union officers is different. Their
insistence on unconditional reinstatement or separation pay
and backwages is unwarranted and unjustified. For knowingly
participating in an illegal strike, the law mandates that a union
officer may be terminated from employment. 34
Notwithstanding the fact that INPORT previously accepted
other union officers and that the screening required by it was
uncalled for, still it cannot be gainsaid that it possessed the
right and prerogative to terminate the union officers from
service. The law, in using the word may, grants the employer
the option of declaring a union officer who participated in an
illegal strike as having lost his employment. 35
Moreover, an illegal strike which, more often than not, brings
about unnecessary economic disruption and chaos in the
workplace should not be countenanced by a relaxation of the
sanctions prescribed by law.
The union officers are, therefore, not entitled to any relief.
However, the above disquisition is now considered moot and
academic and cannot be effected in view of a manifestation
filed by INPORT dated May 15, 1987. 36 In said Manifestation,
it attached a Certification by the President of the Macajalar
Labor Union (MLU-FFW) to the effect that the private
respondents/remaining strikers have ceased to be members
of said union. The MLU-FFW had an existing collective
bargaining agreement with INPORT containing a union
security clause. Article 1, Section 2(b) of the CBA provides:
The corporation shall discharge, dismiss or
terminate any employee who may be a member of
the Union but loses his good standing with the
Union and or corporation, upon proper notice of
such fact made by the latter; provided, however, . .
. after they shall have received the regular
appointment as a condition for his continued
employment with the corporation. . . . 37
Since private respondents (union members) are no longer
members of the MLU, they cannot be reinstated. In lieu of
reinstatement, which was a proper remedy before May 1987
when they were dismissed from the union, we award them
separation pay. We find that to award one month salary for
every year of service until 1985, after April of which year they
no longer formed part of INPORT's productive work force
partly through their own fault, is a fair settlement.
Finally, there is no merit in INPORT's statement that a
Resolution of the NLRC cannot be modified upon
reconsideration after the lapse of an unreasonable period of
time. Under the present circumstances, a period of eleven
months is not an unreasonable length of time. The Resolution
of the public respondent dated January 14, 1991 did not
acquire finality in view of the timely filing of a motion for
reconsideration. Hence, the Commission's modified
Resolution issued on December 12, 1991 is valid and in
accordance with law.
In sum, reinstatement and backwages or, if no longer feasible,
separation pay, can only be granted if sufficient bases exist
 under the law, particularly after a showing of illegal dismissal.
However, while the union members may thus be entitled
under the law to be reinstated or to receive separation pay,
their expulsion from the union in accordance with the
collective bargaining agreement renders the same
impossible.
The NLRC's award of separation pay as "equitable relief" and
P1,000.00 as compensation should be deleted, these being
incompatible with our findings detailed above.
WHEREFORE, from the foregoing premises, the petition in
G.R. No. 103560 ("Gold City Integrated Port Service Inc. v.
National Labor Relations Commission, et al.") is GRANTED.
One month salary for each year of service until 1985 is
awarded to private respondents who were not union officers
as separation pay. The petition in G.R. No. 103599 ("Adelo
Ebuna, et al. v. National Labor Relations Commission, et al.")
is DISMISSED for lack of merit. No costs.
SO ORDERED.
Samahang manggagawa sa SupicioLines vs Sulpicio
A strike is a powerful weapon of the working class. But like a sensitive
explosive, it must be handled carefully, lest it blows up in the workers
own hands.1 Thus, the right to strike has to be pursued within the bounds
of law.
For our resolution is the instant Petition for Review on Certiorari under
Rule 45 of the 1997 Rules of Civil Procedure, as amended, assailing the
Decision2 dated May 28, 1999 and the Resolution3 dated November 25,
1999 rendered by the Court of Appeals in CA-G.R. SP No. 51322,
entitled "Samahang Manggagawa sa Sulpicio Lines, Inc. NAFLU v.
National Labor Relations Commission and Sulpicio Lines, Inc."
The factual antecedents as gleaned from the records
are:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
On February 5, 1991, Sulpicio Lines, Inc. (herein respondent) and the
Samahang Manggagawa sa Sulpicio Lines Inc. NAFLU (herein
petitioner) executed a collective bargaining agreement (CBA) with a
term of five (5) years (from October 17, 1990 to October 16, 1995).
After three (3) years or on December 15, 1993, petitioner union and
respondent company started their negotiation on the CBAs economic
provisions.4 But this negotiation remained at stalemate.
On March 1, 1994, petitioner filed with the National Conciliation and
Mediation Board (NCMB), National Capital Region, a notice of strike due
to collective bargaining deadlock, docketed as NCMB-NCR-NS-03-118-
94.
For its part, respondent, on March 21, 1994, filed with the Office of the
Secretary, Department of Labor and Employment a petition praying that
the Labor Secretary assume jurisdiction over the controversy.
On March 23, 1994, former Labor Secretary Nieves R. Confesor issued
an Order assuming jurisdiction over the labor dispute pursuant to Article
263 (g) of the Labor Code, as amended, thus:
"WHEREFORE PREMISES CONSIDERED, this Office assumes
jurisdiction over the labor dispute at Sulpicio Lines, Inc. pursuant to
Article 263 (g) of the Labor Code, as amended.
"Accordingly, any strike or lockout whether actual or intended is hereby
enjoined.
"Further, the parties are directed to cease and desist from committing
any and all acts that might exacerbate the situation.
"SO ORDERED."
Meanwhile, on May 20, 1994, petitioner filed with the NCMB a second
notice of strike alleging that respondent company committed
acts5 constituting unfair labor practice amounting to union busting,
docketed as NCMB NCR-05-261-94.
Provoked by respondents alleged unfair labor practice/s, petitioner union
immediately conducted a strike vote. Thus, on May 20, 1994, about 9:30
oclock in the morning, 167 rank-and-file employees, officers and
members of petitioner, did not report for work and instead gathered in
front of Pier 12, North Harbor at Manila.
As a remedial measure, former Labor Secretary Confesor issued an
Order dated May 20, 1994 directing the striking employees to return to
work; and certifying the labor dispute to the National Labor Relations
Commission (NLRC) for compulsory arbitration. This certified labor
dispute was docketed as NLRC Case No. CC-0083-94.
Meanwhile, respondent company filed with the NLRC a complaint for
"illegal strike/clearance for termination," docketed as NLRC NCR Case
No. 00-05-04705-94.
On September 29, 1995, the NLRC issued a Resolution6 declaring the
strike of petitioners officers and members illegal, with notice to
respondent of the option to terminate their (petitioners officers)
employment. In the same Resolution, the NLRC dismissed petitioners
complaint against respondent, thus:
"WHEREFORE, premises considered, after a careful and judicious
consideration of the facts, arguments and evidence thus adduced, it is
the considered opinion of thie Commission that the union (Samahang
Manggagawa sa Sulpicio Lines, Inc.) had clearly engaged in an illegal
strike on May 20, 1994, when its officers and members actively
participated in a well concerted refusal, stoppage and cessation to
render work at Sulpicio Lines, Inc.. In clear violation not only of the
procedural requirements of a valid strike, but worse, in clear and blatant
contravention of the assumption order of the Secretary of Labor and
Employment. Consequently, the following union officers named in the
complaint, to wit:
are declared to have lost their employment status with the
company, and the latter may now, if it so desires, terminate their
employment with it. The unions complaint against the company is
hereby DISMISSED for lack of merit.
"SO ORDERED."
Petitioner filed a motion for reconsideration but was denied by the NLRC
in a Resolution7 dated January 15, 1996.
On March 19, 1996, petitioner filed with this Court a petition
for certiorari assailing the NLRC Resolutions. Pursuant to our ruling
in St. Martins Funeral Home v. NLRC,8 we referred the petition to the
Court of Appeals for its appropriate action and disposition.
On May 28, 1999, the Court of Appeals rendered a Decision affirming
the NLRC Resolutions. The Appellate Court held (1) that the NLRC has
jurisdiction to resolve the issue of legality of the strike; (2) that the May
20, 1994 temporary work stoppage by the officers and members of
petitioner amounted to an illegal strike; (3) that even assuming that
respondent committed unfair labor practice/s, still, the strike is illegal
because it failed to comply with the mandatory procedural requirements
of a valid strike under Article 263 (c) and (f) of the Labor Code, as
amended; and (4) that the dismissal of petitioners officers who knowingly
participated in an illegal strike is in accordance with Article 264 (a) of the
Labor Code, as amended.
On October 20, 1995, petitioner filed a motion for reconsideration but
was denied by the Court of Appeals in a Resolution dated November 25,
1999.
Hence, this Petition for Review on Certiorari . Petitioner alleged that the
Court of Appeals seriously erred (1) in holding that the one-day work
stoppage of petitioners officers and members is an illegal strike; (2) in
sustaining the dismissal from the service of its officers; and (3) in ruling
that the NLRC has jurisdiction over a petition to declare the strike illegal.
The basic issue for our determination is whether the strike staged by
petitioners officers and members is illegal. Articles 263 and 264 of the
Labor Code, as amended, provide:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
"ART. 263. STRIKES, PICKETING AND LOCKOUTS.
xxx
(c) In cases of bargaining deadlocks, the duly certified or recognized
bargaining agent may file a notice of strike x x x with the Ministry (now
Department) at least 30 days before the intended date thereof. In cases
of unfair labor practice, the period of notice shall be 15 days and in
the absence of a duly certified or recognized bargaining agent, the notice
of strike may be filed by any legitimate labor organization in behalf of its
members. However, in case of dismissal from employment of union
officers duly elected in accordance with the union constitution and by-
laws, which may constitute union busting where the existence of
the union is threatened, the 15-day cooling-off period shall not
apply and the union may take action immediately.
xxx
(f) A decision to declare a strike must be approved by a majority of
the total union membership in the bargaining unit concerned,
obtained by secret ballot in meetings or referenda called for that
purpose. x x x. The decision shall be valid for the duration of the dispute
based on substantially the same grounds considered when the strike or
lockout vote was taken. The Ministry (now Department) may at its own
initiative or upon the request of any affected party, supervise the conduct
of the secret balloting. In every case, the union x x x shall furnish the
Ministry (now Department) the results of the voting at least seven
days before the intended strike or lockout, subject to the cooling-
off period herein provided.
x x x.
ART. 264. PROHIBITED ACTIVITIES.
(a) No labor organization or employer shall declare a strike or
lockout without first having bargained collectively in accordance with
Title VII of this Book or without first having filed the notice required in the
preceding article or without the necessary strike or lockout vote first
having been obtained and reported to the Ministry (now
Department).
x x x."
Following are the Implementing Guidelines of the above provisions
issued by the Department of Labor and Employment:
1. A strike shall be filed with the Department of Labor and Employment
at least 15 days if the issues raised are unfair labor practice or at least
30 days if the issue involved bargaining deadlock. However, in case of
dismissal from employment of union officers duly elected in accordance
with the union constitution and by-laws, which may constitute union
busting where the existence of the union is threatened, the 15-day
cooling-off period shall not apply and the union may take action
immediately;chanroblesvirtuallawlibrary
2. The strike shall be supported by a majority vote of the members of the
union obtained by secret ballot in a meeting called for the purpose;
andcralawlibrary
3. A strike vote shall be reported to the Department of Labor and
Employment at least seven (7) days before the intended strike.
There is no showing that the petitioner union observed the 7-day strike
ban; and that the results of the strike vote were submitted by petitioners
to the Department of Labor and Employment at least seven (7) days
before the strike.
We thus hold that for failing to comply with the mandatory requirements
of Article 263 (c) and (f) of the Labor Code, the strike mounted by
petitioner union on May 20, 1994 is illegal.
In Gold City Integrated Port Service, Inc. v. NLRC,9 we stressed that "the
language of the law leaves no room for doubt that the cooling-off
period and the seven-day strike ban after the strike-vote report were
intended to be mandatory."
But petitioner insists that the strike can still be declared legal for it was
done in good faith, being in response to what its officers and members
honestly perceived as unfair labor practice or union busting committed
by respondent.
Petitioners accusation of union busting is bereft of any proof. We
scanned the records very carefully and failed to discern any evidence to
sustain such charge.
In Tiu v. NLRC,10 we held:
"x x x. It is the union, therefore, who had the burden of proof to
present substantial evidence to support its allegations (of unfair
labor practices committed by management) .
"x x x.
"x x x, but in the case at bar the facts and the evidence did not establish
even at least a rational basis why the union would wield a strike based
on alleged unfair labor practices it did not even bother to substantiate
during the conciliation proceedings. It is not enough that the union
believed that the employer committed acts of unfair labor practice
when the circumstances clearly negate even a prima facie showing
to warrant such a belief."
We explained in National Federation of Labor v. NLRC11 that "with the
enactment of Republic Act No. 6715 which took effect on March 21,
1989, the rule now is that such requirements as the filing of a notice
of strike, strike vote, and notice given to the Department of Labor
are mandatory in nature. Thus, even if the union acted in good faith
in the belief that the company was committing an unfair labor
practice, if no notice of strike and a strike vote were conducted, the
said strike is illegal."
In a desperate attempt to justify its position, petitioner insists that what
transpired on May 20, 1994 was not a strike but merely a "one-day work
absence"12 or a "simple act of absenteeism".13 ςrνll
We are not convinced. A strike, as defined in Article 212 (o) of the Labor
Code, as amended, means "any temporary stoppage of work by the
concerted action of employees as a result of an industrial or labor
dispute." The term "strike" shall comprise not only concerted work
stoppages, but also slowdowns, mass leaves, sitdowns, attempts to
damage, destroy or sabotage plant equipment and facilities, and similar
activities.14 ςrνll
The basic elements of a strike are present in the case at bar. First,
petitioners officers and members numbering 167, in a concerted
manner, did not report for work on May 20, 1994; second, they gathered
in front of respondents office at Pier 12, North Harbor at Manila to
participate in a strike voting conducted by petitioner; and third, such
union activity was an aftermath of petitioners second notice of strike by
reason of respondents unfair labor practice/s. Clearly, what transpired
then was a strike because the cessation of work by petitioners concerted
action resulted from a labor dispute.
Invoking compassion, petitioner pleads that its officers who participated
in the one-day strike should not be dismissed from the service,
considering that respondents business activities were not interrupted,
much less paralyzed. While we sympathize with their plight, however,
we must take care that in the contest between labor and capital, the
results achieved are fair and in conformity with the law.15 ςrνll
Pertinent is Article 264 (a) of the same Code, thus:
"ART. 264. PROHIBITED ACTIVITIES.
"x x x. 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.
x x x."
It is worth reiterating that the strike is illegal for failure of petitioner to
submit the strike vote to the Department of Labor and Employment at
least seven (7) days prior thereto. Also, petitioner failed to prove that
respondent company committed any unfair labor practice. Amid this
background, the participation of the union officers in an illegal strike
forfeits their employment status.
In Telefunken Semiconductors Employees Union-FFW v. Secretary of
Labor and Employment,16 we explained
"The effects of such illegal strikes, outlined in Article 265 (now Article
264) of the Labor Code, make a distinction between workers and union
officers who participate therein.
"A 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 their employment
status. An ordinary striking worker cannot be terminated for mere
participation in an illegal strike. There must be proof that he
committed illegal acts during a strike. A union officer, on the other
hand, may be terminated from work when he knowingly
participates in an illegal strike, and like other workers, when he
commits an illegal act during a strike."
Moreover, petitioner maintains that the Labor Arbiter, not the NLRC,
should have taken cognizance of the case at bar. We do not agree.
In International Pharmaceuticals, Inc. v. Secretary of Labor and
Employment,17 we held:
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, 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 (underscoring supplied).
"In the same manner, when the Secretary of Labor and Employment
certifies the labor dispute to the NLRC for compulsory arbitration
the latter is concomitantly empowered to resolve all questions and
controversies arising therefrom including cases otherwise
belonging originally and exclusively to the Labor Arbiter."
WHEREFORE, the petition is DENIED. The Decision and Resolution of
the Court of Appeals dated May 28, 1999 and November 25, 1999 are
hereby AFFIRMED.
SO ORDERED.
Philcom Employees Union v PH Global Comm
The Case
This is a Petition for Review 1 to annul the Decision2 dated 31 July 2000
of the Court of Appeals in CA-G.R. SP No. 53989. The Court of Appeals
affirmed the assailed portions of the 2 October 1998 and 27 November
1998 Orders of the Secretary of Labor and Employment in OS-AJ-0022-
97.
The Facts
The facts, as summarized by the Court of Appeals, are as follows:
Upon the expiration of the Collective Bargaining Agreement (CBA)
between petitioner Philcom Employees Union (PEU or union, for brevity)
and private respondent Philippine Global Communications, Inc.
(Philcom, Inc.) on June 30, 1997, the parties started negotiations for the
renewal of their CBA in July 1997. While negotiations were ongoing,
PEU filed on October 21, 1997 with the National Conciliation and
Mediation Board (NCMB) - National Capital Region, a Notice of Strike,
docketed as NCMB-NCR-NS No. 10-435-97, due to perceived unfair
labor practice committed by the company (Annex "1", Comment, p.
565, ibid.). In view of the filing of the Notice of Strike, the company
suspended negotiations on the CBA which moved the union to file on
November 4, 1997 another Notice of Strike, docketed as NCMB-NCR-
NS No. 11-465-97, on the ground of bargaining deadlock (Annex "2",
Comment, p. 566, ibid.)
On November 11, 1997, at a conciliation conference held at the NCMB-
NCR office, the parties agreed to consolidate the two (2) Notices of
Strike filed by the union and to maintain the status quo during the
pendency of the proceedings (Annex "3", Comment, p.
567, ibid.).chanroblesvirtuallawlibrary
On November 17, 1997, however, while the union and the company
officers and representatives were meeting, the remaining union officers
and members staged a strike at the company premises, barricading the
entrances and egresses thereof and setting up a stationary picket at the
main entrance of the building. The following day, the company
immediately filed a petition for the Secretary of Labor and Employment
to assume jurisdiction over the labor dispute in accordance with Article
263(g) of the Labor Code.
On November 19, 1997, then Acting Labor Secretary Cresenciano B.
Trajano issued an Order assuming jurisdiction over the dispute,
enjoining any strike or lockout, whether threatened or actual, directing
the parties to cease and desist from committing any act that may
exacerbate the situation, directing the striking workers to return to work
within twenty-four (24) hours from receipt of the Secretary's Order and
for management to resume normal operations, as well as accept the
workers back under the same terms and conditions prior to the strike.
The parties were likewise required to submit their respective position
papers and evidence within ten (10) days from receipt of said order
(Annex "4", Comment, pp. 610-611, ibid.). On November 28, 1997, a
second order was issued reiterating the previous directive to all striking
employees to return to work immediately.
On November 27, 1997, the union filed a Motion for Reconsideration
assailing, among others, the authority of then Acting Secretary Trajano
to assume jurisdiction over the labor dispute. Said motion was denied in
an Order dated January 7, 1998.
As directed, the parties submitted their respective position papers. In its
position paper, the union raised the issue of the alleged unfair labor
practice of the company hereunder enumerated as follows:
"(a) PABX transfer and contractualization of PABX service and position;
"(b) Massive contractualization;
"(c) Flexible labor and additional work/function;
"(d) Disallowance of union leave intended for union seminar;
"(e) Misimplementation and/or non-implementation of employees'
benefits like shoe allowance, rainboots, raincoats, OIC shift
allowance, P450.00 monthly allowance, driving allowance, motorcycle
award and full-time physician;
"(f) Non-payment, discrimination and/or deprivation of overtime, restday
work, waiting/stand by time and staff meetings;
"(g) Economic inducement by promotion during CBA negotiation;
"(h) Disinformation scheme, surveillance and interference with union
affairs;
"(i) Issuance of memorandum/notice to employees without giving copy
to union, change in work schedule at Traffic Records Section and ITTO
policies; andcralawlibrary
"(j) Inadequate transportation allowance, water and facilities."
(Annex A, Petition; pp. 110-182, ibid.)
The company, on the other hand, raised in its position paper the sole
issue of the illegality of the strike staged by the union (Annex B, Petition;
pp. 302-320, ibid.).chanroblesvirtuallawlibrary
On the premise that public respondent Labor Secretary cannot rule on
the issue of the strike since there was no petition to declare the same
illegal, petitioner union filed on March 4, 1998 a Manifestation/Motion to
Strike Out Portions of & Attachments in Philcom's Position Paper for
being irrelevant, immaterial and impertinent to the issues assumed for
resolution (Annex C, Petition; pp. 330-333, ibid.).
In opposition to PEU's Manifestation/Motion, the company argued that it
was precisely due to the strike suddenly staged by the union on
November 17, 1997 that the dispute was assumed by the Labor
Secretary. Hence, the case would necessarily include the issue of the
legality of the strike (Opposition to PEU'S Motion to Strike Out; Annex F,
Petition; pp. 389-393, ibid.).3
On 2 October 1998, the Secretary of Labor and Employment
("Secretary") issued the first assailed order. The pertinent parts of the
Order read:
Going now to the first issue at hand, a reading of the complaints charged
by the Union as unfair labor practices would reveal that these are not so
within the legal connotation of Article 248 of the Labor Code. On the
contrary, these complaints are actually mere grievances which should
have been processed through the grievance machinery or voluntary
arbitration outlined under the CBA. The issues of flexible labor and
additional functions, misimplementation or non-implementation of
employee benefits, non-payment of overtime and other monetary claims
and inadequate transportation allowance, are all a matter of
implementation or interpretation of the economic provisions of the CBA
subject to the grievance procedure.
Neither do these complaints amount to gross violations which, thus, may
be treated as unfair labor practices outside of the coverage of Article
261. The Union failed to convincingly show that there is flagrant and/or
malicious refusal by the Company to comply with the economic
provisions stipulated in the CBA.
With respect to the charges of contractualization and economic
inducement, this Office is convinced that the acts of said company
qualify as a valid exercise of management prerogative. The act of the
Company in contracting out work or certain services being performed by
Union members should not be seen as an unfair labor practice act per
se. First, the charge of massive contractualization has not been
substantiated while the contractualization of the position of PABX
operator is an isolated instance. Secondly, in the latter case, there was
no proof that such contracting out interfered with, restrained or coerced
the employees in the exercise of their right to self-organization. Thus, it
is not unfair labor practice to contract out work for reason of reduction of
labor cost through the acquisition of automatic machines.
Likewise, the promotion of certain employees, who are incidentally
members of the Union, to managerial positions is a prerogative of
management. A promotion which is manifestly beneficial to an employee
should not give rise to a gratuitous speculation that such a promotion
was made simply to deprive the union of the membership of the
promoted employee (Bulletin Publishing Co. v. Sanchez, et. al., G.R. No.
74425, October 7, 1986).
There remains the issue on bargaining deadlock. The Company has
denied the existence of any impasse in its CBA negotiations with the
Union and instead maintains that it has been negotiating with the latter
in good faith until the strike was initiated. The Union, on the other hand,
contends otherwise and further prays that the remaining CBA proposals
of the Union be declared reasonable and equitable and thus be ordered
incorporated in the new CBA to be executed.
As pointed out by the Union, there are already thirty-seven (37) items
agreed upon by the parties during the CBA negotiations even before
these were suspended. Prior to this Office's assumption over the case,
the Company furnished the Union its improved CBA counter-proposal
on the matter of promotional and wage increases which however was
rejected by the Union as divisive. Even as the Union has submitted its
remaining CBA proposals for resolution, the Company remains silent on
the matter. In the absence of any basis, other than the Union's position
paper, on which this Office may make its determination of the
reasonableness and equitableness of these remaining CBA proposals,
this Office finds it proper to defer deciding on the matter and first allow
the Company to submit its position thereon.
We now come to the question of whether or not the strike staged by the
Union on November 17, 1997 is illegal. The Company claims it is, having
been held on grounds which are non-strikeable, during the pendency of
preventive mediation proceedings in the NCMB, after this Office has
assumed jurisdiction over the dispute, and with the strikers committing
prohibited and illegal acts. The Company further prays for the
termination of some 20 Union officers who were positively identified to
have initiated the alleged illegal strike. The Union, on the other hand,
refuses to submit this issue for resolution.
Considering the precipitous nature of the sanctions sought by the
Company, i.e., declaration of illegality of the strike and the
corresponding termination of the errant Union officers, this Office deems
it wise to defer the summary resolution of the same until both parties
have been afforded due process. The non-compliance of the strikers
with the return-to-work orders, while it may warrant dismissal, is not by
itself conclusive to hold the strikers liable. Moreover, the Union's position
on the alleged commission of illegal acts by the strikers during the strike
is still to be heard. Only after a full-blown hearing may the respective
liabilities of Union officers and members be determined. The case of
Telefunken Semiconductors Employees Union-FFW v. Secretary of
Labor and Employment and Temic Telefunken Micro-Electronics
(Phils.), Inc. (G.R. No. 122743 and 127215, December 12, 1997) is
instructive on this point:
It may be true that the workers struck after the Secretary of Labor and
Employment had assumed jurisdiction over the case and that they may
have failed to immediately return to work even after the issuance of a
return-to-work order, making their continued strike illegal. For, a return-
to-work order is immediately effective and executory notwithstanding the
filing of a motion for reconsideration. But, the liability of each of the union
officers and the workers, if any, has yet to be determined. xxx xxx xxx. 4
The dispositive portion of the Order reads:
WHEREFORE, in view of all the foregoing, judgment is hereby rendered
as follows:
The Union's Manifestation/Motion to Implead Philcom Corporation is
hereby granted. Let summons be issued to respondent Philcom
Corporation to appear before any hearing that may hereafter be
scheduled and to submit its position paper as may be required.
The Union's Manifestation/Motion to Strike Out Portions of and
Attachments in Philcom's Position Paper is hereby denied for lack of
merit.
The Union's charges of unfair labor practice against the Company are
hereby dismissed.
Pending resolution of the issues of illegal strike and bargaining deadlock
which are yet to be heard, all the striking workers are directed to return
to work within twenty-four (24) hours from receipt of this Order and
Philcom and/or Philcom Corporation are hereby directed to
unconditionally accept back to work all striking Union officers and
members under the same terms and conditions prior to the strike. The
parties are directed to cease and desist from committing any acts that
may aggravate the situation.
Atty. Lita V. Aglibut, Officer-In-Charge of the Legal Service, this
Department is hereby designated as the Hearing Officer to hear and
receive evidence on all matters and issues arising from the present labor
dispute and, thereafter, to submit a report/recommendation within twenty
(20) days from the termination of the proceedings.
The parties are further directed to file their respective position papers
with Atty. Lita V. Aglibut within ten (10) days from receipt of this Order.
SO ORDERED.5
Philcom Corporation ("Philcom") filed a motion for reconsideration.
Philcom prayed for reconsideration of the Order impleading it as party-
litigant in the present case and directing it to accept back to work
unconditionally all the officers and members of the union who
participated in the strike.6 Philcom also filed a Motion to Certify Labor
Dispute to the National Labor Relations Commission for Compulsory
Arbitration.7
For its part, Philcom Employees Union (PEU) filed a Motion for Partial
Reconsideration. PEU asked the Secretary to "partially reconsider" the
2 October 1998 Order insofar as it dismissed the unfair labor practices
charges against Philcom and included the illegal strike issue in the labor
dispute.8
The Secretary denied both motions for reconsideration of Philcom and
PEU in its assailed Order of 27 November 1998. The pertinent parts of
the Order read:
The question of whether or not Philcom Corporation should be
impleaded has been properly disposed of in the assailed Order. We
reiterate that neither the Company herein nor its predecessor was able
to convincingly establish that each is a separate entity in the absence of
any proof that there was indeed an actual closure and cessation of the
operations of the predecessor-company. We would have
accommodated the Company for a hearing on the matter had it been
willing and prepared to submit evidence to controvert the finding that
there was a mere merger. As it now stands, nothing on record would
prove that the two (2) companies are separate and distinct from each
other.
Having established that what took place was a mere merger, we
correspondingly conclude that the employer-employee relations
between the Company and the Union officers and members was never
severed. And in merger, the employees of the merged companies or
entities are deemed absorbed by the new company (Filipinas Port
Services, Inc. v. NLRC, et. al., G.R. No. 97237, August 16, 1991).
Considering that the Company failed miserably to adduce any evidence
to provide a basis for a contrary ruling, allegations to the effect that
employer-employee relations and positions previously occupied by the
workers no longer exist remain just that - mere allegations.
Consequently, the Company cannot now exempt itself from compliance
with the Order. Neither can it successfully argue that the employees
were validly dismissed. As held in Telefunken Semiconductor
Employees Union-FFW v. Secretary of Labor and Employment (G.R.
NOS. 122743 and 122715, December 12, 1997), to exclude the workers
without first ascertaining the extent of their individual participation in the
strike or non-compliance with the return-to-work orders will be
tantamount to dismissal without due process of law.
With respect to the unfair labor practice charges against the Company,
we have carefully reviewed the records and found no reason to depart
from the findings previously rendered. The issues now being raised by
the Union are the same issues discussed and passed upon in our earlier
Order.
Finally, it is our determination that the issue of the legality of the strike is
well within the jurisdiction of this Office. The same has been properly
submitted and assumed jurisdiction by the Office for resolution.9
The dispositive portion of the Order reads:
WHEREFORE, there being no merit in the remaining Motions for
Reconsideration filed by both parties, the same are hereby DENIED. Our
2 October 1998 Order STANDS. To expedite the resolution of the Motion
to Certify Labor Dispute to the NLRC for Compulsory Arbitration,
Philcom Employees Union is hereby directed to submit its Opposition
thereto within ten (10) days from receipt of the copy of this Order.
SO ORDERED.10
PEU filed with this Court a petition for certiorari and prohibition under
Rule 65 of the Rules of Court assailing the Secretary's Orders of 2
October 1998 and 27 November 1998. This Court, in accordance with
its Decision of 10 March 1999 in G.R. No. 123426 entitled National
Federation of Labor (NFL) v. Hon. Bienvenido E. Laguesma,
Undersecretary of the Department of Labor and Employment, and
Alliance of Nationalist Genuine Labor Organization, Kilusang Mayo Uno
(ANGLO-KMU),11 referred the case to the Court of Appeals.12
The Ruling of the Court of Appeals
On 31 July 2000, the Court of Appeals rendered judgment as follows:
WHEREFORE, PREMISES CONSIDERED, this petition is hereby
DENIED. The assailed portions of the Orders of the Secretary of Labor
and Employment dated October 2, 1998 and November 27, 1998 are
AFFIRMED.
SO ORDERED.13
The Court of Appeals ruled that, contrary to PEU's view, the Secretary
could take cognizance of an issue, even only incidental to the labor
dispute, provided the issue must be involved in the labor dispute itself or
otherwise submitted to him for resolution.
The Court of Appeals pointed out that the Secretary assumed jurisdiction
over the labor dispute upon Philcom's petition as a consequence of the
strike that PEU had declared and not because of the notices of strike
that PEU filed with the National Conciliation and Mediation Board
(NCMB).
The Court of Appeals stated that the reason of the Secretary's
assumption of jurisdiction over the labor dispute was the staging of the
strike. Consequently, any issue regarding the strike is not merely
incidental to the labor dispute between PEU and Philcom, but also part
of the labor dispute itself. Thus, the Court of Appeals held that it was
proper for the Secretary to take cognizance of the issue on the legality
of the strike.
The Court of Appeals also ruled that for an employee to claim an unfair
labor practice by the employer, the employee must show that the act
charged as unfair labor practice falls under Article 248 of the Labor
Code. The Court of Appeals held that the acts enumerated in Article 248
relate to the workers' right to self-organization. The Court of Appeals
stated that if the act complained of has nothing to do with the acts
enumerated in Article 248, there is no unfair labor practice.
The Court of Appeals held that Philcom's acts, which PEU complained
of as unfair labor practices, were not in any way related to the workers'
right to self-organization under Article 248 of the Labor Code. The Court
of Appeals held that PEU's complaint constitutes an enumeration of
mere grievances which should have been threshed out through the
grievance machinery or voluntary arbitration outlined in the Collective
Bargaining Agreement (CBA).
The Court of Appeals also held that even if by Philcom's acts, Philcom
had violated the provisions of the CBA, still those acts do not constitute
unfair labor practices under Article 248 of the Labor Code. The Court of
Appeals held that PEU failed to show that those violations were gross or
that there was flagrant or malicious refusal on the part of Philcom to
comply with the economic provisions of the CBA.
The Court of Appeals stated that as of 21 March 1989, as held in PAL v.
NLRC,14 violations of CBAs will no longer be deemed unfair labor
practices, except those gross in character. Violations of CBAs, except
those gross in character, are mere grievances resolvable through the
appropriate grievance machinery or voluntary arbitration as provided in
the CBAs.
Hence, this petition.
The Issues
In assailing the Decision of the Court of Appeals, petitioner contends
that:
1. The Honorable Court of Appeals has failed to faithfully adhere with
the decisions of the Supreme Court when it affirmed the order/resolution
of the Secretary of Labor denying the Union's Manifestation/Motion to
Strike Out Portions of & Attachments in Philcom's Position Paper and
including the issue of illegal strike notwithstanding the absence of any
petition to declare the strike illegal.
2. The Honorable Court of Appeals has decided a question of substance
in a way not in accord with law and jurisprudence when it affirmed the
order/resolution of the Secretary of Labor dismissing the Union's
charges of unfair labor practices.
3. The Honorable Court of Appeals has departed from the edict of
applicable law and jurisprudence when it failed to issue such order
mandating/directing the issuance of a writ of execution directing the
Company to unconditionally accept back to work the Union officers and
members under the same terms and conditions prior to the strike and as
well as to pay their salaries/backwages and the monetary equivalent of
their other benefits from October 6, 1998 to date.15
The Ruling of the Court
The petition must fail.
PEU contends that the Secretary should not have taken cognizance of
the issue on the alleged illegal strike because it was not properly
submitted to the Secretary for resolution. PEU asserts that after Philcom
submitted its position paper where it raised the issue of the legality of
the strike, PEU immediately opposed the same by filing
its Manifestation/Motion to Strike Out Portions of and Attachments in
Philcom's Position Paper. PEU asserts that it stated in its
Manifestation/Motion that certain portions of Philcom's position paper
and some of its attachments were "irrelevant, immaterial and impertinent
to the issues assumed for resolution." Thus, PEU asserts that the Court
of Appeals should not have affirmed the Secretary's order denying
PEU's Manifestation/Motion.
PEU also contends that, contrary to the findings of the Court of Appeals,
the Secretary's assumption of jurisdiction over the labor dispute was
based on the two notices of strike that PEU filed with the NCMB. PEU
asserts that only the issues on unfair labor practice and bargaining
deadlock should be resolved in the present case.
PEU insists that to include the issue on the legality of the strike despite
its opposition would convert the case into a petition to declare the strike
illegal.
PEU's contentions are untenable.
The Secretary properly took cognizance of the issue on the legality of
the strike. As the Court of Appeals correctly pointed out, since the very
reason of the Secretary's assumption of jurisdiction was PEU's
declaration of the strike, any issue regarding the strike is not merely
incidental to, but is essentially involved in, the labor dispute itself.
Article 263(g) of the Labor Code provides:
When, in his opinion, there exists a labor dispute causing or likely to
cause a strike or lockout in an industry indispensable to the national
interest, the Secretary of Labor and Employment may assume
jurisdiction over the dispute and decide it or certify the same to the
Commission for compulsory arbitration. Such assumption or certification
shall have the effect of automatically enjoining the intended or
impending strike or lockout as specified in the assumption or certification
order. If one has already taken place at the time of assumption or
certification, all striking or locked out employees shall immediately return
to work and the employer shall immediately resume operations and
readmit all workers under the same terms and conditions prevailing
before the strike or lockout. The Secretary of Labor and Employment or
the Commission may seek the assistance of law enforcement agencies
to ensure the compliance with this provision as well as with such orders
as he may issue to enforce the same.
x x x x.
The powers granted to the Secretary under Article 263(g) of the Labor
Code have been characterized as an exercise of the police power of the
State, with the aim of promoting public good. 16 When the Secretary
exercises these powers, he is granted "great breadth of discretion"
in order to find a solution to a labor dispute. The most obvious of
these powers is the automatic enjoining of an impending strike or lockout
or its lifting if one has already taken place.17
In this case, the Secretary assumed jurisdiction over the dispute
because it falls in an industry indispensable to the national interest. As
noted by the Secretary.
[T]he Company has been a vital part of the telecommunications industry
for 73 years. It is particularly noted for its expertise and dominance in
the area of international telecommunications. Thus, it performs a vital
role in providing critical services indispensable to the national interest. It
is for this very reason that this Office strongly opines that any concerted
action, particularly a prolonged work stoppage is fraught with dire
consequences. Surely, the on-going strike will adversely affect not only
the livelihood of workers and their dependents, but also the company's
suppliers and dealers, both in the public and private sectors who depend
on the company's facilities in the day-to-day operations of their
businesses and commercial transactions. The operational viability of the
company is likewise adversely affected, especially its expansion
program for which it has incurred debts in the approximate amount of P2
Billion. Any prolonged work stoppage will also bring about substantial
losses in terms of lost tax revenue for the government and would surely
pose a serious set back in the company's modernization program.
At this critical time when government is working to sustain the economic
gains already achieved, it is the paramount concern of this Office to avert
any unnecessary work stoppage and, if one has already occurred, to
minimize its deleterious effect on the workers, the company, the industry
and national economy as a whole.18
It is of no moment that PEU never acquiesced to the submission for
resolution of the issue on the legality of the strike. PEU cannot prevent
resolution of the legality of the strike by merely refusing to submit the
issue for resolution. It is also immaterial that this issue, as PEU asserts,
was not properly submitted for resolution of the Secretary.
The authority of the Secretary to assume jurisdiction over a labor dispute
causing or likely to cause a strike or lockout in an industry indispensable
to national interest includes and extends to all questions and
controversies arising from such labor dispute. The power is
plenary and discretionary in nature to enable him to effectively and
efficiently dispose of the dispute.19
Besides, it was upon Philcom's petition that the Secretary immediately
assumed jurisdiction over the labor dispute on 19 November 1997.20 If
petitioner's notices of strike filed on 21 October and 4 November 1997
were what prompted the assumption of jurisdiction, the Secretary would
have issued the assumption order as early as those dates.
Moreover, after an examination of the position paper21 Philcom
submitted to the Secretary, we see no reason to strike out those portions
which PEU seek to expunge from the records. A careful study of all the
facts alleged, issues raised, and arguments presented in the position
paper leads us to hold that the portions PEU seek to expunge are
necessary in the resolution of the present case.
On the documents attached to Philcom's position paper, except for
Annexes MM-2 to MM-22 inclusive22 which deal with the supposed
consolidation of Philippine Global Communications, Inc. and Philcom
Corporation, we find the other annexes relevant and material in the
resolution of the issues that have emerged in this case.
PEU also claims that Philcom has committed several unfair labor
practices. PEU asserts that there are "factual and evidentiary bases" for
the charge of unfair labor practices against Philcom.
On unfair labor practices of employers, Article 248 of the Labor Code
provides:
Unfair labor practices of employers. - It shall be unlawful for an
employer to commit any of the following unfair labor practice:
(a) To interfere with, restrain or coerce employees in the exercise of their
right to self-organization;
(b) To require as a condition of employment that a person or an
employee shall not join a labor organization or shall withdraw from one
to which he belongs;
(c) To contract out services or functions being performed by union
members when such will interfere with, restrain or coerce employees in
the exercise of their rights to self-organization;
(d) To initiate, dominate, assist or otherwise interfere with the formation
or administration of any labor organization, including the giving of
financial or other support to it or its organizers or supporters;
(e) To discriminate in regard to wages, hours of work, and other terms
and conditions of employment in order to encourage or discourage
membership in any labor organization. x x x
(f) To dismiss, discharge, or otherwise prejudice or discriminate against
an employee for having given or being about to give testimony under
this Code;
(g) To violate the duty to bargain collectively as prescribed by this Code;
(h) To pay negotiation or attorney's fees to the union or its officers or
agents as part of the settlement of any issue in collective bargaining or
any other dispute; or
(i) To violate a collective bargaining agreement.
Unfair labor practice refers to acts that violate the workers' right to
organize. The prohibited acts are related to the workers' right to self-
organization and to the observance of a CBA. Without that element, the
acts, no matter how unfair, are not unfair labor practices.23 The only
exception is Article 248(f), which in any case is not one of the acts
specified in PEU's charge of unfair labor practice.
A review of the acts complained of as unfair labor practices of Philcom
convinces us that they do not fall under any of the prohibited acts defined
and enumerated in Article 248 of the Labor Code. The issues of
misimplementation or non-implementation of employee benefits, non-
payment of overtime and other monetary claims, inadequate
transportation allowance, water, and other facilities, are all a matter of
implementation or interpretation of the economic provisions of the CBA
between Philcom and PEU subject to the grievance procedure.
We find it pertinent to quote certain portions of the assailed Decision,
thus '
A reading of private respondent's justification for the acts complained of
would reveal that they were actually legitimate reasons and not in
anyway related to union busting. Hence, as to compelling employees to
render flexible labor and additional work without additional
compensation, it is the company's explanation that the employees
themselves voluntarily took on work pertaining to other assignments but
closely related to their job description when there was slack in the
business which caused them to be idle. This was the case of the
International Telephone Operators who tried telemarketing when they
found themselves with so much free time due to the slowdown in the
demand for international line services. With respect to the Senior
Combination Technician at the Cebu branch who was allegedly made to
do all around work, the same happened only once when the lineman
was absent and the lineman's duty was his ultimate concern. Moreover,
the new assignment of the technicians at CTSS who were promoted to
QCE were based on the job description of QCE, while those of the other
technicians were merely temporary due to the promotion of several
technicians to QCE (pars. 9-12, Philcom's Reply to PEU's Position
Paper; Annex "E", Petition; pp. 350-351, ibid.).
On the alleged misimplementation and/or non-implementation of
employees' benefits, such as shoe allowance, rainboots, raincoats, OIC
shift allowance, P450.00 monthly allowance, driving allowance,
motorcycle award and full-time physician, the company gave the
following explanation which this Court finds plausible, to wit:
16. The employees at CTSS were given One Thousand Pesos
(P1,000.00) cash or its equivalent in purchase orders because it was
their own demand that they be given the option to buy the pair of leather
boots they want. For the Cebu branch, the employees themselves failed
to include these benefits in the list of their demands during the
preparation of the budget for the year 1997 despite the instruction given
to them by the branch manager. According to the employees, they were
not aware that they were entitled to these benefits. They thought that
because they have been provided with two vans to get to their respective
assignments, these benefits are available only to collectors, messengers
and technicians in motorcycles.
17. The P450.00 monthly allowance was provided by the CBA to be
given to counter clerks. However, the position of counter clerks had been
abolished in accordance with the reorganization plan undertaken by the
company in April 1995, with the full knowledge of the Union membership.
As a result of the abolition of the position of counter clerks, there was no
more reason for granting the subject allowance.
18. The company more than satisfied the provision in the CBA to engage
the services of a physician and provided adequate medical services.
Aside from a part time physician who reports for duty everyday, the
company has secured the services of Prolab Diagnostics, which has
complete medical facilities and personnel, to serve the medical needs of
the employees. x x x
19. The Union demands that a full-time physician to be assigned at the
Head Office. This practice, is not provided in the CBA and, moreover is
too costly to maintain. The medical services offered by Prolab
[D]iagnostics are even better and more comprehensive than any full time
physician can give. It places at the employees' disposal numerous
specialists in various fields of medicine. It is beyond understanding why
the Union would insist on having a full-time physician when they could
avail of better services from Prolab Diagnostics.
(Philcom's Reply to PEU's Position Paper, pp.352, 354, ibid.)
On the issue of non-payment, discrimination and/or deprivation of
overtime, restday work, waiting/stand by time and staff meeting
allowance, suffice it to state that there is nothing on record to prove the
same. Petitioner did not present evidence substantial enough to support
its claim.
As to the alleged inadequate transportation allowance and facilities, the
company posits that:
30. The transportation allowances given to the Dasmarinas and Pinugay
employees are more than adequate to defray their daily transportation
cost. Hence, there is absolutely no justification for an increase in the said
allowance. In fact, said employees at Dasmarinas and Pinugay, who are
only residing in areas near their place of work, are more privileged as
they receive transportation expenses while the rest of the company
workers do not.
31. As to the demand for clean drinking water, the company has installed
sufficient and potable water inside the Head Office even before the strike
was staged by the Union. Any person who visits the Makati Head Office
can attest to this fact.
(Philcom's Reply to PEU's Position Paper, p. 357, ibid.)
Anent the allegation of PABX transfer and contractualization of PABX
service and position, these were done in anticipation of the company to
switch to an automatic PABX machine which requires no operator. This
cannot be treated as ULP since management is at liberty, absent any
malice on its part, to abolish positions which it deems no longer
necessary (Arrieta v. National Labor Relations Commission, 279 SCRA
326, 332). Besides, at the time the company hired a temporary employee
to man the machine during daytime, the subject position was vacant
while the assumption of the function by the company guard during
nighttime was only for a brief period.
With respect to the perceived massive contractualization of the
company, said charge cannot be considered as ULP since the hiring of
contractual workers did not threaten the security of tenure of regular
employees or union members. That only 160 employees out of 400
employees in the company's payroll were considered rank and file does
not of itself indicate unfair labor practice since this is but a company
prerogative in connection with its business concerns.
Likewise, the offer or promotions to a few union members is neither
unlawful nor an economic inducement. These offers were made in
accordance with the legitimate need of the company for the services of
these employees to fill positions left vacant by either retirement or
resignation of other employees. Besides, a promotion is part of the
career growth of employees found competent in their work. Thus,
in Bulletin Publishing Corporation v. Sanchez (144 SCRA 628, 641), the
Supreme Court held that "(T)he promotion of employees to managerial
or executive positions rests upon the discretion of management.
Managerial positions are offices which can only be held by persons who
have the trust of the corporation and its officers. It is the prerogative of
management to promote any individual working within the company to a
higher position. It should not be inhibited or prevented from doing so. A
promotion which is manifestly beneficial to an employee should not give
rise to a gratuitous speculation that such a promotion was made simply
to deprive the union of the membership of the promoted employee, who
after all appears to have accepted his promotion."
That the promotions were made near or around the time when CBA
negotiations were about to be held does not make the company's action
an unfair labor practice. As explained by the company, these promotions
were based on the availability of the position and the qualification of the
employees promoted (p. 6, Annex "4", Philcom's Reply to PEU's Position
Paper; p. 380, ibid.)
On the union's charge that management disallowed leave of union
officers and members to attend union seminar, this is belied by the
evidence submitted by the union itself. In a letter to PEU's President, the
company granted the leave of several union officers and members to
attend a seminar notwithstanding that its request to be given more
details about the affair was left unheeded by the union (Annex "Y", PEU's
Position Paper; p. 222, ibid.). Those who were denied leave were
urgently needed for the operation of the company.
On the ULP issue of disinformation scheme, surveillance and
interference with union affairs, these are mere allegations unsupported
by facts. The charge of "black propaganda" allegedly committed by the
company when it supposedly posted two (2) letters addressed to the
Union President is totally baseless. Petitioner presents no proof that it
was the company which was behind the incident. On the purported
disallowance of union members to observe the July 27, 1997 CBA
meeting, the company explained that it only allowed one (1) employee
from ITTO, instead of two (2), as it would adversely affect the operation
of the group. It also took into consideration the fact that ITTO members
represent only 20% of the union. Other union members from other
departments of the company should have equal representation (Annex
"L", Position Paper for the Union; pp. 205-206, ibid.). As to the alleged
surveillance of the company guards during a union seminar, We find the
idea of sending guards to spy on a mere union seminar quite
preposterous. It is thus not likely for the company which can gain nothing
from it to waste its resources in such a scheme.
On the issuance of memorandum/notice to employees without giving
copy to union, change in work schedule at Traffic Records Section and
ITTO policies, the company has sufficiently rebutted the same, thus:
27. The Union also whines about the failure of the company to furnish
copies of memoranda or notices sent to employees and change of work
schedules at the Traffic Records Section and ITTO policies. The CBA,
however, does not obligate the Company to give the Union a copy of
each and every memorandum or notice sent to employees. This would
be unreasonable and impractical. Neither did the Union demand that
they be furnished copies of the same. This is clearly a non-issue as
copies of all memoranda or notices issued by management are readily
available upon request by any employee or the Union.
28. Contrary to the allegations of the Union, the rationale and mechanics
for the abolishment of the midnight schedule at the Traffic Record
Services had been thoroughly and adequately discussed with the
Union's President, Robert Benosa, and the staff of Traffic Record
Services in the meeting held on May 9, 1997. The midnight services
were abolished for purely economic reasons. The company realized that
the midnight work can be handled in the morning without hampering
normal operations. At the same time, the company will be able to save
on cost. For this objective, the employees concerned agreed to create a
manning and shifting schedule starting at 6:00 a.m. up to 10:00 p.m., 1) Wire or wireless telecommunications such as telephone, telegraph,
with each employee rendering only eight hours of work every day without telex, and cable companies or firms; (Emphasis supplied)cralawlibrary
violating any provision of the labor laws or the CBA.24
xxx
The Court has always respected a company's exercise of its prerogative
to devise means to improve its operations. Thus, we have held that
It is therefore clear that the striking employees violated the no-strike
management is free to regulate, according to its own discretion and
policy of the State in regard to vital industries.
judgment, all aspects of employment, including hiring, work
assignments, supervision and transfer of employees, working methods,
time, place and manner of work.25 2. The Secretary had already assumed jurisdiction over the
dispute. Despite the issuance of the return-to-work orders dated 19
November and 28 November 1997, the striking employees failed to
This is so because the law on unfair labor practices is not intended to
return to work and continued with their strike.
deprive employers of their fundamental right to prescribe and enforce
such rules as they honestly believe to be necessary to the proper,
productive and profitable operation of their business.26 Regardless of their motives, or the validity of their claims, the striking
employees should have ceased or desisted from all acts that would
undermine the authority given the Secretary under Article 263(g) of the
Even assuming arguendo that Philcom had violated some provisions in
Labor Code. They could not defy the return-to-work orders by citing
the CBA, there was no showing that the same was a flagrant or malicious
Philcom's alleged unfair labor practices to justify such defiance. 29
refusal to comply with its economic provisions. The law mandates that
such violations should not be treated as unfair labor practices. 27
PEU could not have validly anchored its defiance to the return-to-work
orders on the motion for reconsideration that it had filed on the
PEU also asserts that the Court of Appeals should have issued an order
assumption of jurisdiction order. A return-to-work order is
directing the issuance of a writ of execution ordering Philcom to accept
immediately effective and executory despite the filing of a motion
back to work unconditionally the striking union officers and members
for reconsideration. It must be strictly complied with even during
under the same terms and conditions prevailing before the strike. PEU
the pendency of any petition questioning its validity.30
asserts that the union officers and members should be paid their salaries
or backwages and monetary equivalent of other benefits beginning 6
October 1998 when PEU received a copy of the Secretary's 2 October The records show that on 22 November 1997, Philcom published in
1998 return-to-work order. the Philippine Daily Inquirer a notice to striking employees to return to
work.31 These employees did not report back to work but continued their
mass action. In fact, they lifted their picket lines only on 22 December
PEU claims that even if the "issue of illegal strike can be included in the
1997.32 Philcom formally notified twice these employees to explain in
assailed orders and that the union officers and members have been
writing why they should not be dismissed for defying the return-to-work
terminated as a result of the alleged illegal strike, still, the Secretary has
order.33 Philcom held administrative hearings on these disciplinary
to rule on the illegality of the strike and the liability of each striker." PEU
cases.34 Thereafter, Philcom dismissed these employees for
asserts that the union officers and members should first be accepted
abandonment of work in defiance of the return-to-work order.35
back to work because a return-to-work order is immediately executory.28

A return-to-work order imposes a duty that must be discharged more

We rule on the legality of the strike if only to put an end to this protracted
than it confers a right that may be waived. While the workers may choose
labor dispute. The facts necessary to resolve the legality of the strike are
not to obey, they do so at the risk of severing their relationship with their
not in dispute.
employer.36

The strike and the strike activities that PEU had undertaken were
The following provision of the Labor Code governs the effects of defying
patently illegal for the following reasons:
a return-to-work order:

1. Philcom is engaged in a vital industry protected by Presidential

Decree No. 823 (PD 823), as amended by Presidential Decree No. 849,
from strikes and lockouts. PD 823, as amended, provides:
Sec. 1. It is the policy of the State to encourage free trade unionism and
free collective bargaining within the framework of compulsory and
voluntary arbitration. Therefore, all forms of strikes, picketings and
lockouts are hereby strictly prohibited in vital industries, such as in public
utilities, including transportation and communications, x x x. (Emphasis
supplied)cralawlibrary
Enumerating the industries considered as vital, Letter of Instruction No.
368 provides:
For the guidance of workers and employers, some of whom have been
led into filing notices of strikes and lockouts even in vital industries, you
are hereby instructed to consider the following as vital industries and
companies or firms under PD 823 as amended:
1. Public Utilities:
xxx
B. Communications:
ART. 264. Prohibited activities. ─ (a) x x x x
No strike or lockout shall be declared after assumption of
jurisdiction by the President or the Minister or after certification or
submission of the dispute to compulsory or voluntary arbitration or
during the pendency of cases involving the same grounds for the strike
or lockout x x x x
Any union officer who knowingly participates in illegal strike and any
worker or union officer who knowingly participates in the
commission of illegal acts during a strike may be declared to have
lost his employment status: Provided, That mere participation of a
worker in a lawful strike, shall not constitute sufficient ground for
termination of his employment, even if a replacement had been hired by
the employer during such lawful strike. (Emphasis supplied)cralawlibrary
A strike undertaken despite the Secretary's issuance of an assumption
or certification order becomes a prohibited activity, and thus,
illegal, under Article 264(a) of the Labor Code. The union officers who
knowingly participate in the illegal strike are deemed to have lost their
employment status. The union members, including union officers, who
commit specific illegal acts or who knowingly defy a return-to-work order
are also deemed to have lost their employment status.37 Otherwise, the
workers will simply refuse to return to their work and cause a standstill
in the company operations while retaining the positions they refuse to
discharge and preventing management to fill up their positions. 38
Hence, the failure of PEU's officers and members to comply immediately
with the return-to-work orders dated 19 November and 28 November
1997 cannot be condoned. Defiance of the return-to-work orders of
the Secretary constitutes a valid ground for dismissal.39
3. PEU staged the strike using unlawful means and methods.
Even if the strike in the present case was not illegal per se, the strike
activities that PEU had undertaken, especially the establishment of
human barricades at all entrances to and egresses from the company
premises and the use of coercive methods to prevent company officials
and other personnel from leaving the company premises, were definitely
illegal.40 PEU is deemed to have admitted that its officers and members
had committed these illegal acts, as it never disputed Philcom's
assertions of PEU's unlawful strike activities in all the pleadings that PEU
submitted to the Secretary and to this Court.
PEU's picketing officers and members prohibited other tenants at the
Philcom building from entering and leaving the premises. Leonida S.
Rabe, Country Manager of Societe Internationale De
Telecommunications Aeronautiques (SITA), a tenant at the Philcom
building, wrote two letters addressed to PEU President Roberto B.
Benosa. She told Benosa that PEU's act of obstructing the free ingress
to and egress from the company premises "has badly disrupted normal
operations of their organization."41
The right to strike, while constitutionally recognized, is not without legal
constrictions. Article 264(e) of the Labor Code, on prohibited activities,
provides:
No person engaged in picketing shall commit any act of violence,
coercion or intimidation or obstruct the free ingress to or egress from the
employer's premises for lawful purposes, or obstruct public
thoroughfares.
The Labor Code is emphatic against the use of violence, coercion, and
intimidation during a strike and to this end prohibits the obstruction of
free passage to and from the employer's premises for lawful purposes.
A picketing labor union has no right to prevent employees of another
company from getting in and out of its rented premises, otherwise, it will
be held liable for damages for its acts against an innocent by-stander.42
The sanction provided in Article 264(a) is so severe that any worker or
union officer who knowingly participates in the commission of illegal acts
during a strike may be declared to have lost his employment status.43
By insisting on staging the prohibited strike and defiantly picketing
Philcom's premises to prevent the resumption of company operations,
the striking employees have forfeited their right to be readmitted. 44
4. PEU declared the strike during the pendency of preventive mediation
proceedings at the NCMB.
On 17 November 1997, while a conciliation meeting was being held at
the NCMB in NCMB-NCR-NS 10-435-97, PEU went on strike. It should
be noted that in their meeting on 11 November 1997, both Philcom and
PEU were even "advised to maintain the status quo."45 Such disregard
of the mediation proceedings was a blatant violation of Section 6, Book
V, Rule XXII of the Omnibus Rules Implementing the Labor Code, which
explicitly obliges the parties to bargain collectively in good faith and
prohibits them from impeding or disrupting the proceedings. 46 The
relevant provision of the Implementing Rules provides:
Section 6. Conciliation. ─ x x x x
During the proceedings, the parties shall not do any act which may
disrupt or impede the early settlement of dispute. They are obliged, as
part of their duty, to bargain collectively in good faith, to participate fully
and promptly in the conciliation meetings called by the regional branch
of the Board. x x x x
Article 264(a) of the Labor Code also considers it a prohibited activity to
declare a strike "during the pendency of cases involving the same
grounds for the same strike."
Lamentably, PEU defiantly proceeded with their strike during the
pendency of the conciliation proceedings.
5. PEU staged the strike in utter disregard of the grievance procedure
established in the CBA.
By PEU's own admission, "the Union's complaints to the management
began in June 1997 even before the start of the 1997 CBA
renegotiations."47 Their CBA expired on 30 June 1997.48 PEU could
have just taken up their grievances in their negotiations for the new CBA.
This is what a Philcom officer had suggested to the Dasmariñas staff
when the latter requested on 16 June 1997 for an increase in
transportation allowance.49 In fact, when PEU declared the strike,
Philcom and PEU had already agreed on 37 items in their negotiations
for the new CBA.50
The bottom line is that PEU should have immediately resorted to the
grievance machinery provided for in the CBA.51 In disregarding this
procedure, the union leaders who knowingly participated in the strike
have acted unreasonably. The law cannot interpose its hand to protect
them from the consequences of their illegal acts.52
A strike declared on the basis of grievances which have not been
submitted to the grievance committee as stipulated in the CBA of the
parties is premature and illegal.53
Having held the strike illegal and having found that PEU's officers and
members have committed illegal acts during the strike, we hold that no
writ of execution should issue for the return to work of PEU officers who
participated in the illegal strike, and PEU members who committed
illegal acts or who defied the return-to-work orders that the Secretary
issued on 19 November 1997 and 28 November 1997. The issue of who
participated in the illegal strike, committed illegal acts, or defied the
return-to-work orders is a question of fact that must be resolved in the
appropriate proceedings before the Secretary of Labor.
WHEREFORE, we DISMISS the petition and AFFIRM the Decision of
the Court of Appeals in CA-G.R. SP No. 53989, with
the MODIFICATION that the Secretary of Labor is directed to determine
who among the Philcom Employees Union officers participated in the
illegal strike, and who among the union members committed illegal acts
or defied the return-to-work orders of 19 November 1997 and 28
November 1997. No pronouncement as to costs.
SO ORDERED.
LMG Chemicals Corp vs Secr of Depat of Labor and Employment
Before us is a petition for certiorari with prayer for a temporary
restraining order and a writ of preliminary injunction under Rule 65 of the
1997 Rules of Civil Procedure, as amended, seeking to nullify the orders
dated October 7, 1996 and December 17, 1996, issued by the then
Secretary of Labor and Employment, Hon. Leonardo A. Quisumbing, 1
in OS-AJ-05-10(1)-96, "IN RE: LABOR DISPUTE AT LMG CHEMICALS
CORPORATION"
The facts as culled from the records are:chanrob1es virtua1 law library
LMG Chemicals Corporation, (petitioner) is a domestic corporation
engaged in the manufacture and sale of various kinds of chemical
substances, including aluminum sulfate which is essential in purifying
water, and technical grade sulfuric acid used in thermal power plants.
Petitioner has three divisions, namely: the Organic Division, Inorganic
Division and the Pinamucan Bulk Carriers. There are two unions within
petitioner’s Inorganic Division. One union represents the daily paid
employees and the other union represents the monthly paid employees.
Chemical Workers Union, respondent, is a duly registered labor
organization acting as the collective bargaining agent of all the daily paid read:jgc:chanrobles.com.ph
employees of petitioner’s Inorganic Division.
". . . In the light of the Company’s last offer and the Union’s last position,
Sometime in December 1995, the petitioner and the respondent started We decree that the Company’s offer of P135 per day wage increase be
negotiation for a new Collective Bargaining Agreement (CBA) as their further increased to P140 per (day), which shall be incorporated in the
old CBA was about to expire. They were able to agree on the political new CBA, as follows:chanrob1es virtual 1aw library
provisions of the new CBA, but no agreement was reached on the issue
of wage increase. The economic issues were not also settled. P90 per day for the first 18 months, and

The positions of the parties with respect to wage issue P50 per day for the next 18 months.
were:jgc:chanrobles.com.ph
After all, the Company had granted its supervisory employees an
"Petitioner Company increase of P4,500 per month or P166 per day, more or less, if the period
reckoned is 27 working days.
P40 per day on the first year
In regard to the division of the three-year period into two sub-periods of
P40 per day on the second year 18 months each, this office take cognizance of the same practice under
the old CBA.
P40 per day on the third year
2. Other economic demands
Respondent Union"
Considering the financial condition of the Company, all other economic
P350 per day on the first 18 months, and demands except those provided in No. 3 below are rejected. The
provisions in the old CBA as well as those contained in the Company’s
P150 per day for the next 18 months" Employee’s Primer of Benefits as of Aug. 1, 1994 shall be retained and
incorporated in the new CBA.
In the course of the negotiations, respondent union pruned down the
originally proposed wage increase quoted above to P215 per day, 3. Effectivity of the new CBA
broken down as follows:jgc:chanrobles.com.ph
Article 253-A of the Labor Code, as amended, provides that when no
"P142 for the first 18 months 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’
P73 for the second 18 months" agreement. Inasmuch as the parties could not agree on this issue and
since this Office has assumed jurisdiction, then this matter now lies at
With the CBA negotiations at a deadlock, on March 6, 1996, respondent the discretion of the Secretary of Labor and Employment. Thus the new
union filed a Notice of Strike with the National Conciliation and Mediation Collective Bargaining Agreement which the parties will sign pursuant to
Board, National Capital Region. Despite several conferences and efforts this Order shall retroact to January 1, 1996.
of the designated conciliator-mediator, the parties failed to reach an
amicable settlement. x x x

On April 16, 1996, respondent union staged a strike. In an attempt to

end the strike early, Petitioner, on April 24, 1996, made an improved ACCORDINGLY, this Office now directs the parties to incorporate these
offer of P135 per day, spread over the period of three years, as dispositions in their new Collective bargaining Agreement effective
follows:jgc:chanrobles.com.ph January 1, 1996 to December 31, 1998."cralaw virtua1aw library

"P55 per day on the first year; Forthwith, petitioner filed a motion for reconsideration but was denied by
the Secretary in his order dated December 16, 1996.
P45 per day on the second year;
Petitioner now contends that in issuing the said orders, respondent
P35 per day on the third year."cralaw virtua1aw library Secretary gravely abused his discretion, thus:chanrob1es virtual 1aw
library
On May 9, 1996, another conciliation meeting was held between the
parties. In that meeting, petitioner reiterated its improved offer of P135 I
per day which was again rejected by the respondent union.

On May 20, 1996, the Secretary of Labor and Employment, finding the "THE HONORABLE SECRETARY OF LABOR COMMITTED GRAVE
instant labor dispute impressed with national interest, assumed ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION
jurisdiction over the same. IN DISREGARDING THE EVIDENCE OF PETITIONER’S FINANCIAL
LOSSES AND IN GRANTING A P140.00 WAGE INCREASE TO THE
In compliance with the directive of the Labor Secretary, the parties RESPONDENT UNION.
submitted their respective position papers both dated June 21, 1996.
II
In its position paper, petitioner made a turn-around, stating that it could
no longer afford to grant its previous offer due to serious financial losses
during the early months of 1996. It then made the following THE HONORABLE SECRETARY OF LABOR COMMITTED GRAVE
offer:chanrob1es virtual 1aw library ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION
IN DECREEING THAT THE NEW COLLECTIVE BARGAINING
Zero increase in the first year; AGREEMENT TO BE SIGNED BY THE PARTIES SHALL RETROACT
TO JANUARY 1, 1996."cralaw virtua1aw library
P30 per day increase in the second year; and

P20 per day increase in the third year. Anent the first ground, petitioner asserts that the decreed amount of
P140 wage increase has no basis in fact and in law. Petitioner insists
In its reply to petitioner’s position paper, respondent union claimed it had that public respondent Secretary whimsically presumed that the
a positive performance in terms of income during the covered period. company can survive despite the losses being suffered by its Inorganic
Division and its additional losses caused by the strike held by
On October 7, 1996, the Secretary of Labor and Employment issued the respondent union. Petitioner further contends that respondent Secretary
first assailed order, pertinent portions of which disregarded its evidence showing that for the first part of 1996, its
Inorganic Division suffered serious losses amounting to P15.651 million.
Hence, by awarding wage increase without any basis, respondent
Secretary gravely abused his discretion and violated petitioner’s right to
due process.chanrob1es virtua1 1aw 1ibrary
We are not persuaded.
As aptly stated by the Solicitor General in his comment on the petition
dated July 1, 1997, respondent Secretary considered all the evidence
and arguments adduced by both parties. In ordering the wage increase,
the Secretary ratiocinated as follows:jgc:chanrobles.com.ph
"x x x
In the Company’s Supplemental Comment, it says that it has three
divisions, namely: the Organic Division, Inorganic Division and the
Pinamucan Bulk Carriers. The Union in this instant dispute represent the
daily wage earners in the Inorganic Division. The respective income of
the three divisions is shown in Annex B to the Company’s Supplemental
Comment. The Organic Division posted an income of P369,754,000 in
1995. The Inorganic Division realized an income of P261,288,000 in the
same period. The tail-ender is the Pinamucan Bulk Carriers Division with
annual income of P11,803,000 for the same period. Total Company
income for the period was P642,845,000.
It is a sound business practice that a Company’s income from all sources
are collated to determine its true financial condition. Regardless of
whether one division or another losses or gains in its yearly operation is
not material in reckoning a Company’s financial status. In fact, the loss
in one is usually offset by the gains in the others. It is not a good business
practice to isolate the employees or workers of one division, which
incurred an operating loss for a particular period. That will create
demoralization among its ranks, which will ultimately affect productivity.
The eventual loser will be the company.
So, even if We believe the position of the company that its Inorganic
Division lost last year and during the early months of this year, it would
not be a good argument to deny them of any salary increase. When the
Company made the offer of P135 per day for the three year period, it
was presumed to have studied its financial condition properly, taking into
consideration its past performance and projected income. In fact, the
Company realized a net income of P10,806,678 for 1995 in all its
operations, which could be one factor why it offered the wage increase
package of P135 per day for the Union members.
Besides, as a major player in the country’s corporate field, reneging from
a wage increase package it previously offered and later on withdrawing
the same simply because this Office had already assumed jurisdiction
over its labor dispute with the Union cannot be countenanced. It will be
worse if the employer is allowed to withdraw its offer on the ground that
the union staged a strike and consequently subsequently suffered
business setbacks in its income projections. To sustain the Company’s
position is like hanging the proverbial sword of Damocles over the
Union’s right to concerted activities, ready to fall when the latter clamors
for better terms and conditions of employment.
But we cannot also sustain the Union’s demand for an increase of P215
per day. If we add the overload factors such as the increase in SSS
premiums, medicare and medicaid, and other multiplier costs, the
Company will be saddled with additional labor cost, and its projected
income for the CBS period may not be able to absorb the added cost
without impairing its viability. . . ."cralaw virtua1aw library
Verily, petitioner’s assertion that respondent Secretary failed to consider
the evidence on record lacks merit. It was only the Inorganic Division of
the petitioner corporation that was sustaining losses. Such incident does
not justify the withholding of any salary increase as petitioner’s income
from all sources are collated for the determination of its true financial
condition. As correctly stated by the Secretary, "the loss in one is usually
offset by the gains in the others."cralaw virtua1aw library
Moreover, petitioner company granted its supervisory employees, during
the pendency of the negotiations between the parties, a wage increase
of P4,500 per month or P166 per day, more or less. Petitioner justified
this by saying that the said increase was pursuant to its earlier
agreement with the supervisors. Hence, the company had no choice but
to abide by such agreement even if it was already sustaining losses as
a result of the strike of the rank-and-file employees.
Petitioner’s actuation is actually a discrimination against respondent
union members. If it could grant a wage increase to its supervisors, there
is no valid reason why it should deny the same to respondent union
members. Significantly, while petitioner asserts that it sustained losses
in the first part of 1996, yet during the May 9, 1996 conciliation meeting,
it made the offer of P135 daily wage to the said union members.
This Court, therefore, holds that respondent Secretary did not gravely
abuse his discretion in ordering the wage increase. Grave abuse of
discretion implies whimsical and capricious exercise of power which, in
the instant case, is not obtaining.
On the second ground, petitioner contends that public respondent
committed grave abuse of discretion when he ordered that the new CBA
which the parties will sign shall retroact to January 1, 1996, citing the
cases of Union of Filipro Employees v. NLRC, 2 and Pier 8 Arrastre and
Stevedoring Services, Inc. v. Roldan Confesor. 3
Invoking the provisions of Article 253-A of the Labor Code, petitioner
insists that public respondent’s discretion on the issue of the date of the
effectivity of the new CBA is limited to either: (1) leaving the matter of
the date of effectivity of the new CBA to the agreement of the parties or
(2) ordering that the terms of the new CBA be prospectively applied.
It must be emphasized that respondent Secretary assumed jurisdiction
over the dispute because it is impressed with national interest. As noted
by the Secretary, "the petitioner corporation was then supplying the
sulfate requirements of MWSS as well as the sulfuric acid of NAPOCOR,
and consequently, the continuation of the strike would seriously affect
the water supply of Metro Manila and the power supply of the Luzon
Grid." Such authority of the Secretary to assume jurisdiction carries with
it the power to determine the retroactivity of the parties’ CBA.
It is well settled in our jurisprudence that the authority of the Secretary
of Labor to assume jurisdiction over a labor dispute causing or likely to
cause a strike or lockout in an industry indispensable to national interest
includes and extends to all questions and controversies arising
therefrom. The power is plenary and discretionary in nature to enable
him to effectively and efficiently dispose of the primary dispute. 4
In St. Luke’s Medical Center, Inc. v. Torres 5 , a deadlock developed
during the CBA negotiations between the management and the union.
The Secretary of Labor assumed jurisdiction and ordered that their CBA
shall retroact to the date of the expiration of the previous CBA. The
management claimed that the Secretary of Labor gravely abused his
discretion. This Court held:jgc:chanrobles.com.ph
"x x x
Finally, the effectivity of the Order of January 28, 1991, must retroact to
the date of the expiration of the previous CBA, contrary to the position
of the petitioner. Under the circumstances of the case, Art. 253-A cannot
be properly applied to herein case. As correctly stated by public
respondent in his assailed Order of April 12, 1991 —
‘Anent the alleged lack of basis for retroactivity provisions awarded, We
would stress that the provision of law invoked by the Hospital, Article
253-A of the Labor Code, speaks of agreement by and between the
parties, and not arbitral awards.’
Therefore in the absence of the specific provision of law prohibiting
retroactivity of the effectivity of the arbitral awards issued by the
Secretary of Labor pursuant to Article 263(9) of the Labor Code, such
as herein involved, public respondent is deemed vested with plenary
powers to determine the effectivity thereof."cralaw virtua1aw library

Finally, to deprive respondent Secretary of such power and discretion
would run counter to the well-established rule that all doubts in the
interpretation of labor laws should be resolved in favor of labor. In
upholding the assailed orders of respondent Secretary, this Court is only
giving meaning to this rule. Indeed, the Court should help labor
authorities in providing workers immediate benefits, without being
hampered by arbitration or litigation processes that prove to be not only
nerve-wracking but financially burdensome in the long run.cralaw : red
As we said in Maternity Children’s Hospital v. Secretary of Labor 6
:jgc:chanrobles.com.ph
"Social Justice Legislation, to be truly meaningful and rewarding to our
workers, must not be hampered in its application by long winded-
arbitration and litigation. Rights must be asserted and benefits received
with the least inconvenience. Labor laws are meant to promote, not to
defeat, social justice."cralaw virtua1aw library
WHEREFORE, the instant petition is DENIED. The assailed orders of
the Secretary of Labor dated October 7, 1996 and December 16, 1996
are AFFIRMED. Costs against petitioner.
SO ORDERED.
CapitolMedical Center v trajano
CAPITOL MEDICAL CENTER, INC., Petitioner, v. HON.
CRESENCIANO B. TRAJANO, in his capacity as Secretary of the
Department of Labor and Employment, and CAPITOL MEDICAL
CENTER EMPLOYEES ASSOCIATION-AFW, Respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
For our resolution is the instant Petition for Review on Certiorari under
Rule 45 of the 1997 Rules of Civil Procedure, as amended, assailing the
Decision1 dated September 20, 2001 and the Resolution2 dated October
18, 2002 rendered by the Court of Appeals in CA-G.R. SP No. 53479,
entitled "Capitol Medical Center, Inc. v. Hon. Cresenciano B. Trajano, in
his capacity as Secretary of the Department of Labor and Employment
and Capitol Medical Center Employees Association-AFW."
The factual antecedents as gleaned from the records are:
Capitol Medical Center, Inc., Petitioner, is a hospital with address at
Panay Avenue corner Scout Magbanua Street, Quezon City. Upon the
other hand, Capitol Medical Center Employees Association-Alliance of
Filipino Workers, Respondent, is a duly registered labor union acting as
the certified collective bargaining agent of the rank-and-file employees
of petitioner hospital.
On October 2, 1997, respondent union, through its president Jaime N.
Ibabao, sent petitioner a letter requesting a negotiation of their Collective
Bargaining Agreement (CBA).
In its reply dated October 10, 1997, petitioner, challenging the union's
legitimacy, refused to bargain with respondent. Subsequently or on
October 15, 1997, petitioner filed with the Bureau of Labor Relations
(BLR), Department of Labor and Employment, a petition for cancellation
of respondent's certificate of registration, docketed as NCR-OD-9710-
006-IRD.3
For its part, on October 29, 1997, respondent filed with the National
Conciliation and Mediation Board (NCMB), National Capital Region, a
notice of strike, docketed as NCMB-NCR-NS-10-453-97. Respondent
alleged that petitioner's refusal to bargain constitutes unfair labor
practice. Despite several conferences and efforts of the designated
conciliator-mediator, the parties failed to reach an amicable settlement.
On November 28, 1997, respondent staged a strike.
On December 4, 1997, former Labor Secretary Leonardo A.
Quisumbing, now Associate Justice of this Court, issued an Order
assuming jurisdiction over the labor dispute and ordering all striking
workers to return to work and the management to resume normal
operations, thus:
"WHEREFORE, this Office 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 agreement in compliance with
aforementioned Resolution of the Office as affirmed by the Supreme
Court.
SO ORDERED."
Petitioner then filed a motion for reconsideration but was denied in an
Order dated April 27, 1998.
On June 23, 1998, petitioner filed with this Court a Petition
for Certiorari assailing the Labor Secretary's Orders. Pursuant to our
ruling in St. Martin Funeral Home vs.The National Labor Relations
Commission, et al.,4 we referred the petition to the Court of Appeals for
its appropriate action and disposition.
Meantime, on October 1, 1998, the Regional Director, in NCR-OD-9710-
006-IRD, issued an Order denying the petition for cancellation of
respondent union's certificate of registration.5
On September 20, 2001, the Appellate Court rendered a Decision
affirming the Orders of the Secretary of Labor. The Court of Appeals
held:
"Anent the first issue raised by the petitioner, We find the same
untenable. The public respondent acted well within his duty to order the
petitioner hospital to bargain collectively, for it was the surest way to end
the dispute. In LMG Chemicals Corporation v. 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), the Supreme Court made the following pronouncement, to wit:
'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.
xxxxxx
Indeed, We find no grave abuse of discretion on the part of respondent
Secretary of Labor whose power is plenary and includes the resolution
of all controversies arising from the labor dispute. In fact, he was merely
following the directive laid down by the Supreme Court (Decision dated
February 4, 1997) in the case of Capitol Medical Center Alliance of
Concerned Employees-Unified Filipino Service Workers (CMC-ACE-
UFSW) v. 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, ordering
petitioner hospital to collectively bargain with the Capitol Medical Center
Employees Association-Alliance of Filipino Workers (private respondent
herein) - the certified bargaining agent.
As earlier mentioned, the petition for cancellation was dismissed by the
regional director in a decision dated September 30, 1998. x x x.
xxxxxx
Said decision by the regional director was affirmed by the Director of the
Bureau of Labor Relations in a resolution dated December 29, 1998,
dismissing the appeal of the petitioner hospital from the said DOLE-
NCR's decision.
Finally, the Petition for Certiorari (docketed as CA-G.R. SP No. 52736)
entitled - Capitol Medical Center, Inc. v. Hon. Benedictor R. Bitonio, Jr.,
in his capacity as Director of the Bureau of Labor Relations, Department
of Labor and Employment; Hon. Maximo B. Lim in his capacity as
Regional Director, National Capital Region, Department of Labor and
Employment and Capitol Medical Center Employees Association
(CMCEA-AFW), was dismissed in a decision dated January 11, 2001.
The motion for reconsideration which was subsequently filed was denied
on March 23, 2001.
xxxxxx
In order to allow an employer to validly suspend the bargaining process,
there must be a valid petition for certification election. The mere filing of
a petition does not ipso facto justify the suspension of negotiation by the
employer (Colegio de San Juan de Letran v. Association of Employees
and Faculty of Letran and Eleanor Ambas, G.R. No. 141471, September
18, 2000). If pending a petition for certification, the collective bargaining
is allowed by the Supreme Court to proceed, with more reason should
the collective bargaining (in this case) continue since the High Court had
recognized the respondent as the certified bargaining agent in spite of
several petitions for cancellation filed against it.
xxxxxx
Secondly, We are inclined to agree with the public respondent's
statement that 'the primary assumption of jurisdiction may be exercised
by this Office even without the necessity of prior notice or hearing given
to any of the parties disputants. '(page 56 of the Rollo).
xxxxxx
We are also not convinced by the arguments raised by the petitioner with
respect to its third assigned error. This Court fails to see any
supervening event that would render the execution of the decision of
public respondent impossible. The petitioner asserts that the respondent
union has lost its legitimacy, but at every turn it has been ruled by the
various labor administrative officials that the respondent union is
legitimate. It has failed to convince the labor administrative officials, We
are likewise not persuaded. Unless and until the Certificate of
Registration of the union is cancelled, it (union) remains the certified
bargaining agent and the Hospital has the duty to enter into a collective
bargaining agreement with it.
xxxxxx
WHEREFORE, premises considered, the instant petition is DENIED,
hereby AFFIRMING the two assailed orders, dated December 4, 1997
and April 27, 1998, of the public respondent in OS-AJ-0024-97 (NCMB-
NCR-NS-10-453-97).
SO ORDERED."
On October 18, 2002, the Court of Appeals issued a Resolution denying
petitioner's motion for reconsideration.
Hence, this Petition for Review on certiorari.
Petitioner contends that its petition for the cancellation of respondent
union's certificate of registration involves a prejudicial question that
should first be settled before the Secretary of Labor could order the
parties to bargain collectively.
We are not persuaded.
As aptly stated by the Solicitor General in his comment on the petition,
the Secretary of Labor correctly ruled that the pendency of a petition for
cancellation of union registration does not preclude collective
bargaining, thus:
"That there is a pending cancellation proceedings against the
respondent Union is not a bar to set in motion the mechanics of collective
bargaining. If a certification election may still be ordered despite the
pendency of a petition to cancel the union's registration certificate
(National Union of Bank Employees v. Minister of Labor, 110 SCRA
274), more so should the collective bargaining process continue despite
its pendency. We must emphasize that the majority status of the
respondent Union is not affected by the pendency of the Petition for
Cancellation pending against it. Unless its certificate of registration and
its status as the certified bargaining agent are revoked, the Hospital is,
by express provision of the law, duty bound to collectively bargain with
the Union. Indeed, no less than the Supreme Court already ordered the
Hospital to collectively bargain with the Union when it affirmed the
resolution of this Office dated November 18, 1994 directing the
management of the Hospital to negotiate a collective bargaining
agreement with the Union. That was the categorical directive of the High
Court in its Resolution dated February 4, 1997 in Capitol Medical Center
Alliance of Concerned Employees-United Filipino Service Worker v.
Hon. Bienvenido E. Laguesma, et al., G.R. No. L-118915."
Moreover, as mentioned earlier, during the pendency of this case before
the Court of Appeals, the Regional Director, in NCR-OD-9710-006-IRD,
issued an Order on October 1, 1998 denying the petition for cancellation
of respondent's certificate of registration. This Order became final and
executory and recorded in the BLR's Book of Entries of Judgments on
June 3, 1999.
Petitioner also maintains that the Secretary of Labor cannot exercise his
powers under Article 263 (g) of the Labor Code without observing the
requirements of due process.
Article 263 (g) of the Labor Code, as amended, provides:
"ART. 263. Strikes, Picketing and Lockouts.'
xxxxxx
(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
resume operations and readmit all workers under the same terms and
conditions prevailing before the strike or lockout. The Secretary of Labor
and Employment or the Commission may seek the assistance of law
enforcement agencies to ensure compliance with this provision as well
as with such orders as he may issue to enforce the same.
x x x. In labor disputes adversely affecting the continued operation of
such hospitals, clinics or medical institutions, it shall be the duty of the
striking union or locking-out employer to provide and maintain an
effective skeletal workforce of medical and other health personnel,
whose movement and services shall be unhampered and unrestricted,
as are necessary to insure the proper and adequate protection of the life
and health of its patients, most especially emergency cases, for the
duration of the strike or lockout. In such cases, therefore, the
Secretary of Labor and Employment is mandated to immediately
assume, within twenty-four (24) hours from knowledge of the
occurrence of such a strike or lockout, jurisdiction over the same
or certify it to the Commission for compulsory arbitration. For this
purpose, the contending parties are strictly enjoined to comply with such
orders, prohibitions and/or injunctions as are issued by the Secretary of
Labor and Employment or the Commission, under pain of immediate
disciplinary action, including dismissal or loss of employment status or
payment by the locking-out employer of backwages, damages and other
affirmative relief, even criminal prosecution against either or both of
them.
The foregoing notwithstanding, the President of the Philippines shall not
be precluded from determining the industries that, in his opinion, are
indispensable to the national interest, and from intervening at any time
and assuming jurisdiction over any such labor dispute in order to settle
or terminate the same.
x x x x x x."
In Magnolia Poultry Employees Union v. Sanchez,6 we held that the
discretion to assume jurisdiction may be exercised by the Secretary of
Labor and Employment without the necessity of prior notice or hearing
given to any of the parties. The rationale for his primary assumption of
jurisdiction can justifiably rest on his own consideration of the exigency
of the situation in relation to the national interests.
In sum, petitioner's submissions are bereft of merit.
WHEREFORE, the petition is DENIED. The assailed Decision dated
September 20, 2001 and the Resolution dated October 18, 2002 of the
Court of Appeals in CA-G.R. SP No. 53479 are AFFIRMED. Costs
against petitioner.
SO ORDERED.
NATIONAL FEDERATION OF SUGAR WORKERS v. ETHELWOLDO
R. OVEJERA
PLANA, J.:
This is a petition for prohibition seeking to annul the decision dated
February 20, 1982 of Labor Arbiter Ethelwoldo R. Ovejera of the National
Labor Relations Commission (NLRC) with station at the Regional
Arbitration Branch No. VI-A, Bacolod City, which, among others,
declared illegal the ongoing strike of the National Federation of Sugar
Workers (NFSW) at the Central Azucarera de la Carlota (CAC), and to
restrain the implementation thereof.
I. FACTS -
1. NFSW has been the bargaining agent of CAC rank and file employees
(about 1200 of more than 2000 personnel) and has concluded with CAC
a collective bargaining agreement effective February 16, 1981 -
February 15, 1984. Under Art. VII, Sec. 5 of the said CBA -
"Bonuses - The parties also agree to maintain the present practice on
the grant of Christmas bonus, milling bonus, and amelioration bonus to
the extent as the latter is required by law."
The Christmas and milling bonuses amount to 1-1/2 months' salary.
2. On November 28, 1981, NFSW struck allegedly to compel the
payment of the 13th month pay under PD 851, in addition to the
Christmas, milling and amelioration bonuses being enjoyed by CAC
workers.
3. To settle the strike, a compromise agreement was concluded between
CAC and NFSW on November 30, 1981. Under paragraph 4 thereof-
"The parties agree to abide by the final decision of the Supreme Court
in any case involving the 13th Month Pay Law if it is clearly held that the
employer is liable to pay a 13th month pay separate and distinct from
the bonuses already given."
4. As of November 30, 1981, G.R. No. 51254 (Marcopper Mining Corp.
vs. Blas Ople and Amado Inciong, Minister and Deputy Minister of Labor,
respectively, and Marcopper Employees Labor Union, Petition for
Certiorari and Prohibition) was still pending in the Supreme Court. The
Petition had been dismissed on June 11, 1981 on the vote of seven
Justices.[1] A motion for reconsideration thereafter filed was denied in a
resolution dated December 15, 1981, with only five Justices voting for
denial. (3 dissented; 2 reserved their votes; 4 did not take part)
On December 18, 1981 - the decision of June 11, 1981 having become
final and executory - entry of judgment was made.
5. After the Marcopper decision had become final, NFSW renewed its
demand that CAC give the 13th month pay. CAC refused.
6. On January 22, 1982, NFSW filed with the Ministry of Labor and
Employment (MOLE) Regional Office in Bacolod City a notice to strike
based on nonpayment of the 13th month pay. Six days after, NFSW
struck.
7. One day after the commencement of the strike, or on January 29,
1982, a report of the strike-vote was filed by NFSW with MOLE.
8. On February 8, 1982, CAC filed a petition (R.A.B. Case No. 0110-82)
with the Regional Arbitration Branch VI-A, MOLE, at Bacolod City to
declare the strike illegal, principally for being violative of Batas
Pambansa Blg. 130, that is, the strike was declared before the expiration
of the 15-day cooling-off period for unfair labor practice (ULP) strikes,
and the strike was staged before the lapse of seven days from the
submission to MOLE of the result of the strike-vote.
9. After the submission of position papers and hearing, Labor Arbiter
Ovejera declared the NFSW strike illegal. The dispositive part of his
decision dated February 20, 1982 reads:
"Wherefore, premises considered, judgment is hereby rendered:
"1. Declaring the strike commenced by NFSW on January 28, 1982,
illegal;
"2. Directing the Central to resume operations immediately upon receipt
hereof;
"3. Directing the Central to accept back to work all employees appearing
in its payroll as of January 28, 1982 except those covered by the
February 1, 1982 memorandum on preventive suspension but without
prejudice to the said employees' instituting appropriate actions before
this Ministry relative to whatever causes of action they may have
obtained proceeding from said memorandum;
"4. Directing the Central to pay effective from the date of resumption of
operations the salaries of those to be placed on preventive suspension
as per February 1, 1982 memorandum during their period of preventive
suspension; and
"5. Directing, in view of the finding that the subject strike is illegal, NFSW,
its officers, members, as well as sympathizers to immediately desist from
committing acts that may impair or impede the milling operations of the
Central.
"The law enforcement authorities are hereby requested to assist in the
peaceful enforcement and implementation of this Decision.
"SO ORDERED."
10. On February 26, 1982, the NFSW - bypassing the NLRC - filed the
instant Petition for prohibition alleging that Labor Arbiter Ovejera, CAC
and the PC Provincial Commander of Negros Occidental were
threatening to immediately enforce the February 20, 1982 decision
which would violate fundamental rights of the petitioner, and praying that
-
"WHEREFORE, on the foregoing considerations, it is prayed of the
Honorable Court that on the Petition for Preliminary Injunction, an order,
after hearing, issue:
"1. Restraining implementation or enforcement of the Decision of
February 20, 1982;
"2. Enjoining respondents to refrain from the threatened acts violative of
the rights of strikers and peaceful picketers;
"3. Requiring maintenance of the status quo as of February 20, 1982,
until further orders of the Court;
and on the Main Petition, judgment be rendered after hearing:
"1. Declaring the Decision of February 20, 1982 null and void;
"2. Making the preliminary injunction permanent;
"3. Awarding such other relief as may be just in the premises."
11. Hearing was held, after which the parties submitted their
memoranda. No restraining order was issued.
II. ISSUES -
The parties have raised a number of issues, including some procedural
points. However, considering their relative importance and the impact of
their resolution on ongoing labor disputes in a number of industry
sectors, we have decided - in the interest of expediency and dispatch -
to brush aside non-substantial items and reduce the remaining issues to
but two fundamental ones:
1. Whether the strike declared by NFSW is illegal, the resolution of which
mainly depends on the mandatory or directory character of the cooling-
off period and the 7-day strike ban after report to MOLE of the result of
a strike-vote, as prescribed in the Labor Code.
2. Whether under Presidential Decree 851 (13th Month Pay Law), CAC
is obliged to give its workers a 13th month salary in addition to
Christmas, milling and amelioration bonuses, the aggregate of which
admittedly exceeds by far the disputed 13th month pay. (See petitioner's
memorandum of April 12, 1982, p. 2; CAC memorandum of April 2, 1982,
pp. 3-4.) Resolution of this issue requires an examination of the thrusts
and application of PD 851.
III. DISCUSSION -
1. Articles 264 and 265 of the Labor Code, insofar as pertinent, read:
ART. 264. Strikes, picketing and lockouts. - xx xx xx
"(c) In cases of bargaining deadlocks, the certified or duly recognized
bargaining representative may file a notice of strike with the Ministry (of
Labor and Employment) at least thirty (30) days before the intended date
thereof. In cases of unfair labor practices, the period of notice shall be
shortened to fifteen (15) days; xx xx xx
xx xx xx
"(e) During the cooling-off period, it shall be the duty of the Ministry to
exert all efforts at mediation and conciliation to effect a voluntary
settlement. Should the dispute remain unsettled until the lapse of the
requisite number of days from the mandatory filing of the notice, the
labor union may strike or the employer may declare a lockout.
"(f) A decision to declare a strike must be approved by at least two-thirds
(2/3) of the total union membership in the bargaining unit concerned by
secret ballots in meetings or referenda. A decision to declare a lockout
must be approved by at least two-thirds (2/3) of the board of directors of
the employer corporation or association or of the partners in a
partnership obtained by secret ballot in a meeting called for the purpose.
The decision shall be valid for the duration of the dispute based on
substantially the same grounds considered when the strike or lockout
vote was taken. The Ministry, may at its own initiative or upon the
request of any affected party, supervise the conduct of the secret
balloting. In every case, the union or the employer shall furnish the
Ministry the results of the voting at least seven (7) days before the
intended strike or lockout, subject to the cooling-off period herein
provided." (Emphases supplied.)
"ART. 265. Prohibited activities. -It shall be unlawful for any labor
organization or employer to declare a strike or lockout without first
having bargained collectively in accordance with Title VII of this Book or
without first having filed the notice required in the preceding Article or
without the necessary strike or lockout vote first having been obtained
and reported to the Ministry.
"It shall likewise be unlawful to declare a strike or lockout after
assumption of jurisdiction by the President or the Minister or after
certification or submission of the dispute to compulsory or voluntary
arbitration or during the pendency of cases involving the same grounds
for the strike or lockout." (Emphases supplied.)
(a) Language of the law. - The foregoing provisions hardly leave any
room for doubt that the cooling-off period in Art. 264(c) and the 7-day
strike ban after the strike-vote report prescribed in Art. 264(f) were meant
to be, and should be deemed, mandatory.
When the law says "the labor union may strike" should the dispute
"remain unsettled until the lapse of the requisite number of days
(cooling-off period) from the mandatory filing of the notice," the
unmistakable implication is that the union may not strike before the lapse
of the cooling-off period. Similarly, the mandatory character of the 7-day
strike ban after the report on the strike-vote is manifest in the provision
that "in every case," the union shall furnish the MOLE with the results of
the voting "at least seven (7) days before the intended strike, subject to
the (prescribed) cooling-off period." It must be stressed that the
requirements of cooling-off period and 7-day strike ban must both be
complied with, although the labor union may take a strike vote and report
the same within the statutory cooling-off period.
If only the filing of the strike notice and the strike-vote report would be
deemed mandatory, but not the waiting periods so specifically and
emphatically prescribed by law, the purposes (hereafter discussed) for
which the filing of the strike notice and strike-vote report is required
would not be achieved, as when a strike is declared immediately after a
strike notice is served, or when - as in the instant case - the strike-vote
report is filed with MOLE after the strike had actually commenced. Such
interpretation of the law ought not and cannot be countenanced. It would
indeed be self-defeating for the law to imperatively require the filing on
a strike notice and strike-vote report without at the same time making
the prescribed waiting periods mandatory.
(b) Purposes of strike notice and strike-vote report. - In requiring a strike
notice and a cooling-off period, the avowed intent of the law is to provide
an opportunity for mediation and conciliation. It thus directs the MOLE
"to exert all efforts at mediation and conciliation to effect a voluntary
settlement" during the cooling-off period.
As applied to the CAC-NFSW, dispute regarding the 13th month pay,
MOLE intervention could have possibly induced CAC to provisionally
give the 13th month pay in order to avert great business loss arising from
the projected strike, without prejudice to the subsequent resolution of the
legal dispute by competent authorities; or mediation/conciliation could
have convinced NFSW to at least postpone the intended strike so as to
avoid great waste and loss to the sugar central, the sugar planters and
the sugar workers themselves, if the strike would coincide with the
milling season.
So, too, the 7-day strike-vote report is not without a purpose. As pointed
out by the Solicitor General -
"Many disastrous strikes have been staged in the past based merely on
the insistence of minority groups within the union. The submission of the
report gives assurance that a strike vote has been taken and that, if the
report concerning it is false, the majority of the members can take
appropriate remedy before it is too late." (Answer of public respondents,
pp. 17-18.)
If the purpose of the required strike notice and strike-vote report are to
be achieved, the periods prescribed for their attainment must, as
aforesaid, be deemed mandatory.
". . . when a fair interpretation of the statute, which directs acts or
proceedings to be done in a certain way, shows the legislature intended
a compliance with such provision to be essential to the validity of the act
or proceeding, or when some antecedent and prerequisite conditions
must exist prior to the exercise of power or must be performed before
certain other powers can be exercised, the statute must be regarded as
mandatory. So it has been held that, where a statute is founded on public
policy [such as the policy to encourage voluntary settlement of disputes
without resorting to strikes], those to whom it applies should not be
permitted to waive its provisions. (82 C.J.S. 873-874. Bracketed words
supplied.)
(c) Waiting period after strike notice and strike-vote report, valid
regulation of right to strike. - To quote Justice Jackson in International
Union vs. Wisconsin Employment Relations Board, 336 U.S. 245, at 259
-
"The right to strike, because of its more serious impact upon the public
interest, is more vulnerable to regulation than the right to organize and
select representatives for lawful purposes of collective bargaining..."
The cooling-off period and the 7-day strike ban after the filing of a strike-
vote report, as prescribed in Art. 264 of the Labor Code, are reasonable
restrictions and their imposition is essential to attain the policy objectives
embodied in the law. We hold that they constitute a valid exercise of the
police power of the state.
(d) State policy on amicable settlement of criminal liability. - Petitioner
contends that since the non-compliance (with PD 851) imputed to CAC
is an unfair labor practice which is an offense against the state, the
cooling-off period provided in the Labor Code would not apply, as it does
not apply to ULP strikes. It is argued that mediation or conciliation in
order to settle a criminal offense is not allowed.
In the first place, it is at best unclear whether the refusal of CAC to give
a 13th month pay to NFSW constitutes a criminal act. Under Sec. 9 of
the Rules and Regulations Implementing Presidential Decree No. 851 -
"Non-payment of the thirteenth-month pay provided by the Decree and
these rules shall be treated as money claims cases and shall be
processed in accordance with the Rules Implementing the Labor Code
of the Philippines and the Rules of the National Labor Relations
Commission."
Secondly, the possible dispute settlement, either permanent or
temporary, could very well be along legally permissible lines, as
indicated in (b) above or assume the form of measures designed to abort
the intended strike, rather than compromise criminal liability, if any.
Finally, amicable settlement of criminal liability is not inexorably
forbidden by law. Such settlement is valid when the law itself clearly
authorizes it. In the case of a dispute on the payment of the 13th month
pay, we are not prepared to say that its voluntary settlement is not
authorized by the terms of Art. 264(e) of the Labor Code, which makes
it the duty of the MOLE to exert all efforts at mediation and conciliation
to effect a voluntary settlement of labor disputes.
(e) NFSW strike is illegal. - The NFSW declared the strike six (6) days
after filing a strike notice, i.e., before the lapse of the mandatory cooling-
off period. It also failed to file with the MOLE before launching the strike
a report on the strike-vote, when it should have filed such report "at least
seven (7) days before the intended strike." Under the circumstances, we
are perforce constrained to conclude that the strike staged by petitioner
is not in conformity with law. This conclusion makes it unnecessary for
us to determine whether the pendency of an arbitration case against
CAC on the same issue of payment of 13th month pay [R.A.B. No. 512-
81, Regional Arbitration Branch No. VI-A, NLRC, Bacolod City, in which
the National Congress of Unions in the Sugar Industry of the Philippines
(NACUSIP) and a number of CAC workers are the complainants, with
NFSW as Intervenor seeking the dismissal of the arbitration case as
regards unnamed CAC rank and file employees] has rendered illegal the
above strike under Art. 265 of the Labor Code which provides:
"It shall likewise be unlawful to declare a strike or lockout after
assumption of jurisdiction by the President or the Minister, or after
certification or submission of the dispute to compulsory or voluntary
arbitration or during the pendency of cases involving the same grounds
for the strike or lockout." (Emphases supplied.)
(2) The Second Issue. - At bottom, the NFSW strike arose from a dispute
on the meaning and application of PD 851, with NFSW claiming
entitlement to a 13th month pay on top of bonuses given by CAC to its
workers, as against the diametrically opposite stance of CAC. Since the
strike was just an offshoot of the said dispute, a simple decision on the
legality or illegality of the strike would not spell the end of the NFSW-
CAC labor dispute. And considering further that there are other disputes
and strikes - actual and impending - involving the interpretation and
application of PD 851, it is important for this Court to definitively resolve
the problem: whether under PD 851, CAC is obliged to give its workers
a 13th month salary in addition to Christmas, milling and amelioration
bonuses stipulated in a collective bargaining agreement amounting to
more than a month's pay.
Keenly sensitive to the needs of the workingmen, yet mindful of the
mounting production costs that are the woe of capital which provides
employment to labor, President Ferdinand E. Marcos issued Presidential
Decree No. 851 on 16 December 1975. Thereunder, "all employers are
hereby required to pay all their employees receiving a basic salary of not
more than P1,000 a month, regardless of the nature of their employment,
a 13th month pay not later than December 24 of every year." Exempted
from the obligation however are:
"Employers already paying their employees a 13th month pay or its
equivalent...." (Section 2.)
The evident intention of the law, as revealed by the law itself, was to
grant an additional income in the form of a 13th month pay to employees
not already receiving the same. Otherwise put, the intention was to grant
some relief - not to all workers - but only to the unfortunate ones not
actually paid a 13th month salary or what amounts to it, by whatever
name called; but it was not envisioned that a double burden would be
imposed on the employer already paying his employees a 13th month
pay or its equivalent - whether out of pure generosity or on the basis of
a binding agreement and, in the latter case, regardless of the conditional
character of the grant (such as making the payment dependent on
profit), so long as there is actual payment. Otherwise, what was
conceived to be a 13th month salary would in effect become a 14th or
possibly 15th month pay.
This view is justified by the law itself which makes no distinction in the
grant of exemption: "Employers already paying their employees a 13th
month pay or its equivalent are not covered by this Decree." (P.D. 851.)
The Rules Implementing P.D. 851 issued by MOLE immediately after
the adoption of said law reinforce this stand. Under Section 3(e) thereof
-
"The term 'its equivalent' ... shall include Christmas bonus, mid-year
bonus, profit-sharing payments and other cash bonuses amounting to
not less than 1/12th of the basic salary but shall not include cash and
stock dividends, cost of living allowances and all other allowances
regularly enjoyed by the employee, as well as non-monetary benefits.
Where an employer pays less than 1/12th of the employee's basic
salary, the employer shall pay the difference." (Emphases supplied.)
Having been issued by the agency charged with the implementation of
PD 851 as its contemporaneous interpretation of the law, the quoted rule
should be accorded great weight.
Pragmatic considerations also weigh heavily in favor of crediting both
voluntary and contractual bonuses for the purpose of determining liability
for the 13th month pay. To require employers (already giving their
employees a 13th month salary or its equivalent) to give a second 13th
month pay would be unfair and productive of undesirable results. To the
employer who had acceded and is already bound to give bonuses to his
employees, the additional burden of a 13th month pay would amount to
a penalty for his munificence or liberality. The probable reaction of one
so circumstanced would be to withdraw the bonuses or resist further
voluntary grants for fear that if and when a law is passed giving the same
benefits, his prior concessions might not be given due credit; and this
negative attitude would have an adverse impact on the employees.
In the case at bar, the NFSW-CAC collective bargaining agreement
provides for the grant to CAC workers of Christmas bonus, milling bonus
and amelioration bonus, the aggregate of which is very much more than
a worker's monthly pay. When a dispute arose last year as to whether
CAC workers receiving the stipulated bonuses would additionally be
entitled to a 13th month pay, NFSW and CAC concluded a compromise
agreement by which they -
"agree(d) to abide by the final decision of the Supreme Court in any case
involving the 13th Month Pay Law if it is clearly held that the employer is
liable to pay a 13th month pay separate and distinct from the bonuses
already given."
When this agreement was forged on November 30, 1981, the original
decision dismissing the petition in the aforecited Marcopper case had
already been promulgated by this Court. On the votes of only 7 Justices,
including the distinguished Chief Justice, the petition of Marcopper
Mining Corp. seeking to annul the decision of Labor Deputy Minister
Amado Inciong granting a 13th month pay to Marcopper employees (in
addition to mid-year and Christmas bonuses under a CBA) had been
dismissed. But a motion for reconsideration filed by Marcopper was
pending as of November 30, 1981. In December 1981, the original
decision was affirmed when this Court finally denied the motion for
reconsideration. But the resolution of denial was supported by the votes
of only 5 Justices. The Marcopper decision is therefore a Court decision
but without the necessary eight votes to be doctrinal. This being so, it
cannot be said that the Marcopper decision "clearly held" that "the
employer is liable to pay a 13th month pay separate and distinct from
the bonuses already given," within the meaning of the NFSW-CAC
compromise agreement. At any rate, in view of the rulings made herein,
NFSW cannot insist on its claim that its members are entitled to a 13th
month pay in addition to the bonuses already paid by CAC.
WHEREFORE, the petition is dismissed for lack of merit. No costs.
GRAND BOULEVARD HOTEL vs. GENUINE LABOR
ORGANIZATION
G.R. No. 153664. July 18, 2003
FACTS:
Petitioner and respondent union entered into and signed a CBA covering
the period of July 10, 1988 to July 9, 1991. On September 27, 1990, the
respondent union filed a notice of strike based on the following grounds:
a) Violation of CBA; b) Coercion of employees; c) Harassment; d)
Arbitrary transfer of employees; and e) Illegal termination and
suspension of employees. On October 16, 1990, the petitioner's general
manager, wrote the Acting Secretary of Labor and Employment (SOLE
for brevity) informing him of the petitioner's decision to retrench 171
employees on a staggered basis, spread over a period of 60 days, to
lessen the daily financial losses being incurred by the petitioner. The
next day, the respondent union informed the DOLE-NCR that the union
will conduct a strike vote referendum. The members of the respondent
union voted to stage a strike. DOLE-NCR was thereafter informed of the
results of the strike vote referendum. On October 31, 1990, the SOLE
issued a status quo ante bellum order certifying the case to the NLRC
for compulsory arbitration and enjoining the parties from engaging in any
strike or lockout.
The petitioner wrote the SOLE of its decision to implement its
retrenchment program to stem its huge losses. Subsequently, the
petitioner terminated the employment of 148 employees. The remaining
employees were also informed that it will close in six months. The
respondent union protested the actions of the petitioner invoking Section
15, Article VI of the CBA. By way of riposte, the respondent union filed
on November 16, 1990 another notice of strike because of what it
perceived as the petitioner's continuing unfair labor practices (ULP). On
the same day, the officers of the respondent union and some members
staged a picket in the premises of the hotel, obstructing the free ingress
and egress thereto. The following day, petitioner terminated the
employment of the officers and members of the respondent union. On
November 28, 1990, the SOLE issued an order certifying the labor
dispute to the NLRC. The SOLE issued a return-to-work order, which the
respondent officers and members complied.
Petitioner however filed a complaint with the Regional Arbitration Office
of the NLRC for illegal strike against the respondents on the ground that
the latter failed to comply with the requirements provided under Arts. 263
and 264 of the Labor Code. In their answer, the respondents alleged that
the petitioner committed ULP prior to the filing of the November 16, 1990
notice of strike. Hence, there was no need for the respondent union to
comply with Arts. 263 and 264 of the Labor Code, as the notice filed by
the union on September 27, 1990 was sufficient compliance with the law.
After due trial, the Labor Arbiter rendered a decision in favor of the
petitioner and declared the union officers to have lost and forfeited their
employment. When the petitioner learned of said decision, it forthwith
barred the officers and members of the respondent union from entering
the hotel. The respondent union appealed the decision to the NLRC,
alleging that it had complied with the requirements laid down in Arts. 263
and 264 of the Labor Code because its November 16, 1990 notice of
strike was a mere reiteration of its September 27, 1990 notice of strike,
which, in turn, complied with all the requirements of the aforementioned
articles, i.e., the cooling-off period, the strike ban, the strike vote and the
strike vote report. After trial, the NLRC affirmed the decision of the LA.
It ratiocinated that the compliance by respondents of the requirements
laid down in Arts. 263 and 264 of the Labor Code respecting the
September 27, 1990 notice of strike filed by the union cannot be carried
over to the November 16, 1990 notice of strike. Resultantly, for failure of
the union to comply with the aforementioned requirements for its
November 16, 1990 notice of strike, the strike staged on November 16
up to November 29, 1990 was illegal. Thereafter, the respondents
appealed NLRC’s decision to the CA and the latter ruled that the strike
was legal, hence, the dismissal of respondents were unjustified and
without legal basis. Hence, this petition.
ISSUE: Whether the strike staged by the respondent union on
November 16 was legal?
HELD: NO. The requisites for a valid strike are as follows: (a) a notice
of strike filed with the DOLE thirty days before the intended date thereof
or fifteen days in case of ULP; (b) strike vote approved by a majority of
the total union membership in the bargaining unit concerned obtained
by secret ballot in a meeting called for that purpose; and (c) notice given
to the DOLE of the results of the voting at least seven days before the
intended strike. The requisite seven-day period is intended to give the
DOLE an opportunity to verify whether the projected strike really carries
the approval of the majority of the union members. The notice of strike
and the cooling-off period were intended to provide an opportunity for
mediation and conciliation. The requirements are mandatory and failure
of a union to comply therewith renders the strike illegal. A strike
simultaneously with or immediately after a notice of strike will render the
requisite periods nugatory. Moreover, a strike that is undertaken, despite
the issuance by the SOLE of an assumption or certification order,
becomes a prohibited activity and, thus, illegal pursuant to Art. 264 of
the Labor Code, as amended. Consequently, the union officers and
members are deemed to have lost their employment status for having
knowingly participated in an illegal act.
In this case, the respondent union filed its notice of strike with the
DOLE on November 16, 1990 and on the same day, staged a picket
on the premises of the hotel, in violation of the law. The respondents
cannot argue that since the notice of strike on November 16, 1990 were
for the same grounds as those contained in their notice of strike on
September 27, 1990 which complied with the requirements of the law on
the cooling-off period, strike ban, strike vote and strike vote report, the
strike staged by them on November 16, 1990 was lawful. The matters
contained in the notice of strike of September 27, 1990 had already been
taken cognizance of by the SOLE when he issued on October 31, 1990
a status quo ante bellum order enjoining the respondent union from
intending or staging a strike. Despite the SOLE order, the respondent
union nevertheless staged a strike on November 16, 1990
simultaneously with its notice of strike, thus violating Art. 264(a) of the
Labor Code, as amended, which provides that “ x x x No strike or lockout
shall be declared after assumption of jurisdiction by the President or the
Secretary or after certification or submission of the dispute to
compulsory or voluntary arbitration or during the pendency of cases
involving the same grounds for the strike or lockout.”
While it may be true that the petitioner itself barred the officers of the
respondent union from working and sent out circulars of its decision to
retrench its employees effective December 16, 1990, the same were not
valid justifications for the respondents to do away with the statutory
procedural requirements for a lawful strike. There was no immediate and
imperative need for the respondents to stage a strike on the very day
that the notice of strike on November 16, 1990 was filed because the
retrenchment envisaged by the petitioner had yet to take effect on
December 14, 1990. The grievances of the respondent union could still
very well be ordered and acted upon by the SOLE before December 14,
1990. The respondents' claim of good faith is not a valid excuse to
dispense with the procedural steps for a lawful strike. Thus, even if the
union acted in good faith in the belief that the company was committing
an unfair labor practice, if no notice of strike and a strike vote were
conducted, the said strike is illegal. Hence, the need for a union to
adhere to and comply strictly with the procedural conditions sine
qua non provided for by the law in staging a strike.
SUKHOTHAI CUISINE AND RESTAURANT V CA
Vote
FACTS: The majority of the employees of the petitioner organized
themselves into a union which affiliated with the Philippine Labor
Alliance Council (PLAC), and was designated as PLAC Local 460
Sukhothai Restaurant Chapter (Union). The Union filed a Notice of Strike
with the National Conciliation and Mediation Board (NCMB) on the
ground of unfair labor practice, and particularly, acts of harassment,
fault-finding, and union busting through coercion and interference with sufficient grounds to justify the radical recourse on the part of the private
union affairs. In a conciliation conference, the representatives of the respondents.
petitioner agreed and guaranteed that there will be no termination of the
services of private respondents during the pendency of the case, with For failing to exhaust all steps in the arbitration
the reservation of the management prerogative to issue memos to erring proceedings by virtue of the Submission Agreement, in view of the
employees for the infraction, or violation of company policies. On the proscription under Article 264 of the Labor Code, and the prevailing
following day, a Strike Vote was conducted and supervised by NCMB state policy as well as its underlying rationale, this Court declares
personnel, and the results of the vote were submitted to the NCMB. The that the strike staged by the private respondents is illegal.
petitioner and the Union entered into a Submission Agreement, thereby
agreeing to submit the issue of unfair labor practice – the subject
matter of the foregoing Notice of Strike and the Strike Vote – for
voluntary arbitration with a view to prevent the strike.
During the pendency of the voluntary arbitration proceedings,
the petitioner, dismissed Eugene Lucente, a union member, due to an
alleged petty quarrel with a co-employee. Union filed with the NLRC a
complaint for illegal dismissal. Another union member was relieved from
his post, and his employment as cook, terminated. Union staged a
"wildcat strike."
Notice of Strike was re-filed by the private respondents and
the protest and was converted into a "sit-down strike." On the next day,
or on June 26, 1999, the same was transformed into an "actual strike."
Petitioner filed a complaint for illegal strike, seeking to declare the strike
illegal, and to declare respondents, who participated in the commission
of illegal acts, to have lost their employment status. Labor Arbiter ruled
in favor of petitioner. However, NLRC overruled Labor Arbiter and held
that the petitioner is guilty of union busting; that the petitioner violated
the Submission Agreement.

ISSUE: Whether the strike staged by the private respondents is illegal;

and whether private respondents are deemed to have lost their
employment status by participating in the commission of illegal acts
during the strike
HELD: Yes

RATIO: Respondents insist that the filing of the Notice of Strike on

December 3, 1998, the Strike Vote of December 11, 1998, the
submission of the results of the vote to the NCMB on December 21,
1998, and their observation of the 15-day cooling-off period in case of
unfair labor practice as well as the seven-day reporting period of the
results of the strike vote, all satisfy the mandatory requirements under
Article 263 of the Labor Code and are applicable to the June 1999 strike.
In support of this theory, respondents invoke Article 263(f) in that the
decision to strike is valid for the duration of the dispute based on
substantially the same grounds considered when the strike vote was
taken, thus, there is no need to repeat the process. Furthermore,
according to the respondents, even assuming for the sake of argument
that the Notice of Strike and Strike Vote in December 1998 cannot be
made to apply to the concerted actions in June 1999, these requirements
may nonetheless be dispensed with since the petitioner is guilty of union
busting and, hence, the Union can take action immediately.

The undisputed fact, however, is that at the time the strike was
staged in June 1999, voluntary arbitration between the parties was
ongoing by virtue of the January 21, 1999 Submission Agreement. The
issue to be resolved under those proceedings pertained to the very same
issues stated in the Notice of Strike of December 3, 1998: the
commission of unfair labor practices, such as acts of harassment, fault-
finding, and union busting through coercion and interference with union
affairs.

This Court has held that strikes staged in violation of agreements

providing for arbitration are illegal, since these agreements must be
strictly adhered to and respected if their ends are to be achieved. The
rationale of the prohibition under Article 264 is that once jurisdiction over
the labor dispute has been properly acquired by competent authority,
that jurisdiction should not be interfered with by the application of the
coercive processes of a strike. Indeed it is among the chief policies of
the State to promote and emphasize the primacy of free collective
bargaining and negotiations, including voluntary arbitration, mediation,
and conciliation, as modes of settling labor, or industrial disputes
The alleged dismissals of Lucente and respondent Lanorias,
both union members, which allegedly triggered the wildcat strike, are not