PHILIPPINE DIAMOND HOTEL AND RESORT, INC. (MANILA DIAMOND HOTEL), Petitioner, vs.

MANILA DIAMOND HOTEL EMPLOYEES UNION, Respondent. June 30, 2006 CARPIO MORALES, J.: NATURE: Petition for review on certiorari of CA decision. FACTS:

Manila Diamond Hotel Employees Union (the Union), registered on Aug. 19, 1996, before the DOLE filed for a certification election before the DOLENCR seeking certification as the exclusive bargaining representative of its members. DOLE-NCR denied the unions petition as it failed to comply with legal requirements, specifically Section 2, Rule V, Book V of the Rules and Regulations Implementing the Labor Code, and it was seen to fragment the employees of petitioner. June 2, 1997 - Francis Mendoza (Mendoza), one of the Hotels outlet cashiers, was discovered to have failed to remit to the Hotel the amount of P71,692.50 at the end of his May 31, 1997 duty. It was learned later that said amount was remitted to the Union President Kimpo claimed that he had no knowledge of the procedure when asked to show cause to avoid administrative sanction.

Mendoza was then suspended for a week for his breach of his "responsibility of the cashier to personally drop-off his remittances in the presence of a witness. Through its president Kimpo, the union later notified petitioner of its intention to negotiate, by Notice to Bargain, CBA for its members. Acting on the notice, the Hotel, through its HR Development Manager Mary Anne Mangalindan, advised the union that since it was not certified by the DOLE as the exclusive bargaining agent, it could not be recognized as such. The union clarified that it sought to bargain "for its members only," and declared that "[the Hotels] refusal to bargain [would prompt] the union to engage in concerted activities to protect and assert its rights under the Labor Code." The union then filed a notice of strike with the NCMB for ULP of the petitioner hotel. However, during the conciliation proceedings, the union suddenly went on strike (Nov. 29), along with the support of other unions, NUWHRAIN and two of the hotels supervisory employees The NLRC issued a TRO and the strikers were terminated by the company. They then filed for illegal dismissal. The DOLE-Secretary ordered a status quo ante involving the reinstatement of the strikers while their cases were pending before different labor arbiters. NLRC finally issued a resolution declaring the strike illegal and dismissing the officers and union members who went on strike. On appeal, the CA affirmed the NLRC resolution however modified it by ordering the reinstatement of the union members with payment of backwages. Hence, the present petition. ISSUES/HELD: (1) Was the strike illegal? YES (2) Did the CA err in allowing the reinstatement of the members of the union who participated in the illegal strike and the payment of their backwages? YES. (no backwages should be paid; remanded to the LA to determine who among the members of the union engaged in illegal activities ) RATIO: (1) The unions act in staging the strike is a violation of Art 264 which proscribes the staging of a strike on the ground of ULP during the pendency of cases involving the same grounds for the strike. They also violated Art 264 (e) which prohibited the obstruction of ingress or egress from the employers premises. The strikers also held a noise barrage and threatened the guests with bodily harm. Further, on the unions position of bargaining for its members, ART. 255 of the LC provides: The labor organization designated or selected by the majority of the employees in an appropriate collective bargaining unit shall be theexclusive representative of the employees in such unit for the purpose of collective bargaining. However, an individual employee or group of employees shall have the right at any time to present grievances to their employer.

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

Based on abovementioned provision, only the labor organization designated or selected by the majority of the employees in an appropriate collective bargaining unit is the exclusive representative of the unit for purposes of collective bargaining and in the present case, the union is admittedly not the exclusive representative of the majority of the employees and thus cannot demand the petitioner to bargain collectively on their behalf. Although respondent Union contends that it could validly bargain on behalf of its members, relying on Art. 242 of the Labor Code which states that: A legitimate labor organization shall have the right:(a) To act as representative of its members for the purpose of collective bargaining ,the SC holds that respondents reliance on the general provision on the rights of labor organizations is misplaced because said article should be read in relation to (above-quoted) Art. 255. Further, the unions position in bargaining only for its members would fragment the employees because it would economically impair the rights of non-union members to negotiate their terms and conditions of work which also goes against the goals of the DOLE. Thus, the petitioners refusal to bargain with respondent could not be considered as a ULP to justify the strike staged by the union Moreover, the unions contention that the management prevented members from joining the union and was engaged in union-busting has not been proven by substantial evidence.

(2)

The CA correctly held that the union officers should be dismissed for staging and participating in the illegal

strike, following par. 3, Article 264(a) of the Labor Code which provides that ". . .[a]ny union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during strike may be declared to have lost his employment status . . ."

However, an ordinary striking worker cannot be dismissed for mere participation in an illegal strike. There

must be proof that he committed illegal acts during a strike, unlike a union officer who may be dismissed by mere knowingly participating in an illegal strike and/or committing an illegal act during a strike. Thus, a remand of the case to the NLRC to determine the liability of the strikers is needed.

(on the award of backwages) No backwages are awarded based on the principle that "a fair days wage"

accrues only for a "fair days labor. Even in cases of ULP strikes, award of backwages rests on the courts discretion and only in exceptional instances. Jurisprudential law, however, recognizes several exceptions to the "no backwages rule," to wit: (1) when the employees were illegally locked to thus compel them to stage a strike; (2) when the employer is guilty of the grossest form of ULP;(3) when the employer committed discrimination in the rehiring of strikers refusing to readmit those against whom there were pending criminal cases while admitting nonstrikers who were also criminally charged in court; (4) or when the workers who staged a voluntary ULP strike offered to return to work unconditionally but the employer refused to reinstate them. Not any of these or analogous instances is, however, present in the instant case.

DISPOSITIVE: Remand to the NLRC to determine respective liabilities of union members. The officers of the union and the members who committed said illegal acts would be dismissed from service and for the striking members of respondent who did not commit illegal acts reinstatement without backwages of would thus suffice under the circumstances of the case. If reinstatement is no longer possible, due to the lapse of considerable time from the occurrence of the strike, the award of separation pay of one (1) month salary for each year of service will be awarded in lieu of reinstatement. DISPOSITIVE : judgment affirmed with modification. remand to NLRC to determine respective liabilities of strikers.