strikes and lockouts cases

8/10/2019 Strikes and Lockouts Cases

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STRIKES AND LOCKOUTS PAGE 1

G.R. No. 88210 January 23, 1991

PHILIPPINE AIRLINES, INC., petitioner,

vs.

SECRETARY OF LABOR AND EMPLOYMENT, FRANKLIN M. DRILON, and

PHILIPPINE AIRLINES EMPLOYEES ASSOCIATION (PALEA), respondents.

Ricardo V. Puno, Jr., Caesar R. Dulay, Solon, R. Garcia, Rene B. Gorospe & Bienvenido T. Jamoralinz,

Jr. for petitioner.

E.N.A. Cruz, Entero & Associates for PALEA.

GRIO-AQUINO, J.:p

In issue in this case is the authority of the Secretary of Labor to order the petitioner Philippine

Airlines, Inc. to reinstate officers and members of the union who participated in an illegal strike and

to desist from taking any disciplinary or retaliatory action against them.

The 1986-1989 Collective Bargaining Agreement (CBA) between the Philippine Airlines (PAL) and the

Philippine Airlines Employees Association (PALEA) provided for pay increases for various categories

of employees in Section 1, Article V entitled "PAY SCALE." Besides the pay increases, the CBA alsoprovided for the formation of a PAL/PALEA Payscale Panel

(f) . . . to undertake the study, review, correction, updating, complete overhaul, re-classification

or re-grouping of positions as may be required of the payscale and position classification to evolve

updated payscales as soon as possible. (p. 76, Rollo.)

and that

(iii) . . . the Payscale Panel shall exert all reasonable efforts to complete its studies so as to

evolve new updated payscale and position classification by January 01, 1988, (p. 76, Rollo.)

As agreed by the parties, the PAL/PALEA Payscale Panel was formed in due time and went to work.

By July, 1988, the Job Evaluation Committee of the panel had finished the reconciliation and initial

evaluation of positions in all departments within PAL.

In November, 1988, the PALEA members of the panel proposed the amount of PHP 3,349 as the

minimum salary entry level for the lowest job classification (Job Grade 1), while the PAL panel

members proposed PHP 2,310 and a PHP 200 across-the-board increase for employees who could

not avail of the payscale adjustments. The panel conferences continued but there was no meeting of


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minds. PALEA would not accept less than the amount it proposed, while the PAL panel members

alleged that they had no authority to offer more.

PALEA accused PAL of bargaining in bad faith.

On December 29, 1988, PALEA filed with the National Conciliation and Mediation Board (NCMB) a

notice of strike on account of: (1) bargaining deadlock; and (2) unfair labor practice by bargaining in

bad faith.

On January 3, 1989, PAL filed with the NCMB a motion to dismiss PALEA's notice of strike for being

premature as the issues raised were not strikeable since there still existed a PAL-PALEA CBA which

would not yet expire until September 30, 1989 or with nine (9) more months to run.

During the conciliation meeting, the following evolved as the real issues:

1. determination of the minimum entry rate

2. wage adjustment due to payscale study

3. retroactive pay as a consequence of the upgraded payscale or goodwill bonus. (p. 38, Rollo.)

On January 6, 1989, Attorney Jesus C. Sebastian, NCMB-NCR Executive Conciliator/Mediator, advised

PALEA president, George Pulido, that the issues raised in the notice of strike were "appropriate only

for preventive mediation," hence, not valid grounds for a lawful strike. However, when subsequently

a representative of NCMB supervised the conduct of PALEA'S strike vote, PAL's counsel was baffled

for it was inconsistent with the NCMB order treating the strike notice as preventive mediation case

No. PM-01-007-89. PAL's counsel sought clarification from NCMB'S Sebastian. He assured PAL that

the NCMB representatives could not certify the strike vote.

On January 12, 1989, PALEA submitted the strike vote results to the NCMB. The next day, January

13, 1989, PAL petitioned Secretary of Labor Franklin Drilon to immediately assume jurisdiction over

the dispute in order to avert the impending strike. The reasons for PAL's petition were, as stated by

the Secretary himself:

The Philippine Airlines, Inc. is a corporation where the government has substantial equity holding. It

is engaged in an industry imbued with national interest. It is the flag carrier of the Republic of the

Philippines. Being the sole airline that services domestic routes, a prolonged work stoppage will push

back the national economic recovery program of the government and consequently result to

enormous damage to the economy of the country. Hundreds of thousands of people directly and

indirectly dependent on the continued operations of the firm including the huge work force of the

company will likewise be prejudiced. The viability of the firm will also be endangered. These

considerations have in the past guided this Office in consistently exercising its powers under Article

263(g) of the Labor Code, as amended, in handling labor disputes in the Company. The current

situation is no exception to this rule. This Office is of the view that the present work stoppage at


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Philippine Airlines, Inc. will adversely affect the national interest. Thus, this Office hereby a ssumes

jurisdiction over the instant dispute. (pp. 38-39, Rollo.)

Inexplicably, the Secretary failed to act promptly on PAL's petition for his assumption of jurisdiction.

Seven (7) days passed with no reaction from Secretary Drilon. On January 20, 1989, PALEA declared

a strike paralyzing PAL's entire operations the next day, January 21, 1989, and resulting in serious

inconvenience to thousands of passengers who were stranded in 43 airports throughout the

country, and the loss of millions of pesos in unearned revenue for PAL. Late in the day, at 7:50 P.M.,

Secretary Drilon issued an order assuming jurisdiction over the labor dispute which had already

exploded into a full-blown strike, ordering the strikers to lift their pickets and return to work,

directing management to accept all returning employees, and resolving the issues subject of the

strike, by awarding the following monetary benefits to the strikers, while prohibiting the company

from taking retaliatory action against them:

. . . to resolve the impasse between the herein parties, this Office finds the following award just and

reasonable:

1. As far as the issue of minimum entry level is concerned, the company is directed to adjust

the same to P2,500.00 from its present level effective January 1, 1989.

2. The company is ordered to grant the amount of P3.3 million per month to cover across-the-

board increases of covered regular employees subject to the distribution of the union as embodied

in their proposed scheme but in no instance should the lowest adjustment be less than P300.00. In

line with this, the scheme proposed by the union and submitted to NCMB on January 20,1989 is

herein adopted.

It is understood, however, that in items 1 and 2 above, the amount which is higher should be

granted.

3. A goodwill bonus in the amount of P3,000.00 to be paid in four equal pay period

installments beginning February 15 and up to March 31, 1989 is hereby awarded. (p. 39, Rollo.)

Declaring the strike valid, the Secretary stated:

Except for the fact that the Union's notice of strike was treated as a preventive mediation case (at

the instance of NCMB), it should be noted that the Union complied with all the requirements for a

valid strike. It observed the cooling-off periods required and submitted the necessary strike vote. If

ever there is any ground to discipline the Union officers for non-compliance with the law, it would be

based on the "non-filing" of the strike notice, which "non-filing" was a consequence of the NCMB'S

efforts to create the appropriate atmosphere to resolve the dispute by treating the notice of strike

as a preventive mediation case. Otherwise put, the strike would have been legal in all respects had

not the NCMB, in its good faith effort to settle the dispute, treated the notice of strike as a case for

preventive mediation. Under these circumstances, and in the interest of industrial peace and thepromotion of the concept of preventive mediation, the parties are directed to desist from


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committing any retaliatory act as a result of the work stoppage. The UNION, however, is hereby

warned that in the future this office will not tolerate such conduct and will apply the full force of the

law. (pp. 3-4, Rollo.)

The petitioner filed a motion for reconsideration. The Secretary denied it in a minute resolution on

May 8, 1989 or three months later.

In this petition for review, PAL avers that the Secretary of Labor gravely abused his discretion

amounting to excess or lack of jurisdiction:

1. in ruling on the legality of the strike;

2. in directing PAL to desist from taking retaliatory action against the officers and members of

the Union responsible for the illegal strike; and

3. in failing to seasonably exercise his authority to avert the illegal strike and protect the rights

and interests of PAL whose business is affected with public interest.

Under Art. 263 of the Labor Code, the Labor Secretary's authority to resolve a labor dispute within

30 days from the date of assumption of jurisdiction, encompasses only the issues in the dispute, not

the legality or illegality of any strike that may have been resorted to in the meantine (Binamira vs.

Ogan-Occena, 148 SCRA 677, 685 [1987]). Indeed, as found by the Labor Secretary in his Order of

January 21, 1989, the only issues involved in the dispute were:

1. determination of the minimum entry rate

2. wage adjustment due to payscale study

3. retroactive pay as a consequence of the upgraded payscale or goodwill bonus.

The legality or illegality of the strike was not submitted to the Secretary of Labor for resolution.

The jurisdiction to decide the legality of strikes and lock-outs is vested in Labor Arbiters, not in the

Secretary of Labor. Art. 217, par. a, subpar. 5 of the Labor Code provides:

Art. 217. Jurisdiction of Labor Arbiters and the Commission.

(a) The Labor Arbiters shall have the original and exclusive jurisdiction to hear and decide within

thirty (30) working days after submission of the case by the parties for decision, the following cases

involving all workers, whether agricultural or non- agricultural.

xxx xxx xxx

5. Cases arising from any violation of Article 265 of this code, including questions involving thelegality of strikes and lock-outs. (Emphasis supplied.)


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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.)

The Labor Secretary exceeded his jurisdiction when he restrained PAL from taking disciplinary action

against its guilty employees, for, under Art. 263 of the Labor Code, all that the Secretary may enjoin

is the holding of the strike, but not the company's right to take action against union officers who

participated in the illegal strike and committed illegal acts. The prohibition which the Secretary

issued to PAL constitutes an unlawful deprivation of property and denial of due process for it

prevents PAL from seeking redress for the huge property losses that it suffered as a result of the

union's illegal mass action.

The Secretary may have realized that he was partly to blame for PAL's damages because of his failure

to act promptly and use his authority to avert the illegal strike under Article 263(g) of the LaborCode.

Nevertheless, the Secretary's delay does not excuse the reckless and irresponsible action of the

union in declaring the illegal strike. The liability of the union for that is primary and exclusive.

WHEREFORE, the petition for certiorari is granted. The orders dated January 21, 1989 and May 8,

1989 of the Secretary of Labor in NCMB NCR Case No. PM-01-007-89 are set aside and nullified

insofar as the said orders declare valid the PALEA strike of January 20-21, 1989 and restrain the

petitioner from taking appropriate legal action against PALEA's officers who led the illegal strike, and

any union members who may have committed illegal acts during said strike. The monetary benefits

awarded to the union in the said orders are, however, affirmed. Costs against respondent PALEA.

SO ORDERED.

Narvasa, Cruz, Gancayco and Medialdea, JJ., concu

G.R. No. 147080. April 26, 2005

CAPITOL MEDICAL CENTER, INC., Petitioners,

vs.

NATIONAL LABOR RELATIONS COMMISSION, JAIME IBABAO, JOSE

BALLESTEROS, RONALD CENTENO, NARCISO SARMIENTO, EDUARDO

CANAVERAL, SHERLITO DELA CRUZ, SOFRONIO COMANDAO, MARIANO

GALICIA, RAMON MOLOD, CARMENCITA SARMIENTO, HELEN MOLOD, ROSA

COMANDAO, ANGELITO CUIZON, ALEX MARASIGAN, JESUS CEDRO, ENRICO

ROQUE, JAY PERILLA, HELEN MENDOZA, MARY GLADYS GEMPEROSO, NINI

BAUTISTA, ELENA MACARUBBO, MUSTIOLA SALVACION DAPITO, ALEXANDERMANABE, MICHAEL EUSTAQUIO, ROSE AZARES, FERNANDO MANZANO,


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HENRY VERA CRUZ, CHITO MENDOZA, FREDELITA TOMAYAO, ISABEL BRUCAL,

MAHALKO LAYACAN, RAINIER MANACSA, KAREN VILLARENTE, FRANCES

ACACIO, LAMBERTO CONTI, LORENA BEACH, JUDILAH RAVALO, DEBORAH

NAVE, MARILEN CABALQUINTO, EMILIANA RIVERA, MA. ROSARIO URBANO,

ROWENA ARILLA, CAPITOL MEDICAL CENTER EMPLOYEES ASSOCIATION-AFW,

GREGORIO DEL PRADO, ARIEL ARAJA, and JESUS STA. BARBARA, JR.,

Respondents.

D E C I S I O N

CALLEJO, SR., J.:

This is a petition for review of the Decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 57500and its Resolution denying the motion for reconsideration thereof.

The Antecedents2

Whether the respondent Capitol Medical Center Employees Association-Alliance of Filipino Workers

(the Union, for brevity) was the exclusive bargaining agent of the rank-and-file employees of the

petitioner Capitol Medical Center, Inc. had been the bone of contention between the Union and the

petitioner. The petitioners refusal to negotiate for a collective bargaining agreement (CBA) resulted

in a union-led strike on April 15, 1993.

The Union had to contend with another unionthe Capitol Medical Center Alliance of Concerned

Employees (CMC-ACE)which demanded for a certification election among the rank-and-file

employees of the petitioner. Med-Arbiter Brigida Fadrigon granted the petition, and the matter was

appealed to the Secretary of Labor and Employment (SOLE). Undersecretary Bienvenido E. Laguesma

rendered a Resolution on November 18, 1994 granting the appeal. He, likewise, denied the motion

filed by the petitioner and the CMC-ACE. The latter thereafter brought the matter to the Court which

rendered judgment on February 4, 1997 affirming the resolution of Undersecretary Laguesma, thus:

1. Dismissing the petition for certification election filed by the Capitol Medical Center Alliance of

Concerned Employees-United Filipino Services Workers for lack of merit; and

2. Directing the management of the Capitol Medical Center to negotiate a CBA with the Capitol

Medical Center Employees Association-Alliance of Filipino Workers, the certified bargaining agent of

the rank-and-file employees.3

The decision of the Court became final and executory. Thereafter, in a Letter dated October 3, 1997

addressed to Dr. Thelma N. Clemente, the President and Director of the petitioner, the Union

requested for a meeting to discuss matters pertaining to a negotiation for a CBA, conformably with

the decision of the Court.4 However, in a Letter to the Union dated October 10, 1997, Dr. Clementerejected the proposed meeting, on her claim that it was a violation of Republic Act No. 6713 and that


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the Union was not a legitimate one. On October 15, 1997, the petitioner filed a Petition for the

Cancellation of the Unions Certificate of Registration with the Department of Labor and

Employment (DOLE) on the following grounds:

3) Respondent has failed for several years to submit annually its annual financial statements and

other documents as required by law. For this reason, respondent has long lost its legal personality as

a union.

4) Respondent also engaged in a strike which has been declared illegal by the National Labor

Relations Commission.5

Apparently unaware of the petition, the Union reiterated its proposal for CBA negotiations in a

Letter dated October 16, 1997 and suggested the date, time and place of the initial meeting. The

Union further reiterated its plea in another Letter6 dated October 28, 1997, to no avail.

Instead of filing a motion with the SOLE for the enforcement of the resolutions of Undersecretary

Laguesma as affirmed by this Court, the Union filed a Notice of Strike on October 29, 1997 with the

National Conciliation and Mediation Board (NCMB), serving a copy thereof to the petitioner. The

Union alleged as grounds for the projected strike the following acts of the petitioner: (a) refusal to

bargain; (b) coercion on employees; and (c) interference/ restraint to self-organization.7

A series of conferences was conducted before the NCMB (National Capital Region), but no

agreement was reached. On November 6, 1997, the petitioner even filed a Letter with the Board

requesting that the notice of strike be dismissed;8 the Union had apparently failed to furnish the

Regional Branch of the NCMB with a copy of a notice of the meeting where the strike vote was

conducted.

On November 20, 1997, the Union submitted to the NCMB the minutes9 of the alleged strike vote

purportedly held on November 10, 1997 at the parking lot in front of the petitioners premises, at

the corner of Scout Magbanua Street and Panay Avenue, Quezon City. It appears that 178 out of the

300 union members participated therein, and the results were as follows: 156 members voted to

strike; 14 members cast negative votes; and eight votes were spoiled.10

On November 28, 1997, the officers and members of the Union staged a strike. Subsequently, on

December 1, 1997, the Union filed an ex parte motion with the DOLE, praying for its assumption of

jurisdiction over the dispute. The Union likewise prayed for the imposition of appropriate legal

sanctions, not limited to contempt and other penalties, against the hospital director/president and

other responsible corporate officers for their continuous refusal, in bad faith, to bargain collectively

with the Union, to adjudge the same hospital director/president and other corporate officers guilty

of unfair labor practices, and for other just, equitable and expeditious reliefs in the premises.11

On December 4, 1997, the SOLE issued an Order, assuming jurisdiction over the ongoing labor

dispute. The decretal portion of the order reads:


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WHEREFORE, this Office now assumes jurisdiction over the labor disputes at Capitol Medical Center

pursuant to Article 263(g) of the Labor Code, as amended. Consequently, all striking workers are

directed to return to work within twenty-four (24) hours from the receipt of this Order and the

management to resume normal operations and accept back all striking workers under the same

terms and conditions prevailing before the strike. Further, parties are directed to cease and desist

from committing any act that may exacerbate the situation.

Moreover, parties are hereby directed to submit within 10 days from receipt of this Order proposals

and counter-proposals leading to the conclusion of the collective bargaining agreements in

compliance with aforementioned Resolution of the Office as affirmed by the Supreme Court.

SO ORDERED.12

In obedience to the order of the SOLE, the officers and members of the Union stopped their strike

and returned to work.

For its part, the petitioner filed a petition13 to declare the strike illegal with the National Labor

Relations Commission (NLRC), docketed as NLRC NCR Case No. 00-12-08644-97. In its position paper,

the petitioner appended the affidavit of Erwin Barbacena, the overseer of the property across the

hospital which was being used as a parking lot, at the corner of Scout Magbanua Street and Panay

Avenue, Quezon City. Also included were the affidavits of Simon J. Tingzon and Reggie B. Barawid,

the petitioners security guards assigned in front of the hospital premises. They attested to the fact

that no secret balloting took place at the said parking lot from 6:00 a.m. to 7:00 p.m. of November

10, 1997.14 The petitioner also appended the affidavit of Henry V. Vera Cruz, who alleged that he

was a member of the Union and had discovered that signatures on the Statements of Cash Receipt

Over Disbursement submitted by the Union to the DOLE purporting to be his were not his genuine

signatures;15 the affidavits of 17 of its employees, who declared that no formal voting was held by

the members of the Union on the said date, were also submitted. The latter employees also declared

that they were not members of any union, and yet were asked to sign documents purporting to be a

strike vote attendance and unnumbered strike vote ballots on different dates from November 8 to

11, 1997.

In their position paper, the respondents appended the joint affidavit of the Union president and

those members who alleged that they had cast their votes during the strike vote held on November

10, 1997.16

In the meantime, on September 30, 1998, the Regional Director of the DOLE rendered a Decision

denying the petition for the cancellation of the respondent Unions certificate of registration. The

decision was affirmed by the Director of the Bureau of Labor Relations on December 29, 1998.

In a parallel development, Labor Arbiter Facundo L. Leda rendered a Decision on December 23, 1998

in NLRC NCR Case No. 00-12-08644-97 in favor of the petitioner, and declared the strike staged by

the respondents illegal. The fallo of the decision reads:


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1. Declaring as illegal the strike staged by the respondents from November 28, 1997 to December 5,

1997;

2. Declaring respondent Jaime Ibabao, in his capacity as union president, the other union officers,

and respondents Ronald Q. Centeno, Michael Eustaquio and Henry Vera Cruz to have lost their

employment status with petitioner; and

3. Ordering the above respondents to pay, jointly and severally, petitioner the amount of Two

Hundred Thousand Pesos (P200,000.00) by way of damages.17

The Labor Arbiter ruled that no voting had taken place on November 10, 1997; moreover, no notice

of such voting was furnished to the NCMB at least twenty-four (24) hours prior to the intended

holding of the strike vote. According to the Labor Arbiter, the affidavits of the pet itioners 17

employees who alleged that no strike vote was taken, and supported by the affidavit of the overseer

of the parking lot and the security guards, must prevail as against the minutes of the strike votepresented by the respondents. The Labor Arbiter also held that in light of Article 263(9) of the Labor

Code, the respondent Union should have filed a motion for a writ of execution of the resolution of

Undersecretary Laguesma which was affirmed by this Court instead of staging a strike.

The respondents appealed the decision to the NLRC which rendered a Decision18 on June 14, 1999,

granting their appeal and reversing the decision of the Labor Arbiter. The NLRC also denied the

petitioners petition to declare the strike illegal. In resolving the issueof whether the union

members held a strike vote on November 10, 1997, the NLRC ruled as follows:

We find untenable the Labor Arbiters finding that no actual strike voting took place on November

10, 1997, claiming that this is supported by the affidavit of Erwin Barbacena, the overseer of the

parking lot across the hospital, and the sworn statements of nineteen (19) (sic) union members.

While it is true that no strike voting took place in the parking lot which he is overseeing, it does not

mean that no strike voting ever took place at all because the same was conducted in the parking lot

immediately/directly fronting, not across, the hospital building (Annexes "1-J," "1-K" to "1-K-6").

Further, it is apparent that the nineteen (19) (sic) hospital employees, who recanted their

participation in the strike voting, did so involuntarily for fear of loss of employment, considering that

their Affidavits are uniform and pro forma (Annexes "H-2" to "H-19").19

The NLRC ruled that under Section 7, Rule XXII of DOLE Order No. 9, Series of 1997, absent a showing

that the NCMB decided to supervise the conduct of a secret balloting and informed the union of the

said decision, or that any such request was made by any of the parties who would be affected by the

secret balloting and to which the NCMB agreed, the respondents were not mandated to furnish the

NCMB with such notice before the strike vote was conducted.20

The petitioner filed a motion for the reconsideration of the decision, but the NLRC denied the said

motion on September 30, 1999.21

The petitioner filed a petition for certiorari with the CA assailing the decision and resolution of theNLRC on the following allegation:


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PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION (NLRC) COMMITTED GRAVE

ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION, ACTED CAPRICIOUSLY,

AND CONTRAVENED THE LAW AND ESTABLISHED JURISPRUDENCE IN REVERSING THE LABOR

ARBITERS DECISION DATED DECEMBER 23, 1998 (ANNEX "E") AND IN UPHOLDING THE LEGALITY OF

THE STRIKE STAGED BY PRIVATE RESPONDENTS FROM NOVEMBER 28, 1997 TO DECEMBER 5,

1997.22

On September 29, 2000, the CA rendered judgment dismissing the petition and affirming the

assailed decision and resolution of the NLRC.

The petitioner filed the instant petition for review on certiorari under Rule 45 of the Rules of Court

on the following ground:

THE COURT OF APPEALS GRAVELY ERRED IN UPHOLDING THE NLRCS FINDING THAT RESPONDENTSCOMPLIED WITH THE LEGAL REQUIREMENTS FOR STAGING THE SUBJECT STRIKE.23

The petitioner asserts that the NLRC and the CA erred in holding that the submission of a notice of a

strike vote to the Regional Branch of the NCMB as required by Section 7, Rule XXII of the Omnibus

Rules Implementing the Labor Code, is merely directory and not mandatory. The use of the word

"shall" in the rules, the petitioner avers, indubitably indicates the mandatory nature of the

respondent Unions duty to submit the said notice of strike vote.

The petitioner contends that the CA erred in affirming the decision of the NLRC which declared that

the respondents complied with all the requirements for a lawful strike. The petitioner insists that, as

gleaned from the affidavits of the 17 union members and that of the overseer, and contrary to the

joint affidavit of the officers and some union members, no meeting was held and no secret balloting

was conducted on November 10, 1997.

The petitioner faults the CA and the NLRC for holding that a meeting for a strike vote was held on

the said date by the respondents, despite the fact that the NLRC did not conduct an ocular

inspection of the area where the respondents members allegedly held the voting. The petitioner

also points out that it adduced documentary evidence in the form of affidavits executed by 17

members of the respondent union which remained unrebutted. The petitioner also posits that the

CA and the NLRC erred in reversing the finding of the Labor Arbiter; furthermore, there was no need

for the respondent union to stage a strike on November 28, 1997 because it had filed an urgent

motion with the DOLE for the enforcement and execution of the decision of this Court in G.R. No.

118915.

The petition is meritorious.

We agree with the petitioner that the respondent Union failed to comply with the second paragraph

of Section 10, Rule XXII of the Omnibus Rules of the NLRC which reads:


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Section 10. Strike or lockout vote.A decision to declare a strike must be approved by a majority of

the total union membership in the bargaining unit concerned obtained by secret ballot in meetings

or referenda called for the purpose. A decision to declare a lockout must be approved by a majority

of the Board of Directors of the employer, corporation or association or the partners obtained by a

secret ballot in a meeting called for the purpose.

The regional branch of the Board may, at its own initiative or upon the request of any affected party,

supervise the conduct of the secret balloting. In every case, the union or the employer shall furnish

the regional branch of the Board and notice of meetings referred to in the preceding paragraph at

least twenty-four (24) hours before such meetings as well as the results of the voting at least seven

(7) days before the intended strike or lockout, subject to the cooling-off period provided in this Rule.

Although the second paragraph of Section 10 of the said Rule is not provided in the Labor Code of

the Philippines, nevertheless, the same was incorporated in the Omnibus Rules Implementing the

Labor Code and has the force and effect of law.24

Aside from the mandatory notices embedded in Article 263, paragraphs (c) and (f) of the Labor Code,

a union intending to stage a strike is mandated to notify the NCMB of the meeting for the conduct of

strike vote, at least twenty-four (24) hours prior to such meeting. Unless the NCMB is notified of the

date, place and time of the meeting of the union members for the conduct of a strike vote, the

NCMB would be unable to supervise the holding of the same, if and when it decides to exercise its

power of supervision. In National Federation of Labor v. NLRC,25 the Court enumerated the notices

required by Article 263 of the Labor Code and the Implementing Rules, which include the 24-hour

prior notice to the NCMB:

1) A notice of strike, with the required contents, should be filed with the DOLE, specifically the

Regional Branch of the NCMB, copy furnished the employer of the union;

2) A cooling-off period must be observed between the filing of notice and the actual execution of the

strike thirty (30) days in case of bargaining deadlock and fifteen (15) days in case of unfair labor

practice. However, in the case of union busting where the unions existence is threatened, the

cooling-off period need not be observed.

4) Before a strike is actually commenced, a strike vote should be taken by secret balloting, with a 24-

hour prior notice to NCMB. The decision to declare a strike requires the secret-ballot approval of

majority of the total union membership in the bargaining unit concerned.

5) The result of the strike vote should be reported to the NCMB at least seven (7) days before the

intended strike or lockout, subject to the cooling-off period.

A union is mandated to notify the NCMB of an impending dispute in a particular bargaining unit via a

notice of strike. Thereafter, the NCMB, through its conciliator-mediators, shall call the parties to aconference at the soonest possible time in order to actively assist them in exploring all possibilities


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17 employees of the petitioner also denied in their respective statements that they were not

members of the respondent Union, and were asked to merely sign attendance papers and

unnumbered votes. The NLRC and the CA declared in their respective decisions that the affidavits of

the petitioners 17 employees had no probative weight because the said employees merely executed

their affidavits out of fear of losing their jobs. The NLRC and the CA anchored their conclusion on

their finding that the affidavits of the employees were uniform and pro forma.

We agree with the finding of the Labor Arbiter that no secret balloting to strike was conducted by

the respondent Union on November 10, 1997 at the parking lot in front of the hospital, at the corner

of Scout Magbanua Street and Panay Avenue, Quezon City. This can be gleaned from the affidavit of

Barbacena and the joint affidavit of Tingzon and Barawid, respectively:

1. That I am working as an overseer of a parking lot owned by Mrs. Madelaine Dionisio and located

right in front of the Capitol Medical Center, specifically at the corner of Scout Magbanua Street and

Panay Avenue, Quezon City;

2. That on November 10, 1997, during my entire tour of duty from 6:00 a.m. to 6:00 p.m., no voting

or election was conducted in the aforementioned parking space for employees of the Capitol

Medical Center and/or their guests, or by any other group for that matter.33

1. That I, Simon J. Tingzon, am a security officer of Veterans Philippine Scout Security Agency

(hereinafter referred to as VPSSA), assigned, since July 1997 up to the present, as Security

Detachment Commander at Capitol Medical Center (hereinafter referred to as CMC) located at Scout

Magbanua corner Panay Avenue, Quezon City;

2. That my (Tingzon) functions as such include over-all in charge of security of all buildings and

properties of CMC, and roving in the entire premises including the parking lots of all the buildings of

CMC;

3. That I, Reggie B. Barawid, am a security guard of VPSSA, assigned, since June 1997 up to the

present, as security guard at CMC;

4. That my (Barawid) functions as such include access control of all persons coming in and out of

CMCs buildings and properties. I also sometimes guard the parking areas of CMC;

5. That on November 10, 1997, both of us were on duty at CMC from 7:00 a.m. to 7:00 p.m., with me

(Barawid) assigned at the main door of the CMCs Main Building along Scout Magbanua St.;

6. That on said date, during our entire tour of duty, there was no voting or election conducted in any

of the four parking spaces for CMC personnel and guests.34

The allegations in the foregoing affidavits belie the claim of the respondents and the finding of theNLRC that a secret balloting took place on November 10, 1997 in front of the hospital at the corner


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of Scout Magbanua Street and Panay Avenue, Quezon City. The respondents failed to prove the

existence of a parking lot in front of the hospital other than the parking lot across from it. Indeed, 17

of those who purportedly voted in a secret voting executed their separate affidavits that no secret

balloting took place on November 10, 1997, and that even if they were not members of the

respondent Union, were asked to vote and to sign attendance papers. The respondents failed to

adduce substantial evidence that the said affiants were coerced into executing the said affidavits.

The bare fact that some portions of the said affidavits are similarly worded does not constitute

substantial evidence that the petitioner forced, intimidated or coerced the affiants to execute the

same.

IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The Decisions of the Court of Appeals

and NLRC are SET ASIDE AND REVERSED. The Decision of the Labor Arbiter is REINSTATED. No costs.

SO ORDERED.

Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concu

G.R. No. 99266 March 2, 1999

SAN MIGUEL CORPORATION, petitioner,

vs.

NATIONAL LABOR RELATIONS COMMISSION, SECOND DIVISION, AND SAN

MIGUEL CORPORATION EMPLOYEES UNION (SMCEU) PTGWO,

respondents.

PURISIMA, J.:

At bar is a Petition for Certiorari under Rule 65 of the Revised Rules of Court, assailing the Resolution

1 of the National Labor Relations Commission in NLRC NCR CASE NO. 00094-90, which dismissed the

complaint of San Miguel Corporation (SMC), seeking to dismiss the notice of strike given by the

private respondent union and to compel the latter to comply with the provisions of the Collective

Bargaining Agreement (CBA) 2 on grievance machinery, arbitration, and the no-strike clause, with

prayer for the issuance of a temporary restraining order.

The antecedent facts are as follows:

In July 1990, San Miguel Cooperation, alleging the need to streamline its operations due to financial

loses, shut down some of its plants and declared 55 positions as redundant listed as follows:

seventeen (17) employees in the Business Logistics Division ("BLD"), seventeen (17) in the Ayala

Operations Center (AOC), and eighteen (18) in the Magnolia-Manila Buying Station ("Magnolia-

MBS"). 3 Consequently, the private respondent union filed several grievance cases for the said


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retrenched employees, praying for the redeployment of the said employees to the other divisions of

the company.

The grievance proceedings were conducted pursuant to Sections 5 and 8, Article VIII of the parties'

1990 Collective Bargaining Agreement providing for the following procedures, to wit:

Sec.5. Processing of Grievance. Should a grievance arise, an earnest effort shall be made to settle

the grievance expeditiously in accordance with the following procedures:

Step 1. The individual employee concerned and the Union Directors, or the Union Steward shall,

first take up the employee's grievance orally with his immediate superior. If no satisfactory

agreement or adjustment of the grievance is reached, the grievance shall, within twenty (20)

working days from the occurrence of the cause or event which gave rise to the grievance, be filed in

writing with the Department Manager or the next level superior who shall render his decision within

ten (10) working days from the receipt of the written grievance. A copy of the decision shall befurnished the Plant Personnel Officer.

Step 2. If the decision in Step 1 is rejected, the employee concerned may elevate or appeal this in

writing to the Plant Manager/Director or his duly authorized representative within twenty (20)

working days from the receipt of the Decision of the Department Manager, Otherwise, the decision

in Step 1 shall be deemed accepted by the employee.

The Plant Manager/Director assisted by the Plant Personnel Officer shall determine the necessity, of

conducting grievance meetings. If necessary, the Plant Manager/Director and the Plant Personnel

Officer shall meet the employee concerned and the Union Director/Steward on such date(s) as may

be designated by the Plant Manager. In every plant/office, Grievance Meetings shall be scheduled at

least twice a month.

The Plant Manager shall give his written comments and decision within ten (10) working days after

his receipt of such grievance or the date of submission of the grievance for resolution, as the case

may be. A copy of his Decision shall be furnished the Employee Relations Directorate.

Step 3. If no satisfactory adjustment is arrived at Step 2, the employee may appeal the Decision

to the Conciliation Board as provided under Section 6 hereof, within fifteen (15) working days from

the date of receipt of the decision of the Plant Manager/Director or his designate. Otherwise, the

decision in Step 2 shall be deemed accepted by the employee.

The Conciliation Board shall meet on the grievance in such dates as shall be designated by the

Division/Business Unit Manager or his representative. In every Division/Business Unit, Grievance

Meetings of the Conciliation Board shall be scheduled at least once a month.

The Conciliation Board shall have fifteen (15) working days from the date of submission of the

grievance for resolution within which to decide on the grievance.


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Sec. 6. Conciliation Board. There shall be a conciliation Board per Business Unit or Division. Every

Conciliation Board shall be composed of not more than five (5) representatives each from the

Company and the Union. Management and the Union may be assisted by their respective legal

counsels.

In every Division/Business Unit, the names of the Company and Union representatives to the

Conciliation Board shall be submitted to the Division/Business Unit Manager not later than January

of every year. The Conciliation Board members shall act as such for one (1) year until removed by

the Company or the Union, as the case may be.

xxx xxx xxx

Sec. 8. Submission to Arbitration. If the employee or Union is not satisfied with the Decision of

the Conciliation Board and desires to submit the grievance to arbitration, the employee or the Union

shall serve notice of such intention to the Company within fifteen (15) working days after receipt ofthe Board's decision. If no such written notice is received by the Company within fifteen (15) working

days, the grievance shall be considered settled on the basis of the company's position and shall no

longer be available for arbitration. 4

During the grievance proceedings, however, most of the employees were redeployed, while others

accepted early retirement. As a result only 17 employees remained when the parties proceeded to

the third level (Step 3) of the grievance procedure. In a meeting on October 26, 1990, petitioner

informed private respondent union that if by October 30, 1990, the remaining 17 employees could

not yet be redeployed, their services would be terminated on November 2, 1990. The said meeting

adjourned when Mr. Daniel S. L. Borbon II, a representative of the union, declared that there was

nothing more to discuss in view of the deadlock. 5

On November 7, 1990, the private respondent filed with the National Conciliation and Mediation

Board (NCMB) of the Department of Labor and Employment (DOLE) a notice of strike on the

following grounds: a) bargaining deadlock; b) union busting; c) gross violation of the Collective

Bargaining Agreement (CBA), such as non-compliance with the grievance procedure; d) failure to

provide private respondent with a list of vacant positions pursuant to the parties side agreement

that was appended to the 1990 CBA; and e) defiance of voluntary arbitration award. Petitioner on

the other hand, moved to dismiss the notice of strike but the NCMB failed to act on the motion.

On December 21, 1990, petitioner SMC filed a complaint 6 with the respondent NLRC, praying for:

(1) the dismissal the notice of strike; (2) an order compelling the respondent union to submit to

grievance and arbitration the issue listed in the notice of strike; (3) the recovery of the expenses of

litigation.

On April 16, 1991, respondent NLRC came out with a minute resolution dismissing the complaint;

holding, thus:

NLRC NCR IC NO. 000094-90, entitled San Miguel Corporation, Complainant -versus- San MiguelEmployees Union-PTWO (SMCEU), Respondent. Considering the allegations in the complaint to


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restrain Respondent Union from declaring a strike and to enforce mutual compliance with the

provisions of the collective bargaining agreement on grievance machinery, and the no-strike clause,

with prayer for issuance of temporary restraining order, and the evidence adduced therein, the

Answer filed by the respondent and the memorandum filed by the complainant in support of its

application for the issuance of an injunction, the Second Division, after due deliberation, Resolved to

dismiss the complaint for lack of merit. 7

Aggrieved by the said resolution, petitioner found its way to this court via the present petition,

contending that:

I

IT IS THE POSITIVE LEGAL DUTY OR RESPONDENT NLRC TO COMPEL ARBITRATION AND TO ENJOIN A

STRIKE IN VIOLATION OF A NO STRIKE CLAUSE.

II

INJUNCTION IS THE ONLY IMMEDIATE, EFFECTIVE SUBSTITUTE FOR THE DISASTROUS ECONOMIC

WARFARE THAT ARBITRATION IS DESIGNED TO AVOID. 8

On June 3, 1991, to preserve the status quo, the Court issued a Resolution 9 granting petitioners

prayer for the issuance of a Temporary Restraining Order.

The Petition is impressed with merit.

Rule XXII, Section I, of the Rules and Regulations Implementing Book V the Labor Code 10, reads:

Sec.1. Grounds for strike and lockout. A strike or lockout may be declared in cases of bargaining

deadlocks and unfair labor practices. Violations of the collective bargaining agreements, except

flagrant and/or malicious refusal to comply with its economic provisions, shall not be considered

unfair labor practice and shall not be strikeable. No strike or lockout may be declared on grounds

involving inter-union and intra-union disputes or on issues brought to voluntary, or compulsory,

arbitration.

In the case under consideration, the grounds relied upon by the private respondent union are non-

strikeable. The issues which may lend substance to the notice of strike filed by the private

respondent union are: collective bargaining deadlock and petitioner's alleged violation of the

collective bargaining agreement. These grounds, however, appear more illusory than real.

Collective Bargaining Deadlock is defined as "the situation between the labor and the management

of the company where there is failure in the collective bargaining negotiations resulting in a

stalemate" 11 This situation, is non-existent in the present case since there is a Board assigned on

the third level (Step 3) of the grievance machinery to resolve the conflicting views of the parties.

Instead of asking the Conciliation Board composed of five representatives each from the companyand the union, to decide the conflict, petitioner declared a deadlock, and thereafter, filed a notice of


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strike. For failing to exhaust all the steps in the grievance machinery and arbitration proceedings

provided in the Collective Bargaining Agreement, the notice of strike should have been dismissed by

the NLRC and private respondent union ordered to proceed with the grievance and arbitration

proceedings. In the case of Liberal Labor Union vs. Phil. Can

Co. 12, the court declared as illegal the strike staged by the union for not complying with the

grievance procedure provided in the collective bargaining agreement, ruling that:

. . . the main purpose of the parties in adopting a procedure in the settlement of their disputes is to

prevent a strike. This procedure must be followed in its entirety if it is to achieve its objective. . . .

strikes held in violation of the terms contained in the collective bargaining agreement are illegal,

specially when they provide for conclusive arbitration clauses. These agreements must be strictly

adhered to and respected if their ends have to be achieved. . . . 13

As regards the alleged violation of the CBA, we hold that such a violation is chargeable against the

private respondent union. In abandoning the grievance proceedings and stubbornly refusing to availof the remedies under the CBA. private respondent violated the mandatory provisions of the

collective bargaining agreement.

Abolition of departments or positions in the company is one of the recognized management

prerogatives. 14 Noteworthy is the fact that the private respondent does not question the validity of

the business move of petitioner. In the absence of proof that the act of petitioner was ill -motivated,

it is presumed that petitioner San Miguel Corporation acted in good faith. In fact, petitioner acceded

to the demands of the private respondent union by redeploying most of the employees involved;

such that from an original 17 excess employees in BLD, 15 were successfully redeployed. In AOC, out

of the 17 original excess, 15 were redeployed. In the Magnolia Manila Buying Station, out of 18

employees, 6 were redeployed and only 12 were terminated. 15

So also, in filing complaint with the NLRC, petitioner prayed that the private respondent union be

compelled to proceed with the grievance and arbitration proceedings. Petitioner having evinced its

willingness to negotiate the fate of the remaining employees affected, there is no ground to sustain

the notice of strike of the private respondent union.

All things studiedly considered. we are of the ineluctable conclusion, and so hold, that the NLRC

gravely abused its discretion in dismissing the complaint of Petitioner SMC for the dismissal of the

notice of strike, issuance of a temporary restraining order, and an order compelling the respondent

union to settle the dispute under the grievance machinery of their CBA..

WHEREFORE, the instant petition is hereby GRANTED. Petitioner San Miguel Corporation and private

respondent San Miguel Corporation Employees Union PTGWO are hereby directed to complete

the third level (Step 3) of the Grievance Procedure and proceed with the Arbitration proceedings if

necessary. No pronouncement as to costs.

SO ORDERED.

Romero and Gonzaga-Reyes, JJ., concur.


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GR No. 140518

December 16, 2004

MANILA DIAMOND HOTEL EMPLOYEES UNION, petitioner,

vs.

THE HON. COURT OF APPEALS, THE SECRETARY OF LABOR AND

EMPLOYMENT, and THE MANILA DIAMOND HOTEL, respondents.

D E C I S I O N

AZCUNA, J.:

This petition for review of a decision of the Court of Appeals arose out of a dispute between the

Philippine Diamond Hotel and Resort, Inc. ("Hotel"), owner of the Manila Diamond Hotel, and the

Manila Diamond Hotel Employees Union ("Union"). The facts are as follows:

On November 11, 1996, the Union filed a petition for a certification election so that it may be

declared the exclusive bargaining representative of the Hotels employees for the purpose of

collective bargaining. The petition was dismissed by the Department of Labor and Employment

(DOLE) on January 15, 1997. After a few months, however, on August 25, 1997, the Union sent a

letter to the Hotel informing it of its desire to negotiate for a collective bargaining agreement.1 In aletter dated September 11, 1997, the Hotels Human Resources Department Manager, Mary Anne

Mangalindan, wrote to the Union stating that the Hotel cannot recognize it as the employees

bargaining agent since its petition for certification election had been earlier dismissed by the DOLE.2

On that same day, the Hotel received a letter from the Union stating that they were not giving the

Hotel a notice to bargain, but that they were merely asking for the Hotel to engage in collective

bargaining negotiations with the Union for its members only and not for all the rank and file

employees of the Hotel.3

On September 18, 1997, the Union announced that it was taking a strike vote. A Notice of Strike was

thereafter filed on September 29, 1997, with the National Conciliation and Mediation Board (NCMB)

for the Hotels alleged "refusal x x x to bargain" and for alleged acts of unfair labor practice. The

NCMB summoned both parties and held a series of dialogues, the first of which was on October 6,

1997.

On November 29, 1997, however, the Union staged a strike against the Hotel. Numerous

confrontations between the two parties followed, creating an obvious strain between them. The

Hotel claims that the strike was illegal and it had to dismiss some employees for their participation in

the allegedly illegal concerted activity. The Union, on the other hand, accused the Hotel of illegally

dismissing the workers. What is pertinent to this case, however, is the Order issued by the thenSecretary of Labor and Employment Cresenciano B. Trajano assuming jurisdiction over the labor


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dispute. A Petition for Assumption of Jurisdiction was filed by the Union on April 2, 1998. Thereafter,

the Secretary of Labor and Employment issued an Order dated April 15, 1998, the dispositive portion

of which states:

WHEREFORE, premises considered[,] this Office CERTIFIES the labor dispute at the Manila Diamond

Hotel to the National Labor Relations Commission, for compulsory arbitration, pursuant to Article

263 (g) of the Labor Code, as amended.

Accordingly, the striking officers and members of the Manila Diamond Hotel Employees Union ---

NUWHRAIN are hereby directed to return to work within twenty-four (24) hours upon receipt of this

Order and the Hotel to accept them back under the same terms and conditions prevailing prior to

the strike. The parties are enjoined from committing any act that may exacerbate the situation.

The Union received the aforesaid Order on April 16, 1998 and its members reported for work the

next day, April 17, 1998. The Hotel, however, refused to accept the returning workers and insteadfiled a Motion for Reconsideration of the Secretarys Order.

On April 30, 1998, then Acting Secretary of Labor Jose M. Espaol, issued the disputed Order, which

modified the earlier one issued by Secretary Trajano. Instead of an actual return to work, Acting

Secretary Espaol directed that the strikers be reinstated only in the payroll.4 The Union moved for

the reconsideration of this Order, but its motion was denied on June 25, 1998. Hence, it filed before

this Court on August 26, 1998, a petition for certiorari under Rule 65 of the Rules of Court alleging

grave abuse of discretion on the part of the Secretary of Labor for modifying its earlier order and

requiring instead the reinstatement of the employees in the payroll. However, in a resolution dated

July 12, 1999, this Court referred the case to the Court of Appeals, pursuant to the principle

embodied in National Federation of Labor v. Laguesma.5

On October 19, 1999, the Court of Appeals rendered a Decision dismissing the Unions petition and

affirming the Secretary of Labors Order for payroll reinstatement. The Court of Appeals held that

the challenged order is merely an error of judgment and not a grave abuse of discretion and that

payroll reinstatement is not prohibited by law, but may be "called for" under certain circumstances.6

Hence, the Union now stands before this Court maintaining that:

THE HONORABLE COURT OF APPEALS GRIEVIOUSLY ERRED IN RULING THAT THE SECRETARY OF

LABORS UNAUTHORIZED ORDER OF MERE "PAYROLL REINSTATEMENT" IS NOT GRAVE ABUSE OF

DISCRETION7

The petition has merit.

The Court of Appeals based its decision on this Courts ruling in University of Santo Tomas (UST) v.

NLRC.8 There, the Secretary assumed jurisdiction over the labor dispute between striking teachers

and the university. He ordered the striking teachers to return to work and the university to accept

them under the same terms and conditions. However, in a subsequent order, the NLRC providedpayroll reinstatement for the striking teachers as an alternative remedy to actual reinstatement.


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True, this Court held therein that the NLRC did not commit grave abuse of discretion in providing for

the alternative remedy of payroll reinstatement. This Court found that it was merely an error of

judgment, which is not correctible by a special civil action for certiorari. The NLRC was only trying its

best to work out a satisfactory ad hoc solution to a festering and serious problem.

However, this Court notes that the UST ruling was made in the light of one very important fact: the

teachers could not be given back their academic assignments since the order of the Secretary for

them to return to work was given in the middle of the first semester of the academic year. The NLRC

was, therefore, faced with a situation where the striking teachers were entitled to a return to work

order, but the university could not immediately reinstate them since it would be impracticable and

detrimental to the students to change teachers at that point in time.

In the present case, there is no showing that the facts called for payroll reinstatement as an

alternative remedy. A strained relationship between the striking employees and management is no

reason for payroll reinstatement in lieu of actual reinstatement. Petitioner correctly points out thatlabor disputes naturally involve strained relations between labor and management, and that in most

strikes, the relations between the strikers and the non-strikers will similarly be tense.9 Bitter labor

disputes always leave an aftermath of strong emotions and unpleasant situations. Nevertheless, the

government must still perform its function and apply the law, especially if, as in this case, national

interest is involved.

After making the distinction between UST and the present case, this Court now addresses the issue

of whether the Court of Appeals erred in ruling that the Secretary did not commit any grave abuse of

discretion in ordering payroll reinstatement in lieu of actual reinstatement. This question is

answered by the nature of Article 263(g). As a general rule, the State encourages an environment

wherein employers and employees themselves must deal with their problems in a manner that

mutually suits them best. This is the basic policy embodied in Article XIII, Section 3 of the

Constitution,10 which was further echoed in Article 211 of the Labor Code.11 Hence, a voluntary,

instead of compulsory, mode of dispute settlement is the general rule.

However, Article 263, paragraph (g) of the Labor Code, which allows the Secretary of Labor to

assume jurisdiction over a labor dispute involving an industry indispensable to the national interest,

provides an exception:

(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in

an industry indispensable to the national interest, the Secretary of Labor and Employment may

assume jurisdiction over the dispute and decide it or certify the same to the Commission for

compulsory arbitration. Such assumption or certification shall have the effect of automatically

enjoining the intended or impending strike or lockout as specified in the assumption or certification

order. If one has already taken place at the time of assumption or certification, all striking or locked

out employees shall immediately return to work and the employer shall immediately resume

operations and readmit all workers under the same terms and conditions prevailing before the strike

or lockout. x x x


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This provision is viewed as an exercise of the police power of the State. A prolonged strike or lockout

can be inimical to the national economy and, therefore, the situation is imbued with public necessity

and involves the right of the State and the public to self-protection.12

Under Article 263(g), all workers must immediately return to work and all employers must readmit

all of them under the same terms and conditions prevailing before the strike or lockout. This Court

must point out that the law uses the precise phrase of "under the same terms and conditions,"

revealing that it contemplates only actual reinstatement. This is in keeping with the rationale that

any work stoppage or slowdown in that particular industry can be inimical to the national economy.

It is clear that Article 263(g) was not written to protect labor from the excesses of management, nor

was it written to ease management from expenses, which it normally incurs during a work stoppage

or slowdown. It was an error on the part of the Court of Appeals to view the assumption order of the

Secretary as a measure to protect the striking workers from any retaliatory action from the Hotel.

This Court reiterates that this law was written as a means to be used by the State to protect itself

from an emergency or crisis. It is not for labor, nor is it for management.

It is, therefore, evident from the foregoing that the Secretarys subsequent order for mere payroll

reinstatement constitutes grave abuse of discretion amounting to lack or excess of jurisdiction.

Indeed, this Court has always recognized the "great breadth of discretion" by the Secretary once he

assumes jurisdiction over a labor dispute. However, payroll reinstatement in lieu of actual

reinstatement is a departure from the rule in these cases and there must be showing of special

circumstances rendering actual reinstatement impracticable, as in the UST case aforementioned, or

otherwise not conducive to attaining the purpose of the law in providing for assumption of

jurisdiction by the Secretary of Labor and Employment in a labor dispute that affects the national

interest. None appears to have been established in this case. Even in the exercise of his discretion

under Article 236(g), the Secretary must always keep in mind the purpose of the law. Time and

again, this Court has held that when an official by-passes the law on the asserted ground of attaining

a laudable objective, the same will not be maintained if the intendment or purpose of the law would

be defeated.13

WHEREFORE, the petition is GRANTED and the assailed Decision of the Court of Appeals dated

October 19, 1999 is REVERSED and SET ASIDE. The Order dated April 30, 1998 issued by the

Secretary of Labor and Employment modifying the earlier Order dated April 15, 1998, is likewise SET

ASIDE. No pronouncement as to costs.

SO ORDERED.

Davide, Jr., C.J., (Chairman), Ynares-Santiago, and Carpio, JJ., concur.

Quisumbing, J., no part.

Footnotes

1 Annex "3" of Respondents Comment; Rollo, p. 232.


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4 Annex "B" of the Petition; Rollo, pp. 31-35.

5 G.R. No. 123426, March 10, 1999.

6 Rollo, pp. 24-30.

7 Rollo, p. 11.

8 190 SCRA 758 (1990).

9 The Insular Life Assurance Co., Ltd., Employees Association-NATU v. The Insular Life Assurance Co.Ltd., 37 SCRA 244, 271 (1971).

10 Article XIII, Section 3 of the Constitution:

Sec. 3. The State shall afford full protection to labor, local and overseas, organized and unorganized,

and promote full employment and equality of employment opportunities for all.

It shall guarantee the rights of all workers to self-organization, collective bargaining and

negotiations, and peaceful concerted activities, including the right to strike in accordance with law.

They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall

also participate in policy and decision-making processes affecting their rights and benefits as may be

provided by law.

The State shall promote the principle of shared responsibility between workers and employers and

the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce

their mutual compliance therewith to foster industrial peace.

The State shall regulate the relations between workers and employers, recognizing the right of labor

to its just share in the fruits of production and the right of enterprises to reasonable returns on

investments, and to expansion and growth. (Underscoring ours)

11 Art. 211. Declaration of Policy.

A. It is the policy of the State:

(a) 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;

(b) To promote free trade unionism as an instrument for the enhancement of democracy and thepromotion of social justice and development;


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(c) To foster the free and voluntary organization of a strong and united labor movement;

(d) To promote the enlightenment of workers concerning their rights and obligations as union

members and as employees;

(e) To provide an adequate administrative machinery for the expeditious settlement of labor or

industrial disputes;

(f) To ensure a stable but dynamic and just industrial peace; and

(g) To ensure the participation of workers in decision and policy-making processes affecting their

rights, duties and welfare.

B. To encourage a truly democratic method of regulating the relations between the employers andemployees by means of agreements freely entered into through collective bargaining, no court or

administrative agency or official shall have the power to set or fix wages, rates of pay, hours of work

or other terms and conditions of employment, except as otherwise provided under this Code.

(Underscoring supplied.)

12 Phimco Industries, Inc. v. Brillantes, 304 SCRA 747, 763 (1999).

13 Colgate-Palmolive Philippines, Inc. v. Ople, et al., 163 SCRA 323, 330 (1988

G.R. No. 89920 October 18, 1990

UNIVERSITY OF STO. TOMAS, petitioner,

vs.

NATIONAL LABOR RELATIONS COMMISSION, UST FACULTY UNION,

respondents.

Abad, Leao & Associates for petitioner.

Eduardo J. Mario, Jr. for private respondent.

GUTIERREZ, JR., J.:

May a university, pending resolution by the National Labor Relations Commission (NLRC) of its labor

dispute with its union, comply with a readmission order by granting substantially equivalent

academic assignments, in lieu of actual reinstatement, to dismissed faculty members?


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On June 19, 1989, the University of Sto. Tomas (UST), through its Board of Trustees, terminated the

employment of all sixteen union officers and directors of respondent UST Faculty Union on the

ground that "in publishing or causing to be published in Strike Bulletin No. 5 dated August 4, 1987,

the libelous and defamatory attacks against the Father Rector, (each of them) has committed the

offenses of grave misconduct, serious disrespect to a superior and conduct unbecoming a faculty

member." (Rollo p. 41)

As a result of the dismissal of said employees, some faculty members staged mass leaves of absence

on June 28, 1989 and several days thereafter, disrupting classes in all levels at the University. (Rollo,

pp. 53, 92)

On July 5, 1989, the faculty union filed a complaint for illegal dismissal and unfair labor practice with

the Department of Labor and Employment. (Rollo, p. 42)

On July 7, 1989, the labor arbiter, on a prima facie showing that the termination was causing aserious labor dispute, certified the matter to the Secretary of Labor and Employment for a possible

suspension of the effects of termination. (Rollo, p. 51)

Secretary Franklin Drilon subsequently issued an order dated July 11, 1989, the decretal portion of

which reads as follows:

WHEREFORE, ABOVE PREMISES CONSIDERED, and in the interest of industrial peace and pursuant to

Section 33 (b) of RA 6715, the effects of the termination of Ma. Melvyn Alamis, Eduardo Marino, Jr.,

Urbano Agalabia, Anthony Cura, Norma Collantes, Fulvio Guerrero, Corinta Barranco, Porfirio Jose

Guico, Lily Matias, Rene Sison, Henedino Brondial, Myrna Hilario, Ronaldo Asuncion, Nilda

Redoblado, Zenaida Burgos, and Milagros Nino are hereby suspended and management is likewise

ordered to accept them back to work under the same terms and conditions prevailing prior to their

dismissal.

In furtherance of this Order, all faculty members are directed to immediately report back for work

and for management to accept them back under the same terms and conditions prevailing prior to

the strike.

Labor Arbiter Nieves de Castro is hereby directed to proceed with the case pending before her and

to expedite the resolution of the same.

Pending resolution, the parties are directed to cease and desist, from committing any and all acts

that might exacerbate the situation. (Rollo, p. 54)

Petitioner UST filed a motion for reconsideration on July 12, 1989 asking the Secretary of Labor and

Employment to either assume jurisdiction over the present case or certify it to the National Labor

Relations Commission (NLRC) for compulsory arbitration without suspending the effects of the

termination of the 16 dismissed faculty members. (Rollo, pp. 55-64)


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f) The University is directed to cease and desist from offering the aforementioned faculty

members substantially equivalent academic assignments as this is not compliance in good faith with

the Orders of the Secretary of Labor and Employment. (Rollo, pp. 30-31)

Acting on an urgent motion for the issuance of a writ of preliminary injunction and/or restraining

order, the Court resolved to issue a temporary restraining order dated October 25, 1989 enjoining

respondents from enforcing or executing the assailed NLRC resolution. (Rol lo, p. 160)

The petitioner assigns the following errors:

I

THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION (NLRC) GRAVELY ABUSED ITS

DISCRETION IN A MANNER AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT ISSUED THE

ASSAILED RESOLUTION WHICH ORDERS THE ALTERNATIVE REMEDIES OF ACTUAL REINSTATEMENTOR PAYROLL REINSTATEMENT OF THE DISMISSED FACULTY MEMBERS.

II

THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION GRAVELY ABUSED ITS DISCRETION

AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT DIRECTED THE UNIVERSITY TO PAY

SOME OF THE DISMISSED FACULTY MEMBERS ASSIGNED TO HANDLE SUBSTANTIALLY EQUIVALENT

ACADEMIC ASSIGNMENTS, 'FULL BACKWAGES STARTING FROM JULY 13, 1989, THE DATE THE

FACULTY MEMBERS PRESENTED THEMSELVES FOR REINSTATEMENT UP TO THE DATE OF ACTUAL

REINSTATEMENT OR PAYROLL REINSTATEMENT.

III

THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION COMMITTED GRAVE ABUSE OF

DISCRETION AMOUNT ING TO LACK OR EXCESS OF JURISDICTION WHEN IT CONSIDERED AS 'NOT

COMPLIANCE IN GOOD FAITH WITH THE ORDERS OF THE SECRETARY OF LABOR AND EMPLOYMENT'

THE UNIVERSITY'S ACT OF GRANTING TO SOME OF THE DISMISSED FACULTY MEMBERS,

SUBSTANTIALLY EQUIVALENT ACADEMIC ASSIGNMENTS.

IV

THE HONORABLE NLRC GRAVELY ABUSED ITS DISCRETION WHEN IT ARROGATED UPON ITSELF THE

EXERCISE OF THE RIGHT AND PREROGATIVES REPOSED BY LAW TO THE PETITIONER UNIVERSITY IN

THE LATTER'S CAPACITY AS EMPLOYER. (Rollo, pp. 9-10)

We shall deal with the first and third assignment of errors jointly because they are interrelated.

The petitioner states in its petition that: a) It has already actually reinstated six of the dismissed

faculty members, namely: Professors Alamis, Collantes, Hilario, Barranco, Brondial and Cura; b) As toProfessors Agalabia and Guerrero, whose teaching assignments were partially taken over by new


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faculty members, they were given back their remaining teaching loads (not taken by new faculty

members) but were likewise given substantially equivalent academic assignments corresponding to

their teachings loads already taken over by new faculty members; c) The remaining seven faculty

members, to wit: Professors Asuncion, Marino Jr., Matias, Redoblado, Burgos, Nino and Guico, were

given substantially equivalent academic assignments in lieu of actual teaching loads because all of

their teaching loads originally assigned to them at the start of the first semester of school year 1989-

1990 were already taken over by new faculty members; d) One dismissed faculty member Rene

Sison, had been "absent without official leave" or AWOL as early as the start of the first semester.

(Rollo, pp. 11-12).

The petitioner advances the argument that its grant of substantially equivalent academic

assignments to some of the dismissed faculty members, instead of actual reinstatement, is well-

supported by just and valid reasons. It alleges that actual reinstatement of the dismissed faculty

members whose teaching assignments were previously taken over by new faculty members is not

feasible nor practicable since this would compel the petitioner university to violate and terminate itscontracts with the faculty members who were assigned to and had actually taken over the courses.

The petitioner submits that it was never the intention of the Secretary of Labor to force it to break

employment contracts considering that those ordered temporarily reinstated could very well be

accommodated with substantially equivalent academic assignments without loss in rank, pay or

privilege. Likewise, it claims that to change the faculty member when the semester is about to end

would seriously impair and prejudice the welfare and interest of the students because dislocation,

confusion and loss in momentum, if not demoralization, will surely ensue once the change in faculty

is effected. (Rollo, pp. 13-14)

The petitioner also avers that the faculty members who were given substantially equivalent

academic assignments were told by their respective deans to report to the Office of Academic Affairs

and Research for their academic assignments but the said faculty members failed to comply with

these instructions. (Rollo, p. 118) Thus, the petitioner postulates, mere payroll reinstatement which

would give rise to the obligation of the University to pay these faculty members, even if the latter

are not working, would squarely run counter to the principle of "No Work, No Pay". (Rollo, p. 15)

The respondent UST Faculty Union, on the other hand, decries that the petitioner is using the

supposed substantially equivalent academic assignments as a vehicle to embarrass and degrade the

union leaders and that the refusal of the petitioner to comply with the return-to-work order is

calculated to deter, impede and discourage the union leaders from pursuing their union activities.

(Rollo, pp. 246, 254)

It also claims that the dismissed faculty members were hired to perform teaching functions and,

indeed, they have rendered dedicated teaching service to the University students for periods ranging

from 12 to 39 years. Hence, they maintain, their qualifications are fitted for classroom activities and

the assignment to them of non-teaching duties, such as (a) book analysis; (b) syllabi-making or

revising; (c) test questions construction; (d) writing of monographs and modules for students' use in

learning "hard to understand" topics on the lectures; (e) designing modules, transparencies, charts,

diagrams for students' use as learning aids; and (f) other related assignments, is oppressive. (Rollo,pp. 243-244)


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In resolving the contentions of both parties, this Court refers to Article 263 (g), first paragraph, of the

Labor Code, as amended by Section 27 of Republic Act No. 6715, which provides:

(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout

in an industry indispensable to the national interest, the Secretary of Labor and Employment may

assume jurisdiction over the dispute and decide it or certify the same to the Commission for

compulsory arbitration. Such assumption or certification shall have the effect of automatically

enjoining the intended or impending strike or lockout as specified in the assumption or certification

order. If one has already taken place at the time of assumption or certification, all striking or locked

out employees shall immediately return to work and the employer shall immediately resume

operations and readmit all workers under the same terms and conditions prevailing before the strike

or lockout. 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. (Emphasis supplied.)

It was in compliance with the above provision that Secretary Drilon issued his July 18, 1989 order to

"readmit all its faculty members, including the sixteen (16) union officials, under the same terms and

conditions prevailing prior to the present dispute." (Rollo, p. 81) And rightly so, since the labor

controversy which brought about a temporary stoppage of classes in a university populated by

approximately 40,000 students affected national interest.

After the petitioner filed a motion for clarification which, however, was subsequently withdrawn,

Secretary Drilon issued another order dated July 27, 1989 affirming his July 18 order and directing

the NLRC to immediately call the parties and "ensure the implementation of this order" (Rollo, p.

103)

The NLRC was thereby charged with the task of implementing a valid return-to-work order of the

Secretary of Labor. As the implementing body, its authority did not include the power to amend the

Secretary's order. Since the Secretary's July 18 order specifically provided that the dismissed faculty

members shall be readmitted under the same terms and conditions prevailing prior to the present

dispute, the NLRC should have directed the actual reinstatement of the concerned faculty members.

It therefore erred in granting the alternative remedy of payroll reinstatement which, as it turned,

only resulted in confusion. The remedy of payroll reinstatement is nowhere to be found in the

orders of the Secretary of Labor and hence it should not have been imposed by the public

respondent NLRC. There is no showing that the facts called for this type of alternative remedy.

For the same reason, we rule that the grant of substantially equivalent academic assignments can

not be sustained. Clearly, the giving of substantially equivalent academic assignments, without

actual teaching loads, cannot be considered a reinstatement under the same terms and conditions

prevailing before the strike. Within the context of Article 263(g), the phrase "under the same terms

and conditions" contemplates actual reinstatement or the return of actual teaching loads to the

dismissed faculty members. There are academic assignments such as the research and writing of

treatises for publication or full-time laboratory work leading to exciting discoveries which professors


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yearn for as badges of honor and achievement. The assignments given to the reinstated faculty

members do not fall under such desirable categories.

Article 263(g) was devised to maintain the status quo between the workers and management in a

labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national

interest, pending adjudication of the controversy. This is precisely why the Secretary of Labor, in his

July 11, 1989 order, stated that "Pending resolution, the parties are directed to cease and desist

from committing any and all acts that might exacerbate the situation." (Rollo, p. 54) And in his order

of July 18, he decreed that "The directive to the parties to cease and desist from committing any act

that will aggravate the situation is hereby reiterated." (Rollo, p. 81)

The grant of substantially equivalent academic assignments of the nature assigned by the petitioner

would evidently alter the existing status quo since the temporarily reinstated teachers will not be

given their usual teaching loads. In fact, the grant thereof aggravated the present dispute since the

teachers who were assigned substantially equivalent academic assignments refused to accept andhandle what they felt were degrading or unbecoming assignments, in turn prompting the petitioner

University to withhold their salaries. (Rollo, p. 109)

We therefore hold that the public respondent NLRC did not commit grave abuse of discretion when

it ruled that the petitioner should "cease and desist from offering the aforementioned faculty

members substantially equivalent academic assignments as this is not compliance in good faith with

the order of the Secretary of Labor and Employment."

It was error for the NLRC to order the alternative remedies of payroll reinstatement or actual

reinstatement. However, the order did not amount to grave abuse of discretion. Such error is merely

an error of judgment which is not correctible by a special civil action for certiorari. The NLRC was

only trying its best to work out a satisfactory ad hoc solution to a festering and serious problem. In

the light of our rulings on the impropriety of the substantially equivalent academic assignments and

the need to defer the changes of teachers until the end of the first semester, the payroll

reinstatement will actually minimize the petitioners problems in the payment of full backwages.

As to the second assignment of error, the petitioner contends that the NLRC committed grave abuse

of discretion in awarding backwages from July 13, 1989, the date the faculty members presented

themselves for work, up to the date of actual reinstatement, arguing that the motion for

reconsideration seasonably filed by the petitioner had effectively stayed the Secretary's order dated

July 11, 1989.

The petitioner's stand is unmeritorious. A return-to-work order is immediately effective and

executory despite the filing of a motion for reconsideration by the petitioner. As pointed out by the

Court in Philippine Air Lines Employees Association (PALEA) v. Philippine Air Lines, Inc. (38 SCRA 372

[1971]):

The very nature of a return-to-work order issued in a certified case lends itself to no other

construction. The certification attests to the urgency of the matter affecting as it does an industryindispensable to the national interest. The order is issued in the exercise of the court's compulsory


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power of arbitration, and therefore must be obeyed until set aside. To say that its effectivity must

wait affirmance in a motion for reconsideration is not only to emasculate it but indeed to defeat its

import, for by then the deadline fixed for the return-to-work would, in the ordinary course, have

already passed and hence can no longer be affirmed insofar as the time element is concerned.

Additionally, although the Secretary's order of July 11 was modified by the July 18 order, the return-

to-work portion of the earlier order which states that "the faculty members should be admitted

under the same terms and conditions prevailing prior to the dispute" was affirmed.

We likewise affirm the NLRC's finding that the dismissed teachers presented themselves for

reinstatement on July 13, 1989 since the factual findings of quasi-judicial agencies like the NLRC are

generally accorded not only respect but even finality if such findings are supported by substantial

evidence. (Mamerto v. Inciong, 118 SCRA 265 [1982]; Baby Bus, Inc. v. Minister of Labor, 158 SCRA

221 [1988]; Packaging Products Corporation v. National Labor Relations Commission, 152 SCRA 210

[1987]; Talisay Employees' and Laborers Association (TELA) v. Court of Industrial Relations, 143 SCRA213 [1986]). There is no showing that such substantial evidence is not present.

The petitioner, however, stresses that since the faculty members who were given substantially

equivalent academic assignments did not perform their assigned tasks, then they are not entitled to

backwages. (Rollo, p. 19) The petitioner is wrong. The reinstated faculty members' refusal to assume

their substantially equivalent academic assignments does not contravene the Secretary's return-to-

work order. They were merely insisting on being given actual teaching loads, on the return-to-work

order being followed. We find their persistence justified as they are rightfully and legally entitled to

actual reinstatement. Since the petitioner University failed to comply with the Secretary's order of

actual reinstatement, we adjudge that the NLRC's awar

strikes and lockouts cases

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