Professional Documents
Culture Documents
GREAT PACIFIC LIFE EMPLOYEES UNION and Great Pacific Life Assurance 5. The reinstatement of the employees mentioned in #4 shall be conditioned
Corporation entered sometime in 1990 into a Collective Bargaining Agreement (CBA) upon the submission by Alan B. Domingo and Rodel P. de la Rosa . . . . of their
to take effect 1 July 1990 until 30 June 1993. voluntary resignations to the Company upon the signing of this agreement.
On 18 May 1993, or about a month and a half before the expiration of the CBA, the 6. It is agreed and understood that Messrs. Domingo's and de la Rosa's
parties submitted their respective proposals and counter-proposals to serve as bases resignation while being effective thirty (30) days after submission, shall mean that
for their discussions on its projected renewal. The ensuing series of negotiations they need not report to the Company any longer. For the duration of the thirty
however resulted in a deadlock prompting petitioner Great Pacific Life Employees (30) day period, they shall be considered on leave with pay if they still have any
Union (UNION hereon) on 23 September 1993 to file a notice of strike with the outstanding vacation leave credits for 1993 and 1994.
National Conciliation and Mediation Board (NCMB) of the Department of Labor.
Despite several conciliatory conferences before the Board, the impasse could not be 7. Messrs. Domingo and de la Rosa, as showing of the Company's magnanimity,
resolved. Thus, on 3 November 1993 petitioner UNION led by its President Isidro shall be extended/given separation pay at the rate of one(1) month basic pay per
Alan B. Domingo and Vice President Rodel P. de la Rosa went on strike. year of service based on the new CBA
rates. 4
On 6 November 1993 respondent Great Pacific Life Assurance Corporation
(GREPALIFE hereon) required all striking employees to explain in writing within forty- On 14 February 1994 petitioner UNION in assenting to the offers expressed that —
eight (48) hours why no disciplinary action, including possible dismissal from
employment, should be taken against them for committing illegal acts against the
company in the course of the strike, particularly on 4 and 5 November. They were . . . . Management will make a full and immediate implementation of all the terms
warned that failure to submit their explanations within the prescribed period would be and conditions agreed upon.
construed as waiver of their right to be heard. The company directive was apparently
triggered by some violent incidents that took place while the strike was in progress. On its part, the Union shall forthwith lift the picket lines at the premises of the
Strikers reportedly blocked all points of ingress and egress of the company premises Company. All employees concerned shall terminate the strike and shall return to
in Makati City thus preventing GREPALIFE employees reporting for work from work promptly at the start of working hours on February 16, 1994.
entering their respective offices. These employees and third persons doing business
with the company, including lessees of the GREPALIFE building, were allegedly This acceptance should not be Interpreted to mean acquiescence by the Union to
forced by the strikers to submit their cars/vehicles, bags and other belongings to any portion of the aforementioned "last and final offer of Management" which
illegal search. 1 may be deemed to be contrary to law or public policy, the said offer being the
sole responsibility of Management. Furthermore, it is understood that should any
Complying with the order, UNION President Alan B. Domingo and some strikers portion of said offer be held invalid, the remainder of said offer which has been
explained that they did not violate any law as they were merely exercising their herein accepted shall not be affected thereby. 5
constitutional right to strike. Petitioner Rodel P. de la Rosa and the rest of the strikers
however ignored the management directive. On 15 February 1994 the UNION and GREPALIFE executed a Memorandum of
Agreement (MOA) before the NCMB which ended their dispute. The MOA provided in
GREPALIFE found the explanation of Domingo totally unsatisfactory and considered its Par 4 (on dismissals) that —
de la Rosa as having waived his right to be heard. Thus on 16 November 1993 both
UNION officers were notified of the termination of their services, effective (a) (Except for Domingo and de la Rosa) employees/members of the Union
immediately, as Senior Benefits Clerk and Senior Data Analyst, respectively. 2 All subject of dismissal notices on account of illegal acts committed in the course of
other strikers whose explanations were found unacceptable or who failed to submit the strike shall be given amnesty by the Company and he reinstated (under) the
written explanations were likewise dismissed. 3 Notwithstanding their dismissal from same terms and conditions prior to their dismissals following the signing of this
employment, Domingo and de la Rosa continued to lead the members of the striking agreement; (b) Messrs. Domingo and de la Rosa hereby reserve their right to
union in their concerted action against management.
On 15 February 1994 Domingo and de la Rosa filed a joint letter of resignation with We hold that the NLRC did not commit grave abuse of discretion. The right to strike,
respondent company but emphasized therein that "(their) resignation is submitted while constitutionally recognized, is not without legal constrictions. 14 The Labor Code
only because the same is demanded by the Company, and it should not be is emphatic against the use of violence, coercion and intimidation during a strike and
understood as a waiver — as none is expressingly or impliedly made — of whatever to this end prohibits the obstruction of free passage to and from the employer's
rights (they) may have under existing contracts and labor and social legislation." 7 The premises for lawful purposes. The sanction provided in par. (a) of Art. 262 thereof is
MOA was subsequently incorporated in a new CBA which was signed on 4 March so severe that "any worker or union officer who knowingly participates in the
1994 but made effective on 1 July 1993 until 30 June 1996. commission of illegal acts during a strike may be declared to have lost his
employment status." 15
On 2 June 1994 Domingo and de la Rosa sue GREPALIFE for illegal dismissal, unfair
labor practice and damages. GREPALIFE submitted before the Labor Arbiter several affidavits of its employees
which de la Rosa did not refute. Of these documents, two (2) specifically described
The Labor Arbiter sustained the charge of illegal dismissal. He found that the the incidents that transpired during the strike on 4 and 5 November 1993. Security
evidence of respondent company consisting of affidavits of its employees was self- guard Rodrigo S. Butalid deposed —
serving and inadequate to prove the illegal acts allegedly committed during the strike
by Domingo and de la Rosa. Calling attention to the fifth. Paragraph Of the "last and (3) Since 3 November 1993, I have noticed that the striking employees have
final offer" Of respondent company, he rationalized that if indeed there was justifiable been doing the following: (a) the striking employees are picketing at the entrance
ground to terminate complaints' employment, there would have been no need for the and exit gates. (b) The striking employees would surround every vehicle
company to demand the resignation of the two union officers in exchange for the including vehicles of lessees of the Grepalife Building, that would enter the
reinstatement of all the strikers. He branded this "offer" as nothing more than a Grepalife premises, inspect the same and ask the driver of the vehicle to open
scheme to get rid the complainants, noting the undue haste with which their services the trunk of the vehicle so that the striking employees can see whether there are
were terminated by the respondent company. This, he observed, constituted nothing Grepalife business documents found therein. The vehicle which is being
less than a deprivation of due process of law. Thus, on 25 July 1995 the Labor Arbiter inspected cannot enter the Grepalife premises as the striking employees would
ordered respondent GREPALIFE to reinstate complaints to their former positions place a wooden bench in front of the vehicle. This wooden bench is only
without loss of seniority rights, with one (1) year back wages without qualification or removed to enable the vehicle to enter the Grepalife premises once the signal
deduction computed from 16 November 1993, the date of their dismissal. The other has been given by the striking employees, who stand at the sides and at the back
claims were dismissed for insufficiency of evidence. 8 of the vehicle, to the other striking employees who stand in front of the vehicle
that the vehicle has already been inspected and cleared. (c) If the striking
Both parties appealed to the National Labor Relations Commission (NLRC). employees find Grepalife business documents in the vehicle being inspected, the
Respondent NLRC rejected the finding below that Domingo and de la Rosa. were striking employees would prevent the vehicle from entering the Grepalife
illegally dismissed, contending that a just cause for dismissal had been sufficiently premises. (d) The striking employees do not allow Grepalife, employees to enter
established. However, it agreed that respondent company failed to comply strictly with the Grepalife premises. Occasionally however, the striking employees will allow a
the requirements of due process prior to termination. In its decision dated 14 May Grepalife employees to enter the Grepalife office but on the condition that they
1996, it modified the ruling of the Labor Arbiter by directing respondent GREPALIFE will only get their personal belongings. (e) All persons who wish to enter the
to pay complainants their one (1) month salary 9 for non-observance of due process Grepalife premises are frisked and their bags/brief cases inspected. If a person is
prior to their dismissal. Considering that at the final negotiation for the settlement found to carry any Grepalife business document, he is not allowed to enter the
respondent company offered complainants separation pay of one (1) month salary for Grepalife premises. In the alternative, he would be allowed to enter but the
every year of service based on the new CBA rates in exchange for their voluntary Grepalife business document in his possession will be confiscated from him
resignation, the NLRC additionally ordered payment of such amount. 10 before he is allowed to enter.
On 19 June 1996 respondent GREPALIFE's motion for reconsideration was denied. 4. Among those who I have seen to have participated in the foregoing activities
Pending finality thereof, respondent company and Domingo entered into compromise are the following persons: (a) Alan B. Domingo who I know to be the President of
agreement11 which they submitted to the NLRC for approval. On 10 July 1996 the the Union; (b) Rodel P. dela Rosa who I know to be the Vice-President of the
NLRC considered the case against Domingo terminated, 12 and denied on 16 August Union;
1996 de la Rosa's motion for reconsideration. 13
The affidavit of another security guard, Wilson S. Concha was of similar import.
Pleading before us, petitioner de la Rosa raises two (2) issues. He asserts that he
was illegally dismissed because his actual participation in the illegal acts during the
SO ORDERED.
The Court required both public and private respondents to file their comment on the The NCMB set a conciliation meeting on 19 July 1991, but as early as 16 July 1991
petition. Private respondent RBS filed its comment on 23 April 1996 and public the Union held a strike vote among its members and submitted the results thereof to
respondent NLRC filed its own comment on 9 December 1996. Petitioners filed a the NCMB on 18 July 1991 which showed that majority of the union members voted
reply to both comments on 4 March 1997. Since the parties have exhaustively argued to go on strike.
their position in their respective pleadings, the Court dispensed with the filing of
memoranda and considered this case submitted for resolution. During the conciliation meeting held on 19 July 1991, RBS, through counsel, informed
GMAEU's officers that RBS did not violate any provision in the collective bargaining
The material and relevant facts are as follows: agreement since the issuance of the guidelines was a management prerogative duly
recognized in their agreement. As regards GMAEU's charges of coercion, union
interference and discrimination, RBS argued that these alleged unfair labor practices
RBS had a collective bargaining agreement with GMAEU which took effect on 2 July were neither raised by the union in its 26 June 1991 letter nor during their 3 July and
1989. After the first quarter of 1991, RBS management noted the huge amount of
In a second conciliation meeting held on 25 July 1991, RBS reiterated its request to WHETHER OR NOT THE NLRC COMMITTED GRAVE ABUSE OF DISCRETION
GMAEU's officers to furnish RBS the details of the alleged unfair labor practices WHEN IT UPHELD THE LABOR ARBITER'S DECISION THAT PETITIONERS
committed by RBS' officers. Again, the Union denied RBS' request and refused to STAGED AN ILLEGAL STRIKE ON 2 AUGUST 1991.
hold any further talks with RBS management. On the same day, RBS filed a motion to
dismiss GMAEU's notice of strike and forewarned the Union about the consequences
of an illegal strike. Petitioners argue that any defect in their pro-forma notice of strike was cured when
the NCMB took cognizance of the case and conducted conciliation proceedings on 19
July and 25 July 1991. In addition, upon assumption by the Secretary of Labor of
On 2 August 1991, the union struck. On the same day, RBS filed a complaint for jurisdiction over the dispute and certification of the same for compulsory arbitration, it
illegal strike and unfair labor practice against GMAEU and its fourteen (14) officers is presumed that the union had complied with the procedural requirements under the
(hereafter, illegal strike case). The case was docketed as NLRC Case 00-08-04531- labor code for a valid notice of strike.
91. Meanwhile, the Secretary of Labor immediately assumed jurisdiction over the
case, issued a return-to-work order, and certified the case to the NLRC for
compulsory arbitration (hereafter, certified case). The case was docketed as NCMB- Anent the alleged unfair labor practice committed by RBS, petitioners assert that this
NCR-050-7-488-91. issue was thoroughly discussed with sufficient particularity in their position papers
filed in the certified case and in the illegal strike case; hence. "their notice of strike
was sufficient in form and in substance."
In the certified case, the labor arbiter found no factual and legal ground to hold RBS
guilty of unfair labor practices against the Union. On appeal (docketed as NLRC-NCR
CC No. 00076-01), the NLRC affirmed the labor arbiter's decision in a resolution Petitioners further argue that they believed in good faith that RBS had committed acts
dated 31 July 1992. of unfair labor practice which induced them to proceed with the strike on 2 August
1991. Since it was an unfair labor practice strike, the no-strike clause in the collective
bargaining agreement with RBS does not apply They also showed good faith by their
Meanwhile, the labor arbiter continued to hear the illegal strike case filed by RBS immediate compliance with the return-to-work order issued by the Secretary of Labor
against GMAEU. On 18 February 1994, the labor arbiter rendered judgment declaring upon assuming jurisdiction over the case.
the strike illegal and the union officers who knowingly participated in the illegal strike
to have validly lost their employment status based on the following reasons:
Private respondent RBS refutes these arguments and asserts that the factual findings
of the labor arbiter and the NLRC, being supported by substantial evidence, should
a. "The notice of strike did not specifically charge the company (RBS) of unfair labor be upheld by this Court. This means that petitioners cannot invoke the protective
practices, only pro formaallegations of gross violation of the collective bargaining mantle of the good faith strike doctrine because the alleged issues in the notice of
agreement, employees coercion, union interference, and discrimination." It is strike were never substantiated by the union either before or during the conciliation
"defective as it consisted of vague and general charges which could not be proceedings. The union violated the no strike clause under the collective bargaining
substantiated and which the company could not properly defend itself against." agreement and should be held accountable for their acts by considering them validly
dismissed from their employment with RBS.
b. "The absence of evidence on record that the mandatory cooling-off period and
strike vote under the law were complied which renders the strike staged by the We find no merit in the petition at bar.
respondents illegal per se on technical grounds."
The notice of strike filed by the union before the NCMB on 12 July 1991 contained
c. "On the merits . . . there are no strikeable grounds as there was no bargaining general allegations that RBS management committed unfair labor practices by its
deadlock between the parties. The alleged gross violation of the collective bargaining gross violation of the economic provisions in their collective bargaining agreement
agreement cannot constitute an unfair labor practice because said charges were and by alleged acts of coercion, union interference and discrimination which
bereft of factual and legal basis." "There being no unfair labor practice, it follows that amounted to union busting. It is the union, therefore, who had the burden of proof to
there is no strikeable issue to support the strike conducted by herein respondents (the present substantial evidence to support these allegations.
Union)."
Petitioners plead that their contemporaneous acts, reckoned from their 26 June 1991
letter to RBS up to the actual strike held on 2 August 1991, were justified based on its
honest belief that RBS was committing unfair labor practices. Stated otherwise, "the
presumption of legality (of the strike) prevails even if the allegations of unfair labor
practices are subsequently found out to be untrue." (citing Muster Iron Labor Union v.
NLRC, 219 SCRA 47)
The Court is not unmindful of this rule, 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.
The cases before the Court pit labor against management, in which, on not a few 8. On March 12, 1980, private respondent filed an application for clearance to
occasions, it is labor that has cause for complaint. dismiss Cornelio Pangilinan, Leo Tropics, Olimpio Gumin, Reynaldo Dayrit,
Odilon Lising, Edilberto Quiambao; Ernesto Ramirez, Ernesto Galang,
The Solicitor General states the facts as follows: Buenaventura Puno, Arnel Calilung, Romeo Guina, docketed as R03-AB Case
No. 556-80. Subsequently private respondent filed another clearance to dismiss
Jesus Daquigan, Serafin Pawa and Rufo Bugayong, docketed as R03-A-B Case
xxx xxx xxx No. 55780.
1. Petitioner union is a local chapter of the Central Luzon Labor Congress 9. On April 22,1980, petitioner Ricardo Dormingo who was preventively
(CLLC), a legitimate labor federation duly registered with the Ministry of Labor suspended on April 17, 1980 filed a complaint for unfair labor practice against the
and Employment (MOLE), while the individual petitioners are former employees latter, docketed as R03-AB Case No. 55880.
of private respondent who were officers and members of the petitioner union.
10. On April 30, 1980, the services of nine (9) more union members, namely:
2. Private respondent is a corporation engaged in packing and crating, general Ernesto Tuason, Israel Vino, Pedro Santos, Juanita Suba, Edilberto Sarmiento,
hauling, warehousing, sea van and freight forwarding, Diosalino Pandan, Antonio Razon, Benjamin Capiz and Jesus Sembrano, were
terminated by private respondent on the ground that its contract with the U.S. Air
3. Sometime in January 1980, the majority of the rank and file employees of Force had expired. The rune employees filed a complaint for illegal dismissal
respondent firm organized the e.g. Gochangco Workers Union as an affiliate of against private respondents on June 2, 1980. docketed as R03-AB Case No.
the CLLC. On January 23, 1980, the union filed a petition for certification election 663-80.
under R03-LRD (MA) Case No. 178-80. The MOLE Region 111 office set the
hearing for the petition on February 27,1980. 11. On May 9, 1980, private respondent filed with MOLE, Region III, a Notice of
Termination of Contract together with a list of employees affected by the
4. On February 7,1980, the CLLC national president wrote the general manager expiration of the contract, among them, the 39 individual petitioners herein.
of respondent firm informing him of the organization of the union and requesting
for a labor management conference to normalize employer-employee relations 12. All the aforementioned cases were consolidated and assigned to Labor
(Annex "D," Case 486-80). Arbiter Andres Palumbarit.
5. On February 26,1980, the, union sent a written notice to respondent firm 13. After heating, Labor Arbiter Federico S. Bernardo who took over the cases
requesting permission for certain member officers and members of the union to from Arbiter Palumbarit rendered a decision dated July 2, 1982, the dispositive
portion of which reads:
1. To reinstate all the suspended/dismissed employees to their former 21. Ruben Buela 11,134.00 7,663.00 18,767.00
positions without loss of seniority rights and other privileges, with full
backwages including cost of emergency living allowance from the date of their 22. Rolando Santos 11,134 00 7,663.00 18,767.00
suspension/dismissal up to the supposed date of actual reinstatement, as
follows:
23. Ricardo Domingo 11,134.00 7,663.00 18,767.00
NAME BACK- WAGES ECOLA TOTAL 24. Serafin Pawa 11,134.00 7,663.00 18,767.00
1.Cornelio Pangilinan P 11,266.00 P 7,738.00 P 19,004.00 25. Rufo Bugayong 11,134.00 7,663.00 18,767.00
2. Leo Tropico 11,266.00 7,738.00 19,004.00 26. Ernesto Santos 11,134.00 7,663.00 18,767.00
3. Olimpio Gumin 11,266.00 7,738.00 19,004.00 27. Ismael Cayanan 11,134.00 7,663.00 18,767.00
4. Reynaldo Dayrit 11,266.00 7,738.00 19,004.00 28. Marcelo Lagansad 11,134.00 7,663.00 18,767.00
5. Buenaventura Puno 11,266.00 7,738.00 19,004.00 29. Marcelino Valerio 11,134.00 7,663.00 18,767.00
6. Ernesto Galang 11,266.00 7,738.00 19,004.00 30. Ernesto M. Tuazon 10,618.00 7,225.00 18,767.00
7. Ernesto Ramirez 11,266.00 7,738.00 19,004.00 31. Israel Vino 10,618.00 7,225.00 17,843.00
8. Edilberto Quiambao 11,266.00 7,738.00 19,004.00 32. Pedro Santos 10,618.00 7,225.00 17,843.00
9 Jesus Daquigan 11,266.00 7,738.00 19,004.00 33. Juanita Suba 10,618.00 7,225.00 17,843.00
10. Renato Castaneda 11,134.00 7,633.00 19,004.00 34.Edilberto Sarmiento 10,618.00 7,225.00 17,843.00
11. Edilberto Bingcang 11,134.00 7,663.00 18,767.00 35. Diosalino Pendon 10,618.00 7,225.00 17,843.00
12. Benedicto Capio 11,134.00 7,663.00 18,767.00 36. Antonio Razon 10,618.00 7,225.00 17,843.00
13. Orlando Nacu 11,134.00 7,633.00 18,767.00 37. Benjamin Capiz 10,618.00 7,225.00 17,843.00
14. Rodolfo Capitly 11,134.00 7,663.00 18,767.00 38. Jesus Sembrano 10,618.00 7,225.00 17,843.00
15. Arnel Calilung 11,134.00 7,663.00 18,767.00 GRAND TOTAL P 419,636.00 P 706,973.00 P267,337.00
2. To restore transportation privilege as being extended before the filing of the
16. Romeo Gina 11,134.00 7,663.00 18,767.00 instant case; and
17. Orlando Pangilinan 11,134.00 7,663.00 18,767.00 3. If their reinstatement is no longer possible due to closure of the
establishment, in addition to the payment of their full backwages and cost of
WHEREFORE, in the light of foregoing premises, the appealed decision is This is not to say, however, that such an appeal has judgment. The Solicitor General
hereby set aside and another one issued dismissing the above-entitled cases himself urges that we grant that, petition and hence, reverse the respondent
filed by the complainants-appellees for lack of merit and granting the application Commission. But apart from such urgings, the records themselves show that a
for clearance to terminate the services of individual complainants-appellees filed reversal is in order.
by respondent-appellant.
We are convinced that the respondent company is indeed guilty of an unfair labor
15. Petitioners moved for a reconsideration of the above decision on July 12, practice. It is no coincidence that at the time said respondent issued its suspension
1983 which NLRC denied in a resolution dated December 6,1983. and termination orders, the petitioners were in the midst of a certification election
preliminary to a labor management conference, purportedly, "to normalize employer-
employee relations." 5 It was within the legal right of the petitioners to do so, 6 the
16. Hence, this petition. 1 exercise of which was their sole prerogative, 7 and in which management may not as
a rule interfere. 8 In this connection, the respondent company deserves our strongest
xxx xxx xxx condemnation for ignoring the petitioners' request for permission for some time out to
attend to the hearing of their petition before the med-arbiter. It is not only an act of
The petitioners assign three errors in support of their petition: arrogance, but a brazen interference as well with the employees right to self-
organization, contrary to the prohibition of the Labor Code against unfair labor
practices. 9
I. THAT PUBLIC RESPONDENT GRAVELY ABUSED ITS DISCRETION AND
SERIOUSLY COMMITTED ERRORS IN LAW IN CONSIDERING PRIVATE
RESPONDENTS EVIDENCE INTRODUCED FOR THE FIRST TIME ON APPEAL, But as if to add insult to injury, the company suspended the petitioners on the ground
AND PUBLIC RESPONDENT NLRC HAS SERIOUSLY COMMITTED ERRORS IN of "abandonment of work" 10on February 27, 1980, the date on which, apparently, the
GIVING DUE COURSE TO PRIVATE RESPONDENT APPEAL FROM THE pre-election conference had been scheduled. (The petitioners sought permission on
DECISION OF LABOR ARBITER FEDERICO S. BERNARDO, ALTHOUGH SAID February 26, 1980 while the suspension order was issued on February 28, 1980.)
APPEAL WAS NOT VALIDLY PERFECTED ON TIME; What unfolds here is a clear effort by management to punish the petitioners for their
union activities.
The records show that petitioners were do so, 6 The ar employees whose 21. Ernesto Santos June 1978 Packer
employment did not terminate with the expiration of private respondent's contract
with the U.S. Air Force. In their position paper in the arbitration proceedings, they 22. Benedicto Capio Oct. 1978 Packer
averred that been employer employed by private respondent for six (6) months or
more before they were terminated as follows: 23. Rufo Bugayong May 1977 Packer
On 27 June 1988, the Labor Arbiter rendered his verdict declaring that the closure of in full and complete settlement of NLRC-NCR-CASE NOS. 00-09-03329-87, 00-
SIMEX was a mere subterfuge in order to discourage the formation of the union. The 11-3887-87 and 00-01-00255-88.
respondents, SIMEX and the SANTANDERs, were found guilty of unfair labor
practice and were ordered, jointly and solidarily, to reinstate the 39 workers without I undertake to take charge of obtaining the signatures of the proper officers of the
loss of seniority rights, benefits and privileges, with full backwages from 1 November union to sign the Motion to Dismiss in order to implement the full and final
1987 until such time that these workers are actually reinstated. They were also settlement of said cases between complainant and respondents.
ordered to pay ten per cent (10%) of the total awards as attorney's fees.
I further undertake and warrant that with this payment by the respondents, the
On appeal, the NLRC, in a Decision dated 28 August 1989, set aside the Labor complainant Union and each of their members, hereby RELEASE AND
Arbiter's Decision when it held that the "determination of the wisdom or expediency to DISCHARGE the SIMEX INTERNATIONAL INC., each (sic) Officers, agents and
close a department in a corporation, e.g., the 'lumpia' department in this case, due to representative (sic) fro any demands, claims and liabilities from any cause
financial reverses, is the sole prerogative of the corporation." It ruled that since whatsoever, arising out of their employment with the said respondents (sic)
SIMEX had filed a Notice of Closure on 9 October 1987 and had complied with the corporation.
requirements of the applicable rules and regulations when it posted in their main gate
the aforesaid Notice, its failure to accept the workers of UFW did not constitute unfair
labor practice considering that SIMEX had already closed the "lumpia" department. UFW maintains, however, that the settlement did not materialize because of its
Hence, SIMEX was merely ordered to pay the workers affected a separation pay objections as shown by the fact that it had not filed a Motion to Dismiss and Quitclaim
equivalent to one (1) month's salary for every year of service rendered. in this case.
Petitioner UFW has thus elevated its cause before us in this Petition for Certiorari, The issues for determination then are: 1) whether or not a compromise had been
seeking the reversal of the NLRC Decision, for having been rendered with grave reached by the parties; and 2) whether or not there was a valid closure of SIMEX that
abuse of discretion, and the reinstatement instead of the Decision of the Labor Arbiter entitled it to terminate the employment of its thirty-nine (39) employees. A plea is also
and its affirmance in toto. made that the individual private respondents SANTANDERs be dropped from the suit
since they only acted within the scope of their authority.
The public and private respondents in this case were required to file their respective
Comments. Since the Solicitor General adopted a position contrary to that of the We incline to the view that no valid compromise agreement was arrived at in this
NLRC, the Court required the latter to file its own Comment, which it has done. case.
After the Comments, Reply, Rejoinders and the parties' respective Memoranda were The alleged settlement involved three (3) cases, one of which charges alleged
submitted, private respondents SIMEX and the SANTANDERs filed a Manifestation, violation of labor standards. Compromise agreements involving labor standards cases
dated 10 December 1990 (p. 212, Rollo), signed by Atty. Julio F. Andres, Jr., stating must be reduced to writing and signed in the presence of the Regional Director or his
that after they had manifested to the Court on 9 December 1990 that they were duly authorized representative (Atilano v. De la Cruz, G.R. No. 82488, 28 February
adopting their Memorandum, they discovered that an "Acknowledgment Receipt and 1990, 182 SCRA 886). Section 8, Rule II of the Rules on the Disposition of Labor
Undertaking," dated 9 June 1989, had already been signed between private Standards Cases in the Regional Offices provides:
respondent George SANTANDER and petitioner's former counsel, Atty. Modesto S.
Mendoza, whereby this case as well as two (2) others had already been settled and Sec. 8. Compromise Agreement. — Should the party arrive at an agreement as
compromised. Thereby, this controversy has become moot and academic. Said to the whole or part of the dispute, said agreement shall be reduced [to] writing
Undertaking reads: and signed by the parties in the presence of the regional director or his duly
authorized representative.
I, MODESTO S. MENDOZA, . . ., have today RECEIVED FROM SIMEX
INTERNATIONAL, INC., through its Vice-President, MR. GEORGE The questioned "Acknowledgment Receipt and Undertaking" did not comply with this
SANTANDER, the following amounts: requisite. It was not, therefore, duly executed.
xxx xxx xxx In the case at bar, SIMEX alleged that it suffered export rejections amounting to
$78,959.54 for 1985, $1,654.00 for 1986 and $28,414.11 for 1987, respectively. It
(3) To compromise, to submit questions to arbitration, to renounce the right to alleged that these export rejections resulted in huge financial losses to the company
appeal from a judgment, to waive objections to the venue of an action or to (Rollo, p. 96) so much so that remedial measures were instituted as suppliers
abandon a prescription already acquired. (Emphasis ours). hesitated to given the company their usual credit terms (ibid, p. 97).
No evidence was adduced that would show that the aforementioned counsel for UFW The audited financial statement of SIMEX, however, clearly depicted that for 1985
was authorized to enter into a compromise. Correspondingly, he cannot release and and 1986, the company actually derived retained earnings of P35,593.21 and P73,
discharge SIMEX and the SANTANDERs from their obligation. A perusal of the 241.25, respectively. The private respondents never refuted this fact. Instead, they
"Acknowledgment Receipt and Undertaking" reveals that no representative of UFW merely insisted that these export rejections resulted in heavy losses for the company.
signed the alleged settlement. These export rejections may have, indeed, contributed to a reduction of SIMEX's
earnings. The company, however, was not suffering from business losses, as
claimed, at the time of application for closure.
The fact that said counsel undertook to obtain the signatures of the proper officers of
UFW shows that his action was still subject to ratification by the union members. This
confirmation was never secured as shown by the fact that no motion for the dismissal Indeed, there is no question that an employer may reduce its work force to prevent
of the case at bar had been filed by UFW or on its behalf "in order to implement the losses. However, these losses must be serious, actual and real (Lopez Sugar
full and final settlement of said case," unlike in NLRC-NCR Case No. 00-01-00255-88 Corporation v. Federation of Free Workers, G.R. No. 75000-01, 30 August 1990, 189
where such a Motion had been filed. In an Affidavit, dated 6 May 1991 (p. 258, Rollo), SCRA 179). Otherwise, this "ground for termination would be susceptible to abuse by
Atty. Mendoza also declared that respondent George Santander had stopped the scheming employers who might be merely feigning business losses or reverses in
payment of the three (3) postdated checks, which statement has not been refuted by their business ventures in order to ease out employees (Garcia v. NLRC, G.R. No. L-
private respondents. 67825, 4 September 1987, 153 SCRA 639).
We now shift to the issue bearing on the legality of the closure of SIMEX. Article 283 In this regard, then, SIMEX failed to prove its claim. What were submitted as
(then Article 284) of the Labor Code provides: evidence were mere receipts of export rejections, nothing more. SIMEX never
adduced evidence that would reflect the extent of losses suffered as a result of the
export rejections, which failure is fatal to its cause.
Art. 283. Closure of the establishment and reduction of personnel. — The
employer may also terminate the employment of any employee due to the
installation of labor saving devices, redundancy, retrenchment to prevent losses The Notice of Closure filed by SIMEX had indicated that it will have a permanent
or the closing or cessation of operation of the establishment or undertaking shutdown and/or total closure of all its units of operation. This was not so. Workers
unless the closing is for the purpose of circumventing the provisions of this belonging to the Marketing and Export Divisions were never laid off. A SEC
Title, by serving a written notice on the workers and the Ministry of Labor and Certification, dated 4 February 1988, shows that SIMEX never applied for dissolution.
Employment at least one (1) month before the intended date thereof. In case of The Labor Arbiter also found as a fact that SIMEX continued to export its products,
termination due to the installation of labor saving devices or redundancy, the including "eggroll wrap," long after its target date of closure.
worker affected thereby shall be entitled to a separation pay equivalent to at least
his one (1) month pay or at least one (1) month pay for every year of service, In explaining this discrepancy, SIMEX merely alleged that not all its operations were
whichever is higher. In case of retrenchment to prevent losses and in cases of closed. Even on this score alone, therefore, private respondents' position must be
closures or cessation of operations of establishment and undertaking not due to rejected.
serious business losses or financial losses, the separation pay shall be
equivalent to one (1) month pay or at least one half (1/2) month pay for every These factors strongly give more credence to the Solicitor General and UFW's
contention that the alleged closure of business of SIMEX was "but a subterfuge to
2. Take your meals within the office. We do not know how long you intend to stay out, but we cannot hold your
positions open for long. We have continued to operate and will continue to do so
3. Make a choice whether to go home at the end of the day or to sleep nights at with or without you.
the office where comfortable cots have been prepared.
If you are still interested in continuing in the employ of the Group Companies,
4. Enjoy free coffee and occasional movies. and if there are no criminal charges pending against you, we are giving you until
2 June 1958 to report for work at the home office. If by this date you have not yet
5. Be paid overtime for work performed in excess of eight hours. reported, we may be forced to obtain your replacement.
6. Be sure arrangements will be made for your families. Before, the decisions was yours to make.
The decision to make is yours — whether you still believe in the motives of the So it is now.
strike or in the fairness of the Management.
Incidentally, all of the more than 120 criminal charges filed against the members of
The Unions, however, continued on strike, with the exception of a few unionists who the Unions, except three (3), were dismissed by the fiscal's office and by the courts.
were convinced to desist by the aforesaid letter of May 21, 1958. These three cases involved "slight physical injuries" against one striker and "light
coercion" against two others.
From the date the strike was called on May 21, 1958, until it was called off on May 31,
1958, some management men tried to break thru the Unions' picket lines. Thus, on At any rate, because of the issuance of the writ of preliminary injunction against them
May 21, 1958 Garcia, assistant corporate secretary, and Vicente Abella, chief of the as well as the ultimatum of the Companies giving them until June 2, 1958 to return to
personnel records section, respectively of the Companies, tried to penetrate the their jobs or else be replaced, the striking employees decided to call off their strike
picket lines in front of the Insular Life Building. Garcia, upon approaching the picket and to report back to work on June 2, 1958.
line, tossed aside the placard of a picketer, one Paulino Bugay; a fight ensued
between them, in which both suffered injuries. The Companies organized three bus- However, before readmitting the strikers, the Companies required them not only to
loads of employees, including a photographer, who with the said respondent Olbes, secure clearances from the City Fiscal's Office of Manila but also to be screened by a
succeeded in penetrating the picket lines in front of the Insular Life Building, thus management committee among the members of which were Enage and Garcia. The
causing injuries to the picketers and also to the strike-breakers due to the resistance screening committee initially rejected 83 strikers with pending criminal charges.
offered by some picketers. However, all non-strikers with pending criminal charges which arose from the
breakthrough incident were readmitted immediately by the Companies without being
Alleging that some non-strikers were injured and with the use of photographs as required to secure clearances from the fiscal's office. Subsequently, when practically
evidence, the Companies then filed criminal charges against the strikers with the City all the strikers had secured clearances from the fiscal's office, the Companies
2. In not finding the Companies guilty of unfair labor practice for discriminating
against the striking members of the Unions in the matter of readmission of Moreover, since exhibit A is a letter containing promises of benefits to the employees
employees after the strike; in order to entice them to return to work, it is not protected by the free speech
provisions of the Constitution (NLRB v. Clearfield Cheese Co., Inc., 213 F2d 70). The
same is true with exhibit B since it contained threats to obtain replacements for the
3. In not finding the Companies guilty of unfair labor practice for dismissing striking employees in the event they did not report for work on June 2, 1958. The free
officials and members of the Unions without giving them the benefit of speech protection under the Constitution is inapplicable where the expression of
investigation and the opportunity to present their side in regard to activities opinion by the employer or his agent contains a promise of benefit, or threats, or
undertaken by them in the legitimate exercise of their right to strike; and reprisal (31 Am. Jur. 544; NLRB vs. Clearfield Cheese Co., Inc., 213 F2d 70; NLRB
vs. Goigy Co., 211 F2d 533, 35 ALR 2d 422).
Likewise violative of the right to organize, form and join labor organizations are the It must be recalled that previous to the petitioners' submission of proposals for an
following acts: the offer of a Christmas bonus to all "loyal" employees of a company amended renewal of their respective collective bargaining agreements to the
shortly after the making of a request by the union to bargain; wage increases given respondents, the latter hired Felipe Enage and Ramon Garcia, former legal counsels
for the purpose of mollifying employees after the employer has refused to bargain of the petitioners, as personnel manager and assistant corporate secretary,
with the union, or for the purpose of inducing striking employees to return to work; the respectively, with attractive compensations. After the notice to strike was served on
employer's promises of benefits in return for the strikers' abandonment of their strike the Companies and negotiations were in progress in the Department of Labor, the
in support of their union; and the employer's statement, made about 6 weeks after the respondents reclassified 87 employees as supervisors without increase in salary or in
strike started, to a group of strikers in a restaurant to the effect that if the strikers responsibility, in effect compelling these employees to resign from their unions. And
returned to work, they would receive new benefits in the form of hospitalization, during the negotiations in the Department of Labor, despite the fact that the
accident insurance, profit-sharing, and a new building to work in.2 petitioners granted the respondents' demand that the former drop their demand for
union shop and in spite of urgings by the conciliators of the Department of Labor, the
Citing paragraph 5 of the complaint filed by the acting prosecutor of the lower court respondents adamantly refused to answer the Unions' demands en toto. Incidentally,
which states that "the officers and members of the complainant unions decided to call Enage was the chairman of the negotiating panel for the Companies in the collective
off the strike and return to work on June 2, 1958 by reason of the injunction issued by bargaining between the former and the Unions. After the petitioners went to strike, the
the Manila Court of First Instance," the respondents contend that this was the main strikers were individually sent copies of exhibit A, enticing them to abandon their
cause why the strikers returned to work and not the letters, exhibits A and B. This strike by inducing them to return to work upon promise of special privileges. Two days
assertion is without merit. The circumstance that the strikers later decided to return to later, the respondents, thru their president and manager, respondent Jose M. Olbes,
work ostensibly on account of the injunctive writ issued by the Court of First Instance brought three truckloads of non-strikers and others, escorted by armed men, who,
of Manila cannot alter the intrinsic quality of the letters, which were calculated, or despite the presence of eight entrances to the three buildings occupied by the
which tended, to interfere with the employees' right to engage in lawful concerted Companies, entered thru only one gate less than two meters wide and in the process,
activity in the form of a strike. Interference constituting unfair labor practice will not crashed thru the picket line posted in front of the premises of the Insular Life Building.
cease to be such simply because it was susceptible of being thwarted or resisted, or This resulted in injuries on the part of the picketers and the strike-
that it did not proximately cause the result intended. For success of purpose is not, breakers.lâwphî1.ñèt Then the respondents brought against the picketers criminal
and should not, be the criterion in determining whether or not a prohibited act charges, only three of which were not dismissed, and these three only for slight
constitutes unfair labor practice. misdemeanors. As a result of these criminal actions, the respondents were able to
obtain an injunction from the court of first instance restraining the strikers from
stopping, impeding, obstructing, etc. the free and peaceful use of the Companies'
The test of whether an employer has interfered with and coerced employees gates, entrance and driveway and the free movement of persons and vehicles to and
within the meaning of subsection (a) (1) is whether the employer has engaged in from, out and in, of the Companies' buildings. On the same day that the injunction
conduct which it may reasonably be said tends to interfere with the free exercise was issued, the letter, Exhibit B, was sent — again individually and by registered
of employees' rights under section 3 of the Act, and it is not necessary that there special delivery mail — to the strikers, threatening them with dismissal if they did not
be direct evidence that any employee was in fact intimidated or coerced by report for work on or before June 2, 1958. But when most of the petitioners reported
statements of threats of the employer if there is a reasonable inference that anti- for work, the respondents thru a screening committee — of which Ramon Garcia was
union conduct of the employer does have an adverse effect on self-organization a member — refused to admit 63 members of the Unions on the ground of "pending
and collective bargaining. (Francisco, Labor Laws 1956, Vol. II, p. criminal charges." However, when almost all were cleared of criminal charges by the
323, citing NLRB v. Ford, C.A., 1948, 170 F2d 735). fiscal's office, the respondents adamantly refused admission to 34 officials and union
members. It is not, however, disputed that all-non-strikers with pending criminal
Besides, the letters, exhibits A and B, should not be considered by themselves alone charges which arose from the breakthrough incident of May 23, 1958 were readmitted
but should be read in the light of the preceding and subsequent circumstances immediately by the respondents. Among the non-strikers with pending criminal
surrounding them. The letters should be interpreted according to the "totality of charges who were readmitted were Generoso Abella, Enrique Guidote, Emilio
conduct doctrine," Carreon, Antonio Castillo, Federico Barretto, Manuel Chuidian and Nestor Cipriano.
Thirty (30) days from receipt of this notice by the Office, this [sic] unions intends Our point of inquiry should therefore be directed at whether they also complied with
to go on strike against the second condition. It is not denied that when the strikers reported for work on June
2, 1958, 63 members of the Unions were refused readmission because they had
THE INSULAR LIFE ASSURANCE CO., LTD. pending criminal charges. However, despite the fact that they were able to secure
Plaza Moraga, Manila their respective clearances 34 officials and union members were still refused
readmission on the alleged ground that they committed acts inimical to the
THE FGU INSURANCE GROUP Companies. It is beyond dispute, however, that non-strikers who also had criminal
Plaza Moraga, Manila charges pending against them in the fiscal's office, arising from the same incidents
whence the criminal charges against the strikers evolved, were readily readmitted and
INSULAR LIFE BUILDING ADMINISTRATION were not required to secure clearances. This is a clear act of discrimination practiced
Plaza Moraga, Manila . by the Companies in the process of rehiring and is therefore a violation of sec. 4(a)
(4) of the Industrial Peace Act.
for the following reason: DEADLOCK IN COLLECTIVE BARGAINING...
The respondents did not merely discriminate against all the strikers in general. They
However, the employees did not stage the strike after the thirty-day period, reckoned separated the active from the less active unionists on the basis of their militancy, or
from January 27, 1958. This simply proves that the reason for the strike was not the lack of it, on the picket lines. Unionists belonging to the first category were refused
deadlock on collective bargaining nor any lack of economic concessions. By letter readmission even after they were able to secure clearances from the competent
dated April 15, 1958, the respondents categorically stated what they thought was the authorities with respect to the criminal charges filed against them. It is significant to
cause of the "Notice of Strike," which so far as material, reads: note in this connection that except for one union official who deserted his union on the
second day of the strike and who later participated in crashing through the picket
lines, not a single union officer was taken back to work. Discrimination undoubtedly
3. Because you did not see fit to agree with our position on the union shop, you exists where the record shows that the union activity of the rehired strikers has been
filed a notice of strike with the Bureau of Labor Relations on 27 January 1958, less prominent than that of the strikers who were denied reinstatement.
citing `deadlock in collective bargaining' which could have been for no other issue
than the union shop." (exhibit 8, letter dated April 15, 1958.)
So is there an unfair labor practice where the employer, although authorized by
the Court of Industrial Relations to dismiss the employees who participated in an
The strike took place nearly four months from the date the said notice of strike was illegal strike, dismissed only the leaders of the strikers, such dismissal being
filed. And the actual and main reason for the strike was, "When it became crystal
It is noteworthy that — perhaps in an anticipatory effort to exculpate themselves from This will confirm the termination of your employment with the Insular Life-FGU
charges of discrimination in the readmission of strikers returning to work — the Insurance Group as of 2 June 1958.
respondents delegated the power to readmit to a committee. But the respondent
Olbes had chosen Vicente Abella, chief of the personnel records section, and Ramon The termination of your employment was due to the fact that you committed acts
Garcia, assistant corporate secretary, to screen the unionists reporting back to work. of misconduct while picketing during the last strike. Because this may not
It is not difficult to imagine that these two employees — having been involved in constitute sufficient cause under the law to terminate your employment without
unpleasant incidents with the picketers during the strike — were hostile to the strikers. pay, we are giving you the amount of P1,930.32 corresponding to one-half month
Needless to say, the mere act of placing in the hands of employees hostile to the pay for every year of your service in the Group Company.
strikers the power of reinstatement, is a form of discrimination in rehiring.
Kindly acknowledge receipt of the check we are sending herewith.
Delayed reinstatement is a form of discrimination in rehiring, as is having the
machinery of reinstatement in the hands of employees hostile to the strikers, and
reinstating a union official who formerly worked in a unionized plant, to a job in OLBES
another mill, which was imperfectly organized. (Morabe, The Law on Strikes, p. President,
473, citing Sunshine Mining Co., 7 NLRB 1252; Cleveland Worsted Mills, 43 Insurance Life
NLRB 545; emphasis supplied.) Acting President, FGU.
The respondents, however, admitted that the alleged "acts of misconduct" attributed
Equally significant is the fact that while the management and the members of the to the dismissed strikers were the same acts with which the said strikers were
screening committee admitted the discrimination committed against the strikers, they charged before the fiscal's office and the courts. But all these charges except three
tossed back and around to each other the responsibility for the discrimination. Thus, were dropped or dismissed.
Garcia admitted that in exercising for the management the authority to screen the
returning employees, the committee admitted the non-strikers but refused
readmission to the strikers (tsn., Feb. 6, 1962, pp. 15-19, 23-29). Vicente Abella, Indeed, the individual cases of dismissed officers and members of the striking unions
chairman of the management's screening committee, while admitting the do not indicate sufficient basis for dismissal.
discrimination, placed the blame therefor squarely on the management (tsn., Sept.
20, 1960, pp. 7-8, 14-18). But the management, speaking through the respondent Emiliano Tabasondra, vice-president of the petitioner FGU Insurance Group Workers
Olbes, head of the Companies, disclaimed responsibility for the discrimination. He & Employees Association-NATU, was refused reinstatement allegedly because he did
testified that "The decision whether to accept or not an employee was left in the not report for duty on June 2, 1958 and, hence, had abandoned his office. But the
hands of that committee that had been empowered to look into all cases of the overwhelming evidence adduced at the trial and which the respondents failed to
strikers." (tsn., Sept. 6, 1962, p. 19.) rebut, negates the respondents' charge that he had abandoned his job. In his
testimony, corroborated by many others, Tabasondra particularly identified the
Of course, the respondents — through Ramon Garcia — tried to explain the basis for management men to whom he and his group presented themselves on June 2, 1958.
such discrimination by testifying that strikers whose participation in any alleged He mentioned the respondent Olbes' secretary, De Asis, as the one who received
misconduct during the picketing was not serious in nature were readmissible, while them and later directed them — when Olbes refused them an audience — to Felipe
those whose participation was serious were not. (tsn., Aug. 4, 1961, pp. 48-49, 56). Enage, the Companies' personnel manager. He likewise categorically stated that he
But even this distinction between acts of slight misconduct and acts of serious and his group went to see Enage as directed by Olbes' secretary. If Tabasondra were
misconduct which the respondents contend was the basis for either reinstatement or not telling the truth, it would have been an easy matter for the respondents to produce
discharge, is completely shattered upon a cursory examination of the evidence on De Asis and Enage — who testified anyway as witnesses for the respondents on
record. For with the exception of Pascual Esquillo whose dismissal sent to the other several occasions — to rebut his testimony. The respondents did nothing of the kind.
strikers cited the alleged commission by them of simple "acts of misconduct." Moreover, Tabasondra called on June 21, 1958 the respondents' attention to his non-
admission and asked them to inform him of the reasons therefor, but instead of doing
so, the respondents dismissed him by their letter dated July 10, 1958. Elementary
III. Anent the third assignment of error, the record shows that not a single dismissed fairness required that before being dismissed for cause, Tabasondra be given "his
striker was given the opportunity to defend himself against the supposed charges day in court."
against him. As earlier mentioned, when the striking employees reported back for
Finally, it is not disputed that despite the pendency of criminal charges against non-
striking employees before the fiscal's office, they were readily admitted, but those IV. The lower court should have ordered the reinstatement of the officials and
strikers who had pending charges in the same office were refused readmission. The members of the Unions, with full back wages from June 2, 1958 to the date of their
reinstatement of the strikers is thus in order. actual reinstatement to their usual employment. Because all too clear from the factual
and environmental milieu of this case, coupled with settled decisional law, is that the
Unions went on strike because of the unfair labor practices committed by the
[W]here the misconduct, whether in reinstating persons equally guilty with those respondents, and that when the strikers reported back for work — upon the invitation
whose reinstatement is opposed, or in other ways, gives rise to the inference that of the respondents — they were discriminatorily dismissed. The members and
union activities rather than misconduct is the basis of his [employer] objection, officials of the Unions therefore are entitled to reinstatement with back pay.
the Board has usually required reinstatement." (Teller, supra, p. 853, citing the
Third Annual Report of NLRB [1938], p. 211.)
The respondents notified the petitioner strikers to report back for work on June 2, In a proceeding for unfair labor practice, involving a determination as to whether
1958, which the latter did. A great number of them, however, were refused or not the acts of the employees concerned justified the adoption of the employer
readmission because they had criminal charges against them pending before the of disciplinary measures against them, the mere fact that the employees may be
fiscal's office, although non-strikers who were also facing criminal indictments were able to put up a valid defense in a criminal prosecution for the same acts, does
readily readmitted. These strikers who were refused readmission on June 2, 1958 can not erase or neutralize the employer's right to impose discipline on said
thus be categorized as discriminatorily dismissed employees and are entitled to employees. For it is settled that not even the acquittal of an employee of the
backpay from said date. This is true even with respect to the petitioners Jose Pilapil, criminal charge against him is a bar to the employer's right to impose discipline
Paulino Bugay, Jr. and Jose Garcia, Jr. who were found guilty only of misdemeanors on its employees, should the act upon which the criminal charged was based
which are not considered sufficient to bar reinstatement (Teller, Labor Disputes and constitute nevertheless an activity inimical to the employer's interest... The act of
This is a petition for review on certiorari seeking the reversal of the decision rendered Sometime in November, 1962, the PTGWO urged its member-unions to stage a
by the defunct Court of Industrial Relations on January 21, 1974 adjudging the nationwide strike. Thus, respondent Cruz campaigned among the members of RUWU
petitioner corporation guilty of unfair labor practice and ordering the reinstatement of to join the strike.
and payment of backwages to respondent Antonio Cruz.
On November 28, 1962 at around 11:00 p.m., within the company premises,
The antecedent facts as found by the industrial court are as follows: respondent Cruz approached three co-employees who are supervisors of the
company, namely, Camaguin, Dayadante and Gaspar. These persons contended that
respondent Cruz, who was under the influence of liquor, uttered the following remarks
Respondent Antonio Cruz was employed by petitioner corporation in 1957 as an to them: "Ikaw, Ikaw, Ikaw-mga hayop kayo. Bibigyan ko kayo ng isang linggong
electrician. Sometime in December, 1961, he was elected president of the Royal taning sa buhay ninyo ipapapatay ko kayo." They also claim that respondent Cruz
Undergarment Workers Union (RUWU for brevity), a legitimate labor organization had challenged another co-employee. Respondent and his witnesses denied this
which became affiliated with the Philippine Transport and General Workers charge and claimed that what the respondent actually said to the three employees
Organization (PTGWO for brevity). was: "Ikaw, Ikaw, Ikaw pare, alam kong matitigas kayo rito sa compania, kayat ako'y
nakikiusap, kung maaari pag-natuloy ang nationwide strike bukas, makiisa kayo at
On December 14, 1961, the RUWU-PTGWO, represented by the National Secretary gamitin ang tigas ninyo." Immediately thereafter, the three employees went to the
of PTGWO and respondent Cruz as RUWU President, sent proposals to petitioner personnel officer of petitioner corporation. On November 29, 1962, they executed an
corporation for the purpose of collective bargaining. affidavit regarding the incident.
On the following day, December 15, 1961, petitioner corporation, thru its personnel The following day, on November 30, 1962, the general manager of petitioner
manager, terminated the services of respondent Cruz allegedly on the basis of the corporation placed respondent Cruz on preventive suspension effective December 3,
latter's "record and after careful analysis and deliberation." Respondent's wife, 1962 for threatening "the lives of four (4) employees" and for having 'been reported
Felicidad Cruz, who was also an employee of petitioner, was likewise terminated. under the influence of liquor," both acts being "contrary to rules and regulations."
Thus, RUWU called a strike sometime during the first week of January, 1962.
Upon the request of respondent Cruz and PTGWO, the petitioner corporation
On January 10, 1962, RUWU-PTGWO and petitioner corporation entered into a conducted a conference which was in the nature of an investigation of the incident.
Return-to-Work Agreement thru the conciliation efforts of the Department of Labor.
The agreement contained the following provision: On December 13, 1962, petitioner corporation dismissed respondent Cruz for being
under the influence of liquor on November 28, 1962 and for having threatened the
xxx xxx xxx lives of four of his co-employees.
Regarding the two (2) employees, Mr. Antonio Cruz and Mrs. Cruz, the union Respondent Cruz filed a complaint for unfair labor practice against petitioner
entrusts the settlement of its complaint for decision to the Management, which corporation with the Court of Industrial Relations. On January 21, 1974, the
shall be reinstatement for both employees when the Royal Undergarment respondent industrial court, while affirming the findings of the healing examiner,
Workers Union- PTGWO shall have been chosen as the collective bargaining rendered a decision, the dispositive portion of which, reads as follows:
agent for the workers at the consent election to be held in the company
premises; WHEREFORE, respondent is hereby declared guilty of unfair labor practice and
is ordered to cease and desist from further committing the same. Respondent is
.... (pp. 39-40, Rollo) further directed to reinstate complainant Antonio Cruz to his former or equivalent
position without loss of seniority and other privileges and to pay him backwages
The records do not disclose the results of the consent election. Subsequently including all benefits attached to his position, from the date he was dismissed up
however, respondent Cruz and his wife were both re-employed and reinstated by to November 17, 1969.
petitioner corporation, thereby indicating the victory of RUWU-PTGWO in the consent
election. SO ORDERED. (pp. 43-44, Rollo)
II RESPONDENT CIR LIKEWISE COMMITTED A GRAVE MISAPPREHENSION Then, in the space of eleven months, complainant once again was dismissed
OF FACT IN NOT HOLDING IN ITS DECISION THAT THE DISMISSAL OF from respondents' employ, e.g. in December of the same year he was reinstated.
RESPONDENT CRUZ WAS FOR CAUSE AS PROVIDED FOR IN THE Respondents based its dismissal of complainant on the ground that he was
TERMINATION PAY LAW AND IN ACCORDANCE WITH MANAGEMENT obviously under the influence of liquor and he threatened the lives of four co-
PREROGATIVE. employees. The evidence of being obviously under the influence of liquor' is
based on the supposed observation of the three witnesses whose lives were
allegedly threatened, coming as it is from a biased source. None of these
III ASSUMING ARGUENDO THAT PETITIONER IS GUILTY OF UNFAIR witnesses have ever supplied, much less hinted on the motivation why
LABOR PRACTICE, RESPONDENT CIR ERRED IN AWARDING complainant threatened their lives. On the contrary, they claimed that they were
RESPONDENT CRUZ FULL BACKWAGES WITHOUT DEDUCTING on friendly terms with the complainant with no previous background of
THEREFROM THE INCOME HE EARNED DURING SAID PERIOD. (pp. 9- misunderstanding between them. None of them ever filed criminal charges
10, Rollo) against the complainant for the supposed threat on their lives indicating that
whatever has transpired is not as serious as pictured by the respondent. The
Anent the first and second assigned errors, petitioner submits that the records of the incident was simply blown into such proportion so as to provide a supposed valid
case, particularly the testimonies of respondent Cruz himself and his witnesses, show cause for complainant's dismissal. In the light of the initial attitude of respondent
that petitioner corporation did not interfere with or prevent the union activities of its earlier discussed, the inducing cause directly contributing to complainant's
employees; that the former has even allowed or abetted active unionism within the dismissal is the respondent's antipathy to complainant's union activity and not his
company; that the dismissal of respondent Cruz was not impelled by reason of union misconduct. (pp. 42-43, Rollo)
participation of respondent Cruz but solely by his infraction of company rules and
regulations, specifically, serious threats against the lives of three co-employees, We accord respect to the findings of the industrial court. Section 3 of Republic Act No.
challenging another to a fight and intoxication while on duty, all of which clearly 875, known as the The Industrial Peace Act, as amended, provides that employees
amounted to a dismissal for cause under the Termination Pay Law, Rep. Act No. shall have the right to self-organization and to form, join or assist labor organizations
1052, as amended. of their own choosing for the purpose of collective bargaining through representatives
of their own choosing and to engage in concerted activities for the purpose of
On the other hand, the Court of Industrial Relations found from the surrounding collective bargaining and other mutual aid or protection. Hence, it shall be unfair labor
circumstances of the case, a valid and sufficient basis for the charge of unfair labor practice for an employer to discriminate in regard to tenure of employment or any
practice against petitioner company. Said the respondent court: term or condition of employment to encourage or discourage membership in any labor
organization (Section 4 (a) (4), R.A. No. 875).
There is no question as to the union activities of the complainant. Starting from
the time he was elected president of the RUWU, he had engaged himself actively We have perused the record and found that the totality of evidence as found by
in union affairs. He had in behalf of others pursued assiduously the employee respondent court supports the conclusion that respondent Cruz has been unjustly
relationships of the membership. And on a higher plane, he urged the members dismissed by reason of his union activities. The charge by petitioner against
to join the nation-wide strike being planned by the PTGWO. respondent Cruz for being under the influence of liquor on a certain date and for
having threatened the lives of his co-employees is too flimsy to merit serious
On the part of respondent there appears to be an attitude of antipathy towards consideration. We have on record the undisputed facts that private respondent, as
the complainant. Going back to the time, when the RUWU sent collective president of RUWU, was known for his aggressive and militant union activities; that
bargaining proposals represented then by the complainant, the latter and his wife he and his wife had been previously dismissed on the ground of active participation in
were dismissed one day after the same was received by respondent company. union affairs; that they were reemployed only pursuant to the express terms of the
The record does not show the specific reasons or bases for this action except the Return-to-Work Agreement executed by petitioner corporation and RUWU when the
general proposition that this (complainant's) record was supposedly carefully latter won in the consent election; that respondent Cruz was dismissed again for the
analyzed. And yet, why include his wife in the dismissal? In the Return-to-Work second time in the course of his campaign among RUWU members to join the
Agreement of January, 1962 which followed, a peculiar and strange arrangement nationwide strike of PTGWO in which RUWU is a member union.
was made. The reinstatement of complainant and his wife was made to depend
Upon the filing of a charge for unfair labor practice with the Court of Industrial Then on February 13, 1961 Aronson's original Articles of Incorporation were amended
Relations by herein respondents against petitioners H. Aronson & Co., Inc. — so that, instead of its corporate existence expiring on May 27, 1970, it was made to
hereinafter referred to as Aronson or the Company — and/or Photo Materials & Paper expire nine (9) years earlier, or more specifically, on July 31, 1961. On March 9,
Co., and/or Photo Materials Company, Inc. — hereinafter referred to as Photo 1961, or less than a month after such amendment had been accomplished, Medel
Materials — and Medel Office Materials and Paper Co., Inc. — also referred to was incorporated with a capital stock of P100,000.00, and on July 17 of the same
hereinafter as Medel — a preliminary investigation was had and thereafter the year, another new corporation, Photo Materials was also incorporated with an
corresponding charge was filed against them under the provisions of Section 4 (a), authorized capital stock of P400,000.00.
sub-sections (1), (2), and (4) of Republic Act No. 875. After hearing, the parties
charged were found guilty. Their motion for reconsideration having been denied The total authorized capital stock of the two new corporations amounting to
subsequently by the court en banc, they took the present appeal. P500,000.00 was exactly the same authorized capital stock of Aronson. Moreover,
That the Company was not losing or doing poor business in 1960 is shown by the Our conclusion, therefore, is that the Court of Industrial Relations had jurisdiction over
fact that on April 24, 1960, it increased its personnel by adding two (2) additional the case and the petitioners herein; that it correctly found petitioners guilty of unfair
employees, Patricinio Diaza and Roberto Gorosin (t.s.n., pp. 605-606). Likewise labor practice, and in granting to the individual respondents the relief set forth in the
in January, 1960, the Company gave salary increases to two (2) employees, dispositive portion of the appealed order (Majestic etc. vs. Court of Industrial
namely, Juanito Solon and Andres Tugot (t.s.n., p. 597). Relations, L-12607, Feb. 28, 1962; Fernando vs. Angat Labor Union, L-17896, May
30, 1962; PLASLU vs. Sy, L-18476, May 30, 1964; Yu Ki Lam vs. Micaller, L-9565,
Sept. 14, 1956; Talisay etc. vs. CIR, et al., 60 O.G. pp. 5143, 5151, Jan. 30, 1960).
It is true (and the evidence supporting this is uncontradicted) that the H. Aronson
& Company suffered reduction of its import quota allocations beginning 1960 until
its quota was abolished in the second quarter of 1960. This court can take WHEREFORE, the appealed order being in accordance with law, the same is, hereby
judicial notice that import quota allocations were progressively cut down affirmed, with costs.
beginning 1961 and 1962 in order to prepare our international dollar reserve and
that this reduction was general and nationwide for it affected all import business
in the Philippines. But the business engaged in by the H. Aronson & Company
did not entirely depend for its stock upon importation from abroad. Thus, Mr.
Aronson himself admitted that to fill up its diminishing imported stock and
supplies, the Company resorted to local purchases from local Companies (t.s.n.,
Sometime in 1977, PAL, a local air carrier, entered into a service agreement with In its Decision affirming the ruling of the labor arbiter, Respondent Commission held
STELLAR, a domestic corporation engaged, among others, in the business of job petitioner, as an indirect employer, jointly and severally liable with STELLAR for
contracting janitorial services (PAL and STELLAR's Agreement, Annex "1" of separation pay. First, the individual private respondent's work, although not directly
PAL's Position Paper, Annex "F", id.). related to the business of petitioner, was necessary and desirable for the
maintenance of the petitioner's premises and airplanes. Second, the individual private
respondents were retained for thirteen long years, despite the fact that the contract,
Pursuant to their service agreement, which was impliedly renewed year after which petitioner had entered into STELLAR in 1977, was only for one year.
year, STELLAR hired workers to perform janitorial and maintenance services for
PAL. Among those employed were [Complainants] Manuel Parenas, Daniel
Gaco, Rodolfo Siaron, Alfredo C. Montilla, Romulo S. Castro, Elsa C. Castro, On reconsideration, the NLRC modified its earlier Decision by absolving STELLAR of
Marcelo Paragas, Romulo Parane, Rafael Sanchez, Inocencio [Alcantara], liability, thereby making PAL solely responsible for the award decreed by the labor
Reynaldo Paraiso, Roberto Geronimo, Nomer E. Pescante, Benedicto Santos, arbiter. It held that, first, petitioner was the employer of the individual private
Alberto Tomas, Bonifacio Bayeta, Jr., Danilo Rodriguez, Carleto dela Cruz, respondents, for it engaged in labor-only contracting with STELLAR. This was shown
Rafael Bequio, Eduardo Sitjar, Ruben Tanseco, Teodoro K. Discaya, Ernesto by the failure of petitioner to refute the factual finding that it continued to employ the
Evardone, Arnulfo Lavilla, Glecerio Elabarin, Marcelino Caneda, Epifanio Galibo, individual private respondents after the expiration of the service contract on
Benjamin Gandelaria, Lino B. Dahohoy, Avelino Mullet, Jimmy M. Cordero, December 31, 1990. Second, the individual private respondents' admission in their
Ivanhoe Magino, Felix B. Catindoy, Ruben Daluz, Abenir Yara, Santiago Co[r]tez, Complaint that they were employees of STELLAR was not conclusive, as the
Jr., Armando P. Lucido, Alberto Montilla, Renerio Capon, Leonardo Barrozo, existence of an employer-employee relation was a question of law that could not be
Ireneo Frondozo, Dionesio Banares, Marcelo Marzon, Alfredo Sta. Maria, the subject of stipulation. Respondent Commission concluded that their dismissal was
Bernardo Mamaril, Carlos Delloro, Aldon dela Torre and Florentino Pestido, who without just and valid cause. Because they were no longer seeking reinstatement,
were assigned at PAL's various premises under the supervision of STELLAR's petitioner was liable for separation pay.
supervisors/foremen and timekeepers. The workers were also furnished by
STELLAR with janitorial supplies, such as vacuum cleaner and polisher (Please Hence, this petition. 7 When required by the Court to comment on behalf of
see Manuel Parenas' Contract of Employment with STELLAR, Annex "1" of Respondent Commission, the solicitor general manifested his disagreement with the
Annex "E", id.; STELLAR's Position Paper, pp. 2-5, supra; TSN, May 20, 1993, assailed Decision and Resolution. Thus, Respondent Commission, in compliance with
pp. 15-16 and 19-20). the February 5, 1997 Resolution of this Court,8 filed its own Comment.
On December 31, 1990, the service agreement between PAL and STELLAR The Issues
expired. PAL then called for [the] bidding of its janitorial requirements. This
notwithstanding, STELLAR exerted efforts to maintain its janitorial contract with In its Memorandum,9 petitioner imputes grave abuse of discretion to Respondent
PAL which, in the meantime, allowed Manuel Parenas and others to work at the Commission in this wise: 10
PAL's premises (STELLAR's Position Paper, pp. 2-5, supra, and Memorandum of
Appeal, Annex "H", pp. 3-4, id.; Carlos Callanga's Affidavit, p. 2, pp. 156-160
(a) [I]n holding that the janitorial service agreement with STELLAR was a labor-
only arrangement;
(c) [I]n holding PAL liable for payment of separation pay to the individual On the other hand, permissible job contracting requires the following conditions:
respondents.
(1) The contractor carries on an independent business and undertakes the
The petition raises two main issues. First, whether the individual private respondents contract work on his own account under his own responsibility according to his
are regular employees of PAL. Second, whether petitioner is liable to them for own manner and method, free from the control and direction of his employer or
separation pay. The resolution of the first issue involves a determination of (1) principal in all matters connected with the performance of the work except as to
whether petitioner was a labor-only contractor; and (2) whether the individual private the results thereof; and
respondents became regular employees of PAL because they were allowed to
continue working for petitioner after the expiration of the service contract. (2) The contractor has substantial capital or investment in the form of tools,
equipment, [machinery], work premises, and other materials which are necessary
The Court's Ruling in the conduct of his business. 12
The petition is meritorious. Applying the foregoing provisions to the present case, the Court finds no basis for
holding that PAL engaged in labor-only contracting. The true nature of the individual
First Issue: No Employer-Employee Relation private respondents' employment is evident from the service agreement between
Between Complainants and Petitioner petitioner and STELLAR, which we reproduce hereunder:
Janitorial Service Agreement Is 1. The CONTRACTOR [STELLAR] undertakes to provide the following cleaning
Not Labor-Only Contacting and janitorial maintenance services.
Prohibited labor-only contracting is defined in Article 106 of the Labor Code as Daily Routine:
follows:
(a) Dusting and/or damp-wiping of other vertical and horizontal surfaces that
Art. 106. Contractor or subcontractor. — . . . require daily attention;
There is "labor-only" contracting where the person supplying workers to an (c) Polishing and spot-scrubbing of [illegible];
employer does not have substantial capital or investment in the form of tools,
equipment, machineries, work premises, among others, and the workers
recruited and placed by such persons are performing activities which are directly (d) Dusting, damp-wiping and polishing of [furniture], counters, . . . and other
related to the principal business of such employer. In such cases, the person or office fixtures;
intermediary shall be considered merely as an agent of the employer who shall
be responsible to the workers in the same manner and extent as if the latter were (e) Emptying and cleaning of ash trays;
directly employed by him.
(f) Cleaning and disinfecting of toilets and washrooms;
This definition covers any person who undertakes to supply workers to an employer,
where such person: (g) Cleaning of inside windows, glasses, surfaces, [partitions], etc.;
(1) Does not have substantial capital or investment in the form of tools, (h) On-the-job supervision.
equipment, [machinery], work premises and other materials; and
(3) The equipment, materials and supplies to be used by the CONTRACTOR in 10. This agreement shall be for a period of one (1) year from May 1, 1977 to April
connection with its aforesaid undertakings shall be of high quality and shall not 30, 1978 and [illegible].
cause any damage to OWNER's premises and properties or cause any injury or
annoyance to the persons working or present in the premises. The OWNER shall
place at the disposal of the CONTRACTOR a suitable storage space with lock The foregoing agreement clearly indicates that an employee-employer relation
and key for the safe-keeping of the cleaning equipment and materials which the . existed between the individual private respondents and STELLAR, not PAL. The
. . CONTRACTOR shall use in connection with its undertakings in . . . provisions of the agreement demonstrate that STELLAR possessed these earmarks
Agreement. of an employer: (1) the power of selection and engagement of employees (Stipulation
Nos. 1, 4, 7 and 8), (2) the payment of wages (Stipulation Nos. 5, 6, 7 and 8), (3) the
power of dismissal, and (4) the power to control the employee's conduct (Stipulation
4. The CONTRACTOR warrants that the persons it shall employ to perform the No. 8). 13
work subject to this Agreement shall be honest, reliable, carefully screened,
trained, cooperative, and in possession of health certificates and police
clearances; they will be neat, presentable in appearance, attired in identifying Aside from these stipulations in the service agreement, other pieces of evidence
uniforms and provided with identification cards. The uniforms and identification support the conclusion that STELLAR, not PAL, was the employer of the individual
cards shall be at the expense of the CONTRACTOR. private respondents. A contract of employment 14 existed between STELLAR and the
individual private respondents, proving that it was said corporation which hired them.
It was also STELLAR which dismissed them, as evidenced by Complainant Parenas'
5. In consideration of the services to be rendered by the CONTRACTOR, the termination letter, which was signed by Carlos P. Callanga, vice president for
OWNER shall pay to the CONTRACTOR the sum of PESOS: THREE operations and comptroller of
THOUSAND EIGHT HUNDRED FORTY (P3,840.00) per month in Philippine STELLAR. 15 Likewise, they worked under STELLAR's own supervisors, Rodel
Currency, payable in two equal payments on the 15th and end of each month Pagsulingan, Napoleon Parungao and Renato Topacio. 16 STELLAR even had its
without necessity of demand. In the event that the minimum wage rate shall be own collective bargaining agreement with its employees, including the individual
increased by the operation of law, there shall be a corresponding automatic private respondents. 17 Moreover, PAL had no power of control and dismissal over
increase in the consideration of the contract price to be paid by the OWNER to them.
the CONTRACTOR in consideration of the latter's services.
In fact, STELLAR claims that it falls under the definition of an independent job
6. In case the OWNER shall require the CONTRACTOR to perform the work contractor. Thus, it alleges that it has sufficient capital in the form of tools and
provided under paragraph 1 hereof in excess of eight hours on: (1) any regular equipment, like vacuum cleaners and polishers, and substantial capitalization as
working day, the OWNER shall pay the CONTRACTOR an additional amount to proven by its financial statements. 18 Further, STELLAR has clients other than
be computed in the following manner: petitioner, like San Miguel Corporation, Hongkong and Shanghai Bank, Eveready,
Benguet Management Corporation and Japan Airlines. 19
xxx xxx xxx
All these circumstances establish that STELLAR undertook said contract on its
7. It is agreed that no authority has been conferred upon the CONTRACTOR by account, under its own responsibility, according to its own manner and method, and
the OWNER to hire any person on behalf of the latter and that each person free from the control and direction of the petitioner. Where the control of the principal
employed or hired by the CONTRACTOR in carrying out its part of this is limited only to the result of the work, independent job contracting exists. 20 The
Agreement shall be paid by the CONTRACTOR, and that no such person janitorial service agreement between petitioner and STELLAR is definitely a case of
employed or hired shall be deemed [an] employee or agent of the OWNER. permissible job contracting.
In trying to support this finding, the individual respondents presented, on the other . . . What actually happened was that PAL and STELLAR impliedly renewed, as
hand, an entirely different theory — that petitioner, by allowing them to continue they had previously done before, their service agreement until PAL's janitorial
working after the expiration of the service agreement, because their successor — requirements were bidded to other job contractors. This explains why the
employer. In their Memorandum, 24 they argue: individual private respondents remained working at PAL's premises even after
December 31, 1990.
. . . [T]he records and evidence show that the janitorial service contract between
PAL and Stellar expired on December 31, 1990, and not on November 16, 1991 From the foregoing disquisition, it is evident that petitioner was engaged in
[as stated in the October 31, 1990 letter of the petitioner]. permissible job contracting and that the individual private respondents, for the entire
duration of their employ, were employees not of petitioner but of STELLAR. In
xxx xxx xxx legitimate job contracting, no employer-employee relation exists between the principal
and the job contractor's employees. The principal is responsible to the job contractor's
As a consequence of petitioner's letter and upon knowledge of the termination of employees only for the proper payment of wages. 29 But in labor-only contracting, an
[the] janitorial service contract, respondent Stellar formally notified each of the employer-employee relation is created by law between the principal and the labor-
[complainants] that their individual employment contract likewise be terminated only contractor's employees, such that the former is responsible to such employees,
effective November 16, 1991. Furthermore, it has been expressly and uniformly as if he or she had directly employed them. 30 Besides, the Court has already taken
stated in each of [complainants'] employment contract that their services would judicial notice of the general practice adopted in several government and private
last upon the termination of the janitorial service contract between PAL and institutions of securing janitorial services on an independent contractor basis. 31
Stellar which was of course supposedly on December 31, 1990. By working up to
the time of the final termination which is November 16, 1991, from December 31, Second Issue:
1990, private respondents became direct employees of PAL. STELLAR Is Liable for Separation Pay
xxx xxx xxx Short of expressly admitting to be the employer of the individual private respondents,
STELLAR avers that the former were project employees, whose employment was
coterminous with the service agreement, 32 as evidenced by the following stipulations
in their contract: 33
In order to avoid liability for separation pay, STELLAR argues that it terminated the Subject of the present petition for certiorari are the Court of Appeals Resolution of
services of the individual private respondents for a just and valid cause: the April 13, 19991 and Resolution of September 3, 19992 which dismissed petitioners’
completion of a specific project. Thus, they are not entitled to separation pay. petition for certiorari for having been filed six days beyond the reglementary period
under Section 4, Rule 65 of the 1997 Rules of Civil Procedure, as amended by
The Court is not convinced. The position of STELLAR that individual private Supreme Court En Banc Resolution dated July 21, 1998 reading:
respondents were its project employees is totally unfounded. A regular employee is
distinguished from a project employee by the fact that the latter is employed to carry If the petitioner had filed a motion for new trial or reconsideration in due time after
out a specific project or undertaking, the duration or scope of which was specified at notice of said judgment, order or resolution, the period herein fixed shall be
the time the employees were engaged. 34 A "project" has reference to a particular job interrupted. If the motion is denied, the aggrieved party may file the petition within
or undertaking that may or may not be within the regular or usual business of the the remaining period, but which shall not be less than five (5) days in any
employer. 35 In either case, the project must be distinct, separate and identifiable from event, reckoned from notice of such denial. No extension of time to file the
the main business of the employer, and its duration must be determined or petition shall be granted except for the most compelling reason and in no case to
determinable. exceed fifteen (15) days. (Emphasis and underscoring supplied)
In the case at bar, despite the protestations of STELLAR, the service agreement was Petitioners, in the main, plead for the application of substantial justice over procedural
not a project because its duration was not determined or determinable. While the lapses, conformably to this Court’s pronouncements in several cases, and a liberal
service agreement may have had a specific term, STELLAR disregarded it, construction of the Rules in order to promote its objective of securing a just
repeatedly renewed the service agreement, and continued hiring the individual private disposition of every action or proceeding.3
respondents for thirteen consecutive years. Had STELLAR won the bidding, the
alleged "project" would have never ended. In any event, the aforesaid stipulations in The record shows that the September 3, 1999 Resolution of the Court of Appeals
the employment contract are not included in Articles 282 and 283 of the Labor Code denying petitioners’ motion for reconsideration was received by them on September
as valid causes for the dismissal of employees. 13, 1999. On September 27, 1999, petitioners filed a motion for 30-day extension of
time to file petition which this Court granted. 4 On October 28, 1999, petitioners filed
Again, we must emphasize that the main business of STELLAR is the supply of the present petition for certiorari.5 Doubtless, petitioners could not have availed of
manpower to perform janitorial services for its clients, and the individual private such petition as a mere substitute for lost appeal, 6 hence, this Court treats it as one
respondents were janitors engaged to perform activities that were necessary and for review under Rule 45.
desirable to STELLAR's enterprise. 36 In this case, we hold that the individual private
respondents were STELLAR's regular employees, and there was no valid cause for Indeed, Section 4 of Rule 65 of the 1997 Rules of Civil Procedure was amended by
their dismissal. the July 21, 1998 Resolution of this Court En Banc by adding to it as second
paragraph the above-quoted amendment.
WHEREFORE, the petition is hereby GRANTED. The assailed Decision and
Resolution are SET ASIDE insofar as they held PAL liable for separation pay. The The same Section was, however, subsequently amended by this Court’s En Banc
July 13, 1994 Decision is however reinstated insofar as it ORDERED STELLAR liable Resolution in A.M. No. 00-2-03-SC which took effect on September 1, 2000 providing
for such award. for a 60-day period to file petition under Rule 65 from denial of a motion for
reconsideration or new trial. As thus further amended, Section 4 of Rule 65 now
SO ORDERED. reads:
SEC. 4. When and where petition filed. – The petition shall be filed not later than
sixty (60) days from notice of the judgment, order or resolution. In case a motion
1. Interfering in union activities; b. Violation of CBA, Art. VI – non-granting of ten (10%) percent salary increase to
some union members;
2. Union Busting – violation of CBA’s Article IV, Section 2;9
c. Illegal/unauthorized deductions in the payroll;
3. Union Busting – disregarding the union’s request to deduct penalties from its
members who were absent and without justifiable reasons during union d. Union interference – circulating letters against the union; and
meetings; and
e. Non-implementation of the retirement plan as approved by the BIR. 17
4. Contracting Workout – the management is contracting out services and
functions being performed by Union members.10
A strike was in fact staged on August 5, 1998.
The Notice of Strike was docketed as NCMB-NCR-NS-12-520-97.
By the same Order of August 5, 1998, the DOLE Secretary directed the strikers to
return to work within twenty-four (24) hours. The order was served upon the Union on
Subsequently or on December 17, 1997, a majority of the members of the Union filed August 6, 1998, and the following day, August 7, 1998, at about 3:00 p.m., the Union
a December 15, 1997 petition for audit11 of union funds before the Office of the lifted its strike.18
National Capital Region Director of the Department of Labor and Employment (DOLE)
against the officers of the Union.
The strike staged by the Union on August 5-7, 1998 prompted the University to file on
August 24, 1998 a petition to declare the same illegal, docketed as NLRC-NCR Case
On March 11, 1998, the Regional Director of DOLE-NCR directed the Union officers No. 00-08-06897-98, which was also consolidated with the other cases.
to call a general membership meeting to, among other things, render an accounting of
To constitute ULP, however, violations of the CBA must be gross. Gross violation of
the CBA, under Article 261 of the Labor Code, means flagrant and/or malicious
Article 264.
xxxx
Under the immediately quoted provision, an ordinary striking worker may not be
declared to have lost his employment status by mere participation in an illegal strike.
There must be proof that he knowingly participated in the commission of illegal acts
during the strike. While the University adduced photographs 36 showing strikers
picketing outside the university premises, it failed to identify who they were. It thus
failed to meet the "substantiality of evidence test"37 applicable in dismissal cases.
With respect to the union officers, as already discussed, their mere participation in
the illegal strike warrants their dismissal.
WHEREFORE, the Court of Appeals Resolution of April 13, 1999 and Resolution of
September 3, 1999 are SET ASIDE.
The NLRC Decision of October 12, 1998 and Resolution of January 20, 1999
are AFFIRMED, with the MODIFICATION that the dismissal of petitioner-union
members MONICO CALMA, CONSTANCIO BAYHONAN, BERNARDO SABLE,
NESTOR BRINOSA, NANJI MACARAMPAT, EDUARDO FLORAGUE and DIONY S.
LUMANTA is SET ASIDE, and they are thus ordered REINSTATED WITHOUT
G.R. No. 127598 February 22, 2000 Retroactivity - Dec. 28, 1996-Dec. 27, 199(9) from Dec. 1, 1995
MANILA ELECTRIC COMPANY, petitioner, vs. Hon. SECRETARY OF LABOR Dissatisfied with the Decision, some alleged members of private respondent union
LEONARDO QUISUMBING and MERALCO EMPLOYEES and WORKERS (Union for brevity) filed a motion for intervention and a motion for reconsideration of
ASSOCIATION (MEWA), respondent. the said Decision. A separate intervention was likewise made by the supervisor's
union (FLAMES2) of petitioner corporation alleging that it has bona fide legal interest
In the Decision promulgated on January 27, 1999, the Court disposed of the case as in the outcome of the case.3 The Court required the "proper parties" to file a comment
follows: to the three motions for reconsideration but the Solicitor-General asked that he be
excused from filing the comment because the "petition filed in the instant case was
granted" by the Court.4 Consequently, petitioner filed its own consolidated comment.
WHEREFORE, the petition is granted and the orders of public respondent An "Appeal Seeking Immediate Reconsideration" was also filed by the alleged newly
Secretary of Labor dated August 19, 1996 and December 28, 1996 are set aside elected president of the Union.5 Other subsequent pleadings were filed by the parties
to the extent set forth above. The parties are directed to execute a Collective and intervenors.
Bargaining Agreement incorporating the terms and conditions contained in the
unaffected portions of the Secretary of Labor's orders of August 19, 1996 and
December 28, 1996, and the modifications set forth above. The retirement fund The issues raised in the motions for reconsideration had already been passed upon
issue is remanded to the Secretary of Labor for reception of evidence and by the Court in the January 27, 1999 decision. No new arguments were presented for
determination of the legal personality of the MERALCO retirement fund. 1 consideration of the Court. Nonetheless, certain matters will be considered herein,
particularly those involving the amount of wages and the retroactivity of the Collective
Bargaining Agreement (CBA) arbitral awards.
The modifications of the public respondent's resolutions include the following:
Petitioner warns that if the wage increase of P2,200.00 per month as ordered by the
January 27, 1999 decision Secretary's resolution Secretary is allowed, it would simply pass the cost covering such increase to the
consumers through an increase in the rate of electricity. This is a non sequitur. The
Wages - P1,900.00 for 1995-96 P2,200.00 Court cannot be threatened with such a misleading argument. An increase in the
prices of electric current needs the approval of the appropriate regulatory government
X'mas bonus - modified to one month 2 months agency and does not automatically result from a mere increase in the wages of
petitioner's employees. Besides, this argument presupposes that petitioner is capable
Retirees - remanded to the Secretary granted of meeting a wage increase. The All Asia Capital report upon which the Union relies
to support its position regarding the wage issue cannot be an accurate basis and
Loan to coops - denied granted conclusive determinant of the rate of wage increase. Section 45 of Rule 130 Rules of
Evidence provides:
GHSIP, HMP and
Housing loans - granted up to P60,000.00 granted
Commercial lists and the like. — Evidence of statements of matters of interest to
Signing bonus - denied granted persons engaged in an occupation contained in a list, register, periodical, or
other published compilation is admissible as tending to prove the truth of any
Union leave - 40 days (typo error) 30 days relevant matter so stated if that compilation is published for use by persons
engaged in that occupation and is generally used and relied upon by them
High voltage/pole - not apply to those who are members of a team therein.
not exposed to the risk
Collectors - no need for cash bond, no Under the afore-quoted rule, statement of matters contained in a periodical, may be
need to reduce quota and MAPL admitted only "if that compilation is published for use by persons engaged in that
occupation and is generally used and relied upon by them therein." As correctly held
CBU - exclude confidential employees include in our Decision dated January 27, 1999, the cited report is a mere newspaper account
and not even a commercial list. At most, it is but an analysis or opinion which carries
Union security - maintenance of membership closed shop no persuasive weight for purposes of this case as no sufficient figures to support it
On the allegation concerning the grant of loan to a cooperative, there is no merit in SO ORDERED.
the union's claim that it is no different from housing loans granted by the employer.
The award of loans for housing is justified because it pertains to a basic necessity of G.R. No. L-28607 May 31, 1971
life. It is part of a privilege recognized by the employer and allowed by law. In
contrast, providing seed money for the establishment of the employee's cooperative is
a matter in which the employer has no business interest or legal obligation. Courts SHELL OIL WORKERS' UNION, petitioner, vs.SHELL COMPANY OF THE
should not be utilized as a tool to compel any person to grant loans to another nor to PHILIPPINES, LTD., and THE COURT OF INDUSTRIAL RELATIONS, respondents.
force parties to undertake an obligation without justification. On the contrary, it is the
government that has the obligation to render financial assistance to cooperatives and The insistence on the part of respondent Shell Company of the Philippines to dissolve
the Cooperative Code does not make it an obligation of the employer or any private its security guard section, stationed at its Pandacan Installation notwithstanding its
individual.22 being embraced in, and its continuance as such thus assured by an existing collective
bargaining contract, resulted in a strike called by petitioner Shell Oil Workers' Union,
Anent the 40-day union leave, the Court finds that the same is a typographical error. hereinafter to be designated as the Union, certified a month later on June 27, 1967 by
In order to avoid any confusion, it is herein declared that the union leave is only thirty the President to respondent Court of Industrial Relations. Against its decision
(30) days as granted by the Secretary of Labor and affirmed in the Decision of this declaring the strike illegal primarily on the ground that such dissolution was a valid
Court. exercise of a management prerogative, this appeal is taken. With due Recognition
that the system of industrial democracy fostered in the regime of unionization and
The deep-rooted differences between the parties that led to the subsequent strike The tentative character of such proposed dissolution was made evident by the fact
were made clear in the presidential certification. As set forth in the opening paragraph however that on August 26, 1966, a collective bargaining contract was executed
of the decision now on appeal: "Before this Court for resolution is the labor dispute between the Union and the Shell Company effective from the first of the month of that
between the petitioner Shell Oil Workers' Union, Union for brevity, and the respondent year to December 31, 1969. It contained the usual grievance procedure and no strike
Shell Company of the Philippines Limited, Company for short, which was certified to clauses.6 More relevant to the case before this Court, however, was the inclusion of
this Court on June 27, 1967 by the Office of the President of the Republic of the the category of the security guards in such collective bargaining contract. This was
Philippines pursuant to the provision of Section 10 of Republic Act No. 875. Said stressed in the brief for the petitioner where specific mention is made of the
dispute ... 'was a result of the transfer by the Company of the eighteen (18) security agreement covering rank and file personnel regularly employed by the Company,
guards to its other department and the consequent hiring of a private security agency included in which is the work area covered by the Pandacan Installation. 7 There was
to undertake the work of said security guards.'"1 likewise specific reference to such positions in the wage schedule for hourly-rated
categories appearing in an appendix thereof.8 Mention was expressly made in
The respective contentions of the parties were then taken up. Petitioner "filed the another appendix of the regular remuneration as well as premium pay and night
petition on July 7, 1967 alleging, among others, that the eighteen (18) security guards compensation.9 Nonetheless, Shell Company was bent on doing away with the
affected are part of the bargaining unit and covered by the existing collective security guard section, to be replaced by an outside security agency. That was
bargaining contract, and as such, their transfers and eventual dismissals are illegal communicated to the Union in a panel to panel meeting on May 3, 1967. A counter-
being done in violation of the existing contract. It, therefore, prayed that said security offer on the part of the Union to reduce the working days per week of the guards from
guards be reinstated with full back wages from the time of their dismissal up to the six to five was rejected by Shell Company on the ground of its being unusual and
time of their actual reinstatement."2 Then came a summary of the stand Of Shell impracticable. Two days later, there was a meeting of the Union where a majority of
Company: "For hours hereafter, respondent Company filed its Answer [to] the the members made clear that should there be such a replacement of the company
material allegations in the Union's petition and adverted that the issues in this case guards by a private security agency, there would be a strike. It was noted in the
are: (1) whether or not the Company commits unfair labor practice in contracting out decision that when the strike vote was taken, of 243 members, 226 were for the
its security service to an independent professional security agency and assigning the approval of a motion to that effect. 10 On the afternoon of May 24, 1967, a notice of
18 guards to other sections of the Company; (2) whether or not the dismissal of the reassignment effective at 8:00 o'clock the next morning was handed to the guards
18 security guards are justified; and (3) whether or not (the strike called by the Union affected. At 10:00 o'clock that evening, there was a meeting by the Union attended by
on May 25, 1967 is legal. As special and affirmative defenses, the Company ten officers and a majority of the members wherein it was agreed viva voce that if
maintained that in contracting out the security service and redeploying the 18 security there would be an implementation of the circular dissolving the security section to be
guards affected, it was merely performing its legitimate prerogative to adopt the most replaced by guards from an outside agency, the Union would go on strike
efficient and economical method of operation; that said guards were transferred to immediately. 11 The strike was declared at half-past 7:00 o'clock in the morning of
other sections with increase, except for four (4) guards, in rates of pay and with May 25, 1967 when security guards from an outside agency were trying to pass the
transfer bonus; the said action was motivated by business consideration in line with main gate of the Shell Company to their work. With the picket line established, they
past established practice and made after notice to and discussion with the Union; that were unable to enter. Efforts were made by the Conciliation Service of the
the 18 guards concerned were dismiss for wilfully refusing to obey the transfer order; Department of Labor to settle the matter, but they were unsuccessful. 12 It was not
and that the strike staged by the Union on May 25, 1967 is illegal. Primarily, Company until June 27, 1967, however, that the Presidential certification came. 13 There was a
prayed, among others, for the dismissal of the Union's petition and the said Union's return to work order on July 6, 1967 by respondent Court, by virtue of which pending
strike be declared illegal followed by the termination of the employee status of those the resolution of the case, the Shell Company was not to lockout the employees
responsible and who participated in said illegal strike." 3 involved and the employees in turn were not to strike.
The move for the dissolution of the security section by reassigning the guards to other The decision of respondent Court was rendered on August 5, 1967. It declared that
positions and contracting out such service to an outside security agency had its no unfair labor practice was committed by Shell Company in dissolving its security
origins as far back as 1964. A study made by the Shell Company for the purpose of guards from an outside agency, as such a step was well within management
improving the productivity, organization and efficiency of its Pandacan Installation prerogative. Hence for it, the strike was illegal, there being no compliance with the
recommended its dissolution. If an outside agency to perform such service were to be statutory requisites before an economic strike could be staged. Respondent Court
On this point, it may be observed further that even if there was a mistake in good faith
by the Union that an unfair labor practice was committed by the Shell Company when
such was not the case, still the wholesale termination of employee status of all the
officers of the Union, decreed by respondent Court, hardly commends itself for G.R. No. 174912 July 24, 2013
approval. Such a drastic blow to a labor organization, leaving it leaderless, has
serious repercussions. The immediate effect is to weaken the Union. New leaders BPI EMPLOYEES UNION-DAVAO CITY-FUBU (BPIEU-DAVAO CITY-
may of course emerge. It would not be unlikely, under the circumstances, that they FUBU), Petitioner, vs. BANK OF THE PHILIPPINE ISLANDS (BPI), and BPI
would be less than vigorous in the prosecution of labor's claims. They may be prove OFFICERS CLARO M. REYES, CECIL CONANAN and GEMMA
to fall victims to counsels of timidity and apprehension. At the forefront of their VELEZ, Respondents.
consciousness must be an awareness that a mistaken move could well mean their
discharge from employment. That would be to render the right to self-organization Before the Court is a petition for review on certiorari under Rule 45 of the 1997 Rules
illusory. The plain and unqualified constitutional command of protection to labor of Civil Procedure, assailing the April 5, 2006 Decision1 and August 17, 2006
should not be lost sight of. 33 The State is thus under obligation to lend its aid and its Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 74595 affirming the
succor to the efforts of its labor elements to improve their economic condition. It is December 21, 20013 and August 23, 20024 Resolutions of the National Labor
now generally accepted that unionization is a means to such an end. It should be Relations Commission (NLRC) in declaring as valid and legal the action of
encouraged. Thereby, labor's strength, what there is of it, becomes solidified. It can respondent Bank of the Philippine Islands-Davao City (BPI-Davao) in contracting out
bargain as a collectivity. Management then will not always have the upper hand nor certain functions to BPI Operations Management Corporation (BOMC).
be in a position to ignore its just demands. That, at any rate, is the policy behind the
Industrial Peace Act. The judiciary and administrative agencies in consrtruing it must
ever be conscious of its implications. Only thus may there be fidelity to what is The Factual Antecedents
ordained by the fundamental law. For if it were otherwise, instead of protection, there
would be neglect or disregard. That is ito negate the fundamental principle that the BOMC, which was created pursuant to Central Bank 5 Circular No. 1388, Series of
Constitution is the supreme law. 1993 (CBP Circular No. 1388, 1993), and primarily engaged in providing and/or
handling support services for banks and other financial institutions, is a subsidiary of
the Bank of Philippine Islands (BPI) operating and functioning as an entirely separate
and distinct entity.
On January 1, 1996, the service agreement was likewise implemented in Davao City. On October 27, 2000, a hearing was conducted. Thereafter, the parties were required
Later, a merger between BPI and Far East Bank and Trust Company (FEBTC) took to submit their respective position papers. On November 29, 2000, the Union filed its
effect on April 10, 2000 with BPI as the surviving corporation. Thereafter, BPI’s Urgent Omnibus Motion to Cease and Desist with a prayer that BPI-Davao and/or Mr.
cashiering function and FEBTC’s cashiering, distribution and bookkeeping functions Claro M. Reyes and Mr. Cecil Conanan be held in contempt for the following alleged
were handled by BOMC. Consequently, twelve (12) former FEBTC employees were acts of BPI:
transferred to BOMC to complete the latter’s service complement.
1. The Bank created a Task Force Committee on November 20, 2000 composed
BPI Davao’s rank and file collective bargaining agent, BPI Employees Union-Davao of six (6) former FEBTC employees to handle the Cashiering, Distributing,
City-FUBU (Union), objected to the transfer of the functions and the twelve (12) Clearing, Tellering and Accounting functions of the former FEBTC branches but
personnel to BOMC contending that the functions rightfully belonged to the BPI the "task force" conducts its business at the office of the BOMC using the latter’s
employees and that the Union was deprived of membership of former FEBTC equipment and facilities.
personnel who, by virtue of the merger, would have formed part of the bargaining unit
represented by the Union pursuant to its union shop provision in the CBA. 7 2. On November 27, 2000, the bank integrated the clearing operations of the BPI
and the FEBTC. The clearing function of BPI, then solely handled by the BPI
The Union then filed a formal protest on June 14, 2000 addressed to BPI Vice Processing Center prior to the labor dispute, is now encroached upon by the
Presidents Claro M. Reyes and Cecil Conanan reiterating its objection. It requested BOMC because with the merger, differences between BPI and FEBTC
the BPI management to submit the BOMC issue to the grievance procedure under the operations were diminished or deleted. What the bank did was simply to get the
CBA, but BPI did not consider it as "grievable." Instead, BPI proposed a Labor total of all clearing transactions under BPI but the BOMC employees process the
Management Conference (LMC) between the parties. 8 clearing of checks at the Clearing House as to checks coming from former
FEBTC branches. Prior to the labor dispute, the run-up and distribution of the
checks of BPI were returned to the BPI processing center, now all checks
During the LMC, BPI invoked management prerogative stating that the creation of the whether of BPI or of FEBTC were brought to the BOMC. Since the clearing
BOMC was to preserve more jobs and to designate it as an agency to place operations were previously done by the BPI processing center with BPI
employees where they were most needed. On the other hand, the Union charged that employees, said function should be performed by BPI employees and not by
BOMC undermined the existence of the union since it reduced or divided the BOMC.10
bargaining unit. While BOMC employees perform BPI functions, they were beyond
the bargaining unit’s coverage. In contracting out FEBTC functions to BOMC, BPI
effectively deprived the union of the membership of employees handling said On December 21, 2001, the NLRC came out with a resolution upholding the validity of
functions as well as curtailed the right of those employees to join the union. the service agreement between BPI and BOMC and dismissing the charge of ULP. It
ruled that the engagement by BPI of BOMC to undertake some of its activities was
clearly a valid exercise of its management prerogative. 11 It further stated that the
Thereafter, the Union demanded that the matter be submitted to the grievance spinning off by BPI to BOMC of certain services and functions did not interfere with,
machinery as the resort to the LMC was unsuccessful. As BPI allegedly ignored the restrain or coerce employees in the exercise of their right to self-organization.12 The
demand, the Union filed a notice of strike before the National Conciliation and Union did not present even an iota of evidence showing that BPI had terminated
Mediation Board (NCMB) on the following grounds: employees, who were its members. In fact, BPI exerted utmost diligence, care and
effort to see to it that no union member was terminated.13 The NLRC also stressed
Furthermore, the CA ratiocinated that, considering the ramifications of the corporate Position of BPI-Davao
merger, it was well within BPI’s prerogatives "to determine what additional tasks
should be performed, who should best perform it and what should be done to meet For its part, BPI defended the validity of its service agreement with BOMC on three
the exigencies of business."16 It pointed out that the Union did not, by the mere fact of (3) grounds: 1] that it was pursuant to the prevailing law at that time, CBP Circular No.
the merger, become the bargaining agent of the merged employees 17 as the Union’s 1388; 2] that the creation of BOMC was within management prerogatives intended to
right to represent said employees did not arise until it was chosen by them. 18 streamline the operations and provide focus for BPI’s core activities; and 3] that the
Union recognized, in its CBA, the exclusive right and prerogative of BPI to conduct
As to the applicability of D.O. No. 10, the CA agreed with the NLRC that the said the management and operation of its business.21
order did not apply as BPI, being a commercial bank, its transactions were subject to
the rules and regulations of the BSP. BPI argues that the case of Shell Oil Workers’ Union v. Shell Company of the
Philippines, Ltd.,22 cited by the Union, is not on all fours with the present case. In said
Not satisfied, the Union filed a motion for reconsideration which was, however, denied case, the company dissolved its security guard section and replaced it with an outside
by the CA.1âwphi1 agency, claiming that such act was a valid exercise of management prerogative. The
Court, however, ruled against the said outsourcing because there was an express
assurance in the CBA that the security guard section would continue to exist. Having
Hence, the present petition with the following failed to reserve its right to effect a dissolution, the company’s act of outsourcing and
transferring security guards was invalidated by the Court, ruling that the unfair labor
ASSIGNMENT OF ERRORS: practice strike called by the Union did have the impression of validity. In contrast,
there is no provision in the CBA between BPI and the Union expressly stipulating the
A. THE PETITION BEFORE THE COURT OF APPEALS INVOLVED continued existence of any position within the bargaining unit. For BPI, the absence of
QUESTIONS OF LAW AND ITS DECISION DID NOT ADDRESS THE ISSUE this peculiar fact is enough reason to prevent the application of Shell to this case.
OF WHETHER BPI’S ACT OF OUTSOURCING FUNCTIONS FORMERLY
PERFORMED BY UNION MEMBERS VIOLATES THE CBA. BPI likewise invokes settled jurisprudence,23 where the Court upheld the acts of
management to contract out certain functions held by employees, and even notably
B. THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT DOLE those held by union members. In these cases, the decision to outsource certain
DEPARTMENT ORDER NO. 10 DOES NOT APPLY IN THIS CASE. functions was a justifiable business judgment which deserved no judicial interference.
The only requisite of this act is good faith on the part of the employer and the
absence of malicious and arbitrary action in the outsourcing of functions to BOMC.
The Union is of the position that the outsourcing of jobs included in the existing
bargaining unit to BOMC is a breach of the union-shop agreement in the CBA. In
transferring the former employees of FEBTC to BOMC instead of absorbing them in On the issue of the alleged curtailment of the right of the employees to self-
BPI as the surviving corporation in the merger, the number of positions covered by organization, BPI refutes the Union’s allegation that ULP was committed when the
the bargaining unit was decreased, resulting in the reduction of the Union’s number of positions in the bargaining was reduced. It cites as correct the CA ruling
membership. For the Union, BPI’s act of arbitrarily outsourcing functions formerly that the representation of the Union’s prospective members is contingent on the
performed by the Union members and, in fact, transferring a number of its members choice of the employee, that is, whether or not to join the Union. Hence, it was
beyond the ambit of the Union, is a violation of the CBA and interfered with the
The Court’s Ruling In the case at hand, the union has not presented even an iota of evidence that
petitioner bank has started to terminate certain employees, members of the union. In
In essence, the primordial issue in this case is whether or not the act of BPI to fact, what appears is that the Bank has exerted utmost diligence, care and effort to
outsource the cashiering, distribution and bookkeeping functions to BOMC is in see to it that no union member has been terminated. In the process of the
conformity with the law and the existing CBA. Particularly in dispute is the validity of consolidation or merger of the two banks which resulted in increased diversification of
the transfer of twelve (12) former FEBTC employees to BOMC, instead of being functions, some of these non-banking functions were merely transferred to the BOMC
absorbed in BPI after the corporate merger. The Union claims that a union shop without affecting the union membership.29
agreement is stipulated in the existing CBA. It is unfair labor practice for employer to
outsource the positions in the existing bargaining unit, citing the case of Shell Oil BPI stresses that not a single employee or union member was or would be dislocated
or terminated from their employment as a result of the Service Agreement.30 Neither
Workers’ Union v. Shell Company of the Philippines, Ltd. 24 had it resulted in any diminution of salaries and benefits nor led to any reduction of
union membership.31
The Union’s reliance on the Shell Case is misplaced. The rule now is covered by
Article 261 of the Labor Code, which took effect on November 1, 1974. 25 Article 261 As far as the twelve (12) former FEBTC employees are concerned, the Union failed to
provides: substantially prove that their transfer, made to complete BOMC’s service
complement, was motivated by ill will, anti-unionism or bad faith so as to affect or
interfere with the employees’ right to self-organization.
ART. 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators. – x x
x Accordingly, violations of a Collective Bargaining Agreement, except those which
are gross in character, shall no longer be treated as unfair labor practice and shall be It is to be emphasized that contracting out of services is not illegal perse.1âwphi1 It is
resolved as grievances under the Collective Bargaining Agreement. For purposes of an exercise of business judgment or management prerogative. Absent proof that the
this article, gross violations of Collective Bargaining Agreement shall mean flagrant management acted in a malicious or arbitrary manner, the Court will not interfere with
and/or malicious refusal to comply with the economic provisions of such agreement. the exercise of judgment by an employer.32 In this case, bad faith cannot be attributed
[Emphases supplied] to BPI because its actions were authorized by CBP Circular No. 1388, Series of
199333 issued by the Monetary Board of the then Central Bank of the Philippines (now
Bangko Sentral ng Pilipinas). The circular covered amendments in Book I of the
Clearly, only gross violations of the economic provisions of the CBA are treated as Manual of Regulations for Banks and Other Financial Intermediaries, particularly on
ULP. Otherwise, they are mere grievances. the matter of bank service contracts. A finding of ULP necessarily requires the
alleging party to prove it with substantial evidence. Unfortunately, the Union failed to
In the present case, the alleged violation of the union shop agreement in the CBA, discharge this burden.
even assuming it was malicious and flagrant, is not a violation of an economic
provision in the agreement. The provisions relied upon by the Union were those Much has been said about the applicability of D.O. No. 10. Both the NLRC and the
articles referring to the recognition of the union as the sole and exclusive bargaining CA agreed with BPI that the said order does not apply. With BPI, as a commercial
representative of all rank-and-file employees, as well as the articles on union security, bank, its transactions are subject to the rules and regulations of the governing agency
specifically, the maintenance of membership in good standing as a condition for which is the Bangko Sentral ng Pilipinas.34 The Union insists that D.O. No. 10 should
continued employment and the union shop clause.26 It failed to take into consideration prevail.
its recognition of the bank’s exclusive rights and prerogatives, likewise provided in the
CBA, which included the hiring of employees, promotion, transfers, and dismissals for
just cause and the maintenance of order, discipline and efficiency in its operations. 27 The Court is of the view, however, that there is no conflict between D.O. No. 10 and
CBP Circular No. 1388. In fact, they complement each other.
The Union, however, insists that jobs being outsourced to BOMC were included in the
existing bargaining unit, thus, resulting in a reduction of a number of positions in such Consistent with the maxim, interpretare et concordare leges legibus est optimus
unit. The reduction interfered with the employees’ right to self-organization because interpretandi modus, a statute should be construed not only to be consistent with itself
the power of a union primarily depends on its strength in number. 28 but also to harmonize with other laws on the same subject matter, as to form a
complete, coherent and intelligible system of jurisprudence. 35 The seemingly
conflicting provisions of a law or of two laws must be harmonized to render each
It is incomprehensible how the "reduction of positions in the collective bargaining unit" effective.36 It is only when harmonization is impossible that resort must be made to
interferes with the employees’ right to self-organization because the employees choosing which law to apply.37
Thus, the subject functions appear to be not in any way directly related to the core
activities of banks. They are functions in a processing center of BPI which does not
handle or manage deposit transactions. Clearly, the functions outsourced are not
inherent banking functions, and, thus, are well within the permissible services under
the circular.
The Court agrees with BPI that D.O. No. 10 is but a guide to determine what functions
may be contracted out, subject to the rules and established jurisprudence on
legitimate job contracting and prohibited labor-only contracting.41 Even if the Court
considers D.O. No. 10 only, BPI would still be within the bounds of D.O. No. 10 when
it contracted out the subject functions. This is because the subject functions were not
related or not integral to the main business or operation of the principal which is the
lending of funds obtained in the form of deposits. 42 From the very definition of "banks"
as provided under the General Banking Law, it can easily be discerned that banks
perform only two (2) main or basic functions – deposit and loan functions. Thus,
cashiering, distribution and bookkeeping are but ancillary functions whose
outsourcing is sanctioned under CBP Circular No. 1388 as well as D.O. No. 10. Even
BPI itself recognizes that deposit and loan functions cannot be legally contracted out
as they are directly related or integral to the main business or operation of banks. The
CBP's Manual of Regulations has even categorically stated and emphasized on the
prohibition against outsourcing inherent banking functions, which refer to any contract
G.R. No. L-32853 September 25, 1981 1. As set forth in the B. F. Goodrich Philippines, Inc. decision: "There is novelty in the
specific question raised, as to whether or not a certification election may be stayed at
the instance of the employer, pending the determination of an unfair labor practice
JUAN S. BARRERA, (doing business under the firm and trade name,
case filed by it against certain employees affiliated with respondent-unions. That is a
MACHINERY AND STEEL PRODUCTS ENGINEERING MASPE petitioner, vs. THE
matter of which this Court has not had an opportunity to speak on previously. What is
HONORABLE COURT OF INDUSTRIAL RELATIONS, Philippine Associated
settled law, dating from the case of Standard Cigarette Workers' Union v. Court of
Workers Union (PAWO) and MASPE WORKERS' UNION, respondents.
Industrial Relations, decided in 1957, is that if it were a labor organization objecting to
the participation in a certification election of a company dominated union, as a result
It was the absence of any definite ruling at the time this petition was filed on the of which a complaint for an unfair labor practice case against the employer was filed,
question of whether or not a pending certification election proceeding may be the status of the latter union must be first cleared in such a proceeding before such
dismissed or held in abeyance, there being such a motion on the part of the employer voting could take place." 4
Juan S. Barrera, doing business under the firm and trade name of Machinery and
Steel Products Engineering MASPE alleging an unfair labor practice against one of
2. This is the more relevant excerpt: "The unique situation before us, however, is
the contending parties, private respondent MASPE Workers Union, the other being
exactly the reverse. It is management that would have an unfair labor practice case
private respondent Philippine Associated Workers Union, that led this Court to give it
filed by it for illegal strike engaged in by some of its employees concluded, before it
due course. The unfair labor practice imputed to such labor union consisted of failure
would agree to the holding of a certification election. That is the stand of petitioner. It
to bargain collectively, aggravated by an illegal strike. Respondent Court of Industrial
does not carry conviction. The reason that justifies the postponement of a certification
Relations denied such a motion to dismiss, stating that the grounds therein alleged
election pending an inquiry, as to the bona fides of a labor union, precisely calls for a
"appear not to be indubitable A motion for reconsideration having proved futile, this
different conclusion. If under the circumstances disclosed, management is allowed to
petition was filed.
have its way, the result might be to dilute or fritter away the strength of an
organization bent on a more zealous defense of labor's prerogatives. The difficulties
Subsequently, to be precise, in 1973, in the case of B. F. Goodrich Philippines, Inc. and obstacles that must be then hurdled would not be lost on the rest of the
vs. Goodrich (Marikina Factory) Confidential and Salaried Employees Union- personnel who had not as yet made up their minds one way or the other. This is not
NATU. 1 such a question was given an answer by this Court, one adverse to the claim to say that management is to be precluded from filing an unfair labor practice case. It
of petitioner. This petition, therefore, must be dismissed. is merely to stress that such a suit should not be allowed to lend itself as a means,
whether intended or not, to prevent a truly free expression of the will of the labor
The case for petitioner was put most vigorously in the exhaustive and scholarly brief group as to the organization that will represent it. It is not only the loss of time
of its counsel, Manuel M. Crudo To quote from its pertinent portion: "On September involved, in itself not likely to enhance the prospect of respondent-unions, but also the
22, 1970 the petitioner Barrera filed a motion to dismiss or hold case in abeyance, in fear engendered in the mind of an ordinary employee that management has many
CIR Case No. 2759-MC. In said motion, we called attention to the admission of weapons in its arsenal to bring the full force of its undeniable power against those of
MASPE Workers Union as intervenor in the case. We stated that the intervenor union, its employees dissatisfied with things as they are. There is no valid reason then for
its officers and members had committed various acts of unfair labor practice and were the postponement sought. This is one instance that calls for the application of the
on illegal strike punctuated by force, violence and intimidation. We called attention to maxim, lex dilationes semper exhorret. Moreover, is there not in the posture taken by
our formal charge of unfair labor practice against the intervenor union. We called petitioner a contravention of what is expressly set forth in the Industrial Peace Act,
attention to the fact that in the charge of unfair labor practice among the reliefs prayed which speaks of the labor organizations 'designated or selected for the purpose of
for were to declare respondents therein collectively and individually guilty of unfair collective bargaining by the majority of the employees in an appropriate collective
labor practice; to declare the strike, and other concerted actions resorted to in bargaining unit [be the exclusive] representative of all the employees in such unit for
pursuance of said unfair labor practice illegal to declare the MASPE Workers Union the purpose of collective bargaining.' The law clearly contemplates all the employees,
as consequently having lost all rights and privileges accorded by law to a legitimate not only some of them. As much as possible then, there is to be no unwarranted
labor union; and to declare all individual respondents therein and others as having reduction in the number of those taking part in a certification election, even under the
lost their employment status by virtue of the illegality of the strike staged by them. We guise that in the meanwhile, which may take some time, some of those who are
then pointed out that unless the case for unfair labor practice against MASPE employees could possibly lose such status, by virtue of a pending unfair labor
Workers Union, its officers and members is decided the status of that union and its practice case." 5
members who are respondents would be uncertain (i.e., in relation to the requested
certification election and the outcome thereof). * * * Unfortunately, the respondent 3. Even on the assumption that the vigorous condenmation of the strike and the
Honorable Court of Industrial Relations denied our motion to dismiss or hold case in picketing were attended by violence, it does not automatically follow that thereby the
abeyance. * * * ." 2It remains only to be added that subsequently the Court of strikers in question are no longer entitled to participate in the certification election for
Industrial Relations en banc denied a motion for reconsideration, failing "to find having automatically lost their jobs. So it was made clear in another B.F. Goodrich
sufficient justification to alter or to modify the aforesaid Order." 3 decision: 6 What was set forth in the facts as found by respondent Judge Salvador
SO ORDERED. 1. From the issued shares of stock within the group of Mr. Lucio Tan’s holdings,
the ownership of 60,000 fully paid shares of stock of Philippine Airlines with a par
value of PH₱5.00/share will be transferred in favor of each employee of
G.R. No. 135547 January 23, 2002
Philippine Airlines in the active payroll as of September 15, 1998. Should any
share-owning employee leave PAL, he/she has the option to keep the shares or
GERARDO F. RIVERA, ALFRED A. RAMISO, AMBROCIO PALAD, DENNIS R. sells (sic) his/her shares to his/her union or other employees currently employed
ARANAS, DAVID SORIMA, JR., JORGE P. DELA ROSA, and ISAGANI by PAL.
ALDEA, Petitioners, vs. HON. EDGARDO ESPIRITU in his capacity as Chairman
of the PAL Inter-Agency Task Force created under Administrative Order No. 16;
2. The aggregate shares of stock transferred to PAL employees will allow them
HON. BIENVENIDO LAGUESMA in his capacity as Secretary of Labor and
three (3) members to (sic) the PAL Board of Directors. We, thus, become
Employment; PHILIPPINE AIRLINES (PAL), LUCIO TAN, HENRY SO UY, partners in the boardroom and together, we shall address and find solutions to
ANTONIO V. OCAMPO, MANOLO E. AQUINO, JAIME J. BAUTISTA, and the wide range of problems besetting PAL.
ALEXANDER O. BARRIENTOS, Respondents.
3. In order for PAL to attain (a) degree of normalcy while we are tackling its
In this special civil action for certiorari and prohibition, petitioners charge public problems, we would request for a suspension of the Collective Bargaining
respondents with grave abuse of discretion amounting to lack or excess of jurisdiction Agreements (CBAs) for 10 years.3
for acts taken in regard to the enforcement of the agreement dated September 27,
1998, between Philippine Airlines (PAL) and its union, the PAL Employees
Association (PALEA). On September 10, 1998, the Board of Directors of PALEA voted to accept Tan’s offer
and requested the Task Force’s assistance in implementing the same. Union
On September 17, 1998, PAL informed the Task Force that it was shutting down its b. The ‘union shop/maintenance of membership’ provision under the PAL-
operations effective September 23, 1998, preparatory to liquidating its assets and PALEA CBA shall be respected.
paying off its creditors. The airline claimed that given its labor problems, rehabilitation
was no longer feasible, and hence, the airline had no alternative but to close shop. c. No salary deduction, with full medical benefits.
On September 18, 1998, PALEA sought the intervention of the Office of the President 5. PAL shall grant the benefits under the 26 July 1998 Memorandum of
in immediately convening the parties, the PAL management, PALEA, ALPAP, and Agreement forged by and between PAL and PALEA, to those employees who
FASAP, including the SEC under the direction of the Inter-Agency Task Force, to may opt to retire or be separated from the company.
prevent the imminent closure of PAL.4
6. PALEA members who have been retrenched but have not received separation
On September 19, 1998, PALEA informed the Department of Labor and Employment benefits shall be granted priority in the hiring/rehiring of employees.
(DOLE) that it had no objection to a referendum on the Tan’s offer. 2,799 out of 6,738
PALEA members cast their votes in the referendum under DOLE supervision held on
September 21-22, 1998. Of the votes cast, 1,055 voted in favor of Tan’s offer while 7. In the absence of applicable Company rule or regulation, the provisions of the
1,371 rejected it. Labor Code shall apply.6
On September 23, 1998, PAL ceased its operations and sent notices of termination to Among the signatories to the letter were herein petitioners Rivera, Ramiso, and
its employees. Aranas, as officers and/or members of the PALEA Board of Directors. PAL
management accepted the PALEA proposal and the necessary referendum was
scheduled.
Two days later, the PALEA board wrote President Estrada anew, seeking his
intervention. PALEA offered a 10-year moratorium on strikes and similar actions and
a waiver of some of the economic benefits in the existing CBA. 5 Tan, however, On October 2, 1998, 5,324 PALEA members cast their votes in a DOLE-supervised
rejected this counter-offer. referendum. Of the votes cast, 61% were in favor of accepting the PAL-PALEA
agreement, while 34% rejected it.
On September 27, 1998, the PALEA board again wrote the President proposing the
following terms and conditions, subject to ratification by the general membership: On October 7, 1998, PAL resumed domestic operations. On the same date, seven
officers and members of PALEA filed this instant petition to annul the September 27,
1998 agreement entered into between PAL and PALEA on the following grounds:
1. Each PAL employee shall be granted 60,000 shares of stock with a par value
of ₱5.00, from Mr. Lucio Tan’s shareholdings, with three (3) seats in the PAL
Board and an additional seat from government shares as indicated by His I PUBLIC RESPONDENTS GRAVELY ABUSED THEIR DISCRETION AND
Excellency; EXCEEDED THEIR JURISDICTION IN ACTIVELY PURSUING THE CONCLUSION
OF THE PAL-PALEA AGREEMENT AS THE CONSTITUTIONAL RIGHTS TO SELF-
ORGANIZATION AND COLLECTIVE BARGAINING, BEING FOUNDED ON PUBLIC
2. Likewise, PALEA shall, as far as practicable, be granted adequate POLICY, MAY NOT BE WAIVED, NOR THE WAIVER, RATIFIED.
representation in committees or bodies which deal with matters affecting terms
and conditions of employment;
II PUBLIC RESPONDENTS GRAVELY ABUSED THEIR DISCRETION AND
EXCEEDED THEIR JURISDICTION IN PRESIDING OVER THE CONCLUSION OF
3. To enhance and strengthen labor-management relations, the existing Labor- THE PAL-PALEA AGREEMENT UNDER THREAT OF ABUSIVE EXERCISE OF
Management Coordinating Council shall be reorganized and revitalized, with PAL’S MANAGEMENT PREROGATIVE TO CLOSE BUSINESS USED AS
adequate representation from both PAL management and PALEA; SUBTERFUGE FOR UNION-BUSTING.
4. To assure investors and creditors of industrial peace, PALEA agrees, subject The issues now for our resolution are:
to the ratification by the general membership, (to) the suspension of the PAL-
PALEA CBA for a period of ten (10) years, provided the following safeguards are
in place: (1) Is an original action for certiorari and prohibition the proper remedy to
annul the PAL-PALEA agreement of September 27, 1998;
Petitioners further allege that the 10-year suspension of the CBA under the PAL- WHEREFORE, there being no grave abuse of discretion shown, the instant petition is
PALEA agreement virtually installed PALEA as a company union for said period, DISMISSED. No pronouncement as to costs.
amounting to unfair labor practice, in violation of Article 253-A of the Labor Code
mandating that an exclusive bargaining agent serves for five years only.
SO ORDERED.
The questioned proviso of the agreement reads:
G.R. No. L-18112 October 30, 1962
a. PAL shall continue recognizing PALEA as the duly certified-bargaining agent of the
regular rank-and-file ground employees of the Company; KAPISANAN NG MGA MANGGAGAWA NG ALAK (NAFLU), petitioner, vs.
HAMILTON DISTILLERY COMPANY, CO BON BENG, MARIANO ANG ENG and
HAMILTON WORKERS' UNION, respondents.
Said proviso cannot be construed alone. In construing an instrument with several
provisions, a construction must be adopted as will give effect to all. Under Article
1374 of the Civil Code,22 contracts cannot be construed by parts, but clauses must be Appeal by certiorari from a decision of the Court of Industrial Relations dismissing the
interpreted in relation to one another to give effect to the whole. The legal effect of a complaint herein for unfair labor practice.
contract is not determined alone by any particular provision disconnected from all
others, but from the whole read together.23 The aforesaid provision must be read Respondent Hamilton Distillery Company or Hamilton Wine Manufacturing Co.,
within the context of the next clause, which provides: hereinafter referred to as the Company, is a commercial establishment engaged in
the manufacture of wine in the Philippines, whereas respondents Co Bon Beng and
b. The ‘union shop/maintenance of membership’ provision under the PAL-PALEA Mariano Ang Eng are the superintendent or cashier and the manager respectively
CBA shall be respected. thereof.
The aforesaid provisions, taken together, clearly show the intent of the parties to On September 24, 1957, two (2) labors unions, composed of employees and laborers
maintain "union security" during the period of the suspension of the CBA. Its objective of the Company, were registered with the Department of Labor, namely, petitioner
is to assure the continued existence of PALEA during the said period. We are unable Kapisanan ng mga Manggagawa ng Alak (NAFLU), hereinafter referred to as the
to declare the objective of union security an unfair labor practice. It is State policy to NAFLU, and respondent Hamilton Workers' Union, hereinafter referred to as the
There is evidence to the effect that, upon learning that the NAFLU was being 19. Avinante, Simplicio 45. Martin, Severino
organized, or on September 23, 1957, Co Bon Beng sent for Francisco Dumlao, and
inquired whether it was true that he had organized said labor and was its president; 20. Brion, Felix 46. Mariano, Anicito
that upon receipt of an affirmative answer, Co Bon Beng urged Dumlao to dissolve
the NAFLU, for otherwise he would be dismissed; that when Dumlao answered that 21. Bayano, Ramon 47. Mendoza, Roman
he could not follow this advice, Co Bon Beng bade him to look for another job; that on
September 24, 1957, Co Bon Beng refused to admit him to work upon the ground that 22. Cruz, Jose de la 48. Montevirgin, Manuel
he was unwilling to dissolve the NAFLU; that, subsequently, some members thereof
resigned therefrom and joined the Workers' Union, because otherwise they would be 23. Diaz, Angel 49. Opinaldo, Fernando
dismissed by the Company; that beginning from September 30, 1957, those who
remained affiliated to the NAFLU were allowed to work only two (2) days a week; and 24. Dumalo, Francisco 50. Santos, Vicente
that on October 28, 1957 the following members of the NAFLU, who had not joined
the Workers' Union were dismissed by the Company, namely: 25. Gindoy, Luis, Jr. 51. Reyes, Felicisimo
In this connection, it is well settled in this jurisdiction that, in the absence of a manifest
intent to the contrary, "closed shop" provisions in a collective bargaining agreement
"apply only to persons to be hired or to employees who are not yet members of any
labor organization" and that said provisions of the agreement are "not applicable to
those already in the service at the time of its execution" (Confederated Sons of Labor
vs. Anakan Lumber Co., L-12503 [April 29, 1960]; Local 7, Press & Printing Free
Workers[FFW] vs. Judge Tabigne, L-16093 [November 29, 1960]; Freeman Shirt
G.R. No. L-87672 October 13, 1989 1. DISCRIMINATION PER SE IS NOT UNLAWFUL ESPECIALLY WHEN
THE EMPLOYEES ARE NOT SIMILARLY SITUATED.
WISE AND CO., INC., petitioner, vs. WISE & CO., INC. EMPLOYEES UNION-NATU
AND HONORABLE BIENVENIDO G. LAGUESMA, in his capacity as voluntary 2. THE TERMS AND CONDITIONS STIPULATED IN THE CBA HAVE THE
Arbitrator, respondents. FORCE AND EFFECT OF A LAW BETWEEN THE PARTIES. PRIVATE
RESPONDENT, THEREFORE CANNOT DEMAND, AS A MATTER OF
RIGHT, WHAT IS NOT STIPULATED IN THE CBA.
The center of controversy in this petition is whether the grant by management of profit
sharing benefits to its non-union member employees is discriminatory against its
workers who are union members. 3. THE ACT OF THE UNION IN NEGOTIATING FOR THE INCLUSION OF
THE PROFIT SHARING BENEFIT IN THE PRESENT CBA IS AN IMPLIED
ADMISSION THAT THEY WERE NOT ENTITLED TO IT IN 1987.
The facts are undisputed. On April 3,1987 the management issued a memorandum
circular introducing a profit sharing scheme for its managers and supervisors the
initial distribution of which was to take effect March 31, 1988. II THE HONORABLE VOLUNTARY ARBITRATOR COMMITTED GRAVE ABUSE
OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN
HE MADE THE CLEARLY BASELESS CONCLUSION THAT THE PETITIONER
On July 3,1987 the respondent union wrote petitioner through its president asking for WAS MOTIVATED BY ITS DESIRE TO DEFEAT OR OTHERWISE PREJUDICE
participation in this scheme. This was denied by petitioner on the ground that it had to THE BASIC RIGHTS OF ITS EMPLOYEES. 2
adhere strictly to the Collective Bargaining Agreement (CBA).
The petition is impressed with merit.
In the meantime, talks were underway for early negotiation by the parties of the CBA
which was due to expire on April 30, 1988. The negotiation thus begun earlier than
Respondent union can not claim that there is grave abuse of discretion by the
petitioner in extending the benefits of profit sharing to the non-union employees as
they are two (2) groups not similarly situated. These non-union employees are not
covered by the CBA. They do not derive and enjoy the benefits under the CBA.
The contention of the respondent union that the grant to the non-union employees of
the profit sharing benefits was made at a time when there was a deadlock in the CBA
negotiation so that apparently the motive thereby was to discourage such non-union G.R. No. 73721 March 30, 1987
employees from joining the union is not borne by the record. Petitioner denies this
accusation and instead points out that inspite of this benefit extended to them, some AHS/PHILIPPINES EMPLOYEES UNION [FFW], B.A. AGANON, D.T. GUILLES,
non-union workers actually joined the respondent union thereafter. E.G. SULIT and E.C. RODRIGUEZ, * petitioners, vs. THE NATIONAL LABOR
RELATIONS COMMISSIONS and AHS/PHILIPPINES, INC., respondents.
Respondent union also decries that no less than the president of the petitioner agreed
to include its members in the coverage of the 1987 profit sharing benefit provided that Assailed in this petition for certiorari with prayer for a writ of preliminary injunction is
they would agree to an earlier negotiation for the renewal of the CBA which expired in the decision dated December 27, 1985 of the National Labor Relations Commission
1988. Be this as it may, since there was actually a deadlock in the negotiation and it [NLRC] in NCR-9-3217-84 entitled, "ASH/Philippines, Inc., Complainant-Appellee,
was not resolved and consummated on the period expected, private respondent can versus AHS/Philippines Employees Union [FFW], B.A. Aganon, D.T. Guilles, e.g. Sulit
not now claim that petitioner has a duty to extend the profit sharing benefit to the and E.C. Rodriguez, Respondents-Appellants," which affirmed the labor arbiter's
union members. decision declaring the strike held by petitioners as illegal but with the modification that
individual petitioners be reinstated to their former positions, or paid separation pay or
The Court holds that it is the prerogative of management to regulate, according to its the economic package offered by the company, if reinstatement is impossible. 1
discretion and judgment, all aspects of employment. This flows from the established
rule that labor law does not authorize the of the employer in the conduct of its Petitioner AHS/Philippines Employees Union [FFW] was the recognized collective
business.6 such management prerogative may be availed of without fear of any bargaining agent of the rank-and-file employees of private respondent
liability so long as it is exercised in good faith for the advancement of the employers' AHS/Philippines Inc., a company engaged in the sale of hospital and laboratory
interest and not for the purpose of defeating or circumventing the rights of employees equipment and Berna and Pharmaton products. A collective bargaining agreement
under special laws or valid agreement and are not exercised in a malicious, harsh, [CBA] was concluded between the parties for the period commencing December 1,
oppressive, vindictive or wanton manner or out of malice or spite. 7 1981 to November 30, 1984.
The grant by petitioner of profit sharing benefits to the employees outside the On July 26, 1984, petitioner union filed a notice of strike with the Bureau of Labor
"bargaining unit" falls under the ambit of its managerial prerogative. It appears to Relations, listing as ground therefor unfair labor practice consisting in: 1] diminution of
have been done in good faith and without ulterior motive. More so when as in this benefits, 2] union busting, 3] illegal termination and 4] harassment. 2 A second notice
Meanwhile, the case was heard on November 10, 1986, 13 after which the Court 3] As regards the non-implementation of the yearly increase in per diems and
resolved to require the parties to file their respective memoranda within 20 allowances, public respondent concurred with the observation of the Labor Arbiter
days. 14 The parties complied with this order. that there was no such provision in the CBA so that said issue could not be a proper
ground for the notice of strike or the strike itself. 19
In a manifestation dated December 2, 1986, counsel for private respondent company
informed the Court that in January 1987, private respondent would close its 4] Likewise not considered by the NLRC as a valid ground for strike was the failure of
operations in the Philippines because of the continuing losses being sustained by its respondent company to provide space for a union office as stipulated under Art. XV,
Under the New Labor Code, however, even if the dismissal is based on a just cause Another evidence that respondent company intended to terminate the 31 employees
under Art. 284, the one-month written notice to both the affected employee and the of the Pharmaceutical Division without prior consultation with petitioner union is the
Minister labor is required, on top of the separation pay. Hence, unlike in the old recall of the cars assigned to the field representatives. Two memoranda dated July 23
termination pay laws, payment of a month's salary cannot be considered substantial and 24 addressed to the HML Division and the Pharmaceutical Division, respectively,
compliance with the provisions of Art. 284 of the Labor Code. Since the dismissal of were sent out, directing the field representatives to turnover their respective cars for
the 31 employees of the Pharmaceutical Division of respondent company was inspection at the nearby Cressida Motors. The memorandum to the HML Division
effected in violation of the above-cited provision, the same is illegal. indicated July 26, 1984 as the date of release of the cars to the field representatives,
while that to the Pharmaceutical Division merely mentioned "cut-off dates this
Needless to say, in the absence of a showing that the illegal dismissal was dictated July. 31 The reason given by respondent company for the recall was that estimates of
by anti-union motives, the same does not constitute an unfair labor practice as would car maintenance and repair costs were to be reported by Carlito Santos to its
be a valid ground for a strike. The remedy is an action for reinstatement with Regional Office in Australia. This is obviously an afterthought because the testimony
backwages and damages, Nevertheless, We take this actuation of respondent of said Carlito Santos was that he left for Sydney, Australia on July 24, 1984 and
company as evidence of the abusive and oppressive manner by which the stayed there only for three [3] days or until July 27, 1984. 32 While the recall of the
retrenchment was effected. And while the lack of proper notice could not be a ground cars per se did not constitute a violation of Section 2, Article XIV of the CBA on the
for a strike, this does not mean that the strike staged by petitioner union was illegal car purchase option, We consider the same as an indicia of the blatant disregard by
because it was likewise grounded on a violation by respondent company of the CBA, private respondent company of the CBA provision on consultation.
enumerated as an unfair labor practice under Art. 249 [i] of the Labor Code.
In the same manner that We found the dismissal of the 31 employees of the
Appearing on record is the testimony of Carlito V. Santos, Controller of respondent Pharmaceutical Division in itself not to be constitutive of an unfair labor practice, so
company that the "principal strategy to shift to one distributor came as early as must the dismissal of the 14 rank-and-file employees be characterized. In the first
July. 29 Inspire of this, petitioner union was never consulted, on the matter as provided instance it is not disputed that these employees were hired by respondent company
under Section 4, Article VIII of the CBA as follows: thru a placement agency. In the absence of any evidence that the placement agency
did not have substantial capital or investment in the form of tools, equipment
machineries, work premises, among others, We cannot conclude that the
Section 4. Consultations on Lay-Offs and Terminations. arrangement between respondent company and said placement agency was "Labor-
only" contracting as to make respondent company the direct employer of these 14
a] the COMPANY agrees that whenever it will lay-off or terminate any covered employees. 33 In the second place, even if such conclusion is reached and the 14
employee for economic or other reasons, the UNION shall be consulted prior to employees be deemed regular employees of respondent company, their dismissal not
such lay off/termination. 30 having been shown in the least manner to be connected with union affiliation or
activities cannot be considered an unfair labor practice, and therefore, not a valid
ground for a strike.
The contempt charge against petitioner union, KMU and Nick Elman was predicated The contempt charge against petitioner union, KMU and Nick Elman is dismissed.
mainly on the statement appearing in the circular apparently authored by Nick Elman,
to wit:
SO ORDERED.
It is an open secret, that most of the Supreme Court Justices belong to the upper
privileged class and some of them belonged at one time or another, to law firms G.R. No. 78604 May 9, 1988
that serve the interests of giant transnational corporations as corporate counsels
and retainers and this ruling merely confirmed the perceived apparent pro- BATAAN SHIPYARD and ENGINEERING CO., INC., petitioner, vs.NATIONAL
multinational, pro-capital anti-labor, anti-union and anti-strike posture of LABOR RELATIONS COMMISSION, HON. FRANCISCO JOSE, JR., HON.
personalities in the Supreme Court. 36 VLADIMIR P. L. SAMPANG, JOSE G. CRUZ and NATIONAL FEDERATION OF
LABOR UNIONS , respondents.
and on the fact that at the time the picket was staged, the case was still sub judice.
This is a Petition for certiorari under Rule 65 of the Rules of Court. It seeks to set
Oliveros v. Villaluz, 57 SCRA 163, is but one of the numerous authorities enunciating aside a Resolution of the National Labor Relations Commission.
the principle that "the power to punish for contempt should be used sparingly, with
caution, deliberation and with due regard to the provisions of the law and the The record of the case discloses that the herein petitioner Bataan Shipyard &
constitutional rights of the individual." On this basis, We clear the alleged contemptors Engineering Co., Inc. (BASECO) is a corporate entity duly organized under the laws
of the charge against them. of the Philippines. Its principal office is in Port Area, Manila. On the other hand, the
In its Resolution promulgated on December 27, 1985, the Third Division of the On account of these reasons, the Solicitor General sought the dismissal of the instant
respondent Commission affirmed the Decision of the Executive Labor Arbiter. 2 The Petition for lack of merit.
Commission pointed out that the Company had failed to satisfactorily explain why all
of the employees it had retrenched were officers and members of the NAFLU. The In due time, the case was deemed submitted for decision.
Commission went on to say that the management was in a position to know who of
the employees on leave were affiliated with the said labor organizations. This view
prompted the Commission to conclude that the NAFLU officers and members so After a careful examination of the entire record of the case, We find the instant,
retrenched were being discriminated against by reason of their affiliation in the labor Petition devoid of merit.
organization.
It is not disputed that the retrenchment undertaken by the Company is valid.
On June 10, 1987, the Company elevated the case to this Court by way of the instant However, the manner in which this prerogative is exercised should not be tainted with
Petition for certiorari 3 and sought the annulment or modification of the Resolution of abuse of discretion. Labor is a person's means of livelihood. He cannot be deprived of
the respondent Commission as well as the Decision of the Executive Labor Arbiter his labor or work without due process of law. 7 Retrenchment very heart of one's
insofar as the ruling on unfair labor practice and backwages is concerned. The employment. While the right of strikes at the very heart of an employer to dismiss an
Company maintains that the respondent Commission committed a grave abuse of employee is conceded in a valid retrenchment, the right differs from and should not
discretion, amounting to loss of jurisdiction, in finding the firm guilty of having be confused with the manner in which such right is exercised. It should not be
committed an act of unfair labor practice when are the while the retrenchment it had oppressive and abusive since it affects one's person and property. 8 Due process of
sought was held to be legal and valid. The thrust of the Petition is that the Company law demands nothing less.
(a) To interfere with, restrain or coerce employees in the exercise of their right to
self- organization.;
The respondent Commission and the Executive Labor Arbiter took these
considerations into account in resolving the dispute- This being so, it cannot be said
that the respondent Commission committed a grave abuse of discretion, amounting to
loss of jurisdiction, in finding BASECO guilty of having committed an act of unfair
labor practice despite the valid retrenchment. Accordingly, the writ of certiorari prayed
for by the petitioner cannot issue.
WEREFORE, in view of the foregoing, the instant Petition for certiorari is hereby
DISMISSED for lack of meat. The restraining order of June 22, 1987 is hereby
dissolved. We make no pronouncement as to costs.
SO ORDERED.
the lower court concluded that it had no jurisdiction to entertain the claim of petitioner
b. That subsequent to the filing of the said charge, or on about November 29,
herein. This conclusion is untenable.
1958 and also on or about December 11, 1958, the respondent herein, by its
manager Chua Yiong, summoned and advised union president Lazaro Peralta
that if Francisco San Jose will not withdraw his charge against the company Although subdivision (5) of paragraph (a) of said Section 4 would seem to refer only
(Case No. 1857-ULP), the company will also dismiss his brother Apolonio San to the discharge of the one who preferred charges against the company as
Jose, to which the union president replied that that should not be the attitude of constituting unfair labor practice, the aforementioned subdivision (5) should be
the company because Apolonio has nothing to do with his brother's case. construed in line with the spirit and purpose of said Section 4 and of the legislation of
which forms part — namely, to assure absolute freedom of the employees and
laborers to establish labor organizations and unions, as well as to prefer charges
c. That on or about January 24, 1959, respondent, by its officers and agents, did
before the proper organs of the Government for violation of our labor laws. Now, then,
dismiss Apolonio San Jose without just and valid cause and in gross violation of
if the dismissal of an employee due to the filing by him of said charges would be and
the operative collective bargaining agreement between the complainant union
is an undue restraint upon said freedom, the dismissal of his brother owing to the
and respondent corporation.
non-withdrawal of the charges of the former, would be and constitute as much a
restraint upon the same freedom. In fact, it may be a greater and more effective
The allegations in said sub-paragraphs (a), (b) and (c) of the complaint were restraint thereto. Indeed, a complainant may be willing to risk the hazards of a
substantiated by the oral testimony of complainant's witnesses, but the Court possible and even probable retaliatory action by the employer in the form of a
finds that such allegations do not constitute unfair labor practice acts on the part dismissal or another discriminatory act against him personally, considering that
of respondent. In sub-paragraphs (a) and (b), the Court finds no interference, nobody is perfect, that everybody commits mistakes and that there is always a
coercion and restraint against the employees in the exercise of their guaranteed possibility that the employer may find in the records of any employee, particularly if he
rights to self-organization and discrimination against complainant Apolonio San has long been in the service, some act or omission constituting a fault or negligence
Jose in regard to hire or tenure of his employment. In short, the complainants' which may be an excuse for such dismissal or discrimination. Yet, such complainant
charge is that if Francisco San Jose would not withdraw his unfair labor practice may not withstand the pressure that would result if his brother or another member of
charge against respondent company, the manager of the latter would dismiss his immediate family were threatened with such action unless the charges in question
Apolonio San Jose, the brother of Francisco. In fact, said manager dismissed were withdrawn.
The petitioner filed a motion for reconsideration of the decision with the Court of Considering everything, we are convinced that because of Baldo's refusal to
Industrial Relations en banc, but said Court, on October 27, 1960, denied the petition accede to the demand of his employer not to testify in the certification proceeding
for reconsideration. The petitioner has appealed from the decision, and from the order mentioned above, his Case was "dropped" by the grievance committee of the
denying the motion for reconsideration, of the Court of Industrial Relations affecting union and management, and consequently, he failed to be reinstated in the
only the case of Jose Baldo. No appeal has been filed regarding the case of A. company.
Manaois.
The petitioner, in this appeal, maintains that it was the Itogon Labor Union that
We have examined the records carefully, and we find that the decision of the Court of dropped the case of Baldo regarding the 30-day notice of separation because Baldo
Industrial Relations is supported by substantial evidence. We are quoting hereunder brought his case to a rival union of the Itogon Labor Union, so that the petitioner
pertinent portions of the decision of the lower court which embody its factual findings: should not be charged with unfair labor practice. This contention of the petitioner has
no merit.
From the evidence of record, the following facts are clear. Baldo started working
as miner in the respondent company sometime in 1954. He worked continuously The evidence shows that Baldo had joined the Sangilo-Itogon Workers Union, the
therein until February 4, 1958 when he was given a "30-day notice of termination rival union of the Itogon Labor Union that had a collective bargaining contract with the
of employment" to the effect that his services will not be needed by the petitioner, and that Baldo's membership in the Sangilo-Itogon Workers Union was
respondent company after March 5, 1958 (Exh. "4"). Baldo refused to known to the management of the herein petitioner; that at the time that Baldo was
acknowledge receipt of said notice when Mowry, mine's superintendent of the given the 30-day notice of separation from the service there was pending before the
company, asked him to sign the same. It appears that Baldo was on 15 days Court of Industrial Relations a certification election case which involved the
vacation leave with pay immediately prior to his being served his separation employees of the petitioner, and the certification case was precisely brought about
notice (Exh. "C"). upon petition by the Sangilo-Itogon Workers Union; that when Baldo was given said
notice of separation from the service he brought his case to the grievance committee
The complainant's evidence tended to prove that Baldo was dismissed by the of the Itogon Labor Union and the management of the petitioner — said committee
company because of his membership in the complainant Sangilo-Itogon Workers being composed of representatives of the Itogon Labor Union and the management of
Union, a legitimate labor organization; and, for having testified for the said union the petitioner — with a view to securing his reinstatement; that the grievance
in Case No. 3-MC-PANG a certification proceeding involving the employees of committee withheld action on the case of Baldo; that the case of Baldo was pending
the respondent company. Baldo failed to obtain a reinstatement therein. before the grievance committee when he was asked by Mansueto Gelladoga plant
engineer and former labor relations officer of the petitioner (he was also former Vice-
President of the Itogon Labor Union), not to testify in the hearing of the certification
xxx xxx xxx election case so that be would be reinstated to his job; that in spite of Gelladoga's
request Baldo testified at the healing of the certification election case on April 7,1958,
It is undeniable that Baldo's testimony in Case No. 3-MC-PANG of this Court on and Baldo's testimony was adverse to the petitioner; and that after Baldo had thus
April 7, 1958, was favorable to the complainant Sangilo-Itogon Workers' Union of testified his case was dropped by the grievance committee, and he was never
which he was a member and in some way adverse to the interests of the reinstated. Considering that Baldo's case was pending before the grievance
company. The testimonies of complainant's witnesses are clear that during the committee when he was asked by Gelladoga not to testify, and soon after he had
hearing of the certification case in Itogon, Gelladoga, plant engineer and former testified adversely to the petitioner his case was dropped by the grievance committee,
labor relations officer of the respondent company, asked Baldo not to testify the conclusion is inescapable that the management of the petitioner herein had much
therein are the promise that he will be reinstated. Admittedly, the case of Baldo's to do with the dropping of Baldo's case, and because of the dropping of that case the
separation from the respondent company which was pending consideration at petitioner never reinstated Baldo to his work. This conclusion is bolstered further by
that time with the grievance committee of the union and management was the fact that the petitioner herein had opposed the petition for certification election.
immediately "dropped" after Baldo testified in the certification case "because he The lower court found that Baldo had not committed any serious offense as would
(Baldo) brought his case to a rival union of the Itogon Labor Union." It becomes warrant his immediate and permanent dismissal. On the other hand, the evidence
We agree with the finding of the Court of Industrial Relations that the petitioner had
committed unfair labor practices as contemplated in sub-paragraphs 1, 4 and 5 of
sub-section (a) of Section 4 of Republic Act No. 875 (Henares & Sons vs. National
Labor Union, G. R. No. L-17535, December 28, 1961; National Fastener Corporation
of the Philippines vs. Court of Industrial Relations, etc. G.R. No. L-15834, January 20,
1961).
The petitioner, in this appeal, also contends that the Court of Industrial Relations had
gravely abused its discretion when it ordered the reinstatement of Jose Baldo with
back wages. The petitioner points out that it should not be made to pay back wages
during the time that this case had been pending. This contention is also without merit.
When an employer commits unfair labor practices he should be made to shoulder all
the consequences of his unfair acts. The matter of granting back wages or backpay to
an employee that is reinstated is discretionary with the Court of Industrial Relations
(Section 5 [c], Republic Act No. 875). This question had already been settled in a line
of decisions rendered by this Court (United Employees Welfare Ass'n. vs. Isaac Peral
Bowling Alleys, G. R. No. 10327, Sept. 30, 1958; Union of Philippine Education Co.
Employees vs. Philippine Education Co., 91 Phil. 93, 95). We are satisfied that under
the circumstances as shown by the records of the present case the Court of Industrial
Relations had not abused the exercise of its discretion when it ordered the grant of
back wages to respondent Baldo from the date he was promised reinstatement to the
day of his actual reinstatement.
WHEREFORE, the decision appealed from is affirmed, with costs against the
petitioner.
Herein petitioners claim that they received on September 23, 1969, the aforesaid There is need of briefly restating basic concepts and principles which underlie the
order (p. 11, rec.); and that they filed on September 29, 1969, because September issues posed by the case at bar.
28, 1969 fell on Sunday (p. 59, rec.), a motion for reconsideration of said order dated
September 15, 1969, on the ground that it is contrary to law and the evidence, as well
as asked for ten (10) days within which to file their arguments pursuant to Sections (1) In a democracy, the preservation and enhancement of the dignity and worth of the
15, 16 and 17 of the Rules of the CIR, as amended (Annex "G", pp. 57-60, rec. ) human personality is the central core as well as the cardinal article of faith of our
civilization. The inviolable character of man as an individual must be "protected to the
largest possible extent in his thoughts and in his beliefs as the citadel of his person." 2
In its opposition dated October 7, 1969, filed on October 11, 1969 (p. 63, rec.),
respondent Company averred that herein petitioners received on September 22,
1969, the order dated September 17 (should be September 15), 1969; that under (2) The Bill of Rights is designed to preserve the ideals of liberty, equality and security
Section 15 of the amended Rules of the Court of Industrial Relations, herein "against the assaults of opportunism, the expediency of the passing hour, the erosion
petitioners had five (5) days from September 22, 1969 or until September 27, 1969, of small encroachments, and the scorn and derision of those who have no patience
within which to file their motion for reconsideration; and that because their motion for with general principles."3
reconsideration was two (2) days late, it should be accordingly dismissed,
invoking Bien vs. Castillo,1 which held among others, that a motion for extension of In the pithy language of Mr. Justice Robert Jackson, the purpose of the Bill of Rights
the five-day period for the filing of a motion for reconsideration should be filed before is to withdraw "certain subjects from the vicissitudes of political controversy, to place
the said five-day period elapses (Annex "M", pp. 61-64, rec.). them beyond the reach of majorities and officials, and to establish them as legal
principles to be applied by the courts. One's rights to life, liberty and property, to free
Subsequently, herein petitioners filed on October 14, 1969 their written arguments speech, or free press, freedom of worship and assembly, and other fundamental
dated October 11, 1969, in support of their motion for reconsideration (Annex "I", pp. rights may not be submitted to a vote; they depend on the outcome of no
65-73, rec.). elections."4 Laski proclaimed that "the happiness of the individual, not the well-being
of the State, was the criterion by which its behaviour was to be judged. His interests,
not its power, set the limits to the authority it was entitled to exercise." 5
In a resolution dated October 9, 1969, the respondent en banc dismissed the motion
for reconsideration of herein petitioners for being pro forma as it was filed beyond the
reglementary period prescribed by its Rules (Annex "J", pp. 74-75, rec.), which herein (3) The freedoms of expression and of assembly as well as the right to petition are
petitioners received on October 28, 196 (pp. 12 & 76, rec.). included among the immunities reserved by the sovereign people, in the rhetorical
aphorism of Justice Holmes, to protect the ideas that we abhor or hate more than the
ideas we cherish; or as Socrates insinuated, not only to protect the minority who want
At the bottom of the notice of the order dated October 9, 1969, which was released on to talk, but also to benefit the majority who refuse to listen. 6 And as Justice Douglas
October 24, 1969 and addressed to the counsels of the parties (pp. 75-76, rec.), cogently stresses it, the liberties of one are the liberties of all; and the liberties of one
appear the requirements of Sections 15, 16 and 17, as amended, of the Rules of the are not safe unless the liberties of all are protected.7
Court of Industrial Relations, that a motion for reconsideration shall be filed within five
(5) days from receipt of its decision or order and that an appeal from the decision,
resolution or order of the C.I.R., sitting en banc, shall be perfected within ten (10) (4) The rights of free expression, free assembly and petition, are not only civil rights
days from receipt thereof (p. 76, rec.). but also political rights essential to man's enjoyment of his life, to his happiness and
to his full and complete fulfillment. Thru these freedoms the citizens can participate
not merely in the periodic establishment of the government through their suffrage but
also in the administration of public affairs as well as in the discipline of abusive public
... The Motives of these men are often commendable. What we must remember, Instead of stifling criticism, the Bank should have allowed the respondents to air
however, is thatpreservation of liberties does not depend on motives. A their grievances.
suppression of liberty has the same effect whether the suppress or be a reformer
or an outlaw. The only protection against misguided zeal is a constant alertness
of the infractions of the guarantees of liberty contained in our Constitution. Each xxx xxx xxx
surrender of liberty to the demands of the moment makes easier another, larger
surrender. The battle over the Bill of Rights is a never ending one. The Bank defends its action by invoking its right to discipline for what it calls the
respondents' libel in giving undue publicity to their letter-charge. To be sure, the
... The liberties of any person are the liberties of all of us. right of self-organization of employees is not unlimited (Republic Aviation Corp.
vs. NLRB 324 U.S. 793 [1945]), as the right of the employer to discharge for
cause (Philippine Education Co. v. Union of Phil. Educ. Employees, L-13773,
... In short, the Liberties of none are safe unless the liberties of all are protected. April 29, 1960) is undenied. The Industrial Peace Act does not touch the normal
exercise of the right of the employer to select his employees or to discharge
... But even if we should sense no danger to our own liberties, even if we feel them. It is directed solely against the abuse of that right by interfering with the
secure because we belong to a group that is important and respected, we must countervailing right of self organization (Phelps Dodge Corp. v. NLRB 313 U.S.
recognize that our Bill of Rights is a code of fair play for the less fortunate that we 177 [1941])...
in all honor and good conscience must be observe. 31
xxx xxx xxx
The case at bar is worse.
In the final sum and substance, this Court is in unanimity that the Bank's conduct,
Management has shown not only lack of good-will or good intention, but a complete identified as an interference with the employees' right of self-organization or as a
lack of sympathetic understanding of the plight of its laborers who claim that they are retaliatory action, and/or as a refusal to bargain collectively, constituted an unfair
being subjected to indignities by the local police, It was more expedient for the firm to labor practice within the meaning and intendment of section 4(a) of the Industrial
conserve its income or profits than to assist its employees in their fight for their Peace Act. (Emphasis supplied.) 33
freedoms and security against alleged petty tyrannies of local police officers. This is
sheer opportunism. Such opportunism and expediency resorted to by the respondent If free expression was accorded recognition and protection to fortify labor unionism in
company assaulted the immunities and welfare of its employees. It was pure and the Republic Savings case, supra, where the complaint assailed the morality and
implement selfishness, if not greed. integrity of the bank president no less, such recognition and protection for free
speech, free assembly and right to petition are rendered all the more justifiable and
Of happy relevance is the 1967 case of Republic Savings Bank vs. C.I.R., 32 where more imperative in the case at bar, where the mass demonstration was not against
the petitioner Bank dismissed eight (8) employees for having written and published "a the company nor any of its officers.
patently libelous letter ... to the Bank president demanding his resignation on the
grounds of immorality, nepotism in the appointment and favoritism as well as WHEREFORE, judgement is hereby rendered:
discrimination in the promotion of bank employees." Therein, thru Mr. Justice Castro,
We ruled:
(1) setting aside as null and void the orders of the respondent Court of Industrial
Relations dated September 15 and October 9, 1969; and
It will avail the Bank none to gloat over this admission of the respondents.
Assuming that the latter acted in their individual capacities when they wrote the
letter-charge they were nonetheless protected for they were engaged in (2) directing the re instatement of the herein eight (8) petitioners, with full back pay
concerted activity, in the exercise of their right of self organization that includes from the date of their separation from the service until re instated, minus one day's
concerted activity for mutual aid and protection, (Section 3 of the Industrial Peace pay and whatever earnings they might have realized from other sources during their
Act ...) This is the view of some members of this Court. For, as has been aptly separation from the service.
stated, the joining in protests or demands, even by a small group of employees, if
in furtherance of their interests as such, is a concerted activity protected by the With costs against private respondent Philippine Blooming Company, Inc.
On October 24, 1990, the labor sector staged a welga ng bayan to protest the 7. Lolita delos Angeles Board Member
accelerating prices of oil. On even date, petitioner-unions, led by their officers, herein
petitioners, staged a work stoppage which lasted for several days, prompting 8. Marissa Villoria Board Member
respondents to file on October 31, 1990 a petition to declare the work stoppage illegal
for failure to comply with procedural requirements.4 9. Marita Antonio Board Member
On November 13, 1990, respondents resumed their operations. 5 Petitioners, claiming 10. Lolita Lindio Board Member
that they were illegally locked out by respondents, assert that aside from the fact that
the welga ng bayan rendered it difficult to get a ride and the apprehension that 11. Eliza Caranlia Board Member
violence would erupt between those participating in the welga and the authorities,
respondents’ workers were prevented from reporting for work.
12. Liza Sua Board Member
FIFLEX INDUSTRIAL AND MANUFACTURING LABOR UNION (NAFLU)
3. Barnice Borcelo Secretary II. . . ERR[ED] IN NOT RULING THAT RESPONDENTS ERRED IN
IMMEDIATELY IMPLEMENTING THE DECISION OF THE LABOR ARBITER . . .
4. Nerlie Yagin Treasurer DISMISSING PETITIONERS FROM WORK DESPITE THE FACT THAT THE
SAID DECISION HAS NOT YET BECOME FINAL AND EXECUTORY.
5. Evelyn Santillan Auditor
III. . . ERRED IN DECLARING THAT PETITIONERS WERE GUILTY OF
6. Leony Serdoncilo Director HOLDING AN ILLEGAL STRIKE WHEN CIRCUMSTANCES SHOWED THAT
RESPONDENTS WERE THE ONES WHO WERE GUILTY OF AN ILLEGAL
7. Trinidad Cuga Director LOCKOUT.
On appeal, the National Labor Relations Commission (NLRC) reversed the ruling of
Even if petitioners’ joining the welga ng bayan were considered merely as an exercise
the Labor Arbiter, it holding that there was no strike to speak of as no labor or
industrial dispute existed between the parties.10 It accordingly ordered respondents to of their freedom of expression, freedom of assembly or freedom to petition the
reinstate petitioners to their former positions, without loss of seniority rights, and with government for redress of grievances, the exercise of such rights is not
full backwages from the date of their termination. 11 absolute.17 For the protection of other significant state interests such as the "right of
enterprises to reasonable returns on investments, and to expansion and
growth"18 enshrined in the 1987 Constitution must also be considered, otherwise,
On respondents’ petition for certiorari, the Court of Appeals, by Decision of May 28, oppression or self-destruction of capital in order to promote the interests of labor
2002, reversed that of the NLRC and reinstated that of the Labor Arbiter. would be sanctioned. And it would give imprimatur to workers’ joining
demonstrations/rallies even before affording the employer an opportunity to make the
In finding for respondents, the appellate court discredited petitioners’ claim of having necessary arrangements to counteract the implications of the work stoppage on the
been illegally locked out, given their failure to even file a letter of protest or complaint business, and ignore the novel "principle of shared responsibility between workers
with the management,12 and their failure to comply with the legal requirements of a and employers"19 aimed at fostering industrial peace.
valid strike.13
There being no showing that petitioners notified respondents of their intention, or that
The appellate court further noted that while petitioners claimed that they filed a notice they were allowed by respondents, to join the welga ng bayan on October 24, 1990,
of strike on October 31, 1990, no copy thereof was ever produced before the Labor their work stoppage is beyond legal protection.
Arbiter.14
Petitioners, nonetheless, assert that when they returned to work the day following
Hence, the instant petition which faults the appellate court to have: the welga ng bayan on October 24, 1990, they were refused entry by the
While consultations between FASAP and PAL were ongoing, the latter began a. PAL shall continue recognizing PALEA as the duly certified bargaining
implementing its retrenchment program by initially terminating the services of 140 agent of the regular rank-and-file ground employees of the Company;
probationary cabin attendants only to rehire them in April 1998. Moreover, their
employment was made permanent and regular.11
b. The ‘union shop/maintenance of membership’ provision under the PAL-
PALEA CBA shall be respected.
On July 15, 1998, however, PAL carried out the retrenchment of its more than 1,400
cabin crew personnel.
c. No salary deduction, with full medical benefits.
Meanwhile, in June 1998, PAL was placed under corporate rehabilitation and a
rehabilitation plan was approved per Securities and Exchange Commission (SEC) 5. PAL shall grant the benefits under the 26 July 1998 Memorandum of
Order dated June 23, 1998 in SEC Case No. 06-98-6004.12 Agreement forged by and between PAL and PALEA, to those employees who
may opt to retire or be separated from the company.
On September 4, 1998, PAL, through its Chairman and Chief Executive Officer (CEO)
Lucio Tan, made an offer to transfer shares of stock to its employees and three seats 6. PALEA members who have been retrenched but have not received separation
in its Board of Directors, on the condition that all the existing Collective Bargaining benefits shall be granted priority in the hiring/rehiring of employees.
Agreements (CBAs) with its employees would be suspended for 10 years, but it was
rejected by the employees. On September 17, 1998, PAL informed its employees that 7. In the absence of applicable Company rule or regulation, the provisions of the
it was shutting down its operations effective September 23, 1998, 13 despite the Labor Code shall apply.15
previous approval on June 23, 1998 of its rehabilitation plan.
In a referendum conducted on October 2, 1998, PAL employees ratified the above
On September 23, 1998, PAL ceased its operations and sent notices of termination to proposal. On October 7, 1998, PAL resumed domestic operations and, soon after,
its employees. Two days later, PAL employees, through the Philippine Airlines international flights as well.16
Employees Association (PALEA) board, sought the intervention of then President
Joseph E. Estrada. PALEA offered a 10-year moratorium on strikes and similar Meanwhile, in November 1998, or five months after the June 15, 1998 mass dismissal
actions and a waiver of some of the economic benefits in the existing CBA. Lucio of its cabin crew personnel, PAL began recalling to service those it had previously
Tan, however, rejected this counter-offer.14 retrenched. Thus, in November 199817 and up to March 1999,18 several of those
retrenched were called back to service. To date, PAL claims to have recalled 820 of
On September 27, 1998, the PALEA board again wrote the President proposing the the retrenched cabin crew personnel.19 FASAP, however, claims that only 80 were
following terms and conditions, subject to ratification by the general membership: recalled as of January 2001.20
1. Each PAL employee shall be granted 60,000 shares of stock with a par value In December 1998, PAL submitted a "stand-alone" rehabilitation plan to the SEC by
of P5.00, from Mr. Lucio Tan’s shareholdings, with three (3) seats in the PAL which it undertook a recovery on its own while keeping its options open for the entry
Board and an additional seat from government shares as indicated by His of a strategic partner in the future. Accordingly, it submitted an amended rehabilitation
Excellency; plan to the SEC with a proposed revised business and financial restructuring plan,
which required the infusion of US$200 million in new equity into the airline.
2. Likewise, PALEA shall, as far as practicable, be granted adequate
representation in committees or bodies which deal with matters affecting terms On May 17, 1999, the SEC approved the proposed "Amended and Restated
and conditions of employment; Rehabilitation Plan" of PAL and appointed a permanent rehabilitation receiver for the
latter.21
3. Victor Lanza v. PAL, et al. (NLRC-NCR Case No.00-04-04254-99). The Order of the Labor Arbiter dated April 6, 2000 is also SET ASIDE and the Writ of
Execution dated November 13, 2000 is hereby quashed.
(3) That the employer pays the retrenched employees separation pay equivalent Lastly, but certainly not the least important, alleged losses if already realized, and the
to one (1) month pay or at least one-half (½) month pay for every year of service, expected imminent losses sought to be forestalled, must be proved by sufficient and
whichever is higher; convincing evidence.
(4) That the employer exercises its prerogative to retrench employees in good The law speaks of serious business losses or financial reverses. Sliding incomes or
faith for the advancement of its interest and not to defeat or circumvent the decreasing gross revenues are not necessarily losses, much less serious business
employees’ right to security of tenure; and, losses within the meaning of the law. The fact that an employer may have sustained a
net loss, such loss, per se, absent any other evidence on its impact on the business,
nor on expected losses that would have been incurred had operations been
(5) That the employer used fair and reasonable criteria in ascertaining who would continued, may not amount to serious business losses mentioned in the law. The
be dismissed and who would be retained among the employees, such as status, employer must show that its losses increased through a period of time and that the
efficiency, seniority, physical fitness, age, and financial hardship for certain condition of the company will not likely improve in the near future,49 or that it expected
workers.45 no abatement of its losses in the coming years. 50 Put simply, not every loss incurred
or expected to be incurred by a company will justify retrenchment.51
In view of the facts and the issues raised, the resolution of the instant petition hinges
on a determination of the existence of the first, fourth and the fifth elements set forth The employer must also exhaust all other means to avoid further losses without
above, as well as compliance therewith by PAL, taking to mind that the burden of retrenching its employees.52Retrenchment is a means of last resort; it is justified only
proof in retrenchment cases lies with the employer in showing valid cause for when all other less drastic means have been tried and found insufficient. 53 Even
dismissal;46that legitimate business reasons exist to justify retrenchment. 47 assuming that the employer has actually incurred losses by reason of the Asian
economic crisis, the retrenchment is not completely justified if there is no showing that
FIRST ELEMENT: That retrenchment is reasonably necessary and likely to prevent the retrenchment was the last recourse resorted to. 54 Where the only less drastic
business losses which, if already incurred, are not merely de minimis, but substantial, measure that the employer undertook was the rotation work scheme, or the three-
serious, actual and real, or if only expected, are reasonably imminent as perceived day-work-per-employee-per-week schedule, and it did not endeavor at other
objectively and in good faith by the employer. measures, such as cost reduction, lesser investment on raw materials, adjustment of
the work routine to avoid scheduled power failure, reduction of the bonuses and
The employer’s prerogative to layoff employees is subject to certain limitations. In salaries of both management and rank-and-file, improvement of manufacturing
Lopez Sugar Corporation v. Federation of Free Workers, 48 we held that: efficiency, and trimming of marketing and advertising costs, the claim that
retrenchment was done in good faith to avoid losses is belied.55
Firstly, the losses expected should be substantial and not merely de minimis in
extent. If the loss purportedly sought to be forestalled by retrenchment is clearly Alleged losses if already realized, and the expected imminent losses sought to be
shown to be insubstantial and inconsequential in character, the bona fide nature of forestalled, must be proved by sufficient and convincing evidence. The reason for
the retrenchment would appear to be seriously in question. Secondly, the substantial requiring this is readily apparent: any less exacting standard of proof would render too
loss apprehended must be reasonably imminent, as such imminence can be easy the abuse of this ground for termination of services of employees; scheming
perceived objectively and in good faith by the employer. There should, in other words, employers might be merely feigning business losses or reverses in order to ease out
be a certain degree of urgency for the retrenchment, which is after all a drastic employees.56
recourse with serious consequences for the livelihood of the employees retired or
otherwise laid-off. Because of the consequential nature of retrenchment, it must, In establishing a unilateral claim of actual or potential losses, financial statements
thirdly, be reasonably necessary and likely to effectively prevent the expected losses. audited by independent external auditors constitute the normal method of proof of
The employer should have taken other measures prior or parallel to retrenchment to profit and loss performance of a company.57 The condition of business losses
forestall losses, i.e., cut other costs than labor costs. An employer who, for instance, justifying retrenchment is normally shown by audited financial documents like yearly
lays off substantial numbers of workers while continuing to dispense fat executive balance sheets and profit and loss statements as well as annual income tax returns.
bonuses and perquisites or so-called "golden parachutes," can scarcely claim to be Financial statements must be prepared and signed by independent auditors;
retrenching in good faith to avoid losses. To impart operational meaning to the otherwise, they may be assailed as self-serving.58 A Statement of Profit and Loss
FOURTH ELEMENT: That the employer exercises its prerogative to retrench In sum, we find that PAL had implemented its retrenchment program in an arbitrary
employees in good faith for the advancement of its interest and not to defeat or manner and with evident bad faith, which prejudiced the tenurial rights of the cabin
circumvent the employees’ right to security of tenure. crew personnel.
Concededly, retrenchment to prevent losses is an authorized cause for terminating Moreover, the management’s September 4, 1998 offer to transfer PAL shares of
employment and the decision whether to resort to such move or not is a management stock in the name of its employees in exchange for the latter’s commitment to
prerogative. However, the right of an employer to dismiss an employee differs from suspend all existing CBAs for 10 years; the closure of its operations when the offer
and should not be confused with the manner in which such right is exercised. It must was rejected; and the resumption of its business after the employees relented; all
not be oppressive and abusive since it affects one's person and property. 85 indicate that PAL had not acted in earnest in regard to relations with its employees at
the time.
In Indino v. National Labor Relations Commission,86 the Court held that it is almost an
inflexible rule that employers who contemplate terminating the services of their FIFTH ELEMENT: That the employer used fair and reasonable criteria in ascertaining
workers cannot be so arbitrary and ruthless as to find flimsy excuses for their who would be dismissed and who would be retained among the employees, such as
decisions. This must be so considering that the dismissal of an employee from work status, efficiency, seniority, physical fitness, age, and financial hardship for certain
involves not only the loss of his position but more important, his means of livelihood. workers.
Applying this caveat, it is therefore incumbent for the employer, before putting into
effect any retrenchment process on its work force, to show by convincing evidence
that it was being wrecked by serious financial problems. Simply declaring its state of In selecting employees to be dismissed, fair and reasonable criteria must be used,
insolvency or its impending doom will not be sufficient. To do so would render the such as but not limited to: (a) less preferred status (e.g., temporary employee), (b)
security of tenure of workers and employees illusory. Any employer desirous of efficiency and (c) seniority.90
ridding itself of its employees could then easily do so without need to adduce proof in
support of its action. We can not countenance this. Security of tenure is a right In Villena v. National Labor Relations Commission, 91 the Court considered seniority
guaranteed to employees and workers by the Constitution and should not be denied an important aspect for the validity of a retrenchment program. In Philippine
on the basis of mere speculation. Tuberculosis Society, Inc. v. National Labor Union,92 the Court held that the
implementation of a retrenchment scheme without taking seniority into account
On the requirement that the prerogative to retrench must be exercised in good faith, rendered the retrenchment invalid, even as against factors such as dependability,
we have ruled that the hiring of new employees and subsequent rehiring of adaptability, trainability, job performance, discipline, and attitude towards work.
"retrenched" employees constitute bad faith;87 that the failure of the employer to
· Special Award – +5 2. Number of employees retrenched due to excess sick leaves -- 299
· Commendations – +2 3. Number of employees who were retrenched due to excess sick leave and
other reasons -- 61
· Appreciation – +1
4. Number of employees who were retrenched due to other reasons -- 107
· Disciplinary Actions – Reminder (-3), Warning/Admonition & Reprimands (-5),
Suspension (-20), Passenger Complaints (-30), Appearance (-10) 5. Number of employees who were demoted -- 552
· Perfect Attendance – +2 Prominent from the above data is the retrenchment of cabin crew personnel due to
"other reasons" which, however, are not specifically stated and shown to be for a
· Missed Assignment – -30 valid cause. This is not allowed because it has no basis in fact and in law.
· Sick Leaves in excess of allotment and other leaves in excess of allotment – - Moreover, in assessing the overall performance of each cabin crew personnel, PAL
20 only considered the year 1997. This makes the evaluation of each cabin attendant’s
efficiency rating capricious and prejudicial to PAL employees covered by it. By
discarding the cabin crew personnel’s previous years of service and taking into
· Tardiness – -10 93 consideration only one year’s worth of job performance for evaluation, PAL virtually
did away with the concept of seniority, loyalty and past efficiency, and treated all
The appellate court held that there was no need for PAL to consult with FASAP cabin attendants as if they were on equal footing, with no one more senior than the
regarding standards or criteria that the airline would utilize in the implementation of other.
the retrenchment program; and that the criteria actually used which was unilaterally
formulated by PAL using its Performance Evaluation Form in its Grooming and In sum, PAL’s retrenchment program is illegal because it was based on wrongful
Appearance Handbook was reasonable and fair. Indeed, PAL was not obligated to premise (Plan 14, which in reality turned out to be Plan 22, resulting in retrenchment
consult FASAP regarding the standards it would use in evaluating the performance of of more cabin attendants than was necessary) and in a set of criteria or rating
the each cabin crew. However, we do not agree with the findings of the appellate variables that is unfair and unreasonable when implemented. It failed to take into
court that the criteria utilized by PAL in the actual retrenchment were reasonable and account each cabin attendant’s respective service record, thereby disregarding
fair. seniority and loyalty in the evaluation of overall employee performance.
This Court has repeatedly enjoined employers to adopt and observe fair and Anent the claim of unfair labor practices committed against petitioner, we find the
reasonable standards to effect retrenchment. This is of paramount importance same to be without basis. Article 261 of the Labor Code provides that violations of a
because an employer’s retrenchment program could be easily justified considering CBA, except those which are gross in character, shall no longer be treated as unfair
the subjective nature of this requirement. The adoption and implementation of unfair labor practice and shall be resolved as grievances under the parties’ CBA. Moreover,
and unreasonable criteria could not easily be detected especially in the retrenchment "gross violations of CBA" under the same Article referred to flagrant and/or malicious
of large numbers of employees, and in this aspect, abuse is a very distinct and real refusal to comply with the economic provisions of such agreement, which is not the
possibility. This is where labor tribunals should exercise more diligence; this aspect is issue in the instant case.1avvphi1
As to PAL’s recall and rehire process (of retrenched cabin crew employees), the
same is likewise defective. Considering the illegality of the retrenchment, it follows
that the subsequent recall and rehire process is likewise invalid and without effect.
A corporate officer is not personally liable for the money claims of discharged
corporate employees unless he acted with evident malice and bad faith in terminating
their employment.97 We do not see how respondent Patria Chiong may be held
personally liable together with PAL, it appearing that she was merely acting in
accordance with what her duties required under the circumstances. Being an
Assistant Vice President for Cabin Services of PAL, she takes direct orders from
superiors, or those who are charged with the formulation of the policies to be
implemented.
With respect to moral damages, we have time and again held that as a general rule, a
corporation cannot suffer nor be entitled to moral damages. A corporation, being an
artificial person and having existence only in legal contemplation, has no feelings, no
emotions, no senses; therefore, it cannot experience physical suffering and mental
anguish. Mental suffering can be experienced only by one having a nervous system
and it flows from real ills, sorrows, and griefs of life – all of which cannot be suffered
by an artificial, juridical person.98 The Labor Arbiter’s award of moral damages was
therefore improper.
WHEREFORE, the instant petition is GRANTED. The assailed Decision of the Court
of Appeals in CA-G.R. SP No. 87956 dated August 23, 2006, which affirmed the
Separate appeals by certiorari from the Decision of the Court of Industrial Relations
(Manila) dated July 20, 1973, as well as the Resolution of the court en banc dated
January 24, 1974 denying the reconsideration thereof rendered in ULP Case No.
4951 entitled, "Lakas ng Manggagawang Makabayan, Petitioner, versus Marcelo
Enterprises and Marcelo Tire and Rubber Corporation, Marcelo Rubber and Latex
Products, Marcelo Steel Corporation, Polaris Marketing Corporation, and Marcelo
Chemical and Pigment Corporation, Respondents. "
It appears that prior to May 23, 1967, the date which may be stated as the start of the
labor dispute between Lakas ng Manggagawang Makabayan (hereinafter referred to
as complainant LAKAS) and the management of the Marcelo Tire and Rubber
Corporation, Marcelo Rubber and Latex Products, Inc., Polaris Marketing
Corporation, Marcelo Chemical and Pigment Corporation, and the Marcelo Steel
Corporation (Nail Plan) (hereinafter referred to as respondent Marcelo Companies)
the Marcelo Companies had existing collective bargaining agreements (CBAs) with
the local unions then existing within the appropriate bargaining units, viz: (1) the
respondent Marcelo Tire and Rubber Corporation, with the Marcelo Camelback Tire
and Foam Union (MACATIFU); (2) the respondent Marcelo Rubber and Latex
Products, Inc., with the Marcelo Free Workers Union (MFWU); and (3) the respondent
Marcelo Steel Corporation with the United Nail Workers Union (UNWU). These
existing CBAs were entered into by and between the parties while the aforestated
Again, on May 3, 1967, the management of respondents Marcelo Tire and Rubber On July 14, 1967, as earlier stated, the Notice of Strike filed by complainant LAKAS
Corporation and Marcelo Rubber and Latex Products, Inc., received another letter was withdrawn pursuant to a Memorandum Agreement signed on the same day by
requesting negotiation of new CBAs also for and in behalf of the MACATIFU and the management and LAKAS.
MFWU from J.C. Espinas & Associates.
Thereafter, or on July 20, 1967, letters of proposal for collective bargaining were sent
Finally, on May 23, 1967, the management of all the respondent Marcelo Companies by Prudencio Jalandoni of LAKAS to all the respondent Marcelo companies. In
received a letter from Prudencio Jalandoni, the alleged president of the complainant answer thereto, management wrote two (2) letters, both dated July 24, 1967,
LAKAS. In this letter of May 23, 1967, the complainant LAKAS informed management addressed to Jalandoni, expressing their conformity to sit down in conference on the
The complaint prayed "that after due hearing, judgment be rendered, declaring V. That Mr. Jose P. Marcelo is the President of Marcelo Rubber and Latex
respondents guilty of unfair labor practice, and Products, Inc., Marcelo Tire and Rubber Corporation, and Marcelo Steel
Corporation, while Mr. Jose A. Delfin is the acting Personnel Manager of
respondent Marcelo Rubber and Latex Products, Inc., Marcelo Tire and Rubber
(a) Ordering respondents to cease and desist from further committing the acts Corporation, Marcelo Steel Corporation and Marcelo Chemical and Pigment
complained of; Corporation;
(b) Ordering respondents to comply with the Return-to-Work agreement dated VI. That respondents did not refuse to admit members of the striking union. Only
September 14, 1967, and to admit back to work the workers listed in annexes four (4) workers who had criminal cases filed against them voluntarily failed to
"A", "B " and "C" hereof, with back wages, without loss of seniority rights and report to the Personnel Department for administrative investigation;
privileges thereof;
VII. That after September 14, 1967, all workers of the different respondent
(c) Ordering respondents to bargain in good faith with complainant union; and corporations returned to work except the four mentioned in the preceding
paragraph hereof who have pending criminal cases; between September 14,
(d) Granting complainant and its complaining members thereof such other 1967, and November 7, 1967 another strike was declared without justifiable
affirmative reliefs and remedies equitable and proper, in order to effectuate the cause;
policies of the Industrial Peace Act.
VIII. That on November 28, 1967, respondent obtained an injunction from the
On March 16, 1968, after an Urgent Motion for Extension of Time to File Answer, the Court of First Instance of Rizal, Caloocan City Branch, against the illegal
respondents filed their Answer denying the material allegations of the Complaint and picketing of the local unions; in the first week of December, 1967, the striking
alleging as affirmative defenses, workers began returning to work; on December 13, 1967, a letter was received
from complainant advising respondents that its striking workers were calling off,
I. That the Collective Bargaining Agreement between respondent Marcelo Steel lifting the picket line and returning to work, that from the first week of December,
Corporation and the United Nail Workers Union expired on March 15, 1967; The 1967, respondents invited the striking workers desiring to return to work to fill out
Collective Bargaining Agreement between the United Rubber Workers Union an information sheet stating therein their readiness to work and the exact dates
(which eventually became the Marcelo Free Workers Union) and the respondent they were available so that proper scheduling could be done; a number of
Marcelo Rubber and Latex Products, Inc., expired on June 5, 1967; the workers showed no interest in reporting to work; management posted in the
Collective Bargaining Agreement between Marcelo Camelback Tire and Foam Checkpoint, Bulletin Boards, and the gates notices calling all workers to return to
Union and the Marcelo Tire and Rubber Corporation expired on June 5, 1967; work but a number of workers obviously were not interested in returning
anymore;
II. That on May 23, 1967, one Mr. Prudencio Jalandoni of complainant addressed
a communication to Mr. Jose P. Marcelo of respondents informing him of the
X. That a number of workers in the list Annexes "A", "B" and "C" have resigned xxx xxx xxx
after they found more profitable employment elsewhere;
This was followed by another Manifestation and Motion flied on November 6, 1968
XI. That the local unions referred to in the Complaint if they ever had affiliated and signed by the officers and members of the UNWU, headed by its President, Juan
with complainant union had subsequently disaffiliated therefrom; Balgos, alleging, to wit,
XII. That the strikes called and declared by the striking unions were illegal; 1. That the above-entitled case purportedly shows that the United Nail Workers
Union is being represented by the Petitioner Lakas ng Manggagawang
XIII. That the local unions were bargaining in bad faith with respondents, Makabayan for the alleged reason that the former is one of the affiliates of the
latter;
and praying for the dismissal of the Complaint as well as for the declaration of
illegality of the two (2) strikes called by the striking unions. 2. That on January 15, 1968, all the Officers and members of the United Nail
Workers Union disaffiliated from the herein Petitioning labor organization for the
reason that Petitioning labor organization could not serve the best interest of the
Thereafter, the trial commenced. Then on October 24, 1968, a development occurred Officers and members of the United Nail Workers Union and as such is a
which gave a peculiar aspect to the case at bar. A Manifestation and Motion signed stumbling block to a harmonious labor- management relations within all the
by the respective officers and members of the MUEWA, headed by Paulino Lazaro, Marcelo enterprises; ...
was filed by the said union, alleging, to wit,
3. That the filing of the above-entitled case by the herein Petitioning labor
l. That the above-entitled case purportedly shows that the Marcelo United organization was made over and above the objections of the officers and
Employees and Workers Association is one of the Complainants being members of the United Nail Workers Union;
represented by the Petitioner Lakas ng Manggagawang Makabayan (LMM);
4. That in view of all the foregoing, the Officers and members of the United Nail
2. That it likewise appears in the above-entitled case that the services of the Workers Union do hereby disauthorize the Petitioner of the above-entitled case
herein Petitioner was sought by a certain Augusto Carreon together with his (Re:: Lakas ng Manggagawang Makabayan) from further representing the United
cohorts who are not members of the Marcelo United Employees and Workers Nail Workers Union in the above-entitled case;
Association much less connected with the Marcelo Tire and Rubber Corporation
wherein the Marcelo United Employees and Workers Association has an existing
Collective Bargaining Agreement; 5. That in view further of the fact that the filing of the above-entitled case was
made over and above the objections of the Officers and members of the United
Nail Workers Union, the latter therefore manifest their intention to cease and
3. That to set the records of this Honorable Court straight, the undersigned desist as they hereby ceased and desisted from further prosecuting the above-
officers and members of the Marcelo United Employees and Workers Association entitled case in the interest of a harmonius labor-management relation within the
respectfully manliest that the aforesaid organization has no complaint Marcelo Enterprises;
whatsoever against any of the Marcelo Enterprises;
xxx xxx xxx
4. ...
Likewise, a Manifestation and Motion signed by the Officers and members of the
5. ..., the Complaint filed by the Petitioner in the above-entitled case in behalf of MFWU, headed by its president, Benjamin Mañaol, dated October 28, 1968 and filed
the Marcelo United Employees and Workers Association is without authority from November 6, 1968, stated the same allegations as the Manifestation and Motion filed
the latter and therefore the officers and/or representatives of the petitioning labor by the UNWU quoted above, except that the disaffiliation of the MFWU from LAKAS
organization should be cited for Contempt of Court; was made effective January 25, 1968. The Resolutions of Disaffiliation of both MFWU
and UNWU were attached to these Manifestations.
II. The findings of the trial court declaring the strikes of September 4 and II. Respondent court erred in finding that petitioners herein discriminated against
November 7, 1967 as illegal for being an economic strike is not in accordance individual complainants in Case No. 4951-ULP of respondent court who were not
with law and the facts adduced in this case. readmitted to work after the November 7, 1967 strike, while others were able to
return to their former employment and in holding that the procedure adopted by
III. The Honorable trial court in ordering the reduction of the back wages, without petitioners herein was in effect a screening of those who were readmitted and in
reinstatement, appears to have departed from the substantial evidence rule and finding petitioners herein guilty of unfair labor practice by reasons thereof.
established jurisprudence.
III. Respondent court erred in rendering judgment ordering petitioners herein to
By Resolution of January 24, 1974, the Court en banc denied the two (2) Motions for pay individual complainants in Case No. 4951-ULP of respondent court
Reconsideration filed by both the respondent Marcelo Companies and the individual backwages from December 18, 1967, to June 29, 1970, minus their earnings
complainants. On February 19, 1974 and on February 20, 1974, both parties filed elsewhere, except those who have resigned, those who have been dismissed for
their respective Notices of Appeals. Hence, these petitions. cause, those whose contracts have expired and those who are already working.
In L-38258, the petition filed by complainant Lakas ng Manggagawang Makabayan IV. Respondent court erred in holding that petitioners herein have waived their
(LAKAS), the following were assigned as reversible errors, to wit, right to declare the strikes of September 4, 1967 and November 7, 1967, illegal.
I. The respondent court erred in finding the strikes of September 4 and From the aforecited assignments of errors respectively made in both petitions before
November 7, 1967 to be economic strikes and declaring the said strikes illegal for Us, We find that there are only two basic issues posed for Our resolution, viz: (1)
non-compliance with the procedural requirement of Section 14(d) of Republic Act whether or not the complaint filed by LAKAS against the Marcelo Companies can be
875, although its illegality was condoned or waived because of the Return-to- sustained, in view of the alleged fact that its authority to file and prosecute the same
Work agreement on the first strike, and the discriminatory rehiring of the striking has been squarely raised in issue at the first instance before the respondent court;
employees after the second strike. and (2) whether or not the Marcelo Companies are guilty of unfair labor practice, for
which they should be made liable for backwages and be obliged to reinstate the
employees appearing in Annexes "A", "B", and "C " of the complaint, taking into
II. The respondent court erred in denying reinstatement to the striking consideration the prayer of LAKAS anent the correct payment of said backwages and
complainants in Case No. 4951-ULP, and limiting the computation of their the non-exclusion of some employees from the benefits arising from the appealed
backwages from December 18, 1967 to June 29, 1970 only, despite its findings Decision.
of unfair labor practice against private respondents herein as a consequence of
the discriminatory rehiring of the striking employees after the November 7, 1967
strike. The first issue poses a procedural question which We shall dwell on after a resolution
of the second issue, this latter issue being of greater significance to the correct
determination of the rights- of all parties concerned as it treats of the merits of the
III. The respondent court erred in excluding the other individual complainants, present petitions.
except those who are still working, those who resigned on or before December
18, 1967, and those whose employment contract expired, and denying to these
individual complainants the benefits resulting therefrom. Hence, anent the second issue of whether or not the complaint for unfair labor
practice can be sustained, this Court rules in favor of the respondent Marcelo
Companies and consequently, the appealed Decision is reversed. This reversal is
On the other hand, in L-38260 which is the petition filed by respondents Marcelo inevitable after this Court has pored through the voluminuous records of the case as
Enterprises, Marcelo Tire and Rubber Corporation, Marcelo Rubber & Latex well as after applying the established jurisprudence and the law on the matters raised.
Products, Marcelo Steel Corporation, Marcelo Chemical & Pigment Corporation, and We are not unmindful of the plight of the employees in this case but We consider it
Polaris Marketing Corporation, the following is the alleged assignment of errors, to oppressive to grant their petition in G.R. No. L38258 for not only is there no evidence
wit, which shows that the respondent Marcelo Companies were seeking for an opportunity
to discharge these employees for union activities, or to discriminate against them
I. Respondent court erred in not finding that respondent Lakas ng because of such activities, but there is affirmative evidence to establish the contrary
Manggagawang Makabayan (LAKAS) had no authority to file and/or to prosecute conclusion.
the complaint against the petitioners herein in representation of the local unions
and/or individual complainants and/or members of local unions in their individual
Contrary to the pretensions of complainant LAKAS, the respondent Marcelo ... Although an employer has the undoubted right to bargain with a bargaining
Companies did not ignore the demand for collective bargaining contained in its letter agent whose authority has been established, without the requirement that the
of June 20, 1967. Neither did the companies refuse to bargain at all. What it did was bargaining agent be officially certified by the National Labor Relations Board as
to apprise LAKAS of the existing conflicting demands for recognition as the such, if the informally presented evidence leaves a real doubt as to the issue, the
bargaining representative in the appropriate units involved, and suggested the employer has a right to demand a certification and to refuse to negotiate until
settlement of the issue by means of the filing of a petition for certification election such official certification is presented."
before the Court of Industrial Relations. This was not only the legally approved
procedure but was dictated by the fact that there was indeed a legitimate The clear facts of the case as hereinbefore restated indusputably show that a
representation issue. PSSLU, with whom the existing CBAs were entered into, was legitimate representation issue confronted the respondent Marcelo Companies. In the
demanding of respondent companies to collectively bargain with it; so was Paulino face of these facts and in conformity with the existing jurisprudence.
Lazaro of MUEWA, J.C. Espinas & Associates for MACATIFU and the MFWU, and
the complainant LAKAS for MULU which we understand is the aggrupation of
MACATIFU, MFWU and UNWU. On top of all of these, Jose Roque of UNWU We hold that there existed no duty to bargain collectively with The complainant
disauthorized the PSSLU from representing his union; and similarly, Augusta Carreon LAKAS on the part of said companies. And proceeding from this basis, it follows that
of MACATIFU itself informed management as late as July 11, 1967 or after the all acts instigated by complainant LAKAS such as the filing of the Notice of strike on
demand of LAKAS that no group representing his Union "is not authorized and should June 13, 1967 (although later withdrawn) and the 'two strikes of September 4, 1967
not be entertained. " and November 7, 1967 were calculated , designed and intended to compel the
respondent Marcelo Companies to recognize or bargain with it notwithstanding that it
was an uncertified union, or in the case of respondent Marcelo Tire and Rubber
Indeed, what We said in Philippine Association of Free Labor Unions (PAFLU) vs. Corporation, to bargain with it despite the fact that the MUEWA of Paulino Lazaro vas
The Bureau of Labor Relations,69 SCRA 132, applies as well to this case. already certified as the sole bargaining agent in said respondent company. These
concerted activities executed and carried into effect at the instigation and motivation
..., in a situation like this where the issue of legitimate representation in dispute is of LAKAS ire all illegal and violative of the employer's basic right to bargain
viewed for not only by one legitimate labor organization but two or more, there is collectively only with the representative supported by the majority of its employees in
every equitable ground warranting the holding of a certification election. In this each of the bargaining units. This Court is not unaware of the present predicament of
way, the issue as to who is really the true bargaining representative of all the the employees involved but much as We sympathize with those who have been
employees may be firmly settled by the simple expedient of an election. misled and so lost their jobs through hasty, ill-advised and precipitate moves, We rule
that the facts neither substantiate nor support the finding that the respondent Marcelo
The above-cited case gives the reason for the need of determining once and for all Companies are guilty of unfair labor practice.
the true choice of membership as to who should be their bargaining representative,
which is that, "(E)xperience teaches us, one of the root causes of labor or industrial There are also other facts which this Court cannot ignore. the complaint of LAKAS
disputes is the problem arising from a questionable bargaining representative charge that after their first strike of September 4, 1967, management and the striking
entering into CBA concerning terms and conditions of employment. " employees entered into a Return-to-Work Agreement but that it was violated by the
respondent companies who "refused to admit the members of the three striking local
Respecting the issue of representation and the right of the employer to demand unions ... and gave reference to the casual employees." (No. 8, Complaint). It is also
reasonable proof of majority representation on the part of the supposed or putative alleged that the strike of November 7, 1967 was staged "because of the refusal of the
bargaining agent, the commentaries in Rothenberg on Labor Relations, pp. 42943 1, respondents to accept some union members ... and refusal of respondents to bargain
are forceful and persuasive, thus: in good faith with complainant" (No. 9, Complaint). We find however, that in making
these charges, complainant LAKAS lacked candor, truth and fidelity towards the
courts.
It is essential to the right of a putative bargaining agent to represent the
employees that it be the delegate of a majority of the employees and, conversely,
an employer is under duty to bargain collectively only when the bargaining agent It is a fact found by the respondent court, and as revealed by he records of the case,
is representative of the majority of the employees. A natural consequence of that the respondent Marcelo Companies did not violate the terms of the Return-to-
these principles is that the employer has the right to demand of the asserted Work Agreement negotiated after the first strike. All of the strikers were admitted back
In the light of the above ruling and taking the facts and circumstances of the case
before Us in relation to the requirement by the respondent companies in the filling up In NARIC Workers' Union vs. CIR, 5 We ruled that, "(a) labor union would go beyond
of Exhibit "49", We hold and rule that the requirement was an act of self-preservation, the limits of its legitimate purposes if it is given the unrestrained liberty to prosecute
designed to effect cost-savings as well as to insure peace and order within their any case even for employees who are not members of any union at all. A suit brought
premises. Accordingly, the petition in G. R. No. L-38258 should be dismissed, it by another in representation of a real party in interest is defective." Under the
having failed to prove, substantiate and justify the unfair labor practice charges uncontroverted facts obtaining herein, the aforestated ruling is applicable, the only
against the respondent Marcelo Companies. difference being that, here, a labor federation seeks to represent members of a
registered local union never affiliated with it and members of registered local unions
which, in the course of the proceedings before the industrial court, disaffiliated from it.
Now to the procedural question posed in the first issue brought about by the
respondent court's denial of the motions to withdraw the complaint respectively filed
by MUEWA, UNWU and MFWU. In their petition (G.R. L-38260) the respondent This is not to say that the complaining employees were without any venue for redress.
Marcelo Companies maintain that the respondent court erred in not dismissing the Under the aforestated considerations, the respondent court should have directed the
complaint even as it knew fully well that the very authority of LAKAS to represent the amendment of the complaint by dropping LAKAS as the complainant and allowing the
labor unions who had precisely disaffiliated from the LAKAS, was open to serious suit to be further prosecuted in the individual names of those who had grievances. A
question and was being ventilated before it. On the other hand, the respondent court class suit under Rule 3, Section 12 of the Rules of Court is authorized and should
rationalized the denial of the aforestated motions to withdraw by holding that the suffice for the purpose.
complaint was filed by LAKAS on behalf of the individual employees whose names
were attached to the complaint and hence, that the local unions who were not so In fairness to the complaining employees, however, We treated their Motion for
authorized by these individual employees, cannot withdraw the said complaint. The Reconsideration of the Decision subject of appeal as curing the defect of the
lower court's opinion is erroneous. complaint as the said motion expressly manifested their collective desire to pursue
the complaint for and in their own behalves and disauthorizing LAKAS' counsel from
Firstly, LAKAS cannot bring any action for and in behalf of the employees who were further representing them. And We have also treated their petition before Us in the
members of MUEWA because, as intimated earlier in this Decision, the said local same manner, disregarding the fact that LAKAS remained the petitioning party, as it
union was never an affiliate of LAKAS. What appears clearly from the records is that it appears from the verification that the petition in L38258 was for and in behalf of the
was Augusto Carreon and his followers who joined LAKAS, but then Augusto Carreon complaining employees. The merits of their petition, however, fall short of
was not the recognized president of MUEWA and neither he nor his followers can substantiating the charge of unfair labor practice against the respondent Marcelo
claim any legitimate representation of MUEWA. Apparently, it is this split faction of Companies. On the other hand, the appeal of the Marcelo Companies in L-38260
MUEWA, headed by Augusta Carreon, who is being sought to be represented by must be upheld and sustained.
No costs.
SO ORDERED.
Feather-Bedding
Violation of a CBA