SECOND DIVISION

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

CAPITOL MEDICAL CENTER, INC., Petitioners,

vs.
NATIONAL LABOR RELATIONS COMMISSION, JAIME IBABAO, JOSE
BALLESTEROS, RONALD CENTENO, NARCISO SARMIENTO, EDUARDO
CANAVERAL, SHERLITO DELA CRUZ, SOFRONIO COMANDAO, MARIANO
GALICIA, RAMON MOLOD, CARMENCITA SARMIENTO, HELEN MOLOD,
ROSA COMANDAO, ANGELITO CUIZON, ALEX MARASIGAN, JESUS CEDRO,
ENRICO ROQUE, JAY PERILLA, HELEN MENDOZA, MARY GLADYS
GEMPEROSO, NINI BAUTISTA, ELENA MACARUBBO, MUSTIOLA
SALVACION DAPITO, ALEXANDER MANABE, MICHAEL EUSTAQUIO, ROSE
AZARES, FERNANDO MANZANO, HENRY VERA CRUZ, CHITO MENDOZA,
FREDELITA TOMAYAO, ISABEL BRUCAL, MAHALKO LAYACAN, RAINIER
MANACSA, KAREN VILLARENTE, FRANCES ACACIO, LAMBERTO CONTI,
LORENA BEACH, JUDILAH RAVALO, DEBORAH NAVE, MARILEN
CABALQUINTO, EMILIANA RIVERA, MA. ROSARIO URBANO, ROWENA
ARILLA, CAPITOL MEDICAL CENTER EMPLOYEES ASSOCIATION-AFW,
GREGORIO DEL PRADO, ARIEL ARAJA, and JESUS STA. BARBARA, JR.,
Respondents.

DECISION

CALLEJO, SR., J.:

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

The Antecedents2

Whether the respondent Capitol Medical Center Employees Association-

Alliance of Filipino Workers (the Union, for brevity) was the exclusive
bargaining agent of the rank-and-file employees of the petitioner Capitol
Medical Center, Inc. had been the bone of contention between the Union and
the petitioner. The petitioners refusal to negotiate for a collective bargaining
agreement (CBA) resulted in a union-led strike on April 15, 1993.

The Union had to contend with another union the Capitol Medical Center
Alliance of Concerned Employees (CMC-ACE) which demanded for a
certification election among the rank-and-file employees of the petitioner.
Med-Arbiter Brigida Fadrigon granted the petition, and the matter was
appealed to the Secretary of Labor and Employment (SOLE). Undersecretary
Bienvenido E. Laguesma rendered a Resolution on November 18, 1994
granting the appeal. He, likewise, denied the motion filed by the petitioner and
the CMC-ACE. The latter thereafter brought the matter to the Court which
rendered judgment on February 4, 1997 affirming the resolution of
Undersecretary Laguesma, thus:

1. Dismissing the petition for certification election filed by the Capitol Medical
Center Alliance of Concerned Employees-United Filipino Services Workers for
lack of merit; and

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

with the Capitol Medical Center Employees Association-Alliance of Filipino
Workers, the certified bargaining agent of the rank-and-file employees.3

The decision of the Court became final and executory. Thereafter, in a Letter
dated October 3, 1997 addressed to Dr. Thelma N. Clemente, the President
and Director of the petitioner, the Union requested for a meeting to discuss
matters pertaining to a negotiation for a CBA, conformably with the decision
of the Court.4 However, in a Letter to the Union dated October 10, 1997, Dr.
Clemente rejected the proposed meeting, on her claim that it was a violation
of Republic Act No. 6713 and that the Union was not a legitimate one. On
October 15, 1997, the petitioner filed a Petition for the Cancellation of the
Unions Certificate of Registration with the Department of Labor and
Employment (DOLE) on the following grounds:

3) Respondent has failed for several years to submit annually its annual
financial statements and other documents as required by law. For this reason,
respondent has long lost its legal personality as a union.

4) Respondent also engaged in a strike which has been declared illegal by the
National Labor Relations Commission.5
Apparently unaware of the petition, the Union reiterated its proposal for CBA
negotiations in a Letter dated October 16, 1997 and suggested the date, time
and place of the initial meeting. The Union further reiterated its plea in
another Letter6 dated October 28, 1997, to no avail.

Instead of filing a motion with the SOLE for the enforcement of the resolutions
of Undersecretary Laguesma as affirmed by this Court, the Union filed a
Notice of Strike on October 29, 1997 with the National Conciliation and
Mediation Board (NCMB), serving a copy thereof to the petitioner. The Union
alleged as grounds for the projected strike the following acts of the petitioner:
(a) refusal to bargain; (b) coercion on employees; and (c) interference/
restraint to self-organization.7

A series of conferences was conducted before the NCMB (National Capital

Region), but no agreement was reached. On November 6, 1997, the petitioner
even filed a Letter with the Board requesting that the notice of strike be
dismissed;8 the Union had apparently failed to furnish the Regional Branch
of the NCMB with a copy of a notice of the meeting where the strike vote was
conducted.

On November 20, 1997, the Union submitted to the NCMB the minutes9 of
the alleged strike vote purportedly held on November 10, 1997 at the parking
lot in front of the petitioners premises, at the corner of Scout Magbanua
Street and Panay Avenue, Quezon City. It appears that 178 out of the 300
union members participated therein, and the results were as follows: 156
members voted to strike; 14 members cast negative votes; and eight votes
were spoiled.10

On November 28, 1997, the officers and members of the Union staged a strike.
Subsequently, on December 1, 1997, the Union filed an ex parte motion with
the DOLE, praying for its assumption of jurisdiction over the dispute. The
Union likewise prayed for the imposition of appropriate legal sanctions, not
limited to contempt and other penalties, against the hospital
director/president and other responsible corporate officers for their
continuous refusal, in bad faith, to bargain collectively with the Union, to
adjudge the same hospital director/president and other corporate officers
guilty of unfair labor practices, and for other just, equitable and expeditious
reliefs in the premises.11
On December 4, 1997, the SOLE issued an Order, assuming jurisdiction over
the ongoing labor dispute. The decretal portion of the order reads:

WHEREFORE, this Office now assumes jurisdiction over the labor disputes at
Capitol Medical Center pursuant to Article 263(g) of the Labor Code, as
amended. Consequently, all striking workers are directed to return to work
within twenty-four (24) hours from the receipt of this Order and the
management to resume normal operations and accept back all striking
workers under the same terms and conditions prevailing before the strike.
Further, parties are directed to cease and desist from committing any act that
may exacerbate the situation.

Moreover, parties are hereby directed to submit within 10 days from receipt
of this Order proposals and counter-proposals leading to the conclusion of
the collective bargaining agreements in compliance with aforementioned
Resolution of the Office as affirmed by the Supreme Court.

SO ORDERED.12

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

For its part, the petitioner filed a petition13 to declare the strike illegal with
the National Labor Relations Commission (NLRC), docketed as NLRC NCR
Case No. 00-12-08644-97. In its position paper, the petitioner appended the
affidavit of Erwin Barbacena, the overseer of the property across the hospital
which was being used as a parking lot, at the corner of Scout Magbanua Street
and Panay Avenue, Quezon City. Also included were the affidavits of Simon J.
Tingzon and Reggie B. Barawid, the petitioners security guards assigned in
front of the hospital premises. They attested to the fact that no secret balloting
took place at the said parking lot from 6:00 a.m. to 7:00 p.m. of November 10,
1997.14 The petitioner also appended the affidavit of Henry V. Vera Cruz, who
alleged that he was a member of the Union and had discovered that signatures
on the Statements of Cash Receipt Over Disbursement submitted by the
Union to the DOLE purporting to be his were not his genuine signatures;15
the affidavits of 17 of its employees, who declared that no formal voting was
held by the members of the Union on the said date, were also submitted. The
latter employees also declared that they were not members of any union, and
yet were asked to sign documents purporting to be a strike vote attendance
and unnumbered strike vote ballots on different dates from November 8 to 11,
1997.

In their position paper, the respondents appended the joint affidavit of the
Union president and those members who alleged that they had cast their votes
during the strike vote held on November 10, 1997.16

In the meantime, on September 30, 1998, the Regional Director of the DOLE
rendered a Decision denying the petition for the cancellation of the respondent
Unions certificate of registration. The decision was affirmed by the Director
of the Bureau of Labor Relations on December 29, 1998.

In a parallel development, Labor Arbiter Facundo L. Leda rendered a Decision

on December 23, 1998 in NLRC NCR Case No. 00-12-08644-97 in favor of the
petitioner, and declared the strike staged by the respondents illegal. The fallo
of the decision reads:

1. Declaring as illegal the strike staged by the respondents from November

28, 1997 to December 5, 1997;

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

other union officers, and respondents Ronald Q. Centeno, Michael Eustaquio
and Henry Vera Cruz to have lost their employment status with petitioner;
and

3. Ordering the above respondents to pay, jointly and severally, petitioner the
amount of Two Hundred Thousand Pesos (P200,000.00) by way of
damages.17

The Labor Arbiter ruled that no voting had taken place on November 10, 1997;
moreover, no notice of such voting was furnished to the NCMB at least twenty-
four (24) hours prior to the intended holding of the strike vote. According to
the Labor Arbiter, the affidavits of the petitioners 17 employees who alleged
that no strike vote was taken, and supported by the affidavit of the overseer
of the parking lot and the security guards, must prevail as against the minutes
of the strike vote presented by the respondents. The Labor Arbiter also held
that in light of Article 263(9) of the Labor Code, the respondent Union should
have filed a motion for a writ of execution of the resolution of Undersecretary
Laguesma which was affirmed by this Court instead of staging a strike.

The respondents appealed the decision to the NLRC which rendered a

Decision18 on June 14, 1999, granting their appeal and reversing the decision
of the Labor Arbiter. The NLRC also denied the petitioners petition to declare
the strike illegal. In resolving the issue of whether the union members held a
strike vote on November 10, 1997, the NLRC ruled as follows:

We find untenable the Labor Arbiters finding that no actual strike voting took
place on November 10, 1997, claiming that this is supported by the affidavit
of Erwin Barbacena, the overseer of the parking lot across the hospital, and
the sworn statements of nineteen (19) (sic) union members. While it is true
that no strike voting took place in the parking lot which he is overseeing, it
does not mean that no strike voting ever took place at all because the same
was conducted in the parking lot immediately/directly fronting, not across,
the hospital building (Annexes "1-J," "1-K" to "1-K-6"). Further, it is apparent
that the nineteen (19) (sic) hospital employees, who recanted their
participation in the strike voting, did so involuntarily for fear of loss of
employment, considering that their Affidavits are uniform and pro forma
(Annexes "H-2" to "H-19").19

The NLRC ruled that under Section 7, Rule XXII of DOLE Order No. 9, Series
of 1997, absent a showing that the NCMB decided to supervise the conduct
of a secret balloting and informed the union of the said decision, or that any
such request was made by any of the parties who would be affected by the
secret balloting and to which the NCMB agreed, the respondents were not
mandated to furnish the NCMB with such notice before the strike vote was
conducted.20

The petitioner filed a motion for the reconsideration of the decision, but the
NLRC denied the said motion on September 30, 1999.21

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

PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION (NLRC)

COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR
EXCESS OF JURISDICTION, ACTED CAPRICIOUSLY, AND CONTRAVENED
THE LAW AND ESTABLISHED JURISPRUDENCE IN REVERSING THE
LABOR ARBITERS DECISION DATED DECEMBER 23, 1998 (ANNEX "E")
AND IN UPHOLDING THE LEGALITY OF THE STRIKE STAGED BY PRIVATE
RESPONDENTS FROM NOVEMBER 28, 1997 TO DECEMBER 5, 1997.22

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

and affirming the assailed decision and resolution of the NLRC.

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

THE COURT OF APPEALS GRAVELY ERRED IN UPHOLDING THE NLRCS

FINDING THAT RESPONDENTS COMPLIED WITH THE LEGAL
REQUIREMENTS FOR STAGING THE SUBJECT STRIKE.23

The petitioner asserts that the NLRC and the CA erred in holding that the
submission of a notice of a strike vote to the Regional Branch of the NCMB as
required by Section 7, Rule XXII of the Omnibus Rules Implementing the
Labor Code, is merely directory and not mandatory. The use of the word
"shall" in the rules, the petitioner avers, indubitably indicates the mandatory
nature of the respondent Unions duty to submit the said notice of strike vote.

The petitioner contends that the CA erred in affirming the decision of the
NLRC which declared that the respondents complied with all the requirements
for a lawful strike. The petitioner insists that, as gleaned from the affidavits
of the 17 union members and that of the overseer, and contrary to the joint
affidavit of the officers and some union members, no meeting was held and
no secret balloting was conducted on November 10, 1997.

The petitioner faults the CA and the NLRC for holding that a meeting for a
strike vote was held on the said date by the respondents, despite the fact that
the NLRC did not conduct an ocular inspection of the area where the
respondents members allegedly held the voting. The petitioner also points out
that it adduced documentary evidence in the form of affidavits executed by 17
members of the respondent union which remained unrebutted. The petitioner
also posits that the CA and the NLRC erred in reversing the finding of the
Labor Arbiter; furthermore, there was no need for the respondent union to
stage a strike on November 28, 1997 because it had filed an urgent motion
with the DOLE for the enforcement and execution of the decision of this Court
in G.R. No. 118915.

The petition is meritorious.

We agree with the petitioner that the respondent Union failed to comply with
the second paragraph of Section 10, Rule XXII of the Omnibus Rules of the
NLRC which reads:

Section 10. Strike or lockout vote. A decision to declare a strike must be

approved by a majority of the total union membership in the bargaining unit
concerned obtained by secret ballot in meetings or referenda called for the
purpose. A decision to declare a lockout must be approved by a majority of
the Board of Directors of the employer, corporation or association or the
partners obtained by a secret ballot in a meeting called for the purpose.

The regional branch of the Board may, at its own initiative or upon the request
of any affected party, supervise the conduct of the secret balloting. In every
case, the union or the employer shall furnish the regional branch of the Board
and notice of meetings referred to in the preceding paragraph at least twenty-
four (24) hours before such meetings as well as the results of the voting at
least seven (7) days before the intended strike or lockout, subject to the
cooling-off period provided in this Rule.

Although the second paragraph of Section 10 of the said Rule is not provided
in the Labor Code of the Philippines, nevertheless, the same was incorporated
in the Omnibus Rules Implementing the Labor Code and has the force and
effect of law.24

Aside from the mandatory notices embedded in Article 263, paragraphs (c)
and (f) of the Labor Code, a union intending to stage a strike is mandated to
notify the NCMB of the meeting for the conduct of strike vote, at least twenty-
four (24) hours prior to such meeting. Unless the NCMB is notified of the date,
place and time of the meeting of the union members for the conduct of a strike
vote, the NCMB would be unable to supervise the holding of the same, if and
when it decides to exercise its power of supervision. In National Federation of
Labor v. NLRC,25 the Court enumerated the notices required by Article 263
of the Labor Code and the Implementing Rules, which include the 24-hour
prior notice to the NCMB:
1) A notice of strike, with the required contents, should be filed with the
DOLE, specifically the Regional Branch of the NCMB, copy furnished the
employer of the union;

2) A cooling-off period must be observed between the filing of notice and the
actual execution of the strike thirty (30) days in case of bargaining deadlock
and fifteen (15) days in case of unfair labor practice. However, in the case of
union busting where the unions existence is threatened, the cooling-off
period need not be observed.

4) Before a strike is actually commenced, a strike vote should be taken by

secret balloting, with a 24-hour prior notice to NCMB. The decision to declare
a strike requires the secret-ballot approval of majority of the total union
membership in the bargaining unit concerned.

5) The result of the strike vote should be reported to the NCMB at least seven
(7) days before the intended strike or lockout, subject to the cooling-off period.

A union is mandated to notify the NCMB of an impending dispute in a

particular bargaining unit via a notice of strike. Thereafter, the NCMB,
through its conciliator-mediators, shall call the parties to a conference at the
soonest possible time in order to actively assist them in exploring all
possibilities for amicable settlement. In the event of the failure in the
conciliation/mediation proceedings, the parties shall be encouraged to submit
their dispute for voluntary arbitration. However, if the parties refuse, the
union may hold a strike vote, and if the requisite number of votes is obtained,
a strike may ensue. The purpose of the strike vote is to ensure that the
decision to strike broadly rests with the majority of the union members in
general and not with a mere minority, and at the same time, discourage
wildcat strikes, union bossism and even corruption.26 A strike vote report
submitted to the NCMB at least seven days prior to the intended date of strike
ensures that a strike vote was, indeed, taken. In the event that the report is
false, the seven-day period affords the members an opportunity to take the
appropriate remedy before it is too late.27 The 15 to 30 day cooling-off period
is designed to afford the parties the opportunity to amicably resolve the
dispute with the assistance of the NCMB conciliator/mediator,28 while the
seven-day strike ban is intended to give the DOLE an opportunity to verify
whether the projected strike really carries the imprimatur of the majority of
the union members.29

The requirement of giving notice of the conduct of a strike vote to the NCMB
at least 24 hours before the meeting for the said purpose is designed to (a)
inform the NCMB of the intent of the union to conduct a strike vote; (b) give
the NCMB ample time to decide on whether or not there is a need to supervise
the conduct of the strike vote to prevent any acts of violence and/or
irregularities attendant thereto; and (c) should the NCMB decide on its own
initiative or upon the request of an interested party including the employer,
to supervise the strike vote, to give it ample time to prepare for the deployment
of the requisite personnel, including peace officers if need be. Unless and until
the NCMB is notified at least 24 hours of the unions decision to conduct a
strike vote, and the date, place, and time thereof, the NCMB cannot determine
for itself whether to supervise a strike vote meeting or not and insure its
peaceful and regular conduct. The failure of a union to comply with the
requirement of the giving of notice to the NCMB at least 24 hours prior to the
holding of a strike vote meeting will render the subsequent strike staged by
the union illegal.

In this case, the respondent Union failed to comply with the 24-hour prior
notice requirement to the NCMB before it conducted the alleged strike vote
meeting on November 10, 1997. As a result, the petitioner complained that
no strike vote meeting ever took place and averred that the strike staged by
the respondent union was illegal.

Conformably to Article 264 of the Labor Code of the Philippines30 and Section
7, Rule XXII of the Omnibus Rules Implementing the Labor Code,31 no labor
organization shall declare a strike unless supported by a majority vote of the
members of the union obtained by secret ballot in a meeting called for that
purpose. The requirement is mandatory and the failure of a union to comply
therewith renders the strike illegal.32 The union is thus mandated to allege
and prove compliance with the requirements of the law.

In the present case, there is a divergence between the factual findings of the
Labor Arbiter, on the one hand, and the NLRC and the CA, on the other, in
that the Labor Arbiter found and declared in his decision that no secret voting
ever took place in the parking lot fronting the hospital on November 10, 1997
by and among the 300 members of the respondent Union. Erwin Barbacena,
the overseer of the only parking lot fronting the hospital, and security guards
Simon Tingzon and Reggie Barawid, declared in their respective affidavits that
no secret voting ever took place on November 10, 1997; 17 employees of the
petitioner also denied in their respective statements that they were not
members of the respondent Union, and were asked to merely sign attendance
papers and unnumbered votes. The NLRC and the CA declared in their
respective decisions that the affidavits of the petitioners 17 employees had no
probative weight because the said employees merely executed their affidavits
out of fear of losing their jobs. The NLRC and the CA anchored their
conclusion on their finding that the affidavits of the employees were uniform
and pro forma.

We agree with the finding of the Labor Arbiter that no secret balloting to strike
was conducted by the respondent Union on November 10, 1997 at the parking
lot in front of the hospital, at the corner of Scout Magbanua Street and Panay
Avenue, Quezon City. This can be gleaned from the affidavit of Barbacena and
the joint affidavit of Tingzon and Barawid, respectively:

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

Dionisio and located right in front of the Capitol Medical Center, specifically
at the corner of Scout Magbanua Street and Panay Avenue, Quezon City;

2. That on November 10, 1997, during my entire tour of duty from 6:00 a.m.
to 6:00 p.m., no voting or election was conducted in the aforementioned
parking space for employees of the Capitol Medical Center and/or their
guests, or by any other group for that matter.33

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

Security Agency (hereinafter referred to as VPSSA), assigned, since July 1997
up to the present, as Security Detachment Commander at Capitol Medical
Center (hereinafter referred to as CMC) located at Scout Magbanua corner
Panay Avenue, Quezon City;

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

of all buildings and properties of CMC, and roving in the entire premises
including the parking lots of all the buildings of CMC;
3. That I, Reggie B. Barawid, am a security guard of VPSSA, assigned, since
June 1997 up to the present, as security guard at CMC;

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

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

5. That on November 10, 1997, both of us were on duty at CMC from 7:00
a.m. to 7:00 p.m., with me (Barawid) assigned at the main door of the CMCs
Main Building along Scout Magbanua St.;

6. That on said date, during our entire tour of duty, there was no voting or
election conducted in any of the four parking spaces for CMC personnel and
guests.34

The allegations in the foregoing affidavits belie the claim of the respondents
and the finding of the NLRC that a secret balloting took place on November
10, 1997 in front of the hospital at the corner of Scout Magbanua Street and
Panay Avenue, Quezon City. The respondents failed to prove the existence of
a parking lot in front of the hospital other than the parking lot across from it.
Indeed, 17 of those who purportedly voted in a secret voting executed their
separate affidavits that no secret balloting took place on November 10, 1997,
and that even if they were not members of the respondent Union, were asked
to vote and to sign attendance papers. The respondents failed to adduce
substantial evidence that the said affiants were coerced into executing the
said affidavits. The bare fact that some portions of the said affidavits are
similarly worded does not constitute substantial evidence that the petitioner
forced, intimidated or coerced the affiants to execute the same.

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

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

SO ORDERED.
EN BANC

G.R. No. L-59743 May 31 1982

NATIONAL FEDERATION OF SUGAR WORKERS (NFSW), petitioner,

vs.
ETHELWOLDO R. OVEJERA, CENTRAL AZUCARERA DE LA CARLOTA (CAC),
COL. ROGELIO DEINLA, as Provincial Commander, 3311st P.C. Command,
Negros Occidental, respondents.

PLANA, J:

This is a petition for prohibition seeking to annul the decision dated February
20, 1982 of Labor Arbiter Ethelwoldo R. Ovejera of the National Labor
Relations Commission (NLRC) with station at the Regional Arbitration Branch
No. VI-A, Bacolod City, which, among others, declared illegal the ongoing
strike of the National Federation of Sugar Workers (NFSW) at the Central
Azucarera de la Carlota (CAC), and to restrain the implementation thereof.

I. FACTS

1. NFSW has been the bargaining agent of CAC rank and file employees
(about 1200 of more than 2000 personnel) and has concluded with CAC a
collective bargaining agreement effective February 16, 1981 February 15,
1984. Under Art. VII, Sec. 5 of the said CBA

Bonuses The parties also agree to maintain the present practice on the
grant of Christmas bonus, milling bonus, and amelioration bonus to the
extent as the latter is required by law.

The Christmas and milling bonuses amount to 1- months' salary.

2. On November 28, 1981, NFSW struck allegedly to compel the payment
of the 13th month pay under PD 851, in addition to the Christmas, milling
and amelioration bonuses being enjoyed by CAC workers.

3. To settle the strike, a compromise agreement was concluded between

CAC and NFSW on November 30,1981. Under paragraph 4 thereof

The parties agree to abide by the final decision of the Supreme Court in any
case involving the 13th Month Pay Law if it is clearly held that the employer
is liable to pay a 13th month pay separate and distinct from the bonuses
already given.

4. As of November 30, 1981, G.R. No. 51254 (Marcopper Mining Corp. vs.
Blas Ople and Amado Inciong, Minister and Deputy Minister of Labor,
respectively, and Marcopper Employees Labor Union, Petition for certiorari
and Prohibition) was still pending in the Supreme Court. The Petition had
been dismissed on June 11, 1981 on the vote of seven Justices. 1 A motion
for reconsideration thereafter filed was denied in a resolution dated December
15, 1981, with only five Justices voting for denial. (3 dissented; 2 reserved
their votes: 4 did not take part.)

On December 18, 1981 the decision of June 11, 1981 having become final
and executory entry of judgment was made.

5. After the Marcopper decision had become final, NFSW renewed its
demand that CAC give the 13th month pay. CAC refused.

6. On January 22, 1982, NFSW filed with the Ministry of Labor and
Employment (MOLE) Regional Office in Bacolod City a notice to strike based
on non-payment of the 13th month pay. Six days after, NFSW struck.

7. One day after the commencement of the strike, or on January 29, 1982,
a report of the strike-vote was filed by NFSW with MOLE.

8. On February 8, 1982, CAC filed a petition (R.A.B. Case No. 0110-82)

with the Regional Arbitration Branch VI-A, MOLE, at Bacolod City to declare
the strike illegal, principally for being violative of Batas Pambansa Blg. 130,
that is, the strike was declared before the expiration of the 15-day cooling-off
period for unfair labor practice (ULP) strikes, and the strike was staged before
the lapse of seven days from the submission to MOLE of the result of the
strike-vote.

9. After the submission of position papers and hearing, Labor Arbiter

Ovejera declared the NFSW strike illegal. The dispositive part of his decision
dated February 20, 1982 reads:

Wherefore, premises considered, judgment is hereby rendered:

1. Declaring the strike commenced by NFSW on January 28, 1982, illegal,

2. Directing the Central to resume operations immediately upon receipt

hereof;

3. Directing the Central to accept back to work all employees appearing in

its payroll as of January 28, 1982 except those covered by the February 1,
1982 memorandum on preventive suspension but without prejudice to the
said employees' instituting appropriate actions before this Ministry relative to
whatever causes of action they may have obtained proceeding from said
memorandum;

4. Directing the Central to pay effective from the date of resumption of

operations the salaries of those to be placed on preventive suspension as per
February 1, 1982 memorandum during their period of preventive suspension;
and

5. Directing, in view of the finding that the subject strike is illegal, NFSW,
its officers, members, as well as sympathizers to immediately desist from
committing acts that may impair or impede the milling operations of the
Central

The law enforcement authorities are hereby requested to assist in the peaceful
enforcement and implementation of this Decision.
SO ORDERED.

10. On February 26, 1982, the NFSW by passing the NLRC filed the
instant Petition for prohibition alleging that Labor Arbiter Ovejera, CAC and
the PC Provincial Commander of Negros Occidental were threatening to
immediately enforce the February 20, 1982 decision which would violate
fundamental rights of the petitioner, and praying that

WHEREFORE, on the foregoing considerations, it is prayed of the Honorable

Court that on the Petition for Preliminary Injunction, an order, after hearing,
issue:

1. Restraining implementation or enforcement of the Decision of February

20, 1982;

2. Enjoining respondents to refrain from the threatened acts violative of

the rights of strikers and peaceful picketers;

3. Requiring maintenance of the status quo as of February 20, 1982, until

further orders of the Court;

and on the Main Petition, judgment be rendered after hearing.

1. Declaring the Decision of February 2O, l982 null and void;

2. Making the preliminary injunction permanent;

3. Awarding such other relief as may be just in the premises.

11. Hearing was held, after which the parties submitted their memoranda.
No restraining order was issued.

II ISSUES
The parties have raised a number of issues, including some procedural points.
However, considering their relative importance and the impact of their
resolution on ongoing labor disputes in a number of industry sectors, we have
decided in the interest of expediency and dispatch to brush aside non-
substantial items and reduce the remaining issues to but two fundamental
ones:

1. Whether the strike declared by NFSW is illegal, the resolution of which

mainly depends on the mandatory or directory character of the cooling-off
period and the 7-day strike ban after report to MOLE of the result of a strike-
vote, as prescribed in the Labor Code.

2. Whether under Presidential Decree 851 (13th Month Pay Law), CAC is
obliged to give its workers a 13th month salary in addition to Christmas,
milling and amelioration bonuses, the aggregate of which admittedly exceeds
by far the disputed 13th month pay. (See petitioner's memorandum of April
12, 1982, p. 2; CAC memorandum of April 2, 1982, pp. 3-4.) Resolution of
this issue requires an examination of the thrusts and application of PD 851.

III. DISCUSSION

1. Articles 264 and 265 of the Labor Code, insofar as pertinent, read:

Art. 264, Strikes, picketing and lockouts. ...

(c) In cases of bargaining deadlocks, the certified or duly recognized

bargaining representative may file a notice of strike with the Ministry (of Labor
and Employment) at least thirty (30) days before the intended date thereof. In
cases of unfair labor practices, the period of notice shall be shortened to
fifteen (15) days; ...

(d) During the cooling-off period, it shall be the duty of the voluntary
sttlement. Should the dispute remain unsettled until the lapse of the requisite
number of days from the mandatory filing of the notice, the labor union may
strike or the employer may declare a lockout.
(f) A decision to declae a strike must be approved by at least two-thirds
(2/3) of the total union membership in the bargaining unit concerened by
secret ballots in meetings or referenda. A decision to declae a lockout must
be approved by at least two-thirds (2/3) of the board of direcotrs of the
employer corporation or association or of the partners in a partnership
obtained by secret ballot in a meeting called for the purpose. the decision shall
be valid for the duration of the dispute based on substantially the same
grounds considered when the strike or lockout vote was taken . The Ministry,
may at its own intitiative or upon the request of any affected party, supervise
the conduct of the secret balloting. In every case, the union of the employer
shall furnish the Ministry the results of the voting at least seven (7) days
before the intended strike or lockout, subject to the cooling-off period herein
provided. (Emphasis supplied).

ART. 265. Prohibited activities. It shall be unlawful for any labor

organization or employer to declare a strike or lockout without first having
bargained collectively in accordance with Title VII of this Book or without first
having filed the notice required in the preceding Article or without the
necessary strike or lockout vote first having been obtained and reported to
the Ministry.

It shall likewise be unlawful to declare a strike or lockout after assumption of

jurisdiction by the President or the Minister or after certification or
submission of the dispute to compulsory or voluntary arbitration or during
the pendency of cases involving the same grounds for the strike or lockout.
(Emphasis supplied.)

(a) Language of the law. The foregoing provisions hardly leave any room
for doubt that the cooling-off period in Art. 264(c) and the 7-day strike ban
after the strike-vote report prescribed in Art. 264(f) were meant to be, and
should be deemed, mandatory.

When the law says "the labor union may strike" should the dispute "remain
unsettled until the lapse of the requisite number of days (cooling-off period)
from the filing of the notice," the unmistakable implication is that the union
may not strike before the lapse of the cooling-off period. Similarly, the
mandatory character of the 7-day strike ban after the report on the strike-
vote is manifest in the provision that "in every case," the union shall furnish
the MOLE with the results of the voting "at least seven (7) days before the
intended strike, subject to the (prescribed) cooling-off period." It must be
stressed that the requirements of cooling-off period and 7-day strike ban must
both be complied with, although the labor union may take a strike vote and
report the same within the statutory cooling-off period.

If only the filing of the strike notice and the strike-vote report would be deemed
mandatory, but not the waiting periods so specifically and emphatically
prescribed by law, the purposes (hereafter discussed) for which the filing of
the strike notice and strike-vote report is required would not be achieved, as
when a strike is declared immediately after a strike notice is served, or when
as in the instant case the strike-vote report is filed with MOLE after the
strike had actually commenced Such interpretation of the law ought not and
cannot be countenanced. It would indeed be self-defeating for the law to
imperatively require the filing on a strike notice and strike-vote report without
at the same time making the prescribed waiting periods mandatory.

(b) Purposes of strike notice and strike-vote report. In requiring a strike

notice and a cooling-off period, the avowed intent of the law is to provide an
opportunity for mediation and conciliation. It thus directs the MOLE "to exert
all efforts at mediation and conciliation to effect a voluntary settlement"
during the cooling-off period . As applied to the CAC-NFSW dispute regarding
the 13th month pay, MOLE intervention could have possibly induced CAC to
provisionally give the 13th month pay in order to avert great business loss
arising from the project strike, without prejudice to the subsequent resolution
of the legal dispute by competent authorities; or mediation/conciliation could
have convinced NFSW to at least postpone the intended strike so as to avoid
great waste and loss to the sugar central, the sugar planters and the sugar
workers themselves, if the strike would coincide with the mining season.

So, too, the 7-day strike-vote report is not without a purpose. As pointed out
by the Solicitor General

Many disastrous strikes have been staged in the past based merely on the
insistence of minority groups within the union. The submission of the report
gives assurance that a strike vote has been taken and that, if the report
concerning it is false, the majority of the members can take appropriate
remedy before it is too late. (Answer of public respondents, pp. 17-18.)

If the purpose of the required strike notice and strike-vote report are to be
achieved, the periods prescribed for their attainment must, as aforesaid, be
deemed mandatory.,
... when a fair interpretation of the statute, which directs acts or proceedings
to be done in a certain way, shows the legislature intended a compliance with
such provision to be essential to the validity of the act or proceeding, or when
some antecedent and prerequisite conditions must exist prior to the exercise
of power or must be performed before certain other powers can be exercised,
the statute must be regarded as mandatory. So it has been held that, when a
statute is founded on public policy [such as the policy to encourage voluntary
settlement of disputes without resorting to strikes], those to whom it applies
should not be permitted to waive its provisions. (82 C.J.S. 873-874. Emphasis
supplied.)

(c) Waiting period after strike notice and strike-vote report, valid regulation
of right to strike. To quote Justice Jackson in International Union vs.
Wisconsin Employment Relations Board, 336 U.S. 245, at 259

The right to strike, because of its more serious impact upon the public
interest, is more vulnerable to regulation than the right to organize and select
representatives for lawful purposes of collective bargaining ...

The cooling-off period and the 7-day strike ban after the filing of a strike- vote
report, as prescribed in Art. 264 of the Labor Code, are reasonable restrictions
and their imposition is essential to attain the legitimate policy objectives
embodied in the law. We hold that they constitute a valid exercise of the police
power of the state.

(d) State policy on amicable settlement of criminal liability. Petitioner

contends that since the non-compliance (with PD 851) imputed to CAC is an
unfair labor practice which is an offense against the state, the cooling-off
period provided in the Labor Code would not apply, as it does not apply to
ULP strikes. It is argued that mediation or conciliation in order to settle a
criminal offense is not allowed.

In the first place, it is at best unclear whether the refusal of CAC to give a
13th month pay to NFSW constitutes a criminal act. Under Sec. 9 of the Rules
and regulations Implementing Presidential Decree No. 851

Non-payment of the thirteenth-month pay provided by the Decree and these

rules shall be treated as money claims cases and shall be processed in
accordance with the Rules Implementing the Labor Code of the Philippines
and the Rules of the National Labor Relations Commission.

Secondly, the possible dispute settlement, either permanent or temporary,

could very well be along legally permissible lines, as indicated in (b) above or
assume the form of measures designed to abort the intended strike, rather
than compromise criminal liability, if any. Finally, amicable settlement of
criminal liability is not inexorably forbidden by law. Such settlement is valid
when the law itself clearly authorizes it. In the case of a dispute on the
payment of the 13th month pay, we are not prepared to say that its voluntary
settlement is not authorized by the terms of Art. 264(e) of the Labor Code,
which makes it the duty of the MOLE to exert all efforts at mediation and
conciliation to effect a voluntary settlement of labor disputes.

(e) NFSW strike is illegal. The NFSW declared the strike six (6) days after
filing a strike notice, i.e., before the lapse of the mandatory cooling-off period.
It also failed to file with the MOLE before launching the strike a report on the
strike-vote, when it should have filed such report "at least seven (7) days
before the intended strike." Under the circumstances, we are perforce
constrained to conclude that the strike staged by petitioner is not in
conformity with law. This conclusion makes it unnecessary for us to
determine whether the pendency of an arbitration case against CAC on the
same issue of payment of 13th month pay [R.A.B No. 512-81, Regional
Arbitration Branch No. VI-A, NLRC, Bacolod City, in which the National
Congress of Unions in the Sugar Industry of the Philippines (NACUSIP) and a
number of CAC workers are the complainants, with NFSW as Intervenor
seeking the dismissal of the arbitration case as regards unnamed CAC rank
and file employees] has rendered illegal the above strike under Art. 265 of the
Labor Code which provides:

It shall likewise be unlawful to declare a strike or lockout after assumption of

jurisdiction by the President or the Minister, or after certification or
submission of the dispute to compulsory or voluntary arbitration or during
the pendency of cases involving the same grounds for the strike or lockout.
(Emphasis supplied.)

(2) The Second Issue. At bottom, the NFSW strike arose from a dispute
on the meaning and application of PD 851, with NFSW claiming entitlement
to a 13th month pay on top of bonuses given by CAC to its workers, as against
the diametrically opposite stance of CAC. Since the strike was just an offshoot
of the said dispute, a simple decision on the legality or illegality of the strike
would not spell the end of the NFSW-CAC labor dispute. And considering
further that there are other disputes and strikes actual and impending
involving the interpretation and application of PD 851, it is important for this
Court to definitively resolve the problem: whether under PD 851, CAC is
obliged to give its workers a 13th month salary in addition to Christmas,
milling and amelioration bonuses stipulated in a collective bargaining
agreement amounting to more than a month's pay.

Keenly sensitive to the needs of the workingmen, yet mindful of the mounting
production cost that are the woe of capital which provides employment to
labor, President Ferdinand E. Marcos issued Presidential Decree No. 851 on
16 December 1975. Thereunder, "all employers are hereby required to pay
salary of not more than all their employees receiving a basic P1,000 a month,
regardless of the nature of their employment, a 13th month pay not later than
December 24 of every year." Exempted from the obligation however are:

Employers already paying their employees a 13th month pay or its equivalent
...
(Section 2.)

The evident intention of the law, as revealed by the law itself, was to grant an
additional income in the form of a 13th month pay to employees not already
receiving the same. Otherwise put, the intention was to grant some relief
not to all workers but only to the unfortunate ones not actually paid a 13th
month salary or what amounts to it, by whatever name called; but it was not
envisioned that a double burden would be imposed on the employer already
paying his employees a 13th month pay or its equivalent whether out of
pure generosity or on the basis of a binding agreement and, in the latter ease,
regardless of the conditional character of the grant (such as making the
payment dependent on profit), so long as there is actual payment. Otherwise,
what was conceived to be a 13th month salary would in effect become a 14th
or possibly 15th month pay.

This view is justified by the law itself which makes no distinction in the grant
of exemption: "Employers already paying their employees a 13th month pay
or its equivalent are not covered by this Decree." (P.D. 851.)

The Rules Implementing P.D. 851 issued by MOLE immediately after the
adoption of said law reinforce this stand. Under Section 3(e) thereof
The term "its equivalent" ... shall include Christmas bonus, mid-year bonus,
profit-sharing payments and other cash bonuses amounting to not less than
1/12th of the basic salary but shall not include cash and stock dividends,
cost of living allowances and all other allowances regularly enjoyed by the
employee, as well as non-monetary benefits. Where an employer pays less
than 1/12th of the employee's basic salary, the employer shall pay the
difference." (Italics supplied.)

Having been issued by the agency charged with the implementation of PD 851
as its contemporaneous interpretation of the law, the quoted rule should be
accorded great weight.

Pragmatic considerations also weigh heavily in favor of crediting both

voluntary and contractual bonuses for the purpose of determining liability for
the 13th month pay. To require employers (already giving their employees a
13th month salary or its equivalent) to give a second 13th month pay would
be unfair and productive of undesirable results. To the employer who had
acceded and is already bound to give bonuses to his employees, the additional
burden of a 13th month pay would amount to a penalty for his munificence
or liberality. The probable reaction of one so circumstance would be to
withdraw the bonuses or resist further voluntary grants for fear that if and
when a law is passed giving the same benefits, his prior concessions might
not be given due credit; and this negative attitude would have an adverse
impact on the employees.

In the case at bar, the NFSW-CAC collective bargaining agreement provides

for the grant to CAC workers of Christmas bonus, milling bonus and
amelioration bonus, the aggregate of which is very much more than a worker's
monthly pay. When a dispute arose last year as to whether CAC workers
receiving the stipulated bonuses would additionally be entitled to a 13th
month pay, NFSW and CAC concluded a compromise agreement by which
they

agree(d) to abide by the final decision of the Supreme Court in any case
involving the 13th Month Pay Law if it is clearly held that the employer is
liable to pay a 13th month pay separate and distinct from the bonuses already
given.
When this agreement was forged on November 30,1981, the original decision
dismissing the petition in the aforecited Marcopper case had already been
promulgated by this Court. On the votes of only 7 Justices, including the
distinguished Chief Justice, the petition of Marcopper Mining Corp. seeking
to annul the decision of Labor Deputy Minister Amado Inciong granting a 13th
month pay to Marcopper employees (in addition to mid- year and Christmas
bonuses under a CBA) had been dismissed. But a motion for reconsideration
filed by Marcopper was pending as of November 30, 1981. In December 1981,
the original decision was affirmed when this Court finally denied the motion
for reconsideration. But the resolution of denial was supported by the votes
of only 5 Justices. The Marcopper decision is therefore a Court decision but
without the necessary eight votes to be doctrinal. This being so, it cannot be
said that the Marcopper decision "clearly held" that "the employer is liable to
pay a 13th month pay separate and distinct from the bonuses already given,"
within the meaning of the NFSW-CAC compromise agreement. At any rate, in
view of the rulings made herein, NFSW cannot insist on its claim that its
members are entitled to a 13th month pay in addition to the bonuses already
paid by CAC. WHEREFORE, the petition is dismissed for lack of merit. No
costs.

SO ORDERED.

Separate Opinions

MAKASIAR, J., concurring:

Concurs in the separate opinion of qualified concurrence as to the illegality of

the strike and of dissent as to the interpretation of Presidential Decree No.
851 submitted by the Chief Justice.

FERNANDO, CJ., concurring:

With qualifications on the questions of the legality of the strike and dissenting
on the interpretation to be accorded Presidential Decree No. 851 on the
thirteenth-month additional pay.,
There is at the outset due acknowledgmen t on my part of the high quality of
craftsmanship in the opinion of the Court penned by Justice Efren Plana. It
is distinguished by its lucidity. There is the imprint of inevitability in the
conclusion approached based on the basic premise that underlies it. So it
should be if the decisive consideration is the language used both of the
applicable provisions of the Labor Code, Article 264 (c), (e), and (f) and Article
265, as well as of Presidential Decree No. 851. In that sense, the decision of
the Court can stand the test of scrutiny based on sheer logic.

That for me would not suffice. Such an approach, to my mind, is quite limited.
The standard that should govern is the one supplied by the Constitution. That
is the clear implication of constitutionalism. Anything less would deprive it of
its quality as the fundamental law. It is my submission, therefore, that
statutes, codes, decrees, administrative rules, municipal ordinances and any
other jural norms must be construed in the light of and in accordance with
the Constitution. There is this explicit affirmation in the recently decided case
of De la Llana v. Alba sustaining the validity of Batas Pambansa Blg. 129
reorganizing the judiciary: "The principle that the Constitution enters into and
forms part of every act to avoid any unconstitutional taint must be applied.
Nunez v. Sandiganbayan, promulgated last January, has this relevant
excerpt: 'It is true that the other Sections of the Decree could have been so
worded as to avoid any constitutional objection. As of now, however, no ruling
is called for. The view is given expression in the concurring and dissenting
opinion of Justice Makasiar that in such a case to save the Decree from the
dire fate of invalidity, they must be construed in such a way as to preclude
any possible erosion on the powers vested in this Court by the Constitution.
That is a proposition too plain to be contested. It commends itself for
approval.'" 1

1. It may not be amiss to start with the dissenting portion of this separate
opinion. It is worthwhile to recall the decision in Marcopper Mining
Corporation v. Hon. Blas Ople. 2 It came from a unanimous Court. It is true
that only seven Justices signed the opinion, two of the members of this
Tribunal, who participated in the deliberation, Justices Teehankee and
Melencio-Herrera having reserved their votes. Justice Concepcion Jr. was on
leave. It is accurate, therefore, to state that Marcopper as stated in Justice
Plana's opinion, is not doctrinal in character, the necessary eight votes not
having been obtained. It is a plurality as distinguished from a majority
opinion. It is quite apparent, however, that there was not a single dissenting
vote. There was subsequently a motion for reconsideration. This Court duly
weighed the arguments for and against the merit of the unanimous opinion
rendered. The resolution denying the motion for reconsideration was not
issued until December 15, 1981 on which occasion three Justices dissented.
3 In the brief resolution denying the option for reconsideration, with five
Justices adhering to their original stand 4 it was set forth that such denial
was based: "primarily [on] the reason that the arguments advanced had been
duly considered and found insufficient to call for a decision other than that
promulgated on June 11, 1981, which stands unreversed and unmodified.
This is a case involving the social justice concept, which, as pointed out in
Carillo v. Allied Workers Association of the Philippines involves 'the
effectiveness of the community's effort to assist the economically under-
privileged. For under existing conditions, without such succor and support,
they might not, unaided, be able to secure justice for themselves.' In an earlier
decision, Del Rosario v. De los Santos, it was categorically stated that the
social justice principle 'is the translation into reality of its significance as
popularized by the late President Magsaysay: He who has less in life should
have more in law.'" 5 In his dissent, Justice Fernandez took issue on the
interpretation of social justice by relying on the well- known opinion of Justice
Laurel in Calalang v. William 6 and concluded: "It is as much to the benefit of
labor that the petitioner be accorded social justice. For if the mining
companies, like the petitioner, can no longer operate, all the laborers
employed by aid company shall be laid-off." 7 To reinforce such a conclusion,
it was further stated: "The decision in this case is far reaching. It affects all
employers similarly situated as the petitioner. The natural reaction of
employers similarly situated as the petitioner will be to withdraw gratuities
that they have been giving employees voluntarily. In the long run, the laborers
will suffer. In the higher interest of all concerned the contention of the
petitioner that the mid-year bonus and Christmas bonus that it is giving to
the laborers shall be applied to the 13th month pay should be sustained." 8
Such pragmatic consideration is likewise evident in the opinion of the Court
in this case. It is quite obvious from the above resolution of denial that the
approach based on the Constitution, compelling in its character set forth in
the opinion of the Court of June 11, 1981, is the one followed by the members
of this Court either adhering to or departing from the previous unanimous
conclusion reached. The main reliance to repeat, is on the social justice
provision 9 as reinforced by the protection to labor provision. 10 As noted,
such concepts were enshrined in the 1935 Constitution. 11 The opinion
pursued the matter further: "Even then, there was a realization of their
importance in vitalizing a regime of liberty not just as immunity from
government restraint but as the assumption by the State of an obligation to
assure a life of dignity for all, especially the poor and the needy. The expanded
social justice and protection to labor provisions of the present Constitution
lend added emphasis to the concern for social and economic rights. ... That
was so under the 1935 Constitution. Such an approach is even more valid
now. As a matter of fact, in the first case after the applicability of the 1973
constitution where social and economic rights were involved, this Court in
Alfanta v. Noe, through Justice Antonio, stated: 'In the environment of a new
social order We can do no less. Thus, under the new Constitution, property
ownership has been impressed with a social function. This implies that the
owner has the obligation to use his property not only to benefit himself but
society as well. Hence, it provides under Section 6 of Article II thereof, that in
the promotion of social justice, the State "shall regulate the acquisition,
ownership, use, enjoyment, and disposition of private property, and equitably
diffuse property ownership and profits." The Constitution also ensures that
the worker shall have a just and living wage which should assure for himself
and his family an existence worthy of human dignity and give him opportunity
for a better life.' Such a sentiment finds expression in subsequent opinions.
12

2. It thus becomes apparent, therefore, why predicated on what for me is

the significance of the social justice and the protection to labor mandates of
the Constitution, I cannot, with due respect, concur with my brethren. The
stand taken by this Court, I submit, cannot be justified by the hitherto
hospitable scope accorded such provisions. It is to the credit of this
Administration that even during the period of crisis government, the social
and economic rights were fully implemented. As a matter of fact, some critics,
not fully informed of the actual state of affairs, would predicate their
assessment of its accomplishments in this sphere on their inaccurate and
unsympathetic appraisal of how much success had been achieved. It is a
matter of pride for the Philippines that as far back as her 1935 Constitution,
provisions assuring liberty in its positive sense, enabling her citizens to live a
life of humanity and dignity, were already incorporated. The social and
economic rights found therein antedated by thirteen years the Universal
Declaration of Human Rights. When it is considered that, as pointed out in
the opinion of Justice Antonio in Alfanta, rendered in the first year of the
present Constitution, the social justice principle now lends itself to the
equitable diffusion of property ownership and profits, it becomes difficult for
me to justify why any lurking ambiguity in Presidential Decree No. 851 could
be construed against the rights of labor. This Court is not acting unjustly if it
promotes social justice. This Court is not acting unjustly if it protects labor.
This Court is just being true to its mission of fealty to the Constitution. Under
the concept of separation of powers, while the political branches enact the
laws and thereafter enforce them, any question as to their interpretation,
justiciable in character, is for the courts, ultimately this Tribunal, to decide.
That is its sworn duty. It cannot be recreant to such a trust. Its role, therefore,
is far from passive. It may be said further that if the object Of statutory
construction is in the well-known language of Learned Hand "proliferation of
purpose," there is warrant for the view that I espouse. That is to attain its
basic objective, namely, to cope with the ravages of inflation. Moreover, the
Decree only benefits the low-salaried employees. There is thus ample warrant
for a more liberal approach. It only remains to be added that there was in
Marcopper not only a recognition of the administrative determination by the
Minister of Labor as well as the then Deputy Minister of Labor but also an
acceptance of the ably-written memorandum of Solicitor General Mendoza.
Hence, to repeat, my inability to concur on this point with my brethren whose
views, as I stated earlier, are deserving of the fullest respect.

3. There is, however and it must be so recognized an obstacle to the

approach above followed. There is an agreement both on the part of
management and labor in this case quoted in the main opinion to this effect,
"to abide by the final decision of the Supreme Court in any case involving the
13th Month Pay Law if it is clearly held that the employer is liable to pay a
13th month pay separate and distinct from the bonuses already given." Such
an obstacle, on further reflection, is not, for me, insurmountable. The only
case then within the contemplation of the parties is Marcopper. With the
unanimous opinion rendered and a subsequent denial of a motion for
reconsideration, it would appear that while it lacked doctrinal force, this
Court "clearly held" that there is liability on the part of the employer to pay a
13-month pay separate and distinct from the bonuses already given. Perhaps
the parties, especially labor, could have been more accurate and more precise.
It take comfort from the view expressed by Justice Cardozo in Wood v. Duff-
Gordon: 13 "The law has outgrown its primitive stage of formalism when the
precise word was the sovereign talisman, and every slip was fatal. It takes a
broader view today. A promise may be lacking, and yet the whole writing may
be 'instinct with an obligation,' imperfectly expressed." 14

4. Now as to the qualified concurrence. Based on the codal provisions the

finding of the illegality of strike is warranted. That for me does not fully resolve
the questions raised by such a declaration. From my reading of the opinion of
the Court, it does not go as far as defining the consequences of such illegal
strike. Again the approach I propose to follow is premised on the two basic
mandates of social justice and protection to labor, for while they are
obligations imposed on the government by the fundamental law, compulsory
arbitration as a result of which there could be a finding of illegality is worded
in permissive not in mandatory language. It would be, for me, a departure
from principles to which this Court has long remained committed, if thereby
loss of employment, even loss of seniority rights or other privileges is
ultimately incurred. That is still an open question. The decision has not
touched on that basic aspect of this litigation. The issue is not foreclosed. It
seems fitting that this brief concurrence and dissent should end with a
relevant excerpt from Free Telephone Workers Union v. The Minister of Labor:
15 "It must be stressed anew, however, that the power of compulsory
arbitration, while allowable under the Constitution and quite understandable
in labor disputes affected with a national interest, to be free from the taint of
unconstitutionality, must be exercised in accordance with the constitutional
mandate of protection to labor. The arbiter then is called upon to take due
care that in the decision to be reached, there is no violation of 'the rights of
workers to self-organization, collective bargaining, security of tenure, and just
and humane conditions of work.' It is of course manifest that there is such
unconstitutional application if a law 'fair on its face and impartial in
appearance [is] applied and administered by public authority with an evil eye
and an unequal hand.' It does not even have to go that far. An instance of
unconstitutional application would be discernible if what is ordained by the
fundamental law, the protection of labor, is ignored or disregarded. 16

I am authorized to state that Justice Makasiar joins me in this separate

opinion.

BARREDO, J., concurring:

At this stage of my tenure in the Supreme Court which is to end in about four
months from now, I feel it is but fitting and proper that I make my position
clear and unmistakable in regard to certain principles that have to be applied
to this labor case now before Us. Few perhaps may have noticed it, but the
fact is that in most cases of this nature I have endeavored my very best to
fully abide by the part that pertains to the judiciary in the social justice and
protection to labor clauses of the Constitution, not alone because. I consider
it as an obligation imposed by the fundamental law of the land but by natural
inclination, perhaps because I began to work as a common worker at the age
of thirteen, and I cannot in any sense be considered as a capitalist or
management-inclined just because I happen to have joined, within the legal
bounds of the position I occupy, some business ventures with the more
affluent members of my family and with some good and faithful old time
friends. I need not say that I am pro-labor; I only wish to deny most
vehemently that I am anti-labor

Having been one of the seven members of the Court who co-signed with our
learned Chief Justice the Marcopper "decision" and later on reserved my vote
when a motion for reconsideration thereof was filed for me to concur now by
merely cosigning the brilliant opinion of our distinguished colleague, Mr.
Justice Plana, is to my mind short of what all concerned might expect from
me. For me to merely vote in support of the judgment herein without any
explanation of my peculiar situation does not satisfy my conscience, not to
mention that I owe such explanation to those who would all probably be
raising their eyebrows since they must come to feel they could depend on me
to always vote in favor of labor.
The Supreme Court is a court of law and of equity at the same time but,
understandably, equity comes in only when law is inadequate to afford the
parties concerned the essence of justice, fairness and square dealing. It is to
this basic tenet that I am bound by my oath of office before God and our
people Having this Ideal in mind, the paramount thought that should
dominate my actuations is complete and absolute impartiality in the best light
God has given me. Hence, when the aid of the Court is sought on legal
grounds, We can resort to equity only when there is no law that can be
properly applied. My view of the instant case is that it is one of law, not of
equity. It is on this fundamental basis that I have ventured to write this
concurrence.

Looking back at my concurrence in Marcopper, and guided by the

observations in the main opinion herein, as to the doctrinal value of Our
decision therein, I have come to the realization, after mature deliberation, that
the conclusion reached in the opinion of the Chief Justice may not always be
consistent with the evident intent and purpose of Section 2 of P.D. No. 851
which, indeed, unequivocally provides that "(E)mployers already paying their
employees a 13th month pay or its equivalent are not covered by this decree",
albeit it does not clarify what it means by the "equivalent" of the 13th month
pay. Such being the case, nothing can be more proper than for everyone to
abide by or at least give due respect to the meaning thereof as has been
officially expressed by the usual executive authority called upon to implement
the same, none other than the Ministry of Labor (MOLE, for short), unless, of
course, the understanding of MOLE appears to be manifestly and palpably
erroneous and completely alien to the evident intent of the decree. And Section
3(e) of the Rules Implementing P.D. 851 issued by MOLE reads thus:

The term "its equivalent" as used in paragraph (c) hereof shall include
Christmas bonus, midyear bonus, profit-sharing payments and other cash
bonuses amounting to not less than 1/12th of the basic but shall not include
cash and stock dividends, cost of living allowances and all other allowances
regularly enjoyed by the employee, as well as non-monetary benefits. Where
an employer pays less than 1/12th of the employee's basic salary the
employer shall pay the difference.

Petitioner National Federation of Sugar Workers (NFSW, for short) is now

before Us with the plea that because in its agreement with respondent Central
Azucarera de la Carlota (CAC, for short) of November 30, 1981 to the effect
that:
The parties agree to abide by the final decision of the Supreme Court in any
case involving the 13th Month Pay Law if it is clearly held that the employer
is liable to pay a 13th month pay separate and distinct from the bonuses
already given. (Par. 4)

and because this Court dismissed, in legal effect, for lack of necessary votes,
the petition in the Marcopper case seeking the setting aside of Deputy Minister
Inciong's decision which considered the midyear and Christmas bonuses
being given to the Marcopper workers as not the equivalent of the 13th month
pay enjoined by P.D. 851, We should now order CAC to pay NFSW members
in the same way as stated in the opinion of the Chief Justice in the Marcopper
case.

At first glance, such a pause does appear tenable and plausible. But looking
deeper at the precise wording of the November 30, 1981 agreement between
NFSW and CAC abovequoted, the proposition in the main opinion herein that
what must be deemed contemplated in said agreement is that the final
decision of the Supreme Court therein referred to must be one wherein it
would be "clearly held that the employer is liable to pay 13th month pay
separate and distinct from the bonuses already given", compels concurrence
on my part. I find said agreement to be definitely worded. There is no room at
all for doubt as to the meaning thereof. And tested in the light of such
unambiguous terminology of the said agreement, the Marcopper opinion
signed by only seven members of this Court, cannot, under the Constitution
and prevailing binding legal norms, unfortunately, have doctrinal worth and
cannot be considered as stare decisis. Hence, it cannot be said to be the
"definite" decision of the Supreme Court the parties (CAC and NFSW) had in
mind. Accordingly, it is my considered opinion that NFSW's plea in this case
is premature and rather off tangent.

I am not unmindful of the possibility or even probability that labor may argue
that in signing the November 30, 1981 agreement, NFSW little cared, for it
was not fully informed about what doctrinal and what is not doctrinal signify
in law. Labor may argue that it is enough that Marcopper workers got their
13th month pay in addition to their bonuses by virtue of the denial by this
Supreme Court of Marcopper Company's appeal to US, and NFSW members
should not be left getting less. And it would only be rational to expect labor to
invoke in support of their plea no less than the social justice and protection
to labor provisions of the Constitution.
As I have said at the outset, I am about to leave this Court. Nothing could
warm my heart and lift my spirit more than to part with the noble thought
that during my tenure of fourteen years in this Supreme Court, I have given
labor the most that it has been within my power to give. But again I must
emphasize that what is constitutionally ordained, and by that I mean also by
God and by our country and people, is for me to jealously guard that the
scales of justice are in perfect balance. No fondness for any sector of society,
no love for any man or woman, no adherence to any political party, no feeling
for any relative or friend nor religious consideration or belief should ever
induce me to allow it to tilt in the slightest degree in favor of anyone.

The concept of social justice has been variously explained in previous

decisions of this Court. In Talisay Silay, 1 penned by this writer, We went as
far as to hold that when it comes to labor-management relationship, the social
justice principle is more pervasive and imperious than police power. It is
indeed consecrated as one of the most valued principles of national policy in
the Constitution. (Sec. 6, Art. II) So also is protection to labor. (See. 9, Id.) I
am of the firm conviction, however, that these constitutional injunctions are
primarily directed to and are responsibilities of the policy-determining
departments of the government. In the enforcement of said principles, the role
of the judiciary is to a certain degree less active. The courts are supposed to
be called upon only to strike down any act or actuation of anyone violative
thereof, and, of course 6 in case of doubt in any given situation, to resolve the
same in favor of labor. Verily, neither the Supreme Court nor any other court
is enjoined to favor labor merely for labor's sake, even as the judiciary is duty
bound never to place labor at a disadvantage, for that would not be only
unconstitutional but inhuman, contrary to the Universal Declaration of
Human Rights and unpardonably degrading to the dignity of man who has
been precisely created in the image of God. At bottom the Ideal in social justice
is precisely to maintain the forces of all the economic segments of society in
undisturbed and undisturbable equilibrium, as otherwise there would be no
justice for anyone of them at all.

In the case at bar, I do not feel at liberty to disregard what the parties have
freely agreed upon, assuming, as I must, that in entering into such agreement
both parties were fully aware of their legal rights and responsibilities. In this
connection, I take particular note of the fact that if CAC is a big financially
well conditioned concern, NFSW is not just one ignorant laborer or group of
laborers, but a federation with leaders and lawyers of adequate if not expert
knowledge-ability in regard to their rights and other relevant matters affecting
labor. I am satisfied that there is here no occasion to apply the Civil Code rule
regarding vigilance whenever there is inequality in the situations of the parties
to an agreement or transaction.
In conclusion, I concur fully in the main opinion of Justice Plana as regards
both issues of illegality of the strike here in question and the non- applicability
hereto of whatever has been said in Marcopper. I have added the above
remarks only to make myself clear on labor-management issues before I leave
this Court, lest there be no other appropriate occasion for me to do so.

ABAD SANTOS, J., concurring:

I concur but lest I be accused of inconsistency because in Marcopper Mining

Corporation vs. Ople, et al., No. 51254, June 11, 1981, 105 SCRA 75, I voted
to dismiss the petition for lack of merit and as a result Marcopper had to give
the 13th-month pay provided in P.D. No. 851 even as its employees under the
CBA had mid-year and end-of-year bonuses, I have to state that Marcopper
and La Carlota have different factual situations as follows: 1. In Marcopper,
the CBA clearly stated that the company was obligated to "grant midyear and
end-of-year bonuses to employees following years in which it had profitable
operations." Thus the payment of the bonuses was contingent upon the
realization of profits. If there were no profits, there were to be no bonuses.
Accordingly, it was fair and proper to conclude that Marcopper had not shown
that it was already paying its employees the 13th-month pay or its equivalent
as provided in Sec. 2 of P.D. No. 851. However, in the instant case of La
Carlota the obligation of the employer to pay bonuses is not contingent on the
realization of profits. The CBA stipulates that the "parties also agree to
maintain the present practice on the grant of Christmas bonus, milling bonus,
and amelioration bonus to the extent as the latter is required by law." It can
thus be said that La Carlota is already paying the equivalent of the 13th-
month pay. 2. In Marcopper, the company's liability for the 13th month pay
was determined by no less than the Deputy Minister of Labor, Amado G.
Inciong. I have always given much weight to the determination of officers who
are tasked with implementing legislation because their expertise qualifies
them in making authoritative decisions. In the present case of La Carlota,
there has been no determination that the employees are entitled to the 13th-
month pay. In fact, a negative conclusion can be implied from the declaration
of Labor Arbiter Ovejera that the labor union's strike against La Carlota was
illegal.

MELENCIO-HERRERA, J., concurring.

A. The question of law involved in this Petition for Prohibition with Preliminary
Injunction is based on the following relevant facts which are indicated in the
record:

1. Prior to December 16, 1975, Central Azucarera de la Carlota (LA

CARLOTA, for short), which operates a sugar mill in La Carlota, Negros
Occidental, may be deemed as paying to its employees milling bonus,
amelioration bonus, and Christmas bonus equal at least to a months' salary.

2. PD 851, effective on the aforementioned date of December 16, 1975,

required employers to pay their employees a 13the month pay, provided the
employer was not already paying the said 13th month pay or its equivalent.

3. On December 22, 1975, the then Department of Labor promulgated a

regulation stating that "Christmas bonus" is an equivalent of the 13th month
pay,

4. From 1975 to 1981, LA CARLOTA was not paying 13th month pay on
the assumption that the "Christmas bonus" it was paying was an "equivalent"
of the 13th month pay. The employees of LA CARLOTA and their labor unions
had not protested the non-payment of the 13th month pay in addition to the
Christmas bonus.

5. On June 11, 1981, this Court promulgated its Decision in the

"Marcopper" case, which involved a relationship between the " 13th month
pay" and the "Christmas bonus" being paid by an employer. A Motion for
reconsideration of the Decision was subsequently filed in said case, which
was denied only on December 15,1981.

6. In the meantime, on November 29, 1981, the National Federation of

Sugar Workers (NFSW), as the labor union representing the majority of
employees at LA CARLOTA, staged a strike because LA CARLOTA had refused
to pay the 13th month pay in addition to Christmas bonus. The strike lasted
one day on November 30, 1981, LA CARLOTA and NFSW entered into a
settlement agreement, paragraph 4 whereof provided as follows:

4. The parties agree to abide by the final decision of the Supreme Court in
any case involving the 13th Month Pay Law if it is clearly held that the
employer is liable to pay a 13th Month Pay separate and distinct from the
bonuses already given;

7. On January 28, 1982, NFSW declared a strike on the ground that,

despite the finality of the Marcopper Decision, LA CARLOTA had refused to
grant 13th month pay to its employees, in addition to Christmas bonus, as
agreed upon in the settlement agreement of November 30, 1981.

B. The legal controversy in the matter may be explained as follows:

1. NFSW filed a notice of strike on January 22, 1982, claiming that the
contemplated strike was based on an unfair labor practice, and that it could
declare the strike even before the expiration of fifteen (15) days thereafter. The
unfair labor practice relied upon was management's alleged renegation of the
November 30, 1981 agreement, considering that the finality of the Marcopper
Decision had "clearly held that the employer is liable to pay a 13th month pay
separate and distinct from "the Christmas bonus".

2. On the other hand, LA CARLOTA took the position that the strike was
not a ULP strike but an economic strike subject to a cooling period of thirty
(30) days with its attendant requirements.

3. It is clear that the controversy between NFSW and LA CARLOTA

substantially hinges on the question of whether or not the Marcopper Decision
has clearly held that a Christmas bonus, in whatsoever form, should not deter
the employer's obligation to the payment of the 13th month pay.

C. The proceedings in the case below were as follows:

1. On February 4, 1982, LA CARLOTA filed a petition to declare the strike

of January 28, 1982 as illegal in R. A. B. Case No. 110- 82 of the Regional
Arbitration Branch No. VI-A of the National Labor Commission in Bacolod City
(the CASE BELOW).

2. After relatively protracted hearings, respondent Labor Arbiter rendered

a Decision declaring illegal the strike of January 28, 1982. That is the
Decision assailed by NFSW in this instance claiming it to be null and void.
D. Reference to a collateral proceeding may be made at this juncture:

1. It appears that, in LA CARLOTA, there is another labor union under the

name of National Congress of Unions in the Sugar Industry in the Philippines
(NACUSIP).

2. On July 30, 1981, NACUSIP filed a complaint in FSD Case No. 1192-81
before R. A. B. No. VI-A in Bacolod City praying that an Order be issued
directing LA CARLOTA to pay 13th month pay to its employees from the
effective date of PD 851 (the COLLATERAL PROCEEDING).

3. On December 4, 1981, NFSW filed a notice to intervene in the

COLLATERAL PROCEEDING.

4. On January 26, 1982, a Decision was rendered in the COLLATERAL

PROCEEDING which, in part, said:

On the contrary, what this Labor Arbiter is aware of, with which he can take
notice, is the policy declaration of the Honorable Minister of Labor and
Employment contained in a telegram addressed to Asst. Director Dante G.
Ardivilla Bacolod District Office, this Ministry, and disseminated for the
information of this Branch which states, among other things, that where
bonuses in CBAs are not contingent on realization of profit as in the
Marcopper case, the decision (of the Supreme Court, re: Marcopper case), does
not apply, and cases thereon should be resolved under the provisions of PD
851 and its implementing rules.

5. On February 15, 1982, NFSW filed a Motion for Reconsideration of the

Decision.

Upon the foregoing exposition, there is justification for an outright dismissal

of the Petition for Prohibition for the simple reason that the strike of January
28, 1982 may not be considered a ULP strike. When the strike was declared,
it could not be validly claimed that there was already a final decision made by
this Court which "clearly held that the employer is liable to pay a 13th month
pay separate and distinct from" the Christmas bonus being paid by LA
CARLOTA. However, since the Marcopper Decision has engendered
controversies in labor-management relations in several
industrial/commercial firms, the Court has resolved to rule on the merits of
the substantial question between LA CARLOTA and NFSW for the public
benefit with a clarification of the Marcopper judgment.

I agree with the proposition taken by the Ministry of Labor and Employment
that Christmas bonus, not contingent on realization of profit as in the
Marcoper case, is the equivalent of the 13th month pay. In regards to the
juxtaposition of the terms "13th month pay" and "Christmas bonus" in an
amount not less than a month's salary, the following may be explained:

Within recent time, it has been usual for an industrial or commercial firm,
which has had a successful year, to grant a bonus to its employees generally
denominated before as year-end bonus. A firm usually knows whether or not
it has had a successful year by the middle of December. In case of profitability,
payment of the year-end bonus does not have to await the end of the year,
but it is often times given some days before New Year, generally about
Christmas day. Before long, the year-end bonus became also known as
Christmas bonus, following the change of the Christmas gift-giving day from
January 6th to December 25th. Thus, it has been stated: "a less formal use
of the bonus concept, which is designed to reward workers for a successful
business year, is the annual or Christmas bonus" (3 Ency. Brit., 918).

Although the original concept of a year-end bonus or Christmas bonus, was

that it depended on a successful year, the bonus, in many instances, has been
developed into an obligatory payment as part of wages and not related to
profitability of operations. As part of wages, they are subject to CBA
negotiation. That has been the general trend in the United States and in our
country.

... But where so-called gifts are so tied to the remuneration which employees
receive for their work that they are in fact a part of it, they are in reality wages
within the meaning of the Act.

xxx xxx xxx

In a number of cases an employer has been held required to bargain

concerning bonuses, including regularly given Christmas bonuses. (48 Am
Jur 2d., p. 455).
Moreover, once a Christmas bonus becomes institutionalized, it has to be
non-discriminatory. "An employer violates 29 USC (Sec.) 158(a) (3) where, to
discourage union membership, he ceases giving a Christmas bonus to all
employees and gives the bonus only to office and supervisory employees after
unionization of his production and maintenance employees." (48 Am Jur 2d.,
p. 420).

The Christmas bonus, as it clearly denotes, has a literal religious connection,

"Christmas" being a term within the Christian religion. Considering that the
Christmas bonus has become obligatory and non- discriminatory in many
jurisdictions, a tendency arose to disassociate that bonus from its religious
connotation. Some countries, with non-christian or "liberal" christian
segments, have opted to make the year-end or Christmas bonus obligatory,
and they called it the 13th month pay. It is, perhaps, having our Moslem
brothers in mind that the Government had decided to set up in our country
the obligatory payment of the 13th month pay Thereby, the orthodox non-
christian employee is not subjected to "discrimination" due to his inability to
accept the Christmas bonus because of strict allegiance to this own faith. It
should, therefore, be apparent that "christmas bonus" and "13th month pay"
should be equated one with the other.

PD 851 does not contain a provision for rules and regulations to be

promulgated by the Department of Labor for implementation of the Decree.
Notwithstanding, on December 22, 1975, the Department of Labor issued
"Rules and Regulations Implementing Presidential Decree 851 ", with the
following relevant provision:

The term "its equivalent" as used in paragraph (c) hereof shall include
Christmas bonus, mid-year bonus, profit-sharing payments and other cash
bonuses amounting to not less than 1/12th of the basic salary but shall not
include cash and stock dividends cost of living allowances and all other
allowances regularly enjoyed by the employee, as well as non-monetary
benefits. Where an employer pays less than 1/12th of the employees basic
salary, the employer shall pay the difference.

When administrative rules and regulations are not properly "delegated", they
cannot have the force and effect of law. It has been stated that:
Administrative rules and regulations. As discussed in Public Administrative
Bodies and Procedure (Sec.) 108, rules and regulations duly promulgated and
adopted in pursuance of properly delegated authority have the force and effect
of law where they are legislative in character, but rules and regulations which
are merely executive or administrative views as to the meaning and
construction of the statute are not controlling on the courts, and cannot alter
or extend the plain meaning of a statute, although they are entitled to great
weight where the statute is ambiguous. (82 C.J.S., pp. 770, 771).

Although the rule defining the term "equivalent" as used in PD 851 does not
have the force and effect of law, it can and should be considered as an
administrative view entitled to great weight as it is an interpretation of
"equivalent" made by the administrative agency which has the duty to enforce
the Decree.

In the light of the foregoing views, I concur with the dismissal of the Petition
for Prohibition with the express statements that LA CARLOTA's Christmas
bonus and other bonuses exempts it from giving 13th month pay to its
employees, and that the strike of January 28, 1982 was not a ULP strike and
should be considered illegal even if NFSW had complied with all statutory
requirements for the strike.

FIRST DIVISION

G.R. No. 154113 December 7, 2011

EDEN GLADYS ABARIA, ROMULO ALFORQUE, ELENA ALLA, EVELYN

APOSTOL, AMELIA ARAGON, BEATRIZ ALBASTRO, GLORIA ARDULLES,
GLENDA BANTILAN, VIRGILIE BORINAGA, ROLDAN CALDERON,
ILDEBRANDO CUTA, ROMEO EMPUERTO, LANNIE FERNANDEZ, LUCINELL
GABAYERON, JESUSA GERONA, JOSE GONZAGA, TEOFILO HINAMPAS,
JOSEFINA IBUNA, MARLYN LABRA, MARIA CARMENCITA LAO, ERA CANEN,
RODNEY REX LERIAS, ERNIE MANLIGAS, JOHANNE DEL MAR, RUBY
ORIMACO, CONSTANCIO PAGADOR, MARVELOUS PANAL, NOLAN PANAL,
LILLAN PETALLAR, GERNA PATIGDAS, MELODIA PAULIN, SHIRLEY ROSE
REYES, JOSEFINA REYES, OSCAR DE LOS SANTOS, SOLOMON DE LOS
SANTOS, RAMON TAGNIPIS, BERNADETTE TIBAY, RONALD TUMULAK,
LEONCIO VALLINAS, EDELBERTO VILLA and the NAGKAHIUSANG
MAMUMUO SA METRO CEBU COMMUNITY HOSPITAL, Petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, METRO CEBU COMMUNITY
HOSPITAL, INC., ITS BOARD OF TRUSTEES, REV. GREGORIO IYOY, SHIELA
BUOT, REV. LORENZO GENOTIVA, RUBEN CARABAN, RUBEN ESTOYE,
LILIA SAURO, REV. ELIZER BERTOLDO, RIZALINA VILLAGANTE, DRA.
LUCIA FLORENDO, CONCEPCION VILLEGAS, REV. OLIVER CANEN, DRA.
CYD RAGAS, REV. MIKE CAMBA, AVEDNIGO VALIENTE, RIZALINO
TAGANAS, CIRIACO PONGASI, ISIAS WAGAS, REV. ESTER GELOAGAN,
REV. LEON MANIWAN, CRESENTE BAOAS, WINEFREDA BARLOSO, REV.
RUEL MARIGA AND THE UNITED CHURCH OF CHRIST IN THE PHILIPPINES,
REV. HILARIO GOMEZ, REV. ELMER BOLOCON, THE NATIONAL
FEDERATION OF LABOR AND ARMAND ALFORQUE, Respondents.

x - - - - - - - - - - - - - - - - - - - - - - -x

G.R. No. 187778

PERLA NAVA, DANIELA YOSORES, AGUSTIN ALFORNON, AILEEN

CATACUTAN, ROLANDO REDILOSA, CORNELIO MARIBOJO, VIRGENCITA
CASAS, CRISANTA GENEGABOAS, EMILIO LAO, RICO GASCON, ALBINA
BAEZ, PEDRO CABATINGAN, PROCOMIO SALUPAN, ELIZABETH RAMON,
DIOSCORO GABUNADA, ROY MALAZARTE, FELICIANITA MALAZARTE,
NORBERTA CACA, MILAGROS CASTILLO, EDNA ALBO, BERNABE
LUMAPGUID, CELIA SABAS, SILVERIO LAO, DARIO LABRADOR, ERNESTO
CANEN, JR., ELSA BUCAO, HANNAH BONGCARAS, NEMA BELOCURA,
PEPITO LLAGAS, GUILLERMA REMOCALDO, ROGELIO DABATOS,
ROBERTO JAYMA, RAYMUNDO DELATADO, MERLYN NODADO, NOEL
HORTELANO, HERMELO DELA TORRE, LOURDES OLARTE, DANILO
ZAMORA, LUZ CABASE, CATALINA ALSADO, RUTH BANZON AND THE
NAGKAHIUSANG MAMUMUO SA METRO CEBU COMMUNITY HOSPITAL,
Petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION (FOURTH DIVISION), METRO
CEBU COMMUNITY HOSPITAL, INC., BOARD OF TRUSTEES, REV.
GREGORIO IYOY, SHIELA BUOT, REV. LORENZO GENOTIVA, RUBEN
CABABAN, ROSENDO ESTOYE, LILIA SAURO, REV. ELIZER BERTOLDO,
RIZALINA VILLAGANTE, DRA. LUCIA FLORENDO, CONCEPCION VILLEGAS,
REV. OLIVER CANEN, DRA. CYD RAAGAS, REV. MIKE CAMBA, AVIDNIGO
VALIENTE, RIZALINO TAGANAS, CIRIACO PONGASI, ISIAS WAGAS, REV.
ESTER GELOAGAN, REV. LEON MANIWAN, CRESENTE BAOAS, WINIFREDA
BARLOSO, REV. RUEL MARIGA, THE UNITED CHURCH OF CHRIST IN THE
PHILIPPINES, REV. HILARIO GOMEZ, REV. ELMER BOLOCON, THE
NATIONAL FEDERATION OF LABOR AND ARMANDO ALFORQUE,
Respondents.

x - - - - - - - - - - - - - - - - - - - - - - -x

G.R. No. 187861

METRO CEBU COMMUNITY HOSPITAL, presently known as Visayas

Community Medical Center (VCMC), Petitioner,
vs.
PERLA NAVA, DANIELA YOSORES, AGUSTIN ALFORNON, AILEEN
CATACUTAN, ROLANDO REDILOSA, CORNELIO MARIBOJO, VIRGENCITA
CASAS, CRISANTA GENEGABOAS, EMILIO LAO, RICO GASCON, ALBINA
BANEZ, PEDRO CABATINGAN, PROCOMIO SALUPAN, ELIZABETH RAMON,
DIOSCORO GABUNADA, ROY MALAZARTE, FELICIANITA MALAZARTE,
NORBERTA CACA, MILAGROS CASTILLO, EDNA ALBO, BERNABE
LUMABGUID, CELIA SABAS, SILVERIO LAO, DARIO LABRADOR, ERNESTO
CANEN, JR., ELSA BUCAO, HANNAH BONGCARAS, NEMA BELOCURA,
PEPITO LLAGAS, GUILLERMA REMOCALDO, ROGELIO DABATOS,
ROBERTO JAYMA, RAYMUNDO DELATADO, NOEL HORTELANO, HERMELO
DE LA TORRE, LOURDES OLARTE, DANILO ZAMORA, LUZ CABASE,
CATALINA ALSADO AND RUTH BANZON, Respondents.

x - - - - - - - - - - - - - - - - - - - - - - -x

G.R. No. 196156

VISAYAS COMMUNITY MEDICAL CENTER (VCMC) formerly known as

METRO CEBU COMMUNITY HOSPITAL (MCCH), Petitioner,
vs.
ERMA YBALLE, NELIA ANGEL, ELEUTERIA CORTEZ and EVELYN ONG,
Respondents.

DECISION
VILLARAMA, JR., J.:

The consolidated petitions before us involve the legality of mass termination

of hospital employees who participated in strike and picketing activities.

The factual antecedents:

Metro Cebu Community Hospital, Inc. (MCCHI), presently known as the

Visayas Community Medical Center (VCMC), is a non-stock, non-profit
corporation organized under the laws of the Republic of the Philippines. It
operates the Metro Cebu Community Hospital (MCCH), a tertiary medical
institution located at Osmea Boulevard, Cebu City. MCCH is owned by the
United Church of Christ in the Philippines (UCCP) and Rev. Gregorio P. Iyoy
is the Hospital Administrator.

The National Federation of Labor (NFL) is the exclusive bargaining

representative of the rank-and-file employees of MCCHI. Under the 1987 and
1991 Collective Bargaining Agreements (CBAs), the signatories were Ciriaco
B. Pongasi, Sr. for MCCHI, and Atty. Armando M. Alforque (NFL Legal
Counsel) and Paterno A. Lumapguid as President of NFL-MCCH Chapter. In
the CBA effective from January 1994 until December 31, 1995, the signatories
were Sheila E. Buot as Board of Trustees Chairman, Rev. Iyoy as MCCH
Administrator and Atty. Fernando Yu as Legal Counsel of NFL, while Perla
Nava, President of Nagkahiusang Mamumuo sa MCCH (NAMA-MCCH-NFL)
signed the Proof of Posting.1

On December 6, 1995, Nava wrote Rev. Iyoy expressing the unions desire to
renew the CBA, attaching to her letter a statement of proposals
signed/endorsed by 153 union members. Nava subsequently requested that
the following employees be allowed to avail of one-day union leave with pay
on December 19, 1995: Celia Sabas, Jesusa Gerona, Albina Baez, Eddie
Villa, Roy Malazarte, Ernesto Canen, Jr., Guillerma Remocaldo, Catalina
Alsado, Evelyn Ong, Melodia Paulin, Sofia Bautista, Hannah Bongcaras, Ester
Villarin, Iluminada Wenceslao and Perla Nava. However, MCCHI returned the
CBA proposal for Nava to secure first the endorsement of the legal counsel of
NFL as the official bargaining representative of MCCHI employees.2

Meanwhile, Atty. Alforque informed MCCHI that the proposed CBA submitted
by Nava was never referred to NFL and that NFL has not authorized any other
legal counsel or any person for collective bargaining negotiations. By January
1996, the collection of union fees (check-off) was temporarily suspended by
MCCHI in view of the existing conflict between the federation and its local
affiliate. Thereafter, MCCHI attempted to take over the room being used as
union office but was prevented to do so by Nava and her group who protested
these actions and insisted that management directly negotiate with them for
a new CBA. MCCHI referred the matter to Atty. Alforque, NFLs Regional
Director, and advised Nava that their group is not recognized by NFL.3

In his letter dated February 24, 1996 addressed to Nava, Ernesto Canen, Jr.,
Jesusa Gerona, Hannah Bongcaras, Emma Remocaldo, Catalina Alsado and
Albina Baez, Atty. Alforque suspended their union membership for serious
violation of the Constitution and By-Laws. Said letter states:

During the last General Membership Meeting of the union on February 20,
1996, you openly declared that you recognized the officers of the KMU not
those of the NFL, that you submit to the stuctures [sic] and authority of the
KMU not of the NFL, and that you are loyal only to the KMU not to the NFL.

Also, in the same meeting, you admitted having sent a proposal for a renewed
collective bargaining agreement to the management without any consultation
with the NFL. In fact, in your letter dated February 21, 1996 addressed to
Rev. Gregorio Iyoy, the Administrator of the hospital, you categorically stated
as follows: "We do not need any endorsement from NFL, more particularly
from Atty. Armando Alforque to negotiate our CBA with MCCH." You did not
only ignore the authority of the undersigned as Regional Director but you
maliciously prevented and bluntly refused my request to join the union
negotiating panel in the CBA negotiations.

Your above flagrant actuations, made in the presence of the union

membership, constitute the following offenses:

1. Willful violation of the Constitution and By-Laws of the Federation and the
orders and decisions of duly constituted authorities of the same (Section 4 (b),
Article III), namely:

a) Defying the decision of the organization disaffiliating from the KMU; and
b) Section 9 (b), Article IX which pertains to the powers and responsibilities
of the Regional Director, particularly, to negotiate and sign collective
bargaining agreement together with the local negotiating panel subject to prior
ratification by the general membership;

2. Joining or assisting another labor organization or helping in the formation

of a new labor organization that seeks or tends to defeat the purpose of the
Federation (Section 4 (d), Article III) in relation to the National Executive
Boards Resolution No. 8, September 26-27, 1994, to wit:

"Pursuant to the NEB Resolution disaffiliating from the KMU dated September
11, 1993, the NEB in session hereby declare that KMU is deemed an
organization that seeks to defeat the objective of establishing independent and
democratic unions and seeks to replace the Federation as exclusive
representative of its members.

Committing acts that tend to alienate the loyalty of the members to the
Federation, subvert its duly constituted authorities, and divide the
organization in any level with the objective of establishing a pro-KMU faction
or independent union loyal to the KMU shall be subject to disciplinary action,
suspension or expulsion from union membership, office or position in
accordance with paragraph[s] d and f of Section 4, Article III, and paragraph
h, Section 6, Article VI, paragraph d, Section 9, Article IX."

You are, therefore, directed to submit written explanation on the above

charges within five (5) days from receipt hereof. Failure on your part shall be
considered a waiver of your right to be heard and the Federation will act
accordingly.

Considering the gravity of the charges against you, the critical nature of the
undertaking to renew the collective bargaining agreement, and the serious
threat you posed to the organization, you are hereby placed under temporary
suspension from your office and membership in the union immediately upon
receipt hereof pending investigation and final disposition of your case in
accordance with the unions constitution and by-laws.

For your guidance and compliance.4

On February 26, 1996, upon the request of Atty. Alforque, MCCHI granted
one-day union leave with pay for 12 union members.5 The next day, several
union members led by Nava and her group launched a series of mass actions
such as wearing black and red armbands/headbands, marching around the
hospital premises and putting up placards, posters and streamers. Atty.
Alforque immediately disowned the concerted activities being carried out by
union members which are not sanctioned by NFL. MCCHI directed the union
officers led by Nava to submit within 48 hours a written explanation why they
should not be terminated for having engaged in illegal concerted activities
amounting to strike, and placed them under immediate preventive
suspension. Responding to this directive, Nava and her group denied there
was a temporary stoppage of work, explaining that employees wore their
armbands only as a sign of protest and reiterating their demand for MCCHI
to comply with its duty to bargain collectively. Rev. Iyoy, having been informed
that Nava and her group have also been suspended by NFL, directed said
officers to appear before his office for investigation in connection with the
illegal strike wherein they reportedly uttered slanderous and scurrilous words
against the officers of the hospital, threatening other workers and forcing
them to join the strike. Said union officers, however, invoked the grievance
procedure provided in the CBA to settle the dispute between management and
the union.6

On March 13 and 19, 1996, the Department of Labor and Employment (DOLE)
Regional Office No. 7 issued certifications stating that there is nothing in their
records which shows that NAMA-MCCH-NFL is a registered labor
organization, and that said union submitted only a copy of its Charter
Certificate on January 31, 1995.7 MCCHI then sent individual notices to all
union members asking them to submit within 72 hours a written explanation
why they should not be terminated for having supported the illegal concerted
activities of NAMA-MCCH-NFL which has no legal personality as per DOLE
records. In their collective response/statement dated March 18, 1996, it was
explained that the picketing employees wore armbands to protest MCCHIs
refusal to bargain; it was also contended that MCCHI cannot question the
legal personality of the union which had actively assisted in CBA negotiations
and implementation.8

On March 13, 1996, NAMA-MCCH-NFL filed a Notice of Strike but the same
was deemed not filed for want of legal personality on the part of the filer. The
National Conciliation and Mediation Board (NCMB) Region 7 office likewise
denied their motion for reconsideration on March 25, 1996. Despite such
rebuff, Nava and her group still conducted a strike vote on April 2, 1996
during which an overwhelming majority of union members approved the
strike.9
Meanwhile, the scheduled investigations did not push through because the
striking union members insisted on attending the same only as a group.
MCCHI again sent notices informing them that their refusal to submit to
investigation is deemed a waiver of their right to explain their side and
management shall proceed to impose proper disciplinary action under the
circumstances. On March 30, 1996, MCCHI sent termination letters to union
leaders and other members who participated in the strike and picketing
activities. On April 8, 1996, it also issued a cease-and-desist order to the rest
of the striking employees stressing that the wildcat concerted activities
spearheaded by the Nava group is illegal without a valid Notice of Strike and
warning them that non-compliance will compel management to impose
disciplinary actions against them. For their continued picketing activities
despite the said warning, more than 100 striking employees were dismissed
effective April 12 and 19, 1996.

Unfazed, the striking union members held more mass actions. The means of
ingress to and egress from the hospital were blocked so that vehicles carrying
patients and employees were barred from entering the premises. Placards
were placed at the hospitals entrance gate stating: "Please proceed to another
hospital" and "we are on protest." Employees and patients reported acts of
intimidation and harassment perpetrated by union leaders and members.
With the intensified atmosphere of violence and animosity within the hospital
premises as a result of continued protest activities by union members, MCCHI
suffered heavy losses due to low patient admission rates. The hospitals
suppliers also refused to make further deliveries on credit.

With the volatile situation adversely affecting hospital operations and the
condition of confined patients, MCCHI filed a petition for injunction in the
NLRC (Cebu City) on July 9, 1996 (Injunction Case No. V-0006-96). A
temporary restraining order (TRO) was issued on July 16, 1996. MCCHI
presented 12 witnesses (hospital employees and patients), including a
security guard who was stabbed by an identified sympathizer while in the
company of Navas group. MCCHIs petition was granted and a permanent
injunction was issued on September 18, 1996 enjoining the Nava group from
committing illegal acts mentioned in Art. 264 of the Labor Code.10

On August 27, 1996, the City Government of Cebu ordered the demolition of
the structures and obstructions put up by the picketing employees of MCCHI
along the sidewalk, having determined the same as a public nuisance or
nuisance per se.11
Thereafter, several complaints for illegal dismissal and unfair labor practice
were filed by the terminated employees against MCCHI, Rev. Iyoy, UCCP and
members of the Board of Trustees of MCCHI.

On August 4, 1999, Executive Labor Arbiter Reynoso A. Belarmino rendered

his decision12 dismissing the complaints for unfair labor practice in NLRC
Case Nos. RAB-VII-02-0309-98, RAB-VII-02-0394-98 and RAB-VII-03-0596-
98 filed by Nava and 90 other complainants. Executive Labor Arbiter
Belarmino found no basis for the charge of unfair labor practice and declared
the strike and picketing activities illegal having been conducted by NAMA-
MCCH-NFL which is not a legitimate labor organization. The termination of
union leaders Nava, Alsado, Baez, Bongcaras, Canen, Gerona and
Remocaldo were upheld as valid but MCCHI was directed to grant separation
pay equivalent to one-half month for every year of service, in the total amount
of P3,085,897.40 for the 84 complainants.13

Complainants appealed to the Commission. On March 14, 2001, the NLRCs

Fourth Division rendered its Decision,14 the dispositive portion of which
reads:

WHEREFORE, premises considered, the decision of the Executive Labor

Arbiter dismissing the complaint for unfair labor practice and illegal dismissal
is AFFIRMED with MODIFICATIONS declaring the dismissal of all the
complainants in RAB Case No. 07-02-0394-98 and RAB Case No. 07-03-
0596-98 valid and legal. Necessarily, the award of separation pay and
attorneys fees are hereby Deleted.

Resolution on RAB Case No. 07-02-0309-98 is hereby Deferred upon Joint

Motion of the parties.

SO ORDERED.15

In its Resolution dated July 2, 2001, the NLRC denied complainants motion
for reconsideration.16

Complainants elevated the case to the Court of Appeals (CA) (Cebu Station)
via a petition for certiorari, docketed as CA-G.R. SP No. 66540.17
In its Resolution dated November 14, 2001, the CAs Eighth Division
dismissed the petition on the ground that out of 88 petitioners only 47 have
signed the certification against forum shopping.18 Petitioners moved to
reconsider the said dismissal arguing that the 47 signatories more than
constitute the principal parties as the petition involves a matter of common
concern to all the petitioning employees.19 By Resolution20 dated May 28,
2002, the CA reinstated the case only insofar as the 47 petitioners who signed
the petition are concerned.

Petitioners challenged the validity of the November 14, 2001 and May 28,
2002 resolutions before this Court in a petition for review on certiorari,
docketed as G.R. No. 154113.

Meanwhile, the NLRCs Fourth Division (Cebu City) rendered its Decision21
dated March 12, 2003 in RAB Case Nos. 07-02-0309-98 (NLRC Case No. V-
001042-99) pertaining to complainants Erma Yballe, Evelyn Ong, Nelia Angel
and Eleuteria Cortez as follows:

WHEREFORE, premises considered, the decision of the Executive Labor

Arbiter dismissing the complaint for unfair labor practice and illegal dismissal
is AFFIRMED with MODIFICATIONS declaring all complainants to have been
validly dismissed. Necessarily, the award of separation pay and attorneys fees
are hereby Deleted.

SO ORDERED.22

The NLRC likewise denied the motion for reconsideration filed by

complainants Yballe, et al. in its Resolution dated April 13, 2004.23

On October 17, 2008, the CA rendered its Decision24 in CA-G.R. SP No.

66540, the dispositive portion of which states:

WHEREFORE, premises considered, judgment is hereby rendered

AFFIRMING the Decision of the National Labor Relations Commission (NLRC)
Fourth Division dated March 14, 2001 in NLRC Case No. V-001042-99,
WITH MODIFICATIONS to the effect that (1) the petitioners, except the union
officers, shall be awarded separation pay equivalent to one-half (1/2) month
pay for every year of service, and (2) petitioner Cecilia Sabas shall be awarded
overtime pay amounting to sixty-three (63) hours.

SO ORDERED.25

Petitioners filed a motion for reconsideration while private respondents filed a

motion for partial reconsideration questioning the award of separation pay.
The former also invoked the decision of this Court in Bascon v. Court of
Appeals,26 while the latter argued for the application of the ruling in decision
rendered by the CA (Cebu City) in Miculob v. NLRC, et al. (CA-G.R. SP No.
84538),27 both involving similar complaints filed by dismissed employees of
MCCHI.

By Resolution28 dated April 17, 2009, the CA denied both motions:

WHEREFORE, the petitioners Motion for Reconsideration and the private

respondent[s] Motion for Partial Reconsideration of the October 17, 2008
Decision are both DENIED for lack of merit.

The Motions for Substitution of Counsel and Compromise Agreements

submitted by petitioners Bernardito Lawas, Avelina Bangalao, Dailenda
Hinampas and Daylinda Tigo are hereby approved. Consequently, said
petitioners are ordered dropped from the list of petitioners and the case is
deemed dismissed as to them.

SO ORDERED.29

Complainants Yballe, et al. also challenged before the CA the March 12, 2003
Decision and April 13, 2004 Resolution of the NLRC in a petition for certiorari,
docketed as CA-G.R. SP No. 84998 (Cebu City). By Decision30 dated
November 7, 2008, the CA granted their petition, as follows:

WHEREFORE, the challenged Decision of public respondent dated March 12,

2003 and its Resolution dated April 13, 2004 are hereby REVERSED AND
SET ASIDE. Private respondent Metro Cebu Community Hospital is ordered
to reinstate petitioners Erma Yballe, Eleuteria Cortes, Nelia Angel and Evelyn
Ong without loss of seniority rights and other privileges; to pay them their full
backwages inclusive of their allowances and other benefits computed from the
time of their dismissal up to the time of their actual reinstatement.

No pronouncement as to costs.

SO ORDERED.31

Private respondents (MCCHI, et al.) moved to reconsider the above decision

but the CA denied their motion on February 22, 2011.32

Both petitioners and private respondents in CA-G.R. SP No. 66540 appealed

to this Court. Private respondent MCCHI in CA-G.R. SP No. 84998, under its
new name Visayas Community Medical Center (VCMC), filed a petition for
certiorari in this Court.

In G.R. No. 187778, petitioners Nava, et al. prayed that the CA decision be set
aside and a new judgment be entered by this Court (1) declaring private
respondents guilty of unfair labor practice and union busting; (2) directing
private respondents to cease and desist from further committing unfair labor
practices against the petitioners; (3) imposing upon MCCH the proposed CBA
or, in the alternative, directing the hospital and its officers to bargain with the
local union; (4) declaring private respondents guilty of unlawfully suspending
and illegally dismissing the individual petitioners-employees; (5) directing
private respondents to reinstate petitioners-employees to their former
positions, or their equivalent, without loss of seniority rights with full
backwages and benefits until reinstatement; and (6) ordering private
respondents to pay the petitioners moral damages, exemplary damages, legal
interests, and attorneys fees.33

On the other hand, petitioner MCCHI in G.R. No. 187861 prayed for the
modification of the CA decision by deleting the award of separation pay and
reinstating the March 14, 2001 decision of the NLRC.34

In G.R. No. 196156, MCCHI/VCMC prayed for the annulment of the November
7, 2008 Decision and February 22, 2011 Resolution of the CA, for this Court
to declare the dismissal of respondents Yballe, et al. as valid and legal and to
reinstate the March 12, 2003 Decision and April 13, 2004 Resolution of the
NLRC.
G.R. No. 187861 was consolidated with G.R. Nos. 154113 and 187778 as they
involve similar factual circumstances and identical or related issues. G.R. No.
196156 was later also consolidated with the aforesaid cases.

The issues are: (1) whether the CA erred in dismissing the petition for
certiorari (CA-G.R. SP No. 66540) with respect to the petitioners in G.R. No.
154113 for their failure to sign the certification against forum shopping; (2)
whether MCCHI is guilty of unfair labor practice; (3) whether petitioning
employees were illegally dismissed; and (4) if their termination was illegal,
whether petitioning employees are entitled to separation pay, backwages,
damages and attorneys fees.

Dropping of petitioners who did not sign the certification against forum
shopping improper

The Court has laid down the rule in Altres v. Empleo35 as culled from
"jurisprudential pronouncements", that the certification against forum
shopping must be signed by all the plaintiffs or petitioners in a case;
otherwise, those who did not sign will be dropped as parties to the case. Under
reasonable or justifiable circumstances, however, as when all the plaintiffs or
petitioners share a common interest and invoke a common cause of action or
defense, the signature of only one of them in the certification against forum
shopping substantially complies with the Rule.

In the case at bar, the signatures of 47 out of 88 petitioning employees in the

certification against forum shopping constitute substantial compliance with
the rule. There is no question that they shared a common interest and invoked
a common cause of action when they filed suit before the Labor Arbiter and
NLRC questioning the validity of their termination and charging MCCHI with
unfair labor practice. Thus, when they appealed their case to the CA, they
pursued the same as a collective body, raising only one argument in support
of their cause of action, i.e., the illegal dismissal allegedly committed by
MCCHI when union members resorted to strike and mass actions due to
MCCHIs refusal to bargain with officers of the local chapter. There is
sufficient basis, therefore, for the 47 signatories to the petition, to speak for
and in behalf of their co-petitioners and to file the Petition for Certiorari in the
appellate court.36 Clearly, the CA erred in dropping as parties-petitioners
those who did not sign the certification against forum shopping.lavvphil
However, instead of remanding the case to the CA for it to resolve the petition
with respect to the herein petitioners in G.R. No. 154113, and as prayed for,
the Court shall consider them parties-petitioners in CA-G.R. SP No.
66540,which case has already been decided and now subject of appeal in G.R.
No. 187778.

MCCHI not guilty of unfair labor practice

Art. 248 (g) of the Labor Code, as amended, makes it an unfair labor practice
for an employer "[t]o violate the duty to bargain collectively" as prescribed by
the Code. The applicable provision in this case is Art. 253 which provides:

ART. 253. Duty to bargain collectively when there exists a collective

bargaining agreement. When there is a collective bargaining agreement, the
duty to bargain collectively shall also mean that neither party shall terminate
nor modify such agreement during its lifetime. However, either party can serve
a written notice to terminate or modify the agreement at least sixty (60) days
prior to its expiration date. It shall be the duty of both parties to keep the
status quo and to continue in full force and effect the terms and conditions of
the existing agreement during the 60-day period and/or until a new
agreement is reached by the parties.

NAMA-MCCH-NFL charged MCCHI with refusal to bargain collectively when

the latter refused to meet and convene for purposes of collective bargaining,
or at least give a counter-proposal to the proposed CBA the union had
submitted and which was ratified by a majority of the union membership.
MCCHI, on its part, deferred any negotiations until the local unions dispute
with the national union federation (NFL) is resolved considering that the latter
is the exclusive bargaining agent which represented the rank-and-file hospital
employees in CBA negotiations since 1987.

We rule for MCCHI.

Records of the NCMB and DOLE Region 7 confirmed that NAMA-MCCH-NFL

had not registered as a labor organization, having submitted only its charter
certificate as an affiliate or local chapter of NFL.37 Not being a legitimate labor
organization, NAMA-MCCH-NFL is not entitled to those rights granted to a
legitimate labor organization under Art. 242, specifically:
(a) To act as the representative of its members for the purpose of collective
bargaining;

(b) To be certified as the exclusive representative of all the employees in an

appropriate collective bargaining unit for purposes of collective bargaining;

xxxx

Aside from the registration requirement, it is only the labor organization

designated or selected by the majority of the employees in an appropriate
collective bargaining unit which is the exclusive representative of the
employees in such unit for the purpose of collective bargaining, as provided
in Art. 255.38 NAMA-MCCH-NFL is not the labor organization certified or
designated by the majority of the rank-and-file hospital employees to
represent them in the CBA negotiations but the NFL, as evidenced by CBAs
concluded in 1987, 1991 and 1994. While it is true that a local union has the
right to disaffiliate from the national federation, NAMA-MCCH-NFL has not
done so as there was no any effort on its part to comply with the legal
requisites for a valid disaffiliation during the "freedom period"39 or the last
60 days of the last year of the CBA, through a majority vote in a secret
balloting in accordance with Art. 241 (d).40 Nava and her group simply
demanded that MCCHI directly negotiate with the local union which has not
even registered as one.

To prove majority support of the employees, NAMA-MCCH-NFL presented the

CBA proposal allegedly signed by 153 union members. However, the petition
signed by said members showed that the signatories endorsed the proposed
terms and conditions without stating that they were likewise voting for or
designating the NAMA-MCCH-NFL as their exclusive bargaining
representative. In any case, NAMA-MCCH-NFL at the time of submission of
said proposals was not a duly registered labor organization, hence it cannot
legally represent MCCHIs rank-and-file employees for purposes of collective
bargaining. Hence, even assuming that NAMA-MCCH-NFL had validly
disaffiliated from its mother union, NFL, it still did not possess the legal
personality to enter into CBA negotiations. A local union which is not
independently registered cannot, upon disaffiliation from the federation,
exercise the rights and privileges granted by law to legitimate labor
organizations; thus, it cannot file a petition for certification election.41
Besides, the NFL as the mother union has the right to investigate members of
its local chapter under the federations Constitution and By-Laws, and if
found guilty to expel such members.42 MCCHI therefore cannot be faulted for
deferring action on the CBA proposal submitted by NAMA-MCCH-NFL in view
of the union leaderships conflict with the national federation. We have held
that the issue of disaffiliation is an intra-union dispute43 which must be
resolved in a different forum in an action at the instance of either or both the
federation and the local union or a rival labor organization, not the
employer.44

Not being a legitimate labor organization nor the certified exclusive bargaining
representative of MCCHIs rank-and-file employees, NAMA-MCCH-NFL
cannot demand from MCCHI the right to bargain collectively in their behalf.45
Hence, MCCHIs refusal to bargain then with NAMA-MCCH-NFL cannot be
considered an unfair labor practice to justify the staging of the strike.46

Strike and picketing activities conducted by union officers and members were
illegal

Art. 263 (b) of the Labor Code, as amended, provides:

ART. 263. Strikes, picketing and lockouts. x x x

(b) Workers shall have the right to engage in concerted activities for purposes
of collective bargaining or for their mutual benefit and protection. The right of
legitimate labor organizations to strike and picket and of employers to lockout,
consistent with the national interest, shall continue to be recognized and
respected. However, no labor union may strike and no employer may declare
a lockout on grounds involving inter-union and intra-union disputes.

x x x x (Emphasis supplied.)

As borne by the records, NAMA-MCCH-NFL was not a duly registered or an

independently registered union at the time it filed the notice of strike on March
13, 1996 and when it conducted the strike vote on April 2, 1996. It could not
then legally represent the union members. Consequently, the mandatory
notice of strike and the conduct of the strike vote report were ineffective for
having been filed and conducted by NAMA-MCCH-NFL which has no legal
personality as a legitimate labor organization, in violation of Art. 263 (c), (d)
and (f) of the Labor Code and Rule XXII, Book V of the Omnibus Rules
Implementing the Labor Code.47
Art. 263 of the Labor Code provides:

ART. 263. Strikes, picketing and lockouts. (a) x x x

xxxx

(c) In cases of bargaining deadlocks, the duly certified or recognized

bargaining agent may file a notice of strike or the employer may file a notice
of lockout with the Department at least 30 days before the intended date
thereof. In cases of unfair labor practice, the period of notice shall be 15 days
and in the absence of a duly certified or recognized bargaining agent, the
notice of strike may be filed by any legitimate labor organization in behalf of
its members. However, in case of dismissal from employment of union officers
duly elected in accordance with the union constitution and by-laws, which
may constitute union busting, where the existence of the union is threatened,
the 15-day cooling-off period shall not apply and the union may take action
immediately. (As amended by Executive Order No. 111, December 24, 1986.)

(d) The notice must be in accordance with such implementing rules and
regulations as the Department of Labor and Employment may promulgate.

xxxx

(f) A decision to declare a strike must be approved by a majority of the total

union membership in the bargaining unit concerned, obtained by secret ballot
in meetings or referenda called for that purpose. A decision to declare a
lockout must be approved by a majority of the board of directors of the
corporation or association or of the partners in a partnership, obtained by
secret ballot in a meeting called for that purpose. The decision shall be valid
for the duration of the dispute based on substantially the same grounds
considered when the strike or lockout vote was taken. The Department may,
at its own initiative or upon the request of any affected party, supervise the
conduct of the secret balloting. In every case, the union or the employer shall
furnish the Ministry the voting at least seven days before the intended strike
or lockout, subject to the cooling-off period herein provided. (As amended by
Batas Pambansa Bilang 130, August 21, 1981 and further amended by
Executive Order No. 111, December 24, 1986.) (Emphasis supplied.)
Rule XXII, Book V of the Omnibus Rules Implementing the Labor Code reads:

RULE XXII
CONCILIATION, STRIKES AND LOCKOUTS

xxxx

SEC. 6. Who may declare a strike or lockout. Any certified or duly

recognized bargaining representative may declare a strike in cases of
bargaining deadlocks and unfair labor practices. The employer may declare a
lockout in the same cases. In the absence of a certified or duly recognized
bargaining representative, any legitimate labor organization in the
establishment may declare a strike but only on grounds of unfair labor
practice. (Emphasis supplied.)

Furthermore, the strike was illegal due to the commission of the following
prohibited activities48 : (1) violence, coercion, intimidation and harassment
against non-participating employees; and (2) blocking of free ingress to and
egress from the hospital, including preventing patients and their vehicles from
entering the hospital and other employees from reporting to work, the putting
up of placards with a statement advising incoming patients to proceed to
another hospital because MCCHI employees are on strike/protest. As shown
by photographs49 submitted by MCCHI, as well as the findings of the NCMB
and Cebu City Government, the hospital premises and sidewalk within its
vicinity were full of placards, streamers and makeshift structures that
obstructed its use by the public who were likewise barraged by the noise
coming from strikers using megaphones.50 On the other hand, the
affidavits51 executed by several hospital employees and patients narrated in
detail the incidents of harassment, intimidation, violence and coercion, some
of these witnesses have positively identified the perpetrators. The prolonged
work stoppage and picketing activities of the striking employees severely
disrupted hospital operations that MCCHI suffered heavy financial losses.

The findings of the Executive Labor Arbiter and NLRC, as sustained by the
appellate court, clearly established that the striking union members created
so much noise, disturbance and obstruction that the local government
authorities eventually ordered their removal for being a public nuisance. This
was followed by an injunction from the NCMB enjoining the union leaders
from further blocking the free ingress to and egress from the hospital, and
from committing threats, coercion and intimidation against non-striking
employees and patients/vehicles desiring to enter for the purpose of seeking
medical treatment/confinement. By then, the illegal strike had lasted for
almost five months.

Consequences of illegal strike to union officers and members

Art. 264 (a) of the Labor Code, as amended, provides for the consequences of
an illegal strike to the participating workers:

x x x Any union officer who knowingly participates in illegal strike and any
worker or union officer who knowingly participates in the commission of
illegal acts during a strike may be declared to have lost his employment
status: Provided, That mere participation of a worker in a lawful strike shall
not constitute sufficient ground for termination of his employment, even if a
replacement had been hired by the employer during such lawful strike.

The above provision makes a distinction between workers and union officers
who participate in an illegal strike: an ordinary striking worker cannot be
terminated for mere participation in an illegal strike. There must be proof that
he or she committed illegal acts during a strike. A union officer, on the other
hand, may be terminated from work when he knowingly participates in an
illegal strike, and like other workers, when he commits an illegal act during a
strike.52

Considering their persistence in holding picketing activities despite the

declaration by the NCMB that their union was not duly registered as a
legitimate labor organization and the letter from NFLs legal counsel informing
that their acts constitute disloyalty to the national federation, and their filing
of the notice of strike and conducting a strike vote notwithstanding that their
union has no legal personality to negotiate with MCCHI for collective
bargaining purposes, there is no question that NAMA-MCCH-NFL officers
knowingly participated in the illegal strike. The CA therefore did not err in
ruling that the termination of union officers Perla Nava, Catalina Alsado,
Albina Baez, Hannah Bongcaras, Ernesto Canen, Jesusa Gerona and
Guillerma Remocaldo was valid and justified.
With respect to the dismissed union members, although MCCHI submitted
photographs taken at the picket line, it did not individually name those
striking employees and specify the illegal act committed by each of them. As
to the affidavits executed by non-striking employees, they identified mostly
union officers as the persons who blocked the hospital entrance, harassed
hospital employees and patients whose vehicles were prevented from entering
the premises. Only some of these witnesses actually named a few union
members who committed similar acts of harassment and coercion.
Consequently, we find no error committed by the CA in CA-G.R. SP No. 66540
when it modified the decision of the NLRC and ruled that the dismissal of
union members who merely participated in the illegal strike was illegal. On
the other hand, in CA-G.R. SP No. 84998, the CA did not err in ruling that
the dismissal of Yballe, et al. was illegal; however, it also ordered their
reinstatement with full back wages.

Dismissed union members not entitled to backwages but should be awarded

separation pay in lieu of reinstatement

Since there is no clear proof that union members actually participated in the
commission of illegal acts during the strike, they are not deemed to have lost
their employment status as a consequence of a declaration of illegality of the
strike.

Petitioners in G.R. Nos. 154113 and 187778 assail the CA in not ordering
their reinstatement with back wages. Invoking stare decisis, they cited the
case of Bascon v. Court of Appeals53 decided by this Court in 2004 and which
involved two former hospital employees who likewise sued MCCHI after the
latter terminated their employment due to their participation in the same
illegal strike led by NAMA-MCCH-NFL. In said case we ruled that petitioners
Cole and Bascon were illegally dismissed because MCCHI failed to prove that
they committed illegal acts during the strike. We thus ordered the
reinstatement of petitioners Bascon and Cole without loss of seniority rights
and other privileges and payment of their back wages inclusive of allowances,
and other benefits computed from the time they were dismissed up to the time
of their actual reinstatement. Bascon was also the basis of the award of back
wages in CA-G.R. SP No. 84998.

Stare decisis et non quieta movere. Stand by the decision and disturb not
what is settled. Under the doctrine of stare decisis, once a court has laid down
a principle of law as applicable to a certain state of facts, it will adhere to that
principle and apply it to all future cases where the facts are substantially the
same,54 even though the parties may be different. It proceeds from the first
principle of justice that, absent any powerful countervailing considerations,
like cases ought to be decided alike. Thus, where the same questions relating
to the same event have been put forward by parties similarly situated as in a
previous case litigated and decided by a competent court, the rule of stare
decisis is a bar to any attempt to relitigate the same issue.55

The doctrine though is not cast in stone for upon a showing that
circumstances attendant in a particular case override the great benefits
derived by our judicial system from the doctrine of stare decisis, the Court is
justified in setting it aside.56 For the Court, as the highest court of the land,
may be guided but is not controlled by precedent. Thus, the Court, especially
with a new membership, is not obliged to follow blindly a particular decision
that it determines, after re-examination, to call for a rectification.57

Although the Bascon case involved the very same illegal strike in MCCHI
which led to the termination of herein petitioners, its clearly erroneous
application of the law insofar only as the award of back wages warrants setting
aside the doctrine. Indeed, the doctrine of stare decisis notwithstanding, the
Court has abandoned or overruled precedents whenever it realized that the
Court erred in the prior decisions. "Afterall, more important than anything
else is that this Court should be right."58

In G & S Transport Corporation v. Infante,59 the Court explained the rationale

for its recent rulings deleting back wages awarded to the dismissed workers
if the strike was found to be illegal. Considering that they did not render work
for the employer during the strike, they are entitled only to reinstatement.

With respect to backwages, the principle of a "fair days wage for a fair days
labor" remains as the basic factor in determining the award thereof. If there
is no work performed by the employee there can be no wage or pay unless, of
course, the laborer was able, willing and ready to work but was illegally locked
out, suspended or dismissed or otherwise illegally prevented from working.
While it was found that respondents expressed their intention to report back
to work, the latter exception cannot apply in this case. In Philippine Marine
Officers Guild v. Compaia Maritima, as affirmed in Philippine Diamond
Hotel and Resort v. Manila Diamond Hotel Employees Union, the Court
stressed that for this exception to apply, it is required that the strike be legal,
a situation that does not obtain in the case at bar.
Under the circumstances, respondents reinstatement without backwages
suffices for the appropriate relief. If reinstatement is no longer possible, given
the lapse of considerable time from the occurrence of the strike, the award of
separation pay of one (1) month salary for each year of service, in lieu of
reinstatement, is in order.60 (Emphasis supplied.)

The CA decision in CA-G.R. SP No. 66540 ordering the payment of separation

pay in lieu of reinstatement without back wages is thus in order, to conform
to the policy of a fair days wage for a fair days labor. The amount of
separation pay is increased to one month pay for every year of service,
consistent with jurisprudence. Accordingly, the decision in CA-G.R. SP No.
84998 is modified by deleting the award of back wages and granting
separation pay in lieu of reinstatement.

It is to be noted that as early as April 8, 1996, union members who took part
in the concerted activities have been warned by management that NAMA-
MCCH-NFL is not a legitimate labor organization and its notice of strike was
denied by the NCMB, and directed to desist from further participating in such
illegal activities. Despite such warning, they continued with their picketing
activities and held more mass actions after management sent them
termination notices. The prolonged work stoppage seriously disrupted
hospital operations, which could have eventually brought MCCHI into
bankruptcy had the City Government of Cebu not issued a demolition order
and the NLRC Region 7 not formally enjoined the prohibited picketing
activities. Also, the illegal dismissal complaints subsequently filed by the
terminated employees did not obliterate the fact that they did not suffer loss
of earnings by reason of the employers unjustified acts, there being no unfair
labor practice committed by MCCHI. Hence, fairness and justice dictate that
back wages be denied the said employees who participated in the illegal
concerted activities to the great detriment of the employer.

Separation pay is made an alternative relief in lieu of reinstatement in certain

circumstances, like: (a) when reinstatement can no longer be effected in view
of the passage of a long period of time or because of the realities of the
situation; (b) reinstatement is inimical to the employers interest; (c)
reinstatement is no longer feasible; (d) reinstatement does not serve the best
interests of the parties involved; (e) the employer is prejudiced by the workers
continued employment; (f) facts that make execution unjust or inequitable
have supervened; or (g) strained relations between the employer and
employee.61
Considering that 15 years had lapsed from the onset of this labor dispute,
and in view of strained relations that ensued, in addition to the reality of
replacements already hired by the hospital which had apparently recovered
from its huge losses, and with many of the petitioners either employed
elsewhere, already old and sickly, or otherwise incapacitated, separation pay
without back wages is the appropriate relief. We note that during the
pendency of the cases in this Court, some of the petitioners have entered into
compromise agreements with MCCHI, all of which were duly approved by this
Court. Thus, excluded from the herein monetary awards are the following
petitioners whose compromise agreements have been approved by this Court
and judgment having been entered therein: Gloria Arguilles, Romulo Alforque,
Gerna Patigdas-Barte, Daylinda Tigo Merlyn Nodado, Ramon Tagnipis,
Bernabe Lumapguid, Romeo Empuerto, Marylen Labra, Milagros Castillo
Bernadette Pontillas-Tibay, Constancio Pagador, Nolan Alvin Panal, Edilberto
Villa, Roy Malazarte, Felecianita Malazarte and Noel Hortelano.

Attorneys fees

The dismissed employees having been compelled to litigate in order to seek

redress and protect their rights, they are entitled to reasonable attorneys fees
pursuant to Art. 2208 (2) of the Civil Code. In view of the attendant
circumstances of this case, we hold that attorneys fees in the amount of
P50,000.00 is reasonable and justified. However, the respondents in G.R. No.
196156 are not entitled to the same relief since they did not appeal from the
CA decision which did not include the award of attorneys fees.

WHEREFORE, the petition for review on certiorari in G.R. No. 187861 is

DENIED while the petitions in G.R. Nos. 154113, 187778 and 196156 are
PARTLY GRANTED. The Decision dated October 17, 2008 of the Court of
Appeals in CA-G.R. SP No. 66540 is hereby AFFIRMED with MODIFICATIONS
in that MCCHI is ordered to pay the petitioners in G.R. Nos. 154113 and
187778, except the petitioners who are union officers, separation pay
equivalent to one month pay for every year of service, and reasonable
attorneys fees in the amount of P50,000.00. The Decision dated November 7,
2008 is likewise AFFIRMED with MODIFICATIONS in that MCCHI is ordered
to pay the private respondents in G.R. No. 196156 separation pay equivalent
to one month pay for every year of service, and that the award of back wages
is DELETED.

The case is hereby remanded to the Executive Labor Arbiter for the
recomputation of separation pay due to each of the petitioners union
members in G.R. Nos. 154113, 187778 and 196156 except those who have
executed compromise agreements approved by this Court.

No pronouncement as to costs.

SO ORDERED.

SECOND DIVISION

G. R. No. 160303 September 13, 2007

G & S TRANSPORT CORPORATION, Petitioner,

vs.
TITO S. INFANTE, MELOR VELASCO, JR., JJ. BORBO, and DANILO
CASTAEDA, Respondents.

DECISION

TINGA, J.:

This petition for review seeks the reversal of the decision1 and resolution2 of
the Court of Appeals in CA-G.R. SP No. 71472 dated 27 June 2003 and 8
October 2003, respectively. The assailed judgment reversed and set aside the
decision3 of the National Labor Relations Commission (NLRC) which affirmed
in toto the decision of the Acting Executive Labor Arbiter for Adjudication
Melquiades Sol D. Del Rosario (Labor Arbiter) dated 31 May 1999. The Labor
Arbiter had ordered G & S Transport Corporation (petitioner) to pay
respondents Tito Infante (Infante), Melor Borbo (Borbo) and Danilo Castaeda
(Castaeda) separation pay in lieu of reinstatement without backwages.

Petitioner was the exclusive coupon taxi concessionaire at the Ninoy Aquino
International Airport (NAIA) from 1 February 1989 to 31 January 1994 by
virtue of a five-year concession contract awarded by the Manila International
Airport Authority. Under the terms of the contract, the coupon taxi units
assigned to service arriving plane passengers would be dispatched from the
garage located at the Duty Free Compound opposite NAIA, whereas units
assigned to service departing plane passengers would be given their
assignment by the garage dispatcher via a two-way radio system on their way
back to the garage after taking arriving passengers to their destination.4

Respondents in the employ of petitioner had been drivers since 1 February

1989. At the time of their dismissal, they were assigned at the Domestic
Airport from 16 to 31 May 1990 on two (2) the shifts: morning shift which
starts from 7:00 a.m. to 4:00 p.m. and the afternoon shift from 4:00 p.m. to
1:00 a.m. Castaeda was assigned to the morning shift5 while Infante and
Borbo were assigned to the afternoon shift.6

On 5 May 1990, petitioner claimed to have received from the NAIA Airport
Taxi Service Employees Union-TUPAS (Union) a letter-memorandum
demanding the dismissal from employment of Ricardo Gonzales (Gonzales)
and Ephraim Alzaga (Alzaga), both drivers of petitioner on the ground that
they were found guilty of committing acts of disloyalty, conduct unbecoming
of a union member and acts inimical to the interest of the Union. The Union
based its action on a petition filed by said employees calling for a local
election.7 On 9 May 1990, the two employees were terminated by petitioner.8

Upon learning of the incident, several drivers of petitioner stopped driving

their taxi cabs apparently in sympathy with their dismissed colleagues.
Petitioner alleged that the work stoppage constituted an illegal strike at the
work premises. Furthermore, petitioner averred that various illegal acts, such
as stopping, barring and intimidating other employees wishing to enter the
work premises, were committed by the said drivers that resulted in the
paralyzation of petitioners business operation.9

Petitioner ordered the striking workers to return to work but some of the
drivers, including respondents, refused to do so. On 22 May 1990, petitioner
filed an action for illegal strike before the Labor Arbiter against thirty-seven
(37) drivers. Two days later, said drivers filed a case for illegal dismissal
against petitioner.

In a Joint Affidavit dated 18 October 1990, Infante and Borbo denied joining
the alleged strike. They narrated that they reported to work at the domestic
airport on 16 May 1990 before 4:00 p.m. but did not find their taxi in the
area. They proceeded to the garage at the Duty Free shop. The dispatcher and
the counter sales clerk were likewise not around. Thereafter, they learned
about the protest of their co-workers over the dismissal of Gonzales and
Alzaga. They soon found out that the management had stopped company
operation that afternoon but they stayed on until 1:00 a.m. They did not
report for work on the following day because it was their day-off. On 18 May
1990, they did report for work but were refused entry by the guard because
their names did not appear on the list of drivers allowed by petitioner to work
on that day. They soon received a copy of the complaint filed by petitioner
charging them with illegal strike.10

Castaeda, in his Affidavit dated 17 March 1995, stated that he was on sick
leave from 11 to 15 May 1990. He reported for work on 16 May 1990 but was
not able to perform his duties because of the protest staged by his co-workers.
He reported back to work on the following day but he was not allowed entry
by the guard for having allegedly participated in the illegal strike.11

Out of the 37 complaining drivers, only seven remained as complainants when

the case reached the Labor Arbiter, namely: Gener Mendoza (Mendoza),
Eduardo Dacanay (Dacanay), Norman Sabiniano (Sabiniano), Mario
Daramayo (Daramayo), Borbo, Infante, and Castaeda. Others executed their
respective affidavits of desistance and filed the corresponding motion to
dismiss.12 On 31 May 1999, the Labor Arbiter declared respondents
concerted action as a form of an illegal strike, thus:

Anent the issue of illegal strike, the records show that there was a stoppage
of work on May 16, 1990 at the premises of the garage of G & S Transport
located at the Duty Free Shop just fronting the Ninoy Aquino International
Airport (NAIA), brought about primarily by the dismissal of Messrs. Gonzales
and Alzaga, on the account of acts of [sic] [inimical] to the interest of G & S
union. As pointed out by complainant G & S Transport, its Taxi drivers
undertook those collective action without filing any notice of strike and taking
a strike vote, and in violation of no strike-no lockout clause embodied in the
CBA thus making their action as illegal activity.

xxxx

Actually when the stoppage of work occurred, there seemed to be no labor

disputes but merely a protest of the dismissal of respondents leaders. Under
Article 212 (D) "any temporary stoppage of work by the concerted action of
employees must be a result of an industrial or labor dispute." No industrial
or labor dispute, however, was existing on May 16, 1990, since there was no
pending case in any legal forum then.13

However, finding that Mendoza, Dacanay and Sabiniano had not participated
in the strike, the Labor Arbiter declared their dismissal as illegal and ordered
petitioner to pay them backwages and separation pay, in lieu of
reinstatement, since petitioner had already stopped its operations on 31
January 1995. On the other hand, respondents Daramayo, Borbo, Infante
and Castaeda, though found to have participated in the illegal strike, were
not meted out the penalty of dismissal; instead, petitioner was ordered to pay
them separation pay in lieu of reinstatement but without backwages.14

On appeal, the NLRC affirmed in toto the ruling of the Labor Arbiter.

In a petition for certiorari before the Court of Appeals, respondents assailed

the NLRC decision affirming the Labor Arbiters findings: (1) that respondents
had joined the illegal strike; (2) that petitioner was no longer in operation and
hence, reinstatement could not be ordered; and (3) that respondents were not
illegally dismissed, but were not entitled to reinstatement and backwages.15

On 27 June 2003, the Court of Appeals reversed the decisions of the NLRC
and the Labor Arbiter, the dispositive portion of which reads:

WHEREFORE, based on the foregoing, the petition is GIVEN DUE COURSE.

The assailed Resolution and Order of the National Labor Relations
Commission are ANNULLED and SET ASIDE. The matter is remanded to the
Labor Arbiter for the computation of backwages and such other monetary
benefits awarded in accordance with this Decision.16

The appellate court scored the Labor Arbiter because the latter failed to
categorically rule on the validity of respondents dismissal and instead stood
content in simply stating that respondents should not have been meted out
the severest penalty of dismissal for their inadequacies and wrongful
actions.17 The appellate court went on to declare respondents dismissal as
illegal.

Relying on a certification from the Securities and Exchange Commission (SEC)

that petitioner was then still operational, the Court of Appeals further held
that the Labor Arbiter and the NLRC gravely abused their discretion in
ordering the grant of separation pay instead of reinstatement.18

Dissatisfied, petitioner filed a motion for reconsideration of the said decision.

On 8 October 2003, the Court of Appeals issued a resolution denying said
motion for lack of merit. 19

In the instant petition, petitioner contends that the Court of Appeals erred
when it acted as a trier of facts and ordered the reinstatement of respondents
and payment of backwages.20 Petitioner insists that the appellate court
erroneously substituted its decision with that of the Labor Arbiter, whose
finding and conclusion are in accordance with judicial precedents.21
Petitioner reiterates that extensive trial on the merits was held before the
Labor Arbiter wherein the parties had been afforded the opportunity to
present their respective witnesses and documentary evidence. Petitioner
stresses that findings of the Labor Arbiter, therefore, were all based on facts
and substantial evidence.22

Respondents, for their part, argue that by virtue of the Courts

pronouncement in St. Martin Funeral Homes v. NLRC,23 the Court of Appeals
is clothed with plenary authority to reverse the factual findings of the NLRC
or other quasi-judicial bodies particularly when the latters judgment is based
on a misapprehension of facts when it manifestly overlooked certain relevant
facts, which if properly considered would justify a different conclusion, or
when it erroneously misapplied a law as is obtaining in the case at bar.24

A petition for certiorari is available when any tribunal, board or officer

exercising judicial or quasi-judicial functions has acted without or in excess
of its or his jurisdiction, or with grave abuse of discretion amounting to lack
or excess of jurisdiction. As a general rule, factual issues are not proper
subjects for certiorari which is limited to the issue of jurisdiction and grave
abuse of discretion.25 It does not include an inquiry into the correctness of
the evaluation of evidence which was the basis of the labor agency in reaching
its conclusion. Neither is it for the Court of Appeals nor this Court to re-
examine conflicting evidence, re-evaluate the credibility of witnesses or
substitute the findings of fact of an administrative body which has gained
expertise in its specialized field.26

One question therefore arisesdid the NLRC commit grave abuse of discretion
when it affirmed the findings of the Executive Labor Arbiter? While only
questions of law may be entertained by this Court through a petition for review
on certiorari, there are, however, well-recognized exceptions such as the
instant case where the factual findings of the NLRC and the Court of Appeals
are contradictory. A re-evaluation of the records of this case is necessary for
its proper resolution.27

The issues presented before the Executive Labor Arbiter and the NLRC are the
very same issues proffered by the parties before this Court, which may be
summed up as follows: (1) whether respondents participated in the illegal
strike and (2) whether the order for the payment of separation pay, in lieu of
reinstatement without backwages, is proper.

Petitioner maintains that respondents knowingly and deliberately

participated in the illegal activities in the course of an illegal strike by the
mere fact that they resolutely defied the order directing them to report back
to work and continued to stay outside the premises, barricading the gates,
heckling and intimidating employees who were returning to work.28

Respondents however aver that there was no iota of evidence that would show
that they have trooped the line of the illegal strikers.29 Assuming arguendo
that they participated in the illegal strike, respondents argue that they should
not be dismissed because there was no proof that they committed illegal acts
during the strike.30

In its Reply, petitioner refutes respondents argument and submits that

evidence, such as photographs, affidavits of witnesses, and
memoranda/telegrams, were presented during trial to prove that respondents
joined the illegal strike.

Article 212 of the Labor Code defines strike as any temporary stoppage of
work by the concerted action of employees as a result of an industrial or labor
dispute. A valid strike therefore presupposes the existence of a labor dispute.
The strike undertaken by respondents took the form of a sit-down strike, or
more aptly termed as a sympathetic strike, where the striking employees have
no demands or grievances of their own, but they strike for the purpose of
directly or indirectly aiding others, without direct relation to the advancement
of the interest of the strikers.31 It is indubitable that an illegal strike in the
form of a sit-down strike occurred in petitioners premises, as a show of
sympathy to the two employees who were dismissed by petitioner. Apart from
the allegations in its complaint for illegal strike filed before the Labor Arbiter,
petitioner presented the affidavits and testimonies of their other employees
which confirm the participation of respondents in the illegal strike. Petitioner
has sufficiently established that respondents remained in the work premises
in the guise of waiting for orders from management to resume operations
when, in fact, they were actively participating in the illegal strike.

The office telegram sent to individual respondents informing them to return

to work went unheeded. Respondents failed to satisfactorily explain their
conspicuous absence following the day of the purported illegal strike. No
record whatsoever was presented by Borbo and Infante to prove that 17 May
1990 was their day-off. It was convenient to pass the buck on petitioner by
alleging that proof of their alibi is in petitioners file.32 Castaeda could not
even present a sick leave form to attest to his absence from 11-15 May
1990.33 Moreover, the NLRC and the Court of Appeals appeared unanimous
in sustaining the findings of the Labor Arbiter with respect to respondents
participation in the illegal strike. The appellate courts decision dwelt on the
fact that no illegal activities were committed by respondents in the course of
the illegal strike, hence, reinstatement is proper.

Respondents participation in the illegal strike having been established, we

shall now determine the effects of their proscribed acts.

Article 264 of the Labor Code, in providing for the consequences of an illegal
strike, makes a distinction between union officers and members who
participated therein. Thus, knowingly participating in an illegal strike is a
valid ground for termination of employment of a union officer. The law,
however, treats differently mere union members. Mere participation in an
illegal strike is not a sufficient ground for termination of the services of the
union members.

The Labor Code protects an ordinary, rank-and-file union member who

participated in such a strike from losing his job, provided that he did not
commit an illegal act during the strike.34 It can be gleaned from the aforecited
provision of law in point, however, that an ordinary striking employee cannot
be terminated for mere participation in an illegal strike. There must be proof
that he committed illegal acts during the strike and the striker who
participated in the commission of illegal act must be identified. Proof beyond
reasonable doubt is not required. Substantial evidence available under the
attendant circumstances, which may justify the imposition of the penalty of
dismissal, may suffice.35
In the case at bar, this Court is not convinced that the affidavits of petitioners
witnesses constitute substantial evidence to establish that illegal acts were
committed by respondents. Nowhere in their affidavits did these witnesses
cite the particular illegal acts committed by each individual respondent during
the strike. Notably, no questions during the hearing were asked relative to the
supposed illegal acts.

Interestingly, the Labor Arbiter, the proximate trier of fact, also made no
mention of the supposed illegal acts in his decision, thus:

As adverted to earlier, no matter by what term the respondents complainants

used in describing their concerted action, i.e. [,] protest, sympathy or mere
expression, their joint action have successfully paralyzed the operations of G
& S Transport, and this is considered a strike.

If at all, what mitigates respondent action is their honest albeit wrong belief
that the course of action they have taken is correct because this is the only
way they can show their oneness with their dismissed leaders. But as already
held, their action is not the correct remedy because they failed to execute their
course

of action within the ambit and parameters of the law. Respondents

complainants should not have been meted out the severest penalty of
dismissal for their inadequacies and wrongful action. Had G & S [T]ransport
been still operational[,] the four respondents, namely[:] Melo Borbo, Tito
Infante, Mario Daramayo and Danilo Castaeda, would have been ord[e]red
to return to work sans backwages (the period of time that lapse without wages
being considered as penalty).1wphi1 But since, the company is no longer
operational, then in lieu of reinstatement, said complainants respondents
should be paid a months salary per year of service, a fraction of six (6) months
being considered one year.36

It can now therefore be concluded that the acts of respondents do not merit
their dismissal from employment because it has not been substantially proven
that they committed any illegal act while participating in the illegal strike.
Petitioner, however, disavows that it terminated respondents employment. It
explained that by filing a complaint for illegal strike before the NLRC, it was
merely seeking a declaration that respondents have lost their employment
status.37
Respondents dismissal from work could not be any clearer than the refusal
of petitioner to admit them back as they signified their intention to go back to
work. In fact, this very act of petitioner precipitated respondents filing of a
complaint for illegal dismissal with a prayer for reinstatement.

With respect to backwages, the principle of a "fair days wage for a fair days
labor" remains as the basic factor in determining the award thereof. If there
is no work performed by the employee there

can be no wage or pay unless, of course, the laborer was able, willing and
ready to work but was illegally locked out, suspended or dismissed or
otherwise illegally prevented from working. While it was found that
respondents expressed their intention to report back to work, the latter
exception cannot apply in this case. In Philippine Marine Officers Guild v.
Compaia Maritima,38 as affirmed in Philippine Diamond Hotel and Resort
v. Manila Diamond Hotel Employees Union,39 the Court stressed that for this
exception to apply, it is required that the strike be legal, a situation that does
not obtain in the case at bar.

Under the circumstances, respondents reinstatement without backwages

suffices for the appropriate relief. If reinstatement is no longer possible, given
the lapse of considerable time from the occurrence of the strike, the award of
separation pay of one (1) month salary for each year of service, in lieu of
reinstatement, is in order.

The Court of Appeals, in ordering reinstatement, relied on the SEC

certification that petitioner was then still operational, viz:

Petitioners in this petition attached a certification from the Securities and

Exchange Commission that private respondent is still operational as of
August 6, 1999. Private respondent did not deny the certification. Since
petitioners employment with private

respondent was not conditional on private respondents concession at the

NAIA, it is grave abuse of discretion for the Labor Arbiter and the NLRC to
order the grant of separation pay instead of reinstatement.40
Petitioner asserts that the "belated" certification issued by the SEC bears no
value to respondents reinstatement because the employment of respondents
was conditioned on the subsistence of petitioners concession with NAIA but
which had already been terminated in 1995.41

Respondents counter that petitioner and Avis Coupon Taxi are one and the
same company and that it is of public knowledge that Avis Coupon Taxi still
continues to be the exclusive concessionaire of NAIA at that time. Moreover,
respondents deny that their employment was conditioned on petitioners
concession with NAIA.

The SEC has certified that G & S Transport Corporation was registered on 5
January 1972 for a period of fifty (50) years and as of 6 August 1999, no
document showing its dissolution had been filed.42 Furthermore, the
personnel manager of petitioner verified that Avis Coupon Taxi and G & S
Transport Corporation are one and the same.43 These documents pointedly
indicate that petitioner has not ceased operations. Petitioner cannot seek
refuge behind the mere

assertion that respondents employment is conditioned on the five-year

concession with NAIA. No employment contract was presented to support
such fact. Petitioner in fact even admitted that it obtained another concession
from NAIA in 2000.

It is of no moment that petitioners concession was no longer exclusive. No

evidence exists that the employment of respondents was in any way
conditioned on petitioners obstention of an exclusive contract from NAIA. The
fact remains that petitioner still operates a taxi concession in NAIA and that
logically requires the service of taxi drivers, the same position held by
respondents back in 1990. Section 4, Rule I of the Rules Implementing Book
VI of the Labor Code provides:

SEC. 4. Reinstatement to former position.(a) An employee who is separated

from work without just cause shall be reinstated to his former position, unless
such position no longer exists at the time of his reinstatement, in which case
he shall be given a substantially equivalent position in the same
establishment without loss of seniority rights.
The above-quoted rule enunciates reinstatement as the standard relief.
However, in this case, seventeen (17) years have elapsed since respondents
were illegally dismissed. In Association of Independent Unions in the
Philippines v. NLRC 44 , where more than eight (8) years have passed since
the petitioners therein staged an illegal strike and were found to have been
unlawfully terminated, an award of separation pay equivalent to one (1) month
pay for every year of service, in lieu of reinstatement, was deemed more
practical and appropriate to all the parties concerned. We adopt the same tack
in this case.

In sum, the resolution and order of the NLRC, which adopted the findings of
the Labor Arbiter, are in accordance with law and jurisprudence.
Consequently, the Court of Appeals erred in granting respondents petition for
certiorari, there being no grave abuse of discretion on the part of the NLRC.

WHEREFORE, the petition is GRANTED. The challenged Decision dated 27

June 2003 and Resolution dated 8 October 2003 of the Court of Appeals in
CA-G.R. SP No. 71472 are REVERSED AND SET ASIDE. The Decision dated
15 October 2001 of the NLRC, which affirmed that of the Labor Arbiter, is
REINSTATED.

SO ORDERED.

THIRD DIVISION

G.R. No. 160138 July 13, 2011

AUTOMOTIVE ENGINE REBUILDERS, INC. (AER), ANTONIO T. INDUCIL,

LOURDES T. INDUCIL, JOCELYN T. INDUCIL and MA. CONCEPCION I.
DONATO, Petitioners,
vs.
PROGRESIBONG UNYON NG MGA MANGGAGAWA SA AER, ARNOLD
VILLOTA, FELINO E. AGUSTIN, RUPERTO M. MARIANO II, EDUARDO S.
BRIZUELA, ARNOLD S. RODRIGUEZ, RODOLFO MAINIT, JR., FROILAN B.
MADAMBA, DANILO D. QUIBOY, CHRISTOPHER R. NOLASCO, ROGER V.
BELATCHA, CLEOFAS B. DELA BUENA, JR., HERMINIO P. PAPA, WILLIAM
A. RITUAL, ROBERTO CALDEO, RAFAEL GACAD, JAMES C. CAAMPUED,
ESPERIDION V. LOPEZ, JR., FRISCO M. LORENZO, JR., CRISANTO
LUMBAO, JR., and RENATO SARABUNO, Respondents.

x - - - - - - - - - - - - - - - - - - - - - - -x

G.R. No. 160192

PROGRESIBONG UNYON NG MGA MANGGAGAWA SA AER, ARNOLD

VILLOTA, FELINO E. AGUSTIN, RUPERTO M. MARIANO II, EDUARDO S.
BRIZUELA, ARNOLD S. RODRIGUEZ, RODOLFO MAINIT, JR., FROILAN B.
MADAMBA, DANILO D. QUIBOY, CHRISTOPHER R. NOLASCO, ROGER V.
BELATCHA, CLEOFAS B. DELA BUENA, JR., HERMINIO P. PAPA, WILLIAM
A. RITUAL, ROBERTO CALDEO, RAFAEL GACAD, JAMES C. CAAMPUED,
ESPERIDION V. LOPEZ, JR., FRISCO M. LORENZO, JR., CRISANTO
LUMBAO, JR., and RENATO SARABUNO, Petitioners,
vs.
AUTOMOTIVE ENGINE REBUILDERS, INC., and ANTONIO T. INDUCIL,
Respondents.

DECISION

MENDOZA, J.:

Challenged in these consolidated petitions for review is the October 1, 2003

Amended Decision1 of the Court of Appeals (CA), in CA-G.R. SP No. 73161,
which modified the Resolution2 of the National Labor Relations Commission
(NLRC), by ordering the immediate reinstatement of all the suspended
employees of Automotive Engine Rebuilders, Inc. (AER) without backwages.

Records show that AER is a company engaged in the automotive engine repair
and rebuilding business and other precision and engineering works for more
than 35 years. Progresibong Unyon Ng Mga Manggagawa sa AER (Unyon) is
the legitimate labor union of the rank and file employees of AER which was
formed in the year 1998.
Due to a dispute between the parties, both filed a complaint against each
other before the NLRC. AER accused the Unyon of illegal concerted activities
(illegal strike, illegal walkout, illegal stoppage, and unfair labor practice) while
Unyon accused AER of unfair labor practice, illegal suspension and illegal
dismissal.

AERs Managements Version

On January 28, 1999, eighteen (18) employees of AER, acting collectively and
in concert, suddenly and without reason staged a walkout and assembled
illegally in the company premises.

Despite managements plea for them to go back to work, the concerned

employees refused and, instead, walked out of the company premises and
proceeded to the office of the AER Performance and Service Center (AER-PSC)
located on another street. Upon arrival, they collectively tried to cart away one
(1) line boring machine owned by AER out of the AER-PSC premises. They
threatened and forced the company guards and some company officers and
personnel to open the gate of the AER-PSC compound. They also urged the
AER-PSC employees to likewise stop working.

The concerned employees occupied the AER-PSC premises for several hours,
thus, disrupting the work of the other employees and AERs services to its
clients. They refused to stop their unlawful acts despite the intervention of
the barangay officers. They left the AER-PSC premises only when the police
intervened and negotiated with them.

Subsequently, management issued a memorandum requiring the employees

who joined the illegal walkout to explain in writing why they should not be
disciplined administratively and dismissed for their unjustified and illegal
acts.

The concerned employees submitted their written explanation which

contained their admissions regarding their unjustified acts. Finding their
explanation unsatisfactory, AER terminated the services of the concerned
employees.
On February 22, 1999, the concerned employees started a wildcat strike,
barricaded company premises, and prevented the free ingress and egress of
the other employees, officers, clients, and visitors and the transportation of
company equipments. They also tried to use force and inflict violence against
the other employees. Their wildcat strike stopped after the NLRC issued and
served a temporary restraining order (TRO).

Meantime, six (6) of the concerned employees, namely: Oscar Macaranas,

Bernardino Acosta, Ferdinand Flores, Benson Pingol, Otillo Rabino, and
Jonathan Taborda resigned from the company and signed quitclaims.

Unyons Version

On December 22, 1998, Unyon filed a petition for certification election before
the Department of Labor and Employment (DOLE) after organizing their
employees union within AER. Resenting what they did, AER forced all of its
employees to submit their urine samples for drug testing. Those who refused
were threatened with dismissal.

On January 8, 1999, the results of the drug test came out and the following
employees were found positive for illegal drugs: Froilan Madamba, Arnold
Rodriguez, Roberto Caldeo, Roger Bilatcha, Ruperto Mariano, Edwin Fabian,
and Nazario Madala.

On January 12, 1999, AER issued a memorandum suspending these

employees from work for violation of Article D, Item 2 of the Employees
handbook which reads as follows:

Coming to work under the influence of intoxicating liquor or any drug or

drinking any alcoholic beverages on the premises on company time.

Out of the seven (7) suspended employees, only Edwin Fabian and Nazario
Madala were allowed by AER to report back to work. The other five (5)
suspended employees were not admitted by AER without first submitting the
required medical certificate attesting to their fitness to work.
While they were in the process of securing their respective medical certificates,
however, they were shocked to receive a letter from AER charging them with
insubordination and absence without leave and directing them to explain
their acts in writing. Despite their written explanation, AER refused to
reinstate them.

Meanwhile, Unyon found out that AER was moving out machines from the
main building to the AER-PSC compound located on another street. Sensing
that management was going to engage in a runaway shop, Unyon tried to
prevent the transfer of the machines which prompted AER to issue a
memorandum accusing those involved of gross insubordination, work
stoppage and other offenses.

On February 2, 1999, the affected workers were denied entry into the AER
premises by order of management. Because of this, the affected workers
staged a picket in front of company premises hoping that management would
accept them back to work. When their picket proved futile, they filed a
complaint for unfair labor practice, illegal suspension and illegal dismissal.

Ruling of the Labor Arbiter

On August 9, 2001, the Labor Arbiter (LA) rendered a decision3 in favor of

Unyon by directing AER to reinstate the concerned employees but without
backwages effective October 16, 2001.

The LA ruled, among others, that the concerned employees were suspended
from work without a valid cause and without due process. In finding that
there was illegal suspension, the LA held as follows:

There is no doubt that the hostile attitude of the management to its workers
and vice versa started when the workers began organizing themselves into a
union. As soon as the management learned and received summons regarding
the petition for certification election filed by the employees, they retaliated by
causing the employees to submit themselves to drug test. And out of the seven
who were found positive, five were placed on a 12 day suspension namely: (1)
Froilan Madamba; (2) Arnold Rodriguez; (3) Roberto Caldeo; (4) Roger
Belatcha; and (5) Ruperto Mariano.
This is illegal suspension plain and simple. Even if they were found positive
for drugs, they should have been caused to explain why they were found so.
It could have been that they have taken drugs as cure for ailment under a
physicians prescription and supervision. Doubts should be in favor of the
working class in the absence of evidence that they are drug addicts or they
took prohibited or regulated drugs without any justifiable reason at all. In
fact, there is not even a showing by the company that the performance of
these employees was already adversely affected by their use of drugs.

Lest be misunderstood that we are considering use of prohibited drug or

regulated drugs, what we abhor is suspension without valid cause and
without due process.4

The LA further held that AER was guilty of illegal dismissal for refusing to
reinstate the five (5) employees unless they submit a medical certificate that
they were fit to work. Thus:

x x x Firstly, the employer has not even established that the five employees
are sick of ailments which are not curable within six months, a burden which
rests upon the employers and granting that they were sick or drug addicts,
the remedy is not dismissal but to allow them to be on sick leave and be
treated of their illness and if not cured within 6 months, that is the time that
they may be separated from employment but after payment of months
salary for every year of service by way of separation pay.5

Finally, the LA held that the concerned employees were not totally without
fault. The concerted slowdown of work that they conducted in protesting their
illegal suspension was generally illegal and unjustifiable. The LA, thus, ruled
that both parties were in pari delicto and, therefore, must suffer the
consequences of the wrong they committed.

NLRC Ruling

Both parties filed their respective appeals with the NLRC. The concerned
employees argued that the LA erred in 1) not awarding backwages to them
during the period of their suspension; 2) not holding that AER is guilty of
unfair labor practice; and 3) not holding that they were illegally dismissed
from their jobs.6 AER, on the other hand, claimed that the LA erred in finding
that there was illegal dismissal and in ordering the reinstatement of the
concerned employees without backwages.7

On March 5, 2002, the NLRC issued a Resolution8 modifying the LA decision

by setting aside the order of reinstatement as it found no illegal dismissal.

The NLRC, however, considered only three (3) out of the eighteen concerned
employees, (18) namely: Froilan Madamba, Ruperto Mariano, and Roberto
Caldeo because their names were commonly identified in the LA decision and
in the concerned employees position paper as those employees who were
allegedly illegally suspended.

It wrote that these three (3) employees were validly suspended because they
were found positive for illegal drugs in the drug test conducted by AER.
Management was just exercising its management prerogative in requiring
them to submit a medical fit-to-work certificate before they could be admitted
back to work. The drug test was found to be not discriminatory because all
employees of AER were required to undergo the drug test. Neither was the
drug test related to any union activity.

Finally, the NLRC ruled that the concerned employees had no valid basis in
conducting a strike. Considering that the concerted activity was illegal, AER
had the right to immediately dismiss them.

Unyon and the concerned employees filed a petition before the CA advancing
the following

ARGUMENTS

PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION IN

HOLDING THAT THERE ARE ONLY THREE (3) REMAINING COMPLAINANTS
IN THE CASE FILED BY THE PETITIONERS.

PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION IN

HOLDING THAT THE SUSPENSION OF SEVERAL PETITIONERS WAS VALID
DESPITE THE ABSENCE OF DUE PROCESS.
PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION IN
SUSTAINING THE VALIDITY OF THE DISMISSAL OF EMPLOYEES WHO
TESTED POSITIVE DURING THE DRUG TEST.

PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION IN

ABSOLVING PRIVATE RESPONDENTS OF THE OFFENSE OF UNFAIR LABOR
PRACICE.

PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION IN

DISMISSING PETITIONERS COMPLAINT FOR ILLEGAL DISMISSAL.

The CA Ruling

On June 27, 2003, the CA rendered a decision,9 the dispositive portion of

which reads as follows:

WHEREFORE, premises considered, the petition is GRANTED. Respondents

are hereby directed to reinstate the petitioners effective immediately but
without backwages, except those who were tested positive for illegal drugs and
have failed to submit their respective medical certificates.

SO ORDERED.10

The CA explained that there still remained 26 complaining employees and not
just three (3) as claimed by the NLRC, because 32 members of Unyon signed
and filed the complaint, and from the 32 complaining members, only six (6)
voluntarily signed quitclaims in favor of AER. It reasoned out that the number
of parties to a complaint would correspond to the number of signatories
thereto and not necessarily to the names commonly appearing or identified in
the position paper and the LA decision. Citing Section 6 of the Rules of Court,
the CA held that all persons in whom or against whom any right to relief in
respect to or arising out of the same transaction or series of transactions is
alleged to exist, whether jointly, severally, or in the alternative, may join as
plaintiffs or be joined as defendants in one complaint.

The CA, however, agreed with the NLRC on the legality and validity of the
suspension. The CA wrote:
The petitioners themselves have admitted that all of them were ordered to give
their urine samples for the drug test; that the drug test was applicable to all
the employees lends credence that such test was not related to any union
activity. The union members were not singled out for said drug testing.

The complainants who tested positive for illegal drugs were validly suspended
under the company rules. The Employees Handbook of Company Rules and
Regulations prohibit employees from reporting for work under the influence
of intoxicating liquor and drugs.

With the finding that the petitioners tested positive for illegal drugs, AER
merely exercised their management prerogative to require a medical certificate
that said employees were already fit to work before they can be admitted back
to work.

Due to the failure of the affected petitioners to submit a medical certificate

that they are already fit to work, they were dismissed. Petitioners act of not
reporting for duty upon presentation of the medical certificate that they are
fit to work as per agreement with the DOLE NCMB on January 25, 1999 had
the marks of willful disobedience giving AER the right to terminate
employment.11

The CA further ruled that both parties were guilty of unfair labor practice. It
stated that the hostile attitude of AER towards its workers and vice-versa
started when the workers began organizing themselves into a union. AER tried
to have a runaway shop when it transferred some of its machinery from the
main building to the AER-PSC office located on another street on the pretext
that the main building was undergoing renovation. AER also prevented its
employees, even those who were excluded from its complaint, from going back
to work for allegedly staging an illegal strike. On the other hand, the concerted
work slowdown staged by the concerned employees as a result of their alleged
illegal suspension was unjustified. Hence, both parties were found by the CA
to be in pari delicto and must bear the consequences of their own wrongdoing.

On October 1, 2003, upon the motion for partial reconsideration filed by

Unyon praying for the payment of full backwages and the reinstatement of all
suspended employees, the CA rendered the assailed Amended Decision, the
dispositive portion of which reads, as follows:
WHEREFORE, the partial motion for reconsideration is GRANTED insofar as
the reinstatement of the suspended employees is concerned. This Courts
decision dated June 27, 2003 is hereby MODIFIED. Private respondents are
hereby directed to reinstate all the petitioners immediately without
backwages.

SO ORDERED.12

Unsatisfied, both parties filed the present consolidated petitions on the

following

GROUNDS

FOR UNYON:

THE COURT OF APPEALS LEGALLY ERRED IN NOT AWARDING

BACKWAGES TO INDIVIDUAL PETITIONERS NOTWITHSTANDING HAVING
ORDERED THEIR REINSTATEMENT TO THEIR PREVIOUS POSITIONS.

FOR AER:

THE HONORABLE COURT OF APPEALS ERRED GRIEVOUSLY WHEN IT

GAVE SO MUCH WEIGHT ON THE PRIVATE RESPONDENTS PARTIAL
MOTION FOR RECONSIDERATION BY AMENDING ITS DECISION IN
ORDERING THEIR IMMEDIATE REINSTATEMENT INCLUDING THOSE WHO
HAVE TESTED POSITIVE FOR ILLEGAL DRUGS (DRUG ADDICTS) AND
HAVE FAILED TO SUBMIT ANY MEDICAL CERTIFICATE.

G.R. No. 160138

AERs Position
AER questions the findings of the CA that there were 32 complaining
employees, which number was reduced to only 26 because six (6) resigned
and signed waivers and quitclaims. It argues that the CA should have
respected the findings of the LA and the NLRC that there were only 18
complaining employees, which was reduced to 12 due to the resignations and
signing of the corresponding Release and Quitclaims by six (6) of them. The
figure was further reduced to 8, and finally to just 3 complaining employees.

AER argues that the reinstatement of those employees who tested positive for
drugs and refused to submit their respective medical certificate certifying that
they were fit to work, violated AERs rules and regulations, and the law in
general because it would allow the sheltering of drug addicts in company
premises.

AER likewise insists that the drug test that it conducted was not related to
any union activity because the test covered all employees. The drug test was
part of company rules and guidelines designed to instill discipline and good
behavior among its employees as contained in its Employees Manual
Company Rules and Regulations. AER also claims that it simply exercised its
employers prerogative in requiring a medical certificate from the affected
employees.

Finally, AER avers that the complaining employees, who did not report back
to work despite their medical certificate attesting that they were fit to work,
committed willful disobedience. AER claims that the complaining employees
violated their agreement with the DOLE-National Conciliation and Mediation
Board (NCMB) dated January 25, 1999. AER likewise contends that the
complaining employees are deemed to have lost their employment status
when they engaged in unlawful activities such as abandonment of work,
stoppage of work and the commission of attempted theft involving its boring
machine. Hence, the termination of their employment was valid.

Unyons Position

Unyon argues that the complaint it filed indicated that there were 32
complainants who signed the complaint. Out of the 32, six (6) executed
waivers and quitclaims leaving 26 complainants, not 3 as claimed by AER.
Unyon likewise avers that the dismissal of the affected employees was
unlawful for lack of valid ground and prior notice. Although it admits that
some of the complainant employees tested positive for drugs, it posits that
AER should have, at least, required those affected employees to explain why
they tested positive for drugs because it could be possible that the drug taken
was a regulated drug for an ailment and prescribed by a doctor. Therefore,
prior notice or due process was still necessary.

Unyon further asserts that the penalty for testing positive for illegal drugs was
only a 15-day suspension, which was already served by the affected
employees. It also points out that AER never imposed the policy of drug
examination on its employees before the union was organized. Clearly, AER
adopted a hostile attitude towards the workers when they organized
themselves into a union.

Moreover, of the 32 complaining employees in the illegal dismissal case

against AER, only 18 were charged by AER with illegal strike. Unyon argues
that AER should have admitted back to work those employees who were not
included in the charge. There was no allegation either that those excluded
were involved in the January 28, 1999 incident.

Lastly, Unyon claims that the penalty of outright dismissal against the
eighteen (18) employees charged with illegal strike was grossly
disproportionate to their offense.

G.R. 160192

Unyons Position

Unyon basically argues that there was enough proof that AER acted in bad
faith and it was guilty of illegal lock-out for preventing the affected employees
from going back to work. Hence, the complaining employees are entitled to
backwages.

AERs Position
AER counters that there are only three (3) remaining complaining employees
who were validly suspended, namely: Froilan Madamba, Ruperto Mariano and
Roberto Caldeo. AER claims that these employees are not entitled to
backwages or even reinstatement because their separation from work was
valid due to their unlawful activities and willful disobedience. AER further
states that Unyon failed to properly file a verified position paper. Hence, the
complaining employees who failed to file a verified position paper should be
excluded from the petition.

In sum, the main issue to be resolved in these consolidated cases is whether

or not the CA erred in ruling for the reinstatement of the complaining
employees but without grant of backwages.

The Courts Ruling

The Court agrees with the ruling of the CA that there were 32 complaining
employees who filed and signed their complaint dated February 18, 1999 for
unfair labor practice, illegal dismissal and illegal suspension.13 Out of the
32, six (6) undeniably resigned and signed waivers and quitclaims, leaving 26
remaining complainant employees. Thus, the Court adopts and affirms the
following CA ruling on this matter:

The number of parties to a complaint corresponds to the number of

signatories thereto and not necessarily to the names commonly appearing or
identified in the position paper. All persons in whom or against whom any
right to relief in respect to or arising out of the same transaction or series of
transactions is alleged to exist whether jointly, severally, or in the alternative,
may, except as otherwise provided in these Rules, join as plaintiffs or be joined
as defendants in one complaint, where any question of law or fact common to
all such plaintiffs or to all such defendants may arise in the action; but the
court may make such orders as may be just to prevent any plaintiff or
defendant from being embarrassed or put to expense in connection with any
proceedings in which he may have no interest.14

This Court likewise affirms the ruling of the CA favoring the reinstatement of
all the complaining employees including those who tested positive for illegal
drugs, without backwages. The Court is in accord with the ruling of the LA
and the CA that neither party came to court with clean hands. Both were in
pari delicto.
It cannot be disputed that both parties filed charges against each other,
blaming the other party for violating labor laws. AER filed a complaint against
Unyon and its 18 members for illegal concerted activities. It likewise
suspended 7 union members who tested positive for illegal drugs. On the
other hand, Unyon filed a countercharge accusing AER of unfair labor
practice, illegal suspension and illegal dismissal. In other words, AER claims
that Unyon was guilty of staging an illegal strike while Unyon claims that AER
committed an illegal lockout.

AERs fault is obvious from the fact that a day after the union filed a petition
for certification election before the DOLE, it hit back by requiring all its
employees to undergo a compulsory drug test. Although AER argues that the
drug test was applied to all its employees, it was silent as to whether the drug
test was a regular company policy and practice in their 35 years in the
automotive engine repair and rebuilding business. As the Court sees it, it was
AERs first ever drug test of its employees immediately implemented after the
workers manifested their desire to organize themselves into a union. Indeed,
the timing of the drug test was suspicious.

Moreover, AER failed to show proof that the drug test conducted on its
employees was performed by an authorized drug testing center. It did not
mention how the tests were conducted and whether the proper procedure was
employed. The case of Nacague v. Sulpicio Lines,15 is instructive:

Contrary to Sulpicio Lines allegation, Nacague was already questioning the

credibility of S.M. Lazo Clinic as early as the proceedings before the Labor
Arbiter. In fact, the Labor Arbiter declared that the S.M. Lazo Clinic drug test
result was doubtful since it is not under the supervision of the Dangerous
Drug Board.

The NLRC and the Court of Appeals ruled that Sulpicio Lines validly
terminated Nacagues employment because he was found guilty of using
illegal drugs which constitutes serious misconduct and loss of trust and
confidence. However, we find that Sulpicio Lines failed to clearly show that
Nacague was guilty of using illegal drugs. We agree with the Labor Arbiter that
the lack of accreditation of S.M. Lazo Clinic made its drug test results
doubtful.

Section 36 of R.A. No. 9165 provides that drug tests shall be performed only
by authorized drug testing centers. Moreover, Section 36 also prescribes that
drug testing shall consist of both the screening test and the confirmatory test.
Section 36 of R.A. No. 9165 reads:

SEC. 36. Authorized Drug Testing. Authorized drug testing shall be done by
any government forensic laboratories or by any of the drug testing laboratories
accredited and monitored by the DOH to safeguard the quality of test results.
The DOH shall take steps in setting the price of the drug test with DOH
accredited drug testing centers to further reduce the cost of such drug test.
The drug testing shall employ, among others, two (2) testing methods, the
screening test which will determine the positive result as well as the type of
drug used and the confirmatory test which will confirm a positive screening
test. x x x (Emphases supplied)

Department Order No. 53-03 further provides:

Drug Testing Program for Officers and Employees

Drug testing shall conform with the procedures as prescribed by the

Department of Health (DOH) (www.doh.gov.ph). Only drug testing centers
accredited by the DOH shall be utilized. A list of accredited centers may be
accessed through the OSHC website (www.oshc.dole.gov.ph).

Drug testing shall consist of both the screening test and the confirmatory test;
the latter to be carried out should the screening test turn positive. The
employee concerned must be informed of the test results whether positive or
negative.

In Social Justice Society v. Dangerous Drugs Board, we explained:

As to the mechanics of the test, the law specifies that the procedure shall
employ two testing methods, i.e., the screening test and the confirmatory test,
doubtless to ensure as much as possible the trustworthiness of the results.
But the more important consideration lies in the fact that the tests shall be
conducted by trained professionals in access-controlled laboratories
monitored by the Department of Health (DOH) to safeguard against results
tampering and to ensure an accurate chain of custody.
The law is clear that drug tests shall be performed only by authorized drug
testing centers. In this case, Sulpicio Lines failed to prove that S.M. Lazo
Clinic is an accredited drug testing center. Sulpicio Lines did not even deny
Nacagues allegation that S.M. Lazo Clinic was not accredited. Also, only a
screening test was conducted to determine if Nacague was guilty of using
illegal drugs. Sulpicio Lines did not confirm the positive result of the screening
test with a confirmatory test. Sulpicio Lines failed to indubitably prove that
Nacague was guilty of using illegal drugs amounting to serious misconduct
and loss of trust and confidence. Sulpicio Lines failed to clearly show that it
had a valid and legal cause for terminating Nacagues employment. When the
alleged valid cause for the termination of employment is not clearly proven,
as in this case, the law considers the matter a case of illegal dismissal.
(Emphases supplied)

Furthermore, AER engaged in a runaway shop when it began pulling out

machines from the main AER building to the AER-PSC compound located on
another street on the pretext that the main building was undergoing
renovation. Certainly, the striking workers would have no reason to run and
enter the AER-PSC premises and to cause the return of the machines to the
AER building if they were not alarmed that AER was engaging in a runaway
shop.

AER committed another infraction when it refused to admit back those

employees who were not included in its complaint against the union. Thirty-
two (32) employees filed a complaint for illegal dismissal, illegal suspension
and unfair labor practice against AER. AER charged 18 employees with illegal
strike. AER should have reinstated the 14 employees excluded from its
complaint.

Regarding AERs contention that the affected workers abandoned their jobs,
the Court has thoroughly reviewed the records and found no convincing proof
that they deliberately abandoned their jobs. Besides, this Court has
consistently declared in a myriad of labor cases that abandonment is totally
inconsistent with the immediate filing of a complaint for illegal dismissal.

In any event, the penalty of dismissal imposed by AER against the striking
employees, who, by the way, only staged a one day walkout, was too severe.
The pronouncement in the case of Tupas Local Chapter No. 979 v. NLRC16 is
worth reiterating:
Neither respondent commission's decision nor the labor arbiter's decision as
affirmed with modification by it cites any substantial facts or evidence to
warrant the terribly harsh imposition of the capital penalty of dismissal and
forfeiture of employment on twenty-two of forty-four workers for having staged
the so-called one-day (more accurately, a one-morning) "sitdown strike" on
August 19, 1980 to inform respondent employer of their having formed their
own union and to present their just requests for allowances, overtime pay and
service incentive leave pay. Prescinding from respondent commission's
misappreciation of the facts and evidence and accepting for the nonce its
factual conclusion that the petitioners staged a one-morning sit-down strike
instead of making a mass representation for the employer to recognize their
newly formed union and negotiate their demands, respondent commission's
decision is not in consonance with the constitutional injunction that the
Court has invariably invoked and applied to afford protection to labor and
assure the workers' rights to self-organiza-tion, collective bargaining, security
of tenure and just and humane conditions of work. The said decision likewise
is not in accordance with settled and authoritative doctrine and legal
principles that a mere finding of the ille-gality of a strike does not
automatically warrant a wholesale dismissal of the strikers from their
employment and that a premature or improvident strike should not be visited
with a consequence so severe as dismissal where a penalty less punitive would
suffice. Numerous precedents to this effect have been cited and reaffirmed x
x x.

x x x x.

In the analogous case of PBM Employees Organization vs. PBM Co.,

Inc.,17[10]/ the Court, in setting aside the questioned industrial court's
or-ders held that "the dismissal or termination of the employment of the
peti-tioning eight (8) leaders of the union is harsh for a one-day absence from
work." They had been ordered dismissed for having carried out a mass
demonstration at Malacaang on March 4, 1969 in protest against alleged
abuses of the Pasig police department, upon two days' prior notice to
res-pondent employer company, as against the latter's insistence that the first
shift should not participate but instead report for work, under pain of
dis-missal. The Court held that they were merely exercising their basic human
rights and fighting for their very survival "in seeking sanctuary behind their
freedom of expression as well as their right of assembly and of petition against
alleged persecution of local officialdom." We ruled that "(T)he appropriate
penalty - if it deserves any penalty at all - should have been simply to charge
said one-day absence against their vacation or sick leave. But to dismiss the
eight (8) leaders of the petitioner Union is a most cruel penalty, since as
aforestated the Union leaders depend on their wages for their daily
sustenance as well as that of their respective families aside from the fact that
it is a lethal blow to unionism, while at the same time strengthening the
oppressive hand of the petty tyrants in the localities." [Emphases supplied]

It must also be noted that there were no injuries during the brief walkout.
Neither was there proof that the striking workers inflicted harm or violence
upon the other employees. In fact, the Police Memorandum18 dated January
29, 1999 reported no violent incidents and stated that all parties involved in
the January 28, 1999 incident were allowed to go home and the employees
involved were just given a stern warning.

To the Courts mind, the complaining workers temporarily walked out of their
jobs because they strongly believed that management was committing an
unfair labor practice. They had no intention of hurting anybody or steal
company property. Contrary to AERs assertion, the striking workers did not
intend to steal the line boring machine which they tried to cart away from the
AER-PSC compound; they just wanted to return it to the main AER building.

Like management, the union and the affected workers were also at fault for
resorting to a concerted work slowdown and walking out of their jobs of
protest for their illegal suspension. It was also wrong for them to have forced
their way to the AER-PSC premises to try to bring out the boring machine.
The photos19 shown by AER are enough proof that the picketing employees
prevented the entry and exit of non-participating employees and possibly
AERs clients. Although the unions sudden work stoppage lasted a day, it
surely caused serious disturbance and tension within AERs premises and
could have adversely affected AERs clients and business in general.

The in pari delicto doctrine in labor cases is not novel to us. It has been
applied in the case of Philippines Inter-Fashion, Inc. v NLRC,20 where the
Court held:

The Solicitor General has correctly stated in his comment that "from these
facts are derived the following conclusions which are likewise undisputed:
that petitioner engaged in an illegal lockout while the NAFLU engaged in an
illegal strike; that the unconditional offer of the 150 striking employees to
return to work and to withdraw their complaint of illegal lockout against
petitioner constitutes condonation of the illegal lock-out; and that the
unqualified acceptance of the offer of the 150 striking employees by petitioner
likewise constitutes condonation of the illegal strike insofar as the reinstated
employees are concerned."

The issues at bar arise, however, from respondent commission's approval of

its commissioner's conclusions that (1) petitioner must be deemed to have
waived its right to pursue the case of illegal strike against the 114 employees
who were not reinstated and who pursued their illegal lockout claim against
petitioner; and (2) the said 114 employees are entitled to reinstatement with
three months' backwages.

The Court approves the stand taken by the Solicitor General that there was
no clear and unequivocal waiver on the part of petitioner and on the contrary
the record shows that it tenaciously pursued its application for their
dismissal, but nevertheless in view of the undisputed findings of illegal strike
on the part of the 114 employees and illegal lockout on petitioner's part, both
parties are in pari delicto and such situation warrants the restoration of the
status quo ante and bringing the parties back to the respective positions
before the illegal strike and illegal lockout through the reinstatement of the
said 114 employees, as follows:

The Bisaya case (102 Phil. 438) is inapplicable to the present case, because
in the former, there were only two strikers involved who were both reinstated
by their employer upon their request to return to work. However, in the
present case, there were more than 200 strikers involved, of which 150 who
desired to return to work were reinstated. The rest were not reinstated
because they did not signify their intention to return to work. Thus, the ruling
cited in the Bisaya case that the employer waives his defense of illegality of
the strike upon reinstatement of strikers is applicable only to strikers who
signified their intention to return to work and were accepted back ...

Truly, it is more logical and reasonable for condonation to apply only to

strikers who signified their intention to return and did return to work. The
reason is obvious. These strikers took the initiative in normalizing relations
with their employer and thus helped promote industrial peace. However, as
regards the strikers who decided to pursue with the case, as in the case of the
114 strikers herein, the employer could not be deemed to have condoned their
strike, because they had not shown any willingness to normalize relations
with it. So, if petitioner really had any intention to pardon the 114 strikers, it
would have included them in its motion to withdraw on November 17, 1980.
The fact that it did not, but instead continued to pursue the case to the end,
simply means that it did not pardon the 114 strikers.
xxx xxx xxx

The finding of illegal strike was not disputed. Therefore, the 114 strikers
employees who participated therein are liable for termination (Liberal Labor
Union v. Phil. Can Co., 91 Phil. 72; Insurefco Employees Union v. Insurefco,
95 Phil. 761). On the other hard, the finding of illegal lockout was likewise not
disputed. Therefore, the 114 employees affected by the lockout are also
subject to reinstatement. Petitioner, however, contends that the application
for readmission to work by the 150 strikers constitutes condonation of the
lockout which should likewise bind the 114 remaining strikers. Suffice it to
say that the 150 strikers acted for themselves, not on behalf of the 114
remaining strikers, and therefore the latter could not be deemed to have
condoned petitioner's lockout.

The findings show that both petitioner and the 114 strikers are in pari delicto,
a situation which warrants the maintenance of the status quo. This means
that the contending parties must be brought back to their respective positions
before the controversy; that is, before the strike. Therefore, the order
reinstating the 114 employees is proper.

With such restoration of the status quo ante it necessarily follows, as likewise
submitted by the Solicitor General, that the petition must be granted insofar
as it seeks the setting aside of the award of three months' backwages to the
114 employees ordered reinstated on the basis of the general rule that strikers
are not entitled to backwages (with some exceptions not herein applicable,
such as where the employer is guilty of oppression and union-busting
activities and strikers ordered reinstated are denied such reinstatement and
therefore are declared entitled to backwages from the date of such denial).
More so, is the principle of "no work, no pay" applicable to the case at bar, in
view of the undisputed finding of illegality of the strike.

Likewise, the in pari delicto doctrine was applied in the case of First City
Interlink Transportation Co. Inc. v The Honorable Secretary,21 thus:

3) Petitioner substantially complied with the Return to Work Order. The

medical examination, NBI, Police and Barangay Clearances as well as the
driver's and conductor's/conductress licenses and photographs required as
conditions for reinstatement were reasonable management prerogatives.
However, the other requirements imposed as condition for reinstatement were
unreasonable considering that the employees were not being hired for the first
time, although the imposition of such requirements did not amount to refusal
on the part of the employer to comply with the Return to Work Order or
constitute illegal lockout so as to warrant payment of backwages to the
strikers. If at all, it is the employees' refusal to return to work that may be
deemed a refusal to comply with the Return to Work Order resulting in loss
of their employment status. As both the employer and the employees were, in
a sense, at fault or in pari delicto, the nonreturning employees, provided they
did not participate in illegal acts; should be considered entitled to
reinstatement. But since reinstatement is no longer feasible, they should be
given separation pay computed up to March 8, 1988 (the date set for the
return of the employees) in lieu of reinstatement.1avvphi1 [Emphases and
underscoring supplied]

In the case at bar, since both AER and the union are at fault or in pari delicto,
they should be restored to their respective positions prior to the illegal strike
and illegal lockout. Nonetheless, if reinstatement is no longer feasible, the
concerned employees should be given separation pay up to the date set for
the return of the complaining employees in lieu of reinstatement.

WHEREFORE, the petitions are DENIED. Accordingly, the complaining

employees should be reinstated without backwages. If reinstatement is no
longer feasible, the concerned employees should be given separation pay up
to the date set for their return in lieu of reinstatement.

SO ORDERED.

SPECIAL THIRD DIVISION

G.R. No. 160138 January 16, 2013

AUTOMOTIVE ENGINE REBUILDERS, INC. (AER), ANTONIO T. INDUCIL,

LOURDES T. INDUCIL, JOCELYN T. INDUCIL and MA. CONCEPCION I.
DONATO, Petitioners,
vs.
PROGRESIBONG UNYON NG MGA MANGGAGAWA SA AER, ARNOLD
VILLOTA, FELINO E. AGUSTIN, RUPERTO M. MARIANO II, EDUARDO S.
BRIZUELA, ARNOLD S. RODRIGUEZ, RODOLFO MAINIT, JR., FROILAN B.
MADAMBA, DANILO D. QUIBOY, CHRISTOPHER R. NOLASCO, ROGER V.
BELATCHA, CLEOFAS B. DELA BUENA, JR., HERMINIO P. PAPA, WILLIAM
A. RITUAL, ROBERTO CALDEO, RAFAEL GACAD, JAMES C. CAAMPUED,
ESPERIDION V. LOPEZ, JR., FRISCO M. LORENZO, JR., CRISANTO
LUMBAO, JR., and RENATO SARABUNO, Respondents.

x-----------------------x

G.R. No. 160192

PROGRESIBONG UNYON NG MGA MANGGAGAWA SA AER, ARNOLD

VILLOTA, FELINO E. AGUSTIN, RUPERTO M. MARIANO II, EDUARDO S.
BRIZUELA, ARNOLD S. RODRIGUEZ, RODOLFO MAINIT, JR., FROILAN B.
MADAMBA, DANILO D. QUIBOY, CHRISTOPHER R. NOLASCO, ROGER V.
BELATCHA, CLEOFAS B. DELA BUENA, JR., HERMINIO P. PAPA, WILLIAM
A. RITUAL, ROBERTO CALDEO, RAFAEL GACAD, JAMES C. CAAMPUED,
ESPERIDION V. LOPEZ, JR., FRISCO M. LORENZO, JR., CRISANTO
LUMBAO, JR., and RENA TO SARABUNO, Petitioners,
vs.
AUTOMOTIVE ENGINEREBUILDERS, INC., and ANTONIO T. INDUCIL,
Respondents.

RESOLUTION

MENDOZA, J.:

For resolution is the Motion for Partial Reconsideration filed by Progresibong

Unyon Ng Mga Manggagawa Sa AER (Unyon) which questioned the Courts
July 13, 2011 Decision insofar as it failed to award backwages to fourteen
(14) of its members. The decretal portion of the decision reads:

WHEREFORE, the petitions are DENIED. Accordingly, the complaining

employees should be reinstated without backwages. If reinstatement is no
longer feasible, the concerned employees should be given separation pay up
to the date set for their return in lieu of reinstatement.1
In arriving at said determination, the Court found out both parties were at
fault or in pari delicto and must bear the consequences of their own
wrongdoing.2 Thus, it decreed that the striking employees must be restored
to their respective positions prior to the illegal strike and illegal lockout.

Records disclose that this labor controversy started when both parties filed
charges against each other, blaming the other party for violating labor laws.
Thirty-two (32) employees filed and signed a complaint,3 dated February 18,
1999, against Automotive Engine Rebuilders, Inc. (AER). The complaint
prayed that AER be declared guilty of Unfair Labor Practices, Illegal Dismissal,
Illegal Suspension, and Run-away shop; that the complainants be reinstated;
and that they be paid "full backwages and without loss of seniority rights and
privileges, payment of wages during suspension, plus moral and exemplary
damages and attorneys fees."4

The names of the 32 complaining employees are as follows:

1. Felino Agustin

2. Ruperto Mariano II

3. Eduardo Brizuela

4. Otilio Rabino

5. Arnold Rodriguez

6. Froilan Madamba

7. Ferdinand Flores

8. Jonathan Taborda

9. Rodolfo Mainit, Jr.

10. Danilo Quiboy

11. Christopher Nolasco

12. Roger Belatcha

13. Claud Moncel

14. Cleofas dela Buena, Jr.

15. Edwin Mendoza

16. Herminio Papa

17. Oscar Macaranas

18. William Ritual

19. Roberto Caldeo

20. Rafael Gacad

21. James Caampued

22. Esperidion Lopez, Jr.

23. Frisco Lorenzo, Jr.

24. Bernardino Acosta, Jr.

25. Benson Pingol

26. Tammy Punsalan

27. Edward Ferrancol

28. Crisanto Lumbao, Jr.

29. Arnold Villota

30. Menching Mariano, Jr.

31. Carlos Carolino

32. Renato Sarabuno

Out of the 32, six (6) resigned and signed waivers and quitclaims, namely:

1. Oscar Macaranas

2. Bernardino Acosta

3. Ferdinand Flores

4. Benson Pingol

5. Otillo Rabino

6. Jonathan Taborda
On the other hand, the earlier complaint5 filed by AER against Unyon and
eighteen (18) of its members for illegal concerted activities prayed that, after
notice and hearing, judgment be rendered as follows:

1. Finding respondents guilty of unfair labor practice and illegal concerted

activity;

2. Finding respondents guilty of abandonment of work, serious misconduct,

gross disrespect, commission of felonies against the complainant and their
respective officers, threats, coercion and intimidation;

3. Penalizing complainants with dismissal and/or termination of employment;

and

4. Adjudging respondents to be jointly and solidarily liable to complainant for

moral damages in the sum of P500,000.00, exemplary damages in the sum of
P500,000.00 and attorneys fees and costs.

The names of the 18 workers charged with illegal strike by AER are as follows:

1. Felino Agustin

2. Eduardo Brizuela

3. Otilio Rabino

4. Ferdinand Flores

5. Jonathan Taborda

6. Rodolfo Mainit, Jr.

7. Christopher Nolasco

8. Claud Moncel

9. Cleofas dela Buena

10. Herminio Papa

11. Oscar Macaranas

12. William Ritual

13. Rafael Gacad

14. James Caampued

15. Benson Pingol

16. Frisco Lorenzo, Jr.

17. Bernardino Acosta, Jr.

18. Esperidion Lopez, Jr.

AER likewise suspended seven (7) union members who tested positive for
illegal drugs, namely:

1. Froilan Madamba

2. Arnold Rodriguez
3. Roberto Caldeo

4. Roger Bilatcha

5. Ruperto Mariano

6. Edwin Fabian

7. Nazario Madala

Out of the seven (7) suspended employees, only Edwin Fabian and Nazario
Madala were allowed by AER to report back to work. The other five (5)
suspended employees were not admitted by AER without first submitting the
required medical certificate attesting to their fitness to work.

On August 9, 2001, after the parties submitted their respective position

papers,6 the Labor Arbiter (LA) rendered a decision7 in favor of Unyon by
directing AER to reinstate the concerned employees but without backwages
effective October 16, 2001. Both parties filed their respective appeals8 with
the National Labor Relations Commission (NLRC).

On March 5, 2002, the NLRC issued its Resolution9 modifying the LA decision
by setting aside the order of reinstatement as it ruled out illegal dismissal.
The NLRC likewise ruled that the concerned employees had no valid basis in
conducting a strike. On April 19, 2002, Unyon filed a motion for
reconsideration10 insisting, among others, that AER was guilty of unfair labor
practice, illegal suspension and illegal dismissal. Unyon also argued that
since AER charged only 18 of the 32 employees with illegal strike, the
employees who were not included in the said charge should have been
admitted back to work by AER. Unyon also claimed that there was no
allegation that these employees, who were not included in AERs charge for
illegal strike, were involved in the January 28, 1999 incident.11

After the denial of their motion for reconsideration, Unyon and the concerned
employees filed a petition12 before the Court of Appeals (CA). Unyon reiterated
its argument that AER should admit back to work those excluded from its list
of 18 employees charged with illegal strike.13

On June 27, 2003, the CA rendered a decision,14 the dispositive portion of

which reads, as follows:

WHEREFORE, premises considered, the petition is GRANTED. Respondents

are hereby directed to reinstate the petitioners effective immediately but
without backwages, except those who were tested positive for illegal drugs and
have failed to submit their respective medical certificates.

On October 1, 2003, ruling on the motion for partial reconsideration filed by

Unyon, the CA rendered the assailed Amended Decision,15 ordering the
immediate reinstatement of all the suspended employees without backwages.
Thus,

WHEREFORE, the partial motion for reconsideration is GRANTED insofar as

the reinstatement of the suspended employees is concerned. This Courts
decision dated June 27, 2003 is hereby MODIFIED. Private respondents are
hereby directed to reinstate all petitioners immediately without backwages.

Unsatisfied, both parties filed the present consolidated petitions. Unyon

argued that the CA erred in not awarding backwages to the suspended
employees who were ordered reinstated. AER, on the other hand, argued that
the CA erred in ordering the reinstatement of the suspended employees.

On July 13, 2011, this Court rendered a decision,16 the dispositive portion
of which reads, as follows:

WHEREFORE, the petitions are DENIED. Accordingly, the complaining

employees should be reinstated without backwages. If reinstatement is no
longer feasible, the concerned employees should be given separation pay up
to the date set for their return in lieu of reinstatement.

Unyon filed the subject Motion for Partial Reconsideration17 questioning the
Courts July 13, 2011 Decision insofar as it failed to award backwages to
fourteen (14) of its members.
Unyon argues that backwages should have been awarded to the 14 employees
who were excluded from the complaint filed by AER and that the latter should
have reinstated them immediately because they did not have any case at all.

AER was directed to file its comment. Its Comment,18 however, failed to
address the issue except to say that the motion for partial reconsideration
was pro-forma.

After going over the records again, the Court holds that only nine (9) of the
fourteen (14) excluded employees deserve to be reinstated immediately with
backwages.

Records disclose that thirty-two (32) employees filed a complaint for illegal
suspension and unfair labor practice against AER. Out of these 32 workers,
only eighteen (18) of them were charged by AER with illegal strike leaving
fourteen (14) of them excluded from its complaint. The names of these 14
employees are as follows:

1. Ruperto Mariano II

2. Arnold Rodriguez

3. Froilan Madamba

4. Danilo Quiboy

5. Roger Belatcha

6. Edwin Mendoza

7. Roberto Caldeo
8. Tammy Punsalan

9. Edward Ferrancol

10. Crisanto Lumbao, Jr.

11. Arnold Villota

12. Menching Mariano, Jr.

13. Carlos Carolino

14. Renato Sarabuno

Technically, as no charges for illegal strike were filed against these 14

employees, they cannot be among those found guilty of illegal strike. They
cannot be considered in pari delicto. They should be reinstated and given their
backwages.

Out of these 14 employees, however, five (5) failed to write their names and
affix their signatures in the Membership Resolution19 attached to the petition
filed before the CA, authorizing Union President Arnold Villota to represent
them. It must be noted that Arnold Villota signed as the Affiant in the
Verification and Certification by virtue of the Membership Resolution.20 The
names of these 5 employees are:

1. Edwin Mendoza

2. Tammy Punzalan

3. Edward Ferrancol

4. Menching Mariano, Jr.

5. Carlos Carolina

Because of their failure to affix their names and signatures in the Membership
Resolution, Edwin Mendoza, Tammy Punzalan, Edward Ferrancol, Menching
Mariano, Jr. and Carlos Carolina cannot be granted the relief that Unyon
wanted for them in its Motion for Partial Reconsideration.

Only the following nine (9) employees who signed their names in the petition
can be granted the relief prayed for therein, namely:

1. Ruperto Mariano II

2. Arnold Rodriguez

3. Froilan Madamba

4. Danilo Quiboy

5. Roger Belatcha

6. Roberto Caldeo

7. Crisanto Lumbao, Jr.

8. Arnold Villota

9. Renato Sarabuno

These excluded nine (9) workers, who signed their names in their petition
before the CA, deserve to be reinstated immediately and gra:1ted backwages.
It is basic in jurisprudence that illegally dismissed workers are entitled to
reinstatement with back wages pi us interest at the legal rate.21

As stated in the Amended Decision of the CA, which the Court effectively
affirmed after denying the petition of both parties, the reinstatement shall be
"without prejudice to the right of private respondent AER to subject them for
further medical check-up to determine if subject petitioners are drug
dependents."22

WHEREFORE, the Motion for Pa1iial Reconsideration filed by Progresibong

Unyon Ng Mga Manggagawa Sa AER is GRANTED only insofar as the nine (9)
employees are concerned, namely: Ruperto Mariano II, Arnold Rodriguez,
Froilan Madamba, Danilo Quiboy, Roger Belateha, Roberto Caldeo, Crisanto
Lumbao, Jr., Arnold Villota, and Renato Sarabuno.1wphi1

Accordingly, the July 13, 2011 Decision is hereby MODIFIED in that the
aforementioned nine (9) workers are entitled to be reinstated and granted
backwages with interest at the rate of six percent (6%) per annum which shall
be increased to twelve percent (12%) after the finality of this judgment.

SO ORDERED.