Strikes and Lockouts Cases

G.R. No.
88210
January 23, 1991
PHILIPPINE AIRLINES, INC., petitioner,

vs.
SECRETARY OF LABOR AND EMPLOYMENT, FRANKLIN M. DRILON, and
PHILIPPINE AIRLINES EMPLOYEES ASSOCIATION (PALEA), respondents.
Ricardo V. Puno, Jr., Caesar R. Dulay, Solon, R. Garcia, Rene B. Gorospe & Bienvenido T. Jamoralinz,
Jr. for petitioner.
E.N.A. Cruz, Entero & Associates for PALEA.
GRIO-AQUINO, J.:p
In issue in this case is the authority of the Secretary of Labor to order the petitioner Philippine
Airlines, Inc. to reinstate officers and members of the union who participated in an illegal strike and
to desist from taking any disciplinary or retaliatory action against them.
The 1986-1989 Collective Bargaining Agreement (CBA) between the Philippine Airlines (PAL) and the
Philippine Airlines Employees Association (PALEA) provided for pay increases for various categories
of employees in Section 1, Article V entitled "PAY SCALE." Besides the pay increases, the CBA also
provided for the formation of a PAL/PALEA Payscale Panel
(f)
. . . to undertake the study, review, correction, updating, complete overhaul, re-classification
or re-grouping of positions as may be required of the payscale and position classification to evolve
updated payscales as soon as possible. (p. 76, Rollo.)
and that
(iii)
. . . the Payscale Panel shall exert all reasonable efforts to complete its studies so as to
evolve new updated payscale and position classification by January 01, 1988, (p. 76, Rollo.)
As agreed by the parties, the PAL/PALEA Payscale Panel was formed in due time and went to work.
By July, 1988, the Job Evaluation Committee of the panel had finished the reconciliation and initial
evaluation of positions in all departments within PAL.
In November, 1988, the PALEA members of the panel proposed the amount of PHP 3,349 as the
minimum salary entry level for the lowest job classification (Job Grade 1), while the PAL panel
members proposed PHP 2,310 and a PHP 200 across-the-board increase for employees who could
not avail of the payscale adjustments. The panel conferences continued but there was no meeting of
STRIKES AND LOCKOUTS
PAGE 1
minds. PALEA would not accept less than the amount it proposed, while the PAL panel members
alleged that they had no authority to offer more.
PALEA accused PAL of bargaining in bad faith.
On December 29, 1988, PALEA filed with the National Conciliation and Mediation Board (NCMB) a
notice of strike on account of: (1) bargaining deadlock; and (2) unfair labor practice by bargaining in
bad faith.
On January 3, 1989, PAL filed with the NCMB a motion to dismiss PALEA's notice of strike for being
premature as the issues raised were not strikeable since there still existed a PAL-PALEA CBA which
would not yet expire until September 30, 1989 or with nine (9) more months to run.
During the conciliation meeting, the following evolved as the real issues:
1.
determination of the minimum entry rate
2.
wage adjustment due to payscale study
3.
retroactive pay as a consequence of the upgraded payscale or goodwill bonus. (p. 38, Rollo.)
On January 6, 1989, Attorney Jesus C. Sebastian, NCMB-NCR Executive Conciliator/Mediator, advised

PALEA president, George Pulido, that the issues raised in the notice of strike were "appropriate only
for preventive mediation," hence, not valid grounds for a lawful strike. However, when subsequently
a representative of NCMB supervised the conduct of PALEA'S strike vote, PAL's counsel was baffled
for it was inconsistent with the NCMB order treating the strike notice as preventive mediation case
No. PM-01-007-89. PAL's counsel sought clarification from NCMB'S Sebastian. He assured PAL that
the NCMB representatives could not certify the strike vote.
On January 12, 1989, PALEA submitted the strike vote results to the NCMB. The next day, January
13, 1989, PAL petitioned Secretary of Labor Franklin Drilon to immediately assume jurisdiction over
the dispute in order to avert the impending strike. The reasons for PAL's petition were, as stated by
the Secretary himself:
The Philippine Airlines, Inc. is a corporation where the government has substantial equity holding. It
is engaged in an industry imbued with national interest. It is the flag carrier of the Republic of the
Philippines. Being the sole airline that services domestic routes, a prolonged work stoppage will push
back the national economic recovery program of the government and consequently result to
enormous damage to the economy of the country. Hundreds of thousands of people directly and
indirectly dependent on the continued operations of the firm including the huge work force of the
company will likewise be prejudiced. The viability of the firm will also be endangered. These
considerations have in the past guided this Office in consistently exercising its powers under Article
263(g) of the Labor Code, as amended, in handling labor disputes in the Company. The current
situation is no exception to this rule. This Office is of the view that the present work stoppage at
PAGE 2
Philippine Airlines, Inc. will adversely affect the national interest. Thus, this Office hereby assumes
jurisdiction over the instant dispute. (pp. 38-39, Rollo.)
Inexplicably, the Secretary failed to act promptly on PAL's petition for his assumption of jurisdiction.
Seven (7) days passed with no reaction from Secretary Drilon. On January 20, 1989, PALEA declared
a strike paralyzing PAL's entire operations the next day, January 21, 1989, and resulting in serious
inconvenience to thousands of passengers who were stranded in 43 airports throughout the
country, and the loss of millions of pesos in unearned revenue for PAL. Late in the day, at 7:50 P.M.,
Secretary Drilon issued an order assuming jurisdiction over the labor dispute which had already
exploded into a full-blown strike, ordering the strikers to lift their pickets and return to work,
directing management to accept all returning employees, and resolving the issues subject of the
strike, by awarding the following monetary benefits to the strikers, while prohibiting the company
from taking retaliatory action against them:
. . . to resolve the impasse between the herein parties, this Office finds the following award just and
reasonable:
1.
As far as the issue of minimum entry level is concerned, the company is directed to adjust
the same to P2,500.00 from its present level effective January 1, 1989.
2.
The company is ordered to grant the amount of P3.3 million per month to cover across-theboard increases of covered regular employees subject to the distribution of the union as embodied
in their proposed scheme but in no instance should the lowest adjustment be less than P300.00. In
line with this, the scheme proposed by the union and submitted to NCMB on January 20,1989 is
herein adopted.
It is understood, however, that in items 1 and 2 above, the amount which is higher should be
granted.
3.
A goodwill bonus in the amount of P3,000.00 to be paid in four equal pay period
installments beginning February 15 and up to March 31, 1989 is hereby awarded. (p. 39, Rollo.)
Declaring the strike valid, the Secretary stated:
Except for the fact that the Union's notice of strike was treated as a preventive mediation case (at
the instance of NCMB), it should be noted that the Union complied with all the requirements for a
valid strike. It observed the cooling-off periods required and submitted the necessary strike vote. If
ever there is any ground to discipline the Union officers for non-compliance with the law, it would be
based on the "non-filing" of the strike notice, which "non-filing" was a consequence of the NCMB'S
efforts to create the appropriate atmosphere to resolve the dispute by treating the notice of strike
as a preventive mediation case. Otherwise put, the strike would have been legal in all respects had
not the NCMB, in its good faith effort to settle the dispute, treated the notice of strike as a case for
preventive mediation. Under these circumstances, and in the interest of industrial peace and the
promotion of the concept of preventive mediation, the parties are directed to desist from
PAGE 3
committing any retaliatory act as a result of the work stoppage. The UNION, however, is hereby
warned that in the future this office will not tolerate such conduct and will apply the full force of the
law. (pp. 3-4, Rollo.)
The petitioner filed a motion for reconsideration. The Secretary denied it in a minute resolution on
May 8, 1989 or three months later.
In this petition for review, PAL avers that the Secretary of Labor gravely abused his discretion
amounting to excess or lack of jurisdiction:
1.
in ruling on the legality of the strike;
2.
in directing PAL to desist from taking retaliatory action against the officers and members of
the Union responsible for the illegal strike; and
3.
in failing to seasonably exercise his authority to avert the illegal strike and protect the rights
and interests of PAL whose business is affected with public interest.
Under Art. 263 of the Labor Code, the Labor Secretary's authority to resolve a labor dispute within
30 days from the date of assumption of jurisdiction, encompasses only the issues in the dispute, not
the legality or illegality of any strike that may have been resorted to in the meantine (Binamira vs.
Ogan-Occena, 148 SCRA 677, 685 [1987]). Indeed, as found by the Labor Secretary in his Order of
January 21, 1989, the only issues involved in the dispute were:
1.
determination of the minimum entry rate
2.
wage adjustment due to payscale study
3.
retroactive pay as a consequence of the upgraded payscale or goodwill bonus.
The legality or illegality of the strike was not submitted to the Secretary of Labor for resolution.
The jurisdiction to decide the legality of strikes and lock-outs is vested in Labor Arbiters, not in the
Secretary of Labor. Art. 217, par. a, subpar. 5 of the Labor Code provides:
Art. 217.
Jurisdiction of Labor Arbiters and the Commission.
(a)
The Labor Arbiters shall have the original and exclusive jurisdiction to hear and decide within
thirty (30) working days after submission of the case by the parties for decision, the following cases
involving all workers, whether agricultural or non- agricultural.
xxx
xxx
xxx
5.
Cases arising from any violation of Article 265 of this code, including questions involving the
legality of strikes and lock-outs. (Emphasis supplied.)
PAGE 4
In ruling on the legality of the PALEA strike, the Secretary of Labor acted without or in excess of his
jurisdiction.
There is merit in PAL's contention that the Labor Secretary erred in declaring the strike valid and in
prohibiting PAL from taking retaliatory or disciplinary action against the strikers for the damages
suffered by the Airline as a result of the illegal work stoppage.
PALEA's strike on January 20, 1989 was illegal for three (3) reasons:
1.
It was premature for there was an existing CBA which still had nine (9) months to run, i.e., up
to September 30, 1989. The law expressly provides that neither party to a collective bargaining
agreement shall terminate nor modify such agreement during its lifetime. While either party can
serve a written notice to terminate or modify the agreement at least sixty (60) days prior to its
expiration date (known as the "freedom period") it shall nevertheless 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 freedom period and/or until a new agreement is reached by them (Art. 253,
Labor Code).
2.
It violated the no-strike provision of the CBA, to wit:
The Association agrees that there shall be no strikes, walk outs, stoppage, or slowdown of work, or
any other form of interference with any of the operations of the Company during the period
between the signing of the Agreement up to September 30, 1989. (Emphasis supplied, p-118, Rollo.)
3.
The NCMB had declared the notice of strike as "appropriate for preventive mediation." The
effect of that declaration (which PALEA did not ask to be reconsidered or set aside) was to drop the
case from the docket of notice of strikes, as provided in Rule 41 of the NCMB Rules, as if there was
no notice of strike. During the pendency of preventive mediation proceedings no strike could be
legally declared. The Secretary must have thought so too, that is why he failed to act, for a period of
seven (7) days, on PAL's petition for him to assume jurisdiction over the labor dispute. The strike
which the union mounted, while preventive mediation proceedings were ongoing, was aptly
described by the petitioner as "an ambush" (p. 2, Rollo).
Since the strike was illegal, the company has a right to take disciplinary action against the union
officers who participated in it, and against any union members who committed illegal acts during the
strike, Art. 264 of the Labor Code provides:
Art. 264.
Prohibited activities.. . .
xxx
xxx
xxx
Any worker whose employment has been terminated as a consequence of an unlawful lockout shall
be entitled to reinstatement with full back wages. Any union officer who knowingly participates in an
illegal strike and any worker or union officer who knowingly participates in the commission of illegal
PAGE 5
acts during a strike may be declared to have lost his employment status: Provided, That mere
participation of a worker in a lawful strike shall not constitute sufficient ground for termination of
his employment, even if a replacement had been hired by the employer during such lawful strike.
(Emphasis supplied.)
The Labor Secretary exceeded his jurisdiction when he restrained PAL from taking disciplinary action
against its guilty employees, for, under Art. 263 of the Labor Code, all that the Secretary may enjoin
is the holding of the strike, but not the company's right to take action against union officers who
participated in the illegal strike and committed illegal acts. The prohibition which the Secretary
issued to PAL constitutes an unlawful deprivation of property and denial of due process for it
prevents PAL from seeking redress for the huge property losses that it suffered as a result of the
union's illegal mass action.
The Secretary may have realized that he was partly to blame for PAL's damages because of his failure
to act promptly and use his authority to avert the illegal strike under Article 263(g) of the Labor
Code.
Nevertheless, the Secretary's delay does not excuse the reckless and irresponsible action of the
union in declaring the illegal strike. The liability of the union for that is primary and exclusive.
WHEREFORE, the petition for certiorari is granted. The orders dated January 21, 1989 and May 8,
1989 of the Secretary of Labor in NCMB NCR Case No. PM-01-007-89 are set aside and nullified
insofar as the said orders declare valid the PALEA strike of January 20-21, 1989 and restrain the
petitioner from taking appropriate legal action against PALEA's officers who led the illegal strike, and
any union members who may have committed illegal acts during said strike. The monetary benefits
awarded to the union in the said orders are, however, affirmed. Costs against respondent PALEA.
SO ORDERED.
Narvasa, Cruz, Gancayco and Medialdea, JJ., concu
G.R. No. 147080. April 26, 2005

CAPITOL MEDICAL CENTER, INC., Petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, JAIME IBABAO, JOSE
BALLESTEROS, RONALD CENTENO, NARCISO SARMIENTO, EDUARDO
CANAVERAL, SHERLITO DELA CRUZ, SOFRONIO COMANDAO, MARIANO
GALICIA, RAMON MOLOD, CARMENCITA SARMIENTO, HELEN MOLOD, ROSA
COMANDAO, ANGELITO CUIZON, ALEX MARASIGAN, JESUS CEDRO, ENRICO
ROQUE, JAY PERILLA, HELEN MENDOZA, MARY GLADYS GEMPEROSO, NINI
BAUTISTA, ELENA MACARUBBO, MUSTIOLA SALVACION DAPITO, ALEXANDER
MANABE, MICHAEL EUSTAQUIO, ROSE AZARES, FERNANDO MANZANO,
PAGE 6
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
PAGE 7
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:
PAGE 8
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:
PAGE 9
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:
PAGE 10
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:
PAGE 11
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 24hour 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
PAGE 12
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;
PAGE 13
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
PAGE 14
of Scout Magbanua Street and Panay Avenue, Quezon City. The respondents failed to prove the
existence of a parking lot in front of the hospital other than the parking lot across from it. Indeed, 17
of those who purportedly voted in a secret voting executed their separate affidavits that no secret
balloting took place on November 10, 1997, and that even if they were not members of the
respondent Union, were asked to vote and to sign attendance papers. The respondents failed to
adduce substantial evidence that the said affiants were coerced into executing the said affidavits.
The bare fact that some portions of the said affidavits are similarly worded does not constitute
substantial evidence that the petitioner forced, intimidated or coerced the affiants to execute the
same.
IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The Decisions of the Court of Appeals
and NLRC are SET ASIDE AND REVERSED. The Decision of the Labor Arbiter is REINSTATED. No costs.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concu
G.R. No. 99266
March 2, 1999
SAN MIGUEL CORPORATION, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, SECOND DIVISION, AND SAN
MIGUEL CORPORATION EMPLOYEES UNION (SMCEU) PTGWO,
respondents.
PURISIMA, J.:
At bar is a Petition for Certiorari under Rule 65 of the Revised Rules of Court, assailing the Resolution
1 of the National Labor Relations Commission in NLRC NCR CASE NO. 00094-90, which dismissed the
complaint of San Miguel Corporation (SMC), seeking to dismiss the notice of strike given by the
private respondent union and to compel the latter to comply with the provisions of the Collective
Bargaining Agreement (CBA) 2 on grievance machinery, arbitration, and the no-strike clause, with
prayer for the issuance of a temporary restraining order.
The antecedent facts are as follows:
In July 1990, San Miguel Cooperation, alleging the need to streamline its operations due to financial
loses, shut down some of its plants and declared 55 positions as redundant listed as follows:
seventeen (17) employees in the Business Logistics Division ("BLD"), seventeen (17) in the Ayala
Operations Center (AOC), and eighteen (18) in the Magnolia-Manila Buying Station ("MagnoliaMBS"). 3 Consequently, the private respondent union filed several grievance cases for the said
PAGE 15
retrenched employees, praying for the redeployment of the said employees to the other divisions of
the company.
The grievance proceedings were conducted pursuant to Sections 5 and 8, Article VIII of the parties'
1990 Collective Bargaining Agreement providing for the following procedures, to wit:
Sec.5. Processing of Grievance. Should a grievance arise, an earnest effort shall be made to settle
the grievance expeditiously in accordance with the following procedures:
Step 1. The individual employee concerned and the Union Directors, or the Union Steward shall,
first take up the employee's grievance orally with his immediate superior. If no satisfactory
agreement or adjustment of the grievance is reached, the grievance shall, within twenty (20)
working days from the occurrence of the cause or event which gave rise to the grievance, be filed in
writing with the Department Manager or the next level superior who shall render his decision within
ten (10) working days from the receipt of the written grievance. A copy of the decision shall be
furnished the Plant Personnel Officer.
Step 2. If the decision in Step 1 is rejected, the employee concerned may elevate or appeal this in
writing to the Plant Manager/Director or his duly authorized representative within twenty (20)
working days from the receipt of the Decision of the Department Manager, Otherwise, the decision
in Step 1 shall be deemed accepted by the employee.
The Plant Manager/Director assisted by the Plant Personnel Officer shall determine the necessity, of
conducting grievance meetings. If necessary, the Plant Manager/Director and the Plant Personnel
Officer shall meet the employee concerned and the Union Director/Steward on such date(s) as may
be designated by the Plant Manager. In every plant/office, Grievance Meetings shall be scheduled at
least twice a month.
The Plant Manager shall give his written comments and decision within ten (10) working days after
his receipt of such grievance or the date of submission of the grievance for resolution, as the case
may be. A copy of his Decision shall be furnished the Employee Relations Directorate.
Step 3. If no satisfactory adjustment is arrived at Step 2, the employee may appeal the Decision
to the Conciliation Board as provided under Section 6 hereof, within fifteen (15) working days from
the date of receipt of the decision of the Plant Manager/Director or his designate. Otherwise, the
decision in Step 2 shall be deemed accepted by the employee.
The Conciliation Board shall meet on the grievance in such dates as shall be designated by the
Division/Business Unit Manager or his representative. In every Division/Business Unit, Grievance
Meetings of the Conciliation Board shall be scheduled at least once a month.
The Conciliation Board shall have fifteen (15) working days from the date of submission of the
grievance for resolution within which to decide on the grievance.
PAGE 16
Sec. 6. Conciliation Board. There shall be a conciliation Board per Business Unit or Division. Every
Conciliation Board shall be composed of not more than five (5) representatives each from the
Company and the Union. Management and the Union may be assisted by their respective legal
counsels.
In every Division/Business Unit, the names of the Company and Union representatives to the
Conciliation Board shall be submitted to the Division/Business Unit Manager not later than January
of every year. The Conciliation Board members shall act as such for one (1) year until removed by
the Company or the Union, as the case may be.
xxx
xxx
xxx
Sec. 8. Submission to Arbitration. If the employee or Union is not satisfied with the Decision of
the Conciliation Board and desires to submit the grievance to arbitration, the employee or the Union
shall serve notice of such intention to the Company within fifteen (15) working days after receipt of
the Board's decision. If no such written notice is received by the Company within fifteen (15) working
days, the grievance shall be considered settled on the basis of the company's position and shall no
longer be available for arbitration. 4
During the grievance proceedings, however, most of the employees were redeployed, while others
accepted early retirement. As a result only 17 employees remained when the parties proceeded to
the third level (Step 3) of the grievance procedure. In a meeting on October 26, 1990, petitioner
informed private respondent union that if by October 30, 1990, the remaining 17 employees could
not yet be redeployed, their services would be terminated on November 2, 1990. The said meeting
adjourned when Mr. Daniel S. L. Borbon II, a representative of the union, declared that there was
nothing more to discuss in view of the deadlock. 5
On November 7, 1990, the private respondent filed with the National Conciliation and Mediation
Board (NCMB) of the Department of Labor and Employment (DOLE) a notice of strike on the
following grounds: a) bargaining deadlock; b) union busting; c) gross violation of the Collective
Bargaining Agreement (CBA), such as non-compliance with the grievance procedure; d) failure to
provide private respondent with a list of vacant positions pursuant to the parties side agreement
that was appended to the 1990 CBA; and e) defiance of voluntary arbitration award. Petitioner on
the other hand, moved to dismiss the notice of strike but the NCMB failed to act on the motion.
On December 21, 1990, petitioner SMC filed a complaint 6 with the respondent NLRC, praying for:
(1) the dismissal the notice of strike; (2) an order compelling the respondent union to submit to
grievance and arbitration the issue listed in the notice of strike; (3) the recovery of the expenses of
litigation.
On April 16, 1991, respondent NLRC came out with a minute resolution dismissing the complaint;
holding, thus:
NLRC NCR IC NO. 000094-90, entitled San Miguel Corporation, Complainant -versus- San Miguel
Employees Union-PTWO (SMCEU), Respondent. Considering the allegations in the complaint to
PAGE 17
restrain Respondent Union from declaring a strike and to enforce mutual compliance with the
provisions of the collective bargaining agreement on grievance machinery, and the no-strike clause,
with prayer for issuance of temporary restraining order, and the evidence adduced therein, the
Answer filed by the respondent and the memorandum filed by the complainant in support of its
application for the issuance of an injunction, the Second Division, after due deliberation, Resolved to
dismiss the complaint for lack of merit. 7
Aggrieved by the said resolution, petitioner found its way to this court via the present petition,
contending that:
I
IT IS THE POSITIVE LEGAL DUTY OR RESPONDENT NLRC TO COMPEL ARBITRATION AND TO ENJOIN A
STRIKE IN VIOLATION OF A NO STRIKE CLAUSE.
II
INJUNCTION IS THE ONLY IMMEDIATE, EFFECTIVE SUBSTITUTE FOR THE DISASTROUS ECONOMIC
WARFARE THAT ARBITRATION IS DESIGNED TO AVOID. 8
On June 3, 1991, to preserve the status quo, the Court issued a Resolution 9 granting petitioners
prayer for the issuance of a Temporary Restraining Order.
The Petition is impressed with merit.
Rule XXII, Section I, of the Rules and Regulations Implementing Book V the Labor Code 10, reads:
Sec.1. Grounds for strike and lockout. A strike or lockout may be declared in cases of bargaining
deadlocks and unfair labor practices. Violations of the collective bargaining agreements, except
flagrant and/or malicious refusal to comply with its economic provisions, shall not be considered
unfair labor practice and shall not be strikeable. No strike or lockout may be declared on grounds
involving inter-union and intra-union disputes or on issues brought to voluntary, or compulsory,
arbitration.
In the case under consideration, the grounds relied upon by the private respondent union are nonstrikeable. The issues which may lend substance to the notice of strike filed by the private
respondent union are: collective bargaining deadlock and petitioner's alleged violation of the
collective bargaining agreement. These grounds, however, appear more illusory than real.
Collective Bargaining Deadlock is defined as "the situation between the labor and the management
of the company where there is failure in the collective bargaining negotiations resulting in a
stalemate" 11 This situation, is non-existent in the present case since there is a Board assigned on
the third level (Step 3) of the grievance machinery to resolve the conflicting views of the parties.
Instead of asking the Conciliation Board composed of five representatives each from the company
and the union, to decide the conflict, petitioner declared a deadlock, and thereafter, filed a notice of
PAGE 18
strike. For failing to exhaust all the steps in the grievance machinery and arbitration proceedings
provided in the Collective Bargaining Agreement, the notice of strike should have been dismissed by
the NLRC and private respondent union ordered to proceed with the grievance and arbitration
proceedings. In the case of Liberal Labor Union vs. Phil. Can
Co. 12, the court declared as illegal the strike staged by the union for not complying with the
grievance procedure provided in the collective bargaining agreement, ruling that:
. . . the main purpose of the parties in adopting a procedure in the settlement of their disputes is to
prevent a strike. This procedure must be followed in its entirety if it is to achieve its objective. . . .
strikes held in violation of the terms contained in the collective bargaining agreement are illegal,
specially when they provide for conclusive arbitration clauses. These agreements must be strictly
adhered to and respected if their ends have to be achieved. . . . 13
As regards the alleged violation of the CBA, we hold that such a violation is chargeable against the
private respondent union. In abandoning the grievance proceedings and stubbornly refusing to avail
of the remedies under the CBA. private respondent violated the mandatory provisions of the
collective bargaining agreement.
Abolition of departments or positions in the company is one of the recognized management
prerogatives. 14 Noteworthy is the fact that the private respondent does not question the validity of
the business move of petitioner. In the absence of proof that the act of petitioner was ill-motivated,
it is presumed that petitioner San Miguel Corporation acted in good faith. In fact, petitioner acceded
to the demands of the private respondent union by redeploying most of the employees involved;
such that from an original 17 excess employees in BLD, 15 were successfully redeployed. In AOC, out
of the 17 original excess, 15 were redeployed. In the Magnolia Manila Buying Station, out of 18
employees, 6 were redeployed and only 12 were terminated. 15
So also, in filing complaint with the NLRC, petitioner prayed that the private respondent union be
compelled to proceed with the grievance and arbitration proceedings. Petitioner having evinced its
willingness to negotiate the fate of the remaining employees affected, there is no ground to sustain
the notice of strike of the private respondent union.
All things studiedly considered. we are of the ineluctable conclusion, and so hold, that the NLRC
gravely abused its discretion in dismissing the complaint of Petitioner SMC for the dismissal of the
notice of strike, issuance of a temporary restraining order, and an order compelling the respondent
union to settle the dispute under the grievance machinery of their CBA..
WHEREFORE, the instant petition is hereby GRANTED. Petitioner San Miguel Corporation and private
respondent San Miguel Corporation Employees Union PTGWO are hereby directed to complete
the third level (Step 3) of the Grievance Procedure and proceed with the Arbitration proceedings if
necessary. No pronouncement as to costs.
SO ORDERED.
Romero and Gonzaga-Reyes, JJ., concur.
PAGE 19
GR No. 140518
December 16, 2004
MANILA DIAMOND HOTEL EMPLOYEES UNION, petitioner,
vs.
THE HON. COURT OF APPEALS, THE SECRETARY OF LABOR AND
EMPLOYMENT, and THE MANILA DIAMOND HOTEL, respondents.
DECISION
AZCUNA, J.:
This petition for review of a decision of the Court of Appeals arose out of a dispute between the
Philippine Diamond Hotel and Resort, Inc. ("Hotel"), owner of the Manila Diamond Hotel, and the
Manila Diamond Hotel Employees Union ("Union"). The facts are as follows:
On November 11, 1996, the Union filed a petition for a certification election so that it may be
declared the exclusive bargaining representative of the Hotels employees for the purpose of
collective bargaining. The petition was dismissed by the Department of Labor and Employment
(DOLE) on January 15, 1997. After a few months, however, on August 25, 1997, the Union sent a
letter to the Hotel informing it of its desire to negotiate for a collective bargaining agreement.1 In a
letter dated September 11, 1997, the Hotels Human Resources Department Manager, Mary Anne
Mangalindan, wrote to the Union stating that the Hotel cannot recognize it as the employees
bargaining agent since its petition for certification election had been earlier dismissed by the DOLE.2
On that same day, the Hotel received a letter from the Union stating that they were not giving the
Hotel a notice to bargain, but that they were merely asking for the Hotel to engage in collective
bargaining negotiations with the Union for its members only and not for all the rank and file
employees of the Hotel.3
On September 18, 1997, the Union announced that it was taking a strike vote. A Notice of Strike was
thereafter filed on September 29, 1997, with the National Conciliation and Mediation Board (NCMB)
for the Hotels alleged "refusal x x x to bargain" and for alleged acts of unfair labor practice. The
NCMB summoned both parties and held a series of dialogues, the first of which was on October 6,
1997.
On November 29, 1997, however, the Union staged a strike against the Hotel. Numerous
confrontations between the two parties followed, creating an obvious strain between them. The
Hotel claims that the strike was illegal and it had to dismiss some employees for their participation in
the allegedly illegal concerted activity. The Union, on the other hand, accused the Hotel of illegally
dismissing the workers. What is pertinent to this case, however, is the Order issued by the then
Secretary of Labor and Employment Cresenciano B. Trajano assuming jurisdiction over the labor
PAGE 20
dispute. A Petition for Assumption of Jurisdiction was filed by the Union on April 2, 1998. Thereafter,
the Secretary of Labor and Employment issued an Order dated April 15, 1998, the dispositive portion
of which states:
WHEREFORE, premises considered[,] this Office CERTIFIES the labor dispute at the Manila Diamond
Hotel to the National Labor Relations Commission, for compulsory arbitration, pursuant to Article
263 (g) of the Labor Code, as amended.
Accordingly, the striking officers and members of the Manila Diamond Hotel Employees Union --NUWHRAIN are hereby directed to return to work within twenty-four (24) hours upon receipt of this
Order and the Hotel to accept them back under the same terms and conditions prevailing prior to
the strike. The parties are enjoined from committing any act that may exacerbate the situation.
The Union received the aforesaid Order on April 16, 1998 and its members reported for work the
next day, April 17, 1998. The Hotel, however, refused to accept the returning workers and instead
filed a Motion for Reconsideration of the Secretarys Order.
On April 30, 1998, then Acting Secretary of Labor Jose M. Espaol, issued the disputed Order, which
modified the earlier one issued by Secretary Trajano. Instead of an actual return to work, Acting
Secretary Espaol directed that the strikers be reinstated only in the payroll.4 The Union moved for
the reconsideration of this Order, but its motion was denied on June 25, 1998. Hence, it filed before
this Court on August 26, 1998, a petition for certiorari under Rule 65 of the Rules of Court alleging
grave abuse of discretion on the part of the Secretary of Labor for modifying its earlier order and
requiring instead the reinstatement of the employees in the payroll. However, in a resolution dated
July 12, 1999, this Court referred the case to the Court of Appeals, pursuant to the principle
embodied in National Federation of Labor v. Laguesma.5
On October 19, 1999, the Court of Appeals rendered a Decision dismissing the Unions petition and
affirming the Secretary of Labors Order for payroll reinstatement. The Court of Appeals held that
the challenged order is merely an error of judgment and not a grave abuse of discretion and that
payroll reinstatement is not prohibited by law, but may be "called for" under certain circumstances.6
Hence, the Union now stands before this Court maintaining that:
THE HONORABLE COURT OF APPEALS GRIEVIOUSLY ERRED IN RULING THAT THE SECRETARY OF
LABORS UNAUTHORIZED ORDER OF MERE "PAYROLL REINSTATEMENT" IS NOT GRAVE ABUSE OF
DISCRETION7
The petition has merit.
The Court of Appeals based its decision on this Courts ruling in University of Santo Tomas (UST) v.
NLRC.8 There, the Secretary assumed jurisdiction over the labor dispute between striking teachers
and the university. He ordered the striking teachers to return to work and the university to accept
them under the same terms and conditions. However, in a subsequent order, the NLRC provided
payroll reinstatement for the striking teachers as an alternative remedy to actual reinstatement.
PAGE 21
True, this Court held therein that the NLRC did not commit grave abuse of discretion in providing for
the alternative remedy of payroll reinstatement. This Court found that it was merely an error of
judgment, which is not correctible by a special civil action for certiorari. The NLRC was only trying its
best to work out a satisfactory ad hoc solution to a festering and serious problem.
However, this Court notes that the UST ruling was made in the light of one very important fact: the
teachers could not be given back their academic assignments since the order of the Secretary for
them to return to work was given in the middle of the first semester of the academic year. The NLRC
was, therefore, faced with a situation where the striking teachers were entitled to a return to work
order, but the university could not immediately reinstate them since it would be impracticable and
detrimental to the students to change teachers at that point in time.
In the present case, there is no showing that the facts called for payroll reinstatement as an
alternative remedy. A strained relationship between the striking employees and management is no
reason for payroll reinstatement in lieu of actual reinstatement. Petitioner correctly points out that
labor disputes naturally involve strained relations between labor and management, and that in most
strikes, the relations between the strikers and the non-strikers will similarly be tense.9 Bitter labor
disputes always leave an aftermath of strong emotions and unpleasant situations. Nevertheless, the
government must still perform its function and apply the law, especially if, as in this case, national
interest is involved.
After making the distinction between UST and the present case, this Court now addresses the issue
of whether the Court of Appeals erred in ruling that the Secretary did not commit any grave abuse of
discretion in ordering payroll reinstatement in lieu of actual reinstatement. This question is
answered by the nature of Article 263(g). As a general rule, the State encourages an environment
wherein employers and employees themselves must deal with their problems in a manner that
mutually suits them best. This is the basic policy embodied in Article XIII, Section 3 of the
Constitution,10 which was further echoed in Article 211 of the Labor Code.11 Hence, a voluntary,
instead of compulsory, mode of dispute settlement is the general rule.
However, Article 263, paragraph (g) of the Labor Code, which allows the Secretary of Labor to
assume jurisdiction over a labor dispute involving an industry indispensable to the national interest,
provides an exception:
(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in
an industry indispensable to the national interest, the Secretary of Labor and Employment may
assume jurisdiction over the dispute and decide it or certify the same to the Commission for
compulsory arbitration. Such assumption or certification shall have the effect of automatically
enjoining the intended or impending strike or lockout as specified in the assumption or certification
order. If one has already taken place at the time of assumption or certification, all striking or locked
out employees shall immediately return to work and the employer shall immediately resume
operations and readmit all workers under the same terms and conditions prevailing before the strike
or lockout. x x x
PAGE 22
This provision is viewed as an exercise of the police power of the State. A prolonged strike or lockout
can be inimical to the national economy and, therefore, the situation is imbued with public necessity
and involves the right of the State and the public to self-protection.12
Under Article 263(g), all workers must immediately return to work and all employers must readmit
all of them under the same terms and conditions prevailing before the strike or lockout. This Court
must point out that the law uses the precise phrase of "under the same terms and conditions,"
revealing that it contemplates only actual reinstatement. This is in keeping with the rationale that
any work stoppage or slowdown in that particular industry can be inimical to the national economy.
It is clear that Article 263(g) was not written to protect labor from the excesses of management, nor
was it written to ease management from expenses, which it normally incurs during a work stoppage
or slowdown. It was an error on the part of the Court of Appeals to view the assumption order of the
Secretary as a measure to protect the striking workers from any retaliatory action from the Hotel.
This Court reiterates that this law was written as a means to be used by the State to protect itself
from an emergency or crisis. It is not for labor, nor is it for management.
It is, therefore, evident from the foregoing that the Secretarys subsequent order for mere payroll
reinstatement constitutes grave abuse of discretion amounting to lack or excess of jurisdiction.
Indeed, this Court has always recognized the "great breadth of discretion" by the Secretary once he
assumes jurisdiction over a labor dispute. However, payroll reinstatement in lieu of actual
reinstatement is a departure from the rule in these cases and there must be showing of special
circumstances rendering actual reinstatement impracticable, as in the UST case aforementioned, or
otherwise not conducive to attaining the purpose of the law in providing for assumption of
jurisdiction by the Secretary of Labor and Employment in a labor dispute that affects the national
interest. None appears to have been established in this case. Even in the exercise of his discretion
under Article 236(g), the Secretary must always keep in mind the purpose of the law. Time and
again, this Court has held that when an official by-passes the law on the asserted ground of attaining
a laudable objective, the same will not be maintained if the intendment or purpose of the law would
be defeated.13
WHEREFORE, the petition is GRANTED and the assailed Decision of the Court of Appeals dated
October 19, 1999 is REVERSED and SET ASIDE. The Order dated April 30, 1998 issued by the
Secretary of Labor and Employment modifying the earlier Order dated April 15, 1998, is likewise SET
ASIDE. No pronouncement as to costs.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Ynares-Santiago, and Carpio, JJ., concur.
Quisumbing, J., no part.
Footnotes
1 Annex "3" of Respondents Comment; Rollo, p. 232.
PAGE 23

4 Annex "B" of the Petition; Rollo, pp. 31-35.
5 G.R. No. 123426, March 10, 1999.
6 Rollo, pp. 24-30.
7 Rollo, p. 11.
8 190 SCRA 758 (1990).
9 The Insular Life Assurance Co., Ltd., Employees Association-NATU v. The Insular Life Assurance Co.
Ltd., 37 SCRA 244, 271 (1971).
10 Article XIII, Section 3 of the Constitution:
Sec. 3. The State shall afford full protection to labor, local and overseas, organized and unorganized,
and promote full employment and equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective bargaining and
negotiations, and peaceful concerted activities, including the right to strike in accordance with law.
They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall
also participate in policy and decision-making processes affecting their rights and benefits as may be
provided by law.
The State shall promote the principle of shared responsibility between workers and employers and
the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce
their mutual compliance therewith to foster industrial peace.
The State shall regulate the relations between workers and employers, recognizing the right of labor
to its just share in the fruits of production and the right of enterprises to reasonable returns on
investments, and to expansion and growth. (Underscoring ours)
11 Art. 211. Declaration of Policy.
A. It is the policy of the State:
(a) To promote and emphasize the primacy of free collective bargaining and negotiations, including
voluntary arbitration, mediation and conciliation, as modes of settling labor or industrial disputes;
(b) To promote free trade unionism as an instrument for the enhancement of democracy and the
promotion of social justice and development;
PAGE 24
(c) To foster the free and voluntary organization of a strong and united labor movement;
(d) To promote the enlightenment of workers concerning their rights and obligations as union
members and as employees;
(e) To provide an adequate administrative machinery for the expeditious settlement of labor or
industrial disputes;
(f) To ensure a stable but dynamic and just industrial peace; and
(g) To ensure the participation of workers in decision and policy-making processes affecting their
rights, duties and welfare.
B. To encourage a truly democratic method of regulating the relations between the employers and
employees by means of agreements freely entered into through collective bargaining, no court or
administrative agency or official shall have the power to set or fix wages, rates of pay, hours of work
or other terms and conditions of employment, except as otherwise provided under this Code.
(Underscoring supplied.)
12 Phimco Industries, Inc. v. Brillantes, 304 SCRA 747, 763 (1999).
13 Colgate-Palmolive Philippines, Inc. v. Ople, et al., 163 SCRA 323, 330 (1988
G.R. No. 89920
October 18, 1990
UNIVERSITY OF STO. TOMAS, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, UST FACULTY UNION,
respondents.
Abad, Leao & Associates for petitioner.
Eduardo J. Mario, Jr. for private respondent.
GUTIERREZ, JR., J.:

May a university, pending resolution by the National Labor Relations Commission (NLRC) of its labor
dispute with its union, comply with a readmission order by granting substantially equivalent
academic assignments, in lieu of actual reinstatement, to dismissed faculty members?
PAGE 25
On June 19, 1989, the University of Sto. Tomas (UST), through its Board of Trustees, terminated the
employment of all sixteen union officers and directors of respondent UST Faculty Union on the
ground that "in publishing or causing to be published in Strike Bulletin No. 5 dated August 4, 1987,
the libelous and defamatory attacks against the Father Rector, (each of them) has committed the
offenses of grave misconduct, serious disrespect to a superior and conduct unbecoming a faculty
member." (Rollo p. 41)
As a result of the dismissal of said employees, some faculty members staged mass leaves of absence
on June 28, 1989 and several days thereafter, disrupting classes in all levels at the University. (Rollo,
pp. 53, 92)
On July 5, 1989, the faculty union filed a complaint for illegal dismissal and unfair labor practice with
the Department of Labor and Employment. (Rollo, p. 42)
On July 7, 1989, the labor arbiter, on a prima facie showing that the termination was causing a
serious labor dispute, certified the matter to the Secretary of Labor and Employment for a possible
suspension of the effects of termination. (Rollo, p. 51)
Secretary Franklin Drilon subsequently issued an order dated July 11, 1989, the decretal portion of
which reads as follows:
WHEREFORE, ABOVE PREMISES CONSIDERED, and in the interest of industrial peace and pursuant to
Section 33 (b) of RA 6715, the effects of the termination of Ma. Melvyn Alamis, Eduardo Marino, Jr.,
Urbano Agalabia, Anthony Cura, Norma Collantes, Fulvio Guerrero, Corinta Barranco, Porfirio Jose
Guico, Lily Matias, Rene Sison, Henedino Brondial, Myrna Hilario, Ronaldo Asuncion, Nilda
Redoblado, Zenaida Burgos, and Milagros Nino are hereby suspended and management is likewise
ordered to accept them back to work under the same terms and conditions prevailing prior to their
dismissal.
In furtherance of this Order, all faculty members are directed to immediately report back for work
and for management to accept them back under the same terms and conditions prevailing prior to
the strike.
Labor Arbiter Nieves de Castro is hereby directed to proceed with the case pending before her and
to expedite the resolution of the same.
Pending resolution, the parties are directed to cease and desist, from committing any and all acts
that might exacerbate the situation. (Rollo, p. 54)
Petitioner UST filed a motion for reconsideration on July 12, 1989 asking the Secretary of Labor and
Employment to either assume jurisdiction over the present case or certify it to the National Labor
Relations Commission (NLRC) for compulsory arbitration without suspending the effects of the
termination of the 16 dismissed faculty members. (Rollo, pp. 55-64)
PAGE 26
On July 18, 1989, Secretary Drilon, acting on said motion for reconsideration, issued another order
modifying his previous order. The dispositive portion of the new order is quoted below:
WHEREFORE, ABOVE PREMISES CONSIDERED, the Order dated 11 July 1989 is hereby modified.
Accordingly, this Office hereby certifies the labor dispute to the National Labor Relations
Commission for compulsory arbitration pursuant to Article 263(g) of the Labor Code, as amended by
Section 27 of RA 6715.
In accordance with the above, the University of Santo Tomas is hereby ordered to readmit all its
faculty members, including the sixteen (16) union officials, under the same terms and conditions
prevailing prior to the present dispute.
The NLRC is hereby instructed to immediately call the parties and expedite the resolution of the
dispute.
The directive to the parties to cease and desist from committing any act that will aggravate the
situation is hereby reiterated. (Rollo, p. 81)
The petitioner filed a motion for clarification dated July 20, 1989 which was subsequently
withdrawn. (Rollo, p. 94)
On July 27, 1989, Secretary Drilon issued another order that contained the following dispositive
portion:
WHEREFORE, ABOVE PREMISES CONSIDERED, the Order dated 18 July 1989 directing the
readmission of all faculty members, including the 16 union officials, under the same terms and
conditions prevailing prior to the instant dispute is hereby affirmed.
The NLRC is hereby ordered to immediately call the parties and ensure the implementation of this
Order.
No further motion of this and any nature shall be entertained. (Rollo, p. 103)
The NLRC subsequently caned the parties to a conference on August 11, 1989 before its Labor
Arbiter Romeo Go. (Rollo, p. 9)
On August 14, 1989, the respondent union filed before the NLRC a motion to implement the orders
of the Honorable Secretary of Labor and Employment dated July 11, 18 and 27, 1989 and to cite
Atty. Joselito Guianan Chan (the petitioner's in-house counsel) for contempt. (Rollo, p. 104) The
petitioner, on August 25, 1989, filed its opposition to the private respondent's motion. (Rollo, p. 112)
On September 6, 1989, the NLRC issued a resolution, which is the subject of this petition for
certiorari, set forth below:
PAGE 27
Certified Case No. 0531 IN RE: LABOR DISPUTE at the University of Santo Tomas. Acting on the
Motion to Implement the Orders of the Honorable Secretary of Labor and Employment dated July
11, 18, and 27, 1989 and to cite Joselito Guianan Chan for Contempt dated August 14, 1989 and the
Urgent Ex-parte Motion to Implement Certification Orders of the Honorable Secretary of Labor and
Employment dated July 18 and 17, (Sic) 1989 and the subsequent Manifestation dated September 4,
1989, all filed by the UST Faculty Union; and considering the Opposition to Union's Motion to Cite
Atty. Joselito Guianan Chan for Contempt and Comments on its Motion to Implement the Orders of
the Honorable Secretary of Labor and Employment dated July 11, 18 and 27, 1989 filed on August
25, 1989 by UST through its counsel, the Commission, after deliberation, resolved, to wit:
a)
The University is hereby directed to comply and faithfully abide with the July 11, 18 and 27,
1989 Orders of the Secretary of Labor and Employment by immediately reinstating or readmitting
the following faculty members under the same terms and conditions prevailing prior to the present
dispute or merely reinstate them in the payroll:
a)
Ronaldo Asuncion
b)
Lily Matias
c)
Nilda Redoblado
d)
Zenaida Burgos
e)
Eduardo Marino, Jr.
f)
Milagros Nino
g)
Porfirio Guico
b)
To fully reinstate, by giving him additional units or through payroll reinstatement, Prof.
Urbano Agalabia who was assigned only six (6) units;
c)
To fully reinstate or reinstate through payroll, Prof. Fulvio Guerrero, who was assigned only
three (3) units;
d)
The University is directed to pay the above-mentioned faculty members full backwages
starting from July 13, 1989, the date the faculty members presented themselves for reinstatement
up to the date of actual reinstatement or payroll reinstatement.
e)
The payroll reinstatement of the above-named faculty members is hereby allowed only up
to the end of the First semester 1989; Next semester, the University is directed to actually reinstate
the faculty members by giving them their normal teaching loads;
PAGE 28
f)
The University is directed to cease and desist from offering the aforementioned faculty
members substantially equivalent academic assignments as this is not compliance in good faith with
the Orders of the Secretary of Labor and Employment. (Rollo, pp. 30-31)
Acting on an urgent motion for the issuance of a writ of preliminary injunction and/or restraining
order, the Court resolved to issue a temporary restraining order dated October 25, 1989 enjoining
respondents from enforcing or executing the assailed NLRC resolution. (Rollo, p. 160)
The petitioner assigns the following errors:
I
THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION (NLRC) GRAVELY ABUSED ITS
DISCRETION IN A MANNER AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT ISSUED THE
ASSAILED RESOLUTION WHICH ORDERS THE ALTERNATIVE REMEDIES OF ACTUAL REINSTATEMENT
OR PAYROLL REINSTATEMENT OF THE DISMISSED FACULTY MEMBERS.
II
THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION GRAVELY ABUSED ITS DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT DIRECTED THE UNIVERSITY TO PAY
SOME OF THE DISMISSED FACULTY MEMBERS ASSIGNED TO HANDLE SUBSTANTIALLY EQUIVALENT
ACADEMIC ASSIGNMENTS, 'FULL BACKWAGES STARTING FROM JULY 13, 1989, THE DATE THE
FACULTY MEMBERS PRESENTED THEMSELVES FOR REINSTATEMENT UP TO THE DATE OF ACTUAL
REINSTATEMENT OR PAYROLL REINSTATEMENT.
III
THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNT ING TO LACK OR EXCESS OF JURISDICTION WHEN IT CONSIDERED AS 'NOT
COMPLIANCE IN GOOD FAITH WITH THE ORDERS OF THE SECRETARY OF LABOR AND EMPLOYMENT'
THE UNIVERSITY'S ACT OF GRANTING TO SOME OF THE DISMISSED FACULTY MEMBERS,
SUBSTANTIALLY EQUIVALENT ACADEMIC ASSIGNMENTS.
IV
THE HONORABLE NLRC GRAVELY ABUSED ITS DISCRETION WHEN IT ARROGATED UPON ITSELF THE
EXERCISE OF THE RIGHT AND PREROGATIVES REPOSED BY LAW TO THE PETITIONER UNIVERSITY IN
THE LATTER'S CAPACITY AS EMPLOYER. (Rollo, pp. 9-10)
We shall deal with the first and third assignment of errors jointly because they are interrelated.
The petitioner states in its petition that: a) It has already actually reinstated six of the dismissed
faculty members, namely: Professors Alamis, Collantes, Hilario, Barranco, Brondial and Cura; b) As to
Professors Agalabia and Guerrero, whose teaching assignments were partially taken over by new
PAGE 29
faculty members, they were given back their remaining teaching loads (not taken by new faculty
members) but were likewise given substantially equivalent academic assignments corresponding to
their teachings loads already taken over by new faculty members; c) The remaining seven faculty
members, to wit: Professors Asuncion, Marino Jr., Matias, Redoblado, Burgos, Nino and Guico, were
given substantially equivalent academic assignments in lieu of actual teaching loads because all of
their teaching loads originally assigned to them at the start of the first semester of school year 19891990 were already taken over by new faculty members; d) One dismissed faculty member Rene
Sison, had been "absent without official leave" or AWOL as early as the start of the first semester.
(Rollo, pp. 11-12).
The petitioner advances the argument that its grant of substantially equivalent academic
assignments to some of the dismissed faculty members, instead of actual reinstatement, is wellsupported by just and valid reasons. It alleges that actual reinstatement of the dismissed faculty
members whose teaching assignments were previously taken over by new faculty members is not
feasible nor practicable since this would compel the petitioner university to violate and terminate its
contracts with the faculty members who were assigned to and had actually taken over the courses.
The petitioner submits that it was never the intention of the Secretary of Labor to force it to break
employment contracts considering that those ordered temporarily reinstated could very well be
accommodated with substantially equivalent academic assignments without loss in rank, pay or
privilege. Likewise, it claims that to change the faculty member when the semester is about to end
would seriously impair and prejudice the welfare and interest of the students because dislocation,
confusion and loss in momentum, if not demoralization, will surely ensue once the change in faculty
is effected. (Rollo, pp. 13-14)
The petitioner also avers that the faculty members who were given substantially equivalent
academic assignments were told by their respective deans to report to the Office of Academic Affairs
and Research for their academic assignments but the said faculty members failed to comply with
these instructions. (Rollo, p. 118) Thus, the petitioner postulates, mere payroll reinstatement which
would give rise to the obligation of the University to pay these faculty members, even if the latter
are not working, would squarely run counter to the principle of "No Work, No Pay". (Rollo, p. 15)
The respondent UST Faculty Union, on the other hand, decries that the petitioner is using the
supposed substantially equivalent academic assignments as a vehicle to embarrass and degrade the
union leaders and that the refusal of the petitioner to comply with the return-to-work order is
calculated to deter, impede and discourage the union leaders from pursuing their union activities.
(Rollo, pp. 246, 254)
It also claims that the dismissed faculty members were hired to perform teaching functions and,
indeed, they have rendered dedicated teaching service to the University students for periods ranging
from 12 to 39 years. Hence, they maintain, their qualifications are fitted for classroom activities and
the assignment to them of non-teaching duties, such as (a) book analysis; (b) syllabi-making or
revising; (c) test questions construction; (d) writing of monographs and modules for students' use in
learning "hard to understand" topics on the lectures; (e) designing modules, transparencies, charts,
diagrams for students' use as learning aids; and (f) other related assignments, is oppressive. (Rollo,
pp. 243-244)
PAGE 30
In resolving the contentions of both parties, this Court refers to Article 263 (g), first paragraph, of the
Labor Code, as amended by Section 27 of Republic Act No. 6715, which provides:
(g)
When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout
in an industry indispensable to the national interest, the Secretary of Labor and Employment may
assume jurisdiction over the dispute and decide it or certify the same to the Commission for
compulsory arbitration. Such assumption or certification shall have the effect of automatically
enjoining the intended or impending strike or lockout as specified in the assumption or certification
order. If one has already taken place at the time of assumption or certification, all striking or locked
out employees shall immediately return to work and the employer shall immediately resume
operations and readmit all workers under the same terms and conditions prevailing before the strike
or lockout. The Secretary of Labor and Employment or the Commission may seek the assistance of
law enforcement agencies to ensure compliance with this provision as well as with such orders as he
may issue to enforce the same. (Emphasis supplied.)
It was in compliance with the above provision that Secretary Drilon issued his July 18, 1989 order to
"readmit all its faculty members, including the sixteen (16) union officials, under the same terms and
conditions prevailing prior to the present dispute." (Rollo, p. 81) And rightly so, since the labor
controversy which brought about a temporary stoppage of classes in a university populated by
approximately 40,000 students affected national interest.
After the petitioner filed a motion for clarification which, however, was subsequently withdrawn,
Secretary Drilon issued another order dated July 27, 1989 affirming his July 18 order and directing
the NLRC to immediately call the parties and "ensure the implementation of this order" (Rollo, p.
103)
The NLRC was thereby charged with the task of implementing a valid return-to-work order of the
Secretary of Labor. As the implementing body, its authority did not include the power to amend the
Secretary's order. Since the Secretary's July 18 order specifically provided that the dismissed faculty
members shall be readmitted under the same terms and conditions prevailing prior to the present
dispute, the NLRC should have directed the actual reinstatement of the concerned faculty members.
It therefore erred in granting the alternative remedy of payroll reinstatement which, as it turned,
only resulted in confusion. The remedy of payroll reinstatement is nowhere to be found in the
orders of the Secretary of Labor and hence it should not have been imposed by the public
respondent NLRC. There is no showing that the facts called for this type of alternative remedy.
For the same reason, we rule that the grant of substantially equivalent academic assignments can
not be sustained. Clearly, the giving of substantially equivalent academic assignments, without
actual teaching loads, cannot be considered a reinstatement under the same terms and conditions
prevailing before the strike. Within the context of Article 263(g), the phrase "under the same terms
and conditions" contemplates actual reinstatement or the return of actual teaching loads to the
dismissed faculty members. There are academic assignments such as the research and writing of
treatises for publication or full-time laboratory work leading to exciting discoveries which professors
PAGE 31
yearn for as badges of honor and achievement. The assignments given to the reinstated faculty
members do not fall under such desirable categories.
Article 263(g) was devised to maintain the status quo between the workers and management in a
labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national
interest, pending adjudication of the controversy. This is precisely why the Secretary of Labor, in his
July 11, 1989 order, stated that "Pending resolution, the parties are directed to cease and desist
from committing any and all acts that might exacerbate the situation." (Rollo, p. 54) And in his order
of July 18, he decreed that "The directive to the parties to cease and desist from committing any act
that will aggravate the situation is hereby reiterated." (Rollo, p. 81)
The grant of substantially equivalent academic assignments of the nature assigned by the petitioner
would evidently alter the existing status quo since the temporarily reinstated teachers will not be
given their usual teaching loads. In fact, the grant thereof aggravated the present dispute since the
teachers who were assigned substantially equivalent academic assignments refused to accept and
handle what they felt were degrading or unbecoming assignments, in turn prompting the petitioner
University to withhold their salaries. (Rollo, p. 109)
We therefore hold that the public respondent NLRC did not commit grave abuse of discretion when
it ruled that the petitioner should "cease and desist from offering the aforementioned faculty
members substantially equivalent academic assignments as this is not compliance in good faith with
the order of the Secretary of Labor and Employment."
It was error for the NLRC to order the alternative remedies of payroll reinstatement or actual
reinstatement. However, the order did not amount to grave abuse of discretion. Such error is merely
an error of judgment which is not correctible by a special civil action for certiorari. The NLRC was
only trying its best to work out a satisfactory ad hoc solution to a festering and serious problem. In
the light of our rulings on the impropriety of the substantially equivalent academic assignments and
the need to defer the changes of teachers until the end of the first semester, the payroll
reinstatement will actually minimize the petitioners problems in the payment of full backwages.
As to the second assignment of error, the petitioner contends that the NLRC committed grave abuse
of discretion in awarding backwages from July 13, 1989, the date the faculty members presented
themselves for work, up to the date of actual reinstatement, arguing that the motion for
reconsideration seasonably filed by the petitioner had effectively stayed the Secretary's order dated
July 11, 1989.
The petitioner's stand is unmeritorious. A return-to-work order is immediately effective and
executory despite the filing of a motion for reconsideration by the petitioner. As pointed out by the
Court in Philippine Air Lines Employees Association (PALEA) v. Philippine Air Lines, Inc. (38 SCRA 372
[1971]):
The very nature of a return-to-work order issued in a certified case lends itself to no other
construction. The certification attests to the urgency of the matter affecting as it does an industry
indispensable to the national interest. The order is issued in the exercise of the court's compulsory
PAGE 32
power of arbitration, and therefore must be obeyed until set aside. To say that its effectivity must
wait affirmance in a motion for reconsideration is not only to emasculate it but indeed to defeat its
import, for by then the deadline fixed for the return-to-work would, in the ordinary course, have
already passed and hence can no longer be affirmed insofar as the time element is concerned.
Additionally, although the Secretary's order of July 11 was modified by the July 18 order, the returnto-work portion of the earlier order which states that "the faculty members should be admitted
under the same terms and conditions prevailing prior to the dispute" was affirmed.
We likewise affirm the NLRC's finding that the dismissed teachers presented themselves for
reinstatement on July 13, 1989 since the factual findings of quasi-judicial agencies like the NLRC are
generally accorded not only respect but even finality if such findings are supported by substantial
evidence. (Mamerto v. Inciong, 118 SCRA 265 [1982]; Baby Bus, Inc. v. Minister of Labor, 158 SCRA
221 [1988]; Packaging Products Corporation v. National Labor Relations Commission, 152 SCRA 210
[1987]; Talisay Employees' and Laborers Association (TELA) v. Court of Industrial Relations, 143 SCRA
213 [1986]). There is no showing that such substantial evidence is not present.
The petitioner, however, stresses that since the faculty members who were given substantially
equivalent academic assignments did not perform their assigned tasks, then they are not entitled to
backwages. (Rollo, p. 19) The petitioner is wrong. The reinstated faculty members' refusal to assume
their substantially equivalent academic assignments does not contravene the Secretary's return-towork order. They were merely insisting on being given actual teaching loads, on the return-to-work
order being followed. We find their persistence justified as they are rightfully and legally entitled to
actual reinstatement. Since the petitioner University failed to comply with the Secretary's order of
actual reinstatement, we adjudge that the NLRC's award of backwages until actual reinstatement is
correct.
With respect to the fourth assignment of error, the petitioner expostulates that as employer, it has
the sole and exclusive right and prerogative to determine the nature and kind of work of its
employees and to control and manage its own operations. Thus, it objects to the NLRC's act of
substituting its judgment for that of the petitioner in the conduct of its affairs and operations. (Rollo,
pp. 23-24)
Again, we cannot sustain the petitioner's contention. The hiring, firing, transfer, demotion and
promotion of employees are traditionally Identified as management prerogatives. However, these
are not absolute prerogatives. They are subject to limitations found in law, a collective bargaining
agreement, or general principles of fair play and justice. (Abbott Laboratories [Phil.] Inc. v. NLRC, 154
SCRA 713 [1987])
Article 263(g) is one such limitation provided by law. To the extent that Art. 263(g) calls for the
admission of all workers under the same terms and conditions prevailing before the strike, the
petitioner University is restricted from exercising its generally unbounded right to transfer or
reassign its employees. The public respondent NLRC is not substituting its own judgment for that of
the petitioner in the conduct of its own affairs and operations; it is merely complying with the
mandate of the law.
PAGE 33
The petitioner manifests the fear that if the temporarily reinstated faculty members will be allowed
to handle actual teaching assignments in the classroom, the latter would take advantage of the
situation by making the classroom the forum not for the purpose of imparting knowledge to the
students but for the purpose of assailing and lambasting the administration. (Rollo, p. 330) There
may be a basis for such a fear. We can even state that such concern is not entirely unfounded nor
farfetched. However, such a fear is speculative and does not warrant a deviation from the principle
that the dismissed faculty members must be actually reinstated pending resolution of the labor
dispute. Unpleasant situations are sometimes aftermaths of bitter labor disputes. It is the function of
Government to fairly apply the law and thereby minimize the dispute's harmful effects. It is in this
light that the return to work order should be viewed and obeyed.
One thing has not escaped this Court's attention. Professors Alamis, Cura, Collantes, Barranco,
Brondial and Hilario were already reinstated by the petitioner in compliance with the Secretary's
return-to-work order. Knowing this to be a fact, the NLRC, in its assailed resolution, dealt only with
the fate of the remaining faculty members who were given substantially equivalent academic
assignments. The names of the aforementioned faculty members appear nowhere in the disputed
NLRC order. Inasmuch as these faculty members actually reinstated were not covered by the NLRC
resolution, then it follows that they were likewise not covered by the Court's temporary restraining
order enjoining respondents from enforcing or executing the NLRC resolution. The effects of the
temporary restraining order did not extend to them. Yet, after the Court issued the temporary
restraining order, the petitioner lost no time in recalling their actual teaching assignments and giving
them, together with the rest of the dismissed faculty members, substantially equivalent academic
assignments.
The petitioner's dogmatic insistence in issuing substantially equivalent academic assignments stems
from the fact that the teaching loads of the dismissed professors have already been assigned to
other faculty members. It wants us to accept this remedy as one resorted to in good faith. And yet,
the petitioner's employment of the temporary restraining order as a pretext to enable it to
substitute substantially equivalent academic assignments even for those who were earlier already
reinstated to their actual teaching loads runs counter to the dictates of fair play.
With respect to the private respondent's allegation of union busting by the petitioner, we do not at
this time pass upon this issue. Its determination falls within the competence of the NLRC, as
compulsory arbitrator, before whom the labor dispute is under consideration. We are merely called
upon to decide the propriety of the petitioner University's grant of substantially equivalent academic
assignments pending resolution of the complaint for unfair labor pratice and illegal dismissal filed by
the private respondent.
Although we pronounce that the dismissed faculty members must be actually reinstated while the
labor dispute is being resolved, we have to take into account the fact that at this time, the first
semester for schoolyear 1990-1991 is about to end. To change the faculty members around the time
of final examinations would adversely affect and prejudice the students whose welfare and interest
we consider to be of primordial importance and for whom both the University and the faculty union
must subordinate their claims and desires. This Court therefore resolves that the actual
PAGE 34
reinstatement of the non-reinstated faculty members, pending resolution of the labor controversy
before the NLRC, may take effect at the start of the second semester of the schoolyear 1990-1991
but not later. With this arrangement, the petitioner's reasoning that it will be violating contracts
with the faculty members who took over the dismissed professors' teaching loads becomes moot
considering that, as it alleges in its petition, it operates on a semestral basis.
Under the principle that no appointments can be made to fill items which are not yet lawfully
vacant, the contracts of new professors cannot prevail over the right to reinstatement of the
dismissed personnel. However, we apply equitable principles for the sake of the students and order
actual reinstatement at the start of the second semester.
WHEREFORE, the petition is hereby DISMISSED. However, the NLRC resolution dated September 6,
1989 is MODIFIED and the petitioner University of Sto. Tomas is directed to temporarily reinstate,
pending and without prejudice to the outcome of the labor dispute before the National Labor
Relations Commission, the sixteen (16) dismissed faculty members to their actual teaching
assignments, at the start of the second semester of the schoolyear 1990-1991. Prior to their
temporary reinstatement to their actual teaching loads, the said faculty members shall be entitled to
fall wages, backwages, and other benefits. The Temporary Restraining Order dated October 25, 1989
is hereby LIFTED.
SO ORDERED.
Fernan, C.J., (Chairman), Bidin and Cortes, JJ., concur.
Feliciano, J., is on leave.
G.R. Nos. 86917-18
January 25, 1991
RELIANCE SURETY & INSURANCE CO., INC., petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION and RELIANCE SURETY &
INSURANCE EMPLOYEES UNION, respondents.
Ambrosio Padilla, Mempin & Reyes Law Offices for petitioner.
Banzuela, Flores, Miralles, Raeses, Sy, Taquio & Associates for private respondent.
SARMIENTO, J.:p
The only question in this petition for certiorari is whether or not strikers who have been found to
have staged an illegal strike may be reinstated to work.
PAGE 35
The facts are as follows:

xxx
xxx
xxx
It appears that to avoid unnecessary loss of productive working time due to personal and non-workrelated conversations, personal telephone calls and non-work-connected visits by personnel to other
departments, the respondent Reliance Surety Insurance Co., Inc. (company for short) on 21
November 1986, thru the manager (Mr. Celso Eleazar) of its underwriting department, effected a
change in the seating arrangement of its personnel in said department.
Four of those affected namely: Isagani Rubio, Rosalinda Macapagal, Glene Molina, and Severa
Cansino protested the transfer of their tables and seats, claiming that the change was without prior
notice and was done merely to harass them as union members. When the manager insisted, a
heated discussion ensued, during which Rubio and companions were alleged to have hurled
unprintable insults (sipsip, balimbing, vacuum, etc.) to the manager and supervisors.
Rubio, Macapagal, Molina and Cansino were asked to explain within 48 hours why no disciplinary
action should be taken against them for misconduct, insubordination, and gross disrespect. The work
atmosphere in the department had allegedly become charged or tense as Rubio continued to refuse
to stay at his designated place, and Molina and Macapagal still levelled insults to those who testified
against them. Hence, Rubio and companions were placed under preventive suspension on 3
February 1987 and ultimately dismissed after investigation on 3 March 1987.
On 6 March 1987, the Reliance Surety & Insurance Employees Union (or union for short) filed in
behalf of Rubio, Macapagal, Molina, and Cansino with the NLRC-NRC Branch, Manila, against the
respondent company a complaint for illegal dismissal (NLRC- NCR Case No. 00-03-00828-87) which it
subsequently amended on 7 April 1987 to include the charge of unfair labor practice.
The union claims that the company was guilty of unfair labor practice because it, among others,
effected transfer and changes in the seating arrangement to pressure or intimidate union members;
because it interfered in the union members' exercise of their right to self-organization by forcing
them to undertake overtime work even on a non-working Saturday and in times when there were
scheduled union meetings to prevent them from attending the same: and because, thru its manager
and assistant managers, it caused the resignation and withdrawal of union members from the union.
It also appears that on 12 March 1987, or while the complaint for illegal dismissal and ULP was
hibernating in the NCR Arbitration Branch, the union filed with the DOLE a notice of strike predicated
on unfair labor practices (dismissal of union officers/members, discrimination and coercion on
employees) allegedly committed by the company.
On 13 March 1987, the company received a copy of the notice of strike and a telegram from the
DOLE setting the notice of strike for initial conciliation conference on 17 March 1987 at 2:00 p.m.
But even before the initial conference could take place, the union in the morning of 17 March 1987
struck and picketed the company premises by forming human barricades, which effectively
obstructed the free ingress to and egress from its premises, more particularly at the lobby of the 8th
PAGE 36
floor of the building where it has its office, thereby preventing its officials and employees from doing
their usual duties.
Because of this new development, the company filed on 31 March 1987 with the NLRC-NCR
Arbitration Branch, Manila, a petition to declare the strike illegal (NLRC-CR Case No. 00-03-00117987) on the grounds that the 30 or 15 day cooling-off period was blatantly defied; that the legal
requirement to furnish the department with the results of the strike vote at least 7 days before the
strike was ignored; just as the 24-hour period within which BLR or the Regional Office should be
furnished with a written notice of the meeting to declare a strike was also not complied with.
Charged, together with the union and its members, as individual respondents in the petition to
declare the strike illegal were the following officers: Rolando Tugade, president; Joseph Aying, vicepresident; Isagani Rubio, treasurer; Ms. Glene Molina and Ms. Rosalinda Macapagal, secretaries;
Froilan Garcia and Ms. Luz Monroy, Sgts. at arms: Orlando Calma, auditor; and Manolo Que, pro,
who, the company claims, should be divested of their employment status for having knowingly
participated in the illegal strike and in the commission of illegal acts. 1
xxx
xxx
xxx
The Labor Arbiter found the strike to be illegal, a finding the National Labor Relations Commission,
on appeal, affirmed. However, the Commission held:
xxx
xxx
xxx
However, while we are convinced that the strike is illegal, we are equally convinced that it should
not be visited with the consequence so harsh as the supreme penalty of dismissal, where merely
reinstating them (strikers) without backwages would suffice in view of the union's belief, in
proceeding with strike, that the company was committing unfair labor practice in terminating the
services of some of its officers and members, in line with the Supreme Court ruling in the case of
Ferrer vs. CIR, 17 SCRA 352, to that effect. In justifying the imposition of a penalty lesser than
dismissal even in cases involving strikes tainted with illegality, the Supreme Court in the case of
Almira vs. B.F. Goodrich Phils., Inc., 58 SCRA 120 ruled:
It would imply at the very least that where a penalty less punitive would suffice, whatever missteps s
may be committed by labor ought not to be visited with a consequence so severe. It is not only
because of the law's concern for the workingman. There is, in addition, as family to consider.
Unemployment brings untold hardships and sorrows on those depending on the wage-earner. The
misery and pain attendant on the loss of jobs then could be avoided.
xxx
xxx
xxx
In other words, under the circumstances obtaining in this case, we find it more in keeping with
justice and equity if the striking union officers are reinstated, instead of being dismissed, to their
former positions without loss of seniority rights but without backwages to serve as penalty for their
indiscretion in launching an illegal strike. 2
PAGE 37
xxx
xxx
xxx
The Commission then disposed as follows:

WHEREFORE, under the premises, the decision appealed from is hereby AFFIRMED, subject to the
modification that all the striking officers of the appellant union should be reinstated to their former
positions without loss of seniority rights but without backwages except Isagani Rubio, Glene Molina,
and Rosalinda Macapagal, whose dismissal due to gross disrespect was found to be justified, and Luz
Monroy who, in consideration of the financial assistance of P4,500.00 had withdrawn her appeal and
allowed the arbiter's order of dismissal to be binding upon her. The dismissal of Severa Cansino due
to gross disrespect is likewise upheld. However, the company is directed to pay said employees,
namely Isagani Rubio, Glene Molina, Rosalinda Macapagal and Severa Cansino one month salary
each including cost of living allowance and other benefits. 3
The petitioner argues that in so disposing, the Commission is guilty of a grave abuse of discretion.
There is no dispute that the strike in question was illegal, for failure of the striking personnel to
observe legal strike requirements, to wit: (1) as to the fifteen-day notice; (2) as to the two-thirds
required vote to strike done by secret ballot; (3) as to submission of the strike vote to the
Department of Labor at least seven days prior to the strike. 4
As found likewise by the Commission, in the course of the strike held on April 1, 1987, certain
strikers harassed non-striking employees, called company officers names, and committed acts of
violence (as a result of which, criminal charges were brought with the fiscal's office.) 5
There is no question, finally, that the strike itself was prompted by no actual, existing unfair labor
practice committed by the petitioner. In effecting a change in the seating arrangement in the office
of the underwriting department, the petitioner merely exercised a reasonable prerogative
employees could not validly question, much less assail as an act of unfair labor practice. The Court is
indeed at a loss how rearranging furniture, as it were, can justify a four-month-long strike. As to the
private respondent's charges of harassment, the Commission found none, and as a general rule, we
are bound by its findings of fact.
Amid this background, the Court must grant the petition. In staging the strike in question, a strike
that was illegal in more ways than one, the reinstated union officers were clearly in bad faith, and to
reinstate them without, indeed, loss of seniority rights, is to reward them for an act public policy
does not sanction.
The private respondents can not find sanctuary in the cases of Ferrer v. Court of Industrial Relations
6 and Almira v. BF Goodrich Philippines, Inc., 7 in which we affirmed reinstatement in spite of an
"illegal" strike. In the first place, neither Ferrer nor Almira involved an illegal strike. What was
involved in Ferrer was a defective strike, that is, one conducted in violation of the thirty-day
"cooling-off' period, but one carried out in good faith "to offset what petitioners were warranted in
believing in good faith to be unfair labor practices [committed by] Management." 8 What Almira on
PAGE 38
the other hand declared was that a violent strike alone does not make the action illegal, which
would justify the dismissal of strikers. It is therefore clear that we ordered reinstatement in both
cases not in spite of the illegality of the strike but on the contrary, because the same was "legal",
that is to say, carried out in good faith.
We can not apply, either, the ruling in Bacus v. Ople, 9 where we held that the mere finding of
illegality attending a strike does not justify the "wholesale" dismissal of strikers who were otherwise
impressed with good faith.
The Court must not be understood to be abandoning the teachings of either Ferrer, Almira, or Bacus.
The Court reiterates that good faith is still a valid defense against claims of illegality of a strike. We
do find, however, not a semblance of good faith here, but rather, plain arrogance, pride, and
cynicism of certain workers.
With respect to the private respondent, Isagani Rubio, what militates against his readmission to the
firm is the fact that he had accepted the sum of P2,448.80 "in full satisfaction of the . . . Decision" (of
the Labor Arbiter). He can not now insist on reinstatement after accepting the legality of his
dismissal. He can not have his cake and eat it too.
As a general rule, the sympathy of the Court is on the side of the laboring classes, not only because
the Constitution imposes sympathy but because of the one-sided relation between labor and capital.
The Court must take care, however, that in the contest between labor and capital, the results
achieved are fair and in conformity with the rules. We will not accomplish that objective here by
approving the act of the National Labor Relations Commission which we hold to constitute a grave
abuse of discretion.
WHEREFORE, the petition is GRANTED.
SO ORDERED.
Melencio-Herrera, Paras and Regalado, JJ., concur.
Padilla, J., took no part.
Footnotes
1
Rollo, 156-159.
Id., 164-165.
Id., 165.
Id., 162-163.
PAGE 39
Id., 164-165.
Nos. L-24267-8, May 31, 1966, 17 SCRA 352.
No. L-34974, July 25, 1974, 58 SCRA 120.
Ferrer, supra, 360.
9
No. 56856, October 23, 1984, 132 SCRA 690. See also Nos. 59711-12. May 29, 1987, 150
SCRA 429.
PAGE 40

Strikes and Lockouts Cases

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Strikes and Lockouts Cases

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G.R. No.

January 23, 1991

PHILIPPINE AIRLINES, INC., petitioner,

STRIKES AND LOCKOUTS

determination of the minimum entry rate

wage adjustment due to payscale study

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

STRIKES AND LOCKOUTS

in ruling on the legality of the strike;

determination of the minimum entry rate

wage adjustment due to payscale study

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

Jurisdiction of Labor Arbiters and the Commission.

It violated the no-strike provision of the CBA, to wit:

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

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

STRIKES AND LOCKOUTS

STRIKES AND LOCKOUTS

PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION (NLRC) COMMITTED GRAVE

STRIKES AND LOCKOUTS

G.R. No. 99266

SAN MIGUEL CORPORATION, petitioner,

STRIKES AND LOCKOUTS

STRIKES AND LOCKOUTS

STRIKES AND LOCKOUTS

STRIKES AND LOCKOUTS

2 Annex "4" of Respondents Comment; Rollo, p. 243.

G.R. No. 89920

October 18, 1990

UNIVERSITY OF STO. TOMAS, petitioner,

GUTIERREZ, JR., J.:

STRIKES AND LOCKOUTS

STRIKES AND LOCKOUTS

STRIKES AND LOCKOUTS

Eduardo Marino, Jr.

STRIKES AND LOCKOUTS

STRIKES AND LOCKOUTS

G.R. Nos. 86917-18

January 25, 1991

RELIANCE SURETY & INSURANCE CO., INC., petitioner,

STRIKES AND LOCKOUTS

The facts are as follows:

The Commission then disposed as follows:

Nos. L-24267-8, May 31, 1966, 17 SCRA 352.

No. L-34974, July 25, 1974, 58 SCRA 120.

Ferrer, supra, 360.

STRIKES AND LOCKOUTS

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