UP Law F2021 Philtread Tire and Rubber Corporation vs.

NLRC
and Alliance Of Democratic Free Labor
Organization (Philtread Chapter)
[Labor 2] Union Employer Lockout 1993 Griño-Aquino , J.

FACTS
On March 3, 1990, PR ADFLO-Philtread Chapter filed a Notice of strike with NCMB against petitioner for
alleged discrimination, union-busting, etc. In retaliation, petitioner filed a Notice of Lockout for ULP and
violation of CBA by the union. It also announced that all salaried and supervising union EEs would not be
allowed to work anymore, even posting a notice of job vacancies in the newspaper.

Union picketed and filed for illegal dismissal of union officers. Criminal charges for libel were also filed by
the company against 36 union officers who had allegedly distributed leaflets imputing defects in the
company’s products.

Upon petition of the union, SOLE assumed jurisdiction and certified the case for compulsory arbitration,
ordering the corporation to accept the EEs back under same terms & conditions while case is still pending.
Petitioner partially complied by accepting on May 7, 1990 all except the 36 union officers facing libel
charges. Because of this, Union filed a motion for execution of the return-to-work order.

NLRC: reiterated RTW order

But, petitioner was firm in its refusal. Thus, conciliation meetings were held wherein NLRC Commissioner
Veloso suggested deferment of the execution of the RTW order in exchange for financial concessions. This
was accepted by majority of the EEs present. Despite this though, respondent refiled its motion for
execution.

NLRC: awarding backwages from May 7, 1990 (when the other EEs were accepted back) and separation
pay at 60 days for every year of service

Petitioner contends 2mo-sep pay per year of service was excessive. Private respondent, on the other hand,
contends the deferment of the implementation of the RTW order was not agreed upon by the workers.

ISSUE
W/N NLRC deprived the Union of due process since it was not given a chance to finish presenting
evidence [NO]
NLRC bent over backward to accommodate the Union, but it wasted its numerous opportunities to adduce
evidence in support of its charges against the company. Union’s lawyer absented himself repeatedly from
conciliation proceedings and delayed disposition of the case. The employees preferred financial
concessions in lieu of reinstatement. They did not deny this.
W/N the company had complied with the procedural requirements of a valid lockout
NLRC: The company complied with such under Art. 263 of the Labor Code. It was motivated by its desire
to achieve industrial peace. Thus, the company incurred no liability to the locked out employees. The
lockout was lawful. Besides, the issue of company’s compliance with the procedural requirements of a
valid lockout was not even raised by the Union. However, the company should be penalized for its failure
to fully comply with SOLE’s return to workorder.

Supreme Court cited Sec. 5 (a) and Sec. 6 of Rule IX (Certified Cases) of the NLRC Rules 2 3 of Procedure.
SOLE's assumption and certification orders being executory in character are to be strictly complied with
by the parties even during the pendency of a petition questioning their validity, for this extraordinary
authority given by law to SOLE is aimed at a peaceful and speedy solution to labor disputes, without
jeopardizing national interests. Since the return-to-work order was obtained by the workers, the right to
return to work could be waived by them, as they did in this case when they opted to defer their
reinstatement while negotiating with the company for financial benefits in lieu of reinstatement in view
of the "bad blood" and "severely strained relations" between them and management.
 W/N separation pay was correctly awarded by NLRC [YES]
The award of separation pay in lieu of reinstatement is an equitable recourse that has been sanctioned by
this Court in a number of cases. However, the NLRC's award of 2 months instead of 1-month separation
pay for every year of service to the 36 supervisors is unprecedented and unwarranted both in law (Art.
283, Labor Code), and jurisprudence, and the existing CBA. Philtread correctly argued that this award of
60 days would send signals that disloyalty, destabilization, and the fomenting of labor unrest is rewarded
and given an extra premium over and above the normal grant of retirement benefits to other more
deserving employees. It would be unfair and demoralizing to the quiet and uncomplaining workers when
the troublemakers can look forward to larger financial benefits than the law ordinarily allows. Paying a
higher price to get rid of troublemakers would not be conducive to industrial peace.
FALLO

WHEREFORE, Petition for certiorari and prohibition is partially GRANTED. NLRC resolution is affirmed,
except the award to the 36 unreinstated supervisors of 2 months separation pay for every year of service,
which is hereby reduced to 1 month separation pay for every year of service, a remaining fraction of at least
6 months to be considered as 1 year. In other respects, AFFIRMED. The petition for certiorari is granted. The
questioned resolution dated May 27, 1988 of the NLRC in Injunction Case No. 1582 (Annex A) is hereby
annulled and set aside. Costs against the private respondents. SO ORDERED.