University of the Philippines College of Law

MTP, 2E

Topic In case of illegal strike, illegal lockout/in pari delicto doctrine – status quo ante
Case No. GR 160138; July 13, 2011
Case Name Automotive Engine Rebuilders, Inc. v. Progresibong Unyon ng mga Manggagagawa
sa AER, Arnold Villota plus 19 others
Ponente J. Mendoza

RELEVANT FACTS
 AER is an automotive engine repair company.
 Progresibong Unyon is the legitimate labor union of AER’s rank and file employees.
 Both parties filed a complaint against each other before the NLRC.

 AER filed a complaint against Unyon and its 18 members for illegal concerted activities.
o It likewise suspended 7 union members tested positive for illegal drugs.
o AER claims that Unyon was guilty of staging an illegal strike.

 On the other hand, Unyon filed a counter charge accusing AER of unfair labor practice, illegal
suspension and illegal dismissal.
o Unyon claims that AER committed an illegal lockout.

 The dispute arose a day after the union filed a petition for certification election before the DOLE.
o At that time, AER required all its employees to undergo a compulsory drug test.
o Employees who were found positive for illegal drugs were suspended thereafter.
o In protest of the alleged illegal suspension, the complaining workers staged a one day walkout.
o Subsequently, AER dismissed concerned employees as penalty for the alleged illegal strike.
o Likewise, AER had also pulled out machines from the main building to the AER-PSC compound
located on another street.
o Consequently, protesting employees forced their way to the AER-PSC premises to try to bring
out the boring machine.

 On appeal, CA decided to order reinstatement of all suspended employees without back wages.

ISSUE AND RATIO DECIDENDI

Issue Ratio
W/N both parties are guilty in YES.
pari delicto
1. Errors of AER (Company)
a. Conducted a drug test a day after the union filed a petition
for certification election
i. Suspicious timing of drug test since the company has
not performed any for 35 years
ii. Drug test was not shown to have been performed by
an authorized testing center
 University of the Philippines College of Law
MTP, 2E

b. Engaged in runaway shop when it tried to transfer the boring

machine to its office across the street
c. Refused to admit back those employees who were not
included in its complaint against the union
i. 32 filed of illegal dismissal while only 18 were
charged with illegal strike
ii. The 14 others should have been reinstated
iii. No convincing proof that these employees
abandoned their jobs
d. Penalty of dismissal for the one day walkout was too severe
i. No injuries during the walkout
ii. No harm or violence were inflicted upon the other
employees
iii. No intent to harm or steal the company’s property
2. Errors of the union and workers
a. Resorted to a concerted work slowdown and walkout of
protest
b. Forced their way into the other office to bring back the boring
machine
c. Prevented the entry and exit of non-participating employees
and possible clients

Since both parties are in pari delicto, they should be restored to their
respective positions prior to the illegal strike and illegal lockout.

RULING

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