FILIPINO PIPE AND FOUNDRY CORPORATION v.

NLRC
G.R. 115180 – November 16, 1999
J. Purisima

Topic: Union Chartering and Affiliation: Local and Parent Union Relations – National Union or Federation
Doctrine: NLU-TUCP, the mother union, acted as a mere agent of the FPWU-NLU when it filed a notice of strike.
Therefore, the NLU-TUCP cannot be held liable for the illegality of the strike which the FPWU-NLU had participated in.
Petitioners: Filipino Pipe and Foundry Corporation (FPFC)
Respondents: NLRC, National Labor Union-TUCP, and Eulogio Lerum

Case Summary: FPWU-NLU wanted FPFC to assent to the changes to their CBA. However, before the scheduled
conciliation conference, NLU-TUCP filed a notice of strike on behalf of FPWU-NLU. The strike staged by FPWU-
NLU was found to be illegal. FPFC wanted the NLU-TUCP and its National President Atty. Lerum to be held liable as
the mother union, but the SC stated that the NLU-TUCP merely acted as the agent of FPWU-NLP in filing the notice of
strike, therefore as the principal, the latter should still be held liable for the damages caused by said illegal strike.

Facts:
 February 10, 1986: NLU-TUCP, a national federation of labor unions filed with the then Ministry of Labor and
Employment (MOLE), in behalf of its local chapter, the Filipino Pipe Workers Union-National Labor Union
(FPWU-NLU) a notice of strike signed by its national president, Atty. Lerum, against Petitioner (FPFC)
o They alleged that FPFC is guilty of union busting and non-implementation of their CBA
o Initial conciliation conference was set on February 24, 1986, but the conference was re-set to March 3
(Without notice to FPFC that FPWU-NLU will stage a strike)
 March 3, 1986: Without waiting for the outcome of the conciliation conference, the FPWU-NLU staged the strike
in question until June 13, 1986
 April 8, 1986: FPFC filed a petition before the arbitration branch of the MOLE to declare the strike illegal with
prayer for damages against FPWU-NLU, NLU-TUCP and its national president, Atty. Lerum
 Labor Arbiter: The strike staged was illegal
o NLU-TUCP is to pay the complainant company the ff:
 Actual damages in the form of loss of revenue during the duration of the strike which lasted for
100 days (1,000,000)
 Damages to the good business standing and commercial credit of the company (350,000)
 Exemplary damages (250,000)
 Atty. Lerum is absolved from any liability since there was a lack of showing that he acted in his
personal capacity
o Appealed to the NLRC
 NLRC: Reversed the Decision of the LA
o The appeal of FPFC is dismissed for lack of merit; the appeal of Atty. Lerum is granted  a new
judgment is hereby entered declaring the complaint is dismissed for lack of merit insofar as respondent
NLU and Atty Lerum

Issues + Held:
1. W/N the NLRC erred in finding that the NLU-TUCP and Atty. Lerum are primarily responsible since they had
directly aided, assisted, and abetted and participated in the strike – NO
 Rule XXII, Book V. of the Rules implementing the Labor Code provides:
o 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 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.
o Sec. 3. Notice of strike or lockout. — In cases of bargaining deadlocks, a notice of strike or lockout shall
be filed with the regional branch of the Board at least thirty (30) days before the intended date thereof, a
copy of said notice having been served on the other party concerned.
o Sec. 6. Conciliation. — Upon receipt of the notice, the regional branch of the Board shall exert all efforts
at mediation and conciliation to enable the parties to settle the dispute amicably. The regional branch of
 the Board may, upon consultation, recommend to the parties to submit the dispute to voluntary
arbitration.
During the proceedings, the parties shall not do any act which may disrupt or impede the early settlement
of the dispute. They are obliged as part of the duty to bargain collectively in good faith, to participate
fully and promptly in the conciliation meetings called by the regional branch of the board. The regional
branch of the Board shall have the power to issue subpoenas requiring the attendance of the parties to the
meetings
o Applying said provisions, the SC is of the conclusion that the strike staged by FPWU-NLU was illegal
for want of any legal basis
 The purpose of the strike was to pressure the petitioner company to include the P3.00 wage
increase that the strikers were asking for, and to compute back wages covering the period of Dec.
1, 1980 to Feb. 28, 1986
 A sifting of the records discloses that the alleged union busting was NOT substantiated and the
supposed non-implementation of the CBA was groundless  at the time the notice of strike was
filed, and at the time the union actually struck, the demands of the FPWU-NLU was already
subject of a pending application for a writ of execution filed by the union in a civil case
 Verily, the strike staged by the FPWU-NLU was baseless since it was premature and illegal
because they failed to serve the petitioner company the notice of strike, a clear violation of Sec. 3
of the Rules
 The precepts of due process mandate that the other party should be notified of the adverse action
of the opposing party
 The same section also provides for a mandatory (30) day cooling-off period, which the
union ignored (The staged the strike on March 3, before the 30th day)
 The strike was indeed illegal, but as per the allegation of FPFC that the liability should be borne by NLU-TUCP
and its national president, Atty. Lerum for participating and aiding in the illegal strike, the SC disagrees
o It is argued that FPWU-NLU is a mere agent of NLU-TUCP because the former is not a registered local
chapter, and is merely directly affiliated with the latter, and therefore could NOT have acted on its own
o In Progressive Development Corp. v. Sec. of the DOLE, the Court explained the nature of the relationship
between a mother union/federation and a local union:
 “… the Court held that the mother union, acting for and in behalf of its affiliate, had the status
of an agent while the local union remained the basic unit of the association, free to serve the
common interest of all its members subject only to the restrains imposed by the constitution and
by-laws of the association…”
 This rule applies even if the local union is not a legitimate labor organization
o Evidently, whether or not FPWU-NLU, the local chapter, complied with the requirements that would
make it a legitimate labor organization is immaterial  it would NOT affect its status as the principal and
basic unit of the association
o The requirement laid down in Progressive Development Corp., that the local union must be a legitimate
labor organization pertains to the conditions before a union may file a petition for certification election
and to be certified as sole and exclusive bargaining agent
 In the present case, there is NO dispute that FPWU-NLU is the sole and exclusive bargaining
representative of the rank and file employees of the petitioner company
 The union’s status as a legitimate labor organization is therefor of NO moment  as the local
union, it is considered as the principal; the entity which staged the illegal strike and the one
responsible for the resulting damages
 FPFC is now estopped from reneging the recognition that it extended to FPWU-NLP as the bargaining
representative  it should be noted that since 1981, the latter was already the bargaining agent of the employees
o Evidently, direct and primary responsibility for the damages allegedly caused by the illegal strike sued
upon fall on the local union, FPWU, being the principal, and not on the respondent NLU-TUCP, a mere
agent of the FPWU-NLU
 Being just an agent, the notice of strike filed by Atty. Lerum, the national president of NLU-
TUCP, is deemed to have been filed by its principal, the FPWU-NLU
o Having thus dismissed the claim for damages against the principal, FPWU-NLU, the action for damages
against its agent, respondent, NLU-TUCP, and Atty. Lerum, has no more leg to stand on and should also
be dismissed

Ruling: the petition is DISMISSED.