Labor Relation Set VvI * strikes and lockouts* Page 1 of 52
Republic of the Philippines The Union appealed to the NLRC which dismissed it in a per curiam Decision2 dated September 14, 1999, and the subsequent
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 166879 August 14, 2009
A. SORIANO AVIATION, Petitioner,
vs.
EMPLOYEES ASSOCIATION OF A. SORIANO AVIATION, JULIUS S. VARGAS IN HIS CAPACITY AS UNION PRESIDENT, REYNALDO
ESPERO, JOSEFINO ESPINO, GALMIER BALISBIS, GERARDO BUNGABONG, LAURENTE BAYLON, JEFFREY NERI, ARTURO INES,
REYNALDO BERRY, RODOLFO RAMOS, OSWALD ESPION, ALBERT AGUILA, RAYMOND BARCO, REYNANTE AMIMITA, SONNY
BAWASANTA, MAR NIMUAN AND RAMIR LICUANAN, Respondents.
DECISION
CARPIO MORALES, J.:
On May 22, 1997, A. Soriano Aviation (petitioner or the company) which is engaged in providing transportation of guests to
and from Amanpulo and El Nido resorts in Palawan, and respondent Employees Association of A. Soriano Aviation (the Union),
the duly-certified exclusive bargaining agent of the rank and file employees of petitioner, entered into a Collective Bargaining
Agreement (CBA) effective January 1, 1997 up to December 31, 1999. The CBA included a "No-Strike, No-Lock-out" clause.
On May 1 & 12, and June 12, 1997, which were legal holidays and peak season for the company, eight mechanics-members of
respondent Union, its herein co-respondents Albert Aguila (Aguila), Reynante Amimita (Amimita), Galmier Balisbis (Balisbis),
Raymond Barco (Barco), Gerardo Bungabong (Bungabong), Josefino Espino (Espino), Jeffrey Neri (Neri) and Rodolfo Ramos, Jr.
(Ramos), refused to render overtime work.
Petitioner treated the refusal to work as a concerted action which is a violation of the "No-Strike, No-Lockout" clause in the
CBA. It thus meted the workers a 30-day suspension. It also filed on July 31, 1997 a complaint for illegal strike against them,
docketed as NLRC Case No. 07-05409-97, which was later dismissed at its instance in order to give way to settlement, without
prejudice to its re-filing should settlement be unavailing.
The attempted settlement between the parties having been futile, the Union filed a Notice of Strike with the National
Conciliation and Mediation Board (NCMB) on October 3, 1997, attributing to petitioner the following acts: (1) union busting, (2)
illegal dismissal of union officer, (3) illegal suspension of eight mechanics, (4) violation of memorandum of agreement, (5)
coercion of employees and interrogation of newly-hired mechanics with regard to union affiliation, (6) discrimination against
the aircraft mechanics, (7) harassment through systematic fault-finding, (8) contractual labor, and (9) constructive dismissal of
the Union President, Julius Vargas (Vargas).
As despite conciliation no amicable settlement of the dispute was arrived at, the Union went on strike on October 22, 1997.
Meanwhile, pursuant to its reservation in NLRC Case No. 07-05409-97, petitioner filed a Motion to Re-Open the Case which
was granted by Labor Arbiter Manuel P. Asuncion by Order of October 21, 1997.
By Decision1 dated September 28, 1998 rendered in petitioner’s complaint in NLRC Case No. 07-05409-97, the Labor Arbiter
declared that the newly implemented work-shift schedule was a valid exercise of management prerogative and the refusal of
herein individual respondents to work on three consecutive holidays was a form of protest by the Union, hence, deemed a
concerted action. Noting that the Union failed to comply with the formal requirements prescribed by the Labor Code in the
holding of strike, the strike was declared illegal.
motion for reconsideration was denied by Resolution dated November 11, 1999.
In the interim or on June 16, 1998, eight months into the "second strike," petitioner filed a complaint against respondents
before the Labor Arbiter, praying for the declaration as illegal of the strike on account of their alleged pervasive and
widespread use of force and violence and for the loss of their employment, citing the following acts committed by them:
publicly shouting of foul and vulgar words to company officers and non-striking employees; threatening of officers and non-
striking employees with bodily harm and dousing them with water while passing by the strike area; destruction of or inflicting
of damage to company property, as well as private property of company officers; and putting up of placards and streamers
containing vulgar and insulting epithets including imputing crime on the company.
By Decision3 of June 15, 2000, Labor Arbiter Ramon Valentin C. Reyes declared the "second strike" illegal. Taking judicial notice
of the September 28, 1998 Decision of Labor Arbiter Asuncion, he noted that as the Union went on the "first strike" on a non-
strikeable issue ─ the questioned change of work schedule, it violated the "No-Strike, No-Lockout" clause in the CBA and, in any
event, the Union failed to comply with the requirements for a valid strike.
The Labor Arbiter went on to hold that the Union deliberately resorted to the use of violent and unlawful acts in the course of
the "second strike," hence, the individual respondents were deemed to have lost their employment.
On appeal, the National Labor Relations Commission (NLRC) affirmed in toto the Labor Arbiter’s decision, by Resolution 4 dated
October 31, 2001. It held that even if the strike were legal at the onset, the commission of violent and unlawful acts by
individual respondents in the course thereof rendered it illegal.
Its motion for reconsideration having been denied by Resolution5 dated December 14, 2001, the Union appealed to the Court
of Appeals.
By the assailed Decision of April 16, 2004,6 the appellate court reversed and set aside the NLRC ruling, holding that the acts of
violence committed by the Union members in the course of the strike were not, as compared to the acts complained of in Shell
Oil Workers’ Union v. Shell Company of the Philippines,7 First City Interlink Transportation Co., Inc., v. Roldan-Confesor8 and
Maria Cristina Fertilizer Plant Employees Association v. Tandaya, 9 (this case was applied by the Labor Arbiter in his Decision of
September 28, 2008) where the acts of violence resulted in loss of employment, concluded that the acts in the present case
were not as serious or pervasive as in these immediately-cited cases to call for loss of employment of the striking employees.
Specifically, the appellate court noted that at the time petitioner filed its complaint in June 1998, almost eight months had
already elapsed from the commencement of the strike and, in the interim, the alleged acts of violence were committed only
during nine non-consecutive days, viz: one day in October, two days in November, four days in December, all in 1997, and two
days in January 1998. To the appellate court, these incidents did not warrant the conversion of an otherwise legal strike into an
illegal one, and neither would it result in the loss of employment of the strikers. For, so the appellate court held, the incidents
consisted merely of name-calling and using of banners imputing negligence and criminal acts to the company and its officers,
which do not indicate a degree of violence that could be categorized as grave or serious to warrant the loss of employment of
the individual strikers found to be responsible.
By Resolution of January 25, 2005, the appellate court denied petitioner’s motion for reconsideration, hence, the present
petition.

Petitioner insists that, contrary to the appellate court’s finding, the questioned acts of the strikers were of a serious character,
widespread and pervasive; and that the Union’s imputation of crime and negligence on its part, and the prolonged strike
resulted in its loss of goodwill and business, particularly the termination of its lease and air-service contract with Amanpulo,
the loss of its after-sales repair service agreement with Bell Helicopters, the loss of its accreditation as the Beechcraft service
facility, and the decision of El Nido to put up its own aviation company.
Apart from the acts of violence committed by the strikers, petitioner bases its plea that the strike should be declared illegal on
the violation of the "No-Strike-No-Lockout" clause in the CBA, the strike having arisen from non-strikeable issues. Petitioner
proffers that what actually prompted the holding of the strike was the implementation of the new shift schedule, a valid
exercise of management prerogative.
In issue then is whether the strike staged by respondents is illegal due to the alleged commission of illegal acts and violation of
the "No Strike-No Lockout" clause of the CBA and, if in the affirmative, whether individual respondents are deemed to have
lost their employment status on account thereof.
The Court rules in the affirmative.
The Court notes that, as found by the Labor Arbiter in NLRC Case No. 07-05409-97, the first strike or the mechanics’ refusal to
work on 3 consecutive holidays was prompted by their disagreement with the management-imposed new work schedule.
Having been grounded on a non-strikeable issue and without complying with the procedural requirements, then the same is a
violation of the "No Strike-No Lockout Policy" in the existing CBA. Respecting the second strike, where the Union complied with
procedural requirements, the same was not a violation of the "No Strike- No Lockout" provisions, as a "No Strike-No Lockout"
provision in the Collective Bargaining Agreement (CBA) is a valid stipulation but may be invoked only by employer when the
strike is economic in nature or one which is conducted to force wage or other concessions from the employer that are not
mandated to be granted by the law. It would be inapplicable to prevent a strike which is grounded on unfair labor practice.10 In
the present case, the Union believed in good faith that petitioner committed unfair labor practice when it went on strike on
account of the 30-day suspension meted to the striking mechanics, dismissal of a union officer and perceived union-busting,
among others. As held in Malayang Samahan ng mga Manggaggawa sa M. Greenfield v. Ramos:11
On the submission that the strike was illegal for being grounded on a non-strikeable issue, that is, the intra-union conflict
between the federation and the local union, it bears reiterating that when respondent company dismissed the union officers,
the issue was transformed into a termination dispute and brought respondent company into the picture. Petitioners believed
in good faith that in dismissing them upon request by the federation, respondent company was guilty of unfair labor practice in
that it violated the petitioner’s right to self-organization. The strike was staged to protest respondent company’s act of
dismissing the union officers. Even if the allegations of unfair labor practice are subsequently found out to be untrue, the
presumption of legality of the strike prevails. (Emphasis supplied)
Be that as it may, the Court holds that the second strike became invalid due to the commission of illegal action in its course.
It is hornbook principle that the exercise of the right of private sector employees to strike is not absolute. Thus Section 3 of
Article XIII of the Constitution provides:
SECTION 3. x x x
Labor Relation Set VvI * strikes and lockouts* Page 2 of 52
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. (Emphasis and underscoring supplied)
Indeed, even if the purpose of a strike is valid, the strike may still be held illegal where the means employed are illegal. Thus,
the employment of violence, intimidation, restraint or coercion in carrying out concerted activities which are injurious to the
right to property renders a strike illegal. And so is picketing or the obstruction to the free use of property or the comfortable
enjoyment of life or property, when accompanied by intimidation, threats, violence, and coercion as to constitute nuisance.12
Apropos is the following ruling in Sukhothai Cuisine v. Court of Appeals:13
Well-settled is the rule that even if the strike were to be declared valid because its objective or purpose is lawful, the strike
may still be declared invalid where the means employed are illegal. Among such limits are the prohibited activities under
Article 264 of the Labor Code, particularly paragraph (e), which states that no person engaged in picketing shall:
a) commit any act of violence, coercion, or intimidation or
b) obstruct the free ingress to or egress from the employer's premises for lawful purposes, or
c) obstruct public thoroughfares.
The following acts have been held to be prohibited activities: where the strikers shouted slanderous and scurrilous words
against the owners of the vessels; where the strikers used unnecessary and obscene language or epithets to prevent other
laborers to go to work, and circulated libelous statements against the employer which show actual malice; where the
protestors used abusive and threatening language towards the patrons of a place of business or against co-employees, going
beyond the mere attempt to persuade customers to withdraw their patronage; where the strikers formed a human cordon and
blocked all the ways and approaches to the launches and vessels of the vicinity of the workplace and perpetrated acts of
violence and coercion to prevent work from being performed; and where the strikers shook their fists and threatened non-
striking employees with bodily harm if they persisted to proceed to the workplace. Permissible activities of the picketing
workers do not include obstruction of access of customers. (emphasis supplied)
The appellate court found in the present case, as in fact it is not disputed, that the acts complained of were the following:14
1. On 29 October 1997, while Robertus M. Cohen, personnel manager of the Company, was eating at the canteen, petitioner
Rodolfo Ramos shouted "insults and other abusive, vulgar and foul-mouthed word" with the use of a megaphone, such as,
"sige, ubusin mo yung pagkain," "kapal ng mukha mo;" that when he left the canteen to go back to his office he was splashed
with water from behind so that his whole back was drenched; that when he confronted that strikers at the picket line
accompanied by three (3) security guards, to find out who was responsible, he was told by petitioner Oswald Espion who was
then holding a thick piece of wood approximately two (2) feet long to leave.
2. On the same day, 29 October 1997, petitioners Julius Vargas, Jeffrey Neri, and Rodolfo Ramos, together with Jose Brin,
shouted to Capt. Ben Hur Gomez, the chief operating officer of the Company, in this wise, "Matanda ka na, balatuba ka pa rin.
Mangungurakot ka sa kompanya!"

3. In the morning of 11 November 1997, petitioner Ramos was reported to have shouted to Mr. Maximo Cruz, the Mechanical
and Engineering Manager of the Company, "Max, mag-resign ka na, ang baho ng bunganga mo!"
4. In the afternoon of the same day, 11 November 1997, petitioner Jeffrey Neri was said to have shouted these words – "Max,
mag-resign ka na, ang baho ng bunganga mo!" to Mr. Maximo Cruz;
5. On 12 November 1997. petitioners Julius Vargas, Jeffrey Neri, Oswald Espion, Raymond Barco, together with Jose Brin, were
reported to have shouted to Capt. Gomez and Mr. Maximo Cruz, "Matanda ka na, balatuba ka pa rin! Max, ang baho ng
bunganga mo, kasing baho ng ugali mo!"
6. On the same day, 12 November 1997, petitioner Oswald Espion was said to have shouted to the non-striking employees and
officers of the Company, "putang-ina ninyo!"
7. Also, on 12 November 1997, petitioner Oswald Espion was reported to have thrown gravel and sand to the car owned by
Celso Villamor Gomez, lead man of the Company, as the said car was traveling along company premises near the picket line;
(apart from the marks of mud, gravel and sand found on the entire body of the car, no heavy damages, however, appears to
have been sustained by the car)."
8. On 08 December 1997, petitioners Julius Vargas, Rey Espero, Rey Barry, Galmier Balisbis, Rodolfo Ramos, Sonny Bawasanta
and Arturo Ines, together with Jose Brin, shouted, "Max, ang sama mo talaga, lumabas ka dito at pipitpitin ko ang mukha mo!"
"Cohen, inutil ka talaga. Nagpahaba ka pa ng balbas para kang tsonggo!" Cohen, lumabas ka dito at hahalikan kita."
9. On 10 December 1997, petitioners Vargas and Espion were reported to have shouted to Mr. Maximino Cruz, "Hoy, Max Cruz,
wala kang alam dyan, huwag kang poporma-porma dyan!" and then flashed the "dirty finger" at him;
10. On 15 December 1997, petitioner Neri was said to have shouted to non-striking employees at the canteen, "Hoy, mga
iskerol, kain lang ng kain, mga putangina ninyo!"
11. Also on 15 December 1997, petitioners Vargas, Neri, Espion, Mar Nimuan, Ramir Licuanan, Albert Aguila and Sonny
Bawasanta, together with Jose Brin, splashed water over Edmund C. Manibog, Jr., security guard of the Company;
12. On 20 December 1997, the strikers admittedly lit and threw firecrackers purportedly outside the Company premises, as
part of a noise barrage, while the Company was having its Christmas party inside the Company premises;
13. On 14 January 1998, when Chris A. Oballas, collector of the Company, boarded a public utility jeepney where Jose Brin, a
striker, was also passenger, Jose Brin was said to have shouted to the other passengers and driver of the jeepney, "Mga
pasahero, driver, itong tao ito sherol, ang kapal ng mukha. Iyong pinagtrabahuhan namin kinakain nito, ibenebent[a] kami nito,
hudas ito! Mga pasahero, tingnan niyo, hindi makatingin-tingin sa akin, hindi makapagsalita. Hoy, tingin ka sa akin, napahiya ka
sa mga ginagawa mo ano?" and, that when Chris Oballas was alighting from the jeepney, he was kicked on his leg by Jose Brin;
and,
Labor Relation Set VvI * strikes and lockouts* Page 3 of 52
14. On 15 January 1998, while Julio Tomas, Avionics Technician of the Company, and his girlfriend, Elizabeth Gali, also an
employee of the Company, were waiting for their ride, several union members shouted to Elizabeth Gali, Beth iwanan mo na
yang taong yan, walang kwentang tao yan!" "Beth, paano na yung pinagsamahan natin?" irked, Julio Tomas upon boarding the
passenger jeepney with his girlfriend threw a P2.00 coin in the direction of the picketers, the coin hit the windshield of a
privately-owned jeepney belonging to petitioner Espion which was parked alongside the premises of the strike area; The act of
Tomas, provoked the petitioners Espion and Amimita to follow Tomas, who when left alone inside the tricycle after his
girlfriend took a separate tricycle to her home, was approached by petitioners Espion and Amimita; petitioner Espion then
threw a P2.00 coin at him, and while pointing a baseball bat to his face shouted, "Huwag mong uulitin yung ginawa mo kundi
tatamaan ka sa akin!" (Emphasis and italics in the original)
The Court notes that the placards and banners put up by the striking workers in the company premises read: "ANDRES
SORIANO AVIATION, INC. CAUGHT IN THE ACT, ATTEMPTING TO BRIBE GOVERNMENT OFFICIALS BEWARE, NOW A NAME YOU
CAN TRASH," "ASAI DETERIORATING SAFETY RECORD KILLS 2 DEAD + VARIOUS (IN PLANE CRASH) FLIGHT MISHAPS BEWARE,"
"FLY AT YOUR OWN RISK," "ANDRES SORIANO AVIATION, INC. DETERIORATING SAFETY RECORD KILLS INNOCENT PEOPLE IN
PLANE CRASH, THE CAUSE: UNTRAINED MECHANICS DOING AIRCRAFT RELEASE, THE RESULT: SLIPSHOD MAINTENANCE AND
SLOPPY PLANE INSPECTION," "WANNA FLY BLIND?," "BENHUR GOMEZ DRAGS COMPANY TO DEBT AND SHAMEFUL
EXPERIENCE (MAHIYA KA NAMAN, OY!)," "A. SORIANO AVIATION, INC., DEAD PEOPLE IN PLANE CRASH," "ELY BONIFACIO
(MASAKIT ANG TOTOO) MAGNANAKAW NG PIYESA, PALITAN NA RIN! TINGNAN NYO KUNG NAGNANAKAW," "MEKANIKO DE
EROPLANO Y HUELGA UN VIAJE DE PELIGRO, AIRCRAFT MANAGEMENT BULOK; "A. SORIANO AVIATION KILLS PEOPLE FOR LAX
OVERSIGHT OF SAFETY PROC." "(ELY BONIFACIO-PATALSIKIN NA RIN," "MANDARAMBONG" "MUKHANG KWARTA," "SAAN MO
DINALA ANG DORNIER SPECIAL TOOLS? IKAW HA!)," "ELY BONIFACIO KAWATAN BANTAY SALAKAY," "AMANPULO AND EL NIDO
GUESTS, BEWARE OF ASAI FLIGHTS, AIRCRAFT MECHANICS STILL ON STRIKE," "GOING TO BORACAY AND EL NIDO IS GOOD BUT
FLYING WITH A. SORIANO AVIATION? THINK TWICE!" "ACHTUNG: A SORIANO AVIATION DEAD PEOPLE IN PLANE CRASH
INSURANCE ENTITLEMENTS DENIED DUE TO CAR VIOLATIONS," "UNDRESS SORIANO AVIATION, INC. UNRELIABLE FIXED BASED
OPERATOR KILLS PEOPLE FOR LAX OVERSIGHT OF SAFETY PROCEDURES."
It cannot be gainsaid that by the above-enumerated undisputed acts, the Union committed illegal acts during the strike. The
Union members’ repeated name-calling, harassment and threats of bodily harm directed against company officers and non-
striking employees and, more significantly, the putting up of placards, banners and streamers with vulgar statements imputing
criminal negligence to the company, which put to doubt reliability of its operations, come within the purview of illegal acts
under Art. 264 and jurisprudence.
That the alleged acts of violence were committed in nine non-consecutive days during the almost eight months that the strike
was on-going does not render the violence less pervasive or widespread to be excusable. Nowhere in Art. 264 does it require
that violence must be continuous or that it should be for the entire duration of the strike.1avvphil
The appellate court took against petitioner its filing of its complaint to have the strike declared illegal almost eight months
from the time it commenced. Art. 264 does not, however, state for purposes of having a strike declared as illegal that the
employer should immediately report the same. It only lists what acts are prohibited. It is thus absurd to expect an employer to
file a complaint at the first instance that an act of violence is alleged to be committed, especially, as in the present case,
when an earlier complaint to have the refusal of the individual respondents to work overtime declared as an illegal strike was
still pending — an issue resolved in its favor only on September 25, 1998.
The records show that the Union went on strike on October 22, 1997, and the first reported harassment incident occurred on
October 29, 1997, while the last occurred in January, 1998. Those instances may have been sporadic, but as found by the Labor

Arbiter and the NLRC, the display of placards, streamers and banners even up to the time the appeal was being resolved by the
NLRC works against the Union’s favor.
The acts complained of including the display of placards and banners imputing criminal negligence on the part of the company
and its officers, apparently with the end in view of intimidating the company’s clientele, are, given the nature of its business,
that serious as to make the "second strike" illegal. Specifically with respect to the putting up of those banners and placards,
coupled with the name-calling and harassment, the same indicates that it was resorted to to coerce the resolution of the
dispute – the very evil which Art. 264 seeks to prevent.
While the strike is the most preeminent economic weapon of workers to force management to agree to an equitable sharing of
the joint product of labor and capital, it exerts some disquieting effects not only on the relationship between labor and
management, but also on the general peace and progress of society and economic well-being of the State.15 If such weapon
has to be used at all, it must be used sparingly and within the bounds of law in the interest of industrial peace and public
welfare.
As to the issue of loss of employment of those who participated in the illegal strike, Sukhothai16 instructs:
In the determination of the liabilities of the individual respondents, the applicable provision is Article 264(a) of the Labor Code:
Art. 264. Prohibited Activities – (a) x x x
xxxx
x x x x Any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly
participates in the commission of illegal acts during an illegal 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.
xxxx
In Samahang Manggagawa sa Sulpicio Lines, Inc.-NAFLU v. Sulpicio Lines, Inc., this Court explained that the effects of such
illegal strikes, outlined in Article 264, make a distinction between workers and union officers who participate therein: an
ordinary striking worker cannot be terminated for mere participation in an illegal. There must be proof that he or she
committed illegal acts during a strike. A union officer, on the other hand, may be terminated from work when he knowingly
participates in an illegal strike, and like other workers, when he commits an illegal act during an illegal strike. In all cases, the
striker must be identified. But proof beyond reasonable doubt is not required. Substantial evidence available under the
attendant circumstances, which may justify the imposition of the penalty of dismissal, may suffice.17 (Emphasis supplied)
The liability for prohibited acts has thus to be determined on an individual basis.1awph!1.ñe+ A perusal of the Labor Arbiter’s
Decision, which was affirmed in toto by the NLRC, shows that on account of the staging of the illegal strike, individual
respondents were all deemed to have lost their employment, without distinction as to their respective participation.
Of the participants in the illegal strike, whether they knowingly participated in the illegal strike in the case of union officers
or knowingly participated in the commission of violent acts during the illegal strike in the case of union members, the records
do not indicate. While respondent Julius Vargas was identified to be a union officer, there is no indication if he knowingly
participated in the illegal strike. The Court not being a trier of facts, the remand of the case to the NLRC is in order only for the
purpose of determining the status in the Union of individual respondents and their respective liability, if any.
Labor Relation Set VvI * strikes and lockouts* Page 4 of 52
WHEREFORE, the petition is GRANTED. The Court of Appeals Decision and Resolution dated April 16, 2004 and January 25,
2005, respectively, are REVERSED and SET ASIDE. The Resolutions dated October 31, 2001 and December 14, 2001 of the
National Labor Relations Commission affirming the Decision of the Labor Arbiter in NLRC-NCR Case No. 00-06-04890-98 are
AFFIRMED with the MODIFICATION in light of the foregoing discussions.
The case is accordingly REMANDED to the National Labor Relations Commission for the purpose of determining the Union
status and respective liabilities, if any, of the individual respondents.SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 168406 January 14, 2015
CLUB FILIPINO, INC. and ATTY. ROBERTO F. DE LEON, Petitioners,
vs.
BENJAMIN BAUTISTA, RONIE SUALOG, JOEL CALIDA, JOHNNY ARINTO, CARLITO PRESENTACION, and ROBERTO DE
GUZMAN, Respondents.
RESOLUTION
LEONEN, J.:
This resolves Club Filipino, Inc.'s Supplemental Motion for Reconsideration of this court's Resolution dated July 13, 2009.
Club Filipino Employees Association (CLUFEA) is a union representing the employees of Club Filipino, Inc. CLUFEA and Club
Filipino, Inc. entered into previous collective bargaining agreements, the last of which expired on May 31, 2000.1
Before CLUFEA and Club Filipino, Inc.’s last collective bargaining agreement expired and within the 60-day freedom
period,2 CLUFEA had made several demands on Club Filipino, Inc. to negotiate a new agreement. Club Filipino, Inc., however,
replied that its Board of Directors could not muster a quorum to negotiate with CLUFEA.3
CLUFEA then formally submitted its proposals to Club Filipino Inc.’s negotiating panel sometime in June 2000. Still, Club
Filipino, Inc. failed to negotiate, citing as reason the illness of the chairperson of its negotiating panel.4
To compel Club Filipino, Inc. to negotiate with it, CLUFEA filed before the National Conciliation and Mediation Board (NCMB) a
request for preventive mediation. The negotiating panels of CLUFEA and Club Filipino, Inc. finally met on April 5, 2001.
However, the meeting ended with the parties’ respective panels declaring a deadlock in negotiation.5
Thus, on April 6, 2001, CLUFEA filed with the NCMB a Notice of Strike on the ground of bargaining deadlock. Club Filipino, Inc.
submitted the first part of its counterproposal on April 22, 2001.6
On May 4, 2001, CLUFEA conducted a strike vote under the Department of Labor and Employment’s supervision with the
majority of CLUFEA’s total union membership voting to strike.7

On May 11, 2001, Club Filipino, Inc. submitted to CLUFEA the second part of its counterproposal, which CLUFEA countered with
an improved offer. Club Filipino, Inc., however, refused CLUFEA’s improved offer.8
On May 26, 2001, CLUFEA staged a strike on the ground of bargaining deadlock.9
On May 31, 2001, Club Filipino, Inc. filed before the National Capital Regional Arbitration Branch of the National Labor
Relations Commission (NLRC) a Petition to Declare [CLUFEA’s] Strike Illegal.10 According to Club Filipino, Inc., CLUFEA failed to
file a Notice of Strike and to conduct a strike vote, in violation of the legal requirements for staging a strike. 11 Worse, CLUFEA’s
members allegedly committed illegal acts while on strike, preventing their co-workers from entering and leaving Club Filipino,
Inc.’s premises and even cutting off Club Filipino, Inc.’s electricity and water supply on the first day of the strike.12 Club Filipino,
Inc. prayed that all of CLUFEA’s officers who participated in the strike be declared to have lost their employment pursuant to
Article 264(a) of the Labor Code.13
CLUFEA answered Club Filipino, Inc.’s Petition with the following officers verifying the Answer: Benjamin Bautista, President
(Bautista); Danilo Caluag, Vice President (Caluag); Ronie Sualog, Secretary (Sualog); and Joel Calida, Treasurer (Calida).14
Labor Arbiter Manuel P. Asuncion decided Club Filipino, Inc.’s Petition for declaration of illegal strike.15 He found that CLUFEA’s
Notice of Strike did not contain CLUFEA’s written proposals and Club Filipino, Inc.’s counterproposals, in violation of then Rule
XXII, Section 4 of the Omnibus Rules Implementing the Labor Code.16The rule provided:
In cases of bargaining deadlocks, the notice shall, as far as practicable, further state the unresolved issues in the bargaining
negotiations and be accompanied by the written proposals of the union, the counter-proposals of the employer and the proof
of a request for conference to settle differences. In cases of unfair labor practices, the notice shall, as far as practicable, state
the acts complained of, and efforts taken to resolve the dispute amicably.
Any notice which does not conform with the requirements of this and the foregoing section shall be deemed as not having
been filed and the party concerned shall be so informed by the regional branch of the Board.
Thus, in the Decision17 dated November 28, 2001, the Labor Arbiter declared CLUFEA’s strike "procedurally infirm"18 for
CLUFEA’s failure to comply with the procedural requirements for staging a strike. The Labor Arbiter declared the strike illegal
and considered "all the officers of the union . . . terminated from service." 19 Because of the retrenchment program Club
Filipino, Inc. allegedly launched before the Labor Arbiter issued his Decision, the dismissed union officers were ordered to
receive separation pay "similar in terms with those offered to the employees affected by the retrenchment program of the
club."20
On December 20, 2001, CLUFEA appealed the Labor Arbiter’s Decision before the National Labor Relations Commission (NLRC)
with Bautista, Caluag, Sualog, and Calida verifying the Memorandum of Appeal on CLUFEA’s behalf.21
The NLRC ruled that CLUFEA’s Appeal was filed by persons "[having] no legal standing to question the [Labor Arbiter’s]
decision."22 Bautista had allegedly resigned from Club Filipino, Inc. on September 30, 2001, receiving separation benefits
pursuant to Club Filipino, Inc.’s Employees Retirement Plan.23
Labor Relation Set VvI * strikes and lockouts* Page 5 of 52
For their part, Caluag, Sualog, and Calida allegedly misrepresented themselves as CLUFEA’s officers when they appealed to the
NLRC. According to the NLRC, CLUFEA had already elected a new set of officers on September 28, 2001. Caluag, Sualog, and
Calida, therefore, were no longer CLUFEA’s officers when they filed the Appeal on December 20, 2001.24
Finding that CLUFEA no longer wished to appeal the Labor Arbiter’s Decision, the NLRC cited a letter the new officers of
CLUFEA allegedly gave Atty. Roberto F. De Leon, Club Filipino, Inc.’s President:
Nais po naming ipabatid na ang ginawad na pagpapasya ng NLRC na naging ilegal ang pagdaos ng pag-aalsa noong Mayo 26,
2001 ay hindi lingid sa aming kaalaman at kami’ylubos na nalulungkot para doon sa mga kasaping opisyal na nasangkot at
humantong sa ganito ng dahil na rin sa kanilang kapabayaan, mga padalos-dalos at mapusok na pagkilos na walang pagkunsulta
sa mga miyembro. Ang pamunuan sampu ng aming mga kasapi ay mariing tinututulan ang ano mang uri ng pagaapela upang
maisalba ang natitirang miyembro sa tiyak na kapahamakan kung magpapatuloy and [sic]ganitong uri ng tagisan ng bawat isa.25
Lastly, the NLRC found that as of November 23, 2001, CLUFEA had terminated the services of its legal counsel. 26Yet, its former
legal counsel filed and signed CLUFEA’s Memorandum of Appeal to the NLRC. The Memorandum of Appeal, therefore, was
filed without authority of CLUFEA.
Thus, in the Decision27 dated September 30, 2002, the NLRC denied the Appeal filed on December 20, 2001 for lack of merit.
Club Filipino, Inc. filed a Motion for Partial Reconsideration, while Bautista, Caluag, Sualog, and Calida filed a Motion for
Reconsideration of the NLRC’s Decision dated September 30, 2002. Johnny Arinto (Arinto), Roberto de Guzman (de Guzman),
and Laureno Fegalquin (Fegalquin), all directors and officers of CLUFEA,28 joined Bautista, Caluag, Sualog, and Calida in filing the
Motion for Reconsideration.29
The NLRC denied the Motions in the Resolution30 dated July 15, 2003.
On September 22, 2003, Bautista, Sualog, Calida, Arinto, de Guzman, and Fegalquin filed a Petition for Certiorari with the Court
of Appeals.31 However, Caluag no longer joined his colleagues. Instead, Carlito Presentacion (Presentacion), a CLUFEA member,
joined in the filing of the Petition for Certiorari.
The Court of Appeals first resolved whether Bautista, Sualog, Calida, Arinto, de Guzman, and Fegalquin had legal personality to
appeal before the NLRC. On this issue, the Court of Appeals ruled that "a worker ordered dismissed under a tribunal’s decision
has every right to question his or her dismissal especially if he [or she] had not been properly impleaded in the case and in the
decision that decreed his or her dismissal."32 Being officers of CLUFEA, Bautista, et al. had the right to appeal the loss of their
employment with the NLRC.
With respect to Arinto, de Guzman, and Fegalquin, the Court of Appeals further ruled that they were not granted "the full
hearing that the due process requirements of the Philippine Constitution impose."33 Arinto, de Guzman, and Fegalquin
participated only during the Motion for Reconsideration stage with the NLRC. The Labor Arbiter’s Decision, therefore, did not
bind Arinto, de Guzman, and Fegalquin.
On the merits, the Court of Appeals held that the Labor Arbiter gravely abused his discretion in declaring CLUFEA’s strike illegal.
The Court of Appeals ruled that the requirements under Rule XXII, Section 4 of the Omnibus Rules Implementing the Labor
 Labor Relation Set VvI * strikes and lockouts* Page 6 of 52

Code "[do] not appear to be absolute."34 Rule XXII, Section 4 only requires that the proposals and counterproposals be
attached to the Notice of Strike "as far as practicable."35 Since CLUFEA had already filed a Notice of Strike when Club Filipino,
Inc. submitted its counterproposals, it was not practicable for CLUFEA to attach Club Filipino, Inc.’s counterproposals to the
Notice of Strike.
knowingly participated in the alleged illegal strike. Thus, even assuming . . . that the strike was illegal, [the] automatic dismissal
[of CLUFEA’s officers] had no basis."48
Thus, in the Resolution49 dated July 13, 2009, this court denied Club Filipino, Inc.’s Petition for Review on Certiorari.

The Court of Appeals found that the Labor Arbiter "disregarded"36 the law on the status of employees who participated in an
On August 17, 2009, Club Filipino, Inc. filed a Motion for Reconsideration,50 which this court denied with finality in the
illegal strike. Under the law, union officers may be dismissed for participating in an illegal strike only if they knowingly
Resolution51 dated September 9, 2009. This court declared that it shall not entertain any further pleadings or motions and
participated in it. According to the Court of Appeals, the Labor Arbiter erred in ordering all the officers of CLUFEA dismissed
ordered that Entry of Judgment in this case be made in due course.52
from the service without even naming these officers and specifying the acts these officers committed that rendered the strike
illegal.
On September 14, 2009, Solis Medina Limpingco and Fajardo entered its appearance for Club Filipino, Inc.53 and simultaneously
filed a Motion for Leave54 to file and admit the attached Supplemental Motion for Reconsideration.55
The Court of Appeals, however, found that Bautista and Fegalquin had already resigned during the pendency of the case and
had received separation benefits from Club Filipino, Inc. Bautista and Fegalquin, therefore, "no longer [had] any legal interest
[in filing the petition for certiorari]."37 On November 3, 2009, Club Filipino, Inc. filed its Motion for Leave to File and Admit further Pleading/Motion,56alleging that this
court failed to consider its Supplemental Motion for Reconsideration in issuing its September 9, 2009 Resolution denying Club
Filipino, Inc.’s first Motion for Reconsideration. Club Filipino, Inc. prayed that this court resolve the Supplemental Motion for
As for Presentacion, the Court of Appeals found that he was not an officer of CLUFEA and was not dismissed by virtue of the
Reconsideration.
Labor Arbiter’s Decision. He, therefore, had no personality to join Bautista, Sualog, Calida, Arinto, de Guzman, and Fegalquin in
filing the Petition for Certiorari. As for Sualog, Calida, Arinto, and de Guzman, the Court of Appeals ruled that the Labor
Arbiter’s Decision was void. In the Resolution57 dated January 11, 2010, this court granted Club Filipino, Inc.’s Motions for Leave and noted the
Supplemental Motion for Reconsideration.
Thus, in the Decision38 dated May 31, 2005, the Court of Appeals granted the Petition for Certiorari with respect to Sualog,
Calida, Arinto, and de Guzman. The Court of Appeals set aside the Labor Arbiter’s Decision for being null and void and ordered However, because of this court’s Resolution dated September 9, 2009, an Entry of Judgment58 was issued on October 26, 2010,
the payment of full backwages and benefits to them from the time of their dismissal up to the finality of the Court of Appeals’ declaring that this case had become final and executory as of October 26, 2009. This court likewise ordered the return of the
Decision. In lieu of reinstatement, the Court of Appeals ordered Club Filipino, Inc. to pay Sualog, Calida, Arinto, and de Guzman case records to the Court of Appeals for remand to the court of origin.59
separation pay computed at one (1) month salary per year of service from the time of their hiring up to the finality of the
Decision less any amount Sualog, Calida, Arinto, and de Guzman may have received pursuant to the Labor Arbiter’s Decision. Club Filipino, Inc. received the Entry of Judgment on November 10, 2010.60 Nine (9) days after, Club Filipino, Inc. filed a
Manifestation and Motion,61 arguing that the court prematurely issued the Entry of Judgment because it still had to resolve the
As for Bautista, Fegalquin, and Presentacion, the Court of Appeals dismissed the Petition for Certiorari.39 Supplemental Motion for Reconsideration.

On June 23, 2005, Club Filipino, Inc. filed a Petition for Review on Certiorari40 with this court. Bautista, Sualog, Calida, Arinto,
Presentacion, and de Guzman filed their Comment41 to which Club Filipino, Inc. replied.42
After the parties had filed their respective memoranda,43 this court considered this case submitted for decision.44
This court noted the Manifestation and Motion in the Resolution62 dated January 19, 2011. On October 18, 2011, Club Filipino,
Inc. filed a very urgent Motion to Resolve,63 alleging that respondents filed a Motion for Execution of this court’s Decision on
the illegal strike case despite the pendency of its Supplemental Motion for Reconsideration with this court. Club Flipino, Inc.
prayed that this court resolve the Supplemental Motion for Reconsideration in order not to render the filing of its
Supplemental Motion for Reconsideration moot.

This court agreed with the Court of Appeals’ Decision. This court ruled that CLUFEA could not have attached Club Filipino, Inc.’s
In the Resolution64 dated November 23, 2011, this court noted the very urgent Motion to Resolve.
counterproposals in the Notice of Strike since Club Filipino, Inc. submitted it only after CLUFEA had filed the Notice of Strike. It
was, therefore, "not practicable"45 for CLUFEA to attach Club Filipino, Inc.’s counterproposal to the Notice of Strike. CLUFEA did
not violate Rule XXII, Section 4 of the Omnibus Rules Implementing the Labor Code. On March 23, 2012, Club Filipino, Inc. filed the very urgent Motion for Leave to File and Admit very urgent Motion for
Clarification.65 It informed this court that the NLRC granted respondents’ Motion for Execution, which would allegedly result in
Club Filipino, Inc. paying respondents separation pay twice. Because of the "extreme urgency" 66brought about by the
This court sustained the Court of Appeals’ finding that the Labor Arbiter gravely abused his discretion in ordering the
developments in this case, Club Filipino, Inc. prayed that this court resolve its Supplemental Motion for Reconsideration.
"wholesale dismissal"46 of CLUFEA’s officers. According to this court, the law requires "‘knowledge’ [of the illegality of the
strike] as a condition sine qua non before a union officer can be dismissed . . . for participating in an illegal strike." 47 However,
"[n]owhere in the ruling of the labor arbiter can [there be found] any discussion of how respondents, as union officers,

On April 2, 2012, Club Filipino, Inc. filed a second very urgent Motion for Clarification,67 pleading the court to clarify its January
11, 2010 Resolution noting the Supplemental Motion for Reconsideration. It reiterated its claim that implementing the Writ of
Execution in the illegal strike case "will only result in doubly compensating respondents to the utmost prejudice and manifest
injustice of [Club Filipino, Inc.]."68
Club Filipino, Inc. subsequently filed the very urgent Manifestation and Omnibus Motion,69 very urgent Omnibus Motion,70 and
second very urgent Omnibus Motion,71 all arguing that the implementation of the Writ of Execution would result in double
compensation to respondents. All of these Motions were noted by this court.
In the Supplemental Motion for Reconsideration and the subsequent Motions to Resolve, Club Filipino, Inc. maintains that this
court erred in affirming the Court of Appeals’ award of backwages and separation pay in the illegal strike case on top of the
separation pay respondents received by virtue of Club Filipino, Inc.’s retrenchment program.
Club Filipino, Inc. alleged that pending its Petition for declaration of illegal strike with the NLRC, it implemented a
retrenchment program to minimize its "mounting losses."72 Among the 76 retrenched employees were respondents.
Respondents, together with other retrenched employees, filed a Complaint for illegal dismissal with the NLRC, questioning the
validity of the retrenchment program. In the Decision73 dated October 2, 2002, Labor Arbiter Natividad M. Roma dismissed the
Complaint and found the retrenchment program valid. She ordered that the retrenched employees, which included
respondents, be paid their separation pay.
Labor Arbiter Natividad M. Roma’s Decision was affirmed by the NLRC in the Decision dated February23, 2004. The NLRC’s
Decision became final and executory on March 27, 2004. Considering that the NLRC had finally resolved that respondents were
not illegally dismissed and had already ordered that respondents be paid separation pay under the retrenchment program,
Club Filipino, Inc. argues that the NLRC’s Resolution of the issue constituted res judicata as to bar the Court of Appeals from
declaring that respondents were illegally dismissed and from awarding respondents separation pay in the illegal strike case.
The issues for our Resolution are:
(1) Whether Club Filipino, Inc.’s filing of the Supplemental Motion for Reconsideration prevented our Resolution
dated July 13, 2009 from becoming final and executory; and
(2) Whether the NLRC’s Decision on the illegal dismissal case was res judicata on the illegal strike case.
The Supplemental Motion for Reconsideration must be denied with finality.
I
The filing of the Supplemental Motion for
Reconsideration did not prevent this
court’s Resolution dated July 13, 2009
from becoming final and executory.
Petitioner Club Filipino, Inc.’s Supplemental Motion for Reconsideration of the Resolution dated July 13, 2009 is in the nature
of a second Motion for Reconsideration.
As a general rule, the filing of second Motions for Reconsideration of a judgment or final resolution is prohibited. Rule 52,
Section 2 of the Rules of Court provides:
Labor Relation Set VvI * strikes and lockouts* Page 7 of 52
Section 2. Second motion for reconsideration. — No second motion for reconsideration of a judgment or final resolution by the
same party shall be entertained.
This prohibition is reiterated in Rule 15, Section 3 of the Internal Rules of the Supreme Court: Section 3. Second motion for
reconsideration. – The Court shall not entertain a second motion for reconsideration, and any exception to this rule can only be
granted in the higher interest of justice by the Court en banc upon a vote of at least two-thirds of its actual membership. There
is reconsideration "in the higher interest of justice" when the assailed decision is not only legally erroneous, but is likewise
patently unjust and potentially capable of causing unwarranted and irremediable injury or damage to the parties. A second
motion for reconsideration can only be entertained before the ruling sought to be reconsidered becomes final by operation of
law or by the Court’s declaration.
In the Division, a vote of three Members shall be required to elevate a second motion for reconsideration to the Court En Banc.
For this court to entertain second Motions for Reconsideration, the second Motions must present "extraordinarily persuasive
reasons and only upon express leave first obtained."74 Once leave to file is granted, the second Motion for Reconsideration is
no longer prohibited.75
This court explained the rationale for the rule in Ortigas and Company Limited Partnership v. Judge Velasco,76thus:
A second motion for reconsideration is forbidden except for extraordinarily persuasive reasons, and only upon express leave
first obtained. The propriety or acceptability of such a second motion for reconsideration is not contingent upon the averment
of "new" grounds to assail the judgment, i.e., grounds other than those theretofore presented and rejected. Otherwise,
attainment of finality of a judgment might be staved off indefinitely, depending on the party's ingeniousness or cleverness in
conceiving and formulating "additional flaws" or "newly discovered errors" therein, or thinking up some injury or prejudice to
the rights of the movant for reconsideration. "Piece-meal" impugnation of a judgment by successive motions for
reconsideration is anathema, being precluded by the salutary axiom that a party seeking the setting aside of a judgment, act or
proceeding must set out in his motion all the grounds therefor, and those not so included are deemed waived and cease to be
available for subsequent motions.
For all litigation must come to an end at some point, in accordance with established rules of procedure and jurisprudence. As a
matter of practice and policy, courts must dispose of every case as promptly as possible; and in fulfillment of their role in the
administration of justice, they should brook no delay in the termination of cases by stratagems or maneuverings of parties or
their lawyers.77
In the present case, this court granted leave to petitioner Club Filipino, Inc. to file the Supplemental Motion for
Reconsideration in the Resolution dated January 11, 2010. The Supplemental Motion for Reconsideration, therefore, is no
longer prohibited.
The grant of leave to file the Supplemental Motion for Reconsideration, however, did not prevent this court’s July 13, 2009
Resolution from becoming final and executory. A decision or resolution of this court is deemed final and executory after the
lapse of 15 days from the parties’ receipt of a copy of the decision or resolution.78 The grant of leave to file the second Motion
for Reconsideration does not toll this 15-day period. It only means that the Entry of Judgment first issued may be lifted should
the second Motion for Reconsideration be granted.79

In Aliviado v. Procter and Gamble Philippines, Inc.80 this court explained that:
[i]t is immaterial that the Entry of Judgment was made without the Court having first resolved P&G’s second motion for
reconsideration. This is because the issuance of the entry of judgment is reckoned from the time the parties received a copy of
the resolution denying the first motion for reconsideration. The filing by P&G of several pleadings after receipt of the
resolution denying its first motion for reconsideration does not in any way bar the finality or entry of judgment. Besides, to
reckon the finality of a judgment from receipt of the denial of the second motion for reconsideration would be absurd. First,
the Rules of Court and the Internal Rules of the Supreme Court prohibit the filing of a second motion for reconsideration.
Second, some crafty litigants may resort to filing prohibited pleadings just to delay entry of judgment. 81 (Underscoring in the
original, emphasis supplied)
This case became final and executory on October 26, 2009, after the lapse of the 15th day from petitioner Club Filipino, Inc.’s
receipt of the Resolution denying its first Motion for Reconsideration. Entry of Judgment, therefore, was in order.
Since this court did not issue any temporary restraining order to enjoin the execution of the Court of Appeals’ Decision, the
NLRC correctly proceeded in implementing the Court of Appeals’ Decision in the illegal strike case.
II
The NLRC’s Decision on the illegal
dismissal case was not res judicata on the
illegal strike case.
Res judicata "literally means ‘a matter adjudged; a thing judicially acted upon or decided; [or] a thing or matter settled by
judgment.’"82 Res judicata" lays the rule that an existing final judgment or decree rendered on the merits, and without fraud or
collusion, by a court of competent jurisdiction, upon any matter within its jurisdiction,is conclusive of the rights of the parties
or their privies, in all other actions or suits in the same or any other judicial tribunal of concurrent jurisdiction on the points
and matters in issue in the first suit."83
Res judicata has two (2) aspects. The first is bar by prior judgment that precludes the prosecution of a second action upon the
same claim, demand or cause of action.84 The second aspect is conclusiveness of judgment, which states that "issues actually
and directly resolved in a former suit cannot again be raised in any future case between the same parties involving a different
cause of action."85
The elements of res judicata are:
(1) the judgment sought to bar the new action must be final;
(2) the decision must have been rendered by a court having jurisdiction over the subject matter and the parties;
(3) the disposition of the case must be a judgment on the merits; and
(4) there must be as between the first and second action identity of parties, subject matter, and causes of action.86
The first three (3) elements of res judicata are present in this case.
The NLRC’s judgment on the illegal dismissal case is already final with respondents not having appealed the Decision within the
reglementary period.
Labor Relation Set VvI * strikes and lockouts* Page 8 of 52
The Labor Arbiter, who has the exclusive original jurisdiction to hear, try, and decide illegal dismissal cases,87decided the case.
The Labor Arbiter’s Decision was heard on appeal by the NLRC, which has exclusive appellate jurisdiction over all cases decided
by Labor Arbiters.88
The Labor Arbiter’s judgment was on the merits.89 Based on the facts presented by the parties, the Labor Arbiter ruled that
petitioner Club Filipino, Inc.’s retrenchment program was valid.
The fourth element of res judicata, however, is absent. Although the cases have substantially identical parties and subject
matter of the dismissal of respondents, the cause of action for declaration of illegal strike and the cause of action for illegal
dismissal are different.
A cause of action is "the act or omission by which a party violates the rights of another."90 Its elements are:
1) a right in favor of the plaintiff by whatever means and under whatever law it arises or is created;
2) an obligation on the part of the named defendant to respect or not to violate such right; and 3) act or omission
on the part of such defendant in violation of the right of the plaintiff or constituting a breach of the obligation of the
defendant to the plaintiff for which the latter may maintain an action for recovery of damages or other appropriate
relief.91
In an action for declaration of illegal strike, the cause of action is premised on a union or a labor organization’s conduct of a
strike without compliance with the statutory requirements.92
On the other hand, in an action for illegal dismissal, the cause of action is premised on an employer’s alleged dismissal of an
employee without a just or authorized cause as provided under Articles 282, 283, and 284 of the Labor Code.93
There is no res judicata in the present case. Petitioner Club Filipino, Inc. filed the illegal strike because members of CLUFEA
allegedly disrupted petitioner Club Filipino, Inc.’s business when they staged a strike without complying with the requirements
of the law. For their part, respondents filed the illegal dismissal case to question the validity of petitioner Club Filipino, Inc.’s
retrenchment program.
Although there is no res judicata, the actions have the same subject matter.1âwphi1 The subject matter of an action is "the
matter or thing from which the dispute has arisen."94 Both the illegal strike and illegal dismissal cases involve the dismissal of
respondents. In respondents’ action for illegal dismissal, respondents were found to have been dismissed by virtue of a valid
retrenchment program. The NLRC then ordered that they be paid separation pay based on the parties’ collective bargaining
agreement.
In petitioner Club Filipino, Inc.’s action for declaration of illegal strike, the Labor Arbiter’s finding that respondents conducted
an illegal strike resulted in their dismissal. Respondents were ordered to receive separation pay "similar in terms with those
offered to the employees affected by the retrenchment program of the club."95 The Court of Appeals, however, found that the
Labor Arbiter gravely abused his discretion in declaring the strike illegal. It then reversed the Labor Arbiter’s Decision and
awarded some of the respondents full backwages, benefits, and separation pay.

Because of the cases’ similar subject matter, it was possible that an employee who had already availed of the benefits under
the retrenchment program would be declared entitled to separation benefits under the illegal strike case. This is true especially
if the retrenched employee did not execute a valid quitclaim upon receiving the benefits under the retrenchment program.
Thus, to prevent double compensation, the Court of Appeals ordered that those who already retired and received their
benefits may no longer claim full backwages, benefits, and separation pay under the decision in the illegal strike case. This is
with respect to respondents Benjamin Bautista and Laureno Fegalquin who already executed their quitclaims. The Court of
Appeals said:
We agree in theory with the petitioners’ position that workers’ releases and quitclaims are frowned upon and cannot simply be
accepted at face value. Jurisprudence however provides us guidance on when to accept and when to reject workers’ releases
and quitclaims. In the present case where the recipients are responsible union officers who have regularly acted in behalf of
their members in the discharge of their union duties and where there is no direct evidence of coercion or vitiation of consent,
we believe we can safely conclude that the petitioners Bautista and Fegalquin fully knew that they entered into when they
accepted their retirement benefits and when they executed their quitclaims. The Club (as well as the NLRC) is therefore correct
in their position that these petitioners no longer have any interest that can serve as basis for their participation in the present
petition.96(Citations omitted)
With respect to respondent Carlito Presentacion who was not a union officer and, therefore, could not have been dismissed
under the illegal strike case, the Court of Appeals held that he cannot receive benefits under Court of Appeals’ Decision:
The same is true with respect to petitioner Carlito Presentacion who does not appear to be covered by the assailed Labor
Arbiter and NLRC decisions because he was not a union officer and was not dismissed under the assailed decisions, and who
had sought redress through a separately-filed case.97
For respondents who were not found to have executed a quitclaim with respect to the benefits under the retrenchment
program, the Court of Appeals ruled that any benefits received" as a result of the decisions [of the Labor Arbiter]"98 must be
deducted from the separation pay received under the illegal strike case. This is with respect to Ronie Sualog, Joel Calida,
Roberto de Guzman, and Johnny Arinto:
We grant the petition and declare the assailed decision null and void with respect to petitioners Ronie Sualog, Joel Calida,
Roberto de Guzman and Johnny Arinto as the decision to dismiss them had been attended by grave abuse of discretion on the
part of the Labor Arbiter and the NLRC as discussed above. In the exercise of our discretion, however, we stop short of
ordering the reinstatement of these petitioners’ [sic] in light of their obviously strained relationship with the Club resulting
from the strike and in light as well of the restructuring of the Club’s workforce since then. We confine our order therefore to
the payment of the petitioners’ full backwages and benefits from the time of their dismissal up the finality of this Decision, and
to the payment of petitioners' separation pay computed at one (1) month salary per year of service from the time they were
hired up to the finality of this Decision. Any amount they might have received from the Club as a result of the decisions below
can be deducted from the payments we hereby find to be due them.99
Since the Court of Appeals ordered that any benefit received from the illegal dismissal case be deducted from any benefit
receivable under the Court of Appeals' Decision, there was no "double compensation" as petitioner Club Filipino, Inc. claims.
Labor Relation Set VvI * strikes and lockouts* Page 9 of 52
All told, the Decision in the illegal dismissal case was not res judicata on the illegal strike case. The NLRC correctly executed the
Court of Appeals' Decision in the illegal strike case. WHEREFORE, the Supplemental Motion for Reconsideration is DENIED. No
further pleadings shall be entertained in this case. The Entry of Judgment issued in this case is AFFIRMED.SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
SPECIAL SECOND DIVISION
G.R. No. 155109 March 14, 2012
C. ALCANTARA & SONS, INC., Petitioner,
vs.
COURT OF APPEALS, LABOR ARBITER ANTONIO M. VILLANUEVA, LABOR ARBITER ARTURO L. GAMOLO, SHERIFF OF NLRC
RAB-XI-DAVAO CITY, NAGKAHIUSANG MAMUMUO SA ALSONS-SPFL (NAMAAL-SPFL), FELIXBERTO IRAG, JOSHUA BARREDO,
ERNESTO CUARIO, EDGAR MONDAY, EDILBERTO DEMETRIA, HERMINIO ROBILLO, ROMULO LUNGAY, MATROIL DELOS
SANTOS, BONERME MATURAN, RAUL CANTIGA, EDUARDO CAMPUSO, RUDY ANADON, GILBERTO GABRONINO, BONIFACIO
SALVADOR, CIRILO MINO, ROBERTO ABONADO, WARLITO MONTE, PEDRO ESQUIERDO, ALFREDO TROPICO, DANILO MEJOS,
HECTOR ESTUITA, BARTOLOME CASTILLANES, EDUARDO CAPUYAN, SATURNINO CAGAS, ALEJANDRO HARDER, EDUARDO
LARENA, JAIME MONTEDERAMOS, ERMELANDO BASADRE, REYNALDO LIMPAJAN, ELPIDIO LIBRANZA, TEDDY SUELO, JOSE
AMOYLIN, TRANQUILINO ORALLO, CARLOS BALDOS, MANOLITO SABELLANO, CARMELITO TOBIAS, PRIMITIVO GARCIA,
JUANITO ALDEPOLLA, LUDIVICO ABAD, WENCISLAO INGHUG, RICARDO ALTO, EPIFANIO JARABAY, FELICIANO AMPER,
ALEXANDER JUDILLA, ROBERTO ANDRADE, ALFREDO LESULA, JULIO ANINO, BENITO MAGPUSAO, PEDRO AQUINO, EDDIE
MANSANADES, ROMEO ARANETA, ARGUILLAO MANTICA, CONSTANCIO ARNAIZ, ERNESTO HOTOY, JUSTINO ASCANO,
RICARDO MATURAN, EDILBERTO YAMBAO, ANTONIO MELARGO, JESUS BERITAN, ARSENIO MELICOR, DIOSDADO
BONGABONG, LAURO MONTENEGRO, CARLITO BURILLO, LEO MORA, PABLO BUTIL, ARMANDO GUCILA, JEREMIAH CAGARA,
MARIO NAMOC, CARLITO CAL, GERWINO NATIVIDAD, ROLANDO CAPUYAN, EDGARDO ORDIZ, LEONARDO CASURRA,
PATROCINIO ORTEGA, FILEMON CESAR, MARIO PATAN, ROMEO COMPRADO, JESUS PATOC, RAMON CONSTANTINO,
ALBERTO PIELAGO, SAMUEL DELA LLANA, NICASIO PLAZA, ROSALDO DAGONDON, TITO GUADES, BONIFACIO DINAGUDOS,
PROCOPIO RAMOS, JOSE EBORAN, ROSENDO SAJOL, FRANCISCO EMPUERTO, PATRICIO SALOMON, NESTOR ENDAYA,
MARIO SALVALEON, ERNESTO ESTILO, BONIFACIO SIGUE, VICENTE FABROA, JAIME SUCUAHI, CELSO HUISO, ALEX TAUTO-
AN, SATURNINO YAGON, CLAUDIO TIROL, SULPECIO GAGNI, JOSE TOLERO, FERVIE GALVEZ, ALFREDO TORALBA and
EDUARDO GENELSA, Respondents.
x-----------------------x
G.R. No. 155135
NAGKAHIUSANG MAMUMUO SA ALSONS-SPFL (NAMAAL-SPFL), FELIXBERTO IRAG, JOSHUA BARREDO, ERNESTO CUARIO,
EDGAR MONDAY, EDILBERTO DEMETRIA, HERMINIO ROBILLO, ROMULO LUNGAY, MATROIL DELOS SANTOS, BONERME
MATURAN, RAUL CANTIGA, EDUARDO CAMPUSO, RUDY ANADON, GILBERTO GABRONINO, BONIFACIO SALVADOR, CIRILO
MINO, ROBERTO ABONADO, WARLITO MONTE, PEDRO ESQUIERDO, ALFREDO TROPICO, DANILO MEJOS, HECTOR ESTUITA,
BARTOLOME CASTILLANES, EDUARDO CAPUYAN, SATURNINO CAGAS, ALEJANDRO HARDER, EDUARDO LARENA, JAIME
MONTEDERAMOS, ERMELANDO BASADRE, REYNALDO LIMPAJAN, ELPIDIO LIBRANZA, TEDDY SUELO, JOSE AMOYLIN,
TRANQUILINO ORALLO, CARLOS BALDOS, MANOLITO SABELLANO, CARMELITO TOBIAS, PRIMITIVO GARCIA, JUANITO
ALDEPOLLA, LUDIVICO ABAD, WENCISLAO INGHUG, RICARDO ALTO, EPIFANIO JARABAY, FELICIANO AMPER, ALEXANDER
JUDILLA, ROBERTO ANDRADE, ALFREDO LESULA, JULIO ANINO, BENITO MAGPUSAO, PEDRO AQUINO, EDDIE MANSANADES,
ROMEO ARANETA, ARGUILLAO MANTICA, CONSTANCIO ARNAIZ, ERNESTO HOTOY, JUSTINO ASCANO, RICARDO MATURAN,
EDILBERTO YAMBAO, ANTONIO MELARGO, JESUS BERITAN, ARSENIO MELICOR, DIOSDADO BONGABONG, LAURO
MONTENEGRO, CARLITO BURILLO, LEO MORA, PABLO BUTIL, ARMANDO GUCILA, JEREMIAH CAGARA, MARIO NAMOC,
CARLITO CAL, GERWINO NATIVIDAD, ROLANDO CAPUYAN, JUANITO NISNISAN, AURELIO CARIN, PRIMO OPLIMO, ANGELITO
CASTANEDA, EDGARDO ORDIZ, LEONARDO CASURRA, PATROCINIO ORTEGA, FILEMON CESAR, MARIO PATAN, ROMEO

COMPRADO, JESUS PATOC, RAMON CONSTANTINO, MANUEL PIAPE, ROY CONSTANTINO, ALBERTO PIELAGO, SAMUEL DELA
LLANA, NICASIO PLAZA, ROSALDO DAGONDON, TITO GUADES, BONIFACIO DINAGUDOS, PROCOPIO RAMOS, JOSE EBORAN,
ROSENDO SAJOL, FRANCISCO EMPUERTO, PATRICIO SALOMON, NESTOR ENDAYA, MARIO SALVALEON, ERNESTO ESTILO,
BONIFACIO SIGUE, VICENTE FABROA, JAIME SUCUAHI, CELSO HUISO, ALEX TAUTO-AN, SATURNINO YAGON, CLAUDIO TIROL,
SULPECIO GAGNI, JOSE TOLERO, FERVIE GALVEZ, ALFREDO TORALBA and EDUARDO GENELSA, Petitioners,
vs.
C. ALCANTARA & SONS, INC., EDITHA I. ALCANTARA, ATTY. NELIA A. CLAUDIO, CORNELIO E. CAGUIAT, JESUS S. DELA CRUZ,
ROLANDO Z. ANDRES and JOSE MA. MANUEL YRASUEGUI,Respondents.
x-----------------------x
G.R. No. 179220
NAGKAHIUSANG MAMUMUO SA ALSONS-SPFL (NAMAAL-SPFL), AND ITS MEMBERS whose names are listed
below, Petitioners,
vs.
C. ALCANTARA & SONS, INC., Respondent.
RESOLUTION
PERALTA, J.:
For resolution are the (1) Motion for Partial Reconsideration1 filed by C. Alcantara & Sons, Inc. (CASI) and (2) Motion for
Reconsideration2 filed by Nagkahiusang Mamumuo sa Alsons-SPFL (the Union) and the Union officers3and their striking
members4 of the Court’s Decision5 dated September 29, 2010. In a Resolution6 dated December 13, 2010, the parties were
required to submit their respective Comments. After several motions for extension, the parties submitted the required
comments. Hence, this resolution.
For a proper perspective, we state briefly the facts of the case.
The negotiation between CASI and the Union on the economic provisions of the Collective Bargaining Agreement (CBA) ended
in a deadlock prompting the Union to stage a strike,7 but the strike was later declared by the Labor Arbiter (LA) to be illegal
having been staged in violation of the CBA’s no strike-no lockout provision.8Consequently, the Union officers were deemed to
have forfeited their employment with the company and made them liable for actual damages plus interest and attorney’s fees,
while the Union members were ordered to be reinstated without backwages there being no proof that they actually
committed illegal acts during the strike.9
Notwithstanding the provision of the Labor Code mandating that the reinstatement aspect of the decision be immediately
executory, the LA refused to reinstate the dismissed Union members. On November 8, 1999, the NLRC affirmed the LA decision
insofar as it declared the strike illegal and ordered the Union officers dismissed from employment and liable for damages but
modified the same by considering the Union members to have been validly dismissed from employment for committing
prohibited and illegal acts.10
On petition for certiorari, the Court of Appeals (CA) annulled the NLRC decision and reinstated that of the LA. Aggrieved, CASI,
the Union and the Union officers and members elevated the matter to this Court. The cases were docketed as G.R. Nos.
155109 and 155135.11
During the pendency of the cases, the affected Union members (who were ordered reinstated) filed with the LA a motion for
reinstatement pending appeal and the computation of their backwages. Instead of reinstating the Union members, the LA
awarded separation pay and other benefits.12 On appeal, the NLRC denied the Union members’ claim for separation pay,
Labor Relation Set VvI * strikes and lockouts* Page 10 of 52
accrued wages and other benefits.13 When elevated to the CA, the appellate court held that reinstatement pending appeal
applies only to illegal dismissal cases under Article 223 of the Labor Code and not to cases under Article 263.14 Hence, the
petition by the Union and its officers and members in G.R. No. 179220.
G.R. Nos. 155109, 155135, and 179220 were consolidated. On September 29, 2010, the Court rendered a decision the
dispositive portion of which reads:
WHEREFORE, the Court DENIES the petition of the Nagkahiusang Mamumuo sa Alsons-SPFL and its officers and members in
G.R. No. 155135 for lack of merit, and REVERSES and SETS ASIDE the decision of the Court of Appeals in CA-G.R. SP 59604 dated
March 20, 2002. The Court, on the other hand, GRANTS the petition of C. Alcantara & Sons, Inc. in G.R. 155109 and REINSTATES
the decision of the National Labor Relations Commission in NLRC CA M-004996-99 dated November 8, 1999.
Further, the Court PARTIALLY GRANTS the petition of the Nagkahiusang Mamumuo sa Alsons-SPFL and their dismissed
members in G.R. No. 179220 and ORDERS C. Alcantara & Sons, Inc. to pay the terminated Union members backwages for four
(4) months and nine (9) days and separation pays equivalent to one-half month salary for every year of service to the company
up to the date of their termination, with interest of 12% per annum from the time this decision becomes final and executory
until such backwages and separation pays are paid. The Court DENIES all other claims.SO ORDERED.15
The Court agreed with the CA on the illegality of the strike as well as the termination of the Union officers, but disagreed with
the CA insofar as it affirmed the reinstatement of the Union members. The Court, instead, sustained the dismissal not only of
the Union officers but also the Union members who, during the illegal strike, committed prohibited acts by threatening,
coercing, and intimidating non-striking employees, officers, suppliers and customers; obstructing the free ingress to and egress
from the company premises; and resisting and defying the implementation of the writ of preliminary injunction issued against
the strikers.16
The Court further held that the terminated Union members, who were ordered reinstated by the LA, should have been
immediately reinstated due to the immediate executory nature of the reinstatement aspect of the LA decision. In view,
however, of CASI’s failure to reinstate the dismissed employees, the Court ordered CASI to pay the terminated Union members
their accrued backwages from the date of the LA decision until the eventual reversal by the NLRC of the order of
reinstatement.17 In addition to the accrued backwages, the Court awarded separation pay as a form of financial assistance to
the Union members equivalent to one-half month salary for every year of service to the company up to the date of their
termination.18
Not satisfied, CASI filed a Motion for Partial Reconsideration of the above decision based on the following grounds:
I.
IT IS RESPECTFULLY SUBMITTED THAT A PRECEDENT SETTING RULING OF THIS HONORABLE COURT IN ESCARIO V.
NLRC [G.R. No. 160302, 27 SEPTEMBER 2010] – PARTICULARLY ON THE PROPER APPLICATION OF ARTICLES 264 AND
279 OF THE LABOR CODE – SUPPORTS THE AFFIRMATION AND NOT THE REVERSAL OF THE FINDINGS OF THE COURT
OF APPEALS ["CA"], AND NEGATES THE ENTITLEMENT TO ACCRUED WAGES OF THE UNION MEMBERS WHO
COMMITTED ILLEGAL ACTS DURING THE ILLEGAL STRIKE, NOTWITHSTANDING THAT THE LABOR ARBITER AWARDED
THE SAME.
II.
IT IS RESPECTFULY SUBMITTED THAT THIS HONORABLE COURT ERRED WHEN IT RESOLVED TO GRANT SEPARATION
PAY TO THE UNION MEMBERS WHO COMMITTED ILLEGAL ACTS DURING THE ILLEGAL STRIKE CONSIDERING THAT

JURISPRUDENCE CITED TO JUSTIFY THE GRANT OF SEPARATION PAY DO NOT APPLY TO THE PRESENT CASE AS IT
APPLIES ONLY TO DISMISSALS FOR A JUST CAUSE.19
The Union, its officers and members likewise filed their separate motion for reconsideration assailing the Court’s conclusions
that: (1) the strike is illegal; (2) that the officers of the Union and its appointed shop stewards automatically forfeited their
employment status when they participated in the strike; (3) that the Union members committed illegal acts during the strike
and are deemed to have lost their employment status; and (4) that CASI is entitled to actual damages and attorney’s
fees.20 They also fault the Court in not finding that: (1) CASI and its officers are guilty of acts of unfair labor practice or violation
of Article 248 of the Labor Code; (2) the lockout declared by the company is illegal; (3) CASI and its officers committed acts of
discrimination; (4) CASI and its officers violated Article 254 of the Labor Code; and (5) CASI and its officers are liable for actual,
moral, and exemplary damages to the Union, its officers and members.21
Simply stated, CASI only questions the propriety of the award of backwages and separation pay, while the Union, its officers
and members seek the reversal of the Court’s conclusions on the illegality of the strike, the validity of the termination of the
Union officers and members, and the award of actual damages and attorney’s fees as well as the denial of their counterclaims
against CASI.
After a careful review of the records of the case, we find it necessary to reconsider the Court’s September 29, 2010 decision,
but only as to the award of separation pay.
The LA, the NLRC, the CA and the Court are one in saying that the strike staged by the Union, participated in by the Union
officers and members, is illegal being in violation of the no strike-no lockout provision of the CBA which enjoined both the
Union and the company from resorting to the use of economic weapons available to them under the law and to instead take
recourse to voluntary arbitration in settling their disputes.22 We, therefore, find no reason to depart from such conclusion.
Article 264 (a) of the Labor Code lays down the liabilities of the Union officers and members participating in illegal strikes
and/or committing illegal acts, to wit:
ART. 264. PROHIBITED ACTIVITIES
(a) x x x
Any worker whose employment has been terminated as a consequence of an unlawful lockout shall be entitled to
reinstatement with full backwages. Any Union officer who knowingly participates in an illegal strike and any worker or Union
officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his
employment status: Provided, That mere participation of a worker in a lawful strike shall not constitute sufficient ground for
termination of his employment, even if a replacement had been hired by the employer during such lawful strike.
Thus, the above-quoted provision sanctions the dismissal of a Union officer who knowingly participates in an illegal strike or
who knowingly participates in the commission of illegal acts during a lawful strike.23 In this case, the Union officers were in
clear breach of the above provision of law when they knowingly participated in the illegal strike.24
As to the Union members, the same provision of law provides that a member is liable when he knowingly participates in the
commission of illegal acts during a strike. We find no reason to reverse the conclusion of the Court that CASI presented
substantial evidence to show that the striking Union members committed the following prohibited acts:
Labor Relation Set VvI * strikes and lockouts* Page 11 of 52
a. They threatened, coerced, and intimidated non-striking employees, officers, suppliers and customers;
b. They obstructed the free ingress to and egress from the company premises; and
c. They resisted and defied the implementation of the writ of preliminary injunction issued against the strikers.25
The commission of the above prohibited acts by the striking Union members warrants their dismissal from employment.
As clearly narrated earlier, the LA found the strike illegal and sustained the dismissal of the Union officers, but ordered the
reinstatement of the striking Union members for lack of evidence showing that they committed illegal acts during the illegal
strike. This decision, however, was later reversed by the NLRC. Pursuant to Article 22326 of the Labor Code and well-established
jurisprudence,27 the decision of the LA reinstating a dismissed or separated employee, insofar as the reinstatement aspect is
concerned, shall immediately be executory, pending appeal.28The employee shall either be admitted back to work under the
same terms and conditions prevailing prior to his dismissal or separation, or, at the option of the employee, merely reinstated
in the payroll.29 It is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during
the period of appeal until reversal by the higher court.30 If the employer fails to exercise the option of re-admitting the
employee to work or to reinstate him in the payroll, the employer must pay the employee’s salaries during the period between
the LA’s order of reinstatement pending appeal and the resolution of the higher court overturning that of the LA. 31 In this case,
CASI is liable to pay the striking Union members their accrued wages for four months and nine days, which is the period from
the notice of the LA’s order of reinstatement until the reversal thereof by the NLRC.32
Citing Escario v. National Labor Relations Commission (Third Division),33 CASI claims that the award of the four-month accrued
salaries to the Union members is not sanctioned by jurisprudence. In Escario, the Court categorically stated that the strikers
were not entitled to their wages during the period of the strike (even if the strike might be legal), because they performed no
work during the strike. The Court further held that it was neither fair nor just that the dismissed employees should litigate
against their employer on the latter’s time.34 In this case, however, the four-month accrued salaries awarded to the Union
members are not the backwages referred to in Escario. To be sure, the awards were not given as their salaries during the
period of the strike. Rather, they constitute the employer’s liability to the employees for its failure to exercise the option of
actual reinstatement or payroll reinstatement following the LA’s decision to reinstate the Union members as mandated by
Article 223 of the Labor Code adequately discussed earlier. In other words, such monetary award refers to the Union members’
accrued salaries by reason of the reinstatement order of the LA which is self-executory pursuant to Article 223.35We, therefore,
sustain the award of the four-month accrued salaries.1âwphi1
Finally, as regards the separation pay as a form of financial assistance awarded by the Court, we find it necessary to reconsider
the same and delete the award pursuant to prevailing jurisprudence.
Separation pay may be given as a form of financial assistance when a worker is dismissed in cases such as the installation of
labor-saving devices, redundancy, retrenchment to prevent losses, closing or cessation of operation of the establishment, or in
case the employee was found to have been suffering from a disease such that his continued employment is prohibited by
law.36 It is a statutory right defined as the amount that an employee receives at the time of his severance from the service and
is designed to provide the employee with the wherewithal during the period that he is looking for another employment.37 It is
oriented towards the immediate future, the transitional period the dismissed employee must undergo before locating a
replacement job.38 As a general rule, when just causes for terminating the services of an employee exist, the employee is not
entitled to separation pay because lawbreakers should not benefit from their illegal acts. 39 The rule, however, is subject to
exceptions.40 The Court, in Philippine Long Distance Telephone Co. v. NLRC,41 laid down the guidelines when separation pay in
the form of financial assistance may be allowed, to wit:
 Labor Relation Set VvI * strikes and lockouts* Page 12 of 52

We hold that henceforth separation pay shall be allowed as a measure of social justice only in those instances where the
employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Where the
reason for the valid dismissal is, for example, habitual intoxication or an offense involving moral turpitude, like theft or illicit
sexual relations with a fellow worker, the employer may not be required to give the dismissed employee separation pay, or
financial assistance, or whatever other name it is called, on the ground of social justice.
A contrary rule would, as the petitioner correctly argues, have the effect, of rewarding rather than punishing the erring
employee for his offense. And we do not agree that the punishment is his dismissal only and that the separation pay has
nothing to do with the wrong he has committed x x x.42
We had the occasion to resolve the same issue in Toyota Motor Phils. Corp. Workers Association (TMPCWA) v. National Labor
Relations Commission.43 Following the declaration that the strike staged by the Union members is illegal, the Union officers
and members were considered validly dismissed from employment for committing illegal acts during the illegal strike. The
Court affirmed the CA’s conclusion that the commission of illegal acts during the illegal strike constituted serious
misconduct.44 Hence, the award of separation pay to the Union officials and members was not sustained.45
Indeed, we applied social justice and equity considerations in several cases to justify the award of financial assistance. In Piñero
v. National Labor Relations Commission,46 the Court declared the strike to be illegal for failure to comply with the procedural
requirements. We, likewise, sustained the dismissal of the Union president for participating in said illegal strike. Considering,
however, that his infraction is not so reprehensible and unscrupulous as to warrant complete disregard of his long years of
service, and considering further that he has no previous derogatory records, we granted financial assistance to support him in
the twilight of his life after long years of service.47 The same compassion was also applied in Aparente, Sr. v. NLRC48 where the
employee was declared to have been validly terminated from service after having been found guilty of driving without a valid
driver’s license, which is a clear violation of the company’s rules and regulations.49 We, likewise, awarded financial assistance in
Salavarria v. Letran College50 to the legally dismissed teacher for violation of school policy because such infraction neither
amounted to serious misconduct nor reflected that of a morally depraved person.
Here, not only did the Court declare the strike illegal, rather, it also found the Union officers to have knowingly participated in
the illegal strike. Worse, the Union members committed prohibited acts during the strike. Thus, as we concluded in Toyota,
Telefunken, Chua and the other cases cited above, we delete the award of separation pay as a form of financial assistance.
WHEREFORE, premises considered, the motion for reconsideration of the Union, its officers and members are DENIED for lack
of merit, while the motion for partial reconsideration filed by C. Alcantara & Sons, Inc. is PARTLY GRANTED. The Decision of the
Court dated September 29, 2010 is hereby PARTLY RECONSIDERED by deleting the award of separation pay.SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 160302 September 27, 2010
JAILE OLISA, ISIDRO SANCHEZ, ANTONIO SARCIA, OSCAR CONTRERAS, ROMEO ZAMORA, MARIANO GAGAL, ROBERTO
MARTIZANO, DOMINGO SANTILLICES, ARIEL ESCARIO, HEIRS OF FELIX LUCIANO, AND MALAYANG SAMAHAN NG MGA
MANGGAGAWA SA BALANCED FOODS, Petitioners,
vs.
DANILO ESCARIO, PANFILO AGAO, ARSENIO AMADOR, ELMER COLICO, ROMANO DELUMEN, DOMINADOR AGUILO,
OLYMPIO GOLOSINO, RICARDO LABAN, LORETO MORATA, ROBERTO TIGUE, GILBERT VIBAR, THOMAS MANCILLA, JR.,
NESTOR LASTIMOSO, JIMMY MIRABALLES, NATIONAL LABOR RELATIONS COMMISSION (THIRD DIVISION), PINAKAMASARAP
CORPORATION, DR. SY LIAN TIN, AND DOMINGO TAN, Respondents.
DECISION
BERSAMIN, J.:
Conformably with the long honored principle of a fair day’s wage for a fair day’s labor, employees dismissed for joining an
illegal strike are not entitled to backwages for the period of the strike even if they are reinstated by virtue of their being merely
members of the striking union who did not commit any illegal act during the strike.

We apply this principle in resolving this appeal via a petition for review on certiorari of the decision dated August 18, 2003 of
However, in a number of cases cited in Toyota Motor Phils. Corp. Workers Association (TMPCWA) v. National Labor Relations
the Court of Appeals (CA),1 affirming the decision dated November 29, 2001 rendered by the National Labor Relations
Commission,51 we refrained from awarding separation pay or financial assistance to Union officers and members who were
Commission (NLRC) directing their reinstatement of the petitioners to their former positions without backwages, or, in lieu of
separated from service due to their participation in or commission of illegal acts during the strike.52 In Pilipino Telephone
reinstatement, the payment of separation pay equivalent to one-half month per year of service.2
Corporation v. Pilipino Telephone Employees Association (PILTEA),53 the strike was found to be illegal because of procedural
infirmities and for defiance of the Secretary of Labor’s assumption order. Hence, we upheld the Union officers’ dismissal
without granting financial assistance. In Sukhotai Cuisine and Restaurant v. Court of Appeals, 54 and Manila Diamond Hotel and Antecedents
Resort, Inc. (Manila Diamond Hotel) v. Manila Diamond Hotel Employees Union,55 the Union officers and members who
participated in and committed illegal acts during the illegal strike were deemed to have lost their employment status and were
The petitioners were among the regular employees of respondent Pinakamasarap Corporation (PINA), a corporation engaged
not awarded financial assistance.
in manufacturing and selling food seasoning. They were members of petitioner Malayang Samahan ng mga Manggagawa sa
Balanced Foods (Union).
In Telefunken Semiconductors Employees Union v. Court of Appeals,56 the Court held that the strikers’ open and willful
defiance of the assumption order of the Secretary of Labor constitute serious misconduct and reflective of their moral
At 8:30 in the morning of March 13, 1993, all the officers and some 200 members of the Union walked out of PINA’s premises
character, hence, granting of financial assistance to them cannot be justified. In Chua v. National Labor Relations
and proceeded to the barangay office to show support for Juanito Cañete, an officer of the Union charged with oral
Commission,57 we disallowed the award of financial assistance to the dismissed employees for their participation in the
defamation by Aurora Manor, PINA’s personnel manager, and Yolanda Fabella, Manor’s secretary.3 It appears that the
unlawful and violent strike which resulted in multiple deaths and extensive property damage because it constitutes serious
proceedings in the barangay resulted in a settlement, and the officers and members of the Union all returned to work
misconduct on their part.
thereafter.

As a result of the walkout, PINA preventively suspended all officers of the Union because of the March 13, 1993 incident. PINA
terminated the officers of the Union after a month.
On April 14, 1993, PINA filed a complaint for unfair labor practice (ULP) and damages. The complaint was assigned to then
Labor Arbiter Raul Aquino, who ruled in his decision dated July 13, 1994 that the March 13, 1993 incident was an illegal
walkout constituting ULP; and that all the Union’s officers, except Cañete, had thereby lost their employment.4
On April 28, 1993, the Union filed a notice of strike, claiming that PINA was guilty of union busting through the constructive
dismissal of its officers.5 On May 9, 1993, the Union held a strike vote, at which a majority of 190 members of the Union voted
to strike.6 The strike was held in the afternoon of June 15, 1993.7
PINA retaliated by charging the petitioners with ULP and abandonment of work, stating that they had violated provisions on
strike of the collective bargaining agreement (CBA), such as: (a) sabotage by the insertion of foreign matter in the bottling of
company products; (b) decreased production output by slowdown; (c) serious misconduct, and willful disobedience and
insubordination to the orders of the Management and its representatives; (d) disruption of the work place by invading the
premises and perpetrating commotion and disorder, and by causing fear and apprehension; (e) abandonment of work since
June 28, 1993 despite notices to return to work individually sent to them; and (f) picketing within the company premises on
June 15, 1993 that effectively barred with the use of threat and intimidation the ingress and egress of PINA’s officials,
employees, suppliers, and customers. 8
On September 30, 1994, the Third Division of the National Labor Relations Commission (NLRC) issued a temporary restraining
order (TRO), enjoining the Union’s officers and members to cease and desist from barricading and obstructing the entrance to
and exit from PINA’s premises, to refrain from committing any and all forms of violence, and to remove all forms of
obstructions such as streamers, placards, or human barricade.9
On November 29, 1994, the NLRC granted the writ of preliminary injunction.10
On August 18, 1998, Labor Arbiter Jose G. de Vera (LA) rendered a decision, to wit:
WHEREFORE, all the foregoing premises being considered, judgment is hereby rendered declaring the subject strike to be
illegal.
The complainant’s prayer for decertification of the respondent union being outside of the jurisdiction of this Arbitration Branch
may not be given due course.
And finally, the claims for moral and exemplary damages for want of factual basis are dismissed.SO ORDERED.11
On appeal, the NLRC sustained the finding that the strike was illegal, but reversed the LA’s ruling that there was abandonment,
viz:
However, we disagree with the conclusion that respondents’ union members should be considered to have abandoned their
employment.
Under Article 264 of the Labor Code, as amended, the union officers who knowingly participate in the illegal strike may be
declared to have lost their employment status. However, mere participation of a union member in the illegal strike does not
mean loss of employment status unless he participates in the commission of illegal acts during the strike. While it is true that
complainant thru individual memorandum directed the respondents to return to work (pp. 1031-1112, Records) there is no
showing that respondents deliberately refused to return to work. A worker who joins a strike does so precisely to assert or
Labor Relation Set VvI * strikes and lockouts* Page 13 of 52
improve the terms and conditions of his work. If his purpose is to abandon his work, he would not go to the trouble of joining a
strike (BLTB v. NLRC, 212 SCRA 794).
WHEREFORE, premises considered, the Decision appealed from is hereby MODIFIED in that complainant company is directed
to reinstate respondents named in the complaint to their former positions but without backwages. In the event that
reinstatement is not feasible complainant company is directed to pay respondents separation pay at one (1/2) half month per
year of service.SO ORDERED.12
Following the denial of their motion for reconsideration, the petitioners assailed the NLRC’s decision through a petition for
certiorari in the Court of Appeals (CA), claiming that the NLRC gravely abused its discretion in not awarding backwages
pursuant to Article 279 of the Labor Code, and in not declaring their strike as a good faith strike.
On August 18, 2003, the CA affirmed the NLRC.13 In denying the petitioners’ claim for full backwages, the CA applied the third
paragraph of Article 264(a) instead of Article 279 of the Labor Code, explaining that the only instance under Article 264 when a
dismissed employee would be reinstated with full backwages was when he was dismissed by reason of an illegal lockout; that
Article 264 was silent on the award of backwages to employees participating in a lawful strike; and that a reinstatement with
full backwages would be granted only when the dismissal of the petitioners was not done in accordance with Article 282
(dismissals with just causes) and Article 283 (dismissals with authorized causes) of the Labor Code.
The CA disposed thus:14
WHEREFORE, premises considered, the Petition is DISMISSED for lack of merit and the assailed 29 November 2001 Decision of
respondent Commission in NLRC NRC CA No. 009701-95 is hereby AFFIRMED in toto. No costs.SO ORDERED.15On October 13,
2003, the CA denied the petitioners’ motion for reconsideration.16
Hence, this appeal via petition for review on certiorari.
Issue
The petitioners posit that they are entitled to full backwages from the date of dismissal until the date of actual reinstatement
due to their not being found to have abandoned their jobs. They insist that the CA decided the question in a manner contrary
to law and jurisprudence.
Ruling
We sustain the CA, but modify the decision on the amount of the backwages in order to accord with equity and jurisprudence.
I
Third Paragraph of Article 264 (a), >Labor Code, is Applicable
The petitioners contend that they are entitled to full backwages by virtue of their reinstatement, and submit that applicable to
their situation is Article 279, not the third paragraph of Article 264(a), both of the Labor Code.
We do not agree with the petitioners.
Article 279 provides:

Article 279. Security of Tenure. – In cases of regular employment, the employer shall not terminate the services of an
employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be
entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances,
and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to
the time of his actual reinstatement.
By its use of the phrase unjustly dismissed, Article 279 refers to a dismissal that is unjustly done, that is, the employer
dismisses the employee without observing due process, either substantive or procedural. Substantive due process requires the
attendance of any of the just or authorized causes for terminating an employee as provided under Article 278 (termination by
employer), or Article 283 (closure of establishment and reduction of personnel), or Article 284 (disease as ground for
termination), all of the Labor Code; while procedural due process demands compliance with the twin-notice requirement.17
In contrast, the third paragraph of Article 264(a) states:
Art. 264. Prohibited activities. – (a) xxx
Any worker whose employment has been terminated as a consequence of an unlawful lockout shall be entitled to
reinstatement with full backwages. Any union officer who knowingly participates in an illegal strike and any worker or union
officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his
employment status; Provided, That mere participation of a worker in a lawful strike shall not constitute sufficient ground for
termination of his employment, even if a replacement had been hired by the employer during such lawful strike.
xxx
Contemplating two causes for the dismissal of an employee, that is: (a) unlawful lockout; and (b) participation in an illegal
strike, the third paragraph of Article 264(a) authorizes the award of full backwages only when the termination of employment
is a consequence of an unlawful lockout. On the consequences of an illegal strike, the provision distinguishes between a union
officer and a union member participating in an illegal strike. A union officer who knowingly participates in an illegal strike is
deemed to have lost his employment status, but a union member who is merely instigated or induced to participate in the
illegal strike is more benignly treated. Part of the explanation for the benign consideration for the union member is the policy
of reinstating rank-and-file workers who are misled into supporting illegal strikes, absent any finding that such workers
committed illegal acts during the period of the illegal strikes.18
The petitioners were terminated for joining a strike that was later declared to be illegal. The NLRC ordered their reinstatement
or, in lieu of reinstatement, the payment of their separation pay, because they were mere rank-and-file workers whom the
Union’s officers had misled into joining the illegal strike. They were not unjustly dismissed from work. Based on the text and
intent of the two aforequoted provisions of the Labor Code, therefore, it is plain that Article 264(a) is the applicable one.
II
Petitioners not entitled to backwages despite their reinstatement:
A fair day’s wage for a fair day’s labor
The petitioners argue that the finding of no abandonment equated to a finding of illegal dismissal in their favor. Hence, they
were entitled to full backwages.
Labor Relation Set VvI * strikes and lockouts* Page 14 of 52
The petitioners’ argument cannot be sustained.
The petitioners’ participation in the illegal strike was precisely what prompted PINA to file a complaint to declare them, as
striking employees, to have lost their employment status. However, the NLRC ultimately ordered their reinstatement after
finding that they had not abandoned their work by joining the illegal strike. They were thus entitled only to reinstatement,
regardless of whether or not the strike was the consequence of the employer’s ULP, 19 considering that a strike was not a
renunciation of the employment relation.20
As a general rule, backwages are granted to indemnify a dismissed employee for his loss of earnings during the whole period
that he is out of his job. Considering that an illegally dismissed employee is not deemed to have left his employment, he is
entitled to all the rights and privileges that accrue to him from the employment. 21 The grant of backwages to him is in
furtherance and effectuation of the public objectives of the Labor Code, and is in the nature of a command to the employer to
make a public reparation for his illegal dismissal of the employee in violation of the Labor Code.22
That backwages are not granted to employees participating in an illegal strike simply accords with the reality that they do not
render work for the employer during the period of the illegal strike.23 According to G&S Transport Corporation v. Infante:24
With respect to backwages, the principle of a "fair day’s wage for a fair day’s labor" remains as the basic factor in determining
the award thereof. If there is no work performed by the employee there can be no wage or pay unless, of course, the laborer
was able, willing and ready to work but was illegally locked out, suspended or dismissed or otherwise illegally prevented from
working. xxx In Philippine Marine Officers’ Guild v. Compañia Maritima, as affirmed in Philippine Diamond Hotel and Resort v.
Manila Diamond Hotel Employees Union, the Court stressed that for this exception to apply, it is required that the strike be
legal, a situation that does not obtain in the case at bar. (emphasis supplied)
The petitioners herein do not deny their participation in the June 15, 1993 strike. As such, they did not suffer any loss of
earnings during their absence from work. Their reinstatement sans backwages is in order, to conform to the policy of a fair
day’s wage for a fair day’s labor.
Under the principle of a fair day’s wage for a fair day’s labor, the petitioners were not entitled to the wages during the period
of the strike (even if the strike might be legal), because they performed no work during the strike. Verily, it was neither fair nor
just that the dismissed employees should litigate against their employer on the latter’s time. 25 Thus, the Court deleted the
award of backwages and held that the striking workers were entitled only to reinstatement in Philippine Diamond Hotel and
Resort, Inc. (Manila Diamond Hotel) v. Manila Diamond Hotel Employees Union,26 considering that the striking employees did
not render work for the employer during the strike.
III
Appropriate Amount for Separation Pay
Is One Month per Year of Service
The petitioners were ordered reinstated because they were union members merely instigated or induced to participate in the
illegal strike. By joining the strike, they did not renounce their employment relation with PINA but remained as its employees.
The absence from an order of reinstatement of an alternative relief should the employer or a supervening event not within the
control of the employee prevent reinstatement negates the very purpose of the order. The judgment favorable to the
employee is thereby reduced to a mere paper victory, for it is all too easy for the employer to simply refuse to have the

employee back. To safeguard the spirit of social justice that the Court has advocated in favor of the working man, therefore,
the right to reinstatement is to be considered renounced or waived only when the employee unjustifiably or unreasonably
refuses to return to work upon being so ordered or after the employer has offered to reinstate him.27
However, separation pay is made an alternative relief in lieu of reinstatement in certain circumstances, like: (a) when
reinstatement can no longer be effected in view of the passage of a long period of time or because of the realities of the
situation; (b) reinstatement is inimical to the employer’s interest; (c) reinstatement is no longer feasible; (d) reinstatement
does not serve the best interests of the parties involved; (e) the employer is prejudiced by the workers’ continued
employment; (f) facts that make execution unjust or inequitable have supervened; or (g) strained relations between the
employer and employee.28
Here, PINA manifested that the reinstatement of the petitioners would not be feasible because: (a) it would "inflict disruption
and oppression upon the employer"; (b) "petitioners [had] stayed away" for more than 15 years; (c) its machines had
depreciated and had been replaced with newer, better ones; and (d) it now sold goods through independent distributors,
thereby abolishing the positions related to sales and distribution.29
Under the circumstances, the grant of separation pay in lieu of reinstatement of the petitioners was proper.1awph!1 It is not
disputable that the grant of separation pay or some other financial assistance to an employee is based on equity, which has
been defined as justice outside law, or as being ethical rather than jural and as belonging to the sphere of morals than of
law.30 This Court has granted separation pay as a measure of social justice even when an employee has been validly dismissed,
as long as the dismissal has not been due to serious misconduct or reflective of personal integrity or morality.31
What is the appropriate amount for separation pay?
In G & S Transport,32 the Court awarded separation pay equivalent to one month salary per year of service considering that 17
years had passed from the time when the striking employees were refused reinstatement. In Association of Independent
Unions in the Philippines v. NLRC,33 the Court allowed separation pay equivalent to one month salary per year of service
considering that eight years had elapsed since the employees had staged their illegal strike.
Here, we note that this case has dragged for almost 17 years from the time of the illegal strike. Bearing in mind PINA’s
manifestation that the positions that the petitioners used to hold had ceased to exist for various reasons, we hold that
separation pay equivalent to one month per year of service in lieu of reinstatement fully aligns with the aforecited rulings of
the Court on the matter.
WHEREFORE, we affirm the decision dated August 18, 2003 of the Court of Appeals, subject to the modification to the effect
that in lieu of reinstatement the petitioners are granted backwages equivalent of one month for every year of service.SO
ORDERED.
Republic of the Philippines
SUPREME COURT
ManilaFIRST DIVISION
G.R. No. 154113 December 7, 2011
EDEN GLADYS ABARIA, ROMULO ALFORQUE, ELENA ALLA, EVELYN APOSTOL, AMELIA ARAGON, BEATRIZ ALBASTRO, GLORIA
ARDULLES, GLENDA BANTILAN, VIRGILIE BORINAGA, ROLDAN CALDERON, ILDEBRANDO CUTA, ROMEO EMPUERTO, LANNIE
Labor Relation Set VvI * strikes and lockouts* Page 15 of 52
FERNANDEZ, LUCINELL GABAYERON, JESUSA GERONA, JOSE GONZAGA, TEOFILO HINAMPAS, JOSEFINA IBUNA, MARLYN
LABRA, MARIA CARMENCITA LAO, ERA CANEN, RODNEY REX LERIAS, ERNIE MANLIGAS, JOHANNE DEL MAR, RUBY
ORIMACO, CONSTANCIO PAGADOR, MARVELOUS PANAL, NOLAN PANAL, LILLAN PETALLAR, GERNA PATIGDAS, MELODIA
PAULIN, SHIRLEY ROSE REYES, JOSEFINA REYES, OSCAR DE LOS SANTOS, SOLOMON DE LOS SANTOS, RAMON TAGNIPIS,
BERNADETTE TIBAY, RONALD TUMULAK, LEONCIO VALLINAS, EDELBERTO VILLA and the NAGKAHIUSANG MAMUMUO SA
METRO CEBU COMMUNITY HOSPITAL, Petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, METRO CEBU COMMUNITY HOSPITAL, INC., ITS BOARD OF TRUSTEES, REV.
GREGORIO IYOY, SHIELA BUOT, REV. LORENZO GENOTIVA, RUBEN CARABAN, RUBEN ESTOYE, LILIA SAURO, REV. ELIZER
BERTOLDO, RIZALINA VILLAGANTE, DRA. LUCIA FLORENDO, CONCEPCION VILLEGAS, REV. OLIVER CANEN, DRA. CYD RAGAS,
REV. MIKE CAMBA, AVEDNIGO VALIENTE, RIZALINO TAGANAS, CIRIACO PONGASI, ISIAS WAGAS, REV. ESTER GELOAGAN,
REV. LEON MANIWAN, CRESENTE BAOAS, WINEFREDA BARLOSO, REV. RUEL MARIGA AND THE UNITED CHURCH OF CHRIST
IN THE PHILIPPINES, REV. HILARIO GOMEZ, REV. ELMER BOLOCON, THE NATIONAL FEDERATION OF LABOR AND ARMAND
ALFORQUE, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 187778
PERLA NAVA, DANIELA YOSORES, AGUSTIN ALFORNON, AILEEN CATACUTAN, ROLANDO REDILOSA, CORNELIO MARIBOJO,
VIRGENCITA CASAS, CRISANTA GENEGABOAS, EMILIO LAO, RICO GASCON, ALBINA BAÑEZ, PEDRO CABATINGAN, PROCOMIO
SALUPAN, ELIZABETH RAMON, DIOSCORO GABUNADA, ROY MALAZARTE, FELICIANITA MALAZARTE, NORBERTA CACA,
MILAGROS CASTILLO, EDNA ALBO, BERNABE LUMAPGUID, CELIA SABAS, SILVERIO LAO, DARIO LABRADOR, ERNESTO CANEN,
JR., ELSA BUCAO, HANNAH BONGCARAS, NEMA BELOCURA, PEPITO LLAGAS, GUILLERMA REMOCALDO, ROGELIO DABATOS,
ROBERTO JAYMA, RAYMUNDO DELATADO, MERLYN NODADO, NOEL HORTELANO, HERMELO DELA TORRE, LOURDES
OLARTE, DANILO ZAMORA, LUZ CABASE, CATALINA ALSADO, RUTH BANZON AND THE NAGKAHIUSANG MAMUMUO SA
METRO CEBU COMMUNITY HOSPITAL, Petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION (FOURTH DIVISION), METRO CEBU COMMUNITY HOSPITAL, INC., BOARD OF
TRUSTEES, REV. GREGORIO IYOY, SHIELA BUOT, REV. LORENZO GENOTIVA, RUBEN CABABAN, ROSENDO ESTOYE, LILIA
SAURO, REV. ELIZER BERTOLDO, RIZALINA VILLAGANTE, DRA. LUCIA FLORENDO, CONCEPCION VILLEGAS, REV. OLIVER
CANEN, DRA. CYD RAAGAS, REV. MIKE CAMBA, AVIDNIGO VALIENTE, RIZALINO TAGANAS, CIRIACO PONGASI, ISIAS WAGAS,
REV. ESTER GELOAGAN, REV. LEON MANIWAN, CRESENTE BAOAS, WINIFREDA BARLOSO, REV. RUEL MARIGA, THE UNITED
CHURCH OF CHRIST IN THE PHILIPPINES, REV. HILARIO GOMEZ, REV. ELMER BOLOCON, THE NATIONAL FEDERATION OF
LABOR AND ARMANDO ALFORQUE, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 187861
METRO CEBU COMMUNITY HOSPITAL, presently known as Visayas Community Medical Center (VCMC),Petitioner,
vs.
PERLA NAVA, DANIELA YOSORES, AGUSTIN ALFORNON, AILEEN CATACUTAN, ROLANDO REDILOSA, CORNELIO MARIBOJO,
VIRGENCITA CASAS, CRISANTA GENEGABOAS, EMILIO LAO, RICO GASCON, ALBINA BANEZ, PEDRO CABATINGAN, PROCOMIO
SALUPAN, ELIZABETH RAMON, DIOSCORO GABUNADA, ROY MALAZARTE, FELICIANITA MALAZARTE, NORBERTA CACA,
MILAGROS CASTILLO, EDNA ALBO, BERNABE LUMABGUID, CELIA SABAS, SILVERIO LAO, DARIO LABRADOR, ERNESTO CANEN,
JR., ELSA BUCAO, HANNAH BONGCARAS, NEMA BELOCURA, PEPITO LLAGAS, GUILLERMA REMOCALDO, ROGELIO DABATOS,
ROBERTO JAYMA, RAYMUNDO DELATADO, NOEL HORTELANO, HERMELO DE LA TORRE, LOURDES OLARTE, DANILO
ZAMORA, LUZ CABASE, CATALINA ALSADO AND RUTH BANZON, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 196156
VISAYAS COMMUNITY MEDICAL CENTER (VCMC) formerly known as METRO CEBU COMMUNITY HOSPITAL
(MCCH), Petitioner,

vs.
ERMA YBALLE, NELIA ANGEL, ELEUTERIA CORTEZ and EVELYN ONG, Respondents.
DECISION
VILLARAMA, JR., J.:
The consolidated petitions before us involve the legality of mass termination of hospital employees who participated in strike
and picketing activities.
The factual antecedents:
Metro Cebu Community Hospital, Inc. (MCCHI), presently known as the Visayas Community Medical Center (VCMC), is a non-
stock, non-profit corporation organized under the laws of the Republic of the Philippines. It operates the Metro Cebu
Community Hospital (MCCH), a tertiary medical institution located at Osmeña Boulevard, Cebu City. MCCH is owned by the
United Church of Christ in the Philippines (UCCP) and Rev. Gregorio P. Iyoy is the Hospital Administrator.
The National Federation of Labor (NFL) is the exclusive bargaining representative of the rank-and-file employees of MCCHI.
Under the 1987 and 1991 Collective Bargaining Agreements (CBAs), the signatories were Ciriaco B. Pongasi, Sr. for MCCHI, and
Atty. Armando M. Alforque (NFL Legal Counsel) and Paterno A. Lumapguid as President of NFL-MCCH Chapter. In the CBA
effective from January 1994 until December 31, 1995, the signatories were Sheila E. Buot as Board of Trustees Chairman, Rev.
Iyoy as MCCH Administrator and Atty. Fernando Yu as Legal Counsel of NFL, while Perla Nava, President of Nagkahiusang
Mamumuo sa MCCH (NAMA-MCCH-NFL) signed the Proof of Posting.1
On December 6, 1995, Nava wrote Rev. Iyoy expressing the union’s desire to renew the CBA, attaching to her letter a
statement of proposals signed/endorsed by 153 union members. Nava subsequently requested that the following employees
be allowed to avail of one-day union leave with pay on December 19, 1995: Celia Sabas, Jesusa Gerona, Albina Bañez, Eddie
Villa, Roy Malazarte, Ernesto Canen, Jr., Guillerma Remocaldo, Catalina Alsado, Evelyn Ong, Melodia Paulin, Sofia Bautista,
Hannah Bongcaras, Ester Villarin, Iluminada Wenceslao and Perla Nava. However, MCCHI returned the CBA proposal for Nava
to secure first the endorsement of the legal counsel of NFL as the official bargaining representative of MCCHI employees.2
Meanwhile, Atty. Alforque informed MCCHI that the proposed CBA submitted by Nava was never referred to NFL and that NFL
has not authorized any other legal counsel or any person for collective bargaining negotiations. By January 1996, the collection
of union fees (check-off) was temporarily suspended by MCCHI in view of the existing conflict between the federation and its
local affiliate. Thereafter, MCCHI attempted to take over the room being used as union office but was prevented to do so by
Nava and her group who protested these actions and insisted that management directly negotiate with them for a new CBA.
MCCHI referred the matter to Atty. Alforque, NFL’s Regional Director, and advised Nava that their group is not recognized by
NFL.3
In his letter dated February 24, 1996 addressed to Nava, Ernesto Canen, Jr., Jesusa Gerona, Hannah Bongcaras, Emma
Remocaldo, Catalina Alsado and Albina Bañez, Atty. Alforque suspended their union membership for serious violation of the
Constitution and By-Laws. Said letter states:
During the last General Membership Meeting of the union on February 20, 1996, you openly declared that you recognized the
officers of the KMU not those of the NFL, that you submit to the stuctures [sic] and authority of the KMU not of the NFL, and
that you are loyal only to the KMU not to the NFL.
Labor Relation Set VvI * strikes and lockouts* Page 16 of 52
Also, in the same meeting, you admitted having sent a proposal for a renewed collective bargaining agreement to the
management without any consultation with the NFL. In fact, in your letter dated February 21, 1996 addressed to Rev. Gregorio
Iyoy, the Administrator of the hospital, you categorically stated as follows: "We do not need any endorsement from NFL, more
particularly from Atty. Armando Alforque to negotiate our CBA with MCCH." You did not only ignore the authority of the
undersigned as Regional Director but you maliciously prevented and bluntly refused my request to join the union negotiating
panel in the CBA negotiations.
Your above flagrant actuations, made in the presence of the union membership, constitute the following offenses:
1. Willful violation of the Constitution and By-Laws of the Federation and the orders and decisions of duly constituted
authorities of the same (Section 4 (b), Article III), namely:
a) Defying the decision of the organization disaffiliating from the KMU; and
b) Section 9 (b), Article IX which pertains to the powers and responsibilities of the Regional Director, particularly, to
negotiate and sign collective bargaining agreement together with the local negotiating panel subject to prior
ratification by the general membership;
2. Joining or assisting another labor organization or helping in the formation of a new labor organization that seeks or tends to
defeat the purpose of the Federation (Section 4 (d), Article III) in relation to the National Executive Board’s Resolution No. 8,
September 26-27, 1994, to wit:
"Pursuant to the NEB Resolution disaffiliating from the KMU dated September 11, 1993, the NEB in session hereby declare that
KMU is deemed an organization that seeks to defeat the objective of establishing independent and democratic unions and
seeks to replace the Federation as exclusive representative of its members.
Committing acts that tend to alienate the loyalty of the members to the Federation, subvert its duly constituted authorities,
and divide the organization in any level with the objective of establishing a pro-KMU faction or independent union loyal to the
KMU shall be subject to disciplinary action, suspension or expulsion from union membership, office or position in accordance
with paragraph[s] d and f of Section 4, Article III, and paragraph h, Section 6, Article VI, paragraph d, Section 9, Article IX."
You are, therefore, directed to submit written explanation on the above charges within five (5) days from receipt hereof.
Failure on your part shall be considered a waiver of your right to be heard and the Federation will act accordingly.
Considering the gravity of the charges against you, the critical nature of the undertaking to renew the collective bargaining
agreement, and the serious threat you posed to the organization, you are hereby placed under temporary suspension from
your office and membership in the union immediately upon receipt hereof pending investigation and final disposition of your
case in accordance with the union’s constitution and by-laws.
For your guidance and compliance.4
On February 26, 1996, upon the request of Atty. Alforque, MCCHI granted one-day union leave with pay for 12 union
members.5 The next day, several union members led by Nava and her group launched a series of mass actions such as wearing
black and red armbands/headbands, marching around the hospital premises and putting up placards, posters and streamers.

Atty. Alforque immediately disowned the concerted activities being carried out by union members which are not sanctioned by
NFL. MCCHI directed the union officers led by Nava to submit within 48 hours a written explanation why they should not be
terminated for having engaged in illegal concerted activities amounting to strike, and placed them under immediate preventive
suspension. Responding to this directive, Nava and her group denied there was a temporary stoppage of work, explaining that
employees wore their armbands only as a sign of protest and reiterating their demand for MCCHI to comply with its duty to
bargain collectively. Rev. Iyoy, having been informed that Nava and her group have also been suspended by NFL, directed said
officers to appear before his office for investigation in connection with the illegal strike wherein they reportedly uttered
slanderous and scurrilous words against the officers of the hospital, threatening other workers and forcing them to join the
strike. Said union officers, however, invoked the grievance procedure provided in the CBA to settle the dispute between
management and the union.6
On March 13 and 19, 1996, the Department of Labor and Employment (DOLE) Regional Office No. 7 issued certifications stating
that there is nothing in their records which shows that NAMA-MCCH-NFL is a registered labor organization, and that said union
submitted only a copy of its Charter Certificate on January 31, 1995.7 MCCHI then sent individual notices to all union members
asking them to submit within 72 hours a written explanation why they should not be terminated for having supported the
illegal concerted activities of NAMA-MCCH-NFL which has no legal personality as per DOLE records. In their collective
response/statement dated March 18, 1996, it was explained that the picketing employees wore armbands to protest MCCHI’s
refusal to bargain; it was also contended that MCCHI cannot question the legal personality of the union which had actively
assisted in CBA negotiations and implementation.8
On March 13, 1996, NAMA-MCCH-NFL filed a Notice of Strike but the same was deemed not filed for want of legal personality
on the part of the filer. The National Conciliation and Mediation Board (NCMB) Region 7 office likewise denied their motion for
reconsideration on March 25, 1996. Despite such rebuff, Nava and her group still conducted a strike vote on April 2, 1996
during which an overwhelming majority of union members approved the strike.9
Meanwhile, the scheduled investigations did not push through because the striking union members insisted on attending the
same only as a group. MCCHI again sent notices informing them that their refusal to submit to investigation is deemed a waiver
of their right to explain their side and management shall proceed to impose proper disciplinary action under the
circumstances. On March 30, 1996, MCCHI sent termination letters to union leaders and other members who participated in
the strike and picketing activities. On April 8, 1996, it also issued a cease-and-desist order to the rest of the striking employees
stressing that the wildcat concerted activities spearheaded by the Nava group is illegal without a valid Notice of Strike and
warning them that non-compliance will compel management to impose disciplinary actions against them. For their continued
picketing activities despite the said warning, more than 100 striking employees were dismissed effective April 12 and 19, 1996.
Unfazed, the striking union members held more mass actions. The means of ingress to and egress from the hospital were
blocked so that vehicles carrying patients and employees were barred from entering the premises. Placards were placed at the
hospital’s entrance gate stating: "Please proceed to another hospital" and "we are on protest." Employees and patients
reported acts of intimidation and harassment perpetrated by union leaders and members. With the intensified atmosphere of
violence and animosity within the hospital premises as a result of continued protest activities by union members, MCCHI
suffered heavy losses due to low patient admission rates. The hospital’s suppliers also refused to make further deliveries on
credit.
With the volatile situation adversely affecting hospital operations and the condition of confined patients, MCCHI filed a
petition for injunction in the NLRC (Cebu City) on July 9, 1996 (Injunction Case No. V-0006-96). A temporary restraining order
(TRO) was issued on July 16, 1996. MCCHI presented 12 witnesses (hospital employees and patients), including a security guard
Labor Relation Set VvI * strikes and lockouts* Page 17 of 52
who was stabbed by an identified sympathizer while in the company of Nava’s group. MCCHI’s petition was granted and a
permanent injunction was issued on September 18, 1996 enjoining the Nava group from committing illegal acts mentioned in
Art. 264 of the Labor Code.10
On August 27, 1996, the City Government of Cebu ordered the demolition of the structures and obstructions put up by the
picketing employees of MCCHI along the sidewalk, having determined the same as a public nuisance or nuisance per se.11
Thereafter, several complaints for illegal dismissal and unfair labor practice were filed by the terminated employees against
MCCHI, Rev. Iyoy, UCCP and members of the Board of Trustees of MCCHI.
On August 4, 1999, Executive Labor Arbiter Reynoso A. Belarmino rendered his decision12 dismissing the complaints for unfair
labor practice in NLRC Case Nos. RAB-VII-02-0309-98, RAB-VII-02-0394-98 and RAB-VII-03-0596-98 filed by Nava and 90 other
complainants. Executive Labor Arbiter Belarmino found no basis for the charge of unfair labor practice and declared the strike
and picketing activities illegal having been conducted by NAMA-MCCH-NFL which is not a legitimate labor organization. The
termination of union leaders Nava, Alsado, Bañez, Bongcaras, Canen, Gerona and Remocaldo were upheld as valid but MCCHI
was directed to grant separation pay equivalent to one-half month for every year of service, in the total amount
of P3,085,897.40 for the 84 complainants.13
Complainants appealed to the Commission. On March 14, 2001, the NLRC’s Fourth Division rendered its Decision, 14 the
dispositive portion of which reads:
WHEREFORE, premises considered, the decision of the Executive Labor Arbiter dismissing the complaint for unfair labor
practice and illegal dismissal is AFFIRMED with MODIFICATIONS declaring the dismissal of all the complainants in RAB Case No.
07-02-0394-98 and RAB Case No. 07-03-0596-98 valid and legal. Necessarily, the award of separation pay and attorney’s fees
are hereby Deleted.
Resolution on RAB Case No. 07-02-0309-98 is hereby Deferred upon Joint Motion of the parties.SO ORDERED.15
In its Resolution dated July 2, 2001, the NLRC denied complainants’ motion for reconsideration.16
Complainants elevated the case to the Court of Appeals (CA) (Cebu Station) via a petition for certiorari, docketed as CA-G.R. SP
No. 66540.17
In its Resolution dated November 14, 2001, the CA’s Eighth Division dismissed the petition on the ground that out of 88
petitioners only 47 have signed the certification against forum shopping.18 Petitioners moved to reconsider the said dismissal
arguing that the 47 signatories more than constitute the principal parties as the petition involves a matter of common concern
to all the petitioning employees.19 By Resolution20 dated May 28, 2002, the CA reinstated the case only insofar as the 47
petitioners who signed the petition are concerned.
Petitioners challenged the validity of the November 14, 2001 and May 28, 2002 resolutions before this Court in a petition for
review on certiorari, docketed as G.R. No. 154113.
 Labor Relation Set VvI * strikes and lockouts* Page 18 of 52

Meanwhile, the NLRC’s Fourth Division (Cebu City) rendered its Decision21 dated March 12, 2003 in RAB Case Nos. 07-02-0309-
98 (NLRC Case No. V-001042-99) pertaining to complainants Erma Yballe, Evelyn Ong, Nelia Angel and Eleuteria Cortez as
follows:
WHEREFORE, premises considered, the decision of the Executive Labor Arbiter dismissing the complaint for unfair labor
practice and illegal dismissal is AFFIRMED with MODIFICATIONS declaring all complainants to have been validly dismissed.
Necessarily, the award of separation pay and attorney’s fees are hereby Deleted.SO ORDERED.22
The NLRC likewise denied the motion for reconsideration filed by complainants Yballe, et al. in its Resolution dated April 13,
2004.23
On October 17, 2008, the CA rendered its Decision24 in CA-G.R. SP No. 66540, the dispositive portion of which states:
WHEREFORE, premises considered, judgment is hereby rendered AFFIRMING the Decision of the National Labor Relations
Commission (NLRC) – Fourth Division dated March 14, 2001 in NLRC Case No. V-001042-99, WITH MODIFICATIONS to the effect
that (1) the petitioners, except the union officers, shall be awarded separation pay equivalent to one-half (1/2) month pay for
every year of service, and (2) petitioner Cecilia Sabas shall be awarded overtime pay amounting to sixty-three (63) hours.SO
ORDERED.25
Petitioners filed a motion for reconsideration while private respondents filed a motion for partial reconsideration questioning
the award of separation pay. The former also invoked the decision of this Court in Bascon v. Court of Appeals,26 while the latter
argued for the application of the ruling in decision rendered by the CA (Cebu City) in Miculob v. NLRC, et al. (CA-G.R. SP No.
84538),27 both involving similar complaints filed by dismissed employees of MCCHI.
By Resolution28 dated April 17, 2009, the CA denied both motions:
WHEREFORE, the petitioners’ Motion for Reconsideration and the private respondent[s’] Motion for Partial Reconsideration of
the October 17, 2008 Decision are both DENIED for lack of merit.
Private respondents (MCCHI, et al.) moved to reconsider the above decision but the CA denied their motion on February 22,
2011.32
Both petitioners and private respondents in CA-G.R. SP No. 66540 appealed to this Court. Private respondent MCCHI in CA-G.R.
SP No. 84998, under its new name Visayas Community Medical Center (VCMC), filed a petition for certiorari in this Court.
In G.R. No. 187778, petitioners Nava, et al. prayed that the CA decision be set aside and a new judgment be entered by this
Court (1) declaring private respondents guilty of unfair labor practice and union busting; (2) directing private respondents to
cease and desist from further committing unfair labor practices against the petitioners; (3) imposing upon MCCH the proposed
CBA or, in the alternative, directing the hospital and its officers to bargain with the local union; (4) declaring private
respondents guilty of unlawfully suspending and illegally dismissing the individual petitioners-employees; (5) directing private
respondents to reinstate petitioners-employees to their former positions, or their equivalent, without loss of seniority rights
with full backwages and benefits until reinstatement; and (6) ordering private respondents to pay the petitioners moral
damages, exemplary damages, legal interests, and attorney’s fees.33
On the other hand, petitioner MCCHI in G.R. No. 187861 prayed for the modification of the CA decision by deleting the award
of separation pay and reinstating the March 14, 2001 decision of the NLRC.34
In G.R. No. 196156, MCCHI/VCMC prayed for the annulment of the November 7, 2008 Decision and February 22, 2011
Resolution of the CA, for this Court to declare the dismissal of respondents Yballe, et al. as valid and legal and to reinstate the
March 12, 2003 Decision and April 13, 2004 Resolution of the NLRC.
G.R. No. 187861 was consolidated with G.R. Nos. 154113 and 187778 as they involve similar factual circumstances and
identical or related issues. G.R. No. 196156 was later also consolidated with the aforesaid cases.
The issues are: (1) whether the CA erred in dismissing the petition for certiorari (CA-G.R. SP No. 66540) with respect to the
petitioners in G.R. No. 154113 for their failure to sign the certification against forum shopping; (2) whether MCCHI is guilty of
unfair labor practice; (3) whether petitioning employees were illegally dismissed; and (4) if their termination was illegal,
whether petitioning employees are entitled to separation pay, backwages, damages and attorney’s fees.

The Motions for Substitution of Counsel and Compromise Agreements submitted by petitioners Bernardito Lawas, Avelina
Dropping of petitioners who did not sign the certification against forum shopping improper
Bangalao, Dailenda Hinampas and Daylinda Tigo are hereby approved. Consequently, said petitioners are ordered dropped
from the list of petitioners and the case is deemed dismissed as to them.SO ORDERED.29
The Court has laid down the rule in Altres v. Empleo35 as culled from "jurisprudential pronouncements", that the certification
against forum shopping must be signed by all the plaintiffs or petitioners in a case; otherwise, those who did not sign will be
Complainants Yballe, et al. also challenged before the CA the March 12, 2003 Decision and April 13, 2004 Resolution of the
dropped as parties to the case. Under reasonable or justifiable circumstances, however, as when all the plaintiffs or petitioners
NLRC in a petition for certiorari, docketed as CA-G.R. SP No. 84998 (Cebu City). By Decision30dated November 7, 2008, the CA
share a common interest and invoke a common cause of action or defense, the signature of only one of them in the
granted their petition, as follows:
certification against forum shopping substantially complies with the Rule.

WHEREFORE, the challenged Decision of public respondent dated March 12, 2003 and its Resolution dated April 13, 2004 are
In the case at bar, the signatures of 47 out of 88 petitioning employees in the certification against forum shopping constitute
hereby REVERSED AND SET ASIDE. Private respondent Metro Cebu Community Hospital is ordered to reinstate petitioners
substantial compliance with the rule. There is no question that they shared a common interest and invoked a common cause of
Erma Yballe, Eleuteria Cortes, Nelia Angel and Evelyn Ong without loss of seniority rights and other privileges; to pay them
action when they filed suit before the Labor Arbiter and NLRC questioning the validity of their termination and charging MCCHI
their full backwages inclusive of their allowances and other benefits computed from the time of their dismissal up to the time
with unfair labor practice. Thus, when they appealed their case to the CA, they pursued the same as a collective body, raising
of their actual reinstatement.No pronouncement as to costs.SO ORDERED.31
only one argument in support of their cause of action, i.e., the illegal dismissal allegedly committed by MCCHI when union

members resorted to strike and mass actions due to MCCHI’s refusal to bargain with officers of the local chapter. There is
sufficient basis, therefore, for the 47 signatories to the petition, to speak for and in behalf of their co-petitioners and to file the
Petition for Certiorari in the appellate court.36 Clearly, the CA erred in dropping as parties-petitioners those who did not sign
the certification against forum shopping.lavvphil
However, instead of remanding the case to the CA for it to resolve the petition with respect to the herein petitioners in G.R.
No. 154113, and as prayed for, the Court shall consider them parties-petitioners in CA-G.R. SP No. 66540,which case has
already been decided and now subject of appeal in G.R. No. 187778.
MCCHI not guilty of unfair labor practice
Art. 248 (g) of the Labor Code, as amended, makes it an unfair labor practice for an employer "[t]o violate the duty to bargain
collectively" as prescribed by the Code. The applicable provision in this case is Art. 253 which provides:
ART. 253. Duty to bargain collectively when there exists a collective bargaining agreement. – When there is a collective
bargaining agreement, the duty to bargain collectively shall also mean that neither party shall terminate nor modify such
agreement during its lifetime. However, either party can serve a written notice to terminate or modify the agreement at least
sixty (60) days prior to its expiration date. It shall be the duty of both parties to keep the status quo and to continue in full
force and effect the terms and conditions of the existing agreement during the 60-day period and/or until a new agreement is
reached by the parties.
NAMA-MCCH-NFL charged MCCHI with refusal to bargain collectively when the latter refused to meet and convene for
purposes of collective bargaining, or at least give a counter-proposal to the proposed CBA the union had submitted and which
was ratified by a majority of the union membership. MCCHI, on its part, deferred any negotiations until the local union’s
dispute with the national union federation (NFL) is resolved considering that the latter is the exclusive bargaining agent which
represented the rank-and-file hospital employees in CBA negotiations since 1987.
We rule for MCCHI.
Records of the NCMB and DOLE Region 7 confirmed that NAMA-MCCH-NFL had not registered as a labor organization, having
submitted only its charter certificate as an affiliate or local chapter of NFL.37 Not being a legitimate labor organization, NAMA-
MCCH-NFL is not entitled to those rights granted to a legitimate labor organization under Art. 242, specifically:
(a) To act as the representative of its members for the purpose of collective bargaining;
(b) To be certified as the exclusive representative of all the employees in an appropriate collective bargaining unit
for purposes of collective bargaining;
xxxx
Aside from the registration requirement, it is only the labor organization designated or selected by the majority of the
employees in an appropriate collective bargaining unit which is the exclusive representative of the employees in such unit for
the purpose of collective bargaining, as provided in Art. 255.38 NAMA-MCCH-NFL is not the labor organization certified or
designated by the majority of the rank-and-file hospital employees to represent them in the CBA negotiations but the NFL, as
evidenced by CBAs concluded in 1987, 1991 and 1994. While it is true that a local union has the right to disaffiliate from the
national federation, NAMA-MCCH-NFL has not done so as there was no any effort on its part to comply with the legal
requisites for a valid disaffiliation during the "freedom period"39 or the last 60 days of the last year of the CBA, through a
Labor Relation Set VvI * strikes and lockouts* Page 19 of 52
majority vote in a secret balloting in accordance with Art. 241 (d).40 Nava and her group simply demanded that MCCHI directly
negotiate with the local union which has not even registered as one.
To prove majority support of the employees, NAMA-MCCH-NFL presented the CBA proposal allegedly signed by 153 union
members. However, the petition signed by said members showed that the signatories endorsed the proposed terms and
conditions without stating that they were likewise voting for or designating the NAMA-MCCH-NFL as their exclusive bargaining
representative. In any case, NAMA-MCCH-NFL at the time of submission of said proposals was not a duly registered labor
organization, hence it cannot legally represent MCCHI’s rank-and-file employees for purposes of collective bargaining. Hence,
even assuming that NAMA-MCCH-NFL had validly disaffiliated from its mother union, NFL, it still did not possess the legal
personality to enter into CBA negotiations. A local union which is not independently registered cannot, upon disaffiliation from
the federation, exercise the rights and privileges granted by law to legitimate labor organizations; thus, it cannot file a petition
for certification election.41 Besides, the NFL as the mother union has the right to investigate members of its local chapter under
the federation’s Constitution and By-Laws, and if found guilty to expel such members.42 MCCHI therefore cannot be faulted for
deferring action on the CBA proposal submitted by NAMA-MCCH-NFL in view of the union leadership’s conflict with the
national federation. We have held that the issue of disaffiliation is an intra-union dispute43 which must be resolved in a
different forum in an action at the instance of either or both the federation and the local union or a rival labor organization,
not the employer.44
Not being a legitimate labor organization nor the certified exclusive bargaining representative of MCCHI’s rank-and-file
employees, NAMA-MCCH-NFL cannot demand from MCCHI the right to bargain collectively in their behalf. 45 Hence, MCCHI’s
refusal to bargain then with NAMA-MCCH-NFL cannot be considered an unfair labor practice to justify the staging of the
strike.46
Strike and picketing activities conducted by union officers and members were illegal
Art. 263 (b) of the Labor Code, as amended, provides:
ART. 263. Strikes, picketing and lockouts. – x x x
(b) Workers shall have the right to engage in concerted activities for purposes of collective bargaining or for their mutual
benefit and protection. The right of legitimate labor organizations to strike and picket and of employers to lockout, consistent
with the national interest, shall continue to be recognized and respected. However, no labor union may strike and no employer
may declare a lockout on grounds involving inter-union and intra-union disputes.
x x x x (Emphasis supplied.)
As borne by the records, NAMA-MCCH-NFL was not a duly registered or an independently registered union at the time it filed
the notice of strike on March 13, 1996 and when it conducted the strike vote on April 2, 1996. It could not then legally
represent the union members. Consequently, the mandatory notice of strike and the conduct of the strike vote report were
ineffective for having been filed and conducted by NAMA-MCCH-NFL which has no legal personality as a legitimate labor
organization, in violation of Art. 263 (c), (d) and (f) of the Labor Code and Rule XXII, Book V of the Omnibus Rules Implementing
the Labor Code.47
Art. 263 of the Labor Code provides:
ART. 263. Strikes, picketing and lockouts. — (a) x x x
xxxx

(c) In cases of bargaining deadlocks, the duly certified or recognized bargaining agent may file a notice of strike or the
employer may file a notice of lockout with the Department at least 30 days before the intended date thereof. In cases of unfair
labor practice, the period of notice shall be 15 days and in the absence of a duly certified or recognized bargaining agent, the
notice of strike may be filed by any legitimate labor organization in behalf of its members. However, in case of dismissal from
employment of union officers duly elected in accordance with the union constitution and by-laws, which may constitute union
busting, where the existence of the union is threatened, the 15-day cooling-off period shall not apply and the union may take
action immediately. (As amended by Executive Order No. 111, December 24, 1986.)
(d) The notice must be in accordance with such implementing rules and regulations as the Department of Labor and
Employment may promulgate.
xxxx
(f) A decision to declare a strike must be approved by a majority of the total union membership in the bargaining unit
concerned, obtained by secret ballot in meetings or referenda called for that purpose. A decision to declare a lockout must be
approved by a majority of the board of directors of the corporation or association or of the partners in a partnership, obtained
by secret ballot in a meeting called for that purpose. The decision shall be valid for the duration of the dispute based on
substantially the same grounds considered when the strike or lockout vote was taken. The Department may, at its own
initiative or upon the request of any affected party, supervise the conduct of the secret balloting. In every case, the union or
the employer shall furnish the Ministry the voting at least seven days before the intended strike or lockout, subject to the
cooling-off period herein provided. (As amended by Batas Pambansa Bilang 130, August 21, 1981 and further amended by
Executive Order No. 111, December 24, 1986.) (Emphasis supplied.)
Rule XXII, Book V of the Omnibus Rules Implementing the Labor Code reads:
RULE XXII
CONCILIATION, STRIKES AND LOCKOUTS
xxxx
SEC. 6. Who may declare a strike or lockout. — Any certified or duly recognized bargaining representative may declare a strike
in cases of bargaining deadlocks and unfair labor practices. The employer may declare a lockout in the same cases. In the
absence of a certified or duly recognized bargaining representative, any legitimate labor organization in the establishment may
declare a strike but only on grounds of unfair labor practice. (Emphasis supplied.)
Furthermore, the strike was illegal due to the commission of the following prohibited activities48 : (1) violence, coercion,
intimidation and harassment against non-participating employees; and (2) blocking of free ingress to and egress from the
hospital, including preventing patients and their vehicles from entering the hospital and other employees from reporting to
work, the putting up of placards with a statement advising incoming patients to proceed to another hospital because MCCHI
employees are on strike/protest. As shown by photographs49submitted by MCCHI, as well as the findings of the NCMB and
Cebu City Government, the hospital premises and sidewalk within its vicinity were full of placards, streamers and makeshift
structures that obstructed its use by the public who were likewise barraged by the noise coming from strikers using
megaphones.50 On the other hand, the affidavits51 executed by several hospital employees and patients narrated in detail the
incidents of harassment, intimidation, violence and coercion, some of these witnesses have positively identified the
perpetrators. The prolonged work stoppage and picketing activities of the striking employees severely disrupted hospital
operations that MCCHI suffered heavy financial losses.
The findings of the Executive Labor Arbiter and NLRC, as sustained by the appellate court, clearly established that the striking
union members created so much noise, disturbance and obstruction that the local government authorities eventually ordered
their removal for being a public nuisance. This was followed by an injunction from the NCMB enjoining the union leaders from
Labor Relation Set VvI * strikes and lockouts* Page 20 of 52
further blocking the free ingress to and egress from the hospital, and from committing threats, coercion and intimidation
against non-striking employees and patients/vehicles desiring to enter for the purpose of seeking medical
treatment/confinement. By then, the illegal strike had lasted for almost five months.
Consequences of illegal strike to union officers and members
Art. 264 (a) of the Labor Code, as amended, provides for the consequences of an illegal strike to the participating workers:
x x x Any union officer who knowingly participates in illegal strike and any worker or union officer who knowingly participates
in the commission of illegal acts during a strike may be declared to have lost his employment status:Provided, That mere
participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his employment, even if a
replacement had been hired by the employer during such lawful strike.
The above provision makes a distinction between workers and union officers who participate in an illegal strike: an ordinary
striking worker cannot be terminated for mere participation in an illegal strike. There must be proof that he or she committed
illegal acts during a strike. A union officer, on the other hand, may be terminated from work when he knowingly participates in
an illegal strike, and like other workers, when he commits an illegal act during a strike.52
Considering their persistence in holding picketing activities despite the declaration by the NCMB that their union was not duly
registered as a legitimate labor organization and the letter from NFL’s legal counsel informing that their acts constitute
disloyalty to the national federation, and their filing of the notice of strike and conducting a strike vote notwithstanding that
their union has no legal personality to negotiate with MCCHI for collective bargaining purposes, there is no question that
NAMA-MCCH-NFL officers knowingly participated in the illegal strike. The CA therefore did not err in ruling that the
termination of union officers Perla Nava, Catalina Alsado, Albina Bañez, Hannah Bongcaras, Ernesto Canen, Jesusa Gerona and
Guillerma Remocaldo was valid and justified.
With respect to the dismissed union members, although MCCHI submitted photographs taken at the picket line, it did not
individually name those striking employees and specify the illegal act committed by each of them. As to the affidavits executed
by non-striking employees, they identified mostly union officers as the persons who blocked the hospital entrance, harassed
hospital employees and patients whose vehicles were prevented from entering the premises. Only some of these witnesses
actually named a few union members who committed similar acts of harassment and coercion. Consequently, we find no error
committed by the CA in CA-G.R. SP No. 66540 when it modified the decision of the NLRC and ruled that the dismissal of union
members who merely participated in the illegal strike was illegal. On the other hand, in CA-G.R. SP No. 84998, the CA did not
err in ruling that the dismissal of Yballe, et al. was illegal; however, it also ordered their reinstatement with full back wages.
Dismissed union members not entitled to backwages but should be awarded separation pay in lieu of reinstatement
Since there is no clear proof that union members actually participated in the commission of illegal acts during the strike, they
are not deemed to have lost their employment status as a consequence of a declaration of illegality of the strike.
Petitioners in G.R. Nos. 154113 and 187778 assail the CA in not ordering their reinstatement with back wages. Invoking stare
decisis, they cited the case of Bascon v. Court of Appeals53 decided by this Court in 2004 and which involved two former
hospital employees who likewise sued MCCHI after the latter terminated their employment due to their participation in the
 Labor Relation Set VvI * strikes and lockouts* Page 21 of 52

same illegal strike led by NAMA-MCCH-NFL. In said case we ruled that petitioners Cole and Bascon were illegally dismissed It is to be noted that as early as April 8, 1996, union members who took part in the concerted activities have been warned by
because MCCHI failed to prove that they committed illegal acts during the strike. We thus ordered the reinstatement of management that NAMA-MCCH-NFL is not a legitimate labor organization and its notice of strike was denied by the NCMB, and
petitioners Bascon and Cole without loss of seniority rights and other privileges and payment of their back wages inclusive of directed to desist from further participating in such illegal activities. Despite such warning, they continued with their picketing
allowances, and other benefits computed from the time they were dismissed up to the time of their actual activities and held more mass actions after management sent them termination notices. The prolonged work stoppage
reinstatement. Bascon was also the basis of the award of back wages in CA-G.R. SP No. 84998. seriously disrupted hospital operations, which could have eventually brought MCCHI into bankruptcy had the City Government
of Cebu not issued a demolition order and the NLRC Region 7 not formally enjoined the prohibited picketing activities. Also, the
illegal dismissal complaints subsequently filed by the terminated employees did not obliterate the fact that they did not suffer
Stare decisis et non quieta movere. Stand by the decision and disturb not what is settled. Under the doctrine of stare decisis,
loss of earnings by reason of the employer’s unjustified acts, there being no unfair labor practice committed by MCCHI. Hence,
once a court has laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle and apply it
fairness and justice dictate that back wages be denied the said employees who participated in the illegal concerted activities to
to all future cases where the facts are substantially the same,54 even though the parties may be different. It proceeds from the
the great detriment of the employer.
first principle of justice that, absent any powerful countervailing considerations, like cases ought to be decided alike. Thus,
where the same questions relating to the same event have been put forward by parties similarly situated as in a previous case
litigated and decided by a competent court, the rule of stare decisis is a bar to any attempt to relitigate the same issue.55 Separation pay is made an alternative relief in lieu of reinstatement in certain circumstances, like: (a) when reinstatement can
no longer be effected in view of the passage of a long period of time or because of the realities of the situation; (b)
reinstatement is inimical to the employer’s interest; (c) reinstatement is no longer feasible; (d) reinstatement does not serve
The doctrine though is not cast in stone for upon a showing that circumstances attendant in a particular case override the
the best interests of the parties involved; (e) the employer is prejudiced by the workers’ continued employment; (f) facts that
great benefits derived by our judicial system from the doctrine of stare decisis, the Court is justified in setting it aside. 56 For the
make execution unjust or inequitable have supervened; or (g) strained relations between the employer and employee.61
Court, as the highest court of the land, may be guided but is not controlled by precedent. Thus, the Court, especially with a
new membership, is not obliged to follow blindly a particular decision that it determines, after re-examination, to call for a
rectification.57 Considering that 15 years had lapsed from the onset of this labor dispute, and in view of strained relations that ensued, in
addition to the reality of replacements already hired by the hospital which had apparently recovered from its huge losses, and
with many of the petitioners either employed elsewhere, already old and sickly, or otherwise incapacitated, separation pay
Although the Bascon case involved the very same illegal strike in MCCHI which led to the termination of herein petitioners, its
without back wages is the appropriate relief. We note that during the pendency of the cases in this Court, some of the
clearly erroneous application of the law insofar only as the award of back wages warrants setting aside the doctrine. Indeed,
petitioners have entered into compromise agreements with MCCHI, all of which were duly approved by this Court. Thus,
the doctrine of stare decisis notwithstanding, the Court has abandoned or overruled precedents whenever it realized that the
excluded from the herein monetary awards are the following petitioners whose compromise agreements have been approved
Court erred in the prior decisions. "Afterall, more important than anything else is that this Court should be right."58
by this Court and judgment having been entered therein: Gloria Arguilles, Romulo Alforque, Gerna Patigdas-Barte, Daylinda
Tigo Merlyn Nodado, Ramon Tagnipis, Bernabe Lumapguid, Romeo Empuerto, Marylen Labra, Milagros Castillo Bernadette
In G & S Transport Corporation v. Infante,59 the Court explained the rationale for its recent rulings deleting back wages Pontillas-Tibay, Constancio Pagador, Nolan Alvin Panal, Edilberto Villa, Roy Malazarte, Felecianita Malazarte and Noel
awarded to the dismissed workers if the strike was found to be illegal. Considering that they did not render work for the Hortelano.
employer during the strike, they are entitled only to reinstatement.
Attorney’s fees
With respect to backwages, the principle of a "fair day’s wage for a fair day’s labor" remains as the basic factor in determining
the award thereof. If there is no work performed by the employee there can be no wage or pay unless, of course, the laborer
The dismissed employees having been compelled to litigate in order to seek redress and protect their rights, they are entitled
was able, willing and ready to work but was illegally locked out, suspended or dismissed or otherwise illegally prevented from
to reasonable attorney’s fees pursuant to Art. 2208 (2) of the Civil Code. In view of the attendant circumstances of this case,
working. While it was found that respondents expressed their intention to report back to work, the latter exception cannot
we hold that attorney’s fees in the amount of P50,000.00 is reasonable and justified. However, the respondents in G.R. No.
apply in this case. In Philippine Marine Officers’ Guild v. Compañia Maritima, as affirmed in Philippine Diamond Hotel and
196156 are not entitled to the same relief since they did not appeal from the CA decision which did not include the award of
Resort v. Manila Diamond Hotel Employees Union, the Court stressed that for this exception to apply, it is required that the
attorney’s fees.
strike be legal, a situation that does not obtain in the case at bar.

WHEREFORE, the petition for review on certiorari in G.R. No. 187861 is DENIED while the petitions in G.R. Nos. 154113, 187778
Under the circumstances, respondents’ reinstatement without backwages suffices for the appropriate relief. If reinstatement is
and 196156 are PARTLY GRANTED. The Decision dated October 17, 2008 of the Court of Appeals in CA-G.R. SP No. 66540 is
no longer possible, given the lapse of considerable time from the occurrence of the strike, the award of separation pay of one
hereby AFFIRMED with MODIFICATIONS in that MCCHI is ordered to pay the petitioners in G.R. Nos. 154113 and 187778,
(1) month salary for each year of service, in lieu of reinstatement, is in order.60(Emphasis supplied.)
except the petitioners who are union officers, separation pay equivalent to one month pay for every year of service, and
reasonable attorney’s fees in the amount ofP50,000.00. The Decision dated November 7, 2008 is likewise AFFIRMED with
The CA decision in CA-G.R. SP No. 66540 ordering the payment of separation pay in lieu of reinstatement without back wages is MODIFICATIONS in that MCCHI is ordered to pay the private respondents in G.R. No. 196156 separation pay equivalent to one
thus in order, to conform to the policy of a fair day’s wage for a fair day’s labor. The amount of separation pay is increased to month pay for every year of service, and that the award of back wages is DELETED.
one month pay for every year of service, consistent with jurisprudence. Accordingly, the decision in CA-G.R. SP No. 84998 is
modified by deleting the award of back wages and granting separation pay in lieu of reinstatement.
 Labor Relation Set VvI * strikes and lockouts* Page 22 of 52

The case is hereby remanded to the Executive Labor Arbiter for the recomputation of separation pay due to each of the The names of the 32 complaining employees are as follows:
petitioners union members in G.R. Nos. 154113, 187778 and 196156 except those who have executed compromise
agreements approved by this Court.No pronouncement as to costs.SO ORDERED.
1. Felino Agustin
2. Ruperto Mariano II
Republic of the Philippines 3. Eduardo Brizuela
SUPREME COURT 4. Otilio Rabino
Manila 5. Arnold Rodriguez
SPECIAL THIRD DIVISION 6. Froilan Madamba
G.R. No. 160138 January 16, 2013 7. Ferdinand Flores
AUTOMOTIVE ENGINE REBUILDERS, INC. (AER), ANTONIO T. INDUCIL, LOURDES T. INDUCIL, JOCELYN T. INDUCIL and MA. 8. Jonathan Taborda
CONCEPCION I. DONATO, Petitioners, 9. Rodolfo Mainit, Jr.
vs. 10. Danilo Quiboy
PROGRESIBONG UNYON NG MGA MANGGAGAWA SA AER, ARNOLD VILLOTA, FELINO E. AGUSTIN, RUPERTO M. MARIANO II, 11. Christopher Nolasco
EDUARDO S. BRIZUELA, ARNOLD S. RODRIGUEZ, RODOLFO MAINIT, JR., FROILAN B. MADAMBA, DANILO D. QUIBOY, 12. Roger Belatcha
CHRISTOPHER R. NOLASCO, ROGER V. BELATCHA, CLEOFAS B. DELA BUENA, JR., HERMINIO P. PAPA, WILLIAM A. RITUAL, 13. Claud Moncel
ROBERTO CALDEO, RAFAEL GACAD, JAMES C. CAAMPUED, ESPERIDION V. LOPEZ, JR., FRISCO M. LORENZO, JR., CRISANTO 14. Cleofas dela Buena, Jr.
LUMBAO, JR., and RENATO SARABUNO, Respondents. 15. Edwin Mendoza
x-----------------------x 16. Herminio Papa
G.R. No. 160192 17. Oscar Macaranas
PROGRESIBONG UNYON NG MGA MANGGAGAWA SA AER, ARNOLD VILLOTA, FELINO E. AGUSTIN, RUPERTO M. MARIANO II, 18. William Ritual
EDUARDO S. BRIZUELA, ARNOLD S. RODRIGUEZ, RODOLFO MAINIT, JR., FROILAN B. MADAMBA, DANILO D. QUIBOY, 19. Roberto Caldeo
CHRISTOPHER R. NOLASCO, ROGER V. BELATCHA, CLEOFAS B. DELA BUENA, JR., HERMINIO P. PAPA, WILLIAM A. RITUAL, 20. Rafael Gacad
ROBERTO CALDEO, RAFAEL GACAD, JAMES C. CAAMPUED, ESPERIDION V. LOPEZ, JR., FRISCO M. LORENZO, JR., CRISANTO 21. James Caampued
LUMBAO, JR., and RENA TO SARABUNO, Petitioners, 22. Esperidion Lopez, Jr.
vs. 23. Frisco Lorenzo, Jr.
AUTOMOTIVE ENGINEREBUILDERS, INC., and ANTONIO T. INDUCIL, Respondents. 24. Bernardino Acosta, Jr.
RESOLUTION 25. Benson Pingol
MENDOZA, J.: 26. Tammy Punsalan
For resolution is the Motion for Partial Reconsideration filed by Progresibong Unyon Ng Mga Manggagawa Sa AER (Unyon) 27. Edward Ferrancol
which questioned the Court’s July 13, 2011 Decision insofar as it failed to award backwages to fourteen (14) of its members. 28. Crisanto Lumbao, Jr.
The decretal portion of the decision reads: 29. Arnold Villota
30. Menching Mariano, Jr.
31. Carlos Carolino
WHEREFORE, the petitions are DENIED. Accordingly, the complaining employees should be reinstated without backwages. If
32. Renato Sarabuno
reinstatement is no longer feasible, the concerned employees should be given separation pay up to the date set for their
return in lieu of reinstatement.1
Out of the 32, six (6) resigned and signed waivers and quitclaims, namely:
1. Oscar Macaranas
In arriving at said determination, the Court found out both parties were at fault or in pari delicto and must bear the 2. Bernardino Acosta
consequences of their own wrongdoing.2 Thus, it decreed that the striking employees must be restored to their respective 3. Ferdinand Flores
positions prior to the illegal strike and illegal lockout. 4. Benson Pingol
5. Otillo Rabino
Records disclose that this labor controversy started when both parties filed charges against each other, blaming the other 6. Jonathan Taborda
party for violating labor laws. Thirty-two (32) employees filed and signed a complaint,3 dated February 18, 1999, against
Automotive Engine Rebuilders, Inc. (AER). The complaint prayed that AER be declared guilty of Unfair Labor Practices, Illegal On the other hand, the earlier complaint5 filed by AER against Unyon and eighteen (18) of its members for illegal concerted
Dismissal, Illegal Suspension, and Run-away shop; that the complainants be reinstated; and that they be paid "full backwages activities prayed that, after notice and hearing, judgment be rendered as follows:
and without loss of seniority rights and privileges, payment of wages during suspension, plus moral and exemplary damages 1. Finding respondents guilty of unfair labor practice and illegal concerted activity;
and attorney’s fees."4
 Labor Relation Set VvI * strikes and lockouts* Page 23 of 52

2. Finding respondents guilty of abandonment of work, serious misconduct, gross disrespect, commission of felonies
against the complainant and their respective officers, threats, coercion and intimidation;
3. Penalizing complainants with dismissal and/or termination of employment; and
4. Adjudging respondents to be jointly and solidarily liable to complainant for moral damages in the sum
ofP500,000.00, exemplary damages in the sum of P500,000.00 and attorney’s fees and costs.
April 19, 2002, Unyon filed a motion for reconsideration10 insisting, among others, that AER was guilty of unfair labor practice,
illegal suspension and illegal dismissal. Unyon also argued that since AER charged only 18 of the 32 employees with illegal
strike, the employees who were not included in the said charge should have been admitted back to work by AER. Unyon also
claimed that there was no allegation that these employees, who were not included in AER’s charge for illegal strike, were
involved in the January 28, 1999 incident.11

The names of the 18 workers charged with illegal strike by AER are as follows:
After the denial of their motion for reconsideration, Unyon and the concerned employees filed a petition12 before the Court of
1. Felino Agustin
Appeals (CA). Unyon reiterated its argument that AER should admit back to work those excluded from its list of 18 employees
2. Eduardo Brizuela
charged with illegal strike.13
3. Otilio Rabino
4. Ferdinand Flores
5. Jonathan Taborda On June 27, 2003, the CA rendered a decision,14 the dispositive portion of which reads, as follows:
6. Rodolfo Mainit, Jr.
7. Christopher Nolasco WHEREFORE, premises considered, the petition is GRANTED. Respondents are hereby directed to reinstate the petitioners
8. Claud Moncel effective immediately but without backwages, except those who were tested positive for illegal drugs and have failed to
9. Cleofas dela Buena submit their respective medical certificates.
10. Herminio Papa
11. Oscar Macaranas
12. William Ritual On October 1, 2003, ruling on the motion for partial reconsideration filed by Unyon, the CA rendered the assailed Amended
13. Rafael Gacad Decision,15 ordering the immediate reinstatement of all the suspended employees without backwages. Thus,
14. James Caampued
15. Benson Pingol WHEREFORE, the partial motion for reconsideration is GRANTED insofar as the reinstatement of the suspended employees is
16. Frisco Lorenzo, Jr. concerned. This Court’s decision dated June 27, 2003 is hereby MODIFIED. Private respondents are hereby directed to reinstate
17. Bernardino Acosta, Jr. all petitioners immediately without backwages.
18. Esperidion Lopez, Jr.
Unsatisfied, both parties filed the present consolidated petitions. Unyon argued that the CA erred in not awarding backwages
AER likewise suspended seven (7) union members who tested positive for illegal drugs, namely: to the suspended employees who were ordered reinstated. AER, on the other hand, argued that the CA erred in ordering the
reinstatement of the suspended employees.
1. Froilan Madamba
2. Arnold Rodriguez On July 13, 2011, this Court rendered a decision,16 the dispositive portion of which reads, as follows:
3. Roberto Caldeo
4. Roger Bilatcha
5. Ruperto Mariano WHEREFORE, the petitions are DENIED. Accordingly, the complaining employees should be reinstated without backwages. If
6. Edwin Fabian reinstatement is no longer feasible, the concerned employees should be given separation pay up to the date set for their
7. Nazario Madala return in lieu of reinstatement.

Out of the seven (7) suspended employees, only Edwin Fabian and Nazario Madala were allowed by AER to report back to Unyon filed the subject Motion for Partial Reconsideration17 questioning the Court’s July 13, 2011 Decision insofar as it failed
work. The other five (5) suspended employees were not admitted by AER without first submitting the required medical to award backwages to fourteen (14) of its members.
certificate attesting to their fitness to work.
Unyon argues that backwages should have been awarded to the 14 employees who were excluded from the complaint filed by
On August 9, 2001, after the parties submitted their respective position papers, 6 the Labor Arbiter (LA) rendered a decision7 in AER and that the latter should have reinstated them immediately because they did not have any case at all.
favor of Unyon by directing AER to reinstate the concerned employees but without backwages effective October 16, 2001.
Both parties filed their respective appeals8 with the National Labor Relations Commission (NLRC).
AER was directed to file its comment. Its Comment,18 however, failed to address the issue except to say that the motion for
partial reconsideration was pro-forma.
On March 5, 2002, the NLRC issued its Resolution9 modifying the LA decision by setting aside the order of reinstatement as it
ruled out illegal dismissal. The NLRC likewise ruled that the concerned employees had no valid basis in conducting a strike. On
 Labor Relation Set VvI * strikes and lockouts* Page 24 of 52

After going over the records again, the Court holds that only nine (9) of the fourteen (14) excluded employees deserve to be 7. Crisanto Lumbao, Jr.
reinstated immediately with backwages. 8. Arnold Villota
9. Renato Sarabuno
Records disclose that thirty-two (32) employees filed a complaint for illegal suspension and unfair labor practice against AER.
These excluded nine (9) workers, who signed their names in their petition before the CA, deserve to be reinstated immediately
Out of these 32 workers, only eighteen (18) of them were charged by AER with illegal strike leaving fourteen (14) of them
and gra:1ted backwages. It is basic in jurisprudence that illegally dismissed workers are entitled to reinstatement with back
excluded from its complaint. The names of these 14 employees are as follows:
wages pi us interest at the legal rate.21

1. Ruperto Mariano II
As stated in the Amended Decision of the CA, which the Court effectively affirmed after denying the petition of both parties,
2. Arnold Rodriguez
the reinstatement shall be "without prejudice to the right of private respondent AER to subject them for further medical check-
3. Froilan Madamba
up to determine if subject petitioners are drug dependents."22
4. Danilo Quiboy
5. Roger Belatcha
6. Edwin Mendoza WHEREFORE, the Motion for Pa1iial Reconsideration filed by Progresibong Unyon Ng Mga Manggagawa Sa AER is GRANTED
7. Roberto Caldeo only insofar as the nine (9) employees are concerned, namely: Ruperto Mariano II, Arnold Rodriguez, Froilan Madamba, Danilo
8. Tammy Punsalan Quiboy, Roger Belateha, Roberto Caldeo, Crisanto Lumbao, Jr., Arnold Villota, and Renato Sarabuno.1âwphi1
9. Edward Ferrancol
10. Crisanto Lumbao, Jr.
Accordingly, the July 13, 2011 Decision is hereby MODIFIED in that the aforementioned nine (9) workers are entitled to be
11. Arnold Villota
reinstated and granted backwages with interest at the rate of six percent (6%) per annum which shall be increased to twelve
12. Menching Mariano, Jr.
percent (12%) after the finality of this judgment.SO ORDERED.
13. Carlos Carolino
14. Renato Sarabuno
Technically, as no charges for illegal strike were filed against these 14 employees, they cannot be among those found guilty of Republic of the Philippines
illegal strike. They cannot be considered in pari delicto. They should be reinstated and given their backwages. SUPREME COURT
Out of these 14 employees, however, five (5) failed to write their names and affix their signatures in the Membership Manila
Resolution19 attached to the petition filed before the CA, authorizing Union President Arnold Villota to represent them. It must SPECIAL FIRST DIVISION
be noted that Arnold Villota signed as the Affiant in the Verification and Certification by virtue of the Membership G.R. No. 196156 January 15, 2014
Resolution.20 The names of these 5 employees are: VISAYAS COMMUNITY MEDICAL CENTER (VCMC), Formerly known as METRO CEBU COMMUNITY HOSPITAL
(MCCH), Petitioner,
1. Edwin Mendoza vs.
2. Tammy Punzalan ERMA YBALLE, NELIA ANGEL, ELEUTERIA CORTEZ and EVELYN ONG, Respondents.
3. Edward Ferrancol DECISION
4. Menching Mariano, Jr. VILLARAMA, JR., J.:
5. Carlos Carolina
The present petition was included in the four consolidated cases previously decided by this Court.1 However, its reinstatement
Because of their failure to affix their names and signatures in the Membership Resolution, Edwin Mendoza, Tammy Punzalan, and separate disposition became necessary due to oversight in the issuance of the order of consolidation.
Edward Ferrancol, Menching Mariano, Jr. and Carlos Carolina cannot be granted the relief that Unyon wanted for them in its
Motion for Partial Reconsideration. The Facts

Only the following nine (9) employees who signed their names in the petition can be granted the relief prayed for therein, Respondents were hired as staff nurses (Ong and Angel) and midwives (Yballe and Cortez) by petitioner Visayas Community
namely: Medical Center (VCMC), formerly the Metro Cebu Community Hospital, Inc. (MCCHI). MCCHI is a non-stock, non-profit
1. Ruperto Mariano II corporation which operates the Metro Cebu Community Hospital (MCCH), a tertiary medical institution owned by the United
2. Arnold Rodriguez Church of Christ in the Philippines (UCCP).
3. Froilan Madamba
4. Danilo Quiboy
5. Roger Belatcha Considering the similar factual setting, we quote the relevant portions of the narration of facts in our Decision dated December
6. Roberto Caldeo 7, 2011 in Abaria v. NLRC2:

The National Federation of Labor (NFL) is the exclusive bargaining representative of the rank-and-file employees of MCCHI.
Under the 1987 and 1991 Collective Bargaining Agreements (CBAs), the signatories were Ciriaco B. Pongasi, Sr. for MCCHI, and
Atty. Armando M. Alforque (NFL Legal Counsel) and Paterno A. Lumapguid as President of NFL-MCCH Chapter. In the CBA
effective from January 1994 until December 31, 1995, the signatories were Sheila E. Buot as Board of Trustees Chairman, Rev.
Iyoy as MCCH Administrator and Atty. Fernando Yu as Legal Counsel of NFL, while Perla Nava, President of Nagkahiusang
Mamumuo sa MCCH (NAMA-MCCH-NFL) signed the Proof of Posting.
On December 6, 1995, Nava wrote Rev. Iyoy expressing the union’s desire to renew the CBA, attaching to her letter a
statement of proposals signed/endorsed by 153 union members. Nava subsequently requested that the following employees
be allowed to avail of one-day union leave with pay on December 19, 1995: Celia Sabas, Jesusa Gerona, Albina Bañez, Eddie
Villa, Roy Malazarte, Ernesto Canen, Jr., Guillerma Remocaldo, Catalina Alsado, Evelyn Ong, Melodia Paulin, Sofia Bautista,
Hannah Bongcaras, Ester Villarin, Iluminada Wenceslao and Perla Nava. However, MCCHI returned the CBA proposal for Nava
to secure first the endorsement of the legal counsel of NFL as the official bargaining representative of MCCHI employees.
Meanwhile, Atty. Alforque informed MCCHI that the proposed CBA submitted by Nava was never referred to NFL and that NFL
has not authorized any other legal counsel or any person for collective bargaining negotiations. By January 1996, the collection
of union fees (check-off) was temporarily suspended by MCCHI in view of the existing conflict between the federation and its
local affiliate. Thereafter, MCCHI attempted to take over the room being used as union office but was prevented to do so by
Nava and her group who protested these actions and insisted that management directly negotiate with them for a new CBA.
MCCHI referred the matter to Atty. Alforque, NFL’s Regional Director, and advised Nava that their group is not recognized by
NFL.
In his letter dated February 24, 1996 addressed to Nava, Ernesto Canen, Jr., Jesusa Gerona, Hannah Bongcaras, Emma
Remocaldo, Catalina Alsado and Albina Bañez, Atty. Alforque suspended their union membership for serious violation of the
Constitution and By-Laws. Said letter states:
xxxx
On February 26, 1996, upon the request of Atty. Alforque, MCCHI granted one-day union leave with pay for 12 union members.
The next day, several union members led by Nava and her group launched a series of mass actions such as wearing black and
red armbands/headbands, marching around the hospital premises and putting up placards, posters and streamers. Atty.
Alforque immediately disowned the concerted activities being carried out by union members which are not sanctioned by NFL.
MCCHI directed the union officers led by Nava to submit within 48 hours a written explanation why they should not be
terminated for having engaged in illegal concerted activities amounting to strike, and placed them under immediate preventive
suspension. Responding to this directive, Nava and her group denied there was a temporary stoppage of work, explaining that
employees wore their armbands only as a sign of protest and reiterating their demand for MCCHI to comply with its duty to
bargain collectively. Rev. Iyoy, having been informed that Nava and her group have also been suspended by NFL, directed said
officers to appear before his office for investigation in connection with the illegal strike wherein they reportedly uttered
slanderous and scurrilous words against the officers of the hospital, threatening other workers and forcing them to join the
strike. Said union officers, however, invoked the grievance procedure provided in the CBA to settle the dispute between
management and the union.
On March 13 and 19, 1996, the Department of Labor and Employment (DOLE) Regional Office No. 7 issued certifications stating
that there is nothing in their records which shows that NAMA-MCCH- NFL is a registered labor organization, and that said union
submitted only a copy of its Charter Certificate on January 31, 1995. MCCHI then sent individual notices to all union members
Labor Relation Set VvI * strikes and lockouts* Page 25 of 52
asking them to submit within 72 hours a written explanation why they should not be terminated for having supported the
illegal concerted activities of NAMA-MCCH-NFL which has no legal personality as per DOLE records. In their collective
response/statement dated March 18, 1996, it was explained that the picketing employees wore armbands to protest MCCHI’s
refusal to bargain; it was also contended that MCCHI cannot question the legal personality of the union which had actively
assisted in CBA negotiations and implementation.
On March 13, 1996, NAMA-MCCH-NFL filed a Notice of Strike but the same was deemed not filed for want of legal personality
on the part of the filer. The National Conciliation and Mediation Board (NCMB) Region 7 office likewise denied their motion for
reconsideration on March 25, 1996. Despite such rebuff, Nava and her group still conducted a strike vote on April 2, 1996
during which an overwhelming majority of union members approved the strike.
Meanwhile, the scheduled investigations did not push through because the striking union members insisted on attending the
same only as a group. MCCHI again sent notices informing them that their refusal to submit to investigation is deemed a waiver
of their right to explain their side and management shall proceed to impose proper disciplinary action under the
circumstances. On March 30, 1996, MCCHI sent termination letters to union leaders and other members who participated in
the strike and picketing activities. On April 8, 1996, it also issued a cease-and-desist order to the rest of the striking employees
stressing that the wildcat concerted activities spearheaded by the Nava group is illegal without a valid Notice of Strike and
warning them that non-compliance will compel management to impose disciplinary actions against them. For their continued
picketing activities despite the said warning, more than 100 striking employees were dismissed effective April 12 and 19, 1996.
Unfazed, the striking union members held more mass actions. The means of ingress to and egress from the hospital were
blocked so that vehicles carrying patients and employees were barred from entering the premises. Placards were placed at the
hospital’s entrance gate stating:
"Please proceed to another hospital" and "we are on protest." Employees and patients reported acts of intimidation and
harassment perpetrated by union leaders and members. With the intensified atmosphere of violence and animosity within the
hospital premises as a result of continued protest activities by union members, MCCHI suffered heavy losses due to low patient
admission rates. The hospital’s suppliers also refused to make further deliveries on credit.
With the volatile situation adversely affecting hospital operations and the condition of confined patients, MCCHI filed a
petition for injunction in the NLRC (Cebu City) on July 9, 1996 (Injunction Case No. V-0006-96). A temporary restraining order
(TRO) was issued on July 16, 1996. MCCHI presented 12 witnesses (hospital employees and patients), including a security guard
who was stabbed by an identified sympathizer while in the company of Nava’s group. MCCHI’s petition was granted and a
permanent injunction was issued on September 18, 1996 enjoining the Nava group from committing illegal acts mentioned in
Art. 264 of the Labor Code.
On August 27, 1996, the City Government of Cebu ordered the demolition of the structures and obstructions put up by the
picketing employees of MCCHI along the sidewalk, having determined the same as a public nuisance or nuisance per se.
Thereafter, several complaints for illegal dismissal and unfair labor practice were filed by the terminated employees against
MCCHI, Rev. Iyoy, UCCP and members of the Board of Trustees of MCCHI.3
On August 4, 1999, Executive Labor Arbiter Reynoso A. Belarmino rendered his Decision4 in the consolidated cases which
included NLRC Case No. RAB-VII-02-0309-98 filed by herein respondents. The dispositive portion of said decision reads:

WHEREFORE, premises considered, judgment is hereby rendered dismissing the claim of unfair labor practice and illegal
dismissal and declaring the termination of the following as an offshoot of the illegal strike: Perla Nava, Catalina Alsado, Albina
Bañez, Hannah Bongcaras, Ernesto Canen, Jesusa Gerona and Guillerma Remocaldo but directing the respondent Metro Cebu
Community Hospital to pay the herein complainants separation pay in the sum of THREE MILLION EIGHTY FIVE THOUSAND
EIGHT HUNDRED NINETY SEVEN and [40]/100 (P3,085,897.40) detailed as follows:
xxxx
79. Erma Yballe
6/11/83 – 4/19/96: 12 years, 10 mos. (13 years)
P5,000.00 ÷ 2 x 13 = 32,500.00
80. Eleuteria Cortez
12/13/[74]5 – 4/12/96: 21 years, 4 mos. (21 years)
P5,000.00 ÷ 2 x 21 = 52,500.00
81. Nelia Angel
6/01/88 – 4/12/96: 7 years, 10 mos. (8 years)
P5,000.00 ÷ 2 x 8 = 20,000.00
82. Evelyn Ong
7/07/86 – 4/12/96: 9 years, 9 mos. (10 years)
P5,000.00 ÷ 2 x 10 = 25,000.00
xxxx
SO ORDERED.6
Executive Labor Arbiter Belarmino ruled that MCCHI and its administrators were not guilty of unfair labor practice. He likewise
upheld the termination of complainants union officers who conducted the illegal strike. The rest of the complainants were
found to have been illegally dismissed, thus:
We, however, see that the NAMA members deserve a different treatment. As the Court said, members of a union cannot be
held responsible for an illegal strike on the sole basis of such membership, or even on an account of their affirmative vote
authorizing the same. They become liable only if they actually participated therein (ESSO Phil., Inc. vs. Malayang Manggagawa
sa Esso 75 SCRA 73). But the illegality of their participation is placed in a state of doubt they, being merely followers. Under the
circumstances, We resort to Art. 4 of the Labor Code favoring the workingman in case of doubt in the interpretation and
implementation of laws.
Obviously swayed by the actuations of their leaders, herein complainants ought to be reinstated as a matter of policy but
without backwages for they cannot be compensated having skipped work during the illegal strike (National Federation of Sugar
Workers vs. Overseas et al. 114 SCRA 354). But with their positions already taken over by their replacements and with strained
relations between the parties having taken place, We deem it fair that complainants except for the seven officers, should be
paid separation pay of one-half (1/2) month for every year of service by the respondent hospital.7
Respondents and their co-complainants filed their respective appeals before the National Labor Relations Commission (NLRC)
Cebu City. On February 15, 2001, respondents and MCCHI jointly moved to defer resolution of their appeal (NLRC Case No. V-
001042-99) in view of a possible compromise. Consequently, in its Decision8dated March 14, 2001, the NLRC’s Fourth Division
(Cebu City) resolved only the appeals filed by respondents’ co-complainants. The dispositive portion of said decision reads:
Labor Relation Set VvI * strikes and lockouts* Page 26 of 52
WHEREFORE, premises considered, the decision of the Executive Labor Arbiter dismissing the complaint for unfair labor
practice and illegal dismissal is AFFIRMED with MODIFICATIONS declaring the dismissal of all the complainants in RAB Case No.
07-02-0394-98 and RAB Case No. 07-03-0596-98 valid and legal. Necessarily, the award of separation pay and attorney’s fees
are hereby Deleted.
Resolution on RAB Case No. 07-02-0309-98 is hereby Deferred upon Joint Motion of the parties.SO ORDERED.9
The NLRC denied the motion for reconsideration of the above decision under its Resolution10 dated July 2, 2001.
Having failed to reach a settlement, respondents’ counsel filed a motion to resolve their appeal on January 2, 2003. Thus, on
March 12, 2003, the NLRC-Cebu City Fourth Division rendered its Decision,11 as follows:
WHEREFORE, premises considered, the decision of the Executive Labor Arbiter dismissing the complaint for unfair labor
practice and illegal dismissal is AFFIRMED with MODIFICATIONS declaring all the complainants to have been validly dismissed.
Necessarily, the award of separation pay and attorney’s fees are hereby Deleted.SO ORDERED.12
In deleting the award of separation pay and attorney’s fees, the NLRC emphasized that respondents and their co-complainants
are guilty of insubordination, having persisted in their illegal concerted activities even after MCCHI had sent them individual
notices that the strike was illegal as it was filed by NAMA-MCCH-NFL which is not a legitimate labor organization. It held that
under the circumstances where the striking employees harassed, threatened and prevented non-striking employees and
doctors from entering hospital premises, blocked vehicles carrying patients to the hospital premises and caused anxiety to
recuperating patients by displaying placards along the corridors of the hospital, and the resulting decrease in hospital
admission, refusal of suppliers to make further deliveries due to fears of violence erupting as a result of picketing, and
diminished income due to low admission rates, it would be unfair to saddle MCCHI with the burden of paying separation pay to
complainants who were validly dismissed. Respondents’ motion for reconsideration was denied by the NLRC under its
Resolution13 dated April 13, 2004.
Meanwhile, the petition for certiorari filed by respondents’ co-complainants in the Court of Appeals (CA) Cebu Station (CA-G.R.
SP No. 66540) was initially dismissed by the CA’s Eighth Division on the ground that out of 88 petitioners only 47 have signed
the certification against forum shopping. On motion for reconsideration filed by said petitioners, the petition was reinstated
but only with respect to the 47 signatories. Said ruling was challenged by complainants before this Court via a petition for
review on certiorari, docketed as G.R. No. 154113 (Abaria, et al. v. NLRC, et al.).14
On October 17, 2008, the CA dismissed the petition in CA-G.R. SP No. 66540, as follows:
WHEREFORE, premises considered, judgment is hereby rendered AFFIRMING the Decision of the National Labor Relations
Commission (NLRC) – Fourth Division dated March 14, 2001 in NLRC Case No. V-001042-99, WITH MODIFICATIONS to the effect
that (1) the petitioners, except the union officers, shall be awarded separation pay equivalent to one-half (1/2) month pay for
every year of service, and (2) petitioner Cecilia Sabas shall be awarded overtime pay amounting to sixty-three (63) hours.SO
ORDERED.15
The motion for reconsideration and motion for partial reconsideration respectively filed by the complainants and MCCHI in CA-
G.R. SP No. 66540 were likewise denied by the CA.16 Both parties elevated the case to this Court in separate petitions: G.R. No.

187778 (Perla Nava, et al. v. NLRC, et al.) and G.R. No. 187861 (Metro Cebu Community Hospital v. Perla Nava, et al.). Herein
respondents also filed in the CA a petition for certiorari assailing the March 12, 2003 Decision and April 13, 2004 Resolution of
the NLRC, docketed as CA-G.R. SP No. 84998 (Cebu City). By Decision17 dated November 7, 2008, the CA granted their petition,
as follows:
WHEREFORE, the challenged Decision of public respondent dated March 12, 2003 and its Resolution dated April 13, 2004 are
herebyREVERSED AND SET ASIDE. Private respondent Metro Cebu Community Hospital is ordered to reinstate petitioners Erma
Yballe, Eleuteria Cortes, Nelia Angel and Evelyn Ong without loss of seniority rights and other privileges; to pay them their full
backwages inclusive of their allowances and other benefits computed from the time of their dismissal up to the time of their
actual reinstatement.No pronouncement as to costs.SO ORDERED.18
Petitioner filed a motion for reconsideration which the CA denied in its February 22, 2011 Resolution.19
The Case
The present petition (G.R. No. 196156) was filed on April 27, 2011. Records showed that as early as August 3, 2009, G.R. Nos.
187861 and 187778 were consolidated with G.R. No. 154113 pending with the Third Division.20As to the present petition, it was
initially denied under the June 8, 2011 Resolution21 issued by the Second Division for failure to show any reversible error
committed by the CA. Petitioner filed a motion for reconsideration to which respondents filed an opposition. Said motion for
reconsideration of the earlier dismissal (June 8, 2011) remained unresolved by the Second Division which, on June 29, 2011,
issued a resolution ordering the transfer of the present case to the Third Division.22
It is further recalled that on June 23, 2011, petitioner moved to consolidate the present case with G.R. Nos. 154113, 187861
and 187778 which was opposed by respondents. Under Resolution dated August 1, 2011, the Third Division denied the motion
for consolidation, citing the earlier dismissal of the petition on June 8, 2011. 23However, on motion for reconsideration filed by
petitioner, said resolution was set aside on October 19, 2011 and the present case was ordered consolidated with G.R. Nos.
154113, 187778 and 187861 and transferred to the First Division where the latter cases are pending.24
On December 7, 2011, the Decision25 in the consolidated cases (G.R. Nos. 154113, 187778, 187861 and 196156) was rendered,
the dispositive portion of which states:
WHEREFORE, the petition for review on certiorari in G.R. No. 187861 is DENIED while the petitions in G.R. Nos. 154113, 187778
and 196156 are PARTLY GRANTED. The Decision dated October 17, 2008 of the Court of Appeals in CA-G.R. SP No. 66540 is
hereby AFFIRMED with MODIFICATIONS in that MCCHI is ordered to pay the petitioners in G.R. Nos. 154113 and 187778,
except the petitioners who are union officers, separation pay equivalent to one month pay for every year of service, and
reasonable attorney’s fees in the amount ofP50,000.00. The Decision dated November 7, 2008 is likewise AFFIRMED with
MODIFICATIONS in that MCCHI is ordered to pay the private respondents in G.R. No. 196156 separation pay equivalent to one
month pay for every year of service, and that the award of back wages is DELETED.
The case is hereby remanded to the Executive Labor Arbiter for the recomputation of separation pay due to each of the
petitioners union members in G.R. Nos. 154113, 187778 and 196156 except those who have executed compromise
agreements approved by this Court.No pronouncement as to costs.SO ORDERED.26
Labor Relation Set VvI * strikes and lockouts* Page 27 of 52
On February 7, 2012, respondents filed a Motion for Reconsideration with Motion for Severance and Remand27asserting that
they were denied due process as they had no opportunity to file a comment on the petition prior to the rendition of the
Decision dated December 7, 2011. They also point out that the issues in the present case are different from those raised in the
petitions filed by their co-complainants.
On June 18, 2012, this Court issued a Resolution (1) reinstating the petition and requiring the respondents to file their
comment on the petition; and (2) denying the motion for remand to the Second Division. 28 Respondents thus filed their
Comment, to which petitioner filed its Reply. Thereafter, the parties submitted their respective memoranda.
Issues
In their Memorandum, respondents submit that since the Decision dated December 7, 2011 in the consolidated cases of Abaria
v. NLRC have already declared the dismissal of complainants union members as illegal but awarded separation pay and
reasonable attorney’s fees, the remaining issue to be resolved in this case is whether respondents are entitled to back wages
and damages.
Petitioner, however, further assail the CA in (a) allowing respondents to change their theory on appeal, (b) finding that
respondents did not commit illegal acts during the strike and (c) increasing the award of separation pay to one month pay for
every year of service as held in the December 7, 2011 Decision in view of the damages suffered by petitioner.
Respondents’ Argument
Respondents maintain that there was no iota of evidence presented by petitioner that they took part in the illegal strike
conducted by the Nava group or committed illegal acts like the blocking of ingress and egress in the hospital premises. They
claim that they were never involved in work stoppage but instead were locked out by petitioner as they were unable to resume
work because hospital security personnel prevented them from entering the hospital upon petitioner’s instructions.
Claiming that they have consistently manifested their non- participation in the illegal strike before the regional arbitration
branch, NLRC and the CA, respondents argue that there is absolutely no reason to delete the awards of back wages and
separation pay in lieu of reinstatement.
Petitioner’s Argument
Petitioner contends that respondents have surreptitiously changed their position from admitting in their pleadings before the
NLRC their participation in the illegal strike to that of mere wearing of arm bands and alleged non-receipt of the notices in their
appeal before the CA. They stress the established facts on record that: (1) respondents signed the March 18, 1996 collective
reply of the union officers and members to the notices sent by petitioner regarding their illegal concerted activities, thus
proving that they received the said notices; (2) acknowledged Perla Nava as their union leader which belies respondents’
belated attempt to distance themselves from the Nava group who led the illegal strike; and (3) respondents did not, in their
motion for reconsideration of the NLRC Decision dated March 12, 2003, make any denial of their participation in the illegal
strike but even justified their resort thereto due to the prevailing labor dispute.
 Labor Relation Set VvI * strikes and lockouts* Page 28 of 52

With the Decision in the consolidated cases (Abaria v. NLRC) having already upheld the consistent rule that dismissed and making boisterous and unpleasant remarks. They deny any participation in the illegal strike and assert that no evidence of
employees who participated in an illegal strike are not entitled to back wages, petitioner prays that the previous rulings in their actual participation in the strike was shown by petitioner.
Philippine Diamond Hotel and Resort, Inc. (Manila Diamond Hotel) v. Manila Diamond Hotel Employees Union,29 G & S
Transport Corporation v. Infante,30 Philippine Marine Officers’ Guild v. Compañia Maritima, et al.,31 and Escario v. National
We are not persuaded by respondents’ attempt to dissociate themselves from the Nava group who led the illegal strike. In
Labor Relations Commission (Third Division)32 be likewise applied in this case.
their motion for reconsideration filed before the NLRC, respondents no longer denied having participated in the strike but
simply argued that no termination of employment in connection with the strike "staged by complainants" cannot be legally
Our Ruling sustained because MCCHI "did not file a complaint or petition to declare the strike of complainants illegal or declare that illegal
acts were committed in the conduct of the strike." Respondents further assailed the NLRC’s finding that they were guilty of
insubordination since "the proximate cause of the acts of complainants was the prevailing labor dispute and the consequent
The petition is partly meritorious.
resort by complainants of [sic] a strike action."36 When the case was elevated to the CA, respondents shifted course and again
insisted that they did not participate in the strike nor receive the March 15, 1996 individual notices sent by petitioner to the
Paragraph 3, Article 264(a) of the Labor Code provides that ". . .any union officer who knowingly participates in an illegal strike striking employees.
and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to
have lost his employment status . . ." In the Decision dated December 7, 2011, we declared as invalid the dismissal of MCCH
Respondents’ inconsistent posture cannot be sanctioned. While there was indeed no evidence of any illegal act committed by
employees who participated in the illegal strike conducted by NAMA-MCCH-NFL which is not a legitimate labor organization.
respondents during the strike, the Labor Arbiter and NLRC were one in finding that respondents actively supported the
Since there was no showing that the complainants committed any illegal act during the strike, they may not be deemed to have
concerted protest activities, signed the collective reply of union members manifesting that they launched the mass actions to
lost their employment status by their mere participation in the illegal strike. On the other hand, the union leaders (Nava group)
protest management’s refusal to negotiate a new CBA, refused to appear in the investigations scheduled by petitioner because
who conducted the illegal strike despite knowledge that NAMA-MCCH-NFL is not a duly registered labor union were declared
it was the union’s stand that they would only attend these investigations as a group, and failed to heed petitioner’s final
to have been validly terminated by petitioner.
directive for them to desist from further taking part in the illegal strike. The CA, on the other hand, found that respondents’
participation in the strike was limited to the wearing of armbands. Since an ordinary striking worker cannot be dismissed for
We stress that the law makes a distinction between union members and union officers. A worker merely participating in an such mere participation in the illegal strike, the CA correctly ruled that respondents were illegally dismissed. However, the CA
illegal strike may not be terminated from employment. It is only when he commits illegal acts during a strike that he may be erred in awarding respondents full back wages and ordering their reinstatement despite the prevailing circumstances.
declared to have lost employment status.33 In contrast, a union officer may be terminated from employment for knowingly
participating in an illegal strike or participates in the commission of illegal acts during a strike. The law grants the employer the
As a general rule, back wages are granted to indemnify a dismissed employee for his loss of earnings during the whole period
option of declaring a union officer who participated in an illegal strike as having lost his employment. It possesses the right and
that he is out of his job. Considering that an illegally dismissed employee is not deemed to have left his employment, he is
prerogative to terminate the union officers from service.34
entitled to all the rights and privileges that accrue to him from the employment. 37 The grant of back wages to him is in
furtherance and effectuation of the public objectives of the Labor Code, and is in the nature of a command to the employer to
In this case, the NLRC affirmed the finding of the Labor Arbiter that respondents supported and took part in the illegal strike make a public reparation for his illegal dismissal of the employee in violation of the Labor Code.38
and further declared that they were guilty of insubordination. It noted that the striking employees were determined to force
management to negotiate with their union and proceeded with the strike despite knowledge that NAMA-MCCH-NFL is not a
Are respondents then entitled to back wages? This Court, in G & S Transport Corporation v. Infante,39 ruled in the negative:
legitimate labor organization and without regard to the consequences of their acts consisting of displaying placards and
marching noisily inside the hospital premises, and blocking the entry of vehicles and persons.
With respect to backwages, the principle of a "fair day’s wage for a fair day’s labor" remains as the basic factor in determining
the award thereof. If there is no work performed by the employee there can be no wage or pay unless, of course, the laborer
On appeal, the CA reversed the rulings of the Labor Arbiter and NLRC, ordered the reinstatement of respondents and the
was able, willing and ready to work but was illegally locked out, suspended or dismissed or otherwise illegally prevented from
payment of their full back wages. The CA found that respondents’ participation was limited to the wearing of armband and
working. x x x In Philippine Marine Officers’ Guild v. Compañia Maritima, as affirmed in Philippine Diamond Hotel and Resort v.
thus, citing Bascon v. CA,35 declared respondents’ termination as invalid in the absence of any evidence that they committed
Manila Diamond Hotel Employees Union, the Court stressed that for this exception to apply, it is required that the strike be
any illegal act during the strike.
legal, a situation that does not obtain in the case at bar. (Emphasis supplied)

In the Decision dated December 7, 2011, we likewise ruled that the mass termination of complainants was illegal,
The alternative relief for union members who were dismissed for having participated in an illegal strike is the payment of
notwithstanding the illegality of the strike in which they participated. However, since reinstatement was no longer feasible, we
separation pay in lieu of reinstatement under the following circumstances: (a) when reinstatement can no longer be effected in
ordered MCCHI to pay the dismissed employees separation pay equivalent to one month pay for every year of service. The
view of the passage of a long period of time or because of the realities of the situation; (b) reinstatement is inimical to the
claim for back wages was denied, consistent with existing law and jurisprudence. Respondents argue that the CA correctly
employer’s interest; (c) reinstatement is no longer feasible; (d) reinstatement does not serve the best interests of the parties
awarded them back wages because while they "supported the protest action" they were not part of the Nava group who were
involved; (e) the employer is prejudiced by the workers’ continued employment; (f) facts that make execution unjust or
charged with blocking the free ingress and egress of the hospital, threatening and harassing persons entering the premises,
inequitable have supervened; or (g) strained relations between the employer and employee.40

In the Decision dated December 7, 2011, we held that the grant of separation pay to complainants is the appropriate relief
under the circumstances, thus:
Considering that 15 years had lapsed from the onset of this labor dispute, and in view of strained relations that ensued, in
addition to the reality of replacements already hired by the hospital which had apparently recovered from its huge losses, and
with many of the petitioners either employed elsewhere, already old and sickly, or otherwise incapacitated, separation pay
without back wages is the appropriate relief. x x x41
In fine, we sustain the CA in ruling that respondents who are mere union members were illegally dismissed for participating in
the illegal strike conducted by the Nava group. However, we set aside the order for their reinstatement and payment of full
back wages.
WHEREFORE, the petition is PARTLY GRANTED. The Decision dated November 7, 2008 and Resolution dated February 22, 2011
of the Court of Appeals in CA-G.R. SP No. 84998 are hereby AFFIRMED with MODIFICATIONS. In lieu of reinstatement,
petitioner Visayas Community Medical Center formerly known as the Metro Cebu Community Hospital) is ordered to PAY
respondents Erma Yballe, Evelyn Ong, Nelia Angel and Eleuteria Cortez separation pay equivalent to one month pay for every
year of service. The award of back wages to the said respondents is DELETED.
The case is hereby remanded to the Executive Labor Arbiter for the recomputation of separation pay due to each of the
respondents.SO ORDERED.
Republic of the Philippines
SUPREME COURT
Baguio City
G.R. No. 170007 April 7, 2014
TABANGAO SHELL REFINERY EMPLOYEES ASSOCIATION, Petitioner,
vs.
PILIPINAS SHELL PETROLEUM CORPORATION, Respondent.
DECISION
LEONARDO-DE CASTRO, J.:
This an appeal from the Decision1 dated August 8, 2005 of the Court of Appeals in CA-G.R. SP No. 88178 dismissing the petition
for certiorari of the petitioner Tabangao Shell Refinery Employees Association.
The origins of the controversy
In anticipation of the expiration on April 30, 2004 of the 2001-2004 Collective Bargaining Agreement (CBA) between the
petitioner and the respondent Pilipinas Shell Petroleum Corporation, the parties started negotiations for a new CBA. After
several meetings on the ground rules that would govern the negotiations and on political items, the parties started their
discussion on the economic items on July 27, 2004, their 31st meeting. The union proposed a 20o/o annual across-the-board
basic salary increase for the next three years that would be covered by the new CBA. In lieu of the annual salary increases, the
company made a counter-proposal to grant all covered employees a lump sum amount of P80,000.00 yearly for the three-year
period of the new CBA.2
Labor Relation Set VvI * strikes and lockouts* Page 29 of 52
The union requested the company to present its counter-proposal in full detail, similar to the presentation by the union of its
economic proposal. The company explained that the lump sum amount was based on its affordability for the corporation, the
then current salary levels of the members of the union relative to the industry, and the then current total pay and benefits
package of the employees. Not satisfied with the company’s explanation, the union asked for further justification of the lump
sum amount offered by the company. When the company refused to acknowledge any obligation to give further justification,
the union rejected the company’s counter-proposal and maintained its proposal for a 20% annual increase in basic pay for the
next three years.3
On the 39th meeting of the parties on August 24, 2004, the union lowered its proposal to 12% annual across-the-board
increase for the next three years. For its part, the company increased its counter-proposal to a yearly lump sum payment
of P88,000.00 for the next three years. The union requested financial data for the manufacturing class of business in the
Philippines. It also requested justification for the company’s counter-offer. In response, the company stated that financial
measures for Tabangao were available in the refinery scorecard regularly cascaded by the management to the employees. The
company reiterated that its counter-offer is based on its affordability for the company, comparison with the then existing wage
levels of allied industry, and the then existing total pay and benefits package of the employees. The company subsequently
provided the union with a copy of the company’s audited financial statements.4
However, the union remained unconvinced and asked for additional documents to justify the company’s counter-offer. The
company invited the attention of the union to the fact that additional data, such as the refinery performance scorecard, were
available from the refinery’s website and shared network drives. The company also declared that the bases of its counter-offer
were already presented to the union and contained in the minutes of previous meetings. The union thereafter requested for a
copy of the comparison of the salaries of its members and those from allied industries. The company denied the request on the
ground that the requested information was entrusted to the company under a confidential agreement. Alleging failure on the
part of the company to justify its offer, the union manifested that the company was bargaining in bad faith.5 The company, in
turn, expressed its disagreement with the union’s manifestation.6
On the parties’ 41st meeting held on September 2, 2004, the company proposed the declaration of a deadlock and
recommended that the help of a third party be sought. The union replied that they would formally answer the proposal of the
company a day after the signing of the official minutes of the meeting. On that same day, however, the union filed a Notice of
Strike in the National Conciliation and Mediation Board (NCMB), alleging bad faith bargaining on the part of the company. The
NCMB immediately summoned the parties for the mandatory conciliation-mediation proceedings but the parties failed to
reach an amicable settlement.7
Assumption of Jurisdiction by the Secretary of Labor and Employment
On September 16, 2004, during the cooling off period, the union conducted the necessary strike vote. The members of the
union, who participated in the voting, unanimously voted for the holding of a strike. Upon being aware of this development,
the company filed a Petition for Assumption of Jurisdiction with the Secretary of Labor and Employment. 8 The petition was
filed pursuant to the first paragraph of Article 263(g) of the Labor Code which provides:
ART. 263. Strikes, picketing, and lockouts. – x x x
xxxx
 Labor Relation Set VvI * strikes and lockouts* Page 30 of 52

(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 Company is ordered to attach the following documents to its position paper, to assist this Office in the prompt resolution
the national interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify of this case:
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
a] Complete Audited Financial Statements for the past five [5] years certified as to its completeness by the Chief Financial
taken place at the time of assumption or certification, all striking or locked out employees shall immediately return to work
Comptroller or Accountant, as the case may be[;]
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 the compliance with this provision as well as with such orders as he may issue to enforce SEC stamped COMPLETE audited Financial Statements shall include the following:
the same. 1. Independent Auditor’s opinion
2. Comparative Balance Sheet
3. Comparative Income Statement
The company’s petition for assumption of jurisdiction was docketed as OSEC-AJ-0033-04/NCMB-RBIV-LAG-NS-09-048-04.
4. Comparative Cash Flows
5. Notes to the Financial Statements as required by SEC
In an Order9 dated September 20, 2004, the then Secretary of Labor and Employment, Patricia Sto. Tomas, granted the petition b] Projected Financial Statements of the Company FOR THE NEXT THREE [3] YEARS (Balance Sheets, Income Statements, Cash
of the company. The Secretary of Labor and Employment took notice of the Notice of Strike filed by the union in the NCMB Flow, and Appropriate notes to such projected [F]inancial Statements);
which charged the company with unfair labor practice consisting of bad faith in bargaining negotiations. The Secretary of Labor c] CBA history as to all the economic issues;
and Employment also found that the intended strike would likely affect the company’s capacity to provide petroleum products d] Cost estimates of its final offer on the specific CBA issues;
to the company’s various clientele, including the transportation sector, the energy sector, and the manufacturing and industrial e] A separate itemized summary of the Management Offer and the Union demands with [the] following format:
sectors. The Secretary of Labor and Employment further observed that a strike by the union would certainly have a negative [[reference = http://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2014/april2014/170007.pdf]]
impact on the price of commodities. Convinced that such a strike would have adverse consequences on the national economy,
the Secretary of Labor and Employment ruled that the labor dispute between the parties would cause or likely to cause a strike Description of Demands Existing CBA Union Demands Management Offer
in an industry indispensable to the national interest. Thus, the Secretary of Labor and Employment assumed jurisdiction over
the dispute of the parties. The dispositive portion of the Order dated September 20, 2004 reads: 1.

WHEREFORE, considering the foregoing premises, this Office hereby assumes jurisdiction over the labor dispute between the 2.
TABANGAO SHELL REFINERY EMPLOYEES ASSOCIATION and the PILIPINAS SHELL PETROLEUM CORPORATION, pursuant to The Union is directed to provide a copy of their last CBA, an itemized summary of its CBA demands, as well as a computation of
Article 263 (g) of the Labor Code, as amended. their cost[s] that require resolution in triplicate copies using the same format stated above.

Accordingly, any form of concerted action, whether actual or intended, is hereby enjoined. Parties are directed to maintain the No petition, pleading or any opposition thereto shall be acted upon by this Office, without proof of its service to the adverse
status quo existing at the time of service of this Order. They are also ordered not to commit any act that may exacerbate the party/parties.
situation.

However, if at the time of service of this Order a strike has already commenced, the employees are directed to immediately
return to work within twenty-four (24) hours from receipt thereof. In such case[,] the employer shall, without unnecessary
delay, resume operations and readmit all workers under the same terms and conditions prevailing before the strike.
To expedite the resolution of this dispute, the parties are directed to submit in three [3] copies, their respective Position Paper
on the economic issues and those raised in the Notice of Strike, docketed as NCMB-RBIV-LAG-NS-09-048-04. It must be
submitted personally to this Office within seven [7] calendar days from receipt of this Order. Another three [3] calendar days
from receipt of the other party’s position paper shall be allowed for the personal filing or submission of their respective
Comment and Reply thereon. Service of position papers together with annexes, affidavits and other papers accompanying the
same should be done personally. If service by registered mail cannot be avoided, it should follow the mandate of Article 263 of
the Labor Code and shall be deemed complete upon the expiration of five (5) calendar days from mailing. After said period[,]
the allowed time for filing of Reply shall start, after which, the case shall be deemed submitted for resolution.
In the interest of speedy labor justice, this Office will entertain no motion for extension or postponement.
The urgency of the need to rule on this case is only in faithful adherence to the following provision of Article 263 paragraph (i)
of the Labor Code, as follows:
"The Secretary of Labor and Employment, the Commission or the voluntary arbitrator shall decide or resolve the dispute within
thirty (30) calendar days from the date of the assumption of jurisdiction or the certification or submission of the dispute, as the
case may be. x x x"
The appropriate police authority is hereby deputized to enforce this Order if it turns out that within twenty-four (24) hours
from service hereof, there appears a refusal by either or both parties to comply herewith.10

The Secretary of Labor and Employment denied the motion for reconsideration of the union in a Resolution dated October 6,
2004. The union’s second motion for reconsideration was denied in a Resolution dated December 13, 2004.11
Petition for certiorari in the Court of Appeals
The union thereafter filed a petition for certiorari,12 docketed as CA-G.R. SP No. 88178, in the Court of Appeals on January 13,
2005. The union alleged in its petition that the Secretary of Labor and Employment acted with grave abuse of discretion in
grossly misappreciating the facts and issue of the case. It contended that the issue is the unfair labor practice of the company
in the form of bad faith bargaining and not the CBA deadlock. Anchoring its position on item 8 of what the parties agreed upon
as the ground rules that would govern the negotiations, the union argued that, at the time the Order dated September 20,
2004 was issued, there was no CBA deadlock on account of the union’s non-conformity with the declaration of a deadlock, as
item 8 of the said ground rules provided that a "deadlock can only be declared upon mutual consent of both parties." Thus, the
Secretary of Labor and Employment committed grave abuse of discretion when she assumed jurisdiction and directed the
parties to submit position papers even on the economic issues.13
The Court of Appeals found the position of the union untenable. It cited this Court’s ruling in St. Scholastica’s College v.
Torres14 that the authority of the Secretary of Labor and Employment under Article 263(g) of the Labor Code to assume
jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to national interest
includes questions and controversies arising from the said dispute, including cases over which the Labor Arbiter has exclusive
jurisdiction. Applying St. Scholastica’s College, the Court of Appeals found that the 2004 CBA Official Minutes of the Meetings
show that the union and the company were already discussing the economic issues when the union accused the company of
bargaining in bad faith. As such, the Secretary of Labor and Employment had the authority to take cognizance of the economic
issues, which issues were the necessary consequence of the alleged bad faith bargaining.15
Moreover, according to the Court of Appeals, Article 263(g) of the Labor Code vests in the Secretary of Labor and Employment
not only the discretion to determine what industries are indispensable to national interest but also the power to assume
jurisdiction over such industries’ labor disputes, including all questions and controversies arising from the said disputes. Thus,
as the Secretary of Labor and Employment found the company’s business to be one that is indispensable to national interest,
she had authority to assume jurisdiction over all of the company’s labor disputes, including the economic issues.16
Finally, the Court of Appeals noted that the union’s contention that the Secretary of Labor and Employment cannot resolve the
economic issues because the union had not given its consent to the declaration of a deadlock was already moot. The Court of
Appeals observed that the union filed on February 7, 2005 another Notice of Strike citing CBA deadlock as a ground and, in an
Order dated March 1, 2005, the then Acting Secretary of Labor and Employment, Manuel Imson, granted the company’s
Manifestation with Motion to Consider the Second Notice of Strike as Subsumed to the First Notice of Strike.17
Given the above reasons, the Court of Appeals dismissed the petition for certiorari of the union. The dispositive portion of the
Decision dated August 8, 2005 reads as follows:
UPON THE VIEW WE TAKE OF THIS CASE, THUS, the petition must be, as it hereby is DISMISSED, for lack of merit. Costs against
petitioner.18
A detour: from the National Labor Relations Commission to the Secretary of Labor and Employment
Labor Relation Set VvI * strikes and lockouts* Page 31 of 52
In the meantime, on February 2, 2005, the union filed a complaint for unfair labor practice against the corporation in the
National Labor Relations Commission. The union alleged that the company refused, or violated its duty, to bargain.19
The company moved for the dismissal of the complaint, believing that all the elements of forum shopping and/or litis
pendentia were present.20
In an Order21 dated May 9, 2005, the Labor Arbiter found that the case arose from the very same CBA negotiations which
culminated into a labor dispute when the union filed a notice of strike for bad faith bargaining and CBA deadlock. According to
the Labor Arbiter, the issue raised by the union, refusal to bargain, was a proper incident of the labor dispute over which the
Secretary of Labor and Employment assumed jurisdiction. Thus, the case was forwarded for consolidation with the labor
dispute case of the parties in the Office of the Secretary of Labor and Employment.
Decision of the Secretary of Labor and Employment
During the pendency of the union’s petition for certiorari in the Court of Appeals, the Secretary of Labor and Employment
rendered a Decision22 dated June 8, 2005 in OSEC-AJ-0033-04/NCMB-RBIV-LAG-NS-09-048-04/NCMB-RBIV-LAG-NS-02-004-05.
In her Decision, the Secretary of Labor and Employment held that there was already deadlock although the ground for the first
Notice of Strike was unfair labor practice for bargaining in bad faith. Citing Capitol Medical Center Alliance of Concerned
Employees-Unified Filipino Service Workers v. Laguesma23 where it has been held that there may be a deadlock not only in the
strict legal sense of an impasse despite reasonable effort at good faith bargaining but also where one of the parties unduly
refuses to comply with its duty to bargain, the Secretary of Labor and Employment ruled that the circumstances – 41 CBA
meetings showing "reasonable efforts at good faith bargaining" without arriving at a CBA – show that there was effectively a
bargaining deadlock between the parties.24
Moreover, the Secretary of Labor and Employment also passed upon the issue of whether the company was guilty of
bargaining in bad faith:
Now, is the Company guilty of bargaining in bad faith? This Office rules in the negative.
The duty to bargain does not compel any party to accept a proposal, or make any concession, as recognized by Article 252 of
the Labor Code, as amended. The purpose of collective bargaining is the reaching of an agreement resulting in a contract
binding on the parties; however, the failure to reach an agreement after negotiations continued for a reasonable period does
not establish a lack of good faith. The laws invite and contemplate a collective bargaining contract, but they do not compel
one. The duty to bargain does not include the obligation to reach an agreement. Thus, the Company’s insistence on a
bargaining position to the point of stalemate does not establish bad faith. The Company’s offer[,] a lump sum of Php88,000 per
year, for each covered employee in lieu of a wage increase cannot, by itself, be taken as an act of bargaining in bad faith. The
minutes of the meetings of the parties, show that they both exerted their best efforts, to try to resolve the issues at hand.
Many of the proposed improvements or changes, were either resolved, or deferred for further discussion. It is only on the
matter of the wage increase, that serious debates were registered. However, the totality of conduct of the Company as far as
their bargaining stance with the Union is concerned, does not show that it was bargaining in bad faith.25

The Secretary of Labor and Employment then proceeded to decide on the matter of the wage increase and other economic
issues of the new CBA. For failure of the union to substantiate its demand for wage increase as it did not file its position paper,
the Secretary of Labor and Employment looked at the financial situation of the company, as shown by its audited financial
statements, and found it just and equitable to give a lump sum package ofP95,000.00 per year, per covered employee, for the
new CBA covering the period May 1, 2004 until April 30, 2007. The Secretary of Labor and Employment further retained the
other benefits covered by the 2001-2004 CBA as she found the said benefits to be sufficient and reasonable.26
Neither the union nor the company appealed the Decision dated June 8, 2005 of the Secretary of Labor and
Employment.27 Thus, the said Decision attained finality.
The present petition
The union now comes to this Court to press its contentions. It insists that the corporation is guilty of unfair labor practice
through bad faith bargaining. According to the union, bad faith bargaining and a CBA deadlock cannot legally co-exist because
an impasse in negotiations can only exist on the premise that both parties are bargaining in good faith. Besides, there could
have been no deadlock between the parties as the union had not given its consent to it, pursuant to item 8 of the ground rules
governing the parties’ negotiations which required mutual consent for a declaration of deadlock. The union also posits that its
filing of a CBA deadlock case against the company was a separate and distinct case and not an offshoot of the company’s unfair
labor practice through bargaining in bad faith. According to the union, as there was no deadlock yet when the union filed the
unfair labor practice of bargaining in bad faith, the subsequent deadlock case could neither be an offshoot of, nor an incidental
issue in, the unfair labor practice case. Because there was no deadlock yet at the time of the filing of the unfair labor practice
case, the union claims that deadlock was not an incidental issue but a non-issue. As deadlock was a non-issue with respect to
the unfair labor practice case, the Court of Appeals misapplied St. Scholastica’s College and the Secretary of Labor and
Employment committed grave abuse of discretion when it presumed deadlock in its Order dated September 20, 2004 assuming
jurisdiction over the labor dispute between the union and the company.28
For its part, the company argues that the Court of Appeals correctly affirmed the Order dated September 20, 2004 of the
Secretary of Labor and Employment assuming jurisdiction over the labor dispute between the parties. The company claims that
it is engaged in an industry that is vital to the national interest, and that the evidence on record established that there was
already a full-blown labor dispute between the company and the union arising from the deadlock in CBA negotiations. The
company insists that the alleged bad faith on its part, which the union claimed to have prevented any CBA deadlock, has no
basis. The company invokes the final Decision dated June 8, 2005 of the Secretary of Labor and Employment which ruled that
the company was not guilty of bargaining in bad faith. For the company, even if the union’s first Notice of Strike was based on
unfair labor practice and not deadlock in bargaining, the Secretary of Labor and Employment’s assumption of jurisdiction over
the labor dispute between the parties extended to all questions and controversies arising from the labor dispute, that is,
including the economic issues.29
The Court’s ruling
The petition fails. There are at least four reasons to support the denial of the petition and each reason is sufficient to defeat
the union’s claims.
First, the petition is barred by res judicata in the concept of conclusiveness of judgment.
Labor Relation Set VvI * strikes and lockouts* Page 32 of 52
The concept of conclusiveness of judgment is explained in Nabus v. Court of Appeals30 as follows:
The doctrine states that a fact or question which was in issue in a former suit, and was there judicially passed on and
determined by a court of competent jurisdiction, is conclusively settled by the judgment therein, as far as concerns the parties
to that action and persons in privity with them, and cannot be again litigated in any future action between such parties or their
privies, in the same court or any other court of concurrent jurisdiction on either the same or a different cause of action, while
the judgment remains unreversed or unvacated by proper authority. The only identities thus required for the operation of the
judgment as an estoppel x x x are identity of parties and identity of issues.
It has been held that in order that a judgment in one action can be conclusive as to a particular matter in another action
between the same parties or their privies, it is essential that the issues be identical. If a particular point or question is in issue
in the second action, and the judgment will depend on the determination of that particular point or question, a former
judgment between the same parties [or their privies] will be final and conclusive in the second if that same point or question
was in issue and adjudicated in the first suit[.] x x x. (Citations omitted.)
The Decision dated June 8, 2005 of the Secretary of Labor and Employment in the labor dispute over which he assumed
jurisdiction, OSEC-AJ-0033-04/NCMB-RBIV-LAG-NS-09-048-04/NCMB-RBIV-LAG-NS-02-004-05, has long attained finality. The
union never denied this.
In this connection, Article 263(i) of the Labor Code is clear:
ART. 263. Strikes, picketing, and lockouts. – x x x
xxxx
(i) The Secretary of Labor and Employment, the Commission or the voluntary arbitrator shall decide or resolve the dispute
within thirty (30) calendar days from the date of the assumption of jurisdiction or the certification or submission of the dispute,
as the case may be. The decision of the President, the Secretary of Labor and Employment, the Commission or the voluntary
arbitrator shall be final and executory ten (10) calendar days after receipt thereof by the parties. (Emphases supplied.)
Pursuant to Article 263(i) of the Labor Code, therefore, the Decision dated June 8, 2005 of the Secretary of Labor and
Employment became final and executory after the lapse of the period provided under the said provision. Moreover, neither
party further questioned the Decision dated June 8, 2005 of the Secretary of Labor and Employment.
The Decision dated June 8, 2005 of the Secretary of Labor and Employment already considered and ruled upon the issues being
raised by the union in this petition. In particular, the said Decision already passed upon the issue of whether there was already
an existing deadlock between the union and the company when the Secretary of Labor and Employment assumed jurisdiction
over their labor dispute. The said Decision also answered the issue of whether the company was guilty of bargaining in bad
faith. As the Decision dated June 8, 2005 of the Secretary of Labor and Employment already settled the said issues with finality,
the union cannot once again raise those issues in this Court through this petition without violating the principle of res judicata,
particularly in the concept of conclusiveness of judgment.
Second, a significant consequence of the finality of the Decision dated June 8, 2005 of the Secretary of Labor and Employment
is that it rendered the controversy between the union and the company moot.

In particular, with the finality of the Decision dated June 8, 2005, the labor dispute, covering both the alleged bargaining in bad
faith and the deadlock, between the union and the company was settled with finality. As the said Decision settled essentially
the same questions being raised by the union in this case, the finality of the said Decision rendered this case moot. The union
cannot be allowed to use this case to once again unsettle the issues that have been already settled with finality by the final and
executory Decision dated June 8, 2005 of the Secretary of Labor and Employment.
Moreover, the issues of alleged bargaining in bad faith on the part of the company and the deadlock in the negotiations were
both incident to the framing of a new CBA that would govern the parties for the period 2004 to 2007. Not only had the said
period long lapsed, the final Decision dated June 8, 2005 of the Secretary of Labor and Employment also facilitated the framing
of the new CBA, particularly on the disputed provision on annual lump sum payment in lieu of wage increase. The dispositive
portion of the said Decision is clear and categorical:
WHEREFORE, this Office hereby orders:
1. The award of Php95,000 lump sum, per covered employee per year, for the duration of their CBA, effective 01
May 2004 to 30 April 2007;
2. The retention of benefits on vacation leave, sick leave, and special leave as provided in the 2001-2004 CBA;
3. All improvements that [the] parties may have agreed upon during the negotiations, are adopted as part of the
CBA. All other demands, not passed upon herein, are deemed DENIED.
The parties are hereby directed, to submit a copy of the CBA incorporating the awards granted herein, within ten (10) days
from receipt of this Decision.31
As the above directive of the Secretary of Labor and Employment in the decretal portion of the Decision dated June 8, 2005 has
long been final and executory, the dispute on the matter of the provision on annual wage increase contra yearly lump sum
payment is already moot.
Third, the petition is improper as it presents questions of fact. A question of fact cannot properly be raised in a petition for
review under Rule 45 of the Rules of Court.32 This petition of the union now before this Court is a petition for review under
Rule 45 of the Rules of Court.
The existence of bad faith is a question of fact and is evidentiary.33 The crucial question of whether or not a party has met his
statutory duty to bargain in good faith typically turns on the facts of the individual case, and good faith or bad faith is an
inference to be drawn from the facts.34 Thus, the issue of whether or not there was bad faith on the part of the company when
it was bargaining with the union is a question of fact. It requires that the reviewing court look into the evidence to find if
indeed there is proof that is substantial enough to show such bad faith.
The issue of whether there was already deadlock between the union and the company is likewise a question of fact. It requires
the determination of evidence to find whether there is a "counteraction" of forces between the union and the company and
whether each of the parties exerted "reasonable effort at good faith bargaining."35This is so because a deadlock is defined as
follows:
A ‘deadlock’ is x x x the counteraction of things producing entire stoppage; x x x There is a deadlock when there is a complete
blocking or stoppage resulting from the action of equal and opposed forces x x x. The word is synonymous with the word
Labor Relation Set VvI * strikes and lockouts* Page 33 of 52
impasse, which x x x ‘presupposes reasonable effort at good faith bargaining which, despite noble intentions, does not
conclude in agreement between the parties.’36
Considering that the issues presented by the union are factual issues, the union’s petition is improper. As a rule, this Court
cannot properly inquire into factual matters in the exercise of its judicial power under Rule 45 of the Rules of Court. While
there are exceptions to this rule, none of the exceptions apply in this case.
Fourth, and finally, assuming that this Court may disregard the conclusiveness of judgment and review the factual matters
raised by the union, the merits are still not in the union’s favor.
The findings of fact of the Secretary of Labor and Employment in the Decision dated June 8, 2005 that there already existed a
bargaining deadlock when she assumed jurisdiction over the labor dispute between the union and the company, and that there
was no bad faith on the part of the company when it was bargaining with the union are both supported by substantial
evidence. This Court sees no reason to reverse or overturn the said findings.
The final and executory Decision dated June 8, 2005 of the Secretary of Labor and Employment squarely addressed the
contention of the union that the company was guilty of bargaining in bad faith. The said Decision correctly characterized the
nature of the duty to bargain, that is, it does not compel any party to accept a proposal or to make any concession.37 While the
purpose of collective bargaining is the reaching of an agreement between the employer and the employee’s union resulting in
a binding contract between the parties, the failure to reach an agreement after negotiations continued for a reasonable period
does not mean lack of good faith. The laws invite and contemplate a collective bargaining contract but do not compel
one.38 For after all, a CBA, like any contract is a product of mutual consent and not of compulsion. As such, the duty to bargain
does not include the obligation to reach an agreement.39 In this light, the corporation’s unswerving position on the matter of
annual lump sum payment in lieu of wage increase did not, by itself, constitute bad faith even if such position caused a
stalemate in the negotiations, as correctly ruled by the Secretary of Labor and Employment in the decision dated June 8, 2005.
As there was no bad faith on the part of the company in its bargaining with the union, deadlock was possible and did occur.
The union’s reliance on item 8 of the ground rules governing the parties’ negotiations which required mutual consent for a
declaration of deadlock was reduced to irrelevance by the actual facts. Contra factum non valet argumentum. There is no
argument against facts. And the fact is that the negotiations between the union and the company were stalled by the opposing
offers of yearly wage increase by the union, on the one hand, and annual lump sum payment by the company, on the other
hand. Each party found the other’s offer unacceptable and neither party was willing to yield. The company suggested seeking
the assistance of a third party to settle the issue but the union preferred the remedy of filing a notice of strike. Each party was
adamant in its position. Thus, because of the unresolved issue on wage increase, there was actually a complete stoppage of the
ongoing negotiations between the parties and the union filed a Notice of Strike. A mutual declaration would neither add to nor
subtract from the reality of the deadlock then existing between the parties. Thus, the absence of the parties’ mutual
declaration of deadlock does not mean that there was no deadlock. At most, it would have been simply a recognition of the
prevailing status quo between the parties.
More importantly, the union only caused confusion in the proceedings before the Secretary of Labor and Employment when it
questioned the latter’s assumption of jurisdiction over the labor dispute between the union and the company on the ground
that the "Secretary erred in assuming jurisdiction over the ‘CBA’ case when it [was] not the subject matter of the notice of
strike" because the case was "all about ‘ULP’ in the form of bad faith bargaining." For the union, the Secretary of Labor and
Employment should not have touched the issue of the CBA as there was no CBA deadlock at that time, and should have limited
the assumption of jurisdiction to the charge of unfair labor practice for bargaining in bad faith.40

The union is wrong.
As discussed above, there was already an actual existing deadlock between the parties. What was lacking was the formal
recognition of the existence of such a deadlock because the union refused a declaration of deadlock. Thus, the union’s view
that, at the time the Secretary of Labor and Employment exercised her power of assumption of jurisdiction, the issue of
deadlock was neither an incidental issue to the matter of unfair labor practice nor an existing issue is incorrect.
More importantly, however, the union’s mistaken theory that the deadlock issue was neither incidental nor existing is based
on its premise that the case is all about the company’s alleged unfair labor practice of bargaining in bad faith, which is the
ground stated in its first Notice of Strike. In particular, the union asserts:
The evidentiary value of the Notice of Strike for ULP of BAD FAITH BARGAINING (Annex "M" of the petition) cannot be taken
for granted. It is the very important documentary evidence that shows what is the existing "labor dispute" between the
parties.41
While the first Notice of Strike is indeed significant in the determination of the existing labor dispute between the parties, it is
not the sole criterion. As this Court explained in Union of Filipro Employees-Drug, Food and Allied Industries Unions-Kilusang
Mayo Uno v. Nestle Philippines, Inc.42:
The Secretary of the DOLE has been explicitly granted by Article 263(g) of the Labor Code the authority to assume jurisdiction
over a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, and
decide the same accordingly.1âwphi1 And, as a matter of necessity, it includes questions incidental to the labor dispute; that
is, issues that are necessarily involved in the dispute itself, and not just to that ascribed in the Notice of Strike or otherwise
submitted to him for resolution. x x x (Emphasis supplied.)
The totality of the company’s Petition for Assumption of Jurisdiction, including every allegation therein, also guided the
Secretary of Labor and Employment in the proper determination of the labor dispute over which he or she was being asked to
assume jurisdiction.
A "labor dispute" is defined under Article 212(l) of the Labor Code as follows:
ART. 212. Definitions. – x x x
xxxx
(l) "Labor dispute" includes any controversy or matter concerning terms or conditions of employment or the association or
representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment,
regardless of whether the disputants stand in the proximate relation of employer and employee.
In this case, there was a dispute, an unresolved issue on several matters, between the union and the company in the course of
the negotiations for a new CBA. Among the unsettled issues was the matter of compensation. In particular, paragraphs 1 to 6
of the statement of Antecedent Facts in the company’s Petition for Assumption of Jurisdiction43 read:
1. The Collective Bargaining Agreement (CBA) of the Company and the Union expired on 30 April 2004.
Labor Relation Set VvI * strikes and lockouts* Page 34 of 52
2. Thus, as early as 13 April 2004, the Company and the Union already met to discuss the ground rules that would
govern their upcoming negotiations. Then, on 15 April 2004, the Union submitted its proposals for the renewal of
their CBA.
3. While a total of 41 meetings were held between the parties, several items, including the matter of compensation,
remained unresolved.
Copies of the Minutes of the 41 meetings are attached hereto and made integral part hereof as Annexes "A" to "A-
40".
4. On 2 September 2004, the Union filed a Notice of Strike with the NCMB, Region IV based in Calamba, Laguna
anchored on a perceived unfair labor practice consisting of alleged bad faith bargaining on the part of the Company.
Although there is no basis to the charge of unfair labor practice as to give a semblance of validity to the notice of
strike, the Company willingly and actually participated in the conciliation and mediation conferences called by the
NCMB to settle the dispute.
A copy of the Notice of Strike is attached hereto and made integral part hereof as Annex "B".
5. Although conciliation meetings have been conducted by the National Conciliation and Mediation Board (NCMB)
through Conciliator Leodegario Teodoro on 09 and 13 September 2004, no settlement of the dispute has yet been
agreed upon.
6. Based on the attendant circumstances, as well as on the actuations of the Union officers and members, it is likely
that the Union has already conducted, or is set to conduct soon, a strike vote.44
Thus, the labor dispute between the union and the company concerned the unresolved matters between the parties in relation
to their negotiations for a new CBA. The power of the Secretary of Labor and Employment to assume jurisdiction over this
dispute includes and extends to all questions and controversies arising from the said dispute, such as, but not limited to the
union’s allegation of bad faith bargaining. It also includes and extends to the various unresolved provisions of the new CBA
such as compensation, particularly the matter of annual wage increase or yearly lump sum payment in lieu of such wage
increase, whether or not there was deadlock in the negotiations. Indeed, nowhere does the Order dated September 20, 2004
of the Secretary of Labor and Employment mention a CBA deadlock. What the union viewed as constituting the inclusion of a
CBA deadlock in the assumption of jurisdiction was the inclusion of the economic issues, particularly the company’s stance of
yearly lump sum payment in lieu of annual wage increase, in the directive for the parties to submit their respective position
papers.45 The union’s Motion for Reconsideration (With Urgent Prayer to Compel the Company to Justify Offer of Wage
[Increase] Moratorium) and Second Motion for Reconsideration questioning the Order dated September 20, 2004 of the
Secretary of Labor and Employment actually confirm that the labor dispute between the parties essentially and necessarily
includes the conflicting positions of the union, which advocates annual wage increase, and of the company, which offers yearly
lump sum payment in lieu of wage increase. In fact, that is the reason behind the union’s prayer that the company be ordered
to justify its offer of wage increase moratorium.46 As there is already an existing controversy on the matter of wage increase,
the Secretary of Labor and Employment need not wait for a deadlock in the negotiations to take cognizance of the matter. That
is the significance of the power of the Secretary of Labor and Employment under Article 263(g) of the Labor Code to assume
jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national
interest. As this Court elucidated in Bagong Pagkakaisa ng Manggagawa ng Triumph International v. Secretary of the
Department of Labor and Employment47:
Article 263(g) is both an extraordinary and a preemptive power to address an extraordinary situation - a strike or lockout in an
industry indispensable to the national interest. This grant is not limited to the grounds cited in the notice of strike or lockout
that may have preceded the strike or lockout; nor is it limited to the incidents of the strike or lockout that in the meanwhile
may have taken place. As the term "assume jurisdiction" connotes, the intent of the law is to give the Labor Secretary full
authority to resolve all matters within the dispute that gave rise to or which arose out of the strike or lockout; it includes and
 Labor Relation Set VvI * strikes and lockouts* Page 35 of 52

extends to all questions and controversies arising from or related to the dispute, including cases over which the labor arbiter local chapter of the Pambansang Kaisahan ng Manggagawang Pilipino when its application was granted by the Bureau of Labor
has exclusive jurisdiction. (Citation omitted.) Relations.5

Everything considered, therefore, the Secretary of Labor and Employment committed no abuse of discretion when she Thereafter, on May 6, 2002, KMLMS––now a legitimate labor organization (LLO)––staged a strike where several prohibited and
assumed jurisdiction over the labor dispute of the union and the company.WHEREFORE, the petition is hereby DENIED.SO illegal acts were committed by its participating members.
ORDERED
On the ground of lack of valid notice of strike, ineffective conduct of a strike-vote and commission of prohibited and illegal
acts, petitioners filed their Petition to Declare the Strike of May 6, 2002 Illegal6 before the NLRC Regional Arbitration Board
(RAB) No. IV in Quezon City, docketed as NLRC RAB IV-9-1265-02-R. In their petition, as well as their Position
Paper,7 petitioners prayed, inter alia, that the officers and members of respondent KMLMS who participated in the illegal strike
Republic of the Philippines
and who knowingly committed prohibited and illegal activities, respectively, be declared to have lost or forfeited their
SUPREME COURT
employment status.
Manila
The Ruling of the Labor Arbiter
THIRD DIVISION
G.R. Nos. 191138-39 October 19, 2011
MAGDALA MULTIPURPOSE & LIVELIHOOD COOPERATIVE and SANLOR MOTORS CORP., Petitioners, In her March 26, 2004 Decision,8 Executive Labor Arbiter Lita V. Aglibut (LA Aglibut) found the May 6, 2002 strike illegal and
vs. declared 41 workers to have lost their employment, the dispositive portion reading:
KILUSANG MANGGAGAWA NG LGS, MAGDALA MULTIPURPOSE & LIVELIHOOD CORPERATIVE (KMLMS) and UNION
MEMBERS/ STRIKERS, namely: THOMAS PADULLON, HERBERT BAUTISTA, ARIEL DADIA, AVELINO PARENAS, DENNIS
WHEREFORE, this Office finds the strike conducted by the Kilusang Manggagawa ng LGS, Magdala / Sanlor Motors-KMLMS,
MONTEALEGRE, SONNY CONSTANTINO, SHANDY CONSTANTINO, JOSEPH PERNIA, PETER ALCOY, EDILBERTO CERILLE,
now known and registered as Kilusang [Manggagawa] Ng LGS/Magdala Sanlor Motors Corporation – PKMP, illegal and the
FERNANDO LEONOR, TEOTIMAR REGINIO, ALBERTO BAJETA, ALLAN MENESES, RONEL FABUL, JESUS COMENDADOR, JERRY
employment status of the following workers are hereby declared forfeited: x x x.
PERNIA, OSCAR RIVERA, LEO MELGAR, ENRICO LAYGO, RICKY PALMERO, ROWELL GARCIA, LEOPITO MERANO, ALEJANDRO
DE LARA, JOEL GARCIA, BONIFACIO PEREDA, REMEGIO CONSTANTINO, DICKSON PILAPIL, RANDY CORDANO, DARIUS
PILAPIL, VENICE LUCERO, GREGORIO REANZARES, EULOGIO REGINIO, MICHAEL JAVIER, DENNIS MOSQUERA, FREDDIE All other claims are dismissed for lack of merit.SO ORDERED.9
AZORES, ROGELIO CABRERA, AURELIO TAGUINOD, OSCAR TAGUINOD, DEWELL PILAPIL, JOEL MAS-ING, EDUARDO LOPEZ,
GLICERIO REANZAREZ, JOSEPH FLORES,BUENATO CASAS, ROMEO AZAGRA, ALFREDO ROSALES, ESTELITO BAJETA, PEDY On the ground of non-compliance with the strict and mandatory requirements for a valid conduct of a strike under Article
GEMINA, FERNANDO VELASCO, ALBERTO CANEZA, ALEJANDRO CERVANTES, ERICK CARVAJAL, RONALDO BERNADEZ, JERRY 263(c), (d) and (f) of the Labor Code and Rule XXII, Book V of the Omnibus Rules Implementing the Labor Code, LA Aglibut
COROSA, JAYSON COROSA, JAYSON JUANSON, SHELLY NAREZ, EDGARDO GARCIA, ARIEL LLOSALA, ROMMEL ILAYA, found the May 6, 2002 strike illegal and accordingly dismissed all the 14 union officers of KMLMS. LA Aglibut likewise found 27
RODRIGO PAULETE, MERVIN PANGUINTO, MARVIN SENATIN, JAYSON RILLORA, RAFAEL SARMIENTO, FREDERICK PERMEJO, identified members of KMLMS to have committed prohibited and illegal acts proscribed under Art. 264 of the Labor Code and
NICOLAS BERNARDO, LEONCIO PAZ DE LEON, EDWARD DENNIS MANAHAN, ANTONIO BALDAGO, ALEXANDER accordingly declared them to have forfeited their employment.Both parties appealed the Decision of LA Aglibut before the
BAJETA,Respondents. NLRC.
DECISION The Ruling of the NLRC
VELASCO, JR., J.:
The Case
Petitioners Magdala Multipurpose & Livelihood Cooperative and Sanlor Motors Corp. assail and seek the modification of the On October 15, 2004, the NLRC rendered its Decision affirming with modification LA Aglibut’s Decision by declaring an
June 30, 2009 Decision1 and January 28, 2010 Resolution2 of the Court of Appeals (CA) in CA-G.R. SP Nos. 88614 and 88645, additional seven (7) union members to have forfeited their employment status. The decretal portion reads:
which affirmed in toto the October 15, 2004 Decision3 of the National Labor Relations Commission (NLRC) in NLRC CA No.
040560-04 (NLRC RAB IV-9-1265-02-R). WHEREFORE, premises considered, the decision appealed from is affirmed with modification in that [said seven union
The Facts members] are also declared to have lost their employment status for having committed prohibited acts.SO ORDERED.10

Respondent Kilusang Manggagawa ng LGS, Magdala Multipurpose and Livelihood Cooperative (KMLMS) is the union operating
in Magdala Multipurpose & Livelihood Cooperative and Sanlor Motors Corp. Unsatisfied, both parties again filed their respective appeals before the CA.

The Ruling of the CA

KMLMS filed a notice of strike on March 5, 2002 and conducted its strike-vote on April 8, 2002. However, KMLMS only acquired
legal personality when its registration as an independent labor organization was granted on April 9, 2002 by the Department of The CA rendered the assailed Decision on June 30, 2009 affirming in toto the NLRC Decision, the fallo reading:
Labor and Employment under Registration No. RO-400-200204-UR-002.4 On April 19, 2002, it became officially affiliated as a

WHEREFORE, in view of the following disquisition, the respective petitions for certiorari in CA-G.R. SP. No. 88614 and CA-G.R.
SP. No. 88645 are hereby DISMISSED for lack of merit. Accordingly, the assailed Decision, dated 15 October 2004, of the
National Labor Relations Commission (NLRC) in NLRC CA No. 040560-04 (NLRC RAB IV-9-1265-02-R) is hereby AFFIRMED in
toto.SO ORDERED.11
Thus, petitioners have come to Us, praying for a partial modification of the assailed CA Decision by declaring additional
7312 similarly erring KMLMS members to have lost their employment.
The Issues
A of the secret balloting. In every case, the union or the employer shall furnish the Ministry the results of the voting at
THE COURT OF APPEALS ERRED IN REFUSING TO SIMILARLY DECLARE AS HAVING LOST THEIR EMPLOYMENT STATUS THE REST
OF THE UNION STRIKERS WHO HAVE PARTICIPATED IN THE ILLEGAL STRIKE AND COMMITTED PROHIBITED/ILLEGAL ACTS, TO
THE PREJUDICE OF PETITIONERS[’] BUSINESS OPERATIONS.
B
THE COURT OF APPEALS ERRED IN REFUSING TO AWARD DAMAGES AND ATTORNEY’S FEES AS A RESULT OF THE ILLEGAL
STRIKE THAT NEARLY CRIPPLED THE BUSINESS OPERATIONS OF PETITIONERS.13
The Court’s Ruling
The petition is partly meritorious.
First Issue: The May 6, 2002 Strike Was Illegal
There is no question that the May 6, 2002 strike was illegal, first, because when KMLMS filed the notice of strike on March 5 or
14, 2002, it had not yet acquired legal personality and, thus, could not legally represent the eventual union and its members.
And second, similarly when KMLMS conducted the strike-vote on April 8, 2002, there was still no union to speak of, since
KMLMS only acquired legal personality as an independent LLO only on April 9, 2002 or the day after it conducted the strike-
vote. These factual findings are undisputed and borne out by the records.
Consequently, the mandatory notice of strike and the conduct of the strike-vote report were ineffective for having been filed
and conducted before KMLMS acquired legal personality as an LLO, violating Art. 263(c), (d) and (f) of the Labor Code and Rule
XXII, Book V of the Omnibus Rules Implementing the Labor Code. The Labor Code provisos pertinently provide:
ART. 263. Strikes, Picketing and Lockouts. — (a) x x x
(c) In case of bargaining deadlocks, the duly certified or recognized bargaining agent may file a notice of strike or
the employer may file a notice of lockout with the Ministry at least 30 days before the intended date thereof. In
case of unfair labor practice, the period of notice shall be 15 days and in absence of a duly certified or recognized
bargaining agent, the notice of strike may be filed by any legitimate labor organization in behalf of its members.
However, in case of dismissal from employment of union officers duly elected in accordance with the union
constitution and by-laws, which may constitute union busting, where the existence of the union is threatened, the
15-day cooling-off period shall not apply and the union may take action immediately. (As amended by Executive
Order No. 111, December 24, 1986.)
Labor Relation Set VvI * strikes and lockouts* Page 36 of 52
(d) The notice must be in accordance with such implementing rules and regulations as the Ministry of Labor and
Employment may promulgate.
xxxx
(f) A decision to declare a strike must be approved by a majority of the total union membership in the bargaining
unit concerned, obtained by secret ballot in meetings or referenda called for that purpose. A decision to declare a
lockout must be approved by a majority of the board of directors of the corporation or association or of the
partners in a partnership, obtained by secret ballot in a meeting called for that purpose. The decision shall be valid
for the duration of the dispute based on substantially the same grounds considered when the strike or lockout vote
was taken. The Ministry may, at its own initiative or upon the request of any affected party, supervise the conduct
least seven days before the intended strike or lockout, subject to the cooling-off period herein provided. (As
amended by Batas Pambansa Bilang 130, August 21, 1981 and further amended by Executive Order No. 111,
December 24, 1986.)
On the other hand, Rule XXII, Book V of the Omnibus Rules Implementing the Labor Code likewise pertinently provides:
RULE XXII
CONCILIATION, STRIKES AND LOCKOUTS
xxxx
SEC. 6. Who may declare a strike or lockout. — Any certified or duly recognized bargaining representative may declare a strike
in cases of bargaining deadlocks and unfair labor practices. The employer may declare a lockout in the same cases. In the
absence of a certified or duly recognized bargaining representative, any legitimate labor organization in the establishment may
declare a strike but only on grounds of unfair labor practice. (Emphasis supplied.)
It is, thus, clear that the filing of the notice of strike and the conduct of the strike-vote by KMLMS did not comply with the
aforequoted mandatory requirements of law and its implementing rules. Consequently, the May 6, 2002 strike is illegal. As the
Court held in Hotel Enterprises of the Philippines, Inc. (HEPI) v. Samahan ng mga Manggagawa sa Hyatt-National Union of
Workers in the Hotel and Restaurant and Allied Industries (SAMASAH-NUWHRAIN),14 these requirements are mandatory and
failure of a union to comply renders the strike illegal.
Striking KMLMS Members Committed Prohibited Acts
There is likewise no dispute that when the May 6, 2002 illegal strike was conducted, the members of respondent KMLMS
committed prohibited and illegal acts which doubly constituted the strike illegal. This is the unanimous factual finding of the
courts a quo which the Court accords finality, as supported by evidence on record.
The proscribed acts during a strike are provided under Art. 264 of the Labor Code, thus:
ART. 264. Prohibited Activities. — (a) No Labor organization or employer shall declare a strike or lockout without first having
bargained collectively in accordance with Title VII of this Book or without first having filed the notice required in the preceding
Article or without the necessary strike or lockout vote first having been obtained and reported to the Ministry.

No strike or lockout shall be declared after assumption of jurisdiction by the President or the Minister or after certification or
submission of the dispute to compulsory or voluntary arbitration or during the pendency of case involving the same grounds
for the strike or lockout.
Any worker whose employment has been terminated as a consequence of any unlawful lockout shall be entitled to
reinstatement with full backwages. Any union officer who knowingly participates in an illegal strike and any worker or union
officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his
employment status: Provided, That mere participation of a worker in a lawful strike shall not constitute sufficient ground for
termination of his employment, even if a replacement had been hired by the employer during such lawful strike.
xxxx
(e) No person engaged in picketing shall commit any act of violence, coercion or intimidation or obstruct the free ingress to or
egress from the employer’s premises for lawful purposes, or obstruct public thoroughfares. (As amended by Batas Pambansa
Bilang 227, June 1, 1982).
Here, the striking workers committed acts of (1) interference by obstructing the free ingress to or egress from petitioners’
compound and (2) coercion and intimidation. As aptly pointed out by the appellate court:
This is clear from the Police Blotter Certifications, including a Complaint for Grave Coercion, Affidavits from several workers,
including one from a proprietor, all of whom were prevented from entering the company premises and doing their work or
conducting their business, and the countless photographs which show the striking workers blocking the gates of the company
premises which became the basis of the judgment of the Labor Arbiter and NLRC.15
Thus, We agree with the CA that the arguments of respondent KMLMS are bereft of merit as the May 6, 2002 strike was
properly declared an illegal strike and the prohibited and illegal acts committed by union members during said strike were duly
proved by substantial evidence on record. Substantial evidence is that amount of relevant evidence which a reasonable mind
might accept as adequate to justify a conclusion.16
Proper Sanctions for the Illegal Strike
We now come to the proper sanctions for the conduct of union officers in an illegal strike and for union members who
committed illegal acts during a strike. The above-cited Art. 264 of the Code presents a substantial distinction of the
consequences of an illegal strike between union officers and mere members of the union. For union officers, knowingly
participating in an illegal strike is a valid ground for termination of their employment. But for union members who participated
in a strike, their employment may be terminated only if they committed prohibited and illegal acts during the strike and there
is substantial evidence or proof of their participation, i.e., that they are clearly identified to have committed such prohibited
and illegal acts.
As earlier explained, the May 6, 2002 strike is illegal for non-compliance with provisions of law and its implementing rules.
Consequently, the termination of employment of the 14 union officers is proper.
Labor Relation Set VvI * strikes and lockouts* Page 37 of 52
In the case of union members who participated in the May 6, 2002 strike and committed prohibited and illegal acts of
interference by obstructing the free ingress to or egress from petitioners’ compound, coercion and intimidation, the forfeiture
of their employment is also proper.
LA Aglibut found 27 union members to have committed the illegal acts and properly declared the forfeiture of their
employment status. The NLRC found additional seven (7) union members committing illegal acts and likewise declared the
forfeiture of their employment status. Thus, a total of 34 union members have been declared to have lost their employment
due to their commission of prohibited and illegal acts during the illegal strike of May 6, 2002. Petitioners, however, take
umbrage for the non-declaration of the forfeiture of employment of 72 other union members who were similarly situated as
the 34 union members whose employment was declared forfeited in committing prohibited and illegal acts during the May 6,
2002 strike.
In affirming the NLRC Decision and refusing to declare the other strikers as dismissed, the appellate court found that not all of
the photographs in evidence sufficiently show the strikers committing illegal acts and that the identification of said strikers is
questionable considering that some were still identified even when their faces were indiscernible from the photographs.
We, however, cannot agree with the appellate court’s view that there is no substantial proof of the identity of the other 72
striking union members who committed prohibited and illegal activities. The prohibited and illegal acts are undisputed. It is
only the identity of the striking union workers who committed said acts that is the crux of the partial modification prayed for
by petitioners.
In the instant case, We have pored over the attachments to the pleadings of the parties and We find that petitioners have
substantially proved the identity of 72 other union members who committed prohibited and illegal acts during the May 6, 2002
illegal strike, thus:
First, the photographs17 submitted by petitioners graphically depict and show the identities of the union members who
committed prohibited and illegal acts. Second, the identities of these union members were substantially proved through the
eyewitnesses18 of petitioners who personally knew and recognized them as those who committed the prohibited and illegal
acts. Thus, the identities of these 72 other union members who participated in the strike and committed prohibited and illegal
acts are not only shown through the photographs, but are also sufficiently supported, as earlier cited, by police blotter
certifications,19 a criminal complaint for grave coercion,20and affidavits of several workers21 and a proprietor.22 As aptly pointed
out by petitioners, while several union members were penalized, other union members with them who are identifiable in the
photographs and attested to by witnesses were not so penalized. This must be corrected, for these other unpenalized union
members were similarly situated with those penalized in that they all committed the same prohibited and illegal acts during
the strike. Absent any exculpating circumstance, they must all suffer the same fate with the statutorily provided consequence
of termination of employment.
Thus, We find that there was patent misappreciation of evidence both by the LA and the NLRC, but it was not corrected by the
CA.
Second Issue: Damages and Attorney’s Fees
Anent the issue of the award of damages and attorney’s fees, We affirm the courts a quo’s uniform findings and rulings that
while petitioners prayed for damages and attorney’s fees, they failed to substantiate their claims.

Indeed, the grant of damages and attorney’s fees requires factual, legal and equitable justification; its basis cannot be left to
speculation or conjecture.23 Petitioners simply bank their claims on the Affidavit24 of Julito Sioson. The claim for actual damages
for losses of PhP 10,000 daily or PhP 260,000 a month, as averred by Sioson, cannot be sustained by a mere affidavit of the
owner without being buttressed by other documentary evidence or unassailable substantiation. Even if attested to in an
affidavit, the amount claimed for actual damages is merely speculative at most. To be recoverable, actual damages must not
only be capable of proof, but must actually be proved with reasonable degree of certainty. The Court cannot simply rely on
speculation, conjecture, or guesswork in determining the amount of damages.25 Without any factual basis, it cannot be
granted.
That petitioners had to litigate on the occasion of the illegal strike does not necessarily mean that attorney’s fees will
automatically be granted. On one hand, in labor cases, attorney’s fees granted under Art. 11126 of the Labor Code apply to
unlawful withholding of wages, which indubitably does not apply to the instant case. On the other hand, Art. 2208(2) of the
Civil Code does not ipso facto grant the award of damages in the form of attorney’s fees to a winning party, for the exercise of
protection of one’s right is not compensable.
Besides, jurisprudence instructs that for the award of attorney’s fees to be granted, there must be factual, legal and equitable
justification.27 As the Court held in Filipinas Broadcasting Network, Inc. v. Ago Medical and Educational Center-Bicol Christian
College of Medicine (AMEC-BCCM):
It is an accepted doctrine that the award thereof as an item of damages is the exception rather than the rule, and counsel’s
fees are not to be awarded every time a party wins a suit. The power of the court to award attorney’s fees under Article 2208
of the Civil Code demands factual, legal and equitable justification, without which the award is a conclusion without a premise,
its basis being improperly left to speculation and conjecture. In all events, the court must explicitly state in the text of the
decision, and not only in the decretal portion thereof, the legal reason for the award of attorney’s fees.28
The fact that the courts a quo did not award attorney’s fees to petitioners persuasively shows that they found no factual, legal
and equitable justification for it. Neither do We find any.
WHEREFORE, the instant petition is hereby PARTIALLY GRANTED. The assailed June 30, 2009 CA Decision in CA-G.R. SP Nos.
88614 and 88645 is AFFIRMED with MODIFICATION in that the following additional 72 union members who committed
prohibited and illegal acts during the May 6, 2002 strike are also declared to have forfeited their employment: Thomas
Padullon, Herbert Bautista, Ariel Dadia, Avelino Parenas, Dennis Montealegre, Sonny Constantino, Shandy Constantino, Joseph
Pernia, Peter Alcoy, Edilberto Cerille, Fernando Leonor, Teotimar Reginio, Alberto Bajeta, Allan Meneses, Ronel Fabul, Jesus
Comendador, Jerry Pernia, Oscar Rivera, Leo Melgar, Enrico Laygo, Ricky Palmero, Rowell Garcia, Leopito Merano, Alejandro de
Lara, Joel Garcia, Bonifacio Pereda, Remegio Constantino, Dickson Pilapil, Randy Cordano, Aurelio Taguinod, Oscar Taguinod,
Dewell Pilapil, Joel Mas-ing, Eduardo Lopez, Glicerio Reanzarez, Joseph Flores, Buenato Casas, Romeo Azagra, Alfredo Rosales,
Estelito Bajeta, Pedy Gemina, Fernando Velasco, Alberto Caneza, Alejandro Cervantes, Erick Carvajal, Ronaldo Bernadez, Jerry
Corosa, Jayson Corosa, Jayson Juanson, Shelly Narez, Alexander Bajeta, Edgardo Garcia, Ariel Llosala, Rommel Ilaya, Rodrigo
Paulete, Mervin Paquinto, Marvin Senatin, Jayson Rillora, Darius Pilapil, Venice Lucero, Gregorio Reanzares, Eulogio Reginio,
Michael Javier, Dennis Mosquera, Freddie Azores, Rogelio Cabrera, Rafael Sarmiento, Frederick Permejo, Nicolas Bernardo,
Leoncio Paz de Leon, Edward Dennis Manahan and Antonio Baldago.No pronouncement as to costs.SO ORDERED.
Republic of the Philippines
SUPREME COURT
Baguio City
Labor Relation Set VvI * strikes and lockouts* Page 38 of 52
SECOND DIVISION
G.R. No. 170351 March 30, 2011
LEYTE GEOTHERMAL POWER PROGRESSIVE EMPLOYEES UNION - ALU - TUCP, Petitioner,
vs.
PHILIPPINE NATIONAL OIL COMPANY - ENERGY DEVELOPMENT CORPORATION, Respondent.
DECISION
NACHURA, J.:
Under review is the Decision1 dated June 30, 2005 of the Court of Appeals (CA) in CA-G.R. SP No. 65760, which dismissed the
petition for certiorari filed by petitioner Leyte Geothermal Power Progressive Employees Union – ALU―TUCP (petitioner
Union) to annul and set aside the decision2 dated December 10, 1999 of the National Labor Relations Commission (NLRC) in -
NLRC Certified Case No. V-02-99.
The facts, fairly summarized by the CA, follow.
[Respondent Philippine National Oil Corporation]-Energy Development Corporation [PNOC-EDC] is a government-owned and
controlled corporation engaged in exploration, development, utilization, generation and distribution of energy resources like
geothermal energy.
Petitioner is a legitimate labor organization, duly registered with the Department of Labor and Employment (DOLE) Regional
Office No. VIII, Tacloban City.
Among [respondent’s] geothermal projects is the Leyte Geothermal Power Project located at the Greater Tongonan
Geothermal Reservation in Leyte. The said Project is composed of the Tongonan 1 Geothermal Project (T1GP) and the Leyte
Geothermal Production Field Project (LGPF) which provide the power and electricity needed not only in the provinces and
cities of Central and Eastern Visayas (Region VII and VIII), but also in the island of Luzon as well. Thus, the [respondent] hired
and employed hundreds of employees on a contractual basis, whereby, their employment was only good up to the completion
or termination of the project and would automatically expire upon the completion of such project.
Majority of the employees hired by [respondent] in its Leyte Geothermal Power Projects had become members of petitioner.
In view of that circumstance, the petitioner demands from the [respondent] for recognition of it as the collective bargaining
agent of said employees and for a CBA negotiation with it. However, the [respondent] did not heed such demands of the
petitioner. Sometime in 1998 when the project was about to be completed, the [respondent] proceeded to serve Notices of
Termination of Employment upon the employees who are members of the petitioner.
On December 28, 1998, the petitioner filed a Notice of Strike with DOLE against the [respondent] on the ground of purported
commission by the latter of unfair labor practice for "refusal to bargain collectively, union busting and mass termination." On
the same day, the petitioner declared a strike and staged such strike.
To avert any work stoppage, then Secretary of Labor Bienvenido E. Laguesma intervened and issued the Order, dated January
4, 1999, certifying the labor dispute to the NLRC for compulsory arbitration. Accordingly, all the striking workers were directed
to return to work within twelve (12) hours from receipt of the Order and for the [respondent] to accept them back under the
same terms and conditions of employment prior to the strike. Further, the parties were directed to cease and desist from
committing any act that would exacerbate the situation.

However, despite earnest efforts on the part of the Secretary of Labor and Employment to settle the dispute amicably, the
petitioner remained adamant and unreasonable in its position, causing the failure of the negotiation towards a peaceful
compromise. In effect, the petitioner did not abide by [the] assumption order issued by the Secretary of Labor.
Consequently, on January 15, 1999, the [respondent] filed a Complaint for Strike Illegality, Declaration of Loss of Employment
and Damages at the NLRC-RAB VIII in Tacloban City and at the same time, filed a Petition for Cancellation of Petitioner’s
Certificate of Registration with DOLE, Regional Office No. VIII. The two cases were later on consolidated pursuant to the New
NLRC Rules of Procedure. The consolidated case was docketed as NLRC Certified Case No. V-02-99 (NCMB-RAB VIII-NS-12-0190-
98; RAB Case No. VIII-1-0019-99). The said certified case was indorsed to the NLRC 4th Division in Cebu City on June 21, 1999
for the proper disposition thereof.3
In due course, the NLRC 4th Division rendered a decision in favor of respondent, to wit:
WHEREFORE, based on the foregoing premises, judgment is hereby rendered as follows:
1. Declaring the officers and members of [petitioner] Union as project employees;
2. Declaring the termination of their employment by reason of the completion of the project, or a phase or portion
thereof, to which they were assigned, as valid and legal;
3. Declaring the strike staged and conducted by [petitioner] Union through its officers and members on December
28, 1998 to January 6, 1999 as illegal for failure to comply with the mandatory requirements of the law on strike[;]
4. Declaring all the officers and members of the board of [petitioner] Union who instigated and spearheaded the
illegal strike to have lost their employment[;]
5. Dismissing the claim of [petitioner] Union against PNOC-EDC for unfair labor practice for lack of merit[;]
6. Dismissing both parties’ claims against each other for violation of the Assumption Order dated January 4, 1999
for lack of factual basis[;]
7. Dismissing all other claims for lack of merit.4
Petitioner Union filed a motion for reconsideration of the NLRC decision, which was subsequently denied. Posthaste, petitioner
Union filed a petition for certiorari before the CA, alleging grave abuse of discretion in the decision of the NLRC. As previously
adverted to, the CA dismissed the petition for certiorari, thus:
WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us DISMISSING the Petition. The assailed
Decision dated December 10, 1999 of the NLRC 4th Division in NLRC Certified Case No. V-02-99 (NCMB-RAB VIII-NS-12-0190-
98; RAB Case No. VIII-1-0019-99) and its Order dated March 30, 2001 are hereby AFFIRMED.Costs against the Petitioner.5
Hence, this appeal by certiorari filed by petitioner Union, positing the following questions of law:
1. MAY THE HONORABLE COURT OF APPEALS SUSTAIN THE "PROJECT CONTRACTS" THAT ARE DESIGNED TO DENY AND
DEPRIVE THE EMPLOYEES’ THEIR RIGHT TO SECURITY OF TENURE BY MAKING IT APPEAR THAT THEY ARE MERE PROJECT
EMPLOYEES?
Labor Relation Set VvI * strikes and lockouts* Page 39 of 52
2. WHEN THERE ARE NO INTERVALS IN THE EMPLOYEES’ CONTRACT, SUCH THAT THE SO-CALLED UNDERTAKING WAS
CONTINUOUS, ARE THE EMPLOYEES PROPERLY TREATED AS PROJECT EMPLOYEES?
3. MAY THE HONORABLE COURT OF APPEALS IGNORE THE FIRM’S OWN ESTIMATE OF JOB COMPLETION, PROVING THAT
THERE IS STILL 56.25% CIVIL/STRUCTURAL WORK TO BE ACCOMPLISHED, AND RULE THAT THE EMPLOYEES WERE DISMISSED
FOR COMPLETION [OF] THE "PROJECT?"
4. MAY A FIRM HIDE UNDER THE SPURIOUS CLOAK OF "PROJECT COMPLETION" TO DISMISS EN MASSE THE EMPLOYEES WHO
HAVE ORGANIZED AMONG THEMSELVES A LEGITIMATE LABOR ORGANIZATION TO PROTECT THEIR RIGHTS?
5. WHEN THERE IS NO STOPPAGE OF WORK, MAY A PROTEST ACTIVITY BE CONSIDERED AS A STRIKE CONTRARY TO ITS
CONCEPTUAL DEFINITION UNDER ARTICLE 212 (O) OF THE LABOR CODE OF THE PHILIPPINES?
6. WHEN THE DISMISSAL IS AIMED AT RIDDING THE COMPANY OF MEMBERS OF THE UNION, IS THIS UNION BUSTING?6
Stripped of rhetoric, the issues for our resolution are:
1. Whether the officers and members of petitioner Union are project employees of respondent; and
2. Whether the officers and members of petitioner Union engaged in an illegal strike.
On the first issue, petitioner Union contends that its officers and members performed activities that were usually necessary
and desirable to respondent’s usual business. In fact, petitioner Union reiterates that its officers and members were assigned
to the Construction Department of respondent as carpenters and masons, and to other jobs pursuant to civil works, which are
usually necessary and desirable to the department. Petitioner Union likewise points out that there was no interval in the
employment contract of its officers and members, who were all employees of respondent, which lack of interval, for petitioner
Union, "manifests that the ‘undertaking’ is usually necessary and desirable to the usual trade or business of the employer."
We cannot subscribe to the view taken by petitioner Union.
The distinction between a regular and a project employment is provided in Article 280, paragraph 1, of the Labor Code:
ART. 280. Regular and Casual Employment.— The provisions of written agreement to the contrary notwithstanding and
regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been
engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except
where the employment has been fixed for a specific project or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature
and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any employee
who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular
employee with respect to the activity in which he is employed and his employment shall continue while such actually exists.7

The foregoing contemplates four (4) kinds of employees: (a) regular employees or those who have been "engaged to perform
activities which are usually necessary or desirable in the usual business or trade of the employer"; (b) project employees or
those "whose employment has been fixed for a specific project or undertaking[,] the completion or termination of which has
been determined at the time of the engagement of the employee"; (c) seasonal employees or those who work or perform
services which are seasonal in nature, and the employment is for the duration of the season;8 and (d) casual employees or
those who are not regular, project, or seasonal employees. Jurisprudence has added a fifth kind— a fixed-term employee.9
Article 280 of the Labor Code, as worded, establishes that the nature of the employment is determined by law, regardless of
any contract expressing otherwise. The supremacy of the law over the nomenclature of the contract and the stipulations
contained therein is to bring to life the policy enshrined in the Constitution to "afford full protection to labor." 10 Thus, labor
contracts are placed on a higher plane than ordinary contracts; these are imbued with public interest and therefore subject to
the police power of the State.11
However, notwithstanding the foregoing iterations, project employment contracts which fix the employment for a specific
project or undertaking remain valid under the law:
x x x By entering into such a contract, an employee is deemed to understand that his employment is coterminous with the
project. He may not expect to be employed continuously beyond the completion of the project. It is of judicial notice that
project employees engaged for manual services or those for special skills like those of carpenters or masons, are, as a rule,
unschooled. However, this fact alone is not a valid reason for bestowing special treatment on them or for invalidating a
contract of employment. Project employment contracts are not lopsided agreements in favor of only one party thereto. The
employer’s interest is equally important as that of the employee[s’] for theirs is the interest that propels economic activity.
While it may be true that it is the employer who drafts project employment contracts with its business interest as overriding
consideration, such contracts do not, of necessity, prejudice the employee. Neither is the employee left helpless by a
prejudicial employment contract. After all, under the law, the interest of the worker is paramount.12
In the case at bar, the records reveal that the officers and the members of petitioner Union signed employment contracts
indicating the specific project or phase of work for which they were hired, with a fixed period of employment. The NLRC
correctly disposed of this issue:
A deeper examination also shows that [the individual members of petitioner Union] indeed signed and accepted the
[employment contracts] freely and voluntarily. No evidence was presented by [petitioner] Union to prove improper pressure or
undue influence when they entered, perfected and consummated [the employment] contracts. In fact, it was clearly
established in the course of the trial of this case, as explained by no less than the President of [petitioner] Union, that the
contracts of employment were read, comprehended, and voluntarily accepted by them. x x x.
xxxx
As clearly shown by [petitioner] Union’s own admission, both parties had executed the contracts freely and voluntarily without
force, duress or acts tending to vitiate the worker[s’] consent. Thus, we see no reason not to honor and give effect to the terms
and conditions stipulated therein. x x x.13
Thus, we are hard pressed to find cause to disturb the findings of the NLRC which are supported by substantial evidence.
Labor Relation Set VvI * strikes and lockouts* Page 40 of 52
It is well-settled in jurisprudence that factual findings of administrative or quasi-judicial bodies, which are deemed to have
acquired expertise in matters within their respective jurisdictions, are generally accorded not only respect but even finality,
and bind the Court when supported by substantial evidence.14 Rule 133, Section 5 defines substantial evidence as "that amount
of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion."
Consistent therewith is the doctrine that this Court is not a trier of facts, and this is strictly adhered to in labor cases. 15 We may
take cognizance of and resolve factual issues, only when the findings of fact and conclusions of law of the Labor Arbiter or the
NLRC are inconsistent with those of the CA.16
In the case at bar, both the NLRC and the CA were one in the conclusion that the officers and the members of petitioner Union
were project employees. Nonetheless, petitioner Union insists that they were regular employees since they performed work
which was usually necessary or desirable to the usual business or trade of the Construction Department of respondent.
The landmark case of ALU-TUCP v. NLRC17 instructs on the two (2) categories of project employees:
It is evidently important to become clear about the meaning and scope of the term "project" in the present context. The
"project" for the carrying out of which "project employees" are hired would ordinarily have some relationship to the usual
business of the employer. Exceptionally, the "project" undertaking might not have an ordinary or normal relationship to the
usual business of the employer. In this latter case, the determination of the scope and parameters of the "project" becomes
fairly easy. x x x. From the viewpoint, however, of the legal characterization problem here presented to the Court, there should
be no difficulty in designating the employees who are retained or hired for the purpose of undertaking fish culture or the
production of vegetables as "project employees," as distinguished from ordinary or "regular employees," so long as the
duration and scope of the project were determined or specified at the time of engagement of the "project employees." For, as
is evident from the provisions of Article 280 of the Labor Code, quoted earlier, the principal test for determining whether
particular employees are properly characterized as "project employees" as distinguished from "regular employees," is whether
or not the "project employees" were assigned to carry out a "specific project or undertaking," the duration (and scope) of
which were specified at the time the employees were engaged for that project.
In the realm of business and industry, we note that "project" could refer to one or the other of at least two (2) distinguishable
types of activities. Firstly, a project could refer to a particular job or undertaking that is within the regular or usual business of
the employer company, but which is distinct and separate, and identifiable as such, from the other undertakings of the
company. Such job or undertaking begins and ends at determined or determinable times. The typical example of this first type
of project is a particular construction job or project of a construction company. A construction company ordinarily carries out
two or more [distinct] identifiable construction projects: e.g., a twenty-five-storey hotel in Makati; a residential condominium
building in Baguio City; and a domestic air terminal in Iloilo City. Employees who are hired for the carrying out of one of these
separate projects, the scope and duration of which has been determined and made known to the employees at the time of
employment, are properly treated as "project employees," and their services may be lawfully terminated at completion of the
project.
The term "project" could also refer to, secondly, a particular job or undertaking that is not within the regular business of the
corporation. Such a job or undertaking must also be identifiably separate and distinct from the ordinary or regular business
operations of the employer. The job or undertaking also begins and ends at determined or determinable times.18

Plainly, the litmus test to determine whether an individual is a project employee lies in setting a fixed period of employment
involving a specific undertaking which completion or termination has been determined at the time of the particular employee’s
engagement.
In this case, as previously adverted to, the officers and the members of petitioner Union were specifically hired as project
employees for respondent’s Leyte Geothermal Power Project located at the Greater Tongonan Geothermal Reservation in
Leyte. Consequently, upon the completion of the project or substantial phase thereof, the officers and the members of
petitioner Union could be validly terminated.
Petitioner Union is adamant, however, that the lack of interval in the employment contracts of its officer and members negates
the latter’s statusas mere project employees. For petitioner Union, the lack of interval further drives home its point that its
officers and members are regular employees who performed work which was usually necessary or desirable to the usual
business or trade of respondent.
We are not persuaded.
Petitioner Union’s members’ employment for more than a year does equate to their regular employment with respondent. In
this regard, Mercado, Sr. v. NLRC19 illuminates:
The first paragraph [of Article 280 of the Labor Code] answers the question of who are regular employees. It states that,
regardless of any written or oral agreement to the contrary, an employee is deemed regular where he is engaged in necessary
or desirable activities in the usual business or trade of the employer, except for project employees.
A project employee has been defined to be one whose employment has been fixed for a specific project or undertaking, the
completion or termination of which has been determined at the time of the engagement of the employee, or where the work
or service to be performed is seasonal in nature and the employment is for the duration of the season, as in the present case.
The second paragraph of Art. 280 demarcates as "casual" employees, all other employees who do not fall under the definition
of the preceding paragraph. The proviso, in said second paragraph, deems as regular employees those "casual" employees who
have rendered at least one year of service regardless of the fact that such service may be continuous or broken.
Petitioners, in effect, contend that the proviso in the second paragraph of Art. 280 is applicable to their case and that the Labor
Arbiter should have considered them regular by virtue of said proviso. The contention is without merit.
The general rule is that the office of a proviso is to qualify or modify only the phrase immediately preceding it or restrain or
limit the generality of the clause that it immediately follows. Thus, it has been held that a proviso is to be construed with
reference to the immediately preceding part of the provision to which it is attached, and not to the statute itself or to other
sections thereof. The only exception to this rule is where the clear legislative intent is to restrain or qualify not only the phrase
immediately preceding it (the proviso) but also earlier provisions of the statute or even the statute itself as a whole.
Policy Instruction No. 12 of the Department of Labor and Employment discloses that the concept of regular and casual
employees was designed to put an end to casual employment in regular jobs, which has been abused by many employers to
prevent so – called casuals from enjoying the benefits of regular employees or to prevent casuals from joining unions. The
Labor Relation Set VvI * strikes and lockouts* Page 41 of 52
same instructions show that the proviso in the second paragraph of Art. 280 was not designed to stifle small-scale businesses
nor to oppress agricultural land owners to further the interests of laborers, whether agricultural or industrial. What it seeks to
eliminate are abuses of employers against their employees and not, as petitioners would have us believe, to prevent small-
scale businesses from engaging in legitimate methods to realize profit. Hence, the proviso is applicable only to the employees
who are deemed "casuals" but not to the "project" employees nor the regular employees treated in paragraph one of Art. 280.
Clearly, therefore, petitioners being project employees, or, to use the correct term, seasonal employees, their employment
legally ends upon completion of the project or the [end of the] season. The termination of their employment cannot and
should not constitute an illegal dismissal.
Considering our holding that the officers and the members of petitioner Union were project employees, its claim of union
busting is likewise dismissed.
On the second issue, petitioner Union contends that there was no stoppage of work; hence, they did not strike.
Euphemistically, petitioner Union avers that it "only engaged in picketing,"20 and maintains that "without any work stoppage,
[its officers and members] only engaged in xxx protest activity."
We are not convinced. Petitioner Union splits hairs.
To begin with, quite evident from the records is the undisputed fact that petitioner Union filed a Notice of Strike on December
28, 1998 with the Department of Labor and Employment, grounded on respondent’s purported
unfair labor practices, i.e., "refusal to bargain collectively, union busting and mass termination." On even date, petitioner
Union declared and staged a strike.
Second, then Secretary of Labor, Bienvenido E. Laguesma, intervened and issued a Return-to-Work Order21 dated January 4,
1999, certifying the labor dispute to the NLRC for compulsory arbitration. The Order narrates the facts leading to the labor
dispute, to wit:
On 28 December 1998, [petitioner Union] filed a Notice of Strike against [respondent] citing unfair labor practices, specifically:
refusal to bargain collectively, union busting and mass termination as the grounds [therefor]. On the same day, [petitioner]
Union went on strike and took control over [respondent’s] facilities of its Leyte Geothermal Project.
Attempts by the National Conciliation and Mediation Board –RBVIII to forge a mutually acceptable solution proved futile.
In the meantime, the strike continues with no settlement in sight placing in jeopardy the supply of much needed power supply
in the Luzon and Visayas grids.
xxxx
The on-going strike threatens the availability of continuous electricity to these areas which is critical to day-to-day life,
industry, commerce and trade. Without doubt, [respondent’s] operations [are] indispensable to the national interest and falls
(sic) within the purview of Article 263 (g) of the Labor Code, as amended, which warrants (sic) the intervention of this Office.
 Labor Relation Set VvI * strikes and lockouts* Page 42 of 52

Third, petitioner Union itself, in its pleadings, used the word "strike." by secret ballot in a meeting called for that purpose. The decision shall be valid for the duration of the dispute based on
substantially the same grounds considered when the strike or lockout vote was taken. The Department may, at its own
initiative or upon the request of any affected party, supervise the conduct of the secret balloting. In every case, the union or
Ultimately, petitioner Union’s asseverations are belied by the factual findings of the NLRC, as affirmed by the CA:
the employer shall furnish the Department the results of the voting at least seven days before the intended strike or lockout,
subject to the cooling-off period herein provided.
The failure to comply with the mandatory requisites for the conduct of strike is both admitted and clearly shown on record.
Hence, it is undisputed that no strike vote was conducted; likewise, the cooling-off period was not observed and that the 7-day
In fine, petitioner Union’s bare contention that it did not hold a strike cannot trump the factual findings of the NLRC that
strike ban after the submission of the strike vote was not complied with since there was no strike vote taken.
petitioner Union indeed struck against respondent. In fact, and more importantly, petitioner Union failed to comply with the
requirements set by law prior to holding a strike.1avvphi1
xxxx
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 65760 is AFFIRMED. Costs against
The factual issue of whether a notice of strike was timely filed by [petitioner] Union was resolved by the evidence on record. petitioner Union.SO ORDERED.
The evidence revealed that [petitioner] Union struck even before it could file the required notice of strike. Once again, this
relied on [petitioner] Union’s proof. [Petitioner] Union[’s] witness said:
Republic of the Philippines
SUPREME COURT
Atty. Sinsuat : You stated that you struck on 28 December 1998 is that correct? Manila
Witness : Early in the morning of December 1998. THIRD DIVISION
xxxx G.R. No. 167401 July 5, 2010
Atty. Sinsuat : And you went there to conduct the strike did you not? BAGONG PAGKAKAISA NG MANGGAGAWA NG TRIUMPH INTERNATIONAL, represented by SABINO F. GRAGANZA, Union
Witness : Our plan then was to strike at noon of December 28 and the strikers will be positioned at their respective areas.22 President, and REYVILOSA TRINIDAD, Petitioners,
vs.
SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT and TRIUMPH INTERNATIONAL (PHILS.), INC., Respondents.
Article 263 of the Labor Code enumerates the requisites for holding a strike: x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 167407
TRIUMPH INTERNATIONAL (PHILS.), INC., Petitioner,
Art. 263. Strikes, picketing, and lockouts. – (a) x x x. vs.
x x x x. BAGONG PAGKAKAISA NG MANGGAGAWA NG TRIUMPH INTERNATIONAL, ELOISA FIGURA, JERRY JAICTEN, ROWELL FRIAS,
(c) In cases of bargaining deadlocks, the duly certified or recognized bargaining agent may file a notice of strike or the MARGARITA PATINGO and ROSALINDA OLANGAR, Respondents.
employer may file a notice of lockout with the Department at least 30 days before the intended date thereof. In cases of unfair DECISION
labor practice, the period of notice shall be 15 days and in the absence of a duly certified bargaining agent, the notice of strike BRION, J.:
may be filed by any legitimate labor organization in behalf of its members. However, in case of dismissal from employment of Before the Court are two separate petitions1 which were consolidated pursuant to our Resolution dated June 8,
union officers duly elected in accordance with the union constitution and by-laws, which may constitute union busting, where 2005.2 The first,3 filed by the Bagong Pagkakaisa ng Manggagawa ng Triumph International (union), seeks to set aside the
the existence of the union is threatened, the 15-day cooling-off period shall not apply and the union may take action decision4 of the Court of Appeals (CA) in CA-G.R. SP No. 60516, and the subsequent resolution5 of March 10, 2005, on the
immediately. parties’ motion for reconsideration. The second,6 filed by Triumph International (Phils.), Inc. (company), prays for the
annulment of the same decision and resolution with respect to the illegal dismissal issue.
(d) The notice must be in accordance with such implementing rules and regulations as the Department of Labor and
Employment may promulgate. The Antecedents

(e) During the cooling-off period, it shall be the duty of the Department to exert all efforts at mediation and conciliation to
effect a voluntary settlement. Should the dispute remain unsettled until the lapse of the requisite number of days from the
mandatory filing of the notice, the labor union may strike or the employer may declare a lockout.
(f) A decision to declare a strike must be approved by a majority of the total union membership in the bargaining unit
concerned, obtained by secret ballot in meetings or referenda called for that purpose. A decision to declare a lockout must be
approved by a majority of the board of directors of the corporation or association or of the partners in a partnership, obtained
The relevant facts, clearly laid out in the challenged CA decision, are summarized below.
The union and the company had a collective bargaining agreement (CBA) that expired on July 18, 1999. The union seasonably
submitted proposals to the company for its renegotiation. Among these proposals were economic demands for a wage
increase of P180.00 a day, spread over three (3) years, as follows: P70.00/day from July 19, 1999; P60.00/day from July 19,
2000, and P50.00/day from July 19, 2001. The company countered with a wage increase offer, initially at P42.00 for three
years, then increased it to P45.00, also for three years.

The negotiations reached a deadlock, leading to a Notice of Strike the union filed on October 15, 1999. 7 The National
Conciliation and Mediation Board (NCMB) exerted efforts but failed to resolve the deadlock.
On November 15, 1999, the company filed a Notice of Lock-out8 for unfair labor practice due to the union’s alleged work
slowdown. The union went on strike three days later, or on November 18, 1999.
On January 27, 2000, Secretary Bienvenido E. Laguesma (Labor Secretary) of the Department of Labor and Employment (DOLE)
assumed jurisdiction over the labor dispute, pursuant to Article 263(g) of the Labor Code.9The Labor Secretary directed all
striking workers to return to work within twenty-four (24) hours from receipt of the assumption order, while the company was
directed to accept them back to work under the same terms and conditions existing before the strike. The Labor Secretary also
required the parties to submit their respective position papers.
On February 2 and 3, 2000, several employees attempted to report for work, but the striking employees prevented them from
entering the company premises.
In a petition dated February 8, 2000,10 the company asked the Labor Secretary to issue an order directing the union to allow
free ingress to and egress from the company premises; to dismantle all structures obstructing free ingress and egress; and, to
deputize the Philippine National Police to assist the DOLE in the peaceful implementation of the Labor Secretary's January 27,
2000 order.
The Labor Secretary reiterated his directives in another order dated February 22, 2000,11 and deputized Senior Superintendent
Manuel A. Cabigon, Director of the Southern Police District, "to assist in the peaceful and orderly implementation of this
Order."
At a conciliation meeting held on February 29, 2000, the company agreed to extend the implementation of the return-to-work
order until March 6, 2000.12 The union, through a letter dated March 2, 2000,13 advised the NCMB Administrator of the union
executive board’s decision to return to work the following day. In a letter also dated March 2, 2000,14 the company advised the
NCMB Administrator that it was willing to accept all returning employees, without prejudice to whatever legal action it may
take against those who committed illegal acts. The company also stated that all the union officers and members and the union
board members would be placed under preventive suspension, pending investigation of their alleged illegal acts.
The striking employees returned to work on March 3 and 4, 2000 but twenty (20) union officers and a shop steward were not
allowed entry into the company premises. The excluded union leaders were each served identical letters15 directing them to
explain in writing why their employment should not be terminated or why no disciplinary action should be imposed on them
for defying and violating the Labor Secretary’s assumption order of January 27, 2000 and the second return-to-work order of
February 22, 2000; for blocking and resisting the entry of returning employees on February 2, 3, and 8, 2000; for acts of
violence committed on February 24 and 25, 2000; and for defying the company's return-to-work order of all employees on
February 8, 2000.16
On March 6, 2000, the twenty-one (21) union officers, by motion, asked the Labor Secretary to issue a reinstatement order and
to cite the company for contempt. On March 9, 2000, the Labor Secretary directed the company to accept the union officers
and the shop steward back to work, without prejudice to the continuation of the investigation.17
Labor Relation Set VvI * strikes and lockouts* Page 43 of 52
At the conciliation meeting of March 15, 2000, the company agreed to reinstate the union officers in the payroll effective
March 13, 200018 and withdrew its notice of lockout.19
On March 21, 2000, the union officers again received identically worded letters requiring them to explain in writing within
twenty-four (24) hours why no disciplinary action, including dismissal, should be taken against them for leading, instigating,
and participating in a deliberate work slowdown during the CBA negotiations.20
The union officers explained, as required, through their respective affidavits,21 and a hearing followed on May 5, 2000.
Thereafter, the union officers were each served a notice of termination of employment effective at the close of office hours on
May 11, 2000.22
On June 8, 2000, the union and the officers filed a petition to cite the company and its responsible officers for contempt, and
moved that a reinstatement order be issued.23 They claimed that: (1) the company officials violated the Labor Secretary’s
return-to-work order when these officials placed them under preventive suspension and refused them entry into the company
premises; (2) the company also violated the March 9, 2000 order of the Labor Secretary when they were reinstated only in the
payroll; and (3) the company committed unfair labor practice and dismissed them without basis.
The LABOR Secretary’s Decision
The Labor Secretary resolved the bargaining deadlock24 and awarded a wage increase of P48.00 distributed over three years, as
follows:25
Effective July 19, 1999 – P15.00/day
Effective July 19, 2000 – P16.00/day
Effective July 19, 2001 - P17.00/day
The union’s other economic demands and non-economic proposals were all denied.
The union moved for the reconsideration26 of the Labor Secretary’s decision, while the company moved for its own partial
reconsideration.27 The Labor Secretary denied both motions, declaring that the petition to cite the company and its responsible
officers for contempt had already been rendered moot and academic.28 He also ruled that the legality of the union officers’
dismissal properly falls within the original and exclusive jurisdiction of the labor arbiter under Article 217 of the Labor Code.
The union elevated the case to the CA, through a petition for certiorari under Rule 65 of the Rules of Court,29 on the following
grounds:
1. The Labor Secretary committed grave abuse of discretion amounting to lack or excess of jurisdiction when he
denied the proposals of the 1,130 union members to improve the existing CBA.
2. The Labor Secretary committed grave abuse of discretion when he declared that the issue of reinstatement of the
officers of the union and the petition to cite the company and its responsible officers for contempt had become
academic.
The union insisted on its demanded P180.00 daily wage increase distributed over three years (1999 to 2001), arguing that the
demand is just, fair and reasonable based on the company's capacity to pay and the company’s bargaining history. It noted that

the company gave a P55.00 increase for the years 1993-1995, and P64.00 for the years 1996 to 1998. It also objected the
rejection of its other economic demands and non-economic proposals.
The union also contended that the company and its responsible officers should have been held in contempt for violating the
Labor Secretary’s return-to-work order. It argued that the officers should have been reinstated in the absence of substantial
evidence supporting the charges against them.
The company responded by praying for the dismissal of the petition for lack of abuse of discretion on the part of the Labor
Secretary. It posited that the P48.00 wage increase award is more than reasonable, and that the Labor Secretary properly
stayed his hand on the issue of illegal dismissal as the matter was beyond his jurisdiction. The company likewise argued that
any question on the award had been mooted by the workers’ acceptance of the wage increase.
While the petition was pending, individual settlements were reached between certain individual petitioners (Cenon N.
Dionisio, Catalina N. Velasquez, Nila P. Tresvalles, Vivian A. Arcos, Delia N. Soliven, Leticia S. Santos, Emerita D. Maniebo,
Conchita R. Encinas, Elpidia C. Cancino, Consolacion S. Umalia, Nenette N. Gonzales, Creselita D. Rivera, and Rolando O.
Madera) and the company. These petitioners executed their respective Release, Waiver and Quitclaim after receiving their
separation pay and other benefits from the company.30
In light of these developments and the workers’ acceptance of the wage award (except for the union officers), the company
moved for the dismissal of the petition.31 The union and the remaining union officers opposed the motion, contending that the
workers’ acceptance of the awarded wage increase cannot be considered a waiver of their demand; the receipt of the P48.00
award was merely an advance on their demand. The Release, Waiver and Quitclaim executed by the 13 officers, on the other
hand, cannot bind the officers who opted to maintain the petition.
On December 17, 2001, two more officers – Juliana D. Galo and Remedios C. Barque – also executed their respective Release,
Waiver and Quitclaim.32
The CA Decision
The CA found the petition partly meritorious. It affirmed the Labor Secretary's wage increase award, but modified his ruling on
the dismissal of the union officers.33
On the wage issue and related matters, the CA found the Labor Secretary’s award legally in order. It noted the following factors
supportive of the award:
1. The average daily salary of an employee of P310.00 is more than the statutory minimum wage as admitted by the
union itself.
2. The company grants to its employees forty-two (42) other monetary and welfare benefits.
3. The increase in the wages of the employees carries with it a corresponding increase in their salary-based benefits.
4. The wage increase granted to workers employed in the industry is less than the increase proposed by the
company.
5. The Asian financial crisis.
Labor Relation Set VvI * strikes and lockouts* Page 44 of 52
The CA also noted that, in the meantime, the parties had executed a new CBA for the years 2002 to 2005 where they freely
agreed on a total P45.00/day wage increase distributed over three years.
On the other hand, the CA faulted the Labor Secretary for not ruling on the dismissal of the union officers. It took exception to
the Labor Secretary's view that the dismissal question is within the exclusive jurisdiction of the labor arbiter pursuant to Article
217 of the Labor Code. It invoked the ruling of this Court in Interphil Laboratories Employees Union-FFW v. Interphil
Laboratories, Inc.,34 which, in turn, cited International Pharmaceuticals, Inc. v. Secretary of Labor,35 where we held that the
Labor Secretary has jurisdiction over all questions and controversies arising from an assumed dispute, including cases over
which the labor arbiter has exclusive jurisdiction.
The CA pointed out that while the labor dispute before the Labor Secretary initially involved a bargaining deadlock, a related
strike ensued and charges were brought against the union officers (for defiance of the return-to-work order of the Labor
Secretary, and leading, instigating, and participating in a deliberate work slowdown during the CBA negotiations) resulting in
their dismissal from employment; thus, the dismissal is intertwined with the strike that was the subject of the Labor Secretary’s
assumption of jurisdiction.
The CA, however, avoided a remand of the illegal dismissal aspect of the case to the Labor Secretary on the ground that it
would compel the remaining six officers, lowly workers who had been out of work for four (4) years, to go through the
"calvary" of a protracted litigation. In the CA’s view, it was in keeping with justice and equity for it to proceed to resolve the
dismissal issue itself.
The six remaining officers of the union – Reyvilosa Trinidad, Eloisa Figura, Jerry Jaicten, Rowell Frias, Margarita Patingo, and
Rosalinda Olangar (shop steward) – all stood charged with defying (1) the Labor Secretary’s return-to-work order of January 27,
2000,36 and (2) the company’s general notice for the return of all employees on February 8, 2000.37 Later, they were also
charged with leading, instigating, and participating in a deliberate slowdown during the CBA negotiations.
The charges were supported by the affidavits of Ernesto P. Dayag, Salvio Bayon, Victoria Sanchez, Lyndon Dinglasan, Teresita
Nacion, Herman Vinoya, and Leonardo Gomez.38 The CA noted that in all these affidavits, "no mention was ever made of
[anyone] of the six (6) remaining individual petitioners, save for Reyvilosa Trinidad. Also, none of the said affidavits even hinted
at the culpabilities of petitioners Eloisa Figura, Jerry Jaicten, Rowell Frias, Margarita Patingo, and Rosalinda Olangar for the
alleged illegal acts imputed to them."39
For failure of the company to prove by substantial evidence the charges against the remaining officers, the CA concluded that
their employment was terminated without valid and just cause, making their dismissal illegal.
With respect to Trinidad, the CA found that her presence in the picket line and participation in an illegal act – obstructing the
ingress to and egress from the company's premises – were duly established by the affidavit of Bayon.40 For this reason, the CA
found Trinidad's dismissal valid.
The appellate court thus affirmed the May 31, 200041 order of the Labor Secretary and modified the resolution dated July 14,
2000.42

The CA denied the motions for reconsideration that the union and its officers, and the company filed. 43 Hence, the present
petitions.
The Petitions G.R. No. 167401
The petition is anchored on the following grounds –
1. The CA erred in sustaining the Labor Secretary's wage increase award of P48.00/day spread over three years.
2. The CA erred in finding the dismissal of Trinidad valid.
The union presents the following arguments –
On the CBA Award
The union contends that the CBA wage increases from 1994 to 1998 ranged from P16.00/day to P27.00/day for every year of
the CBA period; the arguments behind the company’s decreased wage offer were the same arguments it raised in previous CBA
negotiations; the alleged financial crisis in the region on which the CBA award was based actually did not affect the company
because it sourced its raw materials from its mother company, thereby avoiding losses; the company’s leading status in the
industry in terms of wages should not be used in the determination of the award; rather, it should be based on the company’s
financial condition and its number one rank among 7,000 corporations in the country manufacturing ladies’, girls’, and babies’
garments, and number 46 in revenues with gross revenues of P1.08B, assets of P525.5M and stockholders’ equity of P232.1M;
in granting only a wage increase out of 44 items in its proposal, the award disregarded the factors on which its demands were
based such as the peso devaluation and the daily expenditure of P1,400.00/day for a family of six (6) as found by the National
Economic and Development Authority.
On the Dismissal of Reyvilosa Trinidad
The union seeks a reversal of the dismissal of Trinidad. It argues that she was dismissed for alleged illegal acts based solely on
the self-serving affidavits executed by officers of the company; the strike had not been declared illegal for the company had
not initiated an action to have it declared illegal; Trinidad was discriminated against because of the four union officers
mentioned in the affidavits, three were granted one month separation pay plus other benefits to settle the dispute in regard to
the three; also the same arrangement was entered into with the other officers, which resulted in the signing of the waiver,
quitclaim and release; the only statement in the affidavits against Trinidad was her alleged megaphone message to the striking
employees not to return to work.
The union thus asks this Court to modify the assailed CA ruling through an order improving the CBA wage award and the grant
of the non-wage proposals. It also asks that the dismissal of Trinidad be declared illegal, and that the company be ordered to
pay the union moral and exemplary damages, litigation expenses, and attorney's fees.
G.R. No. 167407
For its part, the company seeks to annul the CA rulings on the dismissal issue, on the following grounds –
1. The CA erred in ruling that the Labor Secretary abused his discretion in not resolving the issue of the validity of
the dismissal of the officers of the union.
Labor Relation Set VvI * strikes and lockouts* Page 45 of 52
2. The CA erred in resolving the factual issue of dismissal instead of remanding the case for further proceedings.
3. In resolving the issue, the company was deprived of its right to present evidence and, therefore, to due process of
law.
The company submits that the Labor Secretary has no authority to decide the legality or illegality of strikes or lockouts,
jurisdiction over such issue having been vested on the labor arbiters pursuant to Article 217 of the Labor Code; under Article
263 of the Code, the Labor Secretary’s authority over a labor dispute encompasses only the issues, not the legality or illegality
of any strike that may have occurred in the meantime.44 It points out that before the Labor Secretary can take cognizance of an
incidental issue such as a dismissal question, it must first be properly submitted to him, as in the case of International
Pharmaceuticals, Inc. v. Secretary of Labor45 where the Labor Secretary was adjudged to have the power to assume jurisdiction
over a labor dispute and its incidental issues such as unfair labor practices subject of cases already ongoing before the National
Labor Relations Commission (NLRC).
The company takes exception to the CA ruling that it submitted the dismissal issue to the Labor Secretary claiming that it can
be seen from its opposition to the union’s petition to cite the company for contempt;46 that it consistently maintained that the
Labor Secretary has no jurisdiction over the dismissal issue; that the affidavits it submitted to the Labor Secretary were only
intended to establish the union’s violation of the return-to-work orders and, to support its petition, on February 8, 2000,47 for
the issuance of a return-to-work order; and, that the CA overstepped its jurisdiction when it ruled on a factual issue, the sole
office of certiorari being the corrections of errors of jurisdiction, including the commission of grave abuse of discretion.
The company likewise disputes the CA’s declaration that it took into consideration all the evidence on the dismissal issue,
claiming that the evidence on record is deficient, for it did not have the opportunity to adduce evidence to prove the
involvement of the union officers in the individual acts for which they were dismissed; had it been given the opportunity to
present evidence, it could have done so. To prove its point, it included in its motion for partial reconsideration 48 a copy of the
information,49 charging union officers Nenette Gonzales and Margarita Patingo of malicious mischief for stoning a company
vehicle on February 25, 2000, while the strike was ongoing.
Even assuming that it could no longer submit evidence on the dismissal of the union officers, the company posits that sufficient
grounds exist to uphold the dismissals. It maintains that the officers are liable to lose their employment status for knowingly
staging a strike after the assumption of jurisdiction by the Labor Secretary and in defying the return-to-work mandated by the
assumption, which are considered prohibited activities under Article 264(a) of the Labor Code, not to mention that without
first having filed a notice, when the union officers and members engaged in and instigated a work slowdown, a form of strike,
without complying with the procedural requirements for staging a strike, the union officers had engaged in an illegal strike.
The parties practically reiterated these positions and the positions taken below in their respective comments to each other’s
petition.
The Court's Ruling
The CBA Award
We affirm the CA's disposition, upholding the Labor Secretary’s award in resolving the bargaining deadlock between the union
and the company for their 1999-2001 CBA.
We find no compelling justification to disturb the award. We are convinced, as the appellate court was, of the reasonableness
of the award. It was based on the prevailing economic indicators in the workplace, in the industry, and in the local and regional
economy. As well, it took into account the comparative standing of the company in terms of employees' wages and other
economic benefits. We find the following factors as sufficient justification for the award:

1. The regional financial crisis and the downturn in the economy at the time, impacting on the performance of the
company as indicated in its negative financial picture in 1999.
2. The company’s favorable comparison with industry standards in terms of employee benefits, especially wages. Its
average daily basic wage of P310.00 is 40% higher than the statutory minimum wage ofP223.50, and superior to the
industry’s average of P258.00. For the years prior to the 1999 negotiations, its aggregate daily wage increase
of P64.00 surpassed the statutory minimum increase of P33.00.
3. The forty-two (42) non-wage benefit programs of the company which undeniably extend the reach of the
employees' cash wage in enhancing the well-being of the employees and their families.
The Labor Secretary's Order of May 31, 2000 fully explained these considerations as follows:50
We fully agree with the Union that relations between management and labor ought to be governed by the higher precepts of
social justice as enshrined in the Constitution and in the laws. We further agree with it that the worker's over-all well-being is
as much affected by his wages as by other macro-economic factors as the CPI, cost of living, the varied needs of the family. Yet,
the other macro-economic factors cited by the company such as the after-effects of the regional financial crisis, the existing
unemployment rate, and the need to correlate the rate of wage increase with the CPI are equally important. Of course[,] other
macro-economic factors such as the contraction of sales and production as well as the growing lack of direct investors, are also
important considerations. It is noteworthy that both the Union and Management recognize that the entire gamut of macro-
economic factors necessarily impact on the micro-economic conditions of an individual company even in terms of wage
increases.
The Union also makes mention of the need to factor in the industry where the employer belongs x x x. This is affirmed by the
Company when it provides a comparison with the other key players in the industry. It has been properly shown that its
prevailing levels of wages and other benefits are, generally, superior to its counterparts in the local garments industry. x x x
But even as we agree with the Union that the Company's negative financial picture for 1999 should not be an overriding
consideration in coming up with an adjudicated wage increase, We cannot make the historical wage increases as our starting
point in determining the appropriate wage adjustment. The Company’s losses for 1999 which, even the Union recognizes,
amounts to millions of pesos, coupled with the current economic tailspin warrant a more circumspect view[.]
Cognizance is likewise made of the Company's 42 non-wage benefits programs which substantially [answer] the Union's
concerns with respect to the living wage and the needs of a family. It would not be amiss to mention that said benefits have
their corresponding monetary valuations that in effect increase a worker's daily pay. Likewise, the needed family expenditure is
answered for not solely by an individual family member's income alone, but also from other incomes derived by the entire
family from all possible sources.
Considering the foregoing circumstances, We deem it reasonable and fair to balance our award on wages.
The conclusions of the Labor Secretary, drawn as they were from a close examination of the submissions of the parties, do not
indicate any legal error, much less any grave abuse of discretion. We accord respect to these conclusions as they were made by
a public official especially trained in the delicate task of resolving collective bargaining disputes, and are on their face just and
Labor Relation Set VvI * strikes and lockouts* Page 46 of 52
reasonable. "[U]nless there is a clear showing of grave abuse of discretion, this Court cannot, and will not, interfere with the
labor expertise of the public respondent Secretary of Labor," as the Court held in Pier Arrastre and Stevedoring Services v. Ma.
Nieves Roldan-Confesor, et al.51
We also note that during the pendency of the present dispute, the parties entered into a new CBA for the years 2000-2005,
providing for a P45.00/day wage increase for the workers. The CA cited this agreed wage adjustment as an indication of the
reasonableness of the disputed award. The Labor Secretary himself alluded to "the letter-manifestation received by this Office
on 15 June 2000 containing the signatures of some 700 employees of the Company indicating the acceptance of the award
rendered in the 31 May 2000 Order."52 There was also the manifestation of the company dated February 7, 2006, advising the
Court that it concluded another CBA with the union providing for a wage increase of P22.00/day effective July 19,
2005; P20.00/day for July 19, 2006; andP20.00/day for July 19, 2007.53 The successful negotiation of two collective agreements
even before the parties could sit down and formalize the 1999-2001 CBA highlights the need for the parties to abide by the
decision of the Labor Secretary and move on to the next phase of their collective bargaining relationship.
The Illegal Dismissal Issue
Before we rule on the substantive aspect of this issue, we deem it proper to resolve first the company’s submission that the CA
erred: (1) in ruling that the Labor Secretary gravely abused his discretion in not deciding the dismissal issue; and, (2) in deciding
the factual issue itself, instead of remanding the case, thereby depriving it of the right to present evidence on the matter.
We agree with the CA's conclusion that the Labor Secretary erred, to the point of abusing his discretion, when he did not
resolve the dismissal issue on the mistaken reading that this issue falls within the jurisdiction of the labor arbiter. This was an
egregious error and an abdication of authority on the matter of strikes – the ultimate weapon in labor disputes that the law
specifically singled out under Article 263 of the Labor Code by granting the Labor Secretary assumption of jurisdiction powers.
Article 263(g) is both an extraordinary and a preemptive power to address an extraordinary situation – a strike or lockout in an
industry indispensable to the national interest. This grant is not limited to the grounds cited in the notice of strike or lockout
that may have preceded the strike or lockout; nor is it limited to the incidents of the strike or lockout that in the meanwhile
may have taken place. As the term "assume jurisdiction" connotes, the intent of the law is to give the Labor Secretary full
authority to resolve all matters within the dispute that gave rise to or which arose out of the strike or lockout; it includes and
extends to all questions and controversies arising from or related to the dispute, including cases over which the labor arbiter
has exclusive jurisdiction.54
In the present case, what the Labor Secretary refused to rule upon was the dismissal from employment that resulted from the
strike. Article 264 significantly dwells on this exact subject matter by defining the circumstances when a union officer or
member may be declared to have lost his employment. We find from the records that this was an issue that arose from the
strike and was, in fact, submitted to the Labor Secretary, through the union’s motion for the issuance of an order for
immediate reinstatement of the dismissed officers and the company’s opposition to the motion. Thus, the dismissal issue was
properly brought before the Labor Secretary and this development in fact gave rise to his mistaken ruling that the matter is
legally within the jurisdiction of the labor arbiter to decide.
We cannot disagree with the CA’s sympathies when it stated that a remand of the case "would only compel the
individual petitioners, x x x lowly workers who have been out of work for more than four (4) years, to tread once again the
[calvary] of a protracted litigation."55 The dismissal issue and its resolution, however, go beyond the realm of sympathy as they
are governed by law and procedural rules. The recourse to the CA was through the medium of a petition for certiorari under
Rule 65 – an extraordinary but limited remedy. The CA was correct in declaring that the Labor Secretary had seriously erred in

not ruling on the dismissal issue, but was totally out of place in proceeding to resolve the dismissal issue; its action required
the prior and implied act of suspending the Rules of Court – a prerogative that belongs to this Court alone. In the recent case
of Marcos-Araneta v. Court of Appeals,56 we categorically ruled that the CA cannot resolve the merits of the case on a petition
for certiorariunder Rule 65 and must confine itself to the jurisdictional issues raised. Let this case be another reminder to the
CA of the limits of its certiorari jurisdiction.
But as the CA did, we similarly recognize that undue hardship, to the point of injustice, would result if a remand would be
ordered under a situation where we are in the position to resolve the case based on the records before us. As we said
in Roman Catholic Archbishop of Manila v. Court of Appeals:57
[w]e have laid down the rule that the remand of the case to the lower court for further reception of evidence is not necessary
where the Court is in a position to resolve the dispute based on the records before it. On many occasions, the Court, in the
public interest and for the expeditious administration of justice, has resolved actions on the merits instead of remanding them
to the trial court for further proceedings, such as where the ends of justice, would not be subserved by the remand of the
case.58
Thus, we shall directly rule on the dismissal issue. And while we rule that the CA could not validly rule on the merits of this
issue, we shall not hesitate to refer back to its dismissal ruling, where appropriate.
The first question to resolve is the sufficiency of the evidence and records before us to support a ruling on the merits. We find
that the union fully expounded on the merits of the dismissal issue while the company’s positions find principal support from
the affidavits of Dayag, Bayon, Sanchez, Dinglasan, Nacion, Vinoya, and Gomez. The affidavits became the bases of the
individual notices of termination of employment sent to the union officers. The parties’ affidavits and their submitted positions
constitute sufficient bases to support a decision on the merits of the dismissal issue.
The dismissed union officers of the union originally numbered twenty-one (21), twenty (20) of whom – led by union President
Cenon Dionisio – were executive officers and members of the union board. Completing the list was shop steward Olangar. As
mentioned earlier, fifteen (15) of the dismissed officers, including Dionisio, executed a Release, Waiver and Quitclaim and
readily accepted their dismissal.59 Those who remained to contest their dismissal were Reyvilosa N. Trinidad, 2nd Vice-
President; Eloisa Figura, Asst. Secretary; Jerry Jaicten, PRO; Rowell Frias, Board Member; Margarita Patingo, Board Member;
and Rosalinda Olangar, Shop Steward.
The officers of the union subject of the petition were dismissed from the service for allegedly committing illegal acts (1) during
the CBA negotiations and (2) during the strike declared by the union, shortly after the negotiations reached a deadlock. The
acts alluded to under the first category60 involved "leading, instigating, participating in a deliberate slowdown during the CBA
negotiations" and, under the second,61 the alleged defiance and violation by the union officers of the assumption of jurisdiction
and the return-to-work order of the Labor Secretary dated January 27, 2000, as well as the second return-to-work order dated
February 22, 2000. More specifically, in the course of the strike, the officers were charged with blocking and preventing the
entry of returning employees on February 2, 3, and 8, 2000; and on February 24 and 25, 2000, when acts of violence were
committed. They likewise allegedly defied the company's general return-to-work notice for the return of all employees on
February 8, 2000.62
The CA erred in declaring that except for Trinidad, the company failed to prove by substantial evidence the charges against the
remaining union officers, thus making this dismissal illegal. The appellate court noted that in all the affidavits the company
Labor Relation Set VvI * strikes and lockouts* Page 47 of 52
submitted as evidence "no mention was ever made of [anyone] of the six (6) remaining individual petitioners, save for
Reyvilosa Trinidad. Also, none of the said affidavits even hinted at the culpabilities of petitioners Eloisa Figuna, Jerry Jaicten,
Rowell Frias, Margarita Patingo and Rosalinda Olangar for the alleged illegal acts imputed to them."63
The charges on which the company based its decision to dismiss the union officers and the shop steward may be grouped into
the following three categories: (1) defiance of the return-to-work order of the Labor Secretary, (2) commission of illegal acts
during the strike, and (3) leading, instigating and participating in a deliberate work slowdown during the CBA negotiations.
While it may be true that the affidavits the company submitted to the Labor Secretary did not specifically identify Figuna,
Jaiden, Frias, Patingo and Olangar to have committed individual illegal acts during the strike, there is no dispute that the union
defied the return-to-work orders the Labor Secretary handed down on two occasions, first on January 27, 2000 (more than two
months after the union struck on November 18, 1999) and on February 22, 2000. In decreeing a return-to-work for the second
time, the Labor Secretary noted:
To date, despite the lapse of the return-to-work period indicated in the Order, the Union continues with its strike. A report
submitted by NCMB-NCR even indicated that all gates of the Company are blocked thereby preventing free ingress and egress
to the premises.64
Under the law,65 the Labor Secretary's assumption of jurisdiction over the dispute or its certification to the National Labor
Relations Commission for compulsory arbitration shall have the effect of automatically enjoining the intended or impending
strike or lockout and 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 before the strike or lockout. The union and
its officers, as well as the workers, defied the Labor Secretary's assumption of jurisdiction, especially the accompanying return-
to-work order within twenty-four (24) hours; their defiance made the strike illegal under the law66 and applicable
jurisprudence.67 Consequently, it constitutes a valid ground for dismissal.68 Article 264(a), paragraph 3 of the Labor Code
provides that "Any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly
participates in the commission of illegal acts during a strike may be declared to have lost his employment status."
The union officers were answerable not only for resisting the Labor Secretary's assumption of jurisdiction and return-to-work
orders; they were also liable for leading and instigating and, in the case of Figura, for participating in a work slowdown (during
the CBA negotiations), a form of strike69 undertaken by the union without complying with the mandatory legal requirements of
a strike notice and strike vote. These acts are similarly prohibited activities.70
There is sufficient indication in the case record that the union officers, collectively, save for shop steward Olangar, were
responsible for the work slowdown, the illegal strike, and the violation of the Labor Secretary's assumption order, that started
with the slowdown in July 1999 and lasted up to March 2000 (or for about ten (10) months).71These illegal concerted actions
could not have happened at the spur of the moment and could not have been sustained for several months without the
sanction and encouragement of the union and its officers; undoubtedly, they resulted from a collective decision of the entire
union leadership and constituted a major component of the union’s strategy to obtain concessions from the company
management during the CBA negotiations.
That the work slowdown happened is confirmed by the affidavits72 and the documentary evidence submitted by the company.
Thus, Ernesto P. Dayag, a security officer of the agency servicing the company (Tamaraw Security Service, Inc.) stated under
oath that in October 1999, the union members were engaging in a noise-barrage everyday and when it was time to go back to

work at noontime, they would mill around the production area or were at the toilet discussing the ongoing CBA negotiations
(among others), and were slow in their movements; in late October (October 27, 1999), they did the same thing at about seven
o’clock in the morning which was already time for work; even those who were already working were deliberately slow in their
movements. On November 12, 1999, when union officer Lisa Velasquez talked to the union members at lunchtime regarding
the CBA negotiations, only about 50% of the union members returned to their work stations.
Victoria P. Sanchez, a sewer in the company's production department, deposed that sometime in the middle of September
1999, the sewers were told by the shop stewards to reduce their efficiency below 75%. They followed the order as it came
from a decision of the union officers at a meeting. It was not difficult to comply with the order because they only had to slow
down at the pre-production and early segments of the production line so that the rest of the line would suffer.
Teresita T. Nacion, another sewer, corroborated Sanchez's deposition stating that in mid-September 1999, during the CBA
negotiations, the sewers were told by the shop stewards to reduce their efficiency below 75% pursuant to the union decision
to slow down production so that the company would suffer losses.
The work slowdown resulted in production losses to the company which it documented and submitted in evidence73 before the
Labor Secretary and was summarized in the affidavit74 of Leonardo T. Gomez, who testified on the impact of the decrease of
the workers’ production efficiency that peaked in September, October, and November 1999, resulting in a financial loss to the
company of P69.277M. Specifically, the company’s efficiency record for the year 199975 posted Eloisa C. Figura’s76 work
performance from April to June 1999 at 77.19% and from July to November 1999 at 51.77%, a substantial drop in her
efficiency.
The union’s two-pronged strategy to soften the company’s stance in the CBA negotiations culminated in its declaration of a
strike on November 18, 1999, which prompted the Labor Secretary’s intervention through an assumption of jurisdiction.
Judging from the manner the union staged the strike, it is readily apparent that the union’s objective was to paralyze the
company and to maintain the work stoppage for as long as possible.
This is the economic war that underlies the Labor Code’s strike provisions, and which the same Code also tries to temper by
regulation. Thus, even with the assumption of jurisdiction and its accompanying return-to-work order, the union persisted with
the strike and prevented the entry to the company premises of workers who wanted to report back for work. In particular,
Salvio Bayon, a company building technician and a member of the union, deposed that at about seven o'clock in the morning of
February 3, 2000, he and ten (10) of his co-employees attempted to enter the company premises, but they were prevented by
a member of the strikers, led by union President Cenon Dionisio and other officers of the union; the same thing happened on
February 8, 24 and 28, 2000.77
In the face of the union's defiance of his first return-to-work order, the Labor Secretary issued a second return-to-work
directive on February 22, 2000 where the labor official noted that despite the lapse of the return-to-work period indicated in
the order, the union continued with its strike.78 At a conciliation meeting on February 29, 2000, the company agreed to extend
the implementation of the return-to-work order to March 6, 2000.79 The union, through a letter dated March 2, 2000,80 advised
the NCMB administrator of the decision of the union executive board for the return to work of all striking workers the
following day. In a letter also dated March 2, 2000,81 the company also advised the NCMB Administrator that it was willing to
accept all returning employees, without prejudice to whatever legal action it may take against those who committed illegal
acts.
Labor Relation Set VvI * strikes and lockouts* Page 48 of 52
The above union letter clearly shows the involvement of the entire union leadership in defying the Labor Secretary's
assumption of jurisdiction order as well as return-to-work orders. From the illegal work slowdown to the filing of the strike
notice, the declaration of the strike, and the defiance of the Labor Secretary's orders, it was the union officers who were
behind the every move of the striking workers; and collectively deciding the twists and turns of the strike which even became
violent as the striking members prevented and coerced returning workers from gaining entry into the company premises. To
our mind, all the union officers who knowingly participated in the illegal strike knowingly placed their employment status at
risk.
In a different vein, the union faulted the company for having dismissed the officers, there being no case filed on the legality or
illegality of the strike. We see no merit in this argument. In Gold City Integrated Port Service, Inc. v. NLRC, 82 we held that "[t]he
law, in using the word ‘may,’ grants the employer the option of declaring a union officer who participated in an illegal strike as
having lost his employment." We reiterated this principle in San Juan De Dios Educational Foundation Employees Union-
Alliance of Filipino Workers v. San Juan De Dios Educational Foundation, Inc., 83 where we stated that "Despite the receipt of an
order from the SOLE to return to their respective jobs, the Union officers and members refused to do so and defied the same.
Consequently, then, the strike staged by the Union is a prohibited activity under Article 264 of the Labor Code. Hence, the
dismissal of its officers is in order. The respondent Foundation was, thus, justified in terminating the employment of the
petitioner Union's officers."
The union attempted to divert attention from its defiance of the return-to-work orders with the specious submission that it
was the company which violated the Labor Secretary's January 27, 2000 order, by not withdrawing its notice of
lockout.841avvphi1
The evidence indicates otherwise. The Labor Secretary himself, in his order of February 22, 2000,85 noted that the union
continued its strike despite the lapse of the return-to-work period specified in his January 27, 2000 order. There is also the
report of the NCMB-NCR clearly indicating that all gates of the company were blocked, thereby preventing free ingress to and
egress from the company premises. There, too, was the letter of the company personnel manager, Ralph Funtila, advising the
union that the company will comply with the Labor Secretary's January 27, 2000 order; Funtila appealed to the striking
employees and the officers to remove all the obstacles and to lift their picket line to ensure free ingress and egress.86 Further,
as we earlier noted, the union itself, in its letter of March 2, 2000, advised the NCMB that the union board of directors had
decided to return to work on March 3, 2000 indicating that they had been on strike since November 18, 1999 and were defiant
of the return-to-work orders since January 28, 2000.
As a final point, the extension of the return-to-work order and the submission of all striking workers, by the company, cannot
in any way be considered a waiver that the union officers can use to negate liability for their actions, as the CA opined in its
assailed decision.87 In the first place, as clarified by Funtila's letter to the NCMB dated March 2, 2000,88 the company will accept
all employees who will report for work up to March 6, 2000, without prejudice to whatever legal action it may take against
those who committed illegal acts. He also clarified that it extended the return-to-work, upon request of the union and the
DOLE to accommodate employees who were in the provinces, who were not notified, and those who were sick.
As a point of law, we find that the company did not waive the right to take action against the erring officers, and this was
acknowledged by the Labor Secretary himself in his order of March 9, 2000,89 when he directed the company "to accept back
to work the twenty (20) union officers and one (1) shop steward[,] without prejudice to the Company's exercise of its
prerogative to continue its investigation." The order was issued upon complaint of the union that the officers were placed
under preventive suspension.

For having participated in a prohibited activity not once, but twice, the union officers, except those our Decision can no longer
reach because of the amicable settlement they entered into with the company, legally deserve to be dismissed from the
service. For failure of the company, however, to prove by substantial evidence the illegal acts allegedly committed by Rosalinda
Olangar, who is a shop steward but not a union officer, we find her dismissal without a valid cause.
WHEREFORE, premises considered, judgment is hereby rendered AFFIRMING with MODIFICATION the challenged decision and
resolution of the Court of Appeals in CA-G.R. SP No. 60516, as follows:
1. The collective bargaining award of DOLE Secretary Bienvenido E. Laguesma, contained in his order dated May 31,
2000, is fully AFFIRMED;
2. The dismissal of REYVILOSA TRINIDAD, union 2nd Vice-President, is likewise AFFIRMED;
3. The dismissal of ELOISA FIGURA, Assistant Secretary; JERRY JAICTEN, Press Relations Officer; and ROWELL FRIAS,
Board Member, is declared VALID and for a just cause; and
4. The dismissal of ROSALINDA OLANGAR is declared illegal. The CA award is SUSTAINED in her case.SO ORDERED
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. Nos. 169829-30 April 16, 2008
STEEL CORPORATION OF THE PHILIPPINES, petitioner,
vs.
SCP EMPLOYEES UNION-NATIONAL FEDERATION OF LABOR UNIONS, respondent.
DECISION
AZCUNA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court. The petition is seeking to set aside
the Decision1 rendered by the Court of Appeals (CA) dated February 28, 2005 in the consolidated cases CA-G.R. SP Nos. 79446
and 82314, wherein the CA denied the petition in CA-G.R. SP No. 79446 while partially granting the petition in CA-G.R. SP No.
82314, as well as the Resolution2 dated September 22, 2005 denying petitioner's motion for reconsideration.
The antecedents are as follows:
Petitioner Steel Corporation of the Philippines (SCP) is engaged in manufacturing construction materials, supplying
approximately 50% of the domestic needs for roofing materials.3 On August 17, 1998, SCP-Federated Union of the Energy
Leaders – General and Allied Services (FUEL-GAS) filed a petition for Certification Election in its bid to represent the rank-and-
file employees of the petitioner.4 Respondent SCP Employees Union (SCPEU) – National Federation of Labor Unions (NAFLU)
intervened, seeking to participate and be voted for in such election5 but the same was denied for having been filed out of
time.6
On September 14, 1998, a consent election was conducted, with "FUEL-GAS" and "NO UNION" as choices. Said election was
however declared a failure because less than a majority of the rank-and-file employees cast their votes. FUEL-GAS filed an
Election Protest claiming that the certification election was characterized by and replete with irregularities.7 On September 21,
1998, NAFLU, the mother federation of respondent, filed a petition for Certification Election for and on behalf of its affiliate,
seeking to represent the rank-and-file employees of petitioner.8 The Med-Arbiter denied the election protest of FUEL-GAS and
granted the petition for certification election filed by NAFLU and further ordered the conduct of the election with "NAFLU" and
"NO UNION" as choices. Both petitioner and FUEL-GAS appealed to the Secretary of Labor, which appeals were later
consolidated.9
Labor Relation Set VvI * strikes and lockouts* Page 49 of 52
On August 27, 1999, the Department of Labor and Employment (DOLE) Undersecretary rendered a consolidated decision
ordering the conduct of a certification election with "FUEL-GAS," respondent and "NO UNION" as choices.10 Subsequent
motions for reconsideration were denied on October 18, 1999.11 Unsatisfied, petitioner and FUEL-GAS appealed to the CA by
way of certiorari.12
On April 14, 2000, the certification election, as ordered by the Med-Arbiter, proceeded. FUEL-GAS participated without
prejudice to the decision of the CA in its pending petition. In said election, respondent emerged as winner; hence, the second
election protest filed by FUEL-GAS.13
On July 12, 2000, the CA, in CA-G.R. SP No. 55721, rendered a Decision14 which annulled and set aside the August 27, 1999
decision and October 18, 1999 resolution of the Undersecretary. The CA further directed the holding of a certification election
with "FUEL-GAS" and "NO UNION" as choices, to the exclusion of respondent.15
On July 31, 2000, the Med-Arbiter dismissed FUEL-GAS' election protest but deferred the request of respondent to be declared
winner in the certification election until final resolution of the pending petitions with the CA. 16 Not satisfied with the
deferment of their certification as winner, respondent appealed to the Labor Secretary.17 It further filed a Manifestation before
the CA pointing out that in the April 14, 2000 certification election, it emerged as winner, and thus, the election should be
considered as an intervening event sufficient to bar another certification election. 18 The CA, however, dismissed said
manifestation on December 28, 2000.19
Meanwhile, on October 16, 2000, the Undersecretary rendered a Decision20 certifying respondent as the exclusive bargaining
agent of petitioner's employees. Petitioner and FUEL-GAS timely filed motions for reconsideration of the aforesaid decision.21
As a consequence of its certification as the exclusive bargaining agent, respondent sent to petitioner CBA proposals. Petitioner,
however, held in abeyance any action on the proposals in view of its pending motion for reconsideration.22
Finding no justification in petitioner's refusal to bargain with it, respondent filed a Notice of Strike with the National
Conciliation and Mediation Board (NCMB) on December 11, 2000. The union raised the issue of unfair labor practice (ULP)
allegedly committed by petitioner for the latter's refusal to bargain with it.23
On January 19, 2001, FUEL-GAS moved for the conduct of a certification election pursuant to the CA decision.24On February 27,
2001, the Undersecretary affirmed its October 16, 2000 decision.25
On March 16, 2001, the labor dispute was certified to the National Labor Relations Commission (NLRC) for compulsory
arbitration, which case was docketed as Cert. Case No. 000200-01.26 Again, on April 2, 2001, another Notice of Strike27 was filed
by respondent for non-recognition as a certified union; refusal to bargain; discrimination against union officers and members;
harassment and intimidation; and illegal dismissal, which was later consolidated with the certified case.
On December 13, 2001, acting on the January 19, 2001 petition for certification election, the Med-Arbiter recommended the
holding of another certification election but with respondent and FUEL-GAS as contenders.28The decision was appealed to the
Labor Secretary. The Labor Secretary in turn dismissed the motion to conduct certification election in a Resolution dated
October 17, 2002.29

Meanwhile, in Cert. Case No. 000200-01, the NLRC issued a Resolution dated April 17, 2002, declaring petitioner as having no
obligation to recognize respondent as the certified bargaining agent; dismissing the charge of unfair labor practice; declaring as
illegal the strike held by the union; and declaring the loss of employment of the officers of the union. 30 Petitioner filed a
Motion for Partial Reconsideration31 of the resolution praying that additional employees be dismissed. For its part, respondent
also filed a Motion for Reconsideration.32
On May 20, 2002, respondent filed another Notice of Strike alleging as grounds, petitioner's refusal to bargain and union
busting.33 The notice was later dismissed and respondent was enjoined from holding a strike.34
On January 7, 2003, respondent filed another Notice of Strike on the grounds of refusal to bargain and union
busting.35 Respondent thereafter went on strike on February 4, 2003. On February 7, 2003, the Labor Secretary certified the
dispute to the NLRC and directed the employees to return to work.36 The second certified case was docketed as NLRC NCR CC
No. 00253-03. On September 8, 2003, the NLRC rendered a Decision37 ordering petitioner to bargain collectively with
respondent as the duly certified bargaining agent. In addition, it ordered the reinstatement of the employees who were
dismissed in connection with the February 4, 2003 strike, without loss of seniority rights and diminution of salary. 38 Petitioner
filed a motion for reconsideration but it was denied in the Resolution39 dated January 26, 2004. The decision and resolution
became the subject of a petition before the CA in CA-G.R. SP No. 82314.
Meantime, in the first certified case, Cert. Case No. 000200-01, the NLRC, in a Decision40 dated February 12, 2003 opted to
resolve the parties' respective motions for reconsideration collectively. In said decision, the NLRC modified its earlier resolution
by ordering the reinstatement of the union officers whom it previously ordered terminated, which in effect denied petitioner's
motion for partial reconsideration.41 Petitioner filed a motion for reconsideration but it was denied in a Resolution dated June
30, 2003.42 These decision and resolution became the subject of a petition before the CA in CA-G.R. SP No. 79446.
The petitions before the CA were later consolidated. In CA-G.R. SP No. 79446, herein petitioner argued that:
PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION GRAVELY ABUSED ITS DISCRETION IN ORDERING
THE REINSTATEMENT OF THE OFFICERS OF PRIVATE RESPONDENT UNION DESPITE ITS CONCLUSION THAT [PRIVATE]
RESPONDENT HAD CONDUCTED AN ILLEGAL STRIKE.43
In the other case, CA-G.R. SP No. 82314, petitioner herein argued that:
I IV
PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION GRAVELY ABUSED ITS DISCRETION IN DIRECTING PETITIONER
TO RECOGNIZE PRIVATE RESPONDENT UNION DESPITE THE DECISION OF THIS COURT DIRECTING THE HOLDING OF ANOTHER
CERTIFICATION ELECTION.
II
PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT
REVERSED ITS OWN DECISION IN THE SAME CASE WHICH HAS BECOME FINAL AND EXECUTORY.
III
PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION GRAVELY ABUSED ITS DISCRETION WHEN IT CONCLUDED
THAT THE STRIKE CONDUCTED BY SCPEU-NAFLU IS NOT ILLEGAL.
IV
PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION GRAVELY ABUSED ITS DISCRETION IN ORDERING THE
REINSTATEMENT OF THE EMPLOYEES WHO DEFIED THE RETURN TO WORK ORDER OF THE SECRETARY OF LABOR. 44
Labor Relation Set VvI * strikes and lockouts* Page 50 of 52
On February 28, 2005, the CA rendered a Decision45 denying the petition in CA-G.R. SP No. 79446 while partially granting the
petition in CA-G.R. SP No. 82314. The decretal portion of which stated:
WHEREFORE, premises considered, the Petition in CA-G.R. SP No. 79446 is DENIED while the Petition in CA-G.R. SP No. 82314 is
PARTIALLY GRANTED, decreeing herein contending parties to comply with the directives of this Tribunal in CA-G.R. SP No.
55721.SO ORDERED.
In denying the petition in CA-G.R. SP No. 79446, the CA found no cogent reason to reverse the assailed decision of the NLRC in
Cert. Case No. 000200-01. The CA concluded that petitioner's claims are based on pure allegations and not supported by any
substantial evidence.46
In partially granting the petition in CA-G.R. SP No. 82314, the CA reasoned that by virtue of its decision in CA-G.R. SP No. 55721
dated July 12, 2000, the second certification election was, in effect, nullified and set aside. It is to be noted that FUEL-GAS
participated in the second election without prejudice to the petition it filed in court. The CA added that since it did not
recognize the second certification election held on April 14, 2000, wherein NAFLU was voted as the duly-elected bargaining
agent of petitioner's rank-and-file employees, clearly it has no basis for its claim and it has no right to demand that petitioner
collectively bargain with it.47
Petitioner filed a Motion for Reconsideration48 which was denied in the Resolution49 dated September 22, 2005.
Hence, this petition raising the following issues:
I
[Whether or not] the Court of appeals has departed from the law and established jurisprudence when it affirmed the
reinstatement of officers who participated in an illegal strike.
II
[Whether or not] the Court of appeals seriously erred when it failed to declare as illegal the strike held by the union on
february 4, 2003.
III
[Whether or not] the Court of appeals seriously erred when it failed to invalidate the order of the national labor relations
commission directing the reinstatement of the strikers who defied the return-to-work order of the labor secretary.
[Whether or not] the Court of appeals committed a serious error when it ruled that the nlrc has reconsidered its conclusion on
the illegality of the march 2001 strike.
V
[Whether or not] the Court of appeals committed a serious error when it concluded that the national labor relations
commission may reconsider in the second certified case its decision on the first certified case which has become final and
executory.50
Petitioner contends that the February 2003 strike held by respondent is illegal. To buttress its claim, petitioner argues that
respondent has no right to demand that it bargain with the latter. Its refusal to recognize respondent as the bargaining
representative of its employees is based on the directive of the CA in CA-G.R. SP No. 55721 to conduct another certification
election. Petitioner maintains that respondent never denied that its purpose for holding the strike was to force it to recognize
the latter over the other union. Since the strike is a union-recognition-strike, it is illegal.51

Petitioner further argues that the strike was manifestly illegal for it was in gross violation of the Labor Code, particularly Art.
264,52 which expressly prohibits the declaration of a strike over an issue that is pending arbitration between the parties.53 Since
the labor dispute in the first certified case, Cert. Case No. 000200-01, was still pending compulsory arbitration at the time of
the strike on February 4, 2003, and since the said strike was based substantially on the same grounds, i.e., the alleged refusal
by petitioner to recognize the union, the strike is illegal by express provision of the law.
Moreover, petitioner adds that the issue of illegality of the February 2003 strike was already resolved by the NLRC in Cert. Case
No. 000200-01 involving a strike in March 2001 over the same labor dispute, namely, the alleged refusal of petitioner to
recognize respondent. As such, the NLRC's decision in Cert. Case No. 000200-01 constitutes res judicata in the second certified
case, NLRC NCR CC No. 00253-03.54
Petitioner also contends that the union officers who participated in the illegal strike are all deemed to have lost their
employment. Unlike ordinary members of the union, whose dismissal requires that the employer prove that they committed
illegal acts, mere participation of the union officers in an illegal strike warrants their termination from employment.
Consequently, since the strike was illegal, it follows that the termination from employment of the union officers was
warranted.55
Petitioner maintains that it was erroneous on the part of the CA not to have reversed the NLRC decision 56ordering the
reinstatement of the employees which were dismissed in connection with the February 4, 2003 strike. It argues that since the
termination of the employees was due to their refusal to comply with the return-to-work order issued by the Labor Secretary,
not to their alleged participation in an illegal strike, the CA erred in affirming the decision.57
Finally, petitioner avers that the CA also committed serious errors on procedural issues when it concluded that the NLRC may
reconsider in Cert. Case No. 000200-01 its decision in NLRC NCR CC No. 00253-03.58
The petition is meritorious.
Whether or not respondent is the recognized collective bargaining agent had been finally resolved in the negative.
Consequently, as correctly concluded by the CA, it could not compel petitioner to bargain with it. Thus, the only issues left for
determination are: the validity of the strike participated in by the officers of the respondent union; and the validity of their
termination from employment by reason of such participation.
The strike is a legitimate weapon in the human struggle for a decent existence. It is considered as the most effective weapon in
protecting the rights of the employees to improve the terms and conditions of their employment. But to be valid, a strike must
be pursued within legal bounds. The right to strike as a means for the attainment of social justice is never meant to oppress or
destroy the employer. The law provides limits for its exercise.59
In the instant case, the strike undertaken by the officers of respondent union is patently illegal for the following reasons: (1) it
is a union-recognition-strike which is not sanctioned by labor laws; (2) it was undertaken after the dispute had been certified
for compulsory arbitration; and (3) it was in violation of the Secretary's return-to-work order.
Respondent's notices of strike were founded on petitioner's continued refusal to bargain with it. It thus staged the strike to
compel petitioner to recognize it as the collective bargaining agent, making it a union-recognition-strike. As its legal
Labor Relation Set VvI * strikes and lockouts* Page 51 of 52
designation implies, this kind of strike is calculated to compel the employer to recognize one's union and not other contending
groups, as the employees' bargaining representative to work out a collective bargaining agreement despite the striking union's
doubtful majority status to merit voluntary recognition and lack of formal certification as the exclusive representative in the
bargaining unit.60
The certification election that was conducted where respondent emerged as winner, not having been recognized as valid, it has
no authority to represent the rank and file employees of petitioner. Thus, it could not ask petitioner to bargain with it. As the
issue of its identity had been the subject of a separate case which had been settled by the court with finality, 61 petitioner
cannot, therefore, be faulted in refusing to bargain. Neither could this Court sustain respondent's imputation of unfair labor
practice and union busting against petitioner. With more reason, this Court cannot sustain the validity of the strike staged on
such basis.
Even if this Court were to uphold the validity of respondent's purpose or objective in staging a strike, still, the strike would be
declared illegal for having been conducted in utter defiance of the Secretary's return-to-work order and after the dispute had
been certified for compulsory arbitration. Although ostensibly there were several notices of strike successively filed by
respondent, these notices were founded on substantially the same grounds – petitioner's continued refusal to recognize it as
the collective bargaining representative.
Article 263(g) of the Labor Code provides:
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 the compliance with this provision as well as with such orders as he may issue to enforce the same. x x x.62
The powers granted to the Secretary under Article 263(g) of the Labor Code have been characterized as an exercise of the
police power of the State, aimed at promoting the public good. When the Secretary exercises these powers, he is granted
"great breadth of discretion" to find a solution to a labor dispute. The most obvious of these powers is the automatic enjoining
of an impending strike or lockout or its lifting if one has already taken place.63
The moment the Secretary of Labor assumes jurisdiction over a labor dispute in an industry indispensable to national interest,
such assumption shall have the effect of automatically enjoining the intended or impending strike. It was not even necessary
for the Secretary of Labor to issue another order directing a return to work. The mere issuance of an assumption order by the
Secretary of Labor automatically carries with it a return-to-work order, even if the directive to return to work is not expressly
stated in the assumption order.64
A return-to-work order imposes a duty that must be discharged more than it confers a right that may be waived. While the
workers may choose not to obey, they do so at the risk of severing their relationship with their employer.65
 Labor Relation Set VvI * strikes and lockouts* Page 52 of 52

Says the Labor Code:
Art. 264. Prohibited activities. –
xxx
No strike or lockout shall be declared after assumption of jurisdiction by the President or the Secretary or after
certification or submission of the dispute to compulsory or voluntary arbitration or during the pendency of cases
involving the same grounds for the strike or lockout.
Returning to work in this situation is not a matter of option or voluntariness but of obligation. The worker must return to his
job together with his co-workers so that the operations of the company can be resumed and it can continue serving the public
and promoting its interest. This extraordinary authority given to the Secretary of Labor is aimed at arriving at a peaceful and
speedy solution to labor disputes, without jeopardizing national interests. Regardless of their motives, or the validity of their
claims, the striking workers must cease and/or desist from any and all acts that undermine or tend to undermine this authority
of the Secretary of Labor, once an assumption and/or certification order is issued. They cannot, for instance, ignore return-to-
work orders, citing unfair labor practices on the part of the company, to justify their action.66
It bears stressing that the law makes a distinction between union members and union officers. A worker merely participating in
an illegal strike may not be terminated from employment. It is only when he commits illegal acts during a strike that he may be
declared to have lost employment status. For knowingly participating in an illegal strike or participating in the commission of
illegal acts during a strike, the law provides that a union officer may be terminated from employment. The law grants the
employer the option of declaring a union officer who participated in an illegal strike as having lost his employment. It possesses
the right and prerogative to terminate the union officers from service.68 Otherwise, the workers will simply refuse to return to
their work and cause a standstill in the company operations while retaining the positions they refuse to discharge and
preventing management from filling up their positions.69
WHEREFORE, the petition is partly GRANTED. The decision of the Court of Appeals dated February 28, 2005 in the consolidated
cases CA-G.R. SP Nos. 79446 and 82314 and its Resolution dated September 22, 2005 areMODIFIED in that the strike in
question is found ILLEGAL and the order to reinstate the union officers who participated in the illegal strike
is REVERSED and SET ASIDE.No costs.SO ORDERED.

Respondent, in the instant case, after the assumption of jurisdiction and certification of the dispute to the NLRC for
compulsory arbitration, filed notices of strike and staged the strike obviously contrary to the provisions of labor laws. Worse, it
filed not one but several notices of strike which resulted in two certified cases which were earlier consolidated. These disputes
could have been averted had respondent respected the CA's decision. That way, the collective bargaining agent would have
been determined and petitioner could have been compelled to bargain. Respondent, through its officers, instead opted to use
the weapon of strike to force petitioner to recognize it as the bargaining agent. The strike, having been staged after the dispute
had been certified for arbitration and contrary to the return-to-work order, became a prohibited activity, and was thus illegal.

Strikes exert disquieting effects not only on the relationship between labor and management, but also on the general peace
and progress of society, not to mention the economic well-being of the State. It is a weapon that can either breathe life to or
destroy the union and members in their struggle with management for a more equitable due of their labors. Hence, the
decision to wield the weapon of strike must therefore rest on a rational basis, free from emotionalism, unswayed by the
tempers and tantrums of a few, and firmly focused on the legitimate interest of the union which should not however be
antithetical to the public welfare. In every strike staged by a union, the general peace and progress of society and public
welfare are involved.67

Having settled that the subject strike was illegal, this Court shall now determine the proper penalty to be imposed on the union
officers who knowingly participated in the strike.

Article 264 of the Labor Code further provides:

Art. 264. Prohibited activities.— x x x

Any workers 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 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. x x x.