[Labor 2] | [Certification of Designated Majority Union] 1

[Digest maker]

Philippine Diamond Hotel v Manila Diamond

Hotel Employees Union
[GR NO. 158075] | [30 June 2006] | [Carpio-Morales, J.]
Petitioner: Philippine Diamond Hotel and Resort, Inc. (Manila Diamond Hotel)
Respondent: Manila Diamond Hotel Employees Union

FACTS
The union, registered before DOLE, filed a petition for certification election
before DOLE NCR seeking certification as the exclusive bargaining
representative of its members.
DOLE-NCR denied the petition
Union failed to comply with legal requirements and was seen to
fragment the employees of petitioner
The union, through president Kimpo, later notified petitioner of its intention to
negotiate, by Notice to Bargain, a CBA for its members
HRD Manager Mary Anne Mangalindan advised the union that it
could not bargain because it was not certified by the DOLE as
the exclusive bargaining agent
Union clarified that it sought to bargain for its members only and
that the Hotels refusal to bargain would prompt the union to engage in
concerted activities to protect and assert its rights under the Labor
Code.
By Notice to its members, the union announced that its executive officers and
directors would go on strike in view of the managements refusal to bargain
collectively.
They called for the taking of strike vote.
Petitioner then issued a Final Reminder and Warning to respondent against
continuing misinformation campaign and activities which confused the
employees and disturbed their work performance.
Notice of Strike was filed with the NCMB for unfair labor practice
Hotels refusal to bargain and that the rank-and-file employees were
being harassed and prevented from joining
Conciliation conferences were conducted by NCMB during which, the
union insisted on the adoption of a CBA for its members
In one of the conferences (Nov 20, 1997), the union demanded the
holding of a consent election. Hotel did not object, merely requested
that the election be held in Jan 1998
(Nov. 29) Union suddenly went on strike.
National Union of Workers in the Hotel, Restaurant and Allied Industries
(NUWHRAIN) joined the strike and openly extended its support
Hotel supervisors Vicente Agustin, Rowena Junio and Mary Grace de
Leon participated in the strike as such, they failed to report for work
A petition for injunction was filed by petitioner before the NLRC to enjoin the
strikers
 Mary Grace, when directed to explain, alleged that she was trying to
pacify the group, but this was belied by an eye witness; she was
terminated which prompted her to file an illegal dismissal case
Agustin and Rowena also filed a similar complaint after being
terminated.
NLRC representative, who conducted an ocular inspection of the Hotel premises
confirmed that the strikers obstructed the free ingress to and egress from the
Hotel.
NLRC issued a TRO, directing the strikers to immediately cease and desist from
obstructing the way to the Hotel premises.
Petitioner filed a petition to declare the strike illegal
SOLE Trajanos attempts to conciliate the parties failed. Order was
issued certifying the dispute to the NLRC for compulsory arbitration,
upon unions petition for assumption of jurisdiction
Striking officers and members were directed to return to work within 24
hours and the Hotel to accept them under the same terms and
conditions before the strike
Petitioner filed an MR. Then DOLE Acting Sec. Jose Espanol modified
Trajanos Order by directing the Hotel to reinstate the strikers to its
payroll and ordering that all cases between them arising out of labor
disputes before Labor Arbiters be consolidated with the NLRC case for
compulsory arbitration.
(Nov. 19, 1999) NLRC declared the strike illegal
The union officers and members who were reinstated to the Hotels
payroll were deemed to have lost their employment status. Illegal
dismissal complaints as well as ULP case dismissed.
CA affirmed the NLRC resolution that the strike is illegal and the illegal dismissal
complaints is correctly dismissed but it modified the NLRC resolution by ordering
the reinstatement with backwages of union members.

ISSUE
1. WON the strike was legal NO.
2. WON petitioners refusal to bargain with respondent can be considered
a ULP to justify the strike NO.
3. WON those ordered reinstated are entitled to backwages NO.

RATIO
1. WON the strike was legal NO.
a. Petitioner argues that NLRC already declared that the union officers and
members have lost their employment as a consequence of their illegal
strike. In the event NLRCs decision is not upheld insofar as the union
members termination is concerned, petitioner should not be held liable to
pay their backwages.
b. On the other hand, respondent prays for the dismissal of the petition,
arguing that the strike was legal and done in good faith; that even
assuming arguendo that the strike started as an illegal strike, it became
legal after the hotel committed ULP during the strike. Even assuming
arguendo, that the strike was illegal, jurisprudence and LC 264 directs the
reinstatement and payment of full backwages.
 [Labor 2] | [Certification of Designated Majority Union] 3
[Digest maker]

c. SC finds the strike illegal. As provided by Art 255, (now 267), only the
labor organization designated or selected by the majority of the
employees in an appropriate collective bargaining unit is the exclusive
representative of the employees in such unit for collective bargaining.
Respondent union is not the exclusive representative of the
majority of the employees hence, it could not demand the right to
bargain collectively.
d. Respondents reliance on Art 242 (now 251), in arguing that it could
bargain in behalf of its members is misplaced. Art 242 is a general
provision on the rights of legitimate labor organization. It must be read in
relation to Art 255.
e. If the union is allowed to bargain on behalf of its members, it would only
fragment the employees of petitioner, dividing the rank-and file members
from other workers. Those who are not members would be at a serious
disadvantage for they cannot be able to negotiate their terms and
conditions. This would defeat the very essence and reason of collective
bargaining so safeguard against the evil schemes of employers in terms
and conditions of work.
2. WON petitioners refusal to bargain with respondent can be considered
a ULP to justify the strike NO.
a. The burden of proof is on the union to prove its allegations by substantial
evidence. What is stated in their petition are only general allegations.
b. While the union continues to accuse the Hotel of violating the formers
constitutional right to organize by busting the union, the Court noted that
the facts and evidence failed to establish a rational basis for the union to
stage a strike when the union could have substantiated it during the
conciliatory meeting.
c. The Unions principal ground for the strike was the refusal of the
Hotel Management to bargain collectively with the Union for the
benefit of the latters members. Petitioner Union is not a certified
bargaining unit to negotiate a CBA.
d. Respondent violated Art 264 which proscribes the staging of a strike on
the ground of ULP during the pendency of cases involving the same
grounds for the strike.
e. The exercise of the right of private sector employees to strike is not
absolute. It is qualified in Sec 3 of Art XIII of the Constitution that it be in
accordance with law.
f. Appellate court was correct in holding that the union officers should be
dismissed for staging and participating in the illegal strike. Art 264(a)
paragraph 3 provides that ". . .[a]ny 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 strike may be declared to have lost his employment status . . ."
g. An ordinary striking worker cannot be dismissed for mere participation in
an illegal strike. It must be proven that he committed illegal acts. On the
other hand, a union officer may be dismissed by merely participating in an
illegal strike.
h. In the case at hand, photographs show that some of the workers-strikers
who joined the strike committed illegal acts blocking the entrance and
exit of the Hotel, holding noise barrage; but because the list failed to
 specifically identify the ones who actually committed illegal acts, the case
should be remanded to the LA through the NLRC to determine the
respective liabilities of the strikers.
3. WON those ordered reinstated are entitled to backwages NO.
a. The general rule is that backwages shall not be awarded in an economic
strike on the principle that a fair days wage accrues only for a fair
days labor.
b. [JP Heilbronn Co v National Labor Union] If there is no work performed by
the employee, there can be no wage or pay, unless the laborer was able,
willing and ready to work but was illegally locked out, dismissed or
suspended. But for this exception to apply, the strike must first be legal.

DECISION
CA decision affirmed with modification: only those union members who did not
commit illegal acts during the course of the illegal strike should be reinstated.
No backwages.
Case remanded to LA through NLRC to identify members who did not commit
such illegal acts. If reinstatement is no longer feasible, separation pay at the
rate of 1 month pay for every year of service shall be awarded.

APPENDIX
DIGESTERS NOTES / TABLES/ ILLUSTRATIONS

Art 255 (now Art 267). EXCLUSIVE BARGAINING REPRESENTATION AND WORKERS
PARTICIPATION IN POLICY AND DECISION-MAKING

The labor organization designated or selected by the majority of the employees in

an appropriate collective bargaining unit shall be the exclusive representative of the
employees in such unit for the purpose of collective bargaining. However, an
individual employee or group of employees shall have the right at any time to present
grievances to their employer.

Any provision of law to the contrary notwithstanding, workers shall have the right,
subject to such rules and regulations as the Secretary of Labor and Employment may
promulgate, to participate in policy and decision-making process of the establishment
where they are employed insofar as said processes will directly affect their rights,
benefits and welfare. For this purpose, workers and employers may form labor-
management councils: Provided, That the representatives of the workers in such labor
management councils shall be elected by at least the majority of all employees in said
establishment.