CAPITOL MEDICAL CENTER, INC., v. HON. CRESENCIANO B.

TRAJANO, in his capacity

as Secretary of the Department of Labor and Employment, and CAPITOL MEDICAL

CENTER EMPLOYEES ASSOCIATION-AFW

G.R. No. 155690/ June 30, 2005

FACTS:

Petitioner is a hospital with address at Panay Avenue corner Scout Magbanua Street,

Quezon City. Upon the other hand, Respondent is a duly registered labor union acting as the

certified collective bargaining agent of the rank-and-file employees of petitioner hospital.

Respondent sent petitioner a letter requesting a negotiation of their Collective Bargaining

Agreement (CBA).

Petitioner, however, challenged the union’s legitimacy and refused to bargain with

respondent. Subsequently petitioner filed with the (BLR), Department of Labor and

Employment, a petition for cancellation of respondent’s certificate of registration.

For its part, respondent filed with the (NCMB), National Capital Region, a notice of strike.

Respondent alleged that petitioner’s refusal to bargain constitutes unfair labor practice.

Despite several conferences and efforts of the designated conciliator-mediator, the parties

failed to reach an amicable settlement.

Respondent staged a strike.

Former Labor Secretary Leonardo A. Quisumbing, now Associate Justice of this Court,

issued an Order assuming jurisdiction over the labor dispute and ordering all striking

workers to return to work and the management to resume normal operations, thus:

xxx all striking workers are directed to return to work within twenty-four (24) hours from

the receipt of this Order and the management to resume normal operations and accept

back all striking workers under the same terms and conditions prevailing before the

strike. Further, parties are directed to cease and desist from committing any act that may

exacerbate the situation.

Moreover, parties are hereby directed to submit within 10 days from receipt of this Order

proposals and counter-proposals leading to the conclusion of the collective bargaining

agreement in compliance with aforementioned Resolution of the Office as affirmed by the

Supreme Court. xxx

ISSUE:

Whether or not Secretary of Labor cannot exercise his powers under Article 263 (g) of the Labor Code
without observing the requirements of due process.

RULING:

The discretion to assume jurisdiction may be exercised by the Secretary of

Labor and Employment without the necessity of prior notice or hearing given to any of the

parties. The rationale for his primary assumption of jurisdiction can justifiably rest

on his own consideration of the exigency of the situation in relation to the national

interests.
xxx In labor disputes adversely affecting the continued operation of such hospitals, clinics

or medical institutions, it shall be the duty of the striking union or locking-out employer

to provide and maintain an effective skeletal workforce of medical and other health

personnel, whose movement and services shall be unhampered and unrestricted, as are

necessary to insure the proper and adequate protection of the life and health of its patients,

most especially emergency cases, for the duration of the strike or lockout. In such cases,

therefore, the Secretary of Labor and Employment is mandated to immediately

assume, within twenty-four (24) hours from knowledge of the occurrence of such

a strike or lockout, jurisdiction over the same or certify it to the Commission for

compulsory arbitration. For this purpose, the contending parties are strictly enjoined to

comply with such orders, prohibitions and/or injunctions as are issued by the Secretary of

Labor and Employment or the Commission, under pain of immediate disciplinary action,

including dismissal or loss of employment status or payment by the locking-out employer

of backwages, damages and other affirmative relief, even criminal prosecution against

either or both of them.

The foregoing notwithstanding, the President of the Philippines shall not be precluded

from determining the industries that, in his opinion, are indispensable to the national

interest, and from intervening at any time and assuming jurisdiction over any such labor

dispute in order to settle or terminate the same. xxx

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Lapanday vs NLRC
1995 Sept 07

By: Zendy Garcia-Budhi

Facts: Lapanday Agricultural and Development Corporation (LADECO) and Cadeco Argo Development
Phils Inc. are sister companies engaged in the production of bananas. Their agricultural establishments
are located in Davao City. They agreed to a Collective Bargaining Agreement (CBA) covering the period
from December 5, 1985 to November 30, 1988 with Lapanday Workers’ Union (Union). Said union is the
duly certified bargaining agent of the rank and file employees and is affiliated with the KMU-ANGLO.

Before the expiration of the CBA, the management policies were initiated by the sister companies which
changed the relationship of the parties:

Sister companies contracted with Philippine Eagle Protectors and Security Agency, Inc., to provide
security services. But there was an allegation that guards intimidated and harassed the union members.

Seminars on Human Development and Industrial Relations (HDIR) for their managerial and supervisory
employees and the rank-and-file were conducted which the Union claimed that the ANGLO (Alliance of
Nationalist and Genuine Labor Organization) was considered belonging to other outlawed labor
organizations such as the National Democratic Front or other leftist groups.

A labor-management meeting was held on August 2, 1988 where the labor group represented by its
President Arquilao Bacolod, and its legal counsel raised unfair labor practices such as coercion of
employees, intimidation of the union members and union busting. They agreed to allow its members to
attend the seminar for the rank-and-file employees. But, the Union directed its members not to attend
the seminars and picketed the premises of the Philippine Eagle Protectors to show their displeasure on
the hiring of the guards.

The Union filed on August 25, 1988, a Notice of Strike with the National Conciliation and Mediation
Board (NCMB) accusing the company of the same issues raised during the August 2, 1988 labor-
management meeting. A conciliation conference was called for where it was agreed that union officers
would attend the HDIR seminar deleting the discussion on KMU-ANGLO and guidelines governing the
guards would be established.
On September 8, 1988, Danilo Martinez, a member of the Board of Directors of the Sister companies
charged the Union with economic sabotage through slowdown to which they filed charges against the
Union and its members for illegal strike, unfair labor practice and damages, with prayer for injunction.

City Mayor Rodrigo Duterte intervened but the dialogues proved fruitless as sister companies refused to
withdraw the cases earlier filed with the Union. Thereafter, a strike vote was conducted among the
members of the Union and those in favor of the strike won overwhelming support from the workers. The
result of the strike vote was then submitted to the NCMB on October 10, 1988. Two days later, or on
October 12, 1988, the Union struck.

The gunman was later identified as Eledio Samson, an alleged member of the new security forces of
sister companies. This incident resulted to:

most of the members of the Union refused to report for work

they did not comply with the “quota system” adopted by the management to bolster production output

there were allegations that the Union instructed the workers to reduce their production to thirty per
cent (30%).

Tomas Basco and 25 other workers, filed a complaint for unfair labor practice and illegal suspension
against LADECO.

Another complaint for unfair labor practice and illegal dismissal was filed by the Union, together with
Arquilao Bacolod and 58 other complainants. These cases were heard by Labor Arbiter Newton Sancho.

With the case filed by the sister companies, Labor Arbiter Antonio Villanueva ruled that the Union staged
an illegal strike and declared the employees listed as respondents in the complaint to have lost their
employment status with Lapanday Agricultural and Development Corporation and Cadeco Agro
Development Philippines, Inc.; and ordered respondents (petitioners in this case) to desist from further
committing an illegal strike.

Petitioners appealed the Villanueva decision to public respondent NLRC.

Before the NLRC could resolve the appeal on the Villanueva decision, Labor Arbiter Sancho rendered a
decision in the two (2) cases filed by the Union against private respondents LADECO and CADECO
declaring LADECO and CADECO guilty of unfair labor practices and illegal dismissal and ordered the
reinstatement of the dismissed employees of private respondents, with backwages and other benefits. It
considered the refusal of the workers to report for work on September 9, 1988, justified by the
circumstance then prevailing which is the killing of Danilo Martinez on September 8,1988.

NLRC upheld the decision of Labor Arbiter Villanueva. The Union filed its MR but to no avail. Hence, this
petition claiming that NLRC gravely abused its discretion in: a) declaring that their activities, from
September 9, 1988 to October 12, 1988, were strike activities; and b) declaring that the strike staged on
October 12, 1988 was illegal.

ISSUE: Whether strike staged on October 12, 1988 illegal

HELD: Yes, as it was held within the seven (7) day waiting period provided for by paragraph (f), Article
263 of the Labor Code, as amended. The haste in holding the strike prevented the Department of Labor
and Employment from verifying whether it carried the approval of the majority of the union members.
Hence, there was no grave abuse of discretion committed.

RATIO: The applicable laws are Articles 263 and 264 of the Labor Code, as amended by E.O. No. 111,
dated December 24, 1986.

Paragraphs (c) and (f) of Article 263 of the Labor Code, as amended by E.O. 111, provides:

(c) In cases of bargaining deadlocks, the duly certified or recognized bargaining agent may file anotice of
strike or the employer may file, notice of lockout with the Ministry at least 30 days before the intended
date thereof. In cases of unfair labor practice, the 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-daycooling-off period shall not apply and the
union may take action immediately.
xxx xxx xxx

(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 of secret balloting. In every case, the
union or the employer shall furnish the Ministry the results of the votingat least seven (7) days before
the intended strike or lockout subject to the cooling-off period herein provided.

Article 264 of the same Code reads:

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.

xxx xxx xxx

. . . . 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. (emphasis ours).

DISPOSITIVE: The petition is dismissed for failure to show grave abuse of discretion on the part of the
public respondent. Costs against the petitioners

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SARMIENTO v TUICO; ATC v NLRC (1988)

FACTS: Two cases were consolidated herein because of identity of factual antecedents.

1st case (Sarmiento v Tuico): Asian Transmission Corporation (ATC) terminated Catalino Sarmiento, VP of
Bisig ng Asian Transmission Labor Union (BATU) for allegedly carrying a deadly weapon in company
premises. Thus, BATU filed a notice of strike, claiming ATC committed ULP.

ATC filed petition with MOLE asking it to assume jurisdiction or certify to NLRC. ATC being an export-
oriented company and to avoid adverse effects to national interest and welfare of 350 families of ATC’s
workers, MOLE issued order certifying the labor dispute to NLRC and enjoined lock-out and strike. Order
was reiterated upon representation of ATC that some 40 workers still declared a strike and were
picketing the company premises. Proceedings in NLRC however could not continue because 8 NLRC
commissioners resigned. Hence, MOLE assumed jurisdiction. Upon BATU and ATC’s motion in view of
appointment of new NLRC commissioners, however, MOLE returned the case to NLRC.

NLRC finally ordered ATC to accept all striking workers or to reinstate them on payroll immediately. MR
was filed, which was denied. These orders are the subject of present petition for certiorari. In the
meantime, SC issued TRO against the orders.

2nd case (ATC v NLRC): Three criminal complaints were filed against ATC workers for staging illegal strike,
barricading the gates of the ATC plant, and preventing workers through intimidation, harassment, and
force from reporting for work. Warrant of arrest was issued, but SC issued TRO.

ISSUES & RULING:

(TOPICAL) WON the NLRC validly issued the return to work order in the 1 st case
YES. Under Art 264 (g) of the Labor Code, the MOLE may certify a labor dispute causing or likely
to cause strikes or lockouts adversely affecting the national interest to the NLRC for compulsory
arbitration.

ATC is an export-oriented enterprise and its annual export amounts to 90% of its sales generating
more than 12 million dollars per year. The corporation employs 350 workers with a total monthly
take home pay of about P1.3 million a month. Any disruption of company operations will cause
the delay of shipments of export-finished products which have been previously committed to
customers abroad, thereby seriously hampering the economic recovery program which is being
pursued by the government. It will also affect gravely the livelihood of 350 families who will be
deprived of their incomes.

The certification was therefore proper. In line with this, the return to work order was equally
valid as a statutory part and parcel of the certification order.

(TOPICAL) WON the return to work order should benefit all the workers, including those who
continued the strike
NO. The return-to-work order not so much confers a right as it imposes a duty; and while as a right it
may be waived, it must be discharged as a duty even against the worker's will. 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 the operations of the company can be resumed and it can
continue serving the public and promoting its interest. That is the real reason such return can be
compelled. So imperative is the order in fact that it is not even considered violative of the right
against involuntary servitude, as this Court held in Kaisahan ng Mga Manggagawa sa Kahoy v.
Gotamco Sawmills. The worker can of course give up his work, thus severing his ties with the
company, if he does not want to obey the order; but the order must be obeyed if he wants to retain
his work even if his inclination is to strike.

The records show that the return-to-work order was first issued on June 3, 1986, and was
reiterated on June 13, 1986. The strike was declared thereafter, if we go by the criminal
complaints in G.R. Nos. 75271-73, where the alleged acts are claimed to have been done on June
9,1986, and July 15,1986.

These dates are not denied. In fact, the petitioners argue in their pleadings that they were
engaged only in peaceful picketing, which would signify that they had not on those dates
returned to work as required and had decided instead to ignore the said order. By their own acts,
they are deemed to have abandoned their employment and cannot now demand the right to
return thereto by virtue of the very order they have defied.

WON the criminal cases should be suspended

YES. The three criminal cases should be suspended until the completion of the compulsory
arbitration proceedings in the NLRC, conformably to the policy embodied in Circular No. 15,
series of 1982, and Circular No. 9, series of 1986, issued by the Ministry of Justice in connection
with the implementation of B.P. Blg. 227. 21These circulars, briefly stated, require fiscals and
other government prosecutors to first secure the clearance of the Ministry of Labor and/or the
Office of the President "before taking cognizance of complaints for preliminary investigation and
the filing in court of the corresponding informations of cases arising out of or related to a labor
dispute," including "allegations of violence, coercion, physical injuries, assault upon a person in
authority and other similar acts of intimidation obstructing the free ingress to and egress from a
factory or place of operation of the machines of such factory, or the employer's premises." It
does not appear from the record that such clearance was obtained, conformably to the
 procedure laid down "to attain the industrial peace which is the primordial objectives of this
law," before the three criminal cases were filed.

----------

Globe-Mackay Cable and Radio Corporation (GMRC), Petitioner Vs. National Labor Relations Commission
(NLRC) and Imelda Salazar, Respondents

G.R. No. 82511, March 3, 1992

Facts: Private Respondent, "Imelda Salazar" was employed as general systems analyst of Globe-Mackay
Cable and Radio Corp. (GMRC) While Delfin Saldivar, her close friend, was employed as technical
operations' support manager in May 1982.

Petitioner GMRC investigated Saldivar's activities due to the reports indicating that the company
equipment and spare parts were in custody of Saldivar. The internal audit report also indicated that
Saldivar entered into a partnership with Richard A. Yambao, owner and manager of Eledon Engineering
Services (Elecon), a supplier often recommended by Saldivar to the petitioner. It also appeared in the
course of Maramara's investigation that Imelda Salazar violated company regulations by involving herself
in transactions with conflict of interest with the company. Evidence showed that she signed as a witness
to the articles of partnership between Yambao and Saldivar, and that she had full knowledge of the loss
and whereabouts of the missing air conditioner but she failed to inform her employer.

The Company placed Salazar under 1 month preventive suspension, allowing her 30 days within which to
explain her side. However, Salazar instead filed a complaint against petitioner for illegal suspension,
which was later modified to illegal dismissal.

The Labor arbiter ordered the company to reinstate Salazar to her former and equivalent position and to
pay her full back wages and benefits, plus moral damages. National Labor Relations Commission (NLRC)
affirmed the labor arbiter's decision but limited back wages for only two years and deleted the award of
moral damages.
Issue: Whether or Not the action of dismissal would constitute a violation of Art. 279 of the Labor Code,
which protects the security of tenure of an employee.

Held: Positive. The Court did not agree on the petitioner's action of suspension and eventual dismissal of
Salazar due to lack of evidence to show that Salazar was involved with the malicious activities of Saldivar.

The wordings of the Labor Code is clear and unambiguous "An employee who is unjustly dismissed from
work shall be entitled to reinstatement and full back wages." Under the principle of Statutory
Construction, if a statute is clear, plain and free from ambiguity. It must be given its literal meaning and
applied without attempted interpretation. The plain meaning rule or Verba Legis derived from the maxim
"Speech is the index of intention" should be applied in this case.

Since there is no evidence to show an authorized or legal dismissal, and GMRC only relied to an internal
audit findings, Salazar, according to the Labor Code, is entitled to reinstatement and full back wages
allowed by the Court.

-----------

G.R. No. 111651 March 15, 1996

OSMALIK S. BUSTAMANTE, PAULINO A. BANTAYAN, FERNANDO L. BUSTAMANTE, MARIO D. SUMONOD,

and SABU J. LAMARAN v. NATIONAL LABOR RELATIONS COMMISSION, FIFTH DIVISION and EVERGREEN
FARMS, INC.

PADILLA, J.:

FACTS: Respondent company is engaged in the business of producing high grade bananas in its
plantation in Davao del Norte. Petitioners Paulino Bantayan, Fernando Bustamante, Mario Sumonod and
Osmalik Bustamante were employed as laborers and harvesters while petitioner Sabu Lamaran was
employed as a laborer and sprayer in respondent company’s plantation. All the petitioners signed
contracts of employment for a period of six (6) months from 2 January 1990 to 2 July 1990, but they had
started working sometime in September 1989. Previously, they were hired to do the same work for
periods lasting a month or more, from 1985 to 1989. Before the contracts of employment expired on 2
July 1990, petitioners’ employments were terminated on 25 June 1990 on the ground of poor
performance on account of age, as not one of them was allegedly below forty (40) years old.

Petitioners filed a complaint for illegal dismissal.

ISSUE: Whether or not private respondent exercises its power to terminate in good faith so as to make
the award of backwages improper in this case.

RULING: We do not sustain public respondent’s theory that private respondent should not be made to
compensate petitioners for backwages because its termination of their employment was not made in
bad faith. The act of hiring and re-hiring the petitioners over a period of time without considering them
as regular employees evidences bad faith on the part of private respondent. The public respondent
made a finding to this effect when it stated that the subsequent rehiring of petitioners on a probationary
status “clearly appears to be a convenient subterfuge on the part of management to prevent
complainants (petitioners) from becoming regular employees.”

In the case at bar, there is no valid cause for dismissal. The employees (petitioners) have not performed
any act to warrant termination of their employment. Consequently, petitioners are entitled to their full
backwages and other benefits from the time their compensation was withheld from them up to the time
of their actual reinstatement.

Categories: LABOR LAW, Uncategorized

----------

PLDT vs. NLRC

G.R. No. 80609 August 23, 1988

Facts:

Abucay, a traffic operator of the PLDT, was accused by two complainants of having demanded and
received from them the total amount of P3,800.00 in consideration of her promise to facilitate approval
of their applications for telephone installation. Investigated and heard, she was found guilty as charged
and accordingly separated from the service. She went to the Ministry of Labor and Employment claiming
she had been illegally removed. After consideration of the evidence and arguments of the parties, the
company was sustained and the complaint was dismissed for lack of merit. Nevertheless, the dispositive
portion of labor arbiter’s decision declared:

WHEREFORE, the instant complaint is dismissed for lack of merit.

Considering that Dr. Bangayan and Mrs. Martinez are not totally blameless in the light of the fact that the
deal happened outhide the premises of respondent company and that their act of giving P3,800.00
without any receipt is tantamount to corruption of public officers, complainant must be given one month
pay for every year of service as financial assistance.

Both the petitioner and the private respondent appealed to the National Labor Relations Board, which
upheld the said decision in toto and dismissed the appeals. The private respondent took no further
action, thereby impliedly accepting the validity of her dismissal. The petitioner, however, is now before
us to question the affirmance of the above- quoted award as having been made with grave abuse of
discretion.

The position of the petitioner is simply stated: It is conceded that an employee illegally dismissed is
entitled to reinstatement and backwages as required by the labor laws. However, an employee dismissed
for cause is entitled to neither reinstatement nor backwages and is not allowed any relief at all because
his dismissal is in accordance with law. In the case of the private respondent, she has been awarded
financial assistance equivalent to ten months pay corresponding to her 10 year service in the company
despite her removal for cause. She is, therefore, in effect rewarded rather than punished for her
dishonesty, and without any legal authorization or justification. The award is made on the ground of
equity and compassion, which cannot be a substitute for law. Moreover, such award puts a premium on
dishonesty and encourages instead of deterring corruption.

For its part, the public respondent claims that the employee is sufficiently punished with her dismissal.
The grant of financial assistance is not intended as a reward for her offense but merely to help her for
the loss of her employment after working faithfully with the company for ten years. In support of this
position, the Solicitor General cites the cases of Firestone Tire and Rubber Company of the Philippines v.
Lariosa and Soco v. Mercantile Corporation of Davao, where the employees were dismissed for cause but
were nevertheless allowed separation pay on grounds of social and compassionate justice.

Issue: WON Separation pay is proper.

Held:

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. Of course it has.
Indeed, if the employee who steals from the company is granted separation pay even as he is validly
dismissed, it is not unlikely that he will commit a similar offense in his next employment because he
thinks he can expect a like leniency if he is again found out. This kind of misplaced compassion is not
going to do labor in general any good as it will encourage the infiltration of its ranks by those who do not
deserve the protection and concern of the Constitution.
The policy of social justice is not intended to countenance wrongdoing simply because it is committed by
the underprivileged. At best it may mitigate the penalty but it certainly will not condone the offense.
Compassion for the poor is an imperative of every humane society but only when the recipient is not a
rascal claiming an undeserved privilege. Social justice cannot be permitted to be refuge of scoundrels
any more than can equity be an impediment to the punishment of the guilty. Those who invoke social
justice may do so only if their hands are clean and their motives blameless and not simply because they
happen to be poor. This great policy of our Constitution is not meant for the protection of those who
have proved they are not worthy of it, like the workers who have tainted the cause of labor with the
blemishes of their own character.

Applying the above considerations, we hold that the grant of separation pay in the case at bar is
unjustified. The private respondent has been dismissed for dishonesty, as found by the labor arbiter and
affirmed by the NLRC and as she herself has impliedly admitted. The fact that she has worked with the
PLDT for more than a decade, if it is to be considered at all, should be taken against her as it reflects a
regrettable lack of loyalty that she should have strengthened instead of betraying during all of her 10
years of service with the company. If regarded as a justification for moderating the penalty of dismissal,
it will actually become a prize for disloyalty, perverting the meaning of social justice and undermining the
efforts of labor to cleanse its ranks of all undesirables.

Petition granted

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[G.R. No. 145496. February 24, 2004]

STAMFORD MARKETING CORP., GSP MANUFACTURING CORP., GIORGIO ANTONIO MARKETING CORP.,
CLEMENTINE MARKETING CORP., ULTIMATE CONCEPTS PHILIPPINES, INC., and ROSARIO G. APACIBLE,
petitioners, vs. JOSEPHINE JULIAN, LEONOR AMBROSIO, MARILYN AQUINO, PURITA BARRO, ROSARIO
BASADA, HERMINIA BERGUELLES, ERLINDA CANARIA, SALVACION CIRUELOS, MARITESS BALISARIO,
JULIETA DOLONTAP, JOSEFINA DOMINGO, GLORIA FLORENDO, AMELITA GRANDE, SIMONA MALUNES,
CORAZON MARASIGAN, SUSANA OBNAMIA, LUCY PEREZ, GINALYN PIDOY, CAROLINA REYNOSO, LETICIA
SARMIENTO, ARCELY VILLEZA, MARIA SANCHO LABIT, IMELDA RIVERA, ROWENA ALVARADO, VIOLETA
ARRIOLA, VIRGINIA DE VERA, GIRLIE DISCAYA, ADELAIDA LOMOD, MARILOU RABANAL, JOCELYN RUFILA,
ELENA SUEDE, JACINTA TEJADA, MELBA TOLOSA, LEZILDA CARANTO, JECINA BURABOD, LUCITA CASERO,
MONICA CRUZ, GLENDA MIRANDA, YOLANDA PANCHO, MYRNA RAGASA, FILOMENA MORALES, FELIPA
VALENCIA, CORAZON VIRTUZ, MARICEL BOLANGA, SONIA ANTILLA, LEONITA BINAL, GLORIA LARIOSA,
LIZABETH LUANGCO and JULIETA LEANO, respondents.
DECISION

QUISUMBING, J.:

For review on certiorari is the Court of Appeals Decision,[1] dated April 26, 2000, in CA-G.R. SP No.
53169, as well as its Resolution,[2] dated October 11, 2000, denying the petitioners Motion for
Reconsideration. The Court of Appeals modified the Resolution,[3] dated August 27, 1998, of the
National Labor Relations Commission (NLRC)-First Division which, in turn, dismissed the petitioners
appeal from the decision of Labor Arbiter Ramon Valentin C. Reyes in three (3) consolidated cases,
namely:

(1) Josephine Julian, et al. vs. Stamford Marketing Corp. (NLRC NCR Case No. 00-11-08124-94);

(2) Philippine Agricultural, Commercial and Industrial Workers Union, et al. vs. GSP Manufacturing Corp.,
et al. (NLRC NCR Case No. 00-03-02114-95); and

(3) Lucita Casero, et al. vs. GSP Manufacturing Corp., et al. (NLRC NCR Case No. 00-01-10437-95).

The instant controversy stemmed from a letter sent by Zoilo V. De La Cruz, Jr., president of the Philippine
Agricultural, Commercial and Industrial Workers Union (PACIWU-TUCP), on November 2, 1994, to
Rosario A. Apacible, the treasurer and general manager of herein petitioners Stamford Marketing
Corporation, GSP Manufacturing Corporation, Giorgio Antonio Marketing Corporation, Clementine
Marketing Corporation, and Ultimate Concept Phils., Inc. Said letter advised Apacible that the rank-and-
file employees of the aforementioned companies had formed the Apacible Enterprise Employees Union-
PACIWU-TUCP. The union demanded that management recognize its existence. Shortly thereafter,
discord reared its ugly head, and rancor came hard on its wake.

Josephine Julian, et al. vs. Stamford Marketing Corp.

NLRC NCR Case No. 00-11-08124-94

On November 9, 1994, or just a day after Apacible received the letter of PACIWU-TUCP, herein private
respondents Josephine Julian, president of the newly organized labor union; Jacinta Tejada, and Jecina
Burabod, board member and member of the said union, respectively, were effectively dismissed from
employment.

Without further ado, the three dismissed employees filed suit with the Labor Arbiter. In their Complaint,
the three dismissed employees alleged that petitioners had not paid them their overtime pay, holiday
pay/premiums, rest day premium, 13th month pay for the year 1994, salaries for services actually
rendered, and that illegal deduction had been made without their consent from their salaries for a cash
bond.

For its part, herein petitioner Stamford alleged that private respondent Julian was a supervising
employee at the Patricks Boutique at Shoemart (SM) Northmall. In October 1994, when she was four (4)
to five (5) months pregnant, the management of SM Northmall asked her to go on maternity leave,
pursuant to company policy. Julian was then directed to report at Stamfords Head Office for
reassignment. She was also asked to submit a medical certificate to enable the company to approximate
her delivery date. Julian, however, allegedly failed to comply with these directives and instead, ceased to
report for work without having given notice. Stamford then allegedly asked Tejada to take over Julians
position, but the former inexplicably refused to comply with the management directive. Instead, like
Julian, she abandoned her work with nary a notice or an explanation.

As to Burabod, petitioner Giorgio Antonio Boutique (Giorgio) averred that she was employed as one of
its sales clerks at its SM Northmall branch. When directed to report to the Giorgio branch at Robinsons
Galleria, she defiantly questioned the validity of the directive and refused to comply. Like Julian and
Tejada, she then ceased to report for work without giving notice.

Philippine Agricultural, Commercial and

Industrial Workers Union, et al. vs. GSP Manufacturing Corp.

NLRC NCR Case No. 00-03-02114-95

On March 17, 1995, PACIWU-TUCP, filed on behalf of fifty (50) employees allegedly illegally dismissed for
union membership by the petitioners, a Complaint before the Arbitration Branch of NLRC, Metro Manila.
PACIWU-TUCP charged petitioners herein with unfair labor practice. The Complaint alleged that when
Apacible received the letter of PACIWU-TUCP, management began to harass the members of the local
chapter, a move which culminated in their outright dismissal from employment, without any just or
lawful cause. It was a clear case of union-busting, averred PACIWU-TUCP.

GSP Manufacturing Corporation (GSP) denied the unions averments. It claimed that it had verified with
the Bureau of Labor Relations (BLR) whether a labor organization with the name Apacible Enterprises
Employees Union was duly registered. It was informed that no such labor organization was registered
either as a local chapter of PACIWU or of the Trade Union Congress of the Philippines (TUCP). GSP
claimed that after unsuccessfully misrepresenting themselves, herein private respondents then started
making unjustified demands, abandoned their work, and staged an illegal strike from November 1994 up
to the filing of the Complaints. Petitioners then asked the private respondents to lift their picket and
return to work, but were only met with a cold refusal.

Lucita Casero, et al. vs. GSP Manufacturing Corp., et al.

NLRC NCR Case No. 00-01-10437-95

This separate case was also filed by the dismissed union members (complainants in NLRC NCR Case No.
00-03-02114-95), against the petitioners herein for payment of their monetary claims. The dismissed
employees demanded the payment of (1) salary differentials due to underpayment of wages; (2) unpaid
salaries/wages for work actually rendered; (3) 13th month pay for 1994; (4) cash equivalent of the
service incentive leave; and (5) illegal deductions from their salaries for cash bonds.

Petitioner corporations, however, maintained that they have been paying complainants the
wages/salaries mandated by law and that the complaint should be dismissed in view of the execution of
quitclaims and waivers by the private respondents.

The Labor Arbiter ordered the three cases consolidated as the issues were interrelated and the
respondent corporations were under one management.
After due proceedings, Labor Arbiter Ramon Valentin C. Reyes rendered a decision, the decretal portion
of which reads as follows:

WHEREFORE, premises all considered, judgment is hereby rendered in the respective cases as follows:

A. NLRC NCR CASE NO. 00-11-08124-94

1. Holding the respondent guilty of unfair labor practice, and declaring complainants dismissals illegal;

2. Ordering respondent to reinstate complainants to their former positions without loss of seniority
rights and other benefits;

3. Ordering the respondent to pay complainants their backwages from the date of their termination up
to the date of this decision;

4. Ordering the respondent to pay complainants their unpaid salaries, overtime pay, holiday and rest day
premium, unpaid 13th month pay and reimbursement of the cash deposit deducted by the respondent
from the salaries of complainants.

B. NLRC NCR CASE NO. 00-03-02114-95

1. Declaring the strike conducted by complainants to be illegal;

2. Declaring the officers of the union to have lost their employment status, and thus terminating their
employment with respondent companies;

3. Ordering the reinstatement of the complainants who are only members of the union to their former
positions with respondent companies, without backwages, except individual complainants Cristeta De
Luna, Luzviminda Recones, Eden Revilla, and Jinky Dellosa.
C. NLRC NCR CASE NO. 00-01-10431[4]-95

1. Ordering respondents to pay individual complainants:

a. salary differentials resulting from underpayment of wages

b. unpaid salaries/wages for work actually rendered;

c. 13th month pay for the year 1994;

d. cash equivalent of the service incentive leave;

e. illegal deductions in the form of cash deposits

all in accordance with the computation submitted by the individual complainants.

2. Dismissing the complaint with regard to complainants Cristeta De Luna, Luzviminda Recones, Eden
Revilla, and Jinky Dellosa.

All other claims are dismissed for lack of merit.

The Research and Information Division, this Commission, is hereby directed to effect the necessary
computation which shall form part of this Decision.

SO ORDERED.[5]
Labor Arbiter Reyes ruled the reassignment and transfer of complainants in NLRC NCR Case No. 00-11-
08124-94 as unfair labor practice, it being management interference in the complainants formation and
membership of union. He held that the protested reassignments and transfers were highly suspicious,
having been made right after management was informed about the formation of the union. Such timing
could not have been pure coincidence. The Labor Arbiter also found that petitioners herein failed to
substantiate their claim that private respondents had abandoned their employment. He pointed out that
the complainants filing of a case immediately after their alleged dismissal militated against any claim of
abandonment. Moreover, petitioners did not furnish complainants with written notices of dismissal. As
to the unpaid wages and other monetary benefits claimed by private respondents herein, the Labor
Arbiter ruled that as petitioners herein did not present proof of their payment, there is presumption of
non-payment. Finally, Labor Arbiter Reyes found the cash deposit of P2,000.00 unauthorized and illegal,
without any showing that the same was necessary and recognized in the business.

In NLRC NCR Case No. 00-03-02114-95, it was duly established that the employees union was not
registered with the Bureau of Labor Relations. Hence, private respondents had engaged in an illegal
strike since the right to strike maybe availed of only by a legitimate labor organization. Labor Arbiter
Reyes upheld the dismissal of the union officers for leading and participating in an illegal strike, but ruled
the dismissal of the union members to be improper since they acted in good faith in the belief that their
actions were within the bounds of law.

In NLRC NCR Case No. 00-01-10437-95, the Labor Arbiter found petitioners liable for salary differentials
and other monetary claims for petitioners failure to sufficiently prove that it had paid the same to
complainants as required by law. He likewise ordered the return of the cash deposits to complainants,
citing the same reasons as in NLRC NCR Case No. 00-11-08124-94.

Petitioners herein seasonably appealed the decision of Labor Arbiter Reyes. Subsequently, the NLRC
affirmed the decision in NLRC NCR Case Nos. 00-11-08124-94 and 00-01-10437-95. However, the NLRC
set aside the judgment with respect to NLRC NCR Case No. 00-03-02114-95 and ordered the remand of
the case for further proceedings, in view of the various factual issues involved. The NLRC ruling reads:

WHEREFORE, finding the appeal unmeritorious, the same is hereby DISMISSED.

ACCORDINGLY, we hereby set aside the ruling in NLRC NCR CASE NO. 00-03-02114-95 as we order the
same remanded for further proceedings in view of the nature of the issues involved being purely factual
in character. The awards in NLRC NCR CASE NO. 00-11-08-08124-94 and NLRC NCR CASE NO. 00-01-
10437-95 are hereby AFFIRMED.

SO ORDERED.[6]

Meanwhile, on May 14, 1996, petitioners herein filed a Petition to Declare the Strike Illegal against their
striking employees, docketed as NLRC NCR Case No. 05-03064-96 and raffled off to Labor Arbiter Arthur
L. Amansec.

On September 2, 1998, Labor Arbiter Amansec decided NLRC NCR Case No. 05-03064-96, as follows:

WHEREFORE, judgment is hereby made finding the strike conducted by the respondents from December
1, 1994 up to May 14, 1996 illegal and concomitantly, ordering respondents who are established to have
knowingly participated to have committed an illegal act to have lost their employment status.

Other claims for lack of merit are ordered DISMISSED.

SO ORDERED.[7]

In declaring the strike illegal, Labor Arbiter Amansec noted that: (1) no prior notice to strike had been
filed; (2) no strike vote had been taken among the union members; and (3) the issue involved was non-
strikeable, i.e., a demand for salary increases.

Petitioners then moved for reconsideration of the NLRC ruling, citing the ruling in NLRC NCR Case No. 05-
03064-96 to support their position that respondents herein had conducted an illegal strike and were
liable for unlawful acts.

On March 12, 1999, the NLRC resolved to partly grant the Motion for Reconsideration, thus:
WHEREFORE, prescinding from the foregoing premises, the Motion for Reconsideration is partly given
due course, in that the issues raised in NLRC NCR CASE No. 00-03-02114-95 is hereby declared to have
been rendered academic.

The rest of the dispositions in the questioned resolution remains.

SO ORDERED.[8]

Unwilling to let the matter rest there, petitioners then filed a special civil action for certiorari with the
Court of Appeals, docketed as CA-G.R. SP No. 53169. The Court of Appeals considered the following
issues in resolving the petition, to wit: (a) the validity of the respondents dismissal and entitlement to
backwages, (b) the validity of the Release, waiver and quitclaim executed by some of the respondents,
and (c) the validity of the claims for non-payment of salaries, overtime pay, holiday pay, premium pay,
etc.

On April 26, 2000, the appellate court disposed of CA-G.R. SP No. 53169 as follows:

WHEREFORE, premises studiedly considered, the Petition is partly given due course as the 12 March
1999 Resolution of the NLRC is hereby modified as follows:

1. In lieu of reinstatement, private respondents Josephine Julian, Jacinta Tejada, and the rest of the
officers of the Union shall be given separation pay at the rate of one month pay for every year of service,
with a fraction of at least six months of service considered as one year, computed from the time they
were first employed until December 10, 1994;

2. Ordering petitioner corporations to reinstate, without loss of seniority,

Jacina Burabod and the rest of the Union members; plus payment of backwages;

The rest of the dispositions in the two (2) challenged resolutions remains.
SO ORDERED.[9]

The appellate court brushed aside petitioners theory that the illegality of strike makes the respondents
dismissal legal. It stressed that while the strike was illegal, marked as it was with violence and for non-
compliance with the requirements of the Labor Code, nonetheless, Julian, Tejada, and Burabod
(complainants in NLRC NCR Case No. 00-11-08124-94) were dismissed prior to the staging of the strike.
Said dismissal constitutes unfair labor practice. Moreover, said dismissal was done without valid cause
and due process. Thus, the complainants in NLRC NCR Case No. 00-11-08124-94 are entitled to
reinstatement and backwages, although separation pay may be given in lieu of reinstatement due to
strained relations with petitioners. The appellate court also ruled that the quitclaims relied upon by
petitioners herein are void, having been executed under duress. Finally, the Court of Appeals affirmed
the finding of the NLRC that petitioners had failed to support their claim of having paid herein
respondents their money claims, because belated evidence presented by petitioners is bereft of any
probative value.

Petitioners timely moved for reconsideration, but the appellate court denied said motion.

Hence, this petition alleging that the Court of Appeals committed palpable and reversible errorS of law
when:

I IT ORDERED THE RESPONDENTS, WHO ARE UNION MEMBERS, BE REINSTATED AND BE PAID
BACKWAGES, DESPITE THE FACT THAT IT CATEGORICALLY HELD THAT UNLAWFUL ACTS ATTENDED THE
STAGING OF THE ILLEGAL STRIKE IN CONTRAVENTION OF THE CLEAR MANDATE OF ARTICLE 264(a) OF
THE LABOR CODE.

II IT AWARDED BACKWAGES TO THE RESPONDENTS, WHO ARE UNION MEMBERS, DESPITE THE FACT
THAT THE ISSUE OF WHETHER OR NOT THE SAID UNION MEMBERS ARE ENTITTLED TO BACKWAGES
HAVE BEEN ANSWERED IN THE NEGATIVE BY THE DECISION DATED 15 APRIL 1996, PROMULGATED BY
THE HONORABLE LABOR ARBITER A QUO VALENTIN C. REYES AND SUCH RULING HAD ATTAINED
FINALITY.
III IT AWARDED SEPARATION PAY AND BACKWAGES TO THE RESPONDENTS WHO ARE OFFICERS OF THE
UNION, NAMELY: ADELAIDA LUMOD, LUCITA CASERO, MYRNA RAGASA, FELY MORALES, ELEN SUEDE,
FELY VALENCIA AND VIOLETA ARRIOLA, DESPITE THE FACT THAT IT WAS HELD IN THE DECISION DATED 15
APRIL 1996 PROMULGATED BY THE HONORABLE LABOR ARBITER A QUO VALENTIN C. REYES THAT THE
AFORENAMED UNION OFFICERS HAVE LOST THEIR EMPLOYMENT STATUS BY STAGING AN ILLEGAL STRIKE
AND SUCH RULING HAD ATTAINED FINALITY.

IV IT HELD THAT RESPONDENTS JULIAN, TEJADA AND BURABOD WERE ILLEGALLY DISMISSED.

V IT FAILED TO UPHOLD THE VALIDITY OF THE RELEASE, WAIVER AND QUITCLAIM EXECUTED BY THE
RESPONDENTS CONCERNED.

VI IT REFUSED TO GIVE PROBATIVE VALUE ON THE VOLUMINOUS DOCUMENTARY EVIDENCE SUBMITTED

BY HEREIN PETITIONERS.[10]

In our view, considering the assigned errors, the following are the relevant issues for our resolution:

1. Whether the respondents union officers and members were validly and legally dismissed from
employment considering the illegality of the strike;

2. Whether the respondents union officers and members are entitled to backwages, separation pay and
reinstatement, respectively.

On the first issue, petitioners argue that respondents were legally dismissed, pursuant to Article 264[11]
of the Labor Code in view of the determination by the Labor Arbiter that the strike conducted by
respondents are illegal and that illegal acts attended the mass action. The respondents counter that the
determination of the illegality of strike is inconsequential as the conclusion by the appellate court on the
illegality of dismissal was based on the petitioners non-compliance with the due process requirements
on terminating employees, which had nothing to do with the legality of the strike.
Some elaboration on the legality of the strike is needed, though briefly. In ruling the strike illegal, the
NLRC observed that:

While the right to strike is specifically granted by law, it is a remedy which can only be availed of by a
legitimate labor organization. Absent a showing as to the legitimate status of the labor organization, said
strike would have to be considered as illegal.

A review of the records of this case does not show that the local union to which complainants belong to
has complied with these basic requirements necessary to clothe the union with a legitimate status. In
fact, and as respondents claim, there is no record with the BLR that the union complainants belong to
have complied with the aforementioned requirements. This Office then has no recourse but to consider
the union of complainants as not being a legitimate labor organization. It then follows that the strike
conducted by complainants on respondent companies is illegal, as the right to strike is afforded only to a
legitimate labor organization.[12]

Indeed, the right to strike, while constitutionally recognized, is not without legal restrictions.[13] The
Labor Code regulates the exercise of said right by balancing the interests of labor and management in
the light of the overarching public interest. Thus, paragraphs (c) and (f) of Article 263[14] mandate the
following procedural steps to be followed before a strike may be staged: filing of notice of strike, taking
of strike vote, and reporting of the strike vote result to the Department of Labor and Employment.[15] It
bears stressing that these requirements are mandatory, meaning, non-compliance therewith makes the
strike illegal. The evident intention of the law in requiring the strike notice and strike-vote report is to
reasonably regulate the right to strike, which is essential to the attainment of legitimate policy objectives
embodied in the law.[16]

In the instant case, we find no reason to disagree with the findings of the NLRC that the strike conducted
by the respondent union is illegal. First, it has not been shown to the satisfaction of this Court that said
union is a legitimate labor organization, entitled under Article 263 (c) to file a notice of strike on behalf of
its members. Second, the other requirements under Article 263 (c) and (f) were not complied with by the
striking union. On this matter, the record is bare of any showing to the contrary. Hence, what is left for
this Court to do is to determine the effects of the illegality of the strike on respondents union officers
and members, specifically (a) whether such would justify their dismissal from employment, and (b)
whether they ceased to be entitled to the monetary awards and other appropriate reliefs and remedies.
Article 264 of the Labor Code, in providing for the consequences of an illegal strike, makes a distinction
between union officers and members who participated thereon. Thus, knowingly participating in an
illegal strike is a valid ground for termination from employment of a union officer. The law, however,
treats differently mere union members. Mere participation in an illegal strike is not a sufficient ground
for termination of the services of the union members. The Labor Code protects an ordinary, rank-and-file
union member who participated in such a strike from losing his job, provided that he did not commit an
illegal act during the strike.[17] Thus, absent any clear, substantial and convincing proof of illegal acts
committed during an illegal strike, an ordinary striking worker or employee may not be terminated from
work.[18]

Recourse to the records show that the following respondents were the officers of the union, namely:
Josephine C. Julian (President), Adelaida Lomod (Vice President), Lucita Casero (Secretary), Myrna
Ragasa (Treasurer), Filomena Morales (Auditor), Elena Suede (Board Member), Jacinta Tejada (Board
Member), Felipa Valencia (Board Member) and Violeta Arriola (P.R.O.).[19] Before us, petitioners insist
that these employees were legally terminated for their participation in an illegal strike and moreover,
Julian and Tejada were validly dismissed for abandoning their jobs after refusing to comply with transfer
and reassignment orders.

While holding the strike illegal, the Court of Appeals nonetheless still ruled that the union officers and
members were illegally dismissed for non-observance of due process requirements and union busting by
management. It likewise gave no credence to the charge of abandonment against Julian and Tejada.
Thus, it awarded separation pay in lieu of reinstatement to all union officers including respondents Julian
and Tejada and affirmed all other monetary awards by the Labor Arbiter including backwages.

On this point, we affirm the findings of the appellate court that Julian and Tejada did not abandon their
employment. Petitioners utterly failed to show proof that Julian and Tejada had the intent to abandon
their work and sever their employment relationship with petitioners. It is established that an employee
who forthwith takes steps to protest his layoff cannot be said to have abandoned his work.[20] However,
we cannot sustain the appellate courts ruling that the dismissal of Julian and Tejada was tantamount to
unfair labor practice. There is simply nothing on record to show that Julian and Tejada were discouraged
or prohibited from joining any union. Hence, the petitioners cannot be held liable for unfair labor
practice.

With respect to union officers, however, there is no dispute they could be dismissed for participating in
an illegal strike. Union officers are duty- bound to guide their members to respect the law.[21]
Nonetheless, as in other termination cases, union officers must be given the required notices for
terminating an employment, i.e., notice of hearing to enable them to present their side, and notice of
termination, should their explanation prove unsatisfactory. Nothing in Article 264 of the Labor Code
authorizes an immediate dismissal of a union officer for participating in an illegal strike. The act of
dismissal is not intended to happen ipso facto but rather as an option that can be exercised by the
employer and after compliance with the notice requirements for terminating an employee. In this case,
petitioners did not give the required notices to the union officers.

We must stress, however, the dismissals per se are not invalid but only ineffectual in accordance with
Serrano v. National Labor Relations Commission.[22] In said case, we held that (1) the employers failure
to comply with the notice requirement does not constitute denial of due process, but mere failure to
observe a procedure for termination of employment which makes the termination merely ineffectual,
[23] and (2) the dismissal shall be upheld but the employer must be sanctioned for non-compliance with
the prescribed procedure.[24] As to the reliefs to be afforded, Serrano decreed that:

In sum, we hold that if in proceedings for reinstatement under Art. 283, it is shown that the termination
of employment was due to an authorized cause, then the employee concerned should not be ordered
reinstated even though there is failure to comply with the 30-day notice requirement. Instead, he must
be granted separation pay in accordance with Art. 283

If the employees separation is without cause, instead of being given separation pay, he should be
reinstated. In either case, whether he is reinstated or only granted separation pay, he should be paid full
backwages if he has been laid off without written notice at least 30 days in advance.

On the other hand, with respect to dismissals for cause under Art. 282, if it is shown that the employee
was dismissed for any of the just causes mentioned in said Art. 282, then, in accordance with that article,
he should not be reinstated. However, he must be paid backwages from the time his employment was
terminated until it is determined that the termination of employment is for a just cause because the
failure to hear him before he is dismissed renders the termination of his employment without legal
effect.[25]

Admittedly, Serrano does not touch on the termination of an employee who is a mere union member,
due to participation in an illegal strike. But it is settled that an employee who is a mere union member
does not lose his employment status by mere participation allegedly in an illegal strike. If he is
terminated, he is entitled to reinstatement. Moreover, where the employee, whether a union member
or officer, is not given any notice for termination such as in this case, he is entitled to be paid backwages
from the date of his invalid termination until the final judgment of the case.

In the present case, we affirm the appellate courts ruling that the union members who are parties herein
were illegally dismissed and thus, entitled to reinstatement and payment of backwages for lack of
sufficient evidence that they engaged in illegal acts during the strike. They were in good faith in believing
that their actions were within the bounds of the law, since such were meant only to secure economic
benefits for themselves so as to improve their standard of living. Besides, it is not the business of this
Court to determine whether the acts committed by them are illegal, for review of factual issues is not
proper in this petition. Review of labor cases elevated to this Court on a petition for review on certiorari
is confined merely to questions of law, and not of fact, as factual findings generally are conclusive on this
Court.[26]

For the same reasons, we likewise affirm the Court of Appeals in upholding the findings of both the NLRC
and the Labor Arbiter regarding the validity or invalidity of quitclaims and the award of other monetary
claims. Questions on whether the quitclaims were voluntarily executed or not are factual in nature. Thus,
petitioners appeal for us to re-examine certain pieces of documentary evidence concerning monetary
claims cannot now be entertained. Factual findings of labor officials, who are deemed to have acquired
expertise in matters within their respective jurisdiction, are generally accorded not only respect but even
finality, and bind us when supported by substantial evidence. It is not our function to assess and evaluate
the evidence all over again, particularly where the findings of both the Arbiter and the Court of Appeals
coincide.[27]

WHEREFORE, the assailed Decision of the Court of Appeals, dated April 26, 2000 and its Resolution of
October 11, 2000, in CA-G.R. SP No. 53169 are AFFIRMED with MODIFICATION. Dismissal of the union
officers is declared NOT INVALID, and the award of separation pay to said union officers is hereby
DELETED. However, as a sanction for non-compliance with notice requirements for lawful termination by
the petitioners, backwages are AWARDED to the union officers computed from the time they were
dismissed until the final entry of judgment of this case. The rest of the dispositions of the Court of
Appeals in its Decision of April 26, 2000, in CA-G.R. SP No. 53169, are hereby AFFIRMED. No
pronouncement as to costs.

SO ORDERED.

Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.

[1] Penned by Associate Justice Andres B. Reyes, Jr., with Associate Justices Fermin A. Martin, Jr., and
Romeo A. Brawner, concurring. Rollo, pp. 123-143.

[2] Rollo, pp. 119-121.

[3] Id. at 187-200.

[4] Should read as NLRC NCR Case No. 00-01-10437-95. See Rollo, pp. 125, 407.

[5] Rollo, pp. 425-427.

[6] Id. at 243.

[7] Id. at 521.

[8] Id. at 248-249.

[9] Id. at 29-30.

[10] Id. at 65-67.

[11] 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 Department.
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.

Any worker 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.

(b) No person shall obstruct, impede, or interfere with by force, violence, coercion, threats or
intimidation any peaceful picketing by employees during any labor controversy or in the exercise of the
right of self-organization or collective bargaining, or shall aid or abet such obstruction or interference.

(c) No employer shall use or employ any strike-breaker, nor shall any person be employed as a strike-
breaker.

(d) No public official or employee, including officers and personnel of the New Armed Forces of the
Philippines or the Integrated National Police, or armed person, shall bring in, introduce or escort in any
manner any individual who seeks to replace strikers in entering or leaving the premises of a strike area,
or work in place of the strikers. The police force shall keep out of the picket lines unless actual violence
or other criminal acts occur therein: Provided, That nothing herein shall be interpreted to prevent any
public officer from taking any measure necessary to maintain peace and order, protect life and property,
and/or enforce the law and legal order.

(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 employers premises for lawful purposes, or obstruct public
thoroughfares.

[12] Rollo, pp. 419, 422.

[13] Great Pacific Life Employees Union v. Great Pacific Life Assurance Corp., 362 Phil. 452, 460 (1999).

[14] ART. 263. Strikes, picketing and lockouts. -

(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.

(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 Department the voting at least seven days before the
intended strike or lockout, subject to the cooling-off period herein provided.

[15] Lapanday Workers Union v. National Labor Relations Commission, G.R. Nos. 95494-97, 7 September
1995, 248 SCRA 95, 104.

[16] See CCBPI Postmix Workers Union v. NLRC, 359 Phil 741, 759 (1998).

[17] Id. at 760-761.

[18] Id. at 749.

[19] Rollo, p. 166.

[20] Columbus Philippines Bus Corporation v. NLRC, G.R. Nos. 114858-59, 7 September 2001, 364 SCRA
606, 623.

[21] Association of Independent Unions in the Philippines v. NLRC, 364 Phil. 697, 708 (1999).

[22] G.R. No. 117040, 27 January 2000, 323 SCRA 445. Stress supplied.

[23] Id. at 472.

[24] Id. at 463.

[25] Id. at 475-476.

[26] Ignacio v. Coca-Cola Bottlers Phils., Inc., G.R. No. 144400, 19 September 2001, 365 SCRA 418, 423.

[27] Abalos v. Philex Mining Corporation, G.R. No. 140374, 27 November 2002, p. 9.

---------

San Miguel Corporation vs. NLRC

G.R. Nos. 146121-22, April 16, 2008

Facts:
Ibias (respondent) was employed by petitioner SMC on 24 December 1978 initially as a CRO operator in
its Metal Closure and Lithography Plant. Respondent continuously worked therein until he advanced as
Zamatic operator. He was also an active and militant member of a labor organization called Ilaw Buklod
Manggagawa (IBM)-SMC Chapter.

According to SMC’s Policy on Employee Conduct, absences without permission or AWOPs, which are
absences not covered either by a certification of the plant doctor that the employee was absent due to
sickness or by a duly approved application for leave of absence filed at least 6 days prior to the intended
leave, are subject to disciplinary action characterized by progressively increasing weight. The same Policy
on Employee Conduct also punishes falsification of company records or documents with discharge or
termination for the first offense if the offender himself or somebody else benefits from falsification or
would have benefited if falsification is not found on time.

It appears that per company records, respondent was AWOP on the following dates in 1997: 2, 4 and 11
January; 26, 28 and 29 April; and 5, 7, 8, 13, 21, 22, 28 and 29 May. For his absences on 2, 4 and 11
January and 28 and 29 April, he was given a written warning dated 9 May 1997 that he had already
incurred five (5) AWOPs and that further absences would be subject to disciplinary action. For his
absences on 28 and 29 April and 7 and 8 May, respondent was alleged to have falsified his medical
consultation card by stating therein that he was granted sick leave by the plant clinic on said dates when
in truth he was not.

After the completion of the investigation, SMC concluded that respondent committed the offenses of
excessive AWOPs and falsification of company records or documents, and accordingly dismissed him.

On 30 March 1998, respondent filed a complaint for illegal dismissal against SMC. The labor arbiter
believed that respondent had committed the absences pointed out by SMC but found the imposition of
termination of employment based on his AWOPs to be disproportionate since SMC failed to show by
clear and convincing evidence that it had strictly implemented its company policy on absences. It also
noted that termination based on the alleged falsification of company records was unwarranted in view of
SMC’s failure to establish respondent’s guilt.

The appellate court also held that respondent’s AWOPs did not warrant his dismissal in view of SMC’s
inconsistent implementation of its company policies. It could not understand why respondent was given
a mere warning for his absences on 28 and 29 April which constituted his 5th and 6th AWOPs,
respectively, when these should have merited suspension under SMC’s policy. According to the appellate
court, since respondent was merely warned, logically said absences were deemed committed for the first
time; thus, it follows that the subject AWOPs did not justify his dismissal because under SMC’s policy, the
4th to 9th AWOPs are meted the corresponding penalty only when committed for the second time.

Issue: WON the Court of Appeals erred in sustaining the findings of the labor arbiter and the NLRC and in
dismissing SMC’s claims that respondent was terminated from service with just cause.

Held:

Proof beyond reasonable doubt is not required as a basis for judgment on the legality of an employer’s
dismissal of an employee, nor even preponderance of evidence for that matter, substantial evidence
being sufficient. In the instant case, while there may be no denying that respondent’s medical card had
falsified entries in it, SMC was unable to prove, by substantial evidence, that it was respondent who
made the unauthorized entries. Besides, SMC’s (Your) Guide on Employee Conduct punishes the act of
falsification of company records or documents; it does not punish mere possession of a falsified
document.

Respondent cannot feign surprise nor ignorance of the earlier AWOPs he had incurred. He was given a
warning for his 2, 4, and 11 January and 26, 28, and 29 April 1997 AWOPs. In the same warning, he was
informed that he already had six AWOPs for 1997. He admitted that he was absent on 7 and 8 May 1997.
He was also given notices to explain his AWOPs for the period 26 May to 2 June 1997, which he received
but refused to acknowledge. It does not take a genius to figure out that as early as June 1997, he had
more than nine AWOPs.

In any case, when SMC imposed the penalty of dismissal for the 12th and 13th AWOPs, it was acting well
within its rights as an employer. An employer has the prerogative to prescribe reasonable rules and
regulations necessary for the proper conduct of its business, to provide certain disciplinary measures in
order to implement said rules and to assure that the same would be complied with. An employer enjoys
a wide latitude of discretion in the promulgation of policies, rules and regulations on work-related
activities of the employees.

It is axiomatic that appropriate disciplinary sanction is within the purview of management imposition.
Thus, in the implementation of its rules and policies, the employer has the choice to do so strictly or not,
since this is inherent in its right to control and manage its business effectively. Consequently,
management has the prerogative to impose sanctions lighter than those specifically prescribed by its
rules, or to condone completely the violations of its erring employees. Of course, this prerogative must
be exercised free of grave abuse of discretion, bearing in mind the requirements of justice and fair play.

All told, we find that SMC acted well within its rights when it dismissed respondent for his numerous
absences. Respondent was afforded due process and was validly dismissed for cause.

Petition granted

------

ST. SCHOLASTICA'S COLLEGE, petitioner,

vs.
HON. RUBEN TORRES, in his capacity as SECRETARY OF LABOR AND EMPLOYMENT, and SAMAHANG NG
MANGGAGAWANG PANG-EDUKASYON SA STA. ESKOLASTIKA-NAFTEU, respondents.

Effects of failing to comply with a return to work order

Immediacy of returning to work.

Whether striking union members terminated for abandonment of work after failing to comply with return-
to-work orders of the SECRETARY should by law be reinstated.
20 July 1990: petitioner COLLEGE and private respondent UNION initiated negotiations for a first-ever
collective bargaining agreement.
A deadlock in the negotiations prompted the UNION to file on 4 October 1990 a Notice of Strike with the
Department

5 November 1990: UNION declared a strike which paralyzed the operations of the COLLEGE.
Affecting as it did the interest of the students, public respondent SECRETARY:
1. immediately assumed jurisdiction over the labor dispute
2. issued on the same day a return- to- work oerder.
6 November 1990, instead of returning to work, the UNION filed a motion for reconsideration of the return-to-work
order questioning inter alia the assumption of jurisdiction by the SECRETARY.

9 November 1990, COLLEGE:

1. sent individual letters to the striking employees to return to work not later than 8:00 o'clock A.M. of 12
November 1990
2. giving notice to some twenty-three (23) workers that their return would be without prejudice to the filing of
appropriate charges against them.
UNION presented a list of (6) demands to the COLLEGE (11 November 1990).
The most important of these was the unconditional acceptance back to work of the striking employees which were
flatly rejected.

14 and 15 November 1990: parties held conciliation meetings where the UNION pruned down its demands
to three (3), viz.:
1. striking employees be reinstated under the same terms and conditions before the strike;
2. no retaliatory or disciplinary action be taken against them;
3. CBA negotiations be continued.
These efforts proved futile.

23 November 1990: COLLEGE mailed individual notices of termination to the striking employees, which were
received on 26 November 1990, or later.
UNION officers and members tried to return to work but were no longer accepted by the COLLEGE.

5 December 1990: Complaint for Illegal Strike was filed against the UNION, its officers and several of its
(NLRC),

UNION:
1. moved for the enforcement of the return-to-work order (SECRETARY) citing "selective acceptance of returning
strikers"
2. sought dismissal of the complaint.

12 April 1991: SECRETARY issued an Order which:

1. directed the reinstatement of striking UNION members, finding that no violent or otherwise illegal act
accompanied the conduct of the strike
2. fledgling UNION like private respondent was "naturally expected to exhibit unbridled if inexperienced
enthusiasm, in asserting its existence".
3. UNION officers responsible for the violation of the return-to-work orders of 5 and 9 November 1990 and
sustained their termination.

Petitioner questions the assumption by SECRETARY of jurisdiction to decide on termination disputes,

maintaining that such jurisdiction is vested instead in the Labor Arbiter pursuant to Art. 217
Petitioner also invokes PAL v. Secretary stating that the labor Secretary exceeded his jurisdiction when he
restrained PAL from taking disciplinary measures against its guilty employees .
Art. 263 of the Labor Code: all that the Secretary may enjoin is the holding of the strike.

Petitioner contends the doctrine in

1. Sarmiento v. Tuico and
2. Union of Filipro Employees v. Nestle Philippines, Inc.:
Workers who refuse to obey a return-to-work order are not entitled:
1. to be paid for work not done, or
2. to reinstatement to the positions they have abandoned of their refusal to return

Private respondent UNION pleads for reinstatement of its dismissed officers considering that the picket
was:
1. never characterized as a "brazen disregard of successive legal orders"
2. nor was it a willful refusal to return to work unlike in the two cases.

The failure of UNION officers and members to immediately comply with the return-to-work orders was because the
academic institutions were not industries indispensable to the national interest.
The UNION intimated that efforts were immediately initiated to fashion out a reasonable return-to-work
agreement with the COLLEGE, albeit, if failed.
International Pharmaceuticals, Inc. v. Secretary of Labor and Employment:
Secretary was explicitly granted by Article 263 (g) the:
1. 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,
2. decide the same
This authority to assume jurisdiction over the labor dispute must
1. include and extend to all questions and include and extend to all questions
2. controversies arising therefrom, including cases over which the Labor Arbiter has exclusive jurisdiction.

The rulings above seem to run counter to that of PAL v. Secretary of but the conflict is only apparent, not real.
We ruled in the latter case that the jurisdiction of the Secretary assumption and/or certification cases is limited to
the issues:
1. involved in the disputes or
2. submitted to him for resolution.
Since the matter on the legality or illegality of the strike was never submitted to him for resolution, he was thus to
have exceeded his jurisdiction when he restrained the employer from taking disciplinary action against employees
who staged an illegal strike.

Before the Secretary may take cognizance of an issue which is merely incidental to the labor dispute the same must
be:
1. involved in the labor disputed itself,
2. submitted to him for resolution.
If it was not, as in PAL and he acted on it, that assumption of jurisdiction is tantamount to a grave abuse of
discretion.
Otherwise, the ruling in International Pharmaceuticals will apply.

The submission of an incidental issue of a labor dispute, in assumption and/or certification cases, to the Secretary
for his resolution is one of the instances whereby the latter may exercise concurrent jurisdiction together with the
Labor Arbiters.

In the instant petition, the COLLEGE asked the "Secretary of Labor to take the appropriate steps under the said
circumstances."
It likewise prayed that respondent SECRETARY uphold its termination of the striking employees.
The issue on the legality of the termination of striking employees was properly submitted to respondent
SECRETARY for resolution.

Interpretation which is in consonance with the intention of our labor authorities: to provide workers
immediate access to their rights and benefits without being inconvenienced by the arbitration and
litigation process

Whether striking union members, terminated for abandonment of work after failing to comply strictly with a
return-to-work order, should be reinstated.
Law which govern the effects of defying a return-to-work order:

Article 263 (g)

Art. 263. Strikes, picketing, and lockouts. „- . . . (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 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 compliance with this provision as well as with such orders as he may issue to enforce the same . . . (as
amended by Sec. 27, R.A. 6715; emphasis supplied).

2. Article 264
Art. 264. Prohibited activities. „1¤7 (a) No labor organization or employer shall declare a strike or lockout:
1. without first having bargained collectively in accordance with Title VII of this Book or
2. without first having filed the notice required in the preceding Article or
3. without the necessary strike or lockout vote first having been obtained and reported to the Ministry.

No strike or lockout shall be declared:

1. after assumption of jurisdiction by the President or the Minister or
2. after certification or submission of the dispute to compulsory or voluntary arbitration or
3. during the pendency of cases involving the same grounds for the strike or lockout
. . . (emphasis supplied).

Any worker whose employment has been terminated as 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 . . . (emphasis
supplied).

3. Section 6, Rule IX, of the New Rules of Procedure of the NLRC (which took effect on 31 August 1990) „1¤7
Sec. 6. Effects of Defiance. „1¤7 Non-compliance with the certification order of the Secretary of Labor and
Employment or a return to work order of the Commission shall be considered an illegal act committed in the course
of the strike or lockout and shall authorize the Secretary of Labor and Employment or the Commission, as the case
may be, to enforce the same under pain or loss of employment status or entitlement to full employment benefits
from the locking-out employer or backwages, damages and/or other positive and/or affirmative reliefs, even to
criminal prosecution against the liable parties . . . (emphasis supplied).

UNION maintains that the reason they failed to immediately comply with the return-to-work order:
1. questioned the assumption of jurisdiction of respondent SECRETARY.
2. being an academic institution, the school could not be considered an industry indispensable to national interest,
3. pending resolution of the issue, they were under no obligation to immediately return to work.

Position of UNION is simply flawed.

Article 263 (g): if a strike has already taken place at the time of assumption, "all striking . . . employees shall
immediately return to work."
This means that a return-to-work order is immediately effective and executory notwithstanding the filing of a
motion for reconsideration (University of Sto. Tomas v. NLRC).
It must be strictly complied with even during the pendency of any petition questioning its validity (Union of Filipro
Employees v. Nestle Philippines, Inc., supra).
The assumption and/or certification order is issued in the exercise of respondent SECRETARY's compulsive power of
arbitration and, until set aside, must be immediately complied with.

The assumption of jurisdiction by the Secretary over labor disputes involving academic institutions was
already upheld in Philippine School of Business Administration v. Noriel:
There is no doubt that the on-going labor dispute at the school adversely affects the national interest
It is not amiss to mention that the school is engaged in the promotion of the physical, intellectual and
emotional well-being of the country's youth.

The respective liabilities of striking union officers and members who failed to immediately comply with the return-
to-work order is outlined in Art. 264:
Any declaration of a strike or lockout after the Secretary of has assumed jurisdiction over the labor dispute is
considered an illegal. act.
Any worker or union officer who knowingly participates in a strike defying a return-to-work order may,
consequently, "be declared to have lost his employment status."

Records reveal that private respondent UNION opted to defy not only the return-to-work order of 5
November 1990 but also that of 9 November 1990.
The striking union officers and members tried to return to work only eleven (11) days after the conciliation
meetings ended in failure, or twenty (20) days after they received copy of the first return-to-work order on 5
November 1990.

There was willful disobedience not only to one but two return-to-work orders.
Despite containing threats of disciplinary action against some union officers and members who actively
participated in the strike, the letter dated 9 November 1990 sent by the COLLEGE enjoining the union officers and
members to return to work on 12 November 1990 presented the workers an opportunity to return to work under
the same terms and conditions or prior to the strike.
Yet, the UNION decided to ignore the same.
The COLLEGE, correspondingly, had every right to terminate the services of those who chose to disregard the
return-to-work orders issued by respondent SECRETARY in order to protect the interests of its students who form
part of the youth of the land.

On the immediacy of returning to work: immediately after the order/ assumption.

From the moment a worker defies a return-to-work order, he is deemed to have abandoned his job.
It is already in itself knowingly participating in an illegal act.
Respondent SECRETARY gravely abused his discretion when he ordered the reinstatement of striking union
members who refused to report back to work after he issued two (2) return-to-work orders, which in itself
is knowingly participating in an illegal act.
------

MSF Tire and Rubber vs CA

GR 128632
Facts:

Respondent Union filed a notice of strike in the NCMB charging (Phildtread) with unfair labor
practice. Thereafter, they picketed and assembled outside the gate of Philtread’s plant. Philtread, on
the other hand, filed a notice of lockout. Subsequently, the Secretary of Labor assumed jurisdiction
over the labor dispute and certified it for compulsory arbitration.

During the pendency of the labor dispute, Philtread entered into a Memorandum of Agreement with
Siam Tyre whereby its plant and equipment would be sold to a new company, herein petitioner, 80%
of which would be owned by Siam Tyre and 20% by Philtread, while the land on which the plant was
located would be sold to another company, 60% of which would be owned by Philtread and 40% by
Siam Tyre.

Petitioner then asked respondent Union to desist from picketing outside its plant. As the respondent
Union refused petitioner’s request, petitioner filed a complaint for injunction with damages before
the RTC. Respondent Union moved to dismiss the complaint alleging lack of jurisdiction on the part of
the trial court.

Petitioner asserts that its status as an “innocent bystander” with respect to the labor dispute
between Philtread and the Union entitles it to a writ of injunction from the civil courts.

Issue: WON petitioner has shown a clear legal right to the issuance of a writ of injunction under the
“innocent bystander” rule.

Held:

In Philippine Association of Free Labor Unions (PAFLU) v. Cloribel, this Court, through Justice J.B.L.
Reyes, stated the “innocent bystander” rule as follows:

The right to picket as a means of communicating the facts of a labor dispute is a phase of the
freedom of speech guaranteed by the constitution. If peacefully carried out, it cannot be curtailed
even in the absence of employer-employee relationship.

The right is, however, not an absolute one. While peaceful picketing is entitled to protection as an
exercise of free speech, we believe the courts are not without power to confine or localize the sphere
of communication or the demonstration to the parties to the labor dispute, including those
with related interest, and to insulate establishments or persons with no industrial connection or
having interest totally foreign to the context of the dispute. Thus the right may be regulated at the
instance of third parties or “innocent bystanders” if it appears that the inevitable result of its
exercise is to create an impression that a labor dispute with which they have no connection or
interest exists between them and the picketing union or constitute an invasion of their rights.

Thus, an “innocent bystander,” who seeks to enjoin a labor strike, must satisfy the court it is entirely
different from, without any connection whatsoever to, either party to the dispute and, therefore, its
interests are totally foreign to the context thereof.

In the case at bar, petitioner cannot be said not to have such connection to the dispute. We find that
the “negotiation, contract of sale, and the post transaction” between Philtread, as vendor, and Siam
Tyre, as vendee, reveals a legal relation between them which, in the interest of petitioner, we cannot
ignore. To be sure, the transaction between Philtread and Siam Tyre, was not a simple sale whereby
 Philtread ceased to have any proprietary rights over its sold assets. On the contrary, Philtread
remains as 20% owner of private respondent and 60% owner of Sucat Land Corporation which was
likewise incorporated in accordance with the terms of the Memorandum of Agreement with Siam
Tyre, and which now owns the land were subject plant is located. This, together with the fact that
private respondent uses the same plant or factory; similar or substantially the same working
conditions; same machinery, tools, and equipment; and
manufacture the same products as Philtread, lead us to safely conclude that private respondent’s
personality is so closely linked to Philtread as to bar its entitlement to an injunctive writ.

Petition denied.

------

BRENT SCHOOL vs. ZAMORA

BRENT SCHOOL, INC.DIMACHE vs. RONALDO ZAMORA and DOROTEO R. ALEGRE
G.R. No. L-48494 February 5, 1990 en banc

FACTS:

Private respondent Doroteo R. Alegre was engaged as athletic director by petitioner Brent School, Inc. at
a yearly compensation of P20,000.00. The contract fixed a specific term for its existence, five (5) years,
i.e., from July 18, 1971, the date of execution of the agreement, to July 17, 1976. Subsequent subsidiary
agreements dated March 15, 1973, August 28, 1973, and September 14, 1974 reiterated the same terms
and conditions, including the expiry date, as those contained in the original contract of July 18, 1971.

On April 20,1976, Alegre was given a copy of the report filed by Brent School with the Department of
Labor advising of the termination of his services effective on July 16, 1976. The stated ground for the
termination was "completion of contract, expiration of the definite period of employment." Although
protesting the announced termination stating that his services were necessary and desirable in the usual
business of his employer, and his employment lasted for 5 years - therefore he had acquired the status of
regular employee - Alegre accepted the amount of P3,177.71, and signed a receipt therefor containing
the phrase, "in full payment of services for the period May 16, to July 17, 1976 as full payment of
contract."

The Regional Director considered Brent School's report as an application for clearance to terminate
employment (not a report of termination), and accepting the recommendation of the Labor Conciliator,
refused to give such clearance and instead required the reinstatement of Alegre, as a "permanent
employee," to his former position without loss of seniority rights and with full back wages.

ISSUE:

Whether or not the provisions of the Labor Code, as amended, have anathematized "fixed period
employment" or employment for a term.

RULING:
 Respondent Alegre's contract of employment with Brent School having lawfully terminated with and by
reason of the expiration of the agreed term of period thereof, he is declared not entitled to
reinstatement.

The employment contract between Brent School and Alegre was executed on July 18, 1971, at a time
when the Labor Code of the Philippines (P.D. 442) had not yet been promulgated. At that time, the
validity of term employment was impliedly recognized by the Termination Pay Law, R.A. 1052, as
amended by R.A. 1787. Prior, thereto, it was the Code of Commerce (Article 302) which governed
employment without a fixed period, and also implicitly acknowledged the propriety of employment with
a fixed period. The Civil Code of the Philippines, which was approved on June 18, 1949 and became
effective on August 30,1950, itself deals with obligations with a period. No prohibition against term-or
fixed-period employment is contained in any of its articles or is otherwise deducible therefrom.

It is plain then that when the employment contract was signed between Brent School and Alegre, it was
perfectly legitimate for them to include in it a stipulation fixing the duration thereof Stipulations for a
term were explicitly recognized as valid by this Court.

The status of legitimacy continued to be enjoyed by fixed-period employment contracts under the Labor
Code (PD 442), which went into effect on November 1, 1974. The Code contained explicit references to
fixed period employment, or employment with a fixed or definite period. Nevertheless, obscuration of
the principle of licitness of term employment began to take place at about this time.

Article 320 originally stated that the "termination of employment of probationary employees and those
employed WITH A FIXED PERIOD shall be subject to such regulations as the Secretary of Labor may
prescribe." Article 321 prescribed the just causes for which an employer could terminate "an
employment without a definite period." And Article 319 undertook to define "employment without a
fixed period" in the following manner: …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.

Subsequently, the foregoing articles regarding employment with "a definite period" and "regular"
employment were amended by Presidential Decree No. 850, effective December 16, 1975.

Article 320, dealing with "Probationary and fixed period employment," was altered by eliminating the
reference to persons "employed with a fixed period," and was renumbered (becoming Article 271).

As it is evident that Article 280 of the Labor Code, under a narrow and literal interpretation, not only fails
to exhaust the gamut of employment contracts to which the lack of a fixed period would be an anomaly,
but would also appear to restrict, without reasonable distinctions, the right of an employee to freely
stipulate with his employer the duration of his engagement, it logically follows that such a literal
interpretation should be eschewed or avoided. The law must be given a reasonable interpretation, to
preclude absurdity in its application. Outlawing the whole concept of term employment and subverting
to boot the principle of freedom of contract to remedy the evil of employer's using it as a means to
prevent their employees from obtaining security of tenure is like cutting off the nose to spite the face or,
more relevantly, curing a headache by lopping off the head.
 Such interpretation puts the seal on Bibiso upon the effect of the expiry of an agreed period of
employment as still good rule—a rule reaffirmed in the recent case of Escudero vs. Office of the
President (G.R. No. 57822, April 26, 1989) where, in the fairly analogous case of a teacher being served
by her school a notice of termination following the expiration of the last of three successive fixed-term
employment contracts, the Court held:
Reyes (the teacher's) argument is not persuasive. It loses sight of the fact that her employment was
probationary, contractual in nature, and one with a definitive period. At the expiration of the period
stipulated in the contract, her appointment was deemed terminated and the letter informing her of the
non-renewal of her contract is not a condition sine qua non before Reyes may be deemed to have ceased
in the employ of petitioner UST. The notice is a mere reminder that Reyes' contract of employment was
due to expire and that the contract would no longer be renewed. It is not a letter of termination.

Paraphrasing Escudero, respondent Alegre's employment was terminated upon the

expiration of his last contract with Brent School on July 16, 1976 without the necessity of any notice. The
advance written advice given the Department of Labor with copy to said petitioner was a mere reminder
of the impending expiration of his contract, not a letter of termination, nor an application for clearance
to terminate which needed the approval of the Department of Labor to make the termination of his
services effective. In any case, such clearance should properly have been given, not denied.