This case is about a) the consequences of an illegally staged strike upon the employment status of the union officers and its ordinary members and b) the right of reinstated union members to go back to work pending the company's appeal from the order reinstating them.

The Facts and the Case

C. Alcantara & Sons, Inc., (the Company) is a domestic corporation engaged in the manufacture and processing of plywood.  Nagkahiusang Mamumuo sa Alsons-SPFL (the Union) is the exclusive bargaining agent of the Company's rank and file employees.  The other parties to these cases are the Union officers¹ and their striking members.²

The Company and the Union entered into a Collective Bargaining Agreement (CBA) that bound them to hold no strike and no lockout in the course of its life.  At some point the parties began negotiating the economic provisions of their CBA but this ended in a deadlock, prompting the Union to file a notice of strike.  After efforts at conciliation by the Department of Labor and Employment (DOLE) failed, the Union conducted a strike vote that resulted in an overwhelming majority of its members favoring it.  The Union reported the strike vote to the DOLE and, after the observance of the mandatory cooling-off period, went on strike.

During the strike, the Company filed a petition for the issuance of a writ of preliminary injunction with prayer for the issuance of a temporary restraining order (TRO) Ex Parte³ with the National Labor Relations Commission (NLRC) to enjoin the strikers from intimidating, threatening, molesting, and impeding by barricade the entry of non-striking employees at the Company's premises.  The NLRC first issued a 20-day TRO and, after hearing, a writ of preliminary injunction, enjoining the Union and its officers and members from performing the acts complained of.  But several attempts to implement the writ failed.  Only the intervention of law enforcement units made such implementation possible.  Meantime, the Union filed a petition⁴ with the Court of Appeals (CA), questioning the preliminary injunction order.  On February 8, 1999 the latter court dismissed the petition.  The Union did not appeal from such dismissal.

The Company, on the other hand, filed a petition with the Regional Arbitration Board to declare the Union's strike illegal,⁵ citing its violation of the no strike, no lockout, provision of their CBA.  Subsequently, the Company amended its petition to implead the named Union members who allegedly committed prohibited acts during the strike.  For their part, the Union, its officers, and its affected members filed against the Company a counterclaim for unfair labor practices, illegal dismissal, and damages. The Union also assailed as invalid the service of summons on the individual Union members included in the amended petition.

On June 29, 1999 the Labor Arbiter rendered a decision,⁶ declaring the Union's strike illegal for violating the CBA's no strike, no lockout, provision.  As a consequence, the Labor Arbiter held that the Union officers should be deemed to have forfeited their employment with the Company and that they should pay actual damages of P3,825,000.00 plus 10% interest and attorney's fees.  With respect to the striking Union members, finding no proof that they actually committed illegal acts during the strike, the Labor Arbiter ordered their reinstatement without backwages.  The Labor Arbiter denied the Union's counterclaim for lack of merit.

On June 29, 1999 the terminated Union members promptly filed a motion for their immediate reinstatement but the Labor Arbiter did not act on the same.  At any rate, the Company did not reinstate them.  Both parties appealed⁷ the Labor Arbiter's decision to the NLRC. The Company impugned the Labor Arbiter's decision insofar as it ordered the reinstatement of the terminated Union members.  The Union, on the other hand, questioned the declaration of illegality of the strike as well as the dismissal of its officers and the order for them to pay damages.

On November 8, 1999 the NLRC rendered a decision,⁸ affirming that of the Labor Arbiter insofar as the latter declared the strike illegal, ordered the Union officers terminated, and directed them to pay damages to the Company.  The NLRC ruled, however, that the Union members involved, who were identified in the proceedings held in the case, should also be terminated for having committed prohibited and illegal acts.

The Union filed a petition for certiorari⁹ with the CA, questioning the NLRC decision. Finding merit in the petition, the CA rendered a decision on March 20, 2002,¹⁰ annulling the NLRC decision and reinstating that of the Labor Arbiter.  The Company and the Union with its officers and members filed separate petitions for review of the CA decision in G.R. 155109 and 155135, respectively.

During the pendency of these cases, the affected Union members filed with the Labor Arbiter a motion for reinstatement pending appeal by the parties and the computation of their backwages based on the CA decision.  After hearing, the Labor Arbiter issued a resolution dated November 21, 2002,¹¹ holding that due to the delay in the resolution of the dispute and the impracticability of reinstatement owing to the fact that the relations between the terminated Union members and the Company had been severely strained by the prolonged litigation, payment of separation pay to such Union members was in order.  The Labor Arbiter thus approved the computation and payment of their separation pay and denied all their other claims.

Both parties appealed the Labor Arbiter's resolution¹² to the NLRC.  Initially, in its resolution dated April 30, 2003,¹³ the NLRC declared the Labor Arbiter's resolution of November 21, 2002 void for lack of factual and legal basis but ordered the Company to pay the affected employees' accrued wages and 13^th month pay considering the Company's refusal to reinstate them pending appeal.  On motion for reconsideration by both parties, however, the NLRC issued a resolution on August 29, 2003,¹⁴ modifying its earlier resolution by deleting the grant of accrued wages and 13^th month pay to the subject employees, thus denying their motion for computation.

Upon the Union's petition for certiorari¹⁵ with the CA, questioning the NLRC's denial of the terminated Union members' claim for separation pay, accrued wages, and other benefits, the CA rendered a decision on February 24, 2005,¹⁶ dismissing the petition.  The CA ruled that the reinstatement pending appeal provided under Article 223 of the Labor Code contemplated illegal dismissal or termination cases and not cases under Article 263.  Thus, the CA ruled that the resolution ordering the reinstatement of the terminated Union members and the payment of their wages and other benefits had no basis.  Aggrieved, the Union sought intervention by this Court.

The Issues Presented

The issues presented in these cases are:

1. Whether or not the NLRC properly acquired jurisdiction over the persons of the individual Union members impleaded in the case;

2. Whether or not the Union staged an illegal strike;

3. Assuming the strike to be illegal, whether or not the impleaded Union members committed illegal acts during the strike, justifying their termination from employment;

4. Whether or not the terminated Union members are entitled to the payment of backwages on account of the Company's refusal to reinstate them, pending appeal by the parties, from the Labor Arbiter's decision of June 29, 1999; and

5. Whether or not the terminated Union members are entitled to accrued backwages and separation pay.

The Rulings of the Court

One.  The NLRC acquires jurisdiction over parties in cases before it either by summons served on them or by their voluntary appearance before its Labor Arbiter. Here, while the Union insists that summons were not properly served on the impleaded Union members with respect to the Company's amended petition that sought to declare the strike illegal, the records show that they were so served.  The Return of Service of Summons¹⁷ indicated that 74 out of the 81¹⁸ impleaded Union members were served with summons.  But they refused either to accept the summons or to acknowledge receipt of the same. Such refusal cannot of course frustrate the NLRC's acquisition of jurisdiction over them.  Besides, the affected Union members voluntarily entered their appearance in the case when they sought affirmative relief in the course of the proceedings like an award of damages in their favor.

Two.  A strike may be regarded as invalid although the labor union has complied with the strict requirements for staging one as provided in Article 263 of the Labor Code when the same is held contrary to an existing agreement, such as a no strike clause or conclusive arbitration clause.¹⁹  Here, the CBA between the parties contained a "no strike, no lockout" provision that enjoined both the Union and the Company from resorting to the use of economic weapons available to them under the law and to instead take recourse to voluntary arbitration in settling their disputes.

No law or public policy prohibits the Union and the Company from mutually waiving the strike and lockout maces available to them to give way to voluntary arbitration. Indeed, no less than the 1987 Constitution recognizes in Section 3, Article XIII, preferential use of voluntary means to settle disputes.  Thus -

The State shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace.

The Court finds no compelling reason to depart from the findings of the Labor Arbiter, the NLRC, and the CA regarding the illegality of the strike.  Social justice is not one-sided.  It cannot be used as a badge for not complying with a lawful agreement.

Three.  Since the Union's strike has been declared illegal, the Union officers can, in accordance with law be terminated from employment for their actions.  This includes the shop stewards.  They cannot be shielded from the coverage of Article 264 of the Labor Code since the Union appointed them as such and placed them in positions of leadership and power over the men in their respective work units.

As regards the rank and file Union members, Article 264 of the Labor Code provides that termination from employment is not warranted by the mere fact that a union member has taken part in an illegal strike.  It must be shown that such a union member, clearly identified, performed an illegal act or acts during the strike.²⁰

Here, although the Labor Arbiter found no proof that the dismissed rank and file Union members committed illegal acts, the NLRC found following the injunction hearing in NLRC IC M-000126-98 that the Union members concerned committed such acts, for which they had in fact been criminally charged before various courts and the prosecutors' office in Davao City.  Since the CA held that the existence of criminal complaints against the Union members did not warrant their dismissal, it becomes necessary for the Court to go into the records to settle the issue.

The striking Union members allegedly committed the following prohibited acts:

1. They threatened, coerced, and intimidated non-striking employees, officers, suppliers and customers;
   
   
2. They obstructed the free ingress to and egress from the company premises; and
   
   
3. They resisted and defied the implementation of the writ of preliminary injunction issued against the strikers.
   

Cornelio Caguiat, Ruben Tungapalan, and Eufracio Rabusa depicted the above prohibited acts in their affidavits and testimonies.  The Sheriff of the NLRC said in his Report²¹ that, in the course of his implementation of the writ of injunction, he observed that the striking employees blocked the exit lane of the Alson drive with their tent.  Tungapalan, a non-striking employee, identified the Union members who threatened and coerced him.  Indeed, he filed criminal actions against them.  Lastly, the photos taken of the strike show the strikers, properly identified, committing the acts complained of.  These constitute substantial evidence in support of the termination of the subject Union members.

The mere fact that the criminal complaints against the terminated Union members were subsequently dismissed for one reason or another does not extinguish their liability under the Labor Code.  Nor does such dismissal bar the admission of the affidavits, documents, and photos presented to establish their identity and guilt during the hearing of the petition to declare the strike illegal.  The technical grounds that the Union interposed for denying admission of the photos are also not binding on the NLRC.²²

Four.  The terminated Union members contend that, since the Company refused to reinstate them after the Labor Arbiter rendered a decision in their favor, the Company should be ordered to pay them their wages during the pendency of the appeals from the Labor Arbiter's decision.

It will be recalled that after the Labor Arbiter rendered his decision on June 29, 1999, which decision ordered the reinstatement of the terminated Union members, the latter promptly filed a motion for their reinstatement pending appeal.  But the Labor Arbiter did not for some reason act on the motion.  As it happened, after about four months or on November 8, 1999, the NLRC reversed the Labor Arbiter's reinstatement order.  It cannot be said, therefore, that the Company had resisted a standing order of reinstatement directed at it at this point.

Of course, on March 20, 2002 the CA restored the Labor Arbiter's reinstatement order.  And this prompted the affected Union members to again file with the Labor Arbiter a motion for their reinstatement pending appeal.  But, acting on the motion, the Labor Arbiter resolved at this point that reinstatement was no longer practicable because of the severely strained relation between the company and the terminated Union members.  In place of reinstatement, the Labor Arbiter ordered the Company to pay them their separation pays.

Both parties appealed the Labor Arbiter's above ruling²³ to the NLRC.  But, as it turned out the NLRC did not also favor reinstatement. It instead ordered the Company to pay the terminated Union members their accrued wages and 13^th month pay considering its refusal to reinstate them pending appeal.  On motion for reconsideration, however, the NLRC reconsidered and deleted altogether the grant of accrued wages and 13^th month pay.  The Union appealed the NLRC ruling to the CA on behalf of its terminated members but the CA denied their appeal.

The CA denied reinstatement for the reason that the reinstatement pending appeal provided under Article 223 of the Labor Code contemplated illegal dismissal or termination cases and not cases under Article 264.  But this perceived distinction does not find support in the provisions of the Labor Code.

The grounds for termination under Article 264 are based on prohibited acts that employees could commit during a strike.  On the other hand, the grounds for termination under Articles 282 to 284 are based on the employee's conduct in connection with his assigned work. Still, Article 217, which defines the powers of Labor Arbiters, vests in the latter jurisdiction over all termination cases, whatever be the grounds given for the termination of employment. Consequently, Article 223, which provides that the decision of the Labor Arbiter reinstating a dismissed employee shall immediately be executory pending appeal, cannot but apply to all terminations irrespective of the grounds on which they are based.

Here, although the Labor Arbiter failed to act on the terminated Union members' motion for reinstatement pending appeal, the Company had the duty under Article 223 to immediately reinstate the affected employees even if it intended to appeal from the decision ordaining such reinstatement.  The Company's failure to do so makes it liable for accrued backwages until the eventual reversal of the order of reinstatement by the NLRC on November 8, 1999,²⁴ a period of four months and nine days.

Five. While it is true that generally the grant of separation pay is not available to employees who are validly dismissed, there are, in furtherance of the law's policy of compassionate justice, certain circumstances that warrant the grant of some relief in favor of the terminated Union members based on equity.

Bitter labor disputes, especially strikes, always generate a throng of odium and abhorrence that sometimes result in unpleasant, although unwanted, consequences.²⁵ Considering this, the striking employees' breach of certain restrictions imposed on their concerted actions at their employer's doorsteps cannot be regarded as so inherently wicked that the employer can totally disregard their long years of service prior to such breach.²⁶  The records also fail to disclose any past infractions committed by the dismissed Union members.  Taking these circumstances in consideration, the Court regards the award of financial assistance to these Union members in the form of one-half month salary for every year of service to the company up to the date of their termination as equitable and reasonable.

WHEREFORE, the Court DENIES the petition of the Nagkahiusang Mamumuo sa Alsons-SPFL and its officers and members in G.R. 155135 for lack of merit, and REVERSES and SETS ASIDE the decision of the Court of Appeals in CA-G.R. SP 59604 dated March 20, 2002.  The Court, on the other hand, GRANTS the petition of C. Alcantara & Sons, Inc. in G.R. 155109 and REINSTATES the decision of the National Labor Relations Commission in NLRC CA M-004996-99 dated November 8, 1999.

Further, the Court PARTIALLY GRANTS the petition of the Nagkahiusang Mamumuo sa Alsons-SPFL and their dismissed members in G.R. 179220 and ORDERS C. Alcantara & Sons, Inc. to pay the terminated Union members backwages for four (4) months and nine (9) days and separation pays equivalent to one-half month salary for every year of service to the company up to the date of their termination, with interest of 12% per annum from the time this decision becomes final and executory until such backwages and separation pays are paid.  The Court DENIES all other claims.

SO ORDERED.

Carpio, (Chairperson), Nachura, Peralta, and Mendoza, JJ., concur.

Endnotes:

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¹ The officers of the Union are the following: Felixberto Irag, Joshua Barredo, Edilberto Demetria, Romulo Lungay, Bonerme Maturan, Eduardo Campuso, Gilberto Gabronino, Cirilo Mino, Roberto Abonado, Fructoso Cabahog, Alfredo Tropico, Hector Estuita, Eduardo Capuyan, Alejandro Harder, Jaime Montederamos, Reynaldo Limpajan, Ernesto Cuario, Edgar Monday, Herminio Robillo, Matroil delos Santos, Raul Cantiga, Rudy Anadon, Bonifacio Salvador, Florente Seno, Warlito Monte, Pedro Esquierdo, Danilo Mejos, Bartolome Castillanes, Saturnino Cagas, Eduardo Larena, Ermelando Basadre, Elpidio Libranza.Teddy Suelo, Tranquilino Orallo, Manolito Sabellano, Primitivo Garcia, Jose Amoylin, Carlos Baldos, Carmelito Tobias and Juanito Aldepolla.

²  These are Ludivicio Abad, Ricardo Alto, Feliciano Amper, Roberto Andrade, Julio Anino, Pedro Aquino, Romeo Araneta, Constancio Arnaiz, Justino Ascano, Ernesto Baino, Jesus Beritan, Diosdado Bongabong, Carilito Cal, Rolando Capuyan, Aurelio Carin, Angelito Castañeda, Leonaro Casurra, Filemon Cesar, Romeo Comprado, Ramon Constantino, Roy Constantino, Samuel dela Llana, Rosaldo Dagondon, Bonifacio Dinagudos, Jose Eboran, Francisco Empuerto, Nestor Endaya, Ernesto Estilo, Vicente Fabroa, Ramon Fernando, Samson Fulgueras, Sulpecio Gagni, Fervie Galvez, Eduardo Genelsa, Tito Guades, Armando Gucila, Ernesto Hotoy, Wencislao Inghug, Epifanio Jarabay, Alexander Judilla, Alfredo Lesula, Benito Magpusao, Eddie Mansanades, Arguilao Mantica, Silverio Maranian, Ricardo Maturan, Antonio Melargo, Arsenio Melicor, Lauro Montenegro, Leo Mora, Ronaldo Naboya, Mario Namoc, Gerwino Natividad, Juanito Nisnisan, Primo Oplimo, Edgardo Ordiz, Patrocino Ortega, Mario Patan, Jesus Patoc, Manuel Piape, Alberto Pielago, Nicasio Plaza, Fausto Quibod, Procopio Ramos, Rosendo Sajol, Patricio Solomon, Mario Salvaleon, Bonifacio Sigue, Jaime Sucuahi, Alex Tauto-an, Claudio Tirol, Jose Tolero, Alfredo Toralba, Eusebio Tumulak, Hermes Villacarlos, Saturnino Yagon and Edilberto Yambao.

³  Docketed as NLRC IC M-000126-98.

⁴  Docketed as CA-G.R. SP 50371.

⁵  Docketed as NLRC RAB-11-08-01064-98.

⁶  NLRC records, Vol. 1, pp. 845-869.

⁷  Docketed as NLRC CA M-004996-99.

⁸  NLRC records, Vol. 3, pp. 575-591.

⁹  Docketed as CA-G.R. SP 59604.

¹⁰  CA rollo, Vol. 2, pp. 1090-1097.

¹¹  NLRC records, Vol. 6, pp. 164-170.

¹²  Docketed as NLRC CA M-007314-2002.

¹³  Id. at 612-620.

¹⁴  Id. at 1177-1184.

¹⁵  Docketed as CA-G.R. SP 80507.

¹⁶  Rollo (G.R. 155109), pp. 787-800.

¹⁷  NLRC records, Vol. 1, pp. 57-58, 123-127.

¹⁸  Respondents Ricardo Alto, Ramon Constantino, Rosaldo Dagondon, Vicente Fabroa, Jose Tolero, Mario Namoc and Rolando Naboya were not served with summons due to incomplete address.

¹⁹  I Teller 314-317 cited in Azucena, C. Everyone's Labor Code, 2007 edition, p. 291.

²⁰ Toyota Motor Phils. Corp. Workers Association (TMPCWA) v. National Labor Relations Commission, G.R. Nos. 158786, 158789 & 158798-99, October 19, 2007, 537 SCRA 171, 212.

²¹  NLRC records, Vol. 1, pp. 110-111.

²²  LABOR CODE, Article 221.

²³  Docketed as NLRC CA M-007314-2002.

²⁴  See Garcia v. Philippine Airlines, Inc., G.R. No. 164856, January 20, 2009, 576 SCRA 479, 489.

²⁵  Kimberly Clark (Phils.) v. Facundo, G.R. No. 144885. July 12, 2006.

²⁶  Rollo (G.R. 155109), p. 1011.  Some of them were hired as early as 1972.