MIGUELA SANTUYO, CORAZON ZACARIAS, EUGENIA CINCO, ELIZABETH PERALES, SUSANA BELEDIANO, RUFINA TABINAS, LETICIA L.

DELA ROSA, NENITA LINESES, EDITHA DELA RAMA, MARIBEL M. OLIVAR, LOEVEL MALAPAD, FLORENDA M. GONZALO, ELEANOR O. BUEN, EULALIA ABAGAO, LORECA MOCORRO, DIANA MAGDUA, LUZ RAGAY, LYDIA MONTE, CORNELIA BALTAZAR and DAISY MANGANTE, Petitioners,

G.R. No. 174420 Present: CORONA, J., Chairperson, VELASCO, JR., NACHURA, PERALTA and MENDOZA, JJ.

- versus -

REMERCO GARMENTS MANUFACTURING, INC. [1] and/or VICTORIA REYES. Respondents. March 22, 2010

Promulgated:

x---------------------------------------------------x

DECISION CORONA, J.: From 1992 to 1994, due to a serious industrial dispute, the Kaisahan ng Manggagawa sa Remerco Garments Manufacturing Inc.- KMM Kilusan (union) staged a strike against respondent Remerco Garments Manufacturing, Inc. (RGMI). Because the strike was subsequently declared illegal, all union officers were dismissed. Employees who wanted to sever their employment were paid separation pay while those who wanted to resume work were recalled on the condition that they would no longer be paid a daily rate but on a piece-rate basis. Petitioners, who had been employed as sewers, were among those recalled. Without allowing RGMI to normalize its operations, the union filed a notice of strike in the National [2] Conciliation and Mediation Board (NCMB) on August 8, 1995. According to the union, RGMI conducted a time and motion study and changed the salary scheme from a daily rate to piece-rate basis without consulting it. RGMI therefore not only violated the existing collective bargaining agreement (CBA) but also diminished the salaries agreed upon. It therefore committed an unfair labor practice.

On August 24, 1995, RGMI filed a notice of lockout in the NCMB.

[3]

On November 11, 1995, while the union and RGMI were undergoing conciliation in the NCMB, RGMI transferred its factory site. On November 13, 1995, the union went on strike and blocked the entry to RGMIs (new) premises. In an order dated November 21, 1995, the Secretary of Labor assumed jurisdiction pursuant to Article 263(g) of [5] the Labor Code and ordered RGMIs striking workers to return to work immediately. He likewise ordered the union and RGMI to submit their respective position papers. In its position paper, the union denied going on strike and blocking entries (and exits) at RGMIs premises. Furthermore, the union enumerated RGMIs alleged unfair labor practices. RGMI not only changed its salary scheme but also refused to pay wages to its employees for three weeks and transferred the plant to a new site. The union therefore asked for the reinstatement of all employees to their former positions at the old worksite and payment of their unpaid salaries based on the daily rate (as provided in the CBA). RGMI, on the other hand, insisted that its employees refused to obey the November 21, 1995 order. Thus, it prayed that the strike be declared illegal and that all union officers and those employees who refused to return to work be declared to have abandoned their employment. After evaluating the respective arguments of the union and RGMI, the Secretary of Labor held that RGMI did not lock out its employees inasmuch as it informed them of the transfer of the worksite. However, he did not rule on the legality of the strike. Furthermore, based on the time and motion study, the Secretary of Labor found that the employees would receive higher wages if they were paid on a piece-rate rather than on a daily rate basis. Hence, the new salary scheme would be more advantageous to the employees. For this reason, despite the provisions of the CBA, the change in salary scheme was validated. In an order dated September 18, 1996, the Secretary of Labor ordered all employees to return to work and RGMI to pay its employees their unpaid salaries (from September 25, 1995 to October 14, 1995) on the piece-rate basis. Neither the union nor RGMI appealed the aforementioned order. On October 18, 1995, while the conciliation proceedings between the union and respondent were pending, petitioners filed a complaint for illegal dismissal against RGMI and respondent Victoria Reyes, accusing the latter of [7] [8] harassment. Petitioners subsequently amended their complaint, demanding payment of their accrued salaries from September 25 to October 14, 1995 (computed at the daily rate of P145 plus the CBA-decreed increase of P11 per day) and the monetary equivalent of benefits they were entitled to under the CBA but allegedly withheld by RGMI, namely: (1) P200 Christmas package and P50 per person budget for the 1994 and 1995 Christmas party which was not held and (2) 17-day vacation leave in 1994 and 1995.
[6] [4]

Later, petitioners again amended their complaint, stating that respondents suspended them for questioning their [9] decision to pay salaries on a piece-rate basis. Respondents, on the other hand, moved to dismiss the complaint in view of the pending conciliation proceedings (which involved the same issue) in the NCMB. Moreover, alleged violations of the CBA should be resolved

according to the grievance procedure laid out therein. complaint.

[10]

Thus, the labor arbiter had no jurisdiction over the

The labor arbiter found that respondents did not pay petitioners their salaries and deprived them of the benefits [11] they were entitled to under the CBA. Thus, in a decision dated July 15, 1999, he ordered respondents to pay petitioners their unpaid salaries according to their daily rate with the corresponding increase provided in the CBA and benefits, separation pay and attorneys fees. Respondents appealed the decision of the labor arbiter in the National Labor Relations Commission (NLRC) [13] was denied.
[12]

but it

Aggrieved, respondents filed a petition for certiorari in the Court of Appeals (CA) claiming that the NLRC acted with grave abuse of discretion in affirming the decision of the labor arbiter. They argued that since the complaint involved the implementation of the CBA, the labor arbiter had no jurisdiction over it. In a decision dated April 27, 2006, the CA reversed and set aside the decision of the NLRC on the ground that [15] the labor arbiter had no jurisdiction over the complaint. Petitioners moved for reconsideration but it was denied.
[16] [14]

Hence, this recourse.

[17]

Petitioners insist that the labor arbiter had jurisdiction inasmuch as the complaint was for illegal dismissal. Furthermore, they claim that the September 18, 1996 order of the Secretary of Labor was inapplicable to them. Despite being members of the union, they were not among those who went on strike. The petition has no merit. Petitioners clearly and consistently questioned the legality of RGMIs adoption of the new salary scheme (i.e., piece-rate basis), asserting that such action, among others, violated the existing CBA. Indeed, the controversy [18] was not a simple case of illegal dismissal but a labor dispute involving the manner of ascertaining employees salaries, a matter which was governed by the existing CBA. With regard to the question of jurisdiction over the subject matter, Article 217(c) of the Labor Code provides: Article 217. Jurisdiction of Labor Arbiters and the Commission. xxx xxx xxx

(c) Cases arising from the interpretation or implementation of collective bargaining agreements and those arising from the interpretation or enforcement of company personnel policies shall be disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as may be provided in said agreements. (emphasis supplied) This provision requires labor arbiters to refer cases involving the implementation of CBAs to the grievance machinery provided therein and to voluntary arbitration. Moreover, Article 260 of the Labor Code clarifies that such disputes must be referred first to the grievance [19] machinery and, if unresolved within seven days, they shall automatically be referred to voluntary arbitration. In this regard, Article 261 thereof states: Article 261. Jurisdiction of voluntary arbitrators and panel of voluntary arbitrators. The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive jurisdiction to hear and decide all unresolved grievances arising from the interpretation or implementation of the Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies referred to in the immediately

preceding Article. Accordingly, violations of a Collective Bargaining Agreement, except those which are gross in character, shall no longer be treated as unfair labor practice and shall be resolved as grievances under the Collective Bargaining Agreement. For purposes of this Article, gross violations of a Collective Bargaining Agreement shall mean flagrant and/or malicious refusal to comply with the economic provisions of such agreement. (emphasis supplied) xxx xxx xxx

Under this provision, voluntary arbitrators have original and exclusive jurisdiction over matters which have not been resolved by the grievance machinery. Pursuant to Articles 217 in relation to Articles 260 and 261 of the Labor Code, the labor arbiter should have referred the matter to the grievance machinery provided in the CBA. Because the labor arbiter clearly did not have jurisdiction over the subject matter, his decision was void. Nonetheless, the Secretary of the Labor assumed jurisdiction over the labor dispute between the union and RGMI [20] and resolved the same in his September 18, 1996 order. Article 263(g) of the Labor Code gives the Secretary of [21] Labor discretion to assume jurisdiction over a labor dispute likely to cause a strike or a lockout in an industry indispensable to the national interest and to decide the controversy or to refer the same to the NLRC for compulsory arbitration. In doing so, the Secretary of Labor shall resolve all questions and controversies in order to settle the dispute. His power is therefore plenary and discretionary in nature to enable him to effectively and [22] efficiently dispose of the issue. The Secretary of Labor assumed jurisdiction over the controversy because RGMI had a substantial number of [23] employees and was a major exporter of garments to the United States and Canada. In view of these considerations, the Secretary of Labor resolved the labor dispute between the union and RGMI in his September [24] 18, 1996 order. Since neither the union nor RGMI appealed the said order, it became final and executory. Settled is the rule that unions are the agent of its members for the purpose of securing just and fair wages and [25] good working conditions. Since petitioners were part of the bargaining unit represented by the union and members thereof, the September 18, 1996 order of the Secretary of Labor applies to them. Furthermore, since the union was the bargaining agent of petitioners, the complaint was barred under the principle of conclusiveness of judgments. The parties to a case are bound by the findings in a previous judgment [26] with respect to matters actually raised and adjudged therein. Hence, the labor arbiter should have dismissed the complaint on the ground of res judicata. WHEREFORE, the petition is hereby DENIED. Costs against petitioners.

ALBERT TENG, doing business under the firm name ALBERT TENG FISH TRADING, and EMILIA TENGCHUA, Petitioners,

G.R. No. 169704 Present: CARPIO MORALES, J., Chairperson, BRION, BERSAMIN, VILLARAMA, JR., and SERENO, JJ.

versus -

ALFREDO S. PAHAGAC, EDDIE D. NIPA, ORLANDO P. LAYESE, HERNAN Y. BADILLES and ROGER S. PAHAGAC, Respondents.

Promulgated:

November 17, 2010 x---------------------------------------------------------------------------------------- x DECISION BRION, J.: Before this Court is a Petition for Review on Certiorari filed by petitioners Albert Teng Fish Trading, its owner [2] Albert Teng, and its manager Emilia Teng-Chua, to reverse and set aside the September 21, 2004 decision and [3] the September 1, 2005 resolution of the Court of Appeals (CA) in CA-G.R. SP No. 78783. The CA reversed the decision of the Voluntary Arbitrator (VA), National Conciliation and Mediation Board (NCMB), Region IX, Zamboanga City, and declared that there exists an employer-employee relationship between Teng and respondents Hernan Badilles, Orlando Layese, Eddie Nipa, Alfredo Pahagac, and Roger Pahagac (collectively, respondent workers). It also found that Teng illegally dismissed the respondent workers from their employment. BACKGROUND FACTS Albert Teng Fish Trading is engaged in deep sea fishing and, for this purpose, owns boats (basnig), equipment, and other fishing paraphernalia. As owner of the business, Teng claims that he customarily enters into joint venture agreements with master fishermen (maestros) who are skilled and are experts in deep sea fishing; they take charge of the management of each fishing venture, including the hiring of the members of its complement. He avers that the maestros hired the respondent workers as checkers to determine the volume of the fish caught in every fishing [4] voyage. On February 20, 2003, the respondent workers filed a complaint for illegal dismissal against Albert Teng Fish Trading, Teng, and Chua before the NCMB, Region Branch No. IX, Zamboanga City. The respondent workers alleged that Teng hired them, without any written employment contract, to serve as his eyes and ears aboard the fishing boats; to classify the fish caught by baera; to report to Teng via radio communication the classes and volume of each catch; to receive instructions from him as to where and when to unload the catch; to prepare the list of the provisions requested by the maestro and the mechanic for his approval; [5] and, to procure the items as approved by him. They also claimed that they received regular monthly salaries, th 13 month pay, Christmas bonus, and incentives in the form of shares in the total volume of fish caught. They asserted that sometime in September 2002, Teng expressed his doubts on the correct volume of fish caught [6] [7] in every fishing voyage. In December 2002, Teng informed them that their services had been terminated.
[1]

In his defense, Teng maintained that he did not have any hand in hiring the respondent workers; the maestros, rather than he, invited them to join the venture. According to him, his role was clearly limited to the provision of the necessary capital, tools and equipment, consisting of basnig, gears, fuel, food, and other [8] supplies. The VA rendered a decision in Tengs favor and declared that no employer-employee relationship existed between Teng and the respondent workers. The dispositive portion of the VAs May 30, 2003 decision reads: WHEREFORE, premises considered, judgment is hereby rendered dismissing the instant complaint for lack of merit. It follows also, that all other claims are likewise dismissed for lack of merit.
[11] [10] [9]

The respondent workers received the VAs decision on June 12, 2003. They filed a motion for reconsideration, [12] which was denied in an order dated June 27, 2003and which they received on July 8, 2003. The VA reasoned out that Section 6, Rule VII of the 1989 Procedural Guidelines in the Conduct of Voluntary Arbitration Proceedings (1989 Procedural Guidelines) does not provide the remedy of a motion for reconsideration to the party adversely [13] affected by the VAs order or decision. The order states: Under Executive Order No. 126, as amended by Executive Order No. 251, and in order to implement Article 260262 (b) of the Labor Code, as amended by R.A. No. 6715, otherwise known as the Procedural Guidelines in the Conduct of Voluntary Arbitration Proceedings, inter alia: An award or the Decision of the Voluntary Arbitrators becomes final and executory after ten (10) calendar days from receipt of copies of the award or decision by the parties (Sec. 6, Rule VII). Moreover, the above-mentioned guidelines do not provide the remedy of a motion for reconsideration to the [14] party adversely affected by the order or decision of voluntary arbitrators. On July 21, 2003, the respondent-workers elevated the case to the CA. In its decision of September 21, 2004, the CA reversed the VAs decision after finding sufficient evidence showing the existence of employer -employee relationship: WHEREFORE, premises considered, the petition is granted. The questioned decision of the Voluntary Arbitrator dated May 30, 2003 is hereby REVERSED and SET ASIDE by ordering private respondent to pay separation pay with backwages and other monetary benefits. For this purpose, the case is REMANDED to the Voluntary Arbitrator for the computation of petitioners backwages and other monetary benefits. No pronouncement as to costs. SO ORDERED.
[15]

Teng moved to reconsider the CAs decision, but the CA denied the motion in its resolution of September 1, [16] 2005. He, thereafter, filed the present Petition for Review on Certiorari under Rule 45 of the Rules of Court, claiming that: a. b. the VAs decision is not subject to a motion for reconsideration; and no employer-employee relationship existed between Teng and the respondent workers.

Teng contends that the VAs decision is not subject to a motion for reconsideration in the absence of any specific [17] provision allowing this recourse under Article 262-A of the Labor Code. He cites the 1989 Procedural [18] Guidelines, which, as the VA declared, does not provide the remedy of a motion for reconsideration. He claims that after the lapse of 10 days from its receipt, the VAs decision becomes final and executory unless an appeal is [19] [20] taken. He argues that when the respondent workers received the VAs decision on June 12, 2003, they had 10 days, or until June 22, 2003, to file an appeal. As the respondent workers opted instead to move for

reconsideration, the 10-day period to appeal continued to run; thus, the VAs decision had already become final [21] and executory by the time they assailed it before the CA on July 21, 2003. Teng further insists that the VA was correct in ruling that there was no employer-employee relationship between him and the respondent workers. What he entered into was a joint venture agreement with the maestros, where Tengs role was only to provide basnig, gears, nets, and other tools and equipment for every [22] fishing voyage. THE COURTS RULING We resolve to deny the petition for lack of merit. Article 262-A of the Labor Code does not prohibit the filing of a motion for reconsideration.
[23]

On March 21, 1989, Republic Act No. 6715 which was originally worded as:

took effect, amending, among others, Article 263 of the Labor Code

Art. 263 x x x Voluntary arbitration awards or decisions shall be final, unappealable, and executory. As amended, Article 263 is now Article 262-A, which states: Art. 262-A. x x x [T]he award or decision x x x shall contain the facts and the law on which it is based. It shall be final and executory after ten (10) calendar days from receipt of the copy of the award or decision by the parties. Notably, Article 262-A deleted the word unappealable from Article 263. The deliberate selection of the language in the amendatory act differing from that of the original act indicates that the legislature intended a change in the [24] law, and the court should endeavor to give effect to such intent. We recognized the intent of the change of [25] phraseology in Imperial Textile Mills, Inc. v. Sampang, where we ruled that: It is true that the present rule [Art. 262-A] makes the voluntary arbitration award final and executory after ten calendar days from receipt of the copy of the award or decision by the parties. Presumably, the decision may still be reconsidered by the Voluntary Arbitrator on the basis of a motion for reconsideration duly filed during that [26] period. In Coca-Cola Bottlers Phil., Inc., Sales Force Union-PTGWO-Balais v. Coca-Cola Bottlers Philippines, Inc., we likewise ruled that the VAs decision may still be reconsidered on the basis of a motion for reconsideration [28] seasonably filed within 10 days from receipt thereof. The seasonable filing of a motion for reconsideration is a [29] mandatory requirement to forestall the finality of such decision. We further cited the 1989 Procedural [30] Guidelines which implemented Article 262-A,viz: [U]nder Section 6, Rule VII of the same guidelines implementing Article 262-A of the Labor Code, this Decision, as a matter of course, would become final and executory after ten (10) calendar days from receipt of copies of the decision by the parties x x x unless, in the meantime, a motion for reconsideration or a petition for review to the [31] Court of Appeals under Rule 43 of the Rules of Court is filed within the same 10-day period. These rulings fully establish that the absence of a categorical language in Article 262-A does not preclude the filing of a motion for reconsideration of the VAs decision within the 10 -day period. Tengs allegation that the VAs decision had become final and executory by the time the respondent workers filed an appeal with the CA thus fails. We consequently rule that the respondent workers seasonably filed a motion for reconsideration of the VAs judgment, and the VA erred in denying the motion because no motion for reconsideration is allowed.
[27]

The Court notes that despite our interpretation that Article 262-A does not preclude the filing of a motion for reconsideration of the VAs decision, a contrary provision can be found in Section 7, Rule XIX of the Department of [32] Labors Department Order (DO) No. 40, series of 2003: Rule XIX Section 7. Finality of Award/Decision. The decision, order, resolution or award of the voluntary arbitrator or panel of voluntary arbitrators shall be final and executory after ten (10) calendar days from receipt of the copy of the award or decision by the parties and it shall not be subject of a motion for reconsideration. Presumably on the basis of DO 40-03, the 1989 Procedural Guidelines was revised in 2005 (2005 Procedural [33] Guidelines), whose pertinent provisions provide that: Rule VII DECISIONS Section 6. Finality of Decisions. The decision of the Voluntary Arbitrator shall be final and executory after ten (10) calendar days from receipt of the copy of the decision by the parties. Section 7. Motions for Reconsideration. The decision of the Voluntary Arbitrator is not subject of a Motion for Reconsideration. We are surprised that neither the VA nor Teng cited DO 40-03 and the 2005 Procedural Guidelines as authorities for their cause, considering that these were the governing rules while the case was pending and these directly and fully supported their theory. Had they done so, their reliance on the provisions would have nevertheless been unavailing for reasons we shall now discuss. In the exercise of its power to promulgate implementing rules and regulations, an implementing agency, such as [34] the Department of Labor, is restricted from going beyond the terms of the law it seeks to implement; it should neither modify nor improve the law. The agency formulating the rules and guidelines cannot exceed the statutory [35] authority granted to it by the legislature. By allowing a 10-day period, the obvious intent of Congress in amending Article 263 to Article 262-A is to provide an opportunity for the party adversely affected by the VAs decision to seek recourse via a motion for reconsideration or a petition for review under Rule 43 of the Rules of Court filed with the CA. Indeed, a motion for reconsideration is the more appropriate remedy in line with the doctrine of exhaustion of administrative remedies. For this reason, an appeal from administrative agencies to the CA via Rule 43 of the Rules of Court [36] requires exhaustion of available remedies as a condition precedent to a petition under that Rule. The requirement that administrative remedies be exhausted is based on the doctrine that in providing for a remedy before an administrative agency, every opportunity must be given to the agency to resolve the matter and to exhaust all opportunities for a resolution under the given remedy before bringing an action in, or resorting to, [37] the courts of justice. Where Congress has not clearly required exhaustion, sound judicial discretion [38] [39] governs, guided by congressional intent. By disallowing reconsideration of the VAs decision, Section 7, Rule XIX of DO 40 -03 and Section 7 of the 2005 Procedural Guidelines went directly against the legislative intent behind Article 262-A of the Labor Code. These [40] rules deny the VA the chance to correct himself and compel the courts of justice to prematurely intervene with the action of an administrative agency entrusted with the adjudication of controversies coming under its special knowledge, training and specific field of expertise. In this era of clogged court dockets, the need for specialized administrative agencies with the special knowledge, experience and capability to hear and determine promptly disputes on technical matters or intricate questions of facts, subject to judicial review, is [41] [42] indispensable. In Industrial Enterprises, Inc. v. Court of Appeals, we ruled that relief must first be obtained in

an administrative proceeding before a remedy will be supplied by the courts even though the matter is within the [43] proper jurisdiction of a court. There exists an employer-employee relationship between Teng and the respondent workers. We agree with the CAs finding that sufficient evidence exists indicating the existence of an employer -employee relationship between Teng and the respondent workers. While Teng alleged that it was the maestros who hired the respondent workers, it was his company that issued to the respondent workers identification cards (IDs) bearing their names as employees and Tengs signature as the employer. Generally, in a business establishment, IDs are issued to identify the holder as a bona fide employee of the issuing entity. For the 13 years that the respondent workers worked for Teng, they received wages on a regular basis, in addition [44] to their shares in the fish caught. The worksheet showed that the respondent workers received uniform amounts within a given year, which amounts annually increased until the termination of their employment in [45] 2002. Tengs claim that the amounts received by the respondent workers are mere commissions is incredulous, as it would mean that the fish caught throughout the year is uniform and increases in number each year. More importantly, the element of control which we have ruled in a number of cases to be a strong indicator of the existence of an employer-employee relationship is present in this case. Teng not only owned the tools and equipment, he directed how the respondent workers were to perform their job as checkers; they, in fact, acted as Tengs eyes and ears in every fishing expedition. Teng cannot hide behind his argument that the respondent workers were hired by the maestros. To consider the respondent workers as employees of the maestros would mean that Teng committed impermissible labor-only contracting. As a policy, the Labor Code prohibits labor-only contracting: ART. 106. Contractor or Subcontractor x x x The Secretary of Labor and Employment may, by appropriate regulations, restrict or prohibit the contracting-out of labor. xxxx There is labor-only contracting where the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such persons are performing activities which are directly related to the principal business of such employer. In such cases, the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him.
[46]

Section 5 of the DO No. 18-02,

which implements Article 106 of the Labor Code, provides:

Section 5. Prohibition against labor-only contracting. Labor-only contracting is hereby declared prohibited. For this purpose, labor-only contracting shall refer to an arrangement where the contractor or subcontractor merely recruits, supplies or places workers to perform a job, work or service for a principal, and any of the following elements are present: (i) The contractor or subcontractor does not have substantial capital or investment which relates to the job, work or service to be performed and the employees recruited, supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal; or (ii) The contractor does not exercise the right to control over the performance of the work of the contractual employee.

In the present case, the maestros did not have any substantial capital or investment. Teng admitted that he solely provided the capital and equipment, while the maestrossupplied the workers. The power of control over the respondent workers was lodged not with the maestros but with Teng. As checkers, the respondent workers main tasks were to count and classify the fish caught and report them to Teng. They performed tasks that were necessary and desirable in Tengs fishing business. Taken together, these incidents confirm the existence of a labor-only contracting which is prohibited in our jurisdiction, as it is considered to be the employers attempt to evade obligations afforded by law to employees. Accordingly, we hold that employer-employee ties exist between Teng and the respondent workers. A finding that the maestros are labor-only contractors is equivalent to a finding that an employer-employee relationship exists between Teng and the respondent workers. As regular employees, the respondent workers are entitled to all the benefits and rights appurtenant to regular employment. The dismissal of an employee, which the employer must validate, has a twofold requirement: one is substantive, [47] the other is procedural. Not only must the dismissal be for a just or an authorized cause, as provided by law; the rudimentary requirements of due process the opportunity to be heard and to defend oneself must be observed [48] as well. The employer has the burden of proving that the dismissal was for a just cause; failure to show this, as [49] in the present case, would necessarily mean that the dismissal was unjustified and, therefore, illegal. The respondent workers allegation that Teng summarily dismissed them on suspicion that they were not repor ting to him the correct volume of the fish caught in each fishing voyage was never denied by Teng. [50] Unsubstantiated suspicion is not a just cause to terminate ones employment under Article 282 of the Labor Code. To allow an employer to dismiss an employee based on mere allegations and generalities would place the [51] employee at the mercy of his employer, and would emasculate the right to security of tenure. For his failure to comply with the Labor Codes substantive requirement on termination of employment, we declare that Teng illegally dismissed the respondent workers. WHEREFORE, we DENY the petition and AFFIRM the September 21, 2004 decision and the September 1, 2005 resolution of the Court of Appeals in CA-G.R. SP No. 78783. Costs against the petitioners. SO ORDERED.

SAMAHAN NG MGA MANGGAGAWA SA HYATT (SAMASAH-NUWHRAIN), PETITIONER, VS. HON. VOLUNTARY ARBITRATOR BUENAVENTURA C. MAGSALIN AND HOTEL ENTERPRISES OF THE PHILIPPINES, INC., RESPONDENTS. [G.R. NO. 172303] SAMAHAN NG MGA MANGGAGAWA SA HYATT (SAMASAH-NUWHRAIN), PETITIONER, VS. HOTEL ENTERPRISES OF THE PHILIPPINES, INC., RESPONDENT. DECISION VILLARAMA, JR., J.: Before this Court are two consolidated petitions filed by petitioner Samahan ng mga Manggagawa saHyattNUWHRAIN-APL under Rule 45 of the 1997 Rules of Civil Procedure, as amended. The first petition, docketed as [1] [2] G.R. No. 164939, assails the Resolutions dated October 3, 2003 and August 13, 2004 of the Court of Appeals (CA) in CA-G.R. SP No. 78364, which dismissed petitioner's petition for review at the CA for being the wrong [3] remedy. The second petition, docketed as G.R. No. 172303, assails the Decision dated December 16, 2005 and [4] Resolution dated April 12, 2006 of the CA in CA-G.R. SP No. 77478, modifying the judgment of the Voluntary Arbitrator in NCMB-NCR-CRN-07-008-01. The antecedent facts are as follows: Petitioner Samahan ng mga Manggagawa sa Hyatt-NUWHRAIN-APL is a duly registered union and the certified bargaining representative of the rank-and-file employees of Hyatt Regency Manila, a five-star hotel owned and operated by respondent Hotel Enterprises of the Philippines, Inc. On January 31, 2001, Hyatt's General Manager, [5] David C. Pacey, issued a Memorandum informing all hotel employees that hotel security have been instructed to conduct a thorough bag inspection and body frisking in every entrance and exit of the hotel. He enjoined employees to comply therewith. Copies of the Memorandum were furnished petitioner. On February 3, 2001, Angelito Caragdag, a waiter at the hotel's Cafe Al Fresco restaurant and a director of the union, refused to be frisked by the security personnel. The incident was reported to the hotel's Human Resources [6] Department (HRD), which issued a Memorandum to Caragdag on February 5, 2001, requiring him to explain in writing within forty-eight (48) hours from notice why no disciplinary action should be taken against him. The following day, on February 6, 2001, Caragdag again refused to be frisked by the security personnel. Thus, on [7] February 8, 2001, the HRD issued another Memorandum requiring him to explain. On February 14, 2001, the HRD imposed on Caragdag the penalty of reprimand for the February 3, 2001 incident, which was considered a first offense, and suspended him for three days for the February 6, 2001 incident, which [8] was considered as a second offense. Both penalties were in accordance with the hotel's Code of Discipline. Subsequently, on February 22, 2001, when Mike Moral, the manager of Hyatt's Cafe Al Fresco and Caragdag's immediate superior, was about to counsel two staff members, Larry Lacambacal and Allan Alvaro, at the training room, Caragdag suddenly opened the door and yelled at the two with an enraged look. In a disturbing voice he said, "Ang titigas talaga ng ulo n'yo. Sinabi ko na sa inyo na huwag kayong makikipagusap sa management habang ongoing pa ang kaso!" (You are very stubborn. I told you not to speak to management while the case is ongoing!) Moral asked Caragdag what the problem was and informed him that he was simply talking to his staff. Moral also told Caragdag that he did not have the right to interrupt and intimidate him during his counseling session with his staff. On February 23, 2001, Moral issued a Memorandum requiring Caragdag to explain his actions in the training [10] room. Caragdag submitted his written explanation on February 25, 2001 narrating that he was informed by someone that Lacambacal and Alvaro were requesting for his assistance because Moral had invited them to the training room. Believing that he should advise the two that they should be accompanied by a union officer to any
[9]

inquisition, he went to the training room. However, before he could enter the door, Moral blocked him. Thus, he told Lacambacal and Alvaro that they should be assisted by a union representative before giving any statement to management. Caragdag also prayed that Moral be investigated for harassing union officers and union members. On February 28, 2001, Moral found the explanations unsatisfactory. In a Memorandum issued on the same date, Moral held Caragdag liable for Offenses Subject to Disciplinary Action (OSDA) 3.01 of the hotel's Code of Discipline, i.e., "threatening, intimidating, coercing, and provoking to a fight your superior for reasons directly connected with his discharge of official duty." Thus, Caragdag was imposed the penalty of seven days suspension in accordance with the hotel's Code of Discipline. Still later, on March 2, 2001, Caragdag committed another infraction. At 9:35 a.m. on the said date, Caragdag left his work assignment during official hours without prior permission from his Department Head. He was required to [12] submit an explanation, but the explanation he submitted was found unsatisfactory. On March 17, 2001, Moral found Caragdag liable for violating OSDA 3.07, i.e., "leaving work assignment during official working hours without [13] prior permission from the department head or immediate superior," and suspended him for three days. Because of the succession of infractions he committed, the HRD also required Caragdag to explain on May 11, 2001 [3] why the hotel's OSDA 4.32 (Committing offenses which are penalized with three suspensions during a 12-month [14] period) should not be enforced against him. An investigation board was formed after receipt of Caragdag's written explanation, and the matter was set for hearing on May 19, 2001. However, despite notice of the scheduled hearing, both Caragdag and the Union President failed to attend. Thereafter, the investigating board [15] resolved on the said date to dismiss Caragdag for violation of OSDA 4.32. Caragdag appealed but the investigating board affirmed its resolution after hearing on May 24, 2001. On June 1, 2001, the hotel, through Atty. Juancho A. Baltazar, sent Caragdag a Notice of Dismissal, the pertinent portion of which reads: Based on the findings of the Investigation Board dated May 19, 2001 which was approved by the General Manager Mr. David Pacey on the same day and which did not merit any reversal or modification after the hearing on your appeal on May 24, 2001, the penalty of DISMISSAL is therefore affirmed to take effect on June 1, 2001. Caragdag's dismissal was questioned by petitioner, and the dispute was referred to voluntary arbitration upon [17] agreement of the parties. On May 6, 2002, the Voluntary Arbitrator rendered a decision, the dispositive portion of which reads: WHEREFORE, premises considered, this Arbiter rules that the three separate suspensions of Mr. Caragdag are valid, his dismissal is legal and OSDA 4.32 of Hyatt's Code of Discipline is reasonable. However, for humanitarian considerations, Hyatt is hereby ordered to grant financial assistance to Mr. Caragdag in the amount of One Hundred Thousand Pesos (PhP100,000.00). In finding the three separate suspensions of Caragdag valid, the Voluntary Arbitrator reasoned that the union officers and members had no right to breach company rules and regulations on security and employee discipline on the basis of certain suspicions against management and an ongoing CBA negotiation standoff. The Voluntary Arbitrator also found that when Caragdag advised Lacambacal and Alvaro not to give any statement, he threatened and intimidated his superior while the latter was performing his duties. Moreover, there is no reason why he did not arrange his time-off with the Department Head concerned. Thus, Caragdag was validly dismissed pursuant to OSDA 4.32 of Hyatt's Code of Discipline, which states that an employee who commits three different acts of misconduct within a twelve (12)-month period commits serious misconduct. Petitioner sought reconsideration of the decision while respondent filed a motion for partial reconsideration. [18] However, the Voluntary Arbitrator denied both motions on May 26, 2003. On August 1, 2003, petitioner assailed the decision of the Voluntary Arbitrator before the CA in a petition
[16] [11]

for certiorari which was docketed as CA-G.R. SP No. 78364. As mentioned at the outset, the CA dismissed the petition outright for being the wrong remedy. The CA explained: Rule 43, Section 5 of the 1997 Rules of Civil Procedure explicitly provides that the proper mode of appeal from judgments, final orders or resolution of voluntary arbitrators is through a Petition for Review which should be filed within fifteen (15) days from the receipt of notice of judgment, order or resolution of the voluntary arbitrator. Considering that petitioner intends this petition to be a Petition for Certiorari, the Court hereby resolves to dismiss the petition outright for being an improper mode of appeal. Even if this Court treats the instant petition as a Petition for Review, still the Court has no alternative but to dismiss the same for having been filed out of time. As admitted by the petitioner it received the Order dated 26 May 2003 denying their motion for reconsideration on 02 June 2003. The fifteen (15) day period within which to appeal through a Petition for Review is until June 17, 2003. The petitioner filed the present petition on August 1, 2003, [20] way beyond the reglementary period provided for by the Rules. Petitioner duly filed a motion for reconsideration of the dismissal, but the motion was denied by the CA. Thus, petitioner filed before this Court a petition for review on certiorari which was docketed as G.R. No. 164939. In the meantime, on June 30, 2003, respondent also filed a petition for review with the CA on the ground that the Voluntary Arbitrator committed a grievous error in awarding financial assistance to Caragdag despite his finding that the dismissal due to serious misconduct was valid. On December 16, 2005, the CA promulgated a decision in CA-G.R. SP. No. 77478 as follows: WHEREFORE, the Decision dated May 6, 2002 of Voluntary Arbitrator Buenaventura C. Magsalin is AFFIRMED with MODIFICATION by DELETING the award of financial assistance in the amount of P100,000.00 to Angelito Caragdag. SO ORDERED.
[22] [21]

[19]

In deleting the award of financial assistance to Caragdag, the CA cited the case of Philippine Commercial [23] International Bank v. Abad, which held that the grant of separation pay or other financial assistance to an employee dismissed for just cause is based on equity and is a measure of social justice, awarded to an employee who has been validly dismissed if the dismissal was not due to serious misconduct or causes that reflected adversely on the moral character of the employee. In this case, the CA agreed with the findings of the Voluntary Arbitrator that Caragdag was validly dismissed due to serious misconduct. Accordingly, financial assistance should not have been awarded to Caragdag. The CA also noted that it is the employer's prerogative to prescribe reasonable rules and regulations necessary or proper for the conduct of its business or concern, to provide certain disciplinary measures to implement said rules and to ensure compliance therewith. Petitioner sought reconsideration of the decision, but the CA denied the motion for lack of merit. Hence, petitioner filed before us a petition for review on certiorari docketed as G.R. No. 172303. Considering that G.R. Nos. 164939 and 172303 have the same origin, involve the same parties, and raise interrelated issues, the petitions were consolidated. Petitioner raises the following issues: In G.R. No. 164939 THE COURT OF APPEALS ERRED IN DISMISSING OUTRIGHT THE PETITION FOR CERTIORARI ON THE GROUND THAT [24] THE SAME IS AN IMPROPER MODE OF APPEAL. In G.R. No. 172303 THE COURT OF APPEALS ERRED IN DELETING THE AWARD OF FINANCIAL ASSISTANCE IN THE AMOUNT OF [25] P100,000.00 TO ANGELITO CARAGDAG.

The issues for our resolution are thus two-fold: first, whether the CA erred in dismissing outright the petition for certiorari filed before it on the ground that the same is an improper mode of appeal; and second, whether the CA erred in deleting the award of financial assistance in the amount of P100,000.00 to Caragdag. On the first issue, petitioner argues that because decisions rendered by voluntary arbitrators are issued under Title VII-A of the Labor Code, they are not covered by Rule 43 of the 1997 Rules of Civil Procedure, as amended, by express provision of Section 2 thereof. Section 2, petitioner points out, expressly provides that Rule 43 "shall not apply to judgments or final orders issued under the Labor Code of the Philippines." Hence, a petition for certiorari under Rule 65 is the proper remedy for questioning the decision of the Voluntary Arbitrator, and petitioner having availed of such remedy, the CA erred in declaring that the petition was filed out of time since the petition was filed within the sixty (60)-day reglementary period. On the other hand, respondent maintains that the CA acted correctly in dismissing the petition for certiorari for being the wrong mode of appeal. It stresses that Section 1 of Rule 43 clearly states that it is the governing rule with regard to appeals from awards, judgments, final orders or resolutions of voluntary arbitrators. Respondent contends that the voluntary arbitrators authorized by law include the voluntary arbitrators appointed and accredited under the Labor Code, as they are considered as included in the term "quasi-judicial instrumentalities." Petitioner's arguments fail to persuade. In the case of Samahan ng mga Manggagawa sa Hyatt-NUWHRAIN-APL v. Bacungan, we repeated the wellsettled rule that a decision or award of a voluntary arbitrator is appealable to the CA via petition for review under Rule 43. We held that: The question on the proper recourse to assail a decision of a voluntary arbitrator has already been settled in Luzon Development Bank v. Association of Luzon Development Bank Employees, where the Court held that the decision or award of the voluntary arbitrator or panel of arbitrators should likewise be appealable to the Court of Appeals, in line with the procedure outlined in Revised Administrative Circular No. 1-95 (now embodied in Rule 43 of the 1997 Rules of Civil Procedure), just like those of the quasi-judicial agencies, boards and commissions enumerated therein, and consistent with the original purpose to provide a uniform procedure for the appellate review of adjudications of all quasi-judicial entities. Subsequently, in Alcantara, Jr. v. Court of Appeals, and Nippon Paint Employees Union-Olalia v. Court of Appeals, the Court reiterated the aforequoted ruling. In Alcantara, the Court held that notwithstanding Section 2 of Rule 43, the ruling in Luzon Development Bank still stands. The Court explained, thus: "The provisions may be new to the Rules of Court but it is far from being a new law. Section 2, Rules 42 of the 1997 Rules of Civil Procedure, as presently worded, is nothing more but a reiteration of the exception to the exclusive appellate jurisdiction of the Court of Appeals, as provided for in Section 9, Batas Pambansa Blg. 129, as amended by Republic Act No. 7902: (3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions, including the Securities and Exchange Commission, the Employees' Compensation Commission and the Civil Service Commission, except those falling withinthe appellate jurisdiction of the Supreme Court in accordance with the Constitution, the Labor Code of the Philippines under Presidential Decree No. 442, as amended, the provisions of this Act and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948. "The Court took into account this exception in Luzon Development Bank but, nevertheless, held that the decisions of voluntary arbitrators issued pursuant to the Labor Code do not come within its ambit x x x" Furthermore, Sections 1, 3 and 4, Rule 43 of the 1997 Rules of Civil Procedure, as amended, provide: SECTION 1. Scope. - This Rule shall apply to appeals from judgments or final orders of the Court of Tax Appeals and from awards, judgments, final orders or resolutions of or authorized by any quasi-judicial agency in the exercise of
[26]

its quasi-judicial functions. Among these agencies are the x x x, and voluntary arbitrators authorized by law. xxxx SEC. 3. Where to appeal. - An appeal under this Rule may be taken to the Court of Appeals within the period and in the manner therein provided, whether the appeal involves questions of fact, of law, or mixed questions of fact and law. SEC. 4. Period of appeal. - The appeal shall be taken within fifteen (15) days from notice of the award, judgment, final order or resolution, or from the date of its last publication, if publication is required by law for its effectivity, or of the denial of petitioner's motion for new trial or reconsideration duly filed in accordance with the governing law of the court or agency a quo. x x x. (Emphasis supplied.) Hence, upon receipt on May 26, 2003 of the Voluntary Arbitrator's Resolution denying petitioner's motion for reconsideration, petitioner should have filed with the CA, within the fifteen (15)-day reglementary period, a petition for review, not a petition for certiorari. Petitioner insists on a liberal interpretation of the rules but we find no cogent reason in this case to deviate from the general rule. Verily, rules of procedure exist for a noble purpose, and to disregard such rules in the guise of liberal construction would be to defeat such purpose. Procedural rules are not to be disdained as mere technicalities. They may not be ignored to suit the convenience of a party. Adjective law ensures the effective enforcement of substantive rights through the orderly and speedy administration of justice. Rules are not intended to hamper litigants or complicate litigation. But they help provide for a vital system of justice where suitors may be heard following judicial procedure and in the correct forum. Public order and our system of justice [27] are well served by a conscientious observance by the parties of the procedural rules. On the second issue, petitioner argues that Caragdag is entitled to financial assistance in the amount of P100,000 on humanitarian considerations. Petitioner stresses that Caragdag's infractions were due to his being a union officer and his acts did not show moral depravity. Petitioner also adds that, while it is true that the award of financial assistance is given only for dismissals due to causes specified under Articles 283 and 284 of the Labor Code, as amended, this Court has, by way of exception, allowed the grant of financial assistance to an employee dismissed for just causes based on equity. Respondent on the other hand, asserts that the CA correctly deleted the award of financial assistance erroneously granted to Caragdag considering that he was found guilty of serious misconduct and other acts adversely reflecting on his moral character. Respondent stresses that Caragdag's willful defiance of the hotel's security policy, disrespect and intimidation of a superior, and unjustifiable desertion of his work assignment during working hours [28] without permission, patently show his serious and gross misconduct as well as amoral character. Again, petitioner's arguments lack merit. The grant of separation pay or some other financial assistance to an employee dismissed for just causes is based [29] [30] on equity. In Phil. Long Distance Telephone Co.v. NLRC, we ruled that severance compensation, or whatever name it is called, on the ground of social justice shall be allowed only when the cause of the dismissal is other than serious misconduct or for causes which reflect adversely on the employee's moral character.The Court succinctly discussed the propriety of the grant of separation pay in this wise: 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 [31] tainted the cause of labor with the blemishes of their own character. Here, Caragdag's dismissal was due to several instances of willful disobedience to the reasonable rules and regulations prescribed by his employer. The Voluntary Arbitrator pointed out that according to the hotel's Code of Discipline, an employee who commits three different acts of misconduct within a twelve (12)-month period commits serious misconduct. He stressed that Caragdag's infractions were not even spread in a period of twelve (12) months, but rather in a period of a little over a month. Records show the various violations of the hotel's rules and regulations were committed by Caragdag. He was suspended for violating the hotel policy on bag inspection and body frisking. He was likewise suspended for threatening and intimidating a superior while the latter was counseling his staff. He was again suspended for leaving his work assignment without permission. Evidently, Caragdag's acts constitute serious misconduct. In Piedad v. Lanao del Norte Electric Cooperative, Inc., we ruled that a series of irregularities when put together may constitute serious misconduct, which under Article 282 of the Labor Code, as amended, is a just cause for dismissal. Caragdag's dismissal being due to serious misconduct, it follows that he should not be entitled to financial assistance. To rule otherwise would be to reward him for the grave misconduct he committed. We must [33] emphasize that social justice is extended only to those who deserve its compassion. WHEREFORE, the petitions for review on certiorari are DENIED. The October 3, 2003 and August 13, 2004 Court of Appeals Resolutions in CA-G.R. SP No. 78364, as well as the Court of Appeals December 16, 2005 Decision and April 12, 2006 Resolution in CA-G.R. SP No. 77478, are AFFIRMEDand UPHELD. With costs against the petitioner. SO ORDERED.
[32]

ABARIA v. NLRC The consolidated petitions before us involve the legality of mass termination of hospital employees who participated in strike and picketing activities. The factual antecedents: Metro Cebu Community Hospital, Inc. (MCCHI), presently known as the Visayas Community Medical Center (VCMC), is a non-stock, non-profit corporation organized under the laws of the Republic of the Philippines. It operates the Metro Cebu Community Hospital (MCCH), a tertiary medical institution located at Osmea Boulevard, CebuCity. MCCH is owned by the United Church of Christ in the Philippines (UCCP) and Rev. Gregorio P. Iyoy is the Hospital Administrator. The National Federation of Labor (NFL) is the exclusive bargaining representative of the rank-and-file employees of MCCHI. Under the 1987 and 1991 Collective Bargaining Agreements (CBAs), the signatories were Ciriaco B. Pongasi, Sr. for MCCHI, and Atty. Armando M. Alforque (NFL Legal Counsel) and Paterno A. Lumapguid as President of NFL-MCCH Chapter. In the CBA effective from January 1994 until December 31, 1995, the signatories were Sheila E. Buot as Board of Trustees Chairman, Rev. Iyoy as MCCH Administrator and Atty. Fernando Yu as Legal Counsel of NFL, while Perla Nava, President of Nagkahiusang Mamumuo sa MCCH (NAMA-MCCH-NFL) signed the [1] Proof of Posting. On December 6, 1995, Nava wrote Rev. Iyoy expressing the unions desire to renew the CBA, attaching to her letter a statement of proposals signed/endorsed by 153 union members. Nava subsequently requested that the following employees be allowed to avail of one-day union leave with pay on December 19, 1995: Celia Sabas, Jesusa Gerona, Albina Baez, Eddie Villa, Roy Malazarte, Ernesto Canen, Jr., Guillerma Remocaldo, Catalina Alsado, Evelyn Ong, Melodia Paulin, Sofia Bautista, Hannah Bongcaras, Ester Villarin, Iluminada Wenceslao and Perla Nava. However, MCCHI returned the CBA proposal for Nava to secure first the endorsement of the legal counsel of NFL [2] as the official bargaining representative of MCCHI employees. Meanwhile, Atty. Alforque informed MCCHI that the proposed CBA submitted by Nava was never referred to NFL and that NFL has not authorized any other legal counsel or any person for collective bargaining negotiations. By January 1996, the collection of union fees (check-off) was temporarily suspended by MCCHI in view of the existing conflict between the federation and its local affiliate. Thereafter, MCCHI attempted to take over the room being used as union office but was prevented to do so by Nava and her group who protested these actions and insisted that management directly negotiate with them for a new CBA. MCCHI referred the matter to Atty. Alforque, NFLs [3] Regional Director, and advised Nava that their group is not recognized by NFL. In his letter dated February 24, 1996 addressed to Nava, Ernesto Canen, Jr., Jesusa Gerona, Hannah Bongcaras, Emma Remocaldo, Catalina Alsado and Albina Baez, Atty. Alforque suspended their union membership for serious violation of the Constitution and By-Laws. Said letter states: During the last General Membership Meeting of the union on February 20, 1996, you openly declared that you recognized the officers of the KMU not those of the NFL, that you submit to the stuctures [sic] and authority of the KMU not of the NFL, and that you are loyal only to the KMU not to the NFL. Also, in the same meeting, you admitted having sent a proposal for a renewed collective bargaining agreement to the management without any consultation with the NFL. In fact, in your letter datedFebruary 21, 1996 addressed to Rev. Gregorio Iyoy, the Administrator of the hospital, you categorically stated as follows: We do not need any endorsement from NFL, more particularly from Atty. Armando Alforque to negotiate our CBA with MCCH. You did not only ignore the authority of the undersigned as Regional Director but you maliciously prevented and bluntly refused my request to join the union negotiating panel in the CBA negotiations. Your above flagrant actuations, made in the presence of the union membership, constitute the following offenses: 1. Willful violation of the Constitution and By-Laws of the Federation and the orders and decisions of duly constituted authorities of the same (Section 4 (b), Article III), namely: a) Defying the decision of the organization disaffiliating from the KMU; and

b) Section 9 (b), Article IX which pertains to the powers and responsibilities of the Regional Director, particularly, to negotiate and sign collective bargaining agreement together with the local negotiating panel subject to prior ratification by the general membership; 2. Joining or assisting another labor organization or helping in the formation of a new labor organization that seeks or tends to defeat the purpose of the Federation (Section 4 (d), Article III) in relation to the National Executive Boards Resolution No. 8, September 26-27, 1994, to wit: Pursuant to the NEB Resolution disaffiliating from the KMU dated September 11, 1993, the NEB in session hereby declare that KMU is deemed an organization that seeks to defeat the objective of establishing independent and democratic unions and seeks to replace the Federation as exclusive representative of its members. Committing acts that tend to alienate the loyalty of the members to the Federation, subvert its duly constituted authorities, and divide the organization in any level with the objective of establishing a pro-KMU faction or independent union loyal to the KMU shall be subject to disciplinary action, suspension or expulsion from union membership, office or position in accordance with paragraph[s] d and f of Section 4, Article III, and paragraph h, Section 6, Article VI, paragraph d, Section 9, Article IX. You are, therefore, directed to submit written explanation on the above charges within five (5) days from receipt hereof. Failure on your part shall be considered a waiver of your right to be heard and the Federation will act accordingly. Considering the gravity of the charges against you, the critical nature of the undertaking to renew the collective bargaining agreement, and the serious threat you posed to the organization, you are hereby placed under temporary suspension from your office and membership in the union immediately upon receipt hereof pending investigation and final disposition of your case in accordance with the unions constitution and by -laws. [4] For your guidance and compliance. On February 26, 1996, upon the request of Atty. Alforque, MCCHI granted one-day union leave with pay for 12 [5] union members. The next day, several union members led by Nava and her group launched a series of mass actions such as wearing black and red armbands/headbands, marching around the hospital premises and putting up placards, posters and streamers. Atty. Alforque immediately disowned the concerted activities being carried out by union members which are not sanctioned by NFL. MCCHI directed the union officers led by Nava to submit within 48 hours a written explanation why they should not be terminated for having engaged in illegal concerted activities amounting to strike, and placed them under immediate preventive suspension. Responding to this directive, Nava and her group denied there was a temporary stoppage of work, explaining that employees wore their armbands only as a sign of protest and reiterating their demand for MCCHI to comply with its duty to bargain collectively. Rev. Iyoy, having been informed that Nava and her group have also been suspended by NFL, directed said officers to appear before his office for investigation in connection with the illegal strike wherein they reportedly uttered slanderous and scurrilous words against the officers of the hospital, threatening other workers and forcing them to join the strike. Said union officers, however, invoked the grievance procedure provided in the [6] CBA to settle the dispute between management and the union. On March 13 and 19, 1996, the Department of Labor and Employment (DOLE) Regional Office No. 7 issued certifications stating that there is nothing in their records which shows that NAMA-MCCH-NFL is a registered labor organization, and that said union submitted only a copy of its Charter Certificate on January 31, [7] 1995. MCCHI then sent individual notices to all union members asking them to submit within 72 hours a written explanation why they should not be terminated for having supported the illegal concerted activities of NAMAMCCH-NFL which has no legal personality as per DOLE records. In their collective response/statement dated March 18, 1996, it was explained that the picketing employees wore armbands to protest MCCHIs refusal to bargain; it was also contended that MCCHI cannot question the legal personality of the union which had actively assisted in [8] CBA negotiations and implementation. On March 13, 1996, NAMA-MCCH-NFL filed a Notice of Strike but the same was deemed not filed for want of legal personality on the part of the filer. The National Conciliation and Mediation Board (NCMB) Region 7 office likewise denied their motion for reconsideration on March 25, 1996. Despite such rebuff, Nava and her group still conducted a strike vote on April 2, 1996 during which an overwhelming majority of union members approved the [9] strike.

Meanwhile, the scheduled investigations did not push through because the striking union members insisted on attending the same only as a group. MCCHI again sent notices informing them that their refusal to submit to investigation is deemed a waiver of their right to explain their side and management shall proceed to impose proper disciplinary action under the circumstances. On March 30, 1996, MCCHI sent termination letters to union leaders and other members who participated in the strike and picketing activities. On April 8, 1996, it also issued a cease-and-desist order to the rest of the striking employees stressing that the wildcat concerted activities spearheaded by the Nava group is illegal without a valid Notice of Strike and warning them that non-compliance will compel management to impose disciplinary actions against them. For their continued picketing activities despite the said warning, more than 100 striking employees were dismissed effective April 12 and 19, 1996. Unfazed, the striking union members held more mass actions. The means of ingress to and egress from the hospital were blocked so that vehicles carrying patients and employees were barred from entering the premises. Placards were placed at the hospitals entrance gate stating: Please proceed to another hospital and we are on protest. Employees and patients reported acts of intimidation and harassment perpetrated by union leaders and members. With the intensified atmosphere of violence and animosity within the hospital premises as a result of continued protest activities by union members, MCCHI suffered heavy losses due to low patient admission rates. The hospitals suppliers also refused to make further deliveries on credit. With the volatile situation adversely affecting hospital operations and the condition of confined patients, MCCHI filed a petition for injunction in the NLRC (Cebu City) onJuly 9, 1996 (Injunction Case No. V-0006-96). A temporary restraining order (TRO) was issued on July 16, 1996. MCCHI presented 12 witnesses (hospital employees and patients), including a security guard who was stabbed by an identified sympathizer while in the company of Navas group. MCCHIs petition was granted and a permanent injunction was issued on September 18, [10] 1996 enjoining the Nava group from committing illegal acts mentioned in Art. 264 of the Labor Code. On August 27, 1996, the City Government of Cebu ordered the demolition of the structures and obstructions put up by the picketing employees of MCCHI along the sidewalk, having determined the same as a public nuisance or [11] nuisance per se. Thereafter, several complaints for illegal dismissal and unfair labor practice were filed by the terminated employees against MCCHI, Rev. Iyoy, UCCP and members of the Board of Trustees of MCCHI. [12] On August 4, 1999, Executive Labor Arbiter Reynoso A. Belarmino rendered his decision dismissing the complaints for unfair labor practice in NLRC Case Nos. RAB-VII-02-0309-98, RAB-VII-02-0394-98 and RAB-VII-030596-98 filed by Nava and 90 other complainants. Executive Labor Arbiter Belarmino found no basis for the charge of unfair labor practice and declared the strike and picketing activities illegal having been conducted by NAMA-MCCH-NFL which is not a legitimate labor organization. The termination of union leaders Nava, Alsado, Baez, Bongcaras, Canen, Gerona and Remocaldo were upheld as valid but MCCHI was directed to grant separation pay equivalent to one-half month for every year of service, in the total amount of P3,085,897.40 for the [13] 84 complainants. Complainants appealed to the Commission. On March 14, 2001, the NLRCs Fourth Division rendered its [14] Decision, the dispositive portion of which reads: WHEREFORE, premises considered, the decision of the Executive Labor Arbiter dismissing the complaint for unfair labor practice and illegal dismissal is AFFIRMED with MODIFICATIONS declaring the dismissal of all the complainants in RAB Case No. 07-02-0394-98 and RAB Case No. 07-03-0596-98 valid and legal. Necessarily, the award of separation pay and attorneys fees are hereby Deleted. Resolution on RAB Case No. 07-02-0309-98 is hereby Deferred upon Joint Motion of the parties. SO ORDERED. [16] In its Resolution dated July 2, 2001, the NLRC denied complainants motion for reconsideration. Complainants elevated the case to the Court of Appeals (CA) (Cebu Station) via a petition for certiorari, [17] docketed as CA-G.R. SP No. 66540. In its Resolution dated November 14, 2001, the CAs Eighth Division dismissed th e petition on the ground that [18] out of 88 petitioners only 47 have signed the certification against forum shopping. Petitioners moved to
[15]

reconsider the said dismissal arguing that the 47 signatories more than constitute the principal parties as the [19] [20] petition involves a matter of common concern to all the petitioning employees. By Resolution dated May 28, 2002, the CA reinstated the case only insofar as the 47 petitioners who signed the petition are concerned. Petitioners challenged the validity of the November 14, 2001 and May 28, 2002 resolutions before this Court in a petition for review on certiorari, docketed as G.R. No. 154113. [21] Meanwhile, the NLRCs Fourth Division (Cebu City) rendered its Decision dated March 12, 2003 in RAB Case Nos. 07-02-0309-98 (NLRC Case No. V-001042-99) pertaining to complainants Erma Yballe, Evelyn Ong, Nelia Angel and Eleuteria Cortez as follows: WHEREFORE, premises considered, the decision of the Executive Labor Arbiter dismissing the complaint for unfair labor practice and illegal dismissal is AFFIRMED with MODIFICATIONS declaring all complainants to have been validly dismissed. Necessarily, the award of separation pay and attorneys fees are hereby Deleted. [22] SO ORDERED. The NLRC likewise denied the motion for reconsideration filed by complainants Yballe, et al. in its Resolution [23] dated April 13, 2004. [24] On October 17, 2008, the CA rendered its Decision in CA-G.R. SP No. 66540, the dispositive portion of which states: WHEREFORE, premises considered, judgment is hereby rendered AFFIRMING the Decision of the National Labor Relations Commission (NLRC) Fourth Division dated March 14, 2001 in NLRC Case No. V-001042-99, WITH MODIFICATIONS to the effect that (1) the petitioners, except the union officers, shall be awarded separation pay equivalent to one-half (1/2) month pay for every year of service, and (2) petitioner Cecilia Sabas shall be awarded overtime pay amounting to sixty-three (63) hours. [25] SO ORDERED. Petitioners filed a motion for reconsideration while private respondents filed a motion for partial reconsideration questioning the award of separation pay. The former also invoked the decision of this Court [26] in Bascon v. Court of Appeals, while the latter argued for the application of the ruling in decision rendered by [27] the CA (Cebu City) inMiculob v. NLRC, et al. (CA-G.R. SP No. 84538), both involving similar complaints filed by dismissed employees of MCCHI. [28] By Resolution dated April 17, 2009, the CA denied both motions: WHEREFORE, the petitioners Motion for Reconsideration and the private respondent*s+ Motion for Partial Reconsideration of the October 17, 2008 Decision are both DENIED for lack of merit. The Motions for Substitution of Counsel and Compromise Agreements submitted by petitioners Bernardito Lawas, Avelina Bangalao, Dailenda Hinampas and Daylinda Tigo are hereby approved. Consequently, said petitioners are ordered dropped from the list of petitioners and the case is deemed dismissed as to them. [29] SO ORDERED. Complainants Yballe, et al. also challenged before the CA the March 12, 2003 Decision and April 13, 2004 Resolution of the NLRC in a petition for certiorari, docketed as CA-G.R. SP No. 84998 (Cebu City). By [30] Decision dated November 7, 2008, the CA granted their petition, as follows: WHEREFORE, the challenged Decision of public respondent dated March 12, 2003 and its Resolution dated April 13, 2004 are hereby REVERSED AND SET ASIDE. Private respondent MetroCebu Community Hospital is ordered to reinstate petitioners Erma Yballe, Eleuteria Cortes, Nelia Angel and Evelyn Ong without loss of seniority rights and other privileges; to pay them their full backwages inclusive of their allowances and other benefits computed from the time of their dismissal up to the time of their actual reinstatement. No pronouncement as to costs. [31] SO ORDERED. Private respondents (MCCHI, et al.) moved to reconsider the above decision but the CA denied their motion [32] on February 22, 2011. Both petitioners and private respondents in CA-G.R. SP No. 66540 appealed to this Court. Private respondent MCCHI in CA-G.R. SP No. 84998, under its new name Visayas Community Medical Center (VCMC), filed a petition for certiorari in this Court. In G.R. No. 187778, petitioners Nava, et al. prayed that the CA decision be set aside and a new judgment be entered by this Court (1) declaring private respondents guilty of unfair labor practice and union busting; (2) directing private respondents to cease and desist from further committing unfair labor practices against the petitioners; (3) imposing upon MCCH the proposed CBA or, in the alternative, directing the hospital and its officers

to bargain with the local union; (4) declaring private respondents guilty of unlawfully suspending and illegally dismissing the individual petitioners-employees; (5) directing private respondents to reinstate petitionersemployees to their former positions, or their equivalent, without loss of seniority rights with full backwages and benefits until reinstatement; and (6) ordering private respondents to pay the petitioners moral damages, [33] exemplary damages, legal interests, and attorneys fees. On the other hand, petitioner MCCHI in G.R. No. 187861 prayed for the modification of the CA decision by [34] deleting the award of separation pay and reinstating the March 14, 2001 decision of the NLRC. In G.R. No. 196156, MCCHI/VCMC prayed for the annulment of the November 7, 2008 Decision and February 22, 2011 Resolution of the CA, for this Court to declare the dismissal of respondents Yballe, et al. as valid and legal and to reinstate the March 12, 2003 Decision and April 13, 2004 Resolution of the NLRC. G.R. No. 187861 was consolidated with G.R. Nos. 154113 and 187778 as they involve similar factual circumstances and identical or related issues. G.R. No. 196156 was later also consolidated with the aforesaid cases. The issues are: (1) whether the CA erred in dismissing the petition for certiorari (CA-G.R. SP No. 66540) with respect to the petitioners in G.R. No. 154113 for their failure to sign the certification against forum shopping; (2) whether MCCHI is guilty of unfair labor practice; (3) whether petitioning employees were illegally dismissed; and (4) if their termination was illegal, whether petitioning employees are entitled to separation pay, backwages, damages and attorneys fees. Dropping of petitioners who did not sign the certification against forum shopping improper The Court has laid down the rule in Altres v. Empleo as culled from jurisprudential pronouncements, that the certification against forum shopping must be signed by all the plaintiffs or petitioners in a case; otherwise, those who did not sign will be dropped as parties to the case. Under reasonable or justifiable circumstances, however, as when all the plaintiffs or petitioners share a common interest and invoke a common cause of action or defense, the signature of only one of them in the certification against forum shopping substantially complies with the Rule. In the case at bar, the signatures of 47 out of 88 petitioning employees in the certification against forum shopping constitute substantial compliance with the rule. There is no question that they shared a common interest and invoked a common cause of action when they filed suit before the Labor Arbiter and NLRC questioning the validity of their termination and charging MCCHI with unfair labor practice. Thus, when they appealed their case to the CA, they pursued the same as a collective body, raising only one argument in support of their cause of action, i.e., the illegal dismissal allegedly committed by MCCHI when union members resorted to strike and mass actions due to MCCHIs refusal to bargain with officers of the local chapter. There is sufficient basis, there fore, for the 47 signatories to the petition, to speak for and in behalf of their co-petitioners and to file the Petition for [36] Certiorari in the appellate court. Clearly, the CA erred in dropping as parties-petitioners those who did not sign the certification against forum shopping. However, instead of remanding the case to the CA for it to resolve the petition with respect to the herein petitioners in G.R. No. 154113, and as prayed for, the Court shall consider them parties-petitioners in CA-G.R. SP No. 66540,which case has already been decided and now subject of appeal in G.R. No. 187778. MCCHI not guilty of unfair labor practice Art. 248 (g) of the Labor Code, as amended, makes it an unfair labor practice for an employer *t+o violate the duty to bargain collectively as prescribed by the Code. The applicable provision in this case is Art. 253 which provides: ART. 253. Duty to bargain collectively when there exists a collective bargaining agreement. When there is a collective bargaining agreement, the duty to bargain collectively shall also mean that neither party shall terminate nor modify such agreement during its lifetime. However, either party can serve a written notice to terminate or modify the agreement at least sixty (60) days prior to its expiration date. It shall be the duty of both parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period and/or until a new agreement is reached by the parties.
[35]

NAMA-MCCH-NFL charged MCCHI with refusal to bargain collectively when the latter refused to meet and convene for purposes of collective bargaining, or at least give a counter-proposal to the proposed CBA the union had submitted and which was ratified by a majority of the union membership. MCCHI, on its part, deferred any negotiations until the local unions dispute with the n ational union federation (NFL) is resolved considering that the latter is the exclusive bargaining agent which represented the rank-and-file hospital employees in CBA negotiations since 1987. We rule for MCCHI. Records of the NCMB and DOLE Region 7 confirmed that NAMA-MCCH-NFL had not registered as a labor [37] organization, having submitted only its charter certificate as an affiliate or local chapter of NFL. Not being a legitimate labor organization, NAMA-MCCH-NFL is not entitled to those rights granted to a legitimate labor organization under Art. 242, specifically: (a) To act as the representative of its members for the purpose of collective bargaining; (b) To be certified as the exclusive representative of all the employees in an appropriate collective bargaining unit for purposes of collective bargaining; xxxx Aside from the registration requirement, it is only the labor organization designated or selected by the majority of the employees in an appropriate collective bargaining unit which is the exclusive representative of the [38] employees in such unit for the purpose of collective bargaining, as provided in Art. 255. NAMA-MCCH-NFL is not the labor organization certified or designated by the majority of the rank-and-file hospital employees to represent them in the CBA negotiations but the NFL, as evidenced by CBAs concluded in 1987, 1991 and 1994. While it is true that a local union has the right to disaffiliate from the national federation, NAMA-MCCH-NFL has not done so as there was no any effort on its part to comply with the legal requisites for a valid disaffiliation during the [39] freedom period or the last 60 days of the last year of the CBA, through a majority vote in a secret balloting in [40] accordance with Art. 241 (d). Nava and her group simply demanded that MCCHI directly negotiate with the local union which has not even registered as one. To prove majority support of the employees, NAMA-MCCH-NFL presented the CBA proposal allegedly signed by 153 union members. However, the petition signed by said members showed that the signatories endorsed the proposed terms and conditions without stating that they were likewise voting for or designating the NAMA-MCCHNFL as their exclusive bargaining representative. In any case, NAMA-MCCH-NFL at the time of submission of said proposals was not a duly registered labor organization, hence it cannot legally represent MCCHIs rank -and-file employees for purposes of collective bargaining. Hence, even assuming that NAMA-MCCH-NFL had validly disaffiliated from its mother union, NFL, it still did not possess the legal personality to enter into CBA negotiations. A local union which is not independently registered cannot, upon disaffiliation from the federation, exercise the rights and privileges granted by law to legitimate labor organizations; thus, it cannot file a petition for certification [41] election. Besides, the NFL as the mother union has the right to investigate members of its local chapter under [42] the federations Constitution and By-Laws, and if found guilty to expel such members. MCCHI therefore cannot be faulted for deferring action on the CBA proposal submitted by NAMA-MCCH-NFL in view of the union leaderships conflict with the national federation. We have held that the issue of disaffiliation is an intra-union [43] dispute which must be resolved in a different forum in an action at the instance of either or both the federation [44] and the local union or a rival labor organization, not the employer. Not being a legitimate labor organization nor the certified exclusive bargaining representative of MCCHIs rank-and-file employees, NAMA-MCCH-NFL cannot demand from MCCHI the right to bargain collectively in their [45] behalf. Hence, MCCHIs refusal to bargain then with NAMA-MCCH-NFL cannot be considered an unfair labor [46] practice to justify the staging of the strike. Strike and picketing activities conducted by union officers and members were illegal Art. 263 (b) of the Labor Code, as amended, provides: ART. 263. Strikes, picketing and lockouts. x x x (b) Workers shall have the right to engage in concerted activities for purposes of collective bargaining or for their mutual benefit and protection. The right of legitimate labor organizations to strike and picket and of employers to lockout, consistent with the national interest, shall continue to be recognized and respected. However, no labor

union may strike and no employer may declare a lockout on grounds involving inter-union and intra-union disputes. x x x x (Emphasis supplied.) As borne by the records, NAMA-MCCH-NFL was not a duly registered or an independently registered union at the time it filed the notice of strike on March 13, 1996 and when it conducted the strike vote on April 2, 1996. It could not then legally represent the union members. Consequently, the mandatory notice of strike and the conduct of the strike vote report were ineffective for having been filed and conducted by NAMA-MCCH-NFL which has no legal personality as a legitimate labor organization, in violation of Art. 263 (c), (d) and (f) of the Labor Code and [47] Rule XXII, Book V of the Omnibus Rules Implementing the Labor Code. Art. 263 of the Labor Code provides: ART. 263. Strikes, picketing and lockouts. (a) x x x xxxx (c) In cases of bargaining deadlocks, the duly certified or recognized bargaining agent may file a notice of strike or the employer may file a notice of lockout with the Department at least 30 days before the intended date thereof. In cases of unfair labor practice, the period of notice shall be 15 days and in the absence of a duly certified or recognized bargaining agent, the notice of strike may be filed by any legitimate labor organization in behalf of its members. However, in case of dismissal from employment of union officers duly elected in accordance with the union constitution and by-laws, which may constitute union busting, where the existence of the union is threatened, the 15-day cooling-off period shall not apply and the union may take action immediately. (As amended by Executive Order No. 111, December 24, 1986.) (d) The notice must be in accordance with such implementing rules and regulations as the Department of Labor and Employment may promulgate. xxxx (f) A decision to declare a strike must be approved by a majority of the total union membership in the bargaining unit concerned, obtained by secret ballot in meetings or referenda called for that purpose. A decision to declare a lockout must be approved by a majority of the board of directors of the corporation or association or of the partners in a partnership, obtained by secret ballot in a meeting called for that purpose. The decision shall be valid for the duration of the dispute based on substantially the same grounds considered when the strike or lockout vote was taken. The Department may, at its own initiative or upon the request of any affected party, supervise the conduct of the secret balloting. In every case, the union or the employer shall furnish the Ministry the voting at least seven days before the intended strike or lockout, subject to the cooling-off period herein provided. (As amended by Batas Pambansa Bilang 130, August 21, 1981 and further amended by Executive Order No. 111, December 24, 1986.) (Emphasis supplied.) Rule XXII, Book V of the Omnibus Rules Implementing the Labor Code reads: RULE XXII CONCILIATION, STRIKES AND LOCKOUTS xxxx SEC. 6. Who may declare a strike or lockout. Any certified or duly recognized bargaining representative may declare a strike in cases of bargaining deadlocks and unfair labor practices. The employer may declare a lockout in the same cases. In the absence of a certified or duly recognized bargaining representative, any legitimate labor organization in the establishment may declare a strike but only on grounds of unfair labor practice. (Emphasis supplied.) [48] Furthermore, the strike was illegal due to the commission of the following prohibited activities : (1) violence, coercion, intimidation and harassment against non-participating employees; and (2) blocking of free ingress to and egress from the hospital, including preventing patients and their vehicles from entering the hospital and other employees from reporting to work, the putting up of placards with a statement advising incoming patients to proceed to another hospital because MCCHI employees are on strike/protest. As [49] shown by photographs submitted by MCCHI, as well as the findings of the NCMB and Cebu City Government, the hospital premises and sidewalk within its vicinity were full of placards, streamers and makeshift structures that obstructed its use by the public who were likewise barraged by the noise coming from strikers using [50] [51] megaphones. On the other hand, the affidavits executed by several hospital employees and patients narrated in detail the incidents of harassment, intimidation, violence and coercion, some of these witnesses have

positively identified the perpetrators. The prolonged work stoppage and picketing activities of the striking employees severely disrupted hospital operations that MCCHI suffered heavy financial losses. The findings of the Executive Labor Arbiter and NLRC, as sustained by the appellate court, clearly established that the striking union members created so much noise, disturbance and obstruction that the local government authorities eventually ordered their removal for being a public nuisance. This was followed by an injunction from the NCMB enjoining the union leaders from further blocking the free ingress to and egress from the hospital, and from committing threats, coercion and intimidation against non-striking employees and patients/vehicles desiring to enter for the purpose of seeking medical treatment/confinement. By then, the illegal strike had lasted for almost five months. Consequences of illegal strike to union officers and members Art. 264 (a) of the Labor Code, as amended, provides for the consequences of an illegal strike to the participating workers: x x x Any union officer who knowingly participates in illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status: Provided, That mere participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his employment, even if a replacement had been hired by the employer during such lawful strike. The above provision makes a distinction between workers and union officers who participate in an illegal strike: an ordinary striking worker cannot be terminated for mere participation in an illegal strike. There must be proof that he or she committed illegal acts during a strike. A union officer, on the other hand, may be terminated from work when he knowingly participates in an illegal strike, and like other workers, when he commits an illegal [52] act during a strike. Considering their persistence in holding picketing activities despite the declaration by the NCMB that their union was not duly registered as a legitimate labor organization and the letter from NFLs legal counsel informing that their acts constitute disloyalty to the national federation, and their filing of the notice of strike and conducting a strike vote notwithstanding that their union has no legal personality to negotiate with MCCHI for collective bargaining purposes, there is no question that NAMA-MCCH-NFL officersknowingly participated in the illegal strike. The CA therefore did not err in ruling that the termination of union officers Perla Nava, Catalina Alsado, Albina Baez, Hannah Bongcaras, Ernesto Canen, Jesusa Gerona and Guillerma Remocaldo was valid and justified. With respect to the dismissed union members, although MCCHI submitted photographs taken at the picket line, it did not individually name those striking employees and specify the illegal act committed by each of them. As to the affidavits executed by non-striking employees, they identified mostly union officers as the persons who blocked the hospital entrance, harassed hospital employees and patients whose vehicles were prevented from entering the premises. Only some of these witnesses actually named a few union members who committed similar acts of harassment and coercion. Consequently, we find no error committed by the CA in CA-G.R. SP No. 66540 when it modified the decision of the NLRC and ruled that the dismissal of union members who merely participated in the illegal strike was illegal. On the other hand, in CA-G.R. SP No. 84998, the CA did not err in ruling that the dismissal of Yballe, et al. was illegal; however, it also ordered their reinstatement with full back wages. Dismissed union members not entitled to backwages but should be awarded separation pay in lieu of reinstatement Since there is no clear proof that union members actually participated in the commission of illegal acts during the strike, they are not deemed to have lost their employment status as a consequence of a declaration of illegality of the strike. Petitioners in G.R. Nos. 154113 and 187778 assail the CA in not ordering their reinstatement with back [53] wages. Invoking stare decisis, they cited the case of Bascon v. Court of Appeals decided by this Court in 2004 and which involved two former hospital employees who likewise sued MCCHI after the latter terminated their employment due to their participation in the same illegal strike led by NAMA-MCCH-NFL. In said case we ruled that petitioners Cole and Bascon were illegally dismissed because MCCHI failed to prove that they committed illegal

acts during the strike. We thus ordered the reinstatement of petitioners Bascon and Cole without loss of seniority rights and other privileges and payment of their back wages inclusive of allowances, and other benefits computed from the time they were dismissed up to the time of their actual reinstatement. Bascon was also the basis of the award of back wages in CA-G.R. SP No. 84998. Stare decisis et non quieta movere. Stand by the decision and disturb not what is settled. Under the doctrine of stare decisis, once a court has laid down a principle of law as applicable to a certain state of facts, it will adhere [54] to that principle and apply it to all future cases where the facts are substantially the same, even though the parties may be different. It proceeds from the first principle of justice that, absent any powerful countervailing considerations, like cases ought to be decided alike. Thus, where the same questions relating to the same event have been put forward by parties similarly situated as in a previous case litigated and decided by a competent [55] court, the rule of stare decisis is a bar to any attempt to relitigate the same issue. The doctrine though is not cast in stone for upon a showing that circumstances attendant in a particular case override the great benefits derived by our judicial system from the doctrine of stare decisis, the Court is justified in [56] setting it aside. For the Court, as the highest court of the land, may be guided but is not controlled by precedent. Thus, the Court, especially with a new membership, is not obliged to follow blindly a particular decision [57] that it determines, after re-examination, to call for a rectification. Although the Bascon case involved the very same illegal strike in MCCHI which led to the termination of herein petitioners, its clearly erroneous application of the law insofar only as the award of back wages warrants setting aside the doctrine. Indeed, the doctrine of stare decisis notwithstanding, the Court has abandoned or overruled precedents whenever it realized that the Court erred in the prior decisions. Afterall, more important than [58] anything else is that this Court should be right. [59] In G & S Transport Corporation v. Infante, the Court explained the rationale for its recent rulings deleting back wages awarded to the dismissed workers if the strike was found to be illegal. Considering that they did not render work for the employer during the strike, they are entitled only to reinstatement. With respect to backwages, the principle of a fair days wage for a fair days labor remains as the basic factor in determining the award thereof. If there is no work performed by the employee there can be no wage or pay unless, of course, the laborer was able, willing and ready to work but was illegally locked out, suspended or dismissed or otherwise illegally prevented from working. While it was found that respondents expressed their intention to report back to work, the latter exception cannot apply in this case. In Philippine Marine Officers Guild v. Compaia Maritima, as affirmed in Philippine Diamond Hotel and Resort v. Manila Diamond Hotel Employees Union, the Court stressed that for this exception to apply, it is required that the strike be legal, a situation that does not obtain in the case at bar. Under the circumstances, respondents reinstatement without backwa ges suffices for the appropriate relief. If reinstatement is no longer possible, given the lapse of considerable time from the occurrence of the strike, the award of separation pay of one (1) month salary for each year of service, in lieu of reinstatement, is in [60] order. (Emphasis supplied.) The CA decision in CA-G.R. SP No. 66540 ordering the payment of separation pay in lieu of reinstatement without back wages is thus in order, to conform to the policy ofa fair days wage for a fair days labor. The amount of separation pay is increased to one month pay for every year of service, consistent with jurisprudence. Accordingly, the decision in CA-G.R. SP No. 84998 is modified by deleting the award of back wages and granting separation pay in lieu of reinstatement. It is to be noted that as early as April 8, 1996, union members who took part in the concerted activities have been warned by management that NAMA-MCCH-NFL is not a legitimate labor organization and its notice of strike was denied by the NCMB, and directed to desist from further participating in such illegal activities. Despite such warning, they continued with their picketing activities and held more mass actions after management sent them termination notices. The prolonged work stoppage seriously disrupted hospital operations, which could have eventually brought MCCHI into bankruptcy had the City Government of Cebu not issued a demolition order and the NLRC Region 7 not formally enjoined the prohibited picketing activities. Also, the illegal dismissal complaints subsequently filed by the terminated employees did not obliterate the fact that they did not suffer loss of earnings by reason of the employers unjustified acts, there being no unfair labor practice committed by MCCHI. Hence, fairness and justice dictate that back wages be denied the said employees who participated in the illegal concerted activities to the great detriment of the employer.

Separation pay is made an alternative relief in lieu of reinstatement in certain circumstances, like: ( a) when reinstatement can no longer be effected in view of the passage of a long period of time or because of the realities of the situation; (b) reinstatement is inimical to the employers interest; (c) reinstatement is no longer feasible; (d) reinstatement does not serve the best interests of the parties involved; ( e) the employer is prejudiced by the workers continued employment; (f) facts that make execution unjust or inequitable have supervened; or (g) [61] strained relations between the employer and employee. Considering that 15 years had lapsed from the onset of this labor dispute, and in view of strained relations that ensued, in addition to the reality of replacements already hired by the hospital which had apparently recovered from its huge losses, and with many of the petitioners either employed elsewhere, already old and sickly, or otherwise incapacitated, separation pay without back wages is the appropriate relief. We note that during the pendency of the cases in this Court, some of the petitioners have entered into compromise agreements with MCCHI, all of which were duly approved by this Court. Thus, excluded from the herein monetary awards are the following petitioners whose compromise agreements have been approved by this Court and judgment having been entered therein: Gloria Arguilles, Romulo Alforque, Gerna Patigdas-Barte, Daylinda Tigo Merlyn Nodado, Ramon Tagnipis, Bernabe Lumapguid, Romeo Empuerto, Marylen Labra, Milagros Castillo Bernadette Pontillas-Tibay, Constancio Pagador, Nolan Alvin Panal, Edilberto Villa, Roy Malazarte, Felecianita Malazarte and Noel Hortelano. Attorneys fees The dismissed employees having been compelled to litigate in order to seek redress and protect their rights, they are entitled to reasonable attorneys fees pursuant to Art. 2208 (2) of the Civil Code. In view of the attendant circumstances of this case, we hold that attorneys fees in the amount of P50,000.00 is reasonable and justified. However, the respondents in G.R. No. 196156 are not entitled to the same relief since they did not appeal from the CA decision which did not include the award of attorneys fees. WHEREFORE, the petition for review on certiorari in G.R. No. 187861 is DENIED while the petitions in G.R. Nos. 154113, 187778 and 196156 are PARTLY GRANTED. The Decision dated October 17, 2008 of the Court of Appeals in CA-G.R. SP No. 66540 is hereby AFFIRMED with MODIFICATIONS in that MCCHI is ordered to pay the petitioners in G.R. Nos. 154113 and 187778, except the petitioners who are union officers, separation pay equivalent to one month pay for every year of service, and reasonable attorneys fees in the amount of P50,000.00. The Decision dated November 7, 2008 is likewise AFFIRMED with MODIFICATIONS in that MCCHI is ordered to pay the private respondents in G.R. No. 196156 separation pay equivalent to one month pay for every year of service, and that the award of back wages is DELETED. The case is hereby remanded to the Executive Labor Arbiter for the recomputation of separation pay due to each of the petitioners union members in G.R. Nos. 154113, 187778 and 196156 except those who have executed compromise agreements approved by this Court. No pronouncement as to costs. SO ORDERED.

YSS EMPLOYEES UNION PHILIPPINE TRANSPORT AND GENERAL WORKERS ORGANIZATION, Petitioner,

G.R. No. 155125 Present: CORONA, J., Chairperson, CHICO-NAZARIO, VELASCO, JR., NACHURA, and PERALTA, JJ. Promulgated: December 4, 2009

- versus -

YSS LABORATORIES, INC., Respondent.

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x DECISION CHICO-NAZARIO, J.: Before this Court is a Petition for Review on Certiorari filed by petitioner YSS Employees Union (YSSEU) Philippine [1] Transport and General Workers Organization seeking to reverse and set aside the Decision dated 26 November 2001 and the Resolution dated 29 August 2002 of the Court of Appeals in CA-G.R. SP No. 66095. The said Decision and Resolution nullified the Orders of the Secretary of the Department of Labor and Employment (DOLE) dated 11 [2] [3] May 2001 and 9 June 2001 which enjoined the strike staged by petitioner, and ordered respondent YSS Laboratories Inc. (YSS Laboratories) to accept the workers back to their work, including those who were retrenched from employment due to serious business losses. The inclusion of the employees who were previously terminated from service to the return-to-work order is the hub of this controversy. YSS Laboratories is a domestic corporation engaged in the pharmaceutical business. YSSEU is a duly registered labor organization and the sole and exclusive bargaining representative of the rank and file employees of YSS Laboratories. In order to arrest escalating business losses, YSS Laboratories implemented a retrenchment program which [4] affected 11 employees purportedly chosen in accordance with the reasonable standards established by the [5] company. Of the 11 employees sought to be retrenched, nine were officers and members of YSSEU. Initially, these employees were given the option to avail themselves of the early retirement program of the [6] company. When no one opted to retire early, YSS Laboratories exercised its option to terminate the services of [7] its employees as allegedly authorized under Article 283 of the Labor Code. Thus, copies of the Notices of Termination were filed with DOLE on 19 March 2001 and were served to concerned employees on 20 March 2001. Claiming that YSS Laboratories was guilty of discrimination and union-busting in carrying out the said retrenchment program, YSSEU decided to hold a strike. After the necessary strike vote was taken under the supervision of the National Conciliation Mediation Board National Capital Region (NCMB-NCR), YSSEU staged a strike on 20 April [8] 2001. In order to forge a compromise, a number of conciliation proceedings were conducted by the NCMB-NCR, but these efforts proved futile since the parties stance was unbending.

This prompted the Secretary of Labor to finally intervene in order to put an end to a prolonged labor dispute. Underscoring the governments policy of preserving economic gains and employment levels, the Secretary of Labor deemed that the continuation of the labor dispute was inimical to national interest. Thus, in an Order dated 11 May 2001, the Secretary of Labor certified the labor dispute to the National Labor Relations Commission (NLRC) for compulsory arbitration. Accordingly, all striking workers were thereby directed to return to work within 24 hours from their receipt of the said Order, and YSS Laboratories to accept them under the terms and conditions prevailing before the strike. The Order was worded in this wise: CONSIDERING THESE PREMISES, this Office hereby certifies the labor dispute at [YSS Laboratories] to the [NLRC] for compulsory arbitration, pursuant to Article 263(g) of the Labor [Code], as amended. All striking workers are hereby directed to return to work within twenty four (24) hours from receipt of this Order and for the Company to accept them back under the same terms and conditions of employment prior to the strike. The parties are further directed to cease and desist from committing any act which might further worsen the situation. [9] Let the entire records of this case be forwarded to the NLRC for its appropriate action. YSS Laboratories, however, refused to fully comply with the directive of the Secretary of Labor. In its Urgent [10] Motion for Reconsideration, YSS Laboratories argued that nine union officers and members who were previously terminated from service pursuant to a valid retrenchment should be excluded from the operation of the [11] return-to-work order. It also asserted that the union officers who participated in the purported illegal strike should likewise not be allowed to be back to their employment for they were deemed to have already lost their employment status. YSSEU, for its part, moved that YSS Laboratories be cited for contempt for refusing to admit the 18 workers back to work. In addition, YSSEU prayed for the award of backwages in favor of these employees who were not permitted [12] by YSS Laboratories to return to their respective stations despite the Secretary of Labors directive. Acting on the aforesaid motions, the Secretary of Labor, on 9 June 2001, granted the motion of YSSEU and thus [13] issued an Order directing YSS Laboratories to immediately accept back to work the nine retrenched employees and the nine union officers who initiated the alleged illegal strike pending determination of the validity of the retrenchment and illegal strike cases. Should actual physical reinstatement be no longer possible, YSS Laboratories was ordered to reinstate the striking workers in the companys payroll. The decretal portion of the Order reads: WHEREFORE, [YSS Laboratories] is directed to immediately accept back to work the nine (9) retrenched employees and the nine (9) union officers and members against whom an illegal strike case has been filed, by the NLRC, pending determination of the validity of the retrenchment and illegal strike cases. In case the actual and physical reinstatement is not feasible, *YSS Laboratories+ is directed to effect payroll reinstatement with the workers [14] salaries payable every two (2) weeks effective from the *YSS Laboratories+ receipt of this Order. Unyielding, YSS Laboratories brought a Petition for Certiorari under Rule 65 of the Rules of Court before the Court of Appeals, seeking to annul the certification order and the return-to-work order issued by the Secretary of Labor. While recognizing the wide latitude afforded by law to the Secretary of Labor to issue Assumption of Jurisdiction and Certification Orders, YSS Laboratories claimed that the issuance of the 11 May 2001 and 9 June 2001 Orders was tainted with utter grave abuse of discretion and patent bias in favor of YSSEU. Again, YSS Laboratories asseverated that the nine employees who were previously dismissed from employment should be excluded from the coverage of the return-to-work order since they were lawfully retrenched by the company. On 26 November 2001, the Court of Appeals rendered a Decision granting the Petition and reversing the assailed Orders dated 11 May 2001 and 9 June 2001, as they were made with grave abuse of discretion amounting to lack or excess of jurisdiction. The appellate court found that YSS Laboratories validly carried out its retrenchment program, which effectively severed the concerned employees employment with the company. For lack of factual and legal basis, the Court of Appeals struck down the strike staged by YSSEU for being illegal. The appellate court thus disposed: WHEREFORE, premises considered, the Petition is GRANTED; and the two (2) assailed Orders of public respondent
[15]

Secretary of Labor in NCMB-NCR-NS-03-086-01/0S-AJ-0006-2001 are hereby SET ASIDE for [16] being NULL and VOID. Similarly ill-fated was YSSEUs motion for reconsideration which was denied through the Court of Appeals [17] Resolution issued on 29 August 2002. YSSEU is now before this Court assailing the aforementioned decision and resolution of the Court of Appeals on the ground that the appellate court erred in reversing the Orders of the Secretary of Labor. For our resolution are the following issues: I. WHETHER OR NOT THE SECRETARY OF LABOR GRAVELY ABUSED ITS DISCRETION IN CERTIFYING THE LABOR DISPUTE TO THE NLRC FOR COMPULSORY ARBITRATION. II. WHETHER OR NOT THE RETRENCHED EMPLOYEES SHOULD BE EXCLUDED FROM THE OPERATION OF THE RETURN TO WORK ORDER. While this Court prefers to rule on the issue of the validity of the retrenchment program as well as on the questions on the legality or illegality of the strike, and on the individual liabilities of the strikers, if any, we cannot put an end to this protracted labor dispute, however, without preempting the NLRC in the disposition of these [18] issues and thereby transgressing the elementary doctrine of primary jurisdiction. The pivotal issue in this petition centers on whether or not the retrenched employees should be excluded from the coverage of the returnto-work-order. YSSEU maintains that once a labor dispute is certified to the NLRC for compulsory arbitration, the employer should readily admit all striking employees under the status quo ante. It argues that the primary reason why the strike was conducted in the first place was to protest the implementation of the retrenchment program, which clearly discriminated against union officers and members. It bears to stress that out of the 11 employees affected by retrenchment, four are union officers and five are union members. YSS Laboratories, on the other hand, insists that those employees who were already separated from service due to a valid retrenchment should not be readmitted back to work anymore. It avers that the retrenched employees were chosen after a thorough evaluation of their work performance, including their frequencies of absence and tardiness, and their respective lengths of service, rendering YSSEUs claims of discrimination and union busting, preposterous. The petition is impressed with merit. The Orders dated 11 May 2001 and 9 June 2001 of the Secretary of Labor, certifying the labor dispute involving the herein parties to the NLRC for compulsory arbitration, and enjoining YSSEU to return to work and YSS Laboratories to admit them under the same terms and conditions prevailing before the strike, were issued pursuant to Article 263(g) of the Labor Code. Said provision reads: Art. 263. Strikes, picketing, and lockouts. xxxx (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. (Emphasis supplied.)

After martial law was lifted and democracy was restored, the assumption of jurisdiction in Art. 263(g) has now [19] been viewed as an exercise of the police power of the State with the aim of promoting the common good : [I]t must be noted that Articles 263 (g) and 264 of the Labor Code have been enacted pursuant to the police power of the State, which has been defined as the power inherent in a government to enact laws, within constitutional limits, to promote the order, safety, health, morals and general welfare of society. The police power, together with the power of eminent domain and the power of taxation, is an inherent power of government and does not [20] need to be expressly conferred by the Constitution. x x x. The grant of these plenary powers to the Secretary of Labor makes it incumbent upon him to bring about soonest, a fair and just solution to the differences between the employer and the employees, so that the damage such labor dispute might cause upon the national interest may be minimized as much as possible, if not totally averted, by avoiding stoppage of work or any lag in the activities of the industry or the possibility of those contingencies that [21] might cause detriment to the national interest. In order to effectively achieve such end, the assumption or certification order shall have the effect of automatically enjoining the intended or impending strike or lockout. Moreover, if one has already taken place, all striking workers shall immediately return to work, and the employer shall immediately resume operations and readmit all [22] workers under the same terms and conditions prevailing before the strike or lockout. YSS Laboratories vigorous insistence on the exclusion of the retrenched employees from the coverage of the return-to-work order seriously impairs the authority of the Secretary of Labor to forestall a labor dispute that he deems inimical to the national economy. The Secretary of Labor is afforded plenary and broad powers, and is granted great breadth of discretion to adopt the most reasonable and expeditious way of writing finis to the labor [23] dispute. Accordingly, when the Secretary of Labor directed YSS Laboratories to accept all the striking workers back to work, the Secretary did not exceed his jurisdiction, or gravely abuse the same. It is significant at this point to point out that grave abuse of discretion implies a capricious and whimsical exercise of judgment. Thus, an act may be considered as committed in grave abuse of discretion when the same is performed in a capricious or whimsical exercise of judgment, which is equivalent to lack of jurisdiction. The abuse of discretion must be so patent and gross as to amount to an evasion of a positive duty or to a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law, as where the power is exercised in an arbitrary and despotic manner by reason [24] of passion or personal hostility. In the case at bar, there is no showing that the assailed orders were issued in an arbitrary or despotic manner. The Orders dated 11 May 2001 and 9 June 2001 were issued by the Secretary of Labor, with the end in view of preserving the status quo ante while the main issues of the validity of the retrenchment and legality of the strike were being threshed out in the proper forum. This was done for the promotion of the common good, considering that a lingering strike could be inimical to the interest of both employer and employee. The Secretary of Labor acts to maintain industrial peace. Thus, his certification for compulsory arbitration is not intended to interfere with the managements rights but to obtain a speedy [25] settlement of the dispute. This is well-articulated in International Pharmaceuticals, Inc. v. Secretary of Labor, as follows: Plainly, Article 263 (g) of the Labor Code was meant to make both the Secretary (or the various regional directors) and the labor arbiters share jurisdiction, subject to certain conditions. Otherwise, the Secretary would not be able to effectively and efficiently dispose of the primary dispute. To hold the contrary may even lead to the absurd and undesirable result wherein the Secretary and the labor arbiter concerned may have diametrically opposed rulings. As we have said, (i)t is fundamental that a statute is to be read in a manner that would breathe life into it, rather than defeat it. By harping on the validity of the retrenchment and on the exclusion of the retrenched employees from the coverage of the return-to-work order, YSS Laboratories undermines the underlying principle embodied in Article 263(g) of the Labor Code on the settlement of labor disputes -- that assumption and certification orders are executory in character and are to be strictly complied with by the parties, even during the pendency of any

petition questioning their validity. Regardless therefore of its motives, or of the validity of its claims, YSS Laboratories must readmit all striking employees and give them back their respective jobs. Accepting back the workers in this case is not a matter of option, but of obligation mandated by law for YSS Laboratories to faithfully comply with. Its compulsory character is mandated, not to cater to a narrow segment of society, or to favor labor at the expense of management, but to serve the greater interest of society by maintaining the economic equilibrium. Instructive is the ruling of this Court in Philippine Airlines Employees Association v. Philippine Airlines, Inc. : The very nature of a return-to-work order issued in a certified case lends itself to no other construction. The certification attests to the urgency of the matter, affecting as it does an industry indispensable to the national interest. The order is issued in the exercise of the courts compulsory power of arbitration, and therefore must be obeyed until set aside. x x x. Certainly, the determination of who among the strikers could be admitted back to work cannot be made to depend upon the discretion of employer, lest we strip the certification or assumption-of-jurisdiction orders of the coercive power that is necessary for attaining their laudable objective. The return-to-work order does not interfere with the managements prerogative, but merely regulates it when, in the exercise of such right, national interests will be affected. The rights granted by the Constitution are not absolute. They are still subject to control and limitation to ensure that they are not exercised arbitrarily. The interests of both the employers and employees are intended to be protected and not one of them is given undue preference. WHEREFORE, premises considered, the instant Petition is GRANTED. The Decision dated 26 November 2001 and Resolution dated 29 August 2002 of the Court of Appeals in CA-G.R. SP No. 66095 are REVERSED and SET ASIDE. The Orders dated 11 May 2001 and 9 June 2001 of the Secretary of the Department of Labor and Employment in NCMB-NCR-NS-03-086-01/08-AJ-0006-2001 are thereby REINSTATED. No costs. SO ORDERED.
[26]

G.R. No. 163942

November 11, 2008

NATIONAL UNION OF WORKERS IN THE HOTEL RESTAURANT AND ALLIED INDUSTRIES (NUWHRAIN-APL-IUF) DUSIT HOTEL NIKKO CHAPTER, petitioner, vs. THE HONORABLE COURT OF APPEALS (Former Eighth Division), THE NATIONAL LABOR RELATIONS COMMISSION (NLRC), PHILIPPINE HOTELIERS INC., owner and operator of DUSIT HOTEL NIKKO and/or CHIYUKI FUJIMOTO, and ESPERANZA V. ALVEZ, respondents. x----------------------------------------x G.R. No. 166295 November 11, 2008

NUWHRAIN-DUSIT HOTEL NIKKO CHAPTER, petitioner, vs. SECRETARY OF LABOR AND EMPLOYMENT and PHILIPPINE HOTELIERS, INC., respondents. DECISION VELASCO, JR., J.: In G.R. No. 163942, the Petition for Review on Certiorari under Rule 45 of the National Union of Workers in the Hotel Restaurant and Allied Industries Dusit Hotel Nikko Chapter (Union) seeks to set aside the January 19, 2004 1 2 Decision and June 1, 2004 Resolution of the Court of Appeals (CA) in CA-G.R. SP No. 76568 which affirmed the 3 October 9, 2002 Decision of the National Labor Relations Commission (NLRC) in NLRC NCR CC No. 000215-02. In G.R. No. 166295, the Petition for Certiorari under Rule 65 of the Union seeks to nullify the May 6, 2004 4 5 Decision and November 25, 2004 Resolution of the CA in CA-G.R. SP No. 70778 which affirmed the January 31, 6 7 2002 and March 15, 2002 Orders of the Secretary of Labor and Employment, Patricia A. Sto. Tomas (Secretary). Evolution of the Present Petitions The Union is the certified bargaining agent of the regular rank-and-file employees of Dusit Hotel Nikko (Hotel), a five star service establishment owned and operated by Philippine Hoteliers, Inc. located in Makati City. Chiyuki Fuijimoto and Esperanza V. Alvez are impleaded in their official capacities as the Hotel's General Manager and Director of Human Resources, respectively. On October 24, 2000, the Union submitted its Collective Bargaining Agreement (CBA) negotiation proposals to the Hotel. As negotiations ensued, the parties failed to arrive at mutually acceptable terms and conditions. Due to the bargaining deadlock, the Union, on December 20, 2001, filed a Notice of Strike on the ground of the bargaining deadlock with the National Conciliation and Mediation Board (NCMB), which was docketed as NCMB-NCR-NS-12369-01. Thereafter, conciliation hearings were conducted which proved unsuccessful. Consequently, a Strike 8 Vote was conducted by the Union on January 14, 2002 on which it was decided that the Union would wage a strike. Soon thereafter, in the afternoon of January 17, 2002, the Union held a general assembly at its office located in the Hotel's basement, where some members sported closely cropped hair or cleanly shaven heads. The next day, or on January 18, 2002, more male Union members came to work sporting the same hair style. The Hotel prevented these workers from entering the premises claiming that they violated the Hotel's Grooming Standards.

In view of the Hotel's action, the Union staged a picket outside the Hotel premises. Later, other workers were also prevented from entering the Hotel causing them to join the picket. For this reason the Hotel experienced a severe lack of manpower which forced them to temporarily cease operations in three restaurants. Subsequently, on January 20, 2002, the Hotel issued notices to Union members, preventively suspending them and charging them with the following offenses: (1) violation of the duty to bargain in good faith; (2) illegal picket; (3) unfair labor practice; (4) violation of the Hotel's Grooming Standards; (5) illegal strike; and (6) commission of illegal acts during the illegal strike. The next day, the Union filed with the NCMB a second Notice of Strike on the ground of unfair labor practice and violation of Article 248(a) of the Labor Code on illegal lockout, which was docketed as NCMB-NCR-NS-01-019-02. In the meantime, the Union officers and members submitted their explanations to the charges alleged by the Hotel, while they continued to stage a picket just inside the Hotel's compound. On January 26, 2002, the Hotel terminated the services of twenty-nine (29) Union officers and sixty-one (61) members; and suspended eighty-one (81) employees for 30 days, forty-eight (48) employees for 15 days, four (4) employees for 10 days, and three (3) employees for five days. On the same day, the Union declared a strike. Starting that day, the Union engaged in picketing the premises of the Hotel. During the picket, the Union officials and members unlawfully blocked the ingress and egress of the Hotel premises. Consequently, on January 31, 2002, the Union filed its third Notice of Strike with the NCMB which was docketed as NCMB-NCR-NS-01-050-02, this time on the ground of unfair labor practice and union-busting. On the same day, the Secretary, through her January 31, 2002 Order, assumed jurisdiction over the labor dispute and certified the case to the NLRC for compulsory arbitration, which was docketed as NLRC NCR CC No. 000215-02. The Secretary's Order partly reads: WHEREFORE, in order to have a complete determination of the bargaining deadlock and the other incidents of the dispute, this Office hereby consolidates the two Notices of Strike - NCMB-NCR-NS-12-369-01 and NCMB-NCR-NS01-019-02 - and CERTIFIES the entire labor dispute covered by these Notices and the intervening events, to the NATIONAL LABOR RELATIONS COMMISSION for compulsory arbitration pursuant to Article 263 (g) of the Labor Code, as amended, under the following terms: xxxx d. the Hotel is given the option, in lieu of actual reinstatement, to merely reinstate the dismissed or suspended workers in the payroll in light of the special circumstances attendant to their reinstatement; xxxx SO ORDERED. (Emphasis added.) Pursuant to the Secretary's Order, the Hotel, on February 1, 2002, issued an Inter-Office Memorandum, directing some of the employees to return to work, while advising others not to do so, as they were placed under payroll reinstatement. Unhappy with the Secretary's January 31, 2002 Order, the Union moved for reconsideration, but the same was denied per the Secretary's subsequent March 15, 2002 Order. Affronted by the Secretary's January 31, 2002 and March 15, 2002 Orders, the Union filed a Petition for Certiorari with the CA which was docketed as CA-G.R. SP No. 70778.
9

Meanwhile, after due proceedings, the NLRC issued its October 9, 2002 Decision in NLRC NCR CC No. 000215-02, in which it ordered the Hotel and the Union to execute a CBA within 30 days from the receipt of the decision. The NLRC also held that the January 18, 2002 concerted action was an illegal strike in which illegal acts were committed by the Union; and that the strike violated the "No Strike, No Lockout" provision of the CBA, which thereby caused the dismissal of 29 Union officers and 61 Union members. The NLRC ordered the Hotel to grant the 61 dismissed Union members financial assistance in the amount of month's pay for every year of service or their retirement benefits under their retirement plan whichever was higher. The NLRC explained that the strike which occurred on January 18, 2002 was illegal because it failed to comply with the mandatory 30-day cooling-off 10 11 period and the seven-day strike ban, as the strike occurred only 29 days after the submission of the notice of strike on December 20, 2001 and only four days after the submission of the strike vote on January 14, 2002. The NLRC also ruled that even if the Union had complied with the temporal requirements mandated by law, the strike would nonetheless be declared illegal because it was attended by illegal acts committed by the Union officers and members. The Union then filed a Motion for Reconsideration of the NLRC's Decision which was denied in the February 7, 2003 NLRC Resolution. Unfazed, the Union filed a Petition for Certiorari under Rule 65 with the CA, docketed as CA-G.R. SP No. 76568, and assailed both the October 9, 2002 Decision and the February 7, 2003 Resolution of the NLRC. Soon thereafter, the CA promulgated its January 19, 2004 Decision in CA-G.R. SP No. 76568 which dismissed the Union's petition and affirmed the rulings of the NLRC. The CA ratiocinated that the Union failed to demonstrate that the NLRC committed grave abuse of discretion and capriciously exercised its judgment or exercised its power in an arbitrary and despotic manner. For this reason, the Union filed a Motion for Reconsideration which the CA, in its June 1, 2004 Resolution, denied for lack of merit. In the meantime, the CA promulgated its May 6, 2004 Decision in CA-G.R. SP No. 70778 which denied due course to and consequently dismissed the Union's petition. The Union moved to reconsider the Decision, but the CA was unconvinced and denied the motion for reconsideration in its November 25, 2004 Resolution. Thus, the Union filed the present petitions. The Union raises several interwoven issues in G.R. No. 163942, most eminent of which is whether the Union conducted an illegal strike. The issues presented for resolution are: -AWHETHER OR NOT THE UNION, THE 29 UNION OFFICERS AND 61 MEMBERS MAY BE ADJUDGED GUILTY OF STAGING AN ILLEGAL STRIKE ON JANUARY 18, 2002 DESPITE RESPONDENTS' ADMISSION THAT THEY PREVENTED SAID OFFICERS AND MEMBERS FROM REPORTING FOR WORK FOR ALLEGED VIOLATION OF THE HOTEL'S GROOMING STANDARDS -BWHETHER OR NOT THE 29 UNION OFFICERS AND 61 MEMBERS MAY VALIDLY BE DISMISSED AND MORE THAN 200 MEMBERS BE VALIDLY SUSPENDED ON THE BASIS OF FOUR (4) SELF-SERVING AFFIDAVITS OF RESPONDENTS -C-

WHETHER OR NOT RESPONDENTS IN PREVENTING UNION OFFICERS AND MEMBERS FROM REPORTING FOR WORK 12 COMMITTED AN ILLEGAL LOCK-OUT In G.R. No. 166295, the Union solicits a riposte from this Court on whether the Secretary has discretion to impose "payroll" reinstatement when he assumes jurisdiction over labor disputes. The Court's Ruling The Court shall first dispose of G.R. No. 166295. According to the Union, there is no legal basis for allowing payroll reinstatement in lieu of actual or physical reinstatement. As argued, Art. 263(g) of the Labor Code is clear on this point. The Hotel, on the other hand, claims that the issue is now moot and any decision would be impossible to execute in view of the Decision of the NLRC which upheld the dismissal of the Union officers and members. The Union's position is untenable. The Hotel correctly raises the argument that the issue was rendered moot when the NLRC upheld the dismissal of the Union officers and members. In order, however, to settle this relevant and novel issue involving the breadth of the power and jurisdiction of the Secretary in assumption of jurisdiction cases, we now decide the issue on the merits instead of relying on mere technicalities. We held in University of Immaculate Concepcion, Inc. v. Secretary of Labor : With respect to the Secretary's Order allowing payroll reinstatement instead of actual reinstatement for the individual respondents herein, an amendment to the previous Orders issued by her office, the same is usually not allowed. Article 263(g) of the Labor Code aforementioned states that all workers must immediately return to work and all employers must readmit all of them under the same terms and conditions prevailing before the strike or lockout. The phrase "under the same terms and conditions" makes it clear that the norm is actual reinstatement. This is consistent with the idea that any work stoppage or slowdown in that particular industry can be detrimental 13 to the national interest. Thus, it was settled that in assumption of jurisdiction cases, the Secretary should impose actual reinstatement in accordance with the intent and spirit of Art. 263(g) of the Labor Code. As with most rules, however, this one is subject to exceptions. We held in Manila Diamond Hotel Employees' Union v. Court of Appeals that payroll reinstatement is a departure from the rule, and special circumstances which make actual reinstatement 14 impracticable must be shown. In one case, payroll reinstatement was allowed where the employees previously occupied confidential positions, because their actual reinstatement, the Court said, would be impracticable and 15 would only serve to exacerbate the situation. In another case, this Court held that the NLRC did not commit grave abuse of discretion when it allowed payroll reinstatement as an option in lieu of actual reinstatement for teachers 16 who were to be reinstated in the middle of the first term. We held that the NLRC was merely trying its best to 17 work out a satisfactory ad hoc solution to a festering and serious problem. The peculiar circumstances in the present case validate the Secretary's decision to order payroll reinstatement instead of actual reinstatement. It is obviously impracticable for the Hotel to actually reinstate the employees who shaved their heads or cropped their hair because this was exactly the reason they were prevented from working in the first place. Further, as with most labor disputes which have resulted in strikes, there is mutual antagonism, enmity, and animosity between the union and the management. Payroll reinstatement, most especially in this

case, would have been the only avenue where further incidents and damages could be avoided. Public officials entrusted with specific jurisdictions enjoy great confidence from this Court. The Secretary surely meant only to ensure industrial peace as she assumed jurisdiction over the labor dispute. In this case, we are not ready to substitute our own findings in the absence of a clear showing of grave abuse of discretion on her part. The issues raised in G.R. No. 163942, being interrelated, shall be discussed concurrently. To be determined whether legal or not are the following acts of the Union: (1) Reporting for work with their bald or cropped hair style on January 18, 2002; and (2) The picketing of the Hotel premises on January 26, 2002. The Union maintains that the mass picket conducted by its officers and members did not constitute a strike and was merely an expression of their grievance resulting from the lockout effected by the Hotel management. On the other hand, the Hotel argues that the Union's deliberate defiance of the company rules and regulations was a concerted effort to paralyze the operations of the Hotel, as the Union officers and members knew pretty well that they would not be allowed to work in their bald or cropped hair style. For this reason, the Hotel argues that the Union committed an illegal strike on January 18, 2002 and on January 26, 2002. We rule for the Hotel. Art. 212(o) of the Labor Code defines a strike as "any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute." In Toyota Motor Phils. Corp. Workers Association (TMPCWA) v. National Labor Relations Commission , we cited the various categories of an illegal strike, to wit: Noted authority on labor law, Ludwig Teller, lists six (6) categories of an illegal strike, viz.: (1) [when it] is contrary to a specific prohibition of law, such as strike by employees performing governmental functions; or (2) [when it] violates a specific requirement of law[, such as Article 263 of the Labor Code on the requisites of a valid strike]; or (3) [when it] is declared for an unlawful purpose, such as inducing the employer to commit an unfair labor practice against non-union employees; or (4) [when it] employs unlawful means in the pursuit of its objective, such as a widespread terrorism of non-strikers [for example, prohibited acts under Art. 264(e) of the Labor Code]; or (5) [when it] is declared in violation of an existing injunction[, such as injunction, prohibition, or order issued by the DOLE Secretary and the NLRC under Art. 263 of the Labor Code]; or (6) [when it] is contrary to an existing agreement, such as a no-strike clause or conclusive arbitration clause.
18

With the foregoing parameters as guide and the following grounds as basis, we hold that the Union is liable for conducting an illegal strike for the following reasons:

First, the Union's violation of the Hotel's Grooming Standards was clearly a deliberate and concerted action to undermine the authority of and to embarrass the Hotel and was, therefore, not a protected action. The appearances of the Hotel employees directly reflect the character and well-being of the Hotel, being a five-star hotel that provides service to top-notch clients. Being bald or having cropped hair per se does not evoke negative or unpleasant feelings. The reality that a substantial number of employees assigned to the food and beverage outlets of the Hotel with full heads of hair suddenly decided to come to work bald-headed or with cropped hair, however, suggests that something is amiss and insinuates a sense that something out of the ordinary is afoot. Obviously, the Hotel does not need to advertise its labor problems with its clients. It can be gleaned from the records before us that the Union officers and members deliberately and in apparent concert shaved their heads or cropped their hair. This was shown by the fact that after coming to work on January 18, 2002, some Union members even had their heads shaved or their hair cropped at the Union office in the Hotel's basement. Clearly, the decision to violate the company rule on grooming was designed and calculated to place the Hotel management on its heels and to force it to agree to the Union's proposals. In view of the Union's collaborative effort to violate the Hotel's Grooming Standards, it succeeded in forcing the Hotel to choose between allowing its inappropriately hair styled employees to continue working, to the detriment of its reputation, or to refuse them work, even if it had to cease operations in affected departments or service units, which in either way would disrupt the operations of the Hotel. This Court is of the opinion, therefore, that the act of the Union was not merely an expression of their grievance or displeasure but, indeed, a calibrated and calculated act designed to inflict serious damage to the Hotel's finances or its reputation. Thus, we hold that the Union's concerted violation of the Hotel's Grooming Standards which resulted in the temporary cessation and disruption of the Hotel's operations is an unprotected act and should be considered as an illegal strike. Second, the Union's concerted action which disrupted the Hotel's operations clearly violated the CBA's "No Strike, No Lockout" provision, which reads: ARTICLE XXII - NO STRIKE/WORK STOPPAGE AND LOCKOUT SECTION 1. No Strikes The Union agrees that there shall be no strikes, walkouts, stoppage or slow-down of work, boycott, refusal to handle accounts, picketing, sit-down strikes, sympathy strikes or any other form of interference and/or interruptions with any of the normal operations of the HOTEL during the life of this Agreement. The facts are clear that the strike arose out of a bargaining deadlock in the CBA negotiations with the Hotel. The concerted action is an economic strike upon which the afore-quoted "no strike/work stoppage and lockout" 19 prohibition is squarely applicable and legally binding. Third, the Union officers and members' concerted action to shave their heads and crop their hair not only violated the Hotel's Grooming Standards but also violated the Union's duty and responsibility to bargain in good faith. By shaving their heads and cropping their hair, the Union officers and members violated then Section 6, Rule XIII of 20 the Implementing Rules of Book V of the Labor Code. This rule prohibits the commission of any act which will disrupt or impede the early settlement of the labor disputes that are under conciliation. Since the bargaining deadlock is being conciliated by the NCMB, the Union's action to have their officers and members' heads shaved was manifestly calculated to antagonize and embarrass the Hotel management and in doing so effectively disrupted the operations of the Hotel and violated their duty to bargain collectively in good faith.

Fourth, the Union failed to observe the mandatory 30-day cooling-off period and the seven-day strike ban before it conducted the strike on January 18, 2002. The NLRC correctly held that the Union failed to observe the mandatory periods before conducting or holding a strike. Records reveal that the Union filed its Notice of Strike on the ground of bargaining deadlock on December 20, 2001. The 30-day cooling-off period should have been until January 19, 2002. On top of that, the strike vote was held on January 14, 2002 and was submitted to the NCMB only on January 18, 2002; therefore, the 7-day strike ban should have prevented them from holding a strike until January 25, 2002. The concerted action committed by the Union on January 18, 2002 which resulted in the disruption of the Hotel's operations clearly violated the above-stated mandatory periods. Last, the Union committed illegal acts in the conduct of its strike. The NLRC ruled that the strike was illegal since, 21 as shown by the pictures presented by the Hotel, the Union officers and members formed human barricades and obstructed the driveway of the Hotel. There is no merit in the Union's argument that it was not its members but the Hotel's security guards and the police officers who blocked the driveway, as it can be seen that the guards and/or police officers were just trying to secure the entrance to the Hotel. The pictures clearly demonstrate the tense and highly explosive situation brought about by the strikers' presence in the Hotel's driveway. Furthermore, this Court, not being a trier of facts, finds no reason to alter or disturb the NLRC findings on this 22 matter, these findings being based on substantial evidence and affirmed by the CA. Factual findings of labor officials, who are deemed to have acquired expertise in matters within their respective jurisdictions, are generally 23 accorded not only respect but even finality, and bind us when supported by substantial evidence. Likewise, we are not duty-bound to delve into the accuracy of the factual findings of the NLRC in the absence of clear showing 24 that these were arrived at arbitrarily and/or bereft of any rational basis. What then are the consequent liabilities of the Union officers and members for their participation in the illegal strike? Regarding the Union officers and members' liabilities for their participation in the illegal picket and strike, Art. 264(a), paragraph 3 of the Labor Code provides that "[a]ny union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status x x x." The law makes a distinction between union officers and mere union members. Union officers may be validly terminated from employment for their participation in an illegal strike, while union members have to participate in and commit illegal acts for them to lose their 25 employment status. Thus, it is necessary for the company to adduce proof of the participation of the striking 26 employees in the commission of illegal acts during the strikes. Clearly, the 29 Union officers may be dismissed pursuant to Art. 264(a), par. 3 of the Labor Code which imposes the penalty of dismissal on "any union officer who knowingly participates in an illegal strike." We, however, are of the opinion that there is room for leniency with respect to the Union members. It is pertinent to note that the Hotel was able to prove before the NLRC that the strikers blocked the ingress to and egress from the Hotel. But it is quite apparent that the Hotel failed to specifically point out the participation of each of the Union members in the commission of illegal acts during the picket and the strike. For this lapse in judgment or diligence, we are constrained to reinstate the 61 Union members. Further, we held in one case that union members who participated in an illegal strike but were not identified to 27 have committed illegal acts are entitled to be reinstated to their former positions but without backwages. We then held in G & S Transport Corporation v. Infante:

With respect to backwages, the principle of a "fair day's wage for a fair day's labor" remains as the basic factor in determining the award thereof. If there is no work performed by the employee there can be no wage or pay unless, of course, the laborer was able, willing and ready to work but was illegally locked out, suspended or dismissed or otherwise illegally prevented from working. While it was found that respondents expressed their intention to report back to work, the latter exception cannot apply in this case. In Philippine Marine Officer's Guild v. Compaia Maritima, as affirmed in Philippine Diamond Hotel and Resort v. Manila Diamond Hotel Employees Union, the Court stressed that for this exception to apply, it is required that the strike be legal, a situation that 28 does not obtain in the case at bar. In this light, we stand by our recent rulings and reinstate the 61 Union members without backwages. WHEREFORE, premises considered, the CA's May 6, 2004 Decision in CA-G.R. SP No. 70778 is hereby AFFIRMED. The CA's January 19, 2004 Decision in CA-G.R. SP No. 76568 is hereby SET ASIDE. The October 9, 2002 Decision of the NLRC in NLRC NCR CC No. 000215-02 is hereby AFFIRMED withMODIFICATIONS, as follows: The 29 Union officials are hereby declared to have lost their employment status, to wit: 1. LEO ANTONIO ATUTUBO 2. EDWIN E. BALLESTEROS 3. LORETTA DIVINA DE LUNA 4. INISUSAN DE VELEZ 5. DENNIS HABER 6. MARITES HERNANDEZ 7. BERNARD HUGO 8. NORZAMIA INTAL 9. LAURO JAVIER 10. SHANE LAUZ 11. MAY BELEN LEANO 12. EDGAR LINGHON 13. MILAGROS LOPEZ 14. JOSE MUZONES 15. RAY NERVA 16. JESUS NONAN 17. MARLYN OLLERO 18. CATHY ORDUNA 19. REYNALDO RASING 20. JUSTO TABUNDA 21. BARTOLOME TALISAYON 22. JUN TESORO 23. LYNDON TESORO 24. SALVADOR TIPONES 25. SONNY UY 26. WILFREDO VALLES, JR. 27. MEL VILLAHUCO 28. EMMA Q. DANAO 29. JORDAN ALEJANDRO

The 61 Union members are hereby REINSTATED to their former positions without backwages: 1. DANILO AGUINALDO 2. CLARO ABRANTE 3. FELIX ARRIESGADO 4. DAN BAUTISTA 5. MA. THERESA BONIFACIO 6. JUAN BUSCANO 7. ELY CHUA 8. ALLAN DELAGON 9. FRUMENCIO DE LEON 10. ELLIE DEL MUNDO 11. EDWIN DELOS CIENTOS 12. SOLOMON DIZON 13. YLOTSKI DRAPER 14. ERLAND COLLANTES 15. JONAS COMPENIDO 16. RODELIO ESPINUEVA 17. ARMANDO ESTACIO 18. SHERWIN FALCES 19. JELA FRANZUELA 20. REY GEALOGO 21. ALONA GERNOMINO 22. VINCENT HEMBRADOR 23. ROSLYN IBARBIA 24. JAIME IDIOMA, JR. 25. OFELIA LLABAN 26. RENATON LUZONG 27. TEODULO MACALINO 28. JAKE MACASAET 29. HERNANIE PABILONIA 30. HONORIO PACIONE 31. ANDREA VILLAFUERTE 32. MARIO PACULAN 33. JULIO PAJINAG 34. JOSELITO PASION 35. VICENTE PASIOLAN 36. HAZEL PENA 37. PEDRO POLLANTE 38. EDUARDO RAMOS 39. IMELDA RASIN 40. DELFIN RAZALAN 41. EVANGELINE REYES 42. RODOLFO REYES 43. BRIGILDO RUBIO 44. RIO SALCEDO

45. JUANITO SANCHEZ 46. MA. THERESA SANCHEZ 47. DONATO SAN AGUSTIN 48. RICARDO SOCORRO 49. VALERIO SOLIS 50. DOMINADOR SUAREZ 51. ORLANDO TABUGOCA 52. HELEN TALEON 53. ROBERT TANEGRA 54. LOURDES TAYAG 55. ROLANDO TOLENTINO 56. REYNALDO TRESNADO 57. RICHARD SABLADA 58. MAE YAP-DIANGCO 59. GILBERTO VEDASTO 60. DOMINGO VIDAROZAGA 61. DAN VILLANUEVA In view of the possibility that the Hotel might have already hired regular replacements for the afore-listed 61 employees, the Hotel may opt to pay SEPARATION PAY computed at one (1) month's pay for every year of service in lieu of REINSTATEMENT, a fraction of six (6) months being considered one year of service. SO ORDERED.

JACKBILT INDUSTRIES, INC., Petitioner, Present:

G.R. Nos. 171618-19

- versus -

YNARES-SANTIAGO, J., ** CARPIO, Acting Chairperson, CORONA, LEONARDO-DE CASTRO and *** BRION, JJ.

JACKBILT EMPLOYEES WORKERS UNION-NAFLU-KMU, Respondent. March 20, 2009

Promulgated:

x - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x DECISION CORONA, J.: This petition for review on certiorari seeks to reverse and set aside the July 13, 2005 decision and [3] February 9, 2006 resolution of the Court of Appeals in CA-G.R. SP No. 65208 and CA-G.R. SP No. 65425. Due to the adverse effects of the Asian economic crisis on the construction industry beginning 1997, petitioner Jackbilt Industries, Inc. decided to temporarily stop its business of producing concrete hollow blocks, compelling [4] most of its employees to go on leave for six months. Respondent Jackbilt Employees Workers Union-NAFLU-KMU immediately protested the temporary shutdown. Because its collective bargaining agreement with petitioner was expiring during the period of the shutdown, respondent claimed that petitioner halted production to avoid its duty to bargain collectively. The shutdown was allegedly motivated by anti-union sentiments. Accordingly, on March 9, 1998, respondent went on strike. Its officers and members picketed petitioners main gates and deliberately prevented persons and vehicles from going into and out of the compound. On March 19, 1998, petitioner filed a petition for injunction with a prayer for the issuance of a temporary restraining order (TRO) in the National Labor Relations Commission (NLRC). It sought to enjoin respondent from [6] obstructing free entry to and exit from its production facility. On April 14, 1998, the NLRC issued a TRO directing the respondents to refrain from preventing access to petitioners property. The reports of both the implementing officer and the investigating labor arbiter revealed, however, that respondent union violated the April 14, 1998 order. Union members, on various occasions, stopped and inspected private vehicles entering and exiting petitioners production facility. Thus, in a decision dated July 17, 1998, the [7] NLRC ordered the issuance of a writ of preliminary injunction. Meanwhile, petitioner sent individual memoranda to the officers and members of respondent who [8] participated in the strike ordering them to explain why they should not be dismissed for committing illegal acts in [9] the course of a strike. However, respondent repeatedly ignored petitioners memoranda despite the extensions
[5] [1] [2]

granted. Thus, on May 30, 1998, petitioner dismissed the concerned officers and members and barred them from entering its premises effective June 1, 1998. Aggrieved, respondent filed complaints for illegal lockout, runaway shop and damages, unfair labor [12] [13] practice, illegal dismissal and attorneys fees, and refusal to bargain on behalf of its officers and members against petitioner and its corporate officers. It argued that there was no basis for the temporary partial shutdown as it was undertaken by petitioner to avoid its duty to bargain collectively. Petitioner, on the other hand, asserted that because respondent conducted a strike without observing the [14] procedural requirements provided in Article 263 of the Labor Code, the March 9, 1998 strike was illegal. Furthermore, in view of the July 17, 1998 decision of the NLRC (which found that respondent obstructed the free ingress to and egress from petitioners premises), petitioner validly dismissed respondents officers and employees for committing illegal acts in the course of a strike. In a decision dated October 15, 1999, the labor arbiter dismissed the complaints for illegal lockout and unfair labor practice for lack of merit. However, because petitioner did not file a petition to declare the strike [16] illegal before terminating respondents officers and employees, it was found guilty of illegal dismissal. The dispositive portion of the decision read: WHEREFORE, judgment is hereby rendered finding [petitioner and its corporate officers] liable for the illegal dismissal of the 61 union officer and members of [respondent] and concomitantly, [petitioner and its corporate officers+ are hereby jointly and severally ordered to pay *respondents officers and members+ limited backwages from June 1, 1998 to October 4, 1998. [Petitioner and its corporate officers] are further ordered to pay [respondent s officers and members+ separation pay based on salary for every year of credited service, a fraction of at least 6 months to be considered as one whole year in lieu of reinstatement. The complaint for unfair labor practice, moral and exemplary damages and runaway shop are hereby disallowed for lack of merit. SO ORDERED.
[15] [11]

[10]

On December 28, 2000, the NLRC, on appeal, modified the decision of the labor arbiter. It held that only [17] petitioner should be liable for monetary awards granted to respondents officers and members. Both petitioner and respondent moved for reconsideration but they were denied for lack of merit.
[18]

Aggrieved, petitioner assailed the December 28, 2000 decision of the NLRC via a petition for certiorari in the CA. It asserted that the NLRC committed grave abuse of discretion in disregarding its July 17, 1998 [20] decision wherein respondents officers and employees were found to have committed illegal acts in the course [21] of the March 9, 1998 strike. In view thereof and pursuant to Article 264(a)(3) of the Labor Code, petitioner validly terminated respondents officers and employees. [22] The CA dismissed the petition but modified the December 28, 2000 decision of the NLRC. Because most of affected employees were union members, the CA held that the temporary shutdown was moved by anti-union sentiments. Petitioner was therefore guilty of unfair labor practice and, consequently, was ordered to pay respondents officers and employees backwages from March 9, 1998 (instead of June 1, 1998) to October 4, 1998 and separation pay of one month salary for every year of credited service. Petitioner moved for reconsideration but it was denied.
[23]

[19]

Thus, this recourse.

The primordial issue in this petition is whether or not the filing of a petition with the labor arbiter to declare a strike illegal is a condition sine qua non for the valid termination of employees who commit an illegal act in the course of such strike. Petitioner asserts that the filing of a petition to declare the strike illegal was unnecessary since the NLRC, in its July 17, 1998 decision, had already found that respondent committed illegal acts in the course of the strike. We grant the petition. The principle of conclusiveness of judgment, embodied in Section 47(c), Rule 39 of the Rules of [24] Court, holds that the parties to a case are bound by the findings in a previous judgment with respect to matters [25] actually raised and adjudged therein. Article 264(e) of the Labor Code prohibits any person engaged in picketing from obstructing the free ingress to and egress from the employers premises. Since respondent was found in the July 17, 1998 decision of the NLRC to have prevented the free entry into and exit of vehicles from petitioners compound, respondents officers and employees clearly committed illegal acts in the course of the March 9, 1998 strike. The use of unlawful means in the course of a strike renders such strike illegal. Therefore, pursuant to the principle of conclusiveness of judgment, the March 9, 1998 strike was ipso facto illegal. The filing of a petition to declare the strike illegal was thus unnecessary. Consequently, we uphold the legality of the dismissal of respondents officers and employees. Article 264 of the [27] Labor Code further provides that an employer may terminate employees found to have committed illegal acts in [28] [29] the course of a strike. Petitioner clearly had the legal right to terminate respondents officers and employees. WHEREFORE, the petition is hereby granted. The July 13, 2005 decision and February 9, 2006 resolution of the Court of Appeals in CA-G.R. SP No. 65208 and CA-G.R. SP No. 65425 are hereby REVERSED and SET ASIDE. The December 28, 2000 and March 6, 2001 resolutions of the National Labor Relations Commission in NLRCCA No. 022614-2000 are MODIFIED insofar as they affirmed the October 15, 1999 decision of the labor arbiter in NLRC-NCR-Case No. 00-06-05017-98 finding petitioner Jackbilt Industries, Inc. guilty of illegal dismissal for terminating respondents officers and employees. New judgment is hereby entered DISMISSING NLRC-NCR-Case No. 00-06-05017-98 for lack of merit. SO ORDERED.
[26]

G.R. No. 168382

June 6, 2011

AIRLINE PILOTS ASSOCIATION OF THE PHILIPPINES, Petitioner, vs. PHILIPPINE AIRLINES, INC., Respondent. DECISION DEL CASTILLO, J.: A judgment that has attained finality is immutable and could thus no longer be modified. By this Petition for Review on Certiorari, petitioner Airline Pilots Association of the Philippines (ALPAP) assails the 2 3 Decision dated December 22, 2004 and Resolution dated May 30, 2005 of the Court of Appeals (CA) in CA-G.R. SP No. 79686, which found no grave abuse of discretion on the part of Department of Labor and Employment (DOLE) Secretary Patricia A. Sto. Tomas (Sto. Tomas) and Acting Secretary Manuel G. Imson (Imson) in issuing their 4 5 6 respective letters dated July 30, 2003 and July 4, 2003, in connection with ALPAPs motions filed in NCMB NCR NS 12-514-97. Factual Antecedents The present controversy stemmed from a labor dispute between respondent Philippine Airlines, Inc. (PAL) and ALPAP, the legitimate labor organization and exclusive bargaining agent of all commercial pilots of PAL. Claiming 7 that PAL committed unfair labor practice, ALPAP filed on December 9, 1997, a notice of strike against respondent PAL with the DOLE, docketed as NCMB NCR NS 12-514-97. Upon PALs petition and considering that its continued operation is impressed with public interest, the DOLE Secretary assumed jurisdiction over the labor dispute per 8 Order dated December 23, 1997, the dispositive portion of which reads: WHEREFORE, this Office hereby assumes jurisdiction over the labor dispute at the Philippine Airlines, Inc. pursuant to Article 263 (g) of the Labor Code, as amended. Accordingly, all strikes and lockouts at the Philippine Airlines, Inc., whether actual or impending, are hereby strictly prohibited. The parties are also enjoined from committing any act that may exacerbate the situation. The parties are further directed to submit their respective position papers within ten (10) days from receipt of this Order. SO ORDERED.
9 1

In a subsequent Order dated May 25, 1998, the DOLE Secretary reiterated the prohibition contained in the December 23, 1997 Order. Despite such reminder to the parties, however, ALPAP went on strike on June 5, 1998. 11 This constrained the DOLE, through then Secretary Cresenciano B. Trajano, to issue a return-to-work order on June 7, 1998. However, it was only on June 26, 1998 when ALPAP officers and members reported back to work as 12 shown in a logbook signed by each of them. As a consequence, PAL refused to accept the returning pilots for their failure to comply immediately with the return-to-work order. On June 29, 1998, ALPAP filed with the Labor Arbiter a complaint for illegal lockout against PAL, docketed as NLRC NCR Case No. 00-06-05253-98. ALPAP contended that its counsel received a copy of the return-to-work order only on June 25, 1998, which justified their non-compliance therewith until June 26, 1998. It thus prayed that PAL be ordered to accept unconditionally all officers and members of ALPAP without any loss of pay and seniority and to pay whatever salaries and benefits due them pursuant to existing contracts of employment.
13

10

On PALs motion, the Labor Arbiter consolidated the illegal lockout case with NCMB NCR NS 12 -514-97 (strike case) pending before the DOLE Secretary since the controversy presented in the lockout case is an offshoot of the labor dispute over which the DOLE Secretary has assumed jurisdiction and because the factual allegations in both cases 14 15 are interrelated. In a Resolution dated January 18, 1999, the NLRC sustained the consolidation of the illegal lockout case with the strike case, opining that the DOLE Secretary has the authority to resolve all incidents attendant to his return-to-work order. Through then DOLE Secretary Bienvenido E. Laguesma, a Resolution dated June 1, 1999 was rendered in NCMB NCR NS 12-514-97, declaring the strike conducted by ALPAP on June 5, 1998 illegal and pronouncing the loss of employment status of its officers and members who participated in the strike in defiance of the June 7, 1998 return-to-work order. The decretal portion of the Resolution reads: WHEREFORE, PREMISES CONSIDERED, this Office hereby: a. x x x; b. DECLARES the strike conducted by ALPAP on June 5, 1998 and thereafter as illegal for being procedurally infirm and in open defiance of the return-to-work order of June 7, 1998 and, consequently, the strikers are deemed to have lost their employment status; and c. DISMISSES the complaint for illegal lockout for lack of merit. SO ORDERED.
17 16

In a Resolution dated July 23, 1999, ALPAPs motion for reconsideration was denied. Thus, ALPAP filed a Petition 19 for Certiorari with the CA assailing both the June 1, 1999 and July 23, 1999 DOLE Resolutions. The case was docketed as CA-G.R. SP No. 54880. Meanwhile, several ALPAP members filed separate individual complaints for illegal dismissal and non-payment of monetary benefits against PAL with the Labor Arbiters of the NLRC, questioning their termination as a result of the 20 strike staged by other ALPAP members on June 5, 1998. While these cases were pending, the CA, in CA-G.R. SP 21 No. 54880, affirmed and upheld the June 1, 1999 and July 23, 1999 DOLE Resolutions in its Decision dated August 22, 2001. ALPAP then sought a review of the CA Decision, thereby elevating the matter to this Court docketed as G.R. No. 152306. On April 10, 2002, this Court dismissed ALPAPs petition for failure to show that the CA 22 committed grave abuse of discretion or a reversible error. This Courts Resolution attained finality on August 29, 23 2002. Proceedings before the DOLE Secretary On January 13, 2003, ALPAP filed before the Office of the DOLE Secretary a Motion in NCMB NCR NS 12-514-97, requesting the said office to conduct an appropriate legal proceeding to determine who among its officers and members should be reinstated or deemed to have lost their employment with PAL for their actual participation in the strike conducted in June 1998. ALPAP contended that there is a need to conduct a proceeding in order to determine who actually participated in the illegal strike since not only the striking workers were dismissed by PAL but all of ALPAPs officers and members, even t hough some were on official leave or abroad at the time of the strike. It also alleged that there were some who joined the strike and returned to work but were asked to sign new contracts of employment, which abrogated their earned seniority. Also, there were those who initially defied the return-to-work order but immediately complied with the same after proper receipt thereof by ALPAPs counsel. However, PAL still refused to allow them to enter its premises. According to ALPAP, such measure, as to meet the requirements of due process, is essential because it
24

18

must be first established that a union officer or member has participated in the strike or has committed illegal acts before they could be dismissed from employment. In other words, a fair determination of who must suffer the consequences of the illegal strike is indispensable since a significant number of ALPAP members did not at all participate in the strike. The motion also made reference to the favorable recommendation rendered by the Freedom of Association Committee of the International Labour Organization (ILO) in ILO Case No. 2195 which requested the Philippine Government "to initiate discussions in order to consider the possible reinstatement in their previous employment of all ALPAPs workers who were dismissed following the strike staged in June 25 26 1998." A Supplemental Motion was afterwards filed by ALPAP on January 28, 2003, this time asking the DOLE Secretary to resolve all issues relating to the entitlement to employment benefits by the officers and members of ALPAP, whether terminated or not. In its Comment to ALPAPs motions, PAL argued that the motions cannot legally prosper since the DOLE Secretary has no authority to reopen or review a final judgment of the Supreme Court relative to NCMB NCR NS 12-514-97; that the requested proceeding is no longer necessary as the CA or this Court did not order the remand of the case to the DOLE Secretary for such determination; that the NLRC rather than the DOLE Secretary has jurisdiction over the motions as said motions partake of a complaint for illegal dismissal with monetary claims; and that all money claims are deemed suspended in view of the fact that PAL is under receivership. On January 24, 2003, the DOLE called the parties to a hearing to discuss and clarify the issues raised in ALPAPs 28 29 motions. In a letter dated July 4, 2003 addressed to ALPAP President, Capt. Ismael C. Lapus, Jr., then Acting DOLE Secretary, Imson, resolved ALPAPs motions in the following manner: xxxx After a careful consideration of the factual antecedents, applicable legal principles and the arguments of the parties, this Office concludes that NCMB-NCR-NS-12-514-97 has indeed been resolved with finality by the highest tribunal of the land, the Supreme Court. Being final and executory, this Office is bereft of authority to reopen an issue that has been passed upon by the Supreme Court. It is important to note that in pages 18 to 19 of ALPAPs Memorandum, it admitted that individual complaints for illegal dismissal have been filed by the affected pilots before the NLRC. It is therefore an implied recognition on the part of the pilots that the remedy to their present dilemma could be found in the NLRC. xxxx Thus, to avoid multiplicity of suits, splitting causes of action and forum-shopping which are all obnoxious to an orderly administration of justice, it is but proper to respect the final and executory order of the Supreme Court in this case as well as the jurisdiction of the NLRC over the illegal dismissal cases. Since ALPAP and the pilots have opted to seek relief from the NLRC, this Office should respect the authority of that Commission to resolve the dispute in the normal course of law. This Office will no longer entertain any further initiatives to split the jurisdiction or to shop for a forum that shall only foment multiplicity of labor disputes. Parties should not jump from one forum to another. This Office will make sure of that. By reason of the final ruling of the Honorable Supreme Court, the erring pilots have lost their employment status and second, because these pilots have filed cases to contest such loss before another forum, the Motion and Supplemental Motion of ALPAP as well as the arguments raised therein are merely NOTED by this Office. ALPAP filed its motion for reconsideration arguing that the issues raised in its motions have remained unresolved hence, it is the duty of DOLE to resolve the same it having assumed jurisdiction over the labor dispute. ALPAP also denied having engaged in forum shopping as the individual complainants who filed the cases before the NLRC are separate and distinct from ALPAP and that the causes of action therein are different. According to ALPAP, there
30 27

was clear abdication of duty when then Acting Secretary Imson refused to properly act on the motions. In a letter 31 dated July 30, 2003, Secretary Sto. Tomas likewise merely noted ALPAPs motion for reconsideration, reiterating the DOLEs stand to abide by the final and executory judgment of the Supreme Court. Proceedings before the Court of Appeals ALPAP filed a petition for certiorari with the CA, insisting that the assailed letters dated July 4, 2003 and July 30, 2003, which merely noted its motions, were issued in grave abuse of discretion. In their Comment, Sto. Tomas and Imson argued that the matter of who among ALPAPs members and officers participated in the strike was already raised and resolved by the CA and this Court. By filing the motions, ALPAP, in effect, initiated a termination case which is properly cognizable by the Labor Arbiter. And since several ALPAP members have already filed complaints for illegal dismissal and claims for salaries and benefits with the Labor Arbiter, ALPAP is thus engaging in forum-shopping when it filed the subject motions. PAL, on the other hand, also claimed in its Comment that ALPAP violated the principles governing forum shopping, res judicata and multiplicity of suits. It opined that when ALPAP questioned the loss of employment status of "all its officers and members and asked for their reinstatement" in its appeal to reverse the Decision of the DOLE Secretary in the consolidated strike and illegal lockout cases, the matter of who should be meted out the penalty of dismissal was already resolved with finality by this Court and could not anymore be modified. The CA, in its Decision dated December 22, 2004, dismissed the petition. It found no grave abuse of discretion on the part of Sto. Tomas and Imson in refusing to conduct the necessary proceedings to determine issues relating to ALPAP members employment status and entitlement to employment benefits. The CA held that both these issues were among the issues taken up and resolved in the June 1, 1999 DOLE Resolution which was affirmed by the CA in CA-G.R. SP No. 54880 and subsequently determined with finality by this Court in G.R. No. 152306. Therefore, said issues could no longer be reviewed. The CA added that Sto. Tomas and Imson merely acted in deference to the NLRCs jurisdiction over the illegal dismissal cases filed by individual ALPAP members. ALPAP moved for reconsideration which was denied for lack of merit in CA Resolution dated May 30, 2005. Hence, this petition. Issues I. WHETHER X X X THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT DECLARED THAT THE PUBLIC RESPONDENT DID NOT COMMIT GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK AND/OR EXCESS OF JURISDICTION WHEN IT REFUSED TO ACT ON ALPAPS MOTIONS AND MERELY NOTED THE SAME. II. WHETHER X X X THE HONORABLE COURT OF APPEALS COMMITTED GRAVE MISTAKE IN DECLARING THAT THE 01 JUNE 1999 RESOLUTION OF THE DEPARTMENT OF LABOR AND EMPLOYMENT HAS ALREADY TAKEN UP AND RESOLVED THE ISSUE OF WHO AMONG THE ALPAP MEMBERS ARE DEEMED TO HAVE LOST THEIR EMPLOYMENT 37 STATUS. ALPAP contends that it was erroneous for Sto. Tomas and Imson to merely take note of the motions when the issues raised therein sprang from the DOLE Secretarys exercise of authority to assume jurisdiction over a labor dispute which have nevertheless remained unresolved. ALPAP prays that the assailed letters dated July 4, 2003 and
36 35 34 33 32

July 30, 2003 be declared null and void. It likewise seeks for a conduct of a proceeding to determine who actually participated in the illegal strike of June 1998 and consequently who, from its vast membership, should be deemed to have lost employment status. Our Ruling We deny the petition. There was no grave abuse of discretion on the part of Sto. Tomas and Imson in m erely noting ALPAPs twin motions in due deference to a final and immutable judgment rendered by the Supreme Court. From the June 1, 1999 DOLE Resolution, which declared the strike of June 5, 1998 as illegal and pronounced all ALPAP officers and members who participated therein to have lost their employment status, an appeal was taken by ALPAP. This was dismissed by the CA in CA-G.R. SP No. 54880, which ruling was affirmed by this Court and which became final and executory on August 29, 2002. In the instant case, ALPAP seeks for a conduct of a proceeding to determine who among its members and officers actually participated in the illegal strike because, it insists, the June 1, 1999 DOLE Resolution did not make such determination. However, as correctly ruled by Sto. Tomas and Imson and affirmed by the CA, such proceeding would entail a reopening of a final judgment which could not be permitted by this Court. Settled in law is that once a decision has acquired finality, it becomes immutable and unalterable, thus can no longer be modified in any 38 39 respect. Subject to certain recognized exceptions, the principle of immutability leaves the judgment 40 undisturbed as "nothing further can be done except to execute it." True, the dispositive portion of the DOLE Resolution does not specifically enumerate the names of those who actually participated in the strike but only mentions that those strikers who failed to heed the return-to-work order are deemed to have lost their employment. This omission, however, cannot prevent an effective execution 41 of the decision. As was held in Reinsurance Company of the Orient, Inc. v. Court of Appeals, any ambiguity may be clarified by reference primarily to the body of the decision or supplementary to the pleadings previously filed in the case. In any case, especially when there is an ambiguity, "a judgment shall be read in connection with the entire record and construed accordingly."
42

There is no necessity to conduct a proceeding to determine the participants in the illegal strike or those who refused to heed the return to work order because the ambiguity can be cured by reference to the body of the decision and the pleadings filed.1avvphi1 A review of the records reveals that in NCMB NCR NS 12-514-97, the DOLE Secretary declared the ALPAP officers and members to have lost their employment status based on either of two grounds, viz: their participation in the illegal strike on June 5, 1998 or their defiance of the return-to-work order of the DOLE Secretary. The records of 43 the case unveil the names of each of these returning pilots. The logbook with the heading "Return To Work Compliance/ Returnees" bears their individual signature signifying their conformity that they were among those workers who returned to work only on June 26, 1998 or after the deadline imposed by DOLE. From this crucial and vital piece of evidence, it is apparent that each of these pilots is bound by the judgment. Besides, the complaint for illegal lockout was filed on behalf of all these returnees. Thus, a finding that there was no illegal lockout would be enforceable against them. In fine, only those returning pilots, irrespective of whether they comprise the entire membership of ALPAP, are bound by the June 1, 1999 DOLE Resolution. ALPAP harps on the inequity of PALs termination of its officers and members considering that so me of them were on leave or were abroad at the time of the strike. Some were even merely barred from returning to their work which excused them for not complying immediately with the return-to-work order. Again, a scrutiny of the records

of the case discloses that these allegations were raised at a very late stage, that is, after the judgment has finally decreed that the returning pilots termination was legal. Interestingly, these defenses were not raised and discussed when the case was still pending before the DOLE Secretary, the CA or even before this Court. We agree with the position taken by Sto. Tomas and Imson that from the time the return-to-work order was issued until this Court rendered its April 10, 2002 resolution dismissing ALPAPs petition, no ALPAP member has claimed that he was unable to comply with the return-to-work directive because he was either on leave, abroad or unable to report for some reason. These defenses were raised in ALPAPs twin motions only after the Resolution in G.R. No. 152306 reached finality in its last ditch effort to obtain a favorable ruling. It has been held that a proceeding may not be reopened upon grounds already available to the parties during the pendency of such proceedings; 44 otherwise, it may give way to vicious and vexatious proceedings. ALPAP was given all the opportunities to present its evidence and arguments. It cannot now complain that it was denied due process Relevant to mention at this point is that when NCMB NCR NS 12-514-97 (strike/illegal lockout case) was still pending, several complaints for illegal dismissal were filed before the Labor Arbiters of the NLRC by individual members of ALPAP, questioning their termination following the strike staged in June 1998. PAL likewise manifests 45 that there is a pending case involving a complaint for the recovery of accrued and earned benefits belonging to ALPAP members. Nonetheless, the pendency of the foregoing cases should not and could not affect the character of our disposition over the instant case. Rather, these cases should be resolved in a manner consistent and in accord with our present disposition for effective enforcement and execution of a final judgment. WHEREFORE, the petition is DENIED for lack of merit. The Decision of the Court of Appeals dated December 22, 2004 and Resolution dated May 30, 2005 in CA-G.R. SP No. 79686 are AFFIRMED. SO ORDERED.