G.R. No. 144315 July 17, 2006 PHILCOM EMPLOYEES UNION, petitioner, vs.

PHILIPPINE GLOBAL COMMUNICATIONS and PHILCOM CORPORATION, respondents. DECISION CARPIO, J.: The Case This is a petition for review1 to annul the Decision2 dated 31 July 2000 of the Court of Appeals in CAG.R. SP No. 53989. The Court of Appeals affirmed the assailed portions of the 2 October 1998 and 27 November 1998 Orders of the Secretary of Labor and Employment in OS-AJ-0022-97. The Facts The facts, as summarized by the Court of Appeals, are as follows: Upon the expiration of the Collective Bargaining Agreement (CBA) between petitioner Philcom Employees Union (PEU or union, for brevity) and private respondent Philippine Global Communications, Inc. (Philcom, Inc.) on June 30, 1997, the parties started negotiations for the renewal of their CBA in July 1997. While negotiations were ongoing, PEU filed on October 21, 1997 with the National Conciliation and Mediation Board (NCMB) National Capital Region, a Notice of Strike, docketed as NCMB-NCR-NS No. 10-435-97, due to perceived unfair labor practice committed by the company (Annex "1", Comment, p. 565, ibid.). In view of the filing of the Notice of Strike, the company suspended negotiations on the CBA which moved the union to file on November 4, 1997 another Notice of Strike, docketed as NCMB-NCR-NS No. 11-465-97, on the ground of bargaining deadlock (Annex "2", Comment, p. 566, ibid.) On November 11, 1997, at a conciliation conference held at the NCMB-NCR office, the parties agreed to consolidate the two (2) Notices of Strike filed by the union and to maintain the status quo during the pendency of the proceedings (Annex "3", Comment, p. 567, ibid.). On November 17, 1997, however, while the union and the company officers and representatives were meeting, the remaining union officers and members staged a strike at the company premises, barricading the entrances and egresses thereof and setting up a stationary picket at the main entrance of the building. The following day, the company immediately filed a petition for the Secretary of Labor and Employment to assume jurisdiction over the labor dispute in accordance with Article 263(g) of the Labor Code. On November 19, 1997, then Acting Labor Secretary Cresenciano B. Trajano issued an Order assuming jurisdiction over the dispute, enjoining any strike or lockout, whether threatened or actual, directing the parties to cease and desist from committing any act that may exacerbate the situation, directing the striking workers to return to work within twenty-four (24) hours from receipt of the Secretary's Order and for management to resume normal operations, as well as accept the workers back under the same terms and conditions prior to the strike. The parties were likewise required to submit their respective position papers and evidence within ten (10) days from receipt of said order (Annex "4", Comment, pp. 610-611, ibid.). On November 28, 1997, a second order was issued reiterating the previous directive to all striking employees to return to work immediately. On November 27, 1997, the union filed a Motion for Reconsideration assailing, among others, the authority of then Acting Secretary Trajano to assume jurisdiction over the labor dispute. Said motion was denied in an Order dated January 7, 1998. As directed, the parties submitted their respective position papers. In its position paper, the union raised the issue of the alleged unfair labor practice of the company hereunder enumerated as follows: "(a) PABX transfer and contractualization of PABX service and position; "(b) Massive contractualization; "(c) Flexible labor and additional work/function; "(d) Disallowance of union leave intended for union seminar; "(e) Misimplementation and/or non-implementation of employees' benefits like shoe allowance, rainboots, raincoats, OIC shift allowance, P450.00 monthly allowance, driving allowance, motorcycle award and full-time physician;

"(f) Non-payment, discrimination and/or deprivation of overtime, restday work, waiting/stand by time and staff meetings; "(g) Economic inducement by promotion during CBA negotiation; "(h) Disinformation scheme, surveillance and interference with union affairs; "(i) Issuance of memorandum/notice to employees without giving copy to union, change in work schedule at Traffic Records Section and ITTO policies; and "(j) Inadequate transportation allowance, water and facilities." (Annex A, Petition; pp. 110-182, ibid.) The company, on the other hand, raised in its position paper the sole issue of the illegality of the strike staged by the union (Annex B, Petition; pp. 302-320, ibid.). On the premise that public respondent Labor Secretary cannot rule on the issue of the strike since there was no petition to declare the same illegal, petitioner union filed on March 4, 1998 a Manifestation/Motion to Strike Out Portions of & Attachments in Philcom's Position Paper for being irrelevant, immaterial and impertinent to the issues assumed for resolution (Annex C, Petition; pp. 330-333, ibid.). In opposition to PEU's Manifestation/Motion, the company argued that it was precisely due to the strike suddenly staged by the union on November 17, 1997 that the dispute was assumed by the Labor Secretary. Hence, the case would necessarily include the issue of the legality of the strike (Opposition to PEU'S Motion to Strike Out; Annex F, Petition; pp. 389-393, ibid.).3 On 2 October 1998, the Secretary of Labor and Employment ("Secretary") issued the first assailed order. The pertinent parts of the Order read: Going now to the first issue at hand, a reading of the complaints charged by the Union as unfair labor practices would reveal that these are not so within the legal connotation of Article 248 of the Labor Code. On the contrary, these complaints are actually mere grievances which should have been processed through the grievance machinery or voluntary arbitration outlined under the CBA. The issues of flexible labor and additional functions, misimplementation or non-implementation of employee benefits, non-payment of overtime and other monetary claims and inadequate transportation allowance, are all a matter of implementation or interpretation of the economic provisions of the CBA subject to the grievance procedure. Neither do these complaints amount to gross violations which, thus, may be treated as unfair labor practices outside of the coverage of Article 261. The Union failed to convincingly show that there is flagrant and/or malicious refusal by the Company to comply with the economic provisions stipulated in the CBA. With respect to the charges of contractualization and economic inducement, this Office is convinced that the acts of said company qualify as a valid exercise of management prerogative. The act of the Company in contracting out work or certain services being performed by Union members should not be seen as an unfair labor practice act per se. First, the charge of massive contractualization has not been substantiated while the contractualization of the position of PABX operator is an isolated instance. Secondly, in the latter case, there was no proof that such contracting out interfered with, restrained or coerced the employees in the exercise of their right to self-organization. Thus, it is not unfair labor practice to contract out work for reason of reduction of labor cost through the acquisition of automatic machines. Likewise, the promotion of certain employees, who are incidentally members of the Union, to managerial positions is a prerogative of management. A promotion which is manifestly beneficial to an employee should not give rise to a gratuitous speculation that such a promotion was made simply to deprive the union of the membership of the promoted employee (Bulletin Publishing Co. v. Sanchez, et. al., G.R. No. 74425, October 7, 1986). There remains the issue on bargaining deadlock. The Company has denied the existence of any impasse in its CBA negotiations with the Union and instead maintains that it has been negotiating with the latter in good faith until the strike was initiated. The Union, on the other hand, contends otherwise and further prays that the remaining CBA proposals of the Union be declared reasonable and equitable and thus be ordered incorporated in the new CBA to be executed. As pointed out by the Union, there are already thirty-seven (37) items agreed upon by the parties during the CBA negotiations even before these were suspended. Prior to this Office's assumption over the case, the Company furnished the Union its improved CBA counter-

proposal on the matter of promotional and wage increases which however was rejected by the Union as divisive. Even as the Union has submitted its remaining CBA proposals for resolution, the Company remains silent on the matter. In the absence of any basis, other than the Union's position paper, on which this Office may make its determination of the reasonableness and equitableness of these remaining CBA proposals, this Office finds it proper to defer deciding on the matter and first allow the Company to submit its position thereon. We now come to the question of whether or not the strike staged by the Union on November 17, 1997 is illegal. The Company claims it is, having been held on grounds which are nonstrikeable, during the pendency of preventive mediation proceedings in the NCMB, after this Office has assumed jurisdiction over the dispute, and with the strikers committing prohibited and illegal acts. The Company further prays for the termination of some 20 Union officers who were positively identified to have initiated the alleged illegal strike. The Union, on the other hand, refuses to submit this issue for resolution. Considering the precipitous nature of the sanctions sought by the Company, i.e., declaration of illegality of the strike and the corresponding termination of the errant Union officers, this Office deems it wise to defer the summary resolution of the same until both parties have been afforded due process. The non-compliance of the strikers with the return-to-work orders, while it may warrant dismissal, is not by itself conclusive to hold the strikers liable. Moreover, the Union's position on the alleged commission of illegal acts by the strikers during the strike is still to be heard. Only after a full-blown hearing may the respective liabilities of Union officers and members be determined. The case of Telefunken Semiconductors Employees Union-FFW v. Secretary of Labor and Employment and Temic Telefunken Micro-Electronics (Phils.), Inc. (G.R. No. 122743 and 127215, December 12, 1997) is instructive on this point: It may be true that the workers struck after the Secretary of Labor and Employment had assumed jurisdiction over the case and that they may have failed to immediately return to work even after the issuance of a return-to-work order, making their continued strike illegal. For, a return-to-work order is immediately effective and executory notwithstanding the filing of a motion for reconsideration. But, the liability of each of the union officers and the workers, if any, has yet to be determined. xxx xxx xxx.4 The dispositive portion of the Order reads: WHEREFORE, in view of all the foregoing, judgment is hereby rendered as follows: The Union's Manifestation/Motion to Implead Philcom Corporation is hereby granted. Let summons be issued to respondent Philcom Corporation to appear before any hearing that may hereafter be scheduled and to submit its position paper as may be required. The Union's Manifestation/Motion to Strike Out Portions of and Attachments in Philcom's Position Paper is hereby denied for lack of merit. The Union's charges of unfair labor practice against the Company are hereby dismissed. Pending resolution of the issues of illegal strike and bargaining deadlock which are yet to be heard, all the striking workers are directed to return to work within twenty-four (24) hours from receipt of this Order and Philcom and/or Philcom Corporation are hereby directed to unconditionally accept back to work all striking Union officers and members under the same terms and conditions prior to the strike. The parties are directed to cease and desist from committing any acts that may aggravate the situation. Atty. Lita V. Aglibut, Officer-In-Charge of the Legal Service, this Department is hereby designated as the Hearing Officer to hear and receive evidence on all matters and issues arising from the present labor dispute and, thereafter, to submit a report/recommendation within twenty (20) days from the termination of the proceedings. The parties are further directed to file their respective position papers with Atty. Lita V. Aglibut within ten (10) days from receipt of this Order. SO ORDERED.5 Philcom Corporation ("Philcom") filed a motion for reconsideration. Philcom prayed for reconsideration of the Order impleading it as party-litigant in the present case and directing it to accept back to work unconditionally all the officers and members of the union who participated in the strike.6 Philcom also filed a Motion to Certify Labor Dispute to the National Labor Relations Commission for Compulsory Arbitration.7

For its part, Philcom Employees Union (PEU) filed a Motion for Partial Reconsideration. PEU asked the Secretary to "partially reconsider" the 2 October 1998 Order insofar as it dismissed the unfair labor practices charges against Philcom and included the illegal strike issue in the labor dispute.8 The Secretary denied both motions for reconsideration of Philcom and PEU in its assailed Order of 27 November 1998. The pertinent parts of the Order read: The question of whether or not Philcom Corporation should be impleaded has been properly disposed of in the assailed Order. We reiterate that neither the Company herein nor its predecessor was able to convincingly establish that each is a separate entity in the absence of any proof that there was indeed an actual closure and cessation of the operations of the predecessor-company. We would have accommodated the Company for a hearing on the matter had it been willing and prepared to submit evidence to controvert the finding that there was a mere merger. As it now stands, nothing on record would prove that the two (2) companies are separate and distinct from each other. Having established that what took place was a mere merger, we correspondingly conclude that the employer-employee relations between the Company and the Union officers and members was never severed. And in merger, the employees of the merged companies or entities are deemed absorbed by the new company (Filipinas Port Services, Inc. v. NLRC, et. al., G.R. No. 97237, August 16, 1991). Considering that the Company failed miserably to adduce any evidence to provide a basis for a contrary ruling, allegations to the effect that employeremployee relations and positions previously occupied by the workers no longer exist remain just that mere allegations. Consequently, the Company cannot now exempt itself from compliance with the Order. Neither can it successfully argue that the employees were validly dismissed. As held in Telefunken Semiconductor Employees Union-FFW v. Secretary of Labor and Employment (G.R. Nos. 122743 and 122715, December 12, 1997), to exclude the workers without first ascertaining the extent of their individual participation in the strike or noncompliance with the return-to-work orders will be tantamount to dismissal without due process of law. With respect to the unfair labor practice charges against the Company, we have carefully reviewed the records and found no reason to depart from the findings previously rendered. The issues now being raised by the Union are the same issues discussed and passed upon in our earlier Order. Finally, it is our determination that the issue of the legality of the strike is well within the jurisdiction of this Office. The same has been properly submitted and assumed jurisdiction by the Office for resolution.9 The dispositive portion of the Order reads: WHEREFORE, there being no merit in the remaining Motions for Reconsideration filed by both parties, the same are hereby DENIED. Our 2 October 1998 Order STANDS. To expedite the resolution of the Motion to Certify Labor Dispute to the NLRC for Compulsory Arbitration, Philcom Employees Union is hereby directed to submit its Opposition thereto within ten (10) days from receipt of the copy of this Order. SO ORDERED.10 PEU filed with this Court a petition for certiorari and prohibition under Rule 65 of the Rules of Court assailing the Secretary's Orders of 2 October 1998 and 27 November 1998. This Court, in accordance with its Decision of 10 March 1999 in G.R. No. 123426 entitled National Federation of Labor (NFL) vs. Hon. Bienvenido E. Laguesma, Undersecretary of the Department of Labor and Employment, and Alliance of Nationalist Genuine Labor Organization, Kilusang Mayo Uno (ANGLO-KMU),11 referred the case to the Court of Appeals.12 The Ruling of the Court of Appeals On 31 July 2000, the Court of Appeals rendered judgment as follows: WHEREFORE, PREMISES CONSIDERED, this petition is hereby DENIED. The assailed portions of the Orders of the Secretary of Labor and Employment dated October 2, 1998 and November 27, 1998 are AFFIRMED. SO ORDERED.13 The Court of Appeals ruled that, contrary to PEU's view, the Secretary could take cognizance of an issue, even only incidental to the labor dispute, provided the issue must be involved in the labor dispute itself or otherwise submitted to him for resolution.

The Court of Appeals pointed out that the Secretary assumed jurisdiction over the labor dispute upon Philcom's petition as a consequence of the strike that PEU had declared and not because of the notices of strike that PEU filed with the National Conciliation and Mediation Board (NCMB). The Court of Appeals stated that the reason of the Secretary's assumption of jurisdiction over the labor dispute was the staging of the strike. Consequently, any issue regarding the strike is not merely incidental to the labor dispute between PEU and Philcom, but also part of the labor dispute itself. Thus, the Court of Appeals held that it was proper for the Secretary to take cognizance of the issue on the legality of the strike. The Court of Appeals also ruled that for an employee to claim an unfair labor practice by the employer, the employee must show that the act charged as unfair labor practice falls under Article 248 of the Labor Code. The Court of Appeals held that the acts enumerated in Article 248 relate to the workers' right to self-organization. The Court of Appeals stated that if the act complained of has nothing to do with the acts enumerated in Article 248, there is no unfair labor practice. The Court of Appeals held that Philcom's acts, which PEU complained of as unfair labor practices, were not in any way related to the workers' right to self-organization under Article 248 of the Labor Code. The Court of Appeals held that PEU's complaint constitutes an enumeration of mere grievances which should have been threshed out through the grievance machinery or voluntary arbitration outlined in the Collective Bargaining Agreement (CBA). The Court of Appeals also held that even if by Philcom's acts, Philcom had violated the provisions of the CBA, still those acts do not constitute unfair labor practices under Article 248 of the Labor Code. The Court of Appeals held that PEU failed to show that those violations were gross or that there was flagrant or malicious refusal on the part of Philcom to comply with the economic provisions of the CBA. The Court of Appeals stated that as of 21 March 1989, as held in PAL vs. NLRC,14 violations of CBAs will no longer be deemed unfair labor practices, except those gross in character. Violations of CBAs, except those gross in character, are mere grievances resolvable through the appropriate grievance machinery or voluntary arbitration as provided in the CBAs. Hence, this petition. The Issues In assailing the Decision of the Court of Appeals, petitioner contends that: 1. The Honorable Court of Appeals has failed to faithfully adhere with the decisions of the Supreme Court when it affirmed the order/resolution of the Secretary of Labor denying the Union's Manifestation/Motion to Strike Out Portions of & Attachments in Philcom's Position Paper and including the issue of illegal strike notwithstanding the absence of any petition to declare the strike illegal. 2. The Honorable Court of Appeals has decided a question of substance in a way not in accord with law and jurisprudence when it affirmed the order/resolution of the Secretary of Labor dismissing the Union's charges of unfair labor practices. 3. The Honorable Court of Appeals has departed from the edict of applicable law and jurisprudence when it failed to issue such order mandating/directing the issuance of a writ of execution directing the Company to unconditionally accept back to work the Union officers and members under the same terms and conditions prior to the strike and as well as to pay their salaries/backwages and the monetary equivalent of their other benefits from October 6, 1998 to date.15 The Ruling of the Court The petition must fail. PEU contends that the Secretary should not have taken cognizance of the issue on the alleged illegal strike because it was not properly submitted to the Secretary for resolution. PEU asserts that after Philcom submitted its position paper where it raised the issue of the legality of the strike, PEU immediately opposed the same by filing its Manifestation/Motion to Strike Out Portions of and Attachments in Philcom's Position Paper. PEU asserts that it stated in its Manifestation/Motion that certain portions of Philcom's position paper and some of its attachments were "irrelevant, immaterial and impertinent to the issues assumed for resolution." Thus, PEU asserts that the Court of Appeals should not have affirmed the Secretary's order denying PEU's Manifestation/Motion. PEU also contends that, contrary to the findings of the Court of Appeals, the Secretary's assumption of jurisdiction over the labor dispute was based on the two notices of strike that PEU filed with the NCMB.

PEU asserts that only the issues on unfair labor practice and bargaining deadlock should be resolved in the present case. PEU insists that to include the issue on the legality of the strike despite its opposition would convert the case into a petition to declare the strike illegal. PEU's contentions are untenable. The Secretary properly took cognizance of the issue on the legality of the strike. As the Court of Appeals correctly pointed out, since the very reason of the Secretary's assumption of jurisdiction was PEU's declaration of the strike, any issue regarding the strike is not merely incidental to, but is essentially involved in, the labor dispute itself. Article 263(g) of the Labor Code provides: When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory arbitration. Such assumption or certification shall have the effect of automatically enjoining the intended or impending strike or lockout as specified in the assumption or certification order. If one has already taken place at the time of assumption or certification, all striking or locked out employees shall immediately return to work and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout. The Secretary of Labor and Employment or the Commission may seek the assistance of law enforcement agencies to ensure the compliance with this provision as well as with such orders as he may issue to enforce the same. x x x x. The powers granted to the Secretary under Article 263(g) of the Labor Code have been characterized as an exercise of the police power of the State, with the aim of promoting public good.16 When the Secretary exercises these powers, he is granted "great breadth of discretion" in order to find a solution to a labor dispute. The most obvious of these powers is the automatic enjoining of an impending strike or lockout or its lifting if one has already taken place.17 In this case, the Secretary assumed jurisdiction over the dispute because it falls in an industry indispensable to the national interest. As noted by the Secretary. [T]he Company has been a vital part of the telecommunications industry for 73 years. It is particularly noted for its expertise and dominance in the area of international telecommunications. Thus, it performs a vital role in providing critical services indispensable to the national interest. It is for this very reason that this Office strongly opines that any concerted action, particularly a prolonged work stoppage is fraught with dire consequences. Surely, the on-going strike will adversely affect not only the livelihood of workers and their dependents, but also the company's suppliers and dealers, both in the public and private sectors who depend on the company's facilities in the day-to-day operations of their businesses and commercial transactions. The operational viability of the company is likewise adversely affected, especially its expansion program for which it has incurred debts in the approximate amount of P2 Billion. Any prolonged work stoppage will also bring about substantial losses in terms of lost tax revenue for the government and would surely pose a serious set back in the company's modernization program. At this critical time when government is working to sustain the economic gains already achieved, it is the paramount concern of this Office to avert any unnecessary work stoppage and, if one has already occurred, to minimize its deleterious effect on the workers, the company, the industry and national economy as a whole.18 It is of no moment that PEU never acquiesced to the submission for resolution of the issue on the legality of the strike. PEU cannot prevent resolution of the legality of the strike by merely refusing to submit the issue for resolution. It is also immaterial that this issue, as PEU asserts, was not properly submitted for resolution of the Secretary. The authority of the Secretary to assume jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to national interest includes and extends to all questions and controversies arising from such labor dispute. The power is plenary and discretionary in nature to enable him to effectively and efficiently dispose of the dispute.19

Besides, it was upon Philcom's petition that the Secretary immediately assumed jurisdiction over the labor dispute on 19 November 1997.20 If petitioner's notices of strike filed on 21 October and 4 November 1997 were what prompted the assumption of jurisdiction, the Secretary would have issued the assumption order as early as those dates. Moreover, after an examination of the position paper21 Philcom submitted to the Secretary, we see no reason to strike out those portions which PEU seek to expunge from the records. A careful study of all the facts alleged, issues raised, and arguments presented in the position paper leads us to hold that the portions PEU seek to expunge are necessary in the resolution of the present case. On the documents attached to Philcom's position paper, except for Annexes MM-2 to MM-22 inclusive22 which deal with the supposed consolidation of Philippine Global Communications, Inc. and Philcom Corporation, we find the other annexes relevant and material in the resolution of the issues that have emerged in this case. PEU also claims that Philcom has committed several unfair labor practices. PEU asserts that there are "factual and evidentiary bases" for the charge of unfair labor practices against Philcom. On unfair labor practices of employers, Article 248 of the Labor Code provides: Unfair labor practices of employers. - It shall be unlawful for an employer to commit any of the following unfair labor practice: (a) To interfere with, restrain or coerce employees in the exercise of their right to selforganization; (b) To require as a condition of employment that a person or an employee shall not join a labor organization or shall withdraw from one to which he belongs; (c) To contract out services or functions being performed by union members when such will interfere with, restrain or coerce employees in the exercise of their rights to self-organization; (d) To initiate, dominate, assist or otherwise interfere with the formation or administration of any labor organization, including the giving of financial or other support to it or its organizers or supporters; (e) To discriminate in regard to wages, hours of work, and other terms and conditions of employment in order to encourage or discourage membership in any labor organization. x x x (f) To dismiss, discharge, or otherwise prejudice or discriminate against an employee for having given or being about to give testimony under this Code; (g) To violate the duty to bargain collectively as prescribed by this Code; (h) To pay negotiation or attorney's fees to the union or its officers or agents as part of the settlement of any issue in collective bargaining or any other dispute; or (i) To violate a collective bargaining agreement. Unfair labor practice refers to acts that violate the workers' right to organize. The prohibited acts are related to the workers' right to self-organization and to the observance of a CBA. Without that element, the acts, no matter how unfair, are not unfair labor practices.23 The only exception is Article 248(f), which in any case is not one of the acts specified in PEU's charge of unfair labor practice. A review of the acts complained of as unfair labor practices of Philcom convinces us that they do not fall under any of the prohibited acts defined and enumerated in Article 248 of the Labor Code. The issues of misimplementation or non-implementation of employee benefits, non-payment of overtime and other monetary claims, inadequate transportation allowance, water, and other facilities, are all a matter of implementation or interpretation of the economic provisions of the CBA between Philcom and PEU subject to the grievance procedure. We find it pertinent to quote certain portions of the assailed Decision, thus A reading of private respondent's justification for the acts complained of would reveal that they were actually legitimate reasons and not in anyway related to union busting. Hence, as to compelling employees to render flexible labor and additional work without additional compensation, it is the company's explanation that the employees themselves voluntarily took on work pertaining to other assignments but closely related to their job description when there was slack in the business which caused them to be idle. This was the case of the International Telephone Operators who tried telemarketing when they found themselves with so much free time due to the slowdown in the demand for international line services. With respect to the Senior Combination Technician at the Cebu branch who was allegedly made to do all around work, the same happened only once when the lineman was absent and the lineman's duty was his ultimate concern. Moreover, the new assignment of the technicians at CTSS who were

promoted to QCE were based on the job description of QCE, while those of the other technicians were merely temporary due to the promotion of several technicians to QCE (pars. 9-12, Philcom's Reply to PEU's Position Paper; Annex "E", Petition; pp. 350-351, ibid.). On the alleged misimplementation and/or non-implementation of employees' benefits, such as shoe allowance, rainboots, raincoats, OIC shift allowance, P450.00 monthly allowance, driving allowance, motorcycle award and full-time physician, the company gave the following explanation which this Court finds plausible, to wit: 16. The employees at CTSS were given One Thousand Pesos (P1,000.00) cash or its equivalent in purchase orders because it was their own demand that they be given the option to buy the pair of leather boots they want. For the Cebu branch, the employees themselves failed to include these benefits in the list of their demands during the preparation of the budget for the year 1997 despite the instruction given to them by the branch manager. According to the employees, they were not aware that they were entitled to these benefits. They thought that because they have been provided with two vans to get to their respective assignments, these benefits are available only to collectors, messengers and technicians in motorcycles. 17. The P450.00 monthly allowance was provided by the CBA to be given to counter clerks. However, the position of counter clerks had been abolished in accordance with the reorganization plan undertaken by the company in April 1995, with the full knowledge of the Union membership. As a result of the abolition of the position of counter clerks, there was no more reason for granting the subject allowance. 18. The company more than satisfied the provision in the CBA to engage the services of a physician and provided adequate medical services. Aside from a part time physician who reports for duty everyday, the company has secured the services of Prolab Diagnostics, which has complete medical facilities and personnel, to serve the medical needs of the employees. x x x 19. The Union demands that a full-time physician to be assigned at the Head Office. This practice, is not provided in the CBA and, moreover is too costly to maintain. The medical services offered by Prolab [D]iagnostics are even better and more comprehensive than any full time physician can give. It places at the employees' disposal numerous specialists in various fields of medicine. It is beyond understanding why the Union would insist on having a full-time physician when they could avail of better services from Prolab Diagnostics. (Philcom's Reply to PEU's Position Paper, pp.352, 354, ibid.) On the issue of non-payment, discrimination and/or deprivation of overtime, restday work, waiting/stand by time and staff meeting allowance, suffice it to state that there is nothing on record to prove the same. Petitioner did not present evidence substantial enough to support its claim. As to the alleged inadequate transportation allowance and facilities, the company posits that: 30. The transportation allowances given to the Dasmarinas and Pinugay employees are more than adequate to defray their daily transportation cost. Hence, there is absolutely no justification for an increase in the said allowance. In fact, said employees at Dasmarinas and Pinugay, who are only residing in areas near their place of work, are more privileged as they receive transportation expenses while the rest of the company workers do not. 31. As to the demand for clean drinking water, the company has installed sufficient and potable water inside the Head Office even before the strike was staged by the Union. Any person who visits the Makati Head Office can attest to this fact. (Philcom's Reply to PEU's Position Paper, p. 357, ibid.) Anent the allegation of PABX transfer and contractualization of PABX service and position, these were done in anticipation of the company to switch to an automatic PABX machine which requires no operator. This cannot be treated as ULP since management is at liberty, absent any malice on its part, to abolish positions which it deems no longer necessary (Arrieta vs. National Labor Relations Commission, 279 SCRA 326, 332). Besides, at the time the company hired a temporary employee to man the machine during daytime, the subject position

was vacant while the assumption of the function by the company guard during nighttime was only for a brief period. With respect to the perceived massive contractualization of the company, said charge cannot be considered as ULP since the hiring of contractual workers did not threaten the security of tenure of regular employees or union members. That only 160 employees out of 400 employees in the company's payroll were considered rank and file does not of itself indicate unfair labor practice since this is but a company prerogative in connection with its business concerns. Likewise, the offer or promotions to a few union members is neither unlawful nor an economic inducement. These offers were made in accordance with the legitimate need of the company for the services of these employees to fill positions left vacant by either retirement or resignation of other employees. Besides, a promotion is part of the career growth of employees found competent in their work. Thus, in Bulletin Publishing Corporation vs. Sanchez (144 SCRA 628, 641), the Supreme Court held that "(T)he promotion of employees to managerial or executive positions rests upon the discretion of management. Managerial positions are offices which can only be held by persons who have the trust of the corporation and its officers. It is the prerogative of management to promote any individual working within the company to a higher position. It should not be inhibited or prevented from doing so. A promotion which is manifestly beneficial to an employee should not give rise to a gratuitous speculation that such a promotion was made simply to deprive the union of the membership of the promoted employee, who after all appears to have accepted his promotion." That the promotions were made near or around the time when CBA negotiations were about to be held does not make the company's action an unfair labor practice. As explained by the company, these promotions were based on the availability of the position and the qualification of the employees promoted (p. 6, Annex "4", Philcom's Reply to PEU's Position Paper; p. 380, ibid.) On the union's charge that management disallowed leave of union officers and members to attend union seminar, this is belied by the evidence submitted by the union itself. In a letter to PEU's President, the company granted the leave of several union officers and members to attend a seminar notwithstanding that its request to be given more details about the affair was left unheeded by the union (Annex "Y", PEU's Position Paper; p. 222, ibid.). Those who were denied leave were urgently needed for the operation of the company. On the ULP issue of disinformation scheme, surveillance and interference with union affairs, these are mere allegations unsupported by facts. The charge of "black propaganda" allegedly committed by the company when it supposedly posted two (2) letters addressed to the Union President is totally baseless. Petitioner presents no proof that it was the company which was behind the incident. On the purported disallowance of union members to observe the July 27, 1997 CBA meeting, the company explained that it only allowed one (1) employee from ITTO, instead of two (2), as it would adversely affect the operation of the group. It also took into consideration the fact that ITTO members represent only 20% of the union. Other union members from other departments of the company should have equal representation (Annex "L", Position Paper for the Union; pp. 205-206, ibid.). As to the alleged surveillance of the company guards during a union seminar, We find the idea of sending guards to spy on a mere union seminar quite preposterous. It is thus not likely for the company which can gain nothing from it to waste its resources in such a scheme. On the issuance of memorandum/notice to employees without giving copy to union, change in work schedule at Traffic Records Section and ITTO policies, the company has sufficiently rebutted the same, thus: 27. The Union also whines about the failure of the company to furnish copies of memoranda or notices sent to employees and change of work schedules at the Traffic Records Section and ITTO policies. The CBA, however, does not obligate the Company to give the Union a copy of each and every memorandum or notice sent to employees. This would be unreasonable and impractical. Neither did the Union demand that they be furnished copies of the same. This is clearly a non-issue as copies of all memoranda or notices issued by management are readily available upon request by any employee or the Union.

28. Contrary to the allegations of the Union, the rationale and mechanics for the abolishment of the midnight schedule at the Traffic Record Services had been thoroughly and adequately discussed with the Union's President, Robert Benosa, and the staff of Traffic Record Services in the meeting held on May 9, 1997. The midnight services were abolished for purely economic reasons. The company realized that the midnight work can be handled in the morning without hampering normal operations. At the same time, the company will be able to save on cost. For this objective, the employees concerned agreed to create a manning and shifting schedule starting at 6:00 a.m. up to 10:00 p.m., with each employee rendering only eight hours of work every day without violating any provision of the labor laws or the CBA.24 The Court has always respected a company's exercise of its prerogative to devise means to improve its operations. Thus, we have held that management is free to regulate, according to its own discretion and judgment, all aspects of employment, including hiring, work assignments, supervision and transfer of employees, working methods, time, place and manner of work.25 This is so because the law on unfair labor practices is not intended to deprive employers of their fundamental right to prescribe and enforce such rules as they honestly believe to be necessary to the proper, productive and profitable operation of their business.26 Even assuming arguendo that Philcom had violated some provisions in the CBA, there was no showing that the same was a flagrant or malicious refusal to comply with its economic provisions. The law mandates that such violations should not be treated as unfair labor practices.27 PEU also asserts that the Court of Appeals should have issued an order directing the issuance of a writ of execution ordering Philcom to accept back to work unconditionally the striking union officers and members under the same terms and conditions prevailing before the strike. PEU asserts that the union officers and members should be paid their salaries or backwages and monetary equivalent of other benefits beginning 6 October 1998 when PEU received a copy of the Secretary's 2 October 1998 returnto-work order. PEU claims that even if the "issue of illegal strike can be included in the assailed orders and that the union officers and members have been terminated as a result of the alleged illegal strike, still, the Secretary has to rule on the illegality of the strike and the liability of each striker." PEU asserts that the union officers and members should first be accepted back to work because a return-to-work order is immediately executory.28 We rule on the legality of the strike if only to put an end to this protracted labor dispute. The facts necessary to resolve the legality of the strike are not in dispute. The strike and the strike activities that PEU had undertaken were patently illegal for the following reasons: 1. Philcom is engaged in a vital industry protected by Presidential Decree No. 823 (PD 823), as amended by Presidential Decree No. 849, from strikes and lockouts. PD 823, as amended, provides: Sec. 1. It is the policy of the State to encourage free trade unionism and free collective bargaining within the framework of compulsory and voluntary arbitration. Therefore, all forms of strikes, picketings and lockouts are hereby strictly prohibited in vital industries, such as in public utilities, including transportation and communications, x x x. (Emphasis supplied) Enumerating the industries considered as vital, Letter of Instruction No. 368 provides: For the guidance of workers and employers, some of whom have been led into filing notices of strikes and lockouts even in vital industries, you are hereby instructed to consider the following as vital industries and companies or firms under PD 823 as amended: 1. Public Utilities: xxxx B. Communications: 1) Wire or wireless telecommunications such as telephone, telegraph, telex, and cable companies or firms; (Emphasis supplied) xxxx It is therefore clear that the striking employees violated the no-strike policy of the State in regard to vital industries.

2. The Secretary had already assumed jurisdiction over the dispute. Despite the issuance of the returnto-work orders dated 19 November and 28 November 1997, the striking employees failed to return to work and continued with their strike. Regardless of their motives, or the validity of their claims, the striking employees should have ceased or desisted from all acts that would undermine the authority given the Secretary under Article 263(g) of the Labor Code. They could not defy the return-to-work orders by citing Philcom's alleged unfair labor practices to justify such defiance.29 PEU could not have validly anchored its defiance to the return-to-work orders on the motion for reconsideration that it had filed on the assumption of jurisdiction order. A return-to-work order is immediately effective and executory despite the filing of a motion for reconsideration. It must be strictly complied with even during the pendency of any petition questioning its validity.30 The records show that on 22 November 1997, Philcom published in the Philippine Daily Inquirer a notice to striking employees to return to work.31 These employees did not report back to work but continued their mass action. In fact, they lifted their picket lines only on 22 December 1997.32 Philcom formally notified twice these employees to explain in writing why they should not be dismissed for defying the return-to-work order.33 Philcom held administrative hearings on these disciplinary cases.34 Thereafter, Philcom dismissed these employees for abandonment of work in defiance of the return-to-work order.35 A return-to-work order imposes a duty that must be discharged more than it confers a right that may be waived. While the workers may choose not to obey, they do so at the risk of severing their relationship with their employer.36 The following provision of the Labor Code governs the effects of defying a return-to-work order: ART. 264. Prohibited activities. (a) x x x x No strike or lockout shall be declared after assumption of jurisdiction by the President or the Minister or after certification or submission of the dispute to compulsory or voluntary arbitration or during the pendency of cases involving the same grounds for the strike or lockout x 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. (Emphasis supplied) A strike undertaken despite the Secretary's issuance of an assumption or certification order becomes a prohibited activity, and thus, illegal, under Article 264(a) of the Labor Code. The union officers who knowingly participate in the illegal strike are deemed to have lost their employment status. The union members, including union officers, who commit specific illegal acts or who knowingly defy a return-towork order are also deemed to have lost their employment status.37 Otherwise, the workers will simply refuse to return to their work and cause a standstill in the company operations while retaining the positions they refuse to discharge and preventing management to fill up their positions.38 Hence, the failure of PEU's officers and members to comply immediately with the return-to-work orders dated 19 November and 28 November 1997 cannot be condoned. Defiance of the return-to-work orders of the Secretary constitutes a valid ground for dismissal.39 3. PEU staged the strike using unlawful means and methods. Even if the strike in the present case was not illegal per se, the strike activities that PEU had undertaken, especially the establishment of human barricades at all entrances to and egresses from the company premises and the use of coercive methods to prevent company officials and other personnel from leaving the company premises, were definitely illegal.40 PEU is deemed to have admitted that its officers and members had committed these illegal acts, as it never disputed Philcom's assertions of PEU's unlawful strike activities in all the pleadings that PEU submitted to the Secretary and to this Court. PEU's picketing officers and members prohibited other tenants at the Philcom building from entering and leaving the premises. Leonida S. Rabe, Country Manager of Societe Internationale De Telecommunications Aeronautiques (SITA), a tenant at the Philcom building, wrote two letters addressed to PEU President Roberto B. Benosa. She told Benosa that PEU's act of obstructing the free ingress to and egress from the company premises "has badly disrupted normal operations of their organization." 41 The right to strike, while constitutionally recognized, is not without legal constrictions. Article 264(e) of the Labor Code, on prohibited activities, provides:

No person engaged in picketing shall commit any act of violence, coercion or intimidation or obstruct the free ingress to or egress from the employer's premises for lawful purposes, or obstruct public thoroughfares. The Labor Code is emphatic against the use of violence, coercion, and intimidation during a strike and to this end prohibits the obstruction of free passage to and from the employer's premises for lawful purposes. A picketing labor union has no right to prevent employees of another company from getting in and out of its rented premises, otherwise, it will be held liable for damages for its acts against an innocent by-stander.42 The sanction provided in Article 264(a) is so severe that 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.43 By insisting on staging the prohibited strike and defiantly picketing Philcom's premises to prevent the resumption of company operations, the striking employees have forfeited their right to be readmitted.44 4. PEU declared the strike during the pendency of preventive mediation proceedings at the NCMB. On 17 November 1997, while a conciliation meeting was being held at the NCMB in NCMB-NCR-NS 10-435-97, PEU went on strike. It should be noted that in their meeting on 11 November 1997, both Philcom and PEU were even "advised to maintain the status quo."45 Such disregard of the mediation proceedings was a blatant violation of Section 6, Book V, Rule XXII of the Omnibus Rules Implementing the Labor Code, which explicitly obliges the parties to bargain collectively in good faith and prohibits them from impeding or disrupting the proceedings.46 The relevant provision of the Implementing Rules provides: Section 6. Conciliation. x x x x During the proceedings, the parties shall not do any act which may disrupt or impede the early settlement of dispute. They are obliged, as part of their duty, to bargain collectively in good faith, to participate fully and promptly in the conciliation meetings called by the regional branch of the Board. x x x x Article 264(a) of the Labor Code also considers it a prohibited activity to declare a strike "during the pendency of cases involving the same grounds for the same strike." Lamentably, PEU defiantly proceeded with their strike during the pendency of the conciliation proceedings. 5. PEU staged the strike in utter disregard of the grievance procedure established in the CBA. By PEU's own admission, "the Union's complaints to the management began in June 1997 even before the start of the 1997 CBA renegotiations."47 Their CBA expired on 30 June 1997.48 PEU could have just taken up their grievances in their negotiations for the new CBA. This is what a Philcom officer had suggested to the Dasmarias staff when the latter requested on 16 June 1997 for an increase in transportation allowance.49 In fact, when PEU declared the strike, Philcom and PEU had already agreed on 37 items in their negotiations for the new CBA.50 The bottom line is that PEU should have immediately resorted to the grievance machinery provided for in the CBA.51 In disregarding this procedure, the union leaders who knowingly participated in the strike have acted unreasonably. The law cannot interpose its hand to protect them from the consequences of their illegal acts.52 A strike declared on the basis of grievances which have not been submitted to the grievance committee as stipulated in the CBA of the parties is premature and illegal.53 Having held the strike illegal and having found that PEU's officers and members have committed illegal acts during the strike, we hold that no writ of execution should issue for the return to work of PEU officers who participated in the illegal strike, and PEU members who committed illegal acts or who defied the return-to-work orders that the Secretary issued on 19 November 1997 and 28 November 1997. The issue of who participated in the illegal strike, committed illegal acts, or defied the return-to-work orders is a question of fact that must be resolved in the appropriate proceedings before the Secretary of Labor. WHEREFORE, we DISMISS the petition and AFFIRM the Decision of the Court of Appeals in CAG.R. SP No. 53989, with the MODIFICATION that the Secretary of Labor is directed to determine who among the Philcom Employees Union officers participated in the illegal strike, and who among the union members committed illegal acts or defied the return-to-work orders of 19 November 1997 and 28 November 1997. No pronouncement as to costs. SO ORDERED.

Quisumbing, Chairman, Carpio-Morales, Tinga, Velasco, Jr., J.J., concur. Footnotes Under Rule 45 of the 1997 Rules of Civil Procedure. Penned by Associate Justice Fermin A. Martin, Jr., with Associate Justices Salvador J. Valdez, Jr. and Remedios S. Fernando, concurring. Rollo, pp. 869-888. 3 Rollo, pp. 871-874. 4 Id. at 582-583. 5 Id. at 584. 6 Id. at 585-595. 7 Id. at 597-603. 8 Id. at 605-612. 9 Id. at 622-623. 10 Id. at 623. 11 364 Phil. 44 (1999). 12 Rollo, p. 637. 13 Id. at 887-888. 14 347 Phil. 602 (1997). 15 Rollo, pp. 52-53. 16 Manila Diamond Hotel Employees' Union v. Court of Appeals, G.R. No. 140518, 16 December 2004, 447 SCRA 97. 17 Trans-Asia Shipping Lines, Inc.-Unlicensed Crews Employees Union-Associated Labor Unions (Tasli-Alu) v. Court of Appeals, G.R. No. 145428, 7 July 2004, 433 SCRA 610. 18 Rollo, pp. 691-692. 19 LMG Chemicals Corporation v. Secretary of the Department of Labor and Employment, G.R. No. 127422, 17 April 2001, 356 SCRA 577; International Pharmaceuticals, Inc. v. Secretary of Labor, G.R. Nos. 92981-83, 9 January 1992, 205 SCRA 59. 20 Rollo, p. 579. 21 Id. at 422-440. 22 Id. at 548-568. 23 Great Pacific Life Employees Union v. Great Pacific Life Assurance Corporation, G.R. No. 126717, 11 February 1999, 303 SCRA 113; Cesario A. Azucena, Jr., II The Labor Code with Comments and Cases 210 (5th ed. 2004) [The Labor Code with Comments and Cases]. 24 Rollo, pp. 880-886. 25 Unicorn Safety Glass, Inc. v. Basarte, G.R. No. 154689, 25 November 2004, 444 SCRA 287; Benguet Electric Cooperative v. Fianza, G.R. No. 158606, 9 March 2004, 425 SCRA 41. 26 II The Labor Code with Comments and Cases 214. 27 ART. 261, Labor Code. x x x 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 Collective Bargaining Agreement shall mean flagrant and/or malicious refusal to comply with the economic provisions of such agreement. 28 Rollo, pp. 110-112. 29 Allied Banking Corp. v. NLRC, G.R. No. 116128, 12 July 1996, 258 SCRA 724. 30 Telefunken Semiconductors Employees Union-FFW v. Sec. of Labor and Employment, 347 Phil. 447 (1997); St. Scholastica's College v. Torres, G.R. No. 100158, 29 June 1992, 210 SCRA 565. 31 Rollo, p. 444. 32 Id. at 35. 33 Id. at 1006. 34 Id. at 996. 35 Id. at 38-39. 36 Asian Transmission Corporation v. NLRC, G.R. No. 88725, 22 November 1989, 179 SCRA 582. 37 Grand Boulevard Hotel v. Genuine Labor Organization of Workers in Hotel, Restaurant and Allied Industries (GLOWHRAIN), 454 Phil. 463 (2003).
1 2

St. Scholastica's College v. Torres, supra note 30. Allied Banking Corp. v. NLRC, supra note 29. 40 Federation of Free Workers v. Inciong, G.R. No. 49983, 20 April 1992, 208 SCRA 157. 41 Rollo, pp. 445-448. 42 Liwayway Publications, Inc. v. Permanent Concrete Workers Union, 195 Phil. 51 (1981). 43 Great Pacific Life Employees Union v. Great Pacific Life Assurance Corporation, supra note 23. 44 St. Scholastica's College v. Torres, supra note 30. 45 Rollo, p. 443. 46 San Miguel Corp. v. NLRC, 451 Phil. 514 (2003). 47 Rollo, p. 70. 48 Id. at 579. 49 Id. at 307. 50 Id. at 583. 51 Id. at 507-508. 52 Tiu v. NLRC, 343 Phil. 478 (1997). 53 II The Labor Code with Comments and Cases 443.
38 39

G.R. No. L-87672 October 13, 1989 WISE AND CO., INC., petitioner, vs. WISE & CO., INC. EMPLOYEES UNION-NATU AND HONORABLE BIENVENIDO G. LAGUESMA, in his capacity as voluntary Arbitrator, respondents. Angara, Abello, Concepcion, Regala & Cruz for petitioner. GANCAYCO, J.: The center of controversy in this petition is whether the grant by management of profit sharing benefits to its non-union member employees is discriminatory against its workers who are union members. The facts are undisputed. On April 3,1987 the management issued a memorandum circular introducing a profit sharing scheme for its managers and supervisors the initial distribution of which was to take effect March 31, 1988. On July 3,1987 the respondent union wrote petitioner through its president asking for participation in this scheme. This was denied by petitioner on the ground that it had to adhere strictly to the Collective Bargaining Agreement (CBA). In the meantime, talks were underway for early negotiation by the parties of the CBA which was due to expire on April 30, 1988. The negotiation thus begun earlier than the freedom period. On November 11, 1987 petitioner wrote respondent union advising the latter that they were prepared to consider including the employees covered by the CBA in the profit sharing scheme beginning the year 1987 provided that the ongoing negotiations were concluded prior to December 1987. However, the collective bargaining negotiations reached a deadlock on the issue of the scope of the bargaining unit. Conciliation efforts to settle the dispute on 29 March 1988 were made but no settlement was reached. On March 30, 1988, petitioner distributed the profit sharing benefit not only to managers and supervisors but also to all other rank and file employees not covered by the CBA. This caused the respondent union to file a notice of strike alleging that petitioner was guilty of unfair labor practice because the union members were discriminated against in the grant of the profit sharing benefits. Consequently, management refused to proceed with the CBA negotiations unless the last notice of strike was first resolved. The union agreed to postpone discussions on the profit sharing demand until a new CBA was concluded. After a series of conciliation conferences, the parties agreed to settle the dispute through voluntary arbitration. After the parties submitted their position papers, a rejoinder and reply, on March 20,1989 the voluntary arbitrator issued an award ordering petitioner to likewise extend the benefits of the 1987 profit sharing scheme to the members of respondent union. 1 Hence, this petition wherein petitioner alleged the following grounds in support thereof I

THE HONORABLE VOLUNTARY ARBITRATOR ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN HE ORDERED THE EXTENSION OF PROFIT SHARING BENEFITS TO THOSE EMPLOYEES COVERED BY THE CBA DESPITE PATENT LACK OF FACTUAL AND LEGAL BASIS THEREFOR IN THAT1. DISCRIMINATION PER SE IS NOT UNLAWFUL ESPECIALLY WHEN THE EMPLOYEES ARE NOT SIMILARLY SITUATED. 2. THE TERMS AND CONDITIONS STIPULATED IN THE CBA HAVE THE FORCE AND EFFECT OF A LAW BETWEEN THE PARTIES. PRIVATE RESPONDENT, THEREFORE CANNOT DEMAND, AS A MATTER OF RIGHT, WHAT IS NOT STIPULATED IN THE CBA. 3. THE ACT OF THE UNION IN NEGOTIATING FOR THE INCLUSION OF THE PROFIT SHARING BENEFIT IN THE PRESENT CBA IS AN IMPLIED ADMISSION THAT THEY WERE NOT ENTITLED TO IT IN 1987. II THE HONORABLE VOLUNTARY ARBITRATOR COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN HE MADE THE CLEARLY BASELESS CONCLUSION THAT THE PETITIONER WAS MOTIVATED BY ITS DESIRE TO DEFEAT OR OTHERWISE PREJUDICE THE BASIC RIGHTS OF ITS EMPLOYEES. 2 The petition is impressed with merit. Under the CBA between the parties that was in force and effect from May 1, 1985 to April 30,1988 it was agreed that the "bargaining unit" covered by the CBA "consists of all regular or permanent employees, below the rank of assistant supervisor, 3 Also expressly excluded from the term "appropriate bargaining unit" are all regular rank and file employees in the office of the president, vice-president, and the other offices of the company personnel office, security office, corporate affairs office, accounting and treasurer department . 4 It is to this class of employees who were excluded in the "bargaining unit" and who do not derive benefits from the CBA that the profit sharing privilege was extended by petitioner. There can be no discrimination committed by petitioner thereby as the situation of the union employees are different and distinct from the non-union employees. 5 Indeed, discrimination per se is not unlawful. There can be no discrimination where the employees concerned are not similarly situated. Respondent union can not claim that there is grave abuse of discretion by the petitioner in extending the benefits of profit sharing to the non-union employees as they are two (2) groups not similarly situated. These non-union employees are not covered by the CBA. They do not derive and enjoy the benefits under the CBA. The contention of the respondent union that the grant to the non-union employees of the profit sharing benefits was made at a time when there was a deadlock in the CBA negotiation so that apparently the motive thereby was to discourage such non-union employees from joining the union is not borne by the record. Petitioner denies this accusation and instead points out that inspite of this benefit extended to them, some non-union workers actually joined the respondent union thereafter. Respondent union also decries that no less than the president of the petitioner agreed to include its members in the coverage of the 1987 profit sharing benefit provided that they would agree to an earlier negotiation for the renewal of the CBA which expired in 1988. Be this as it may, since there was actually a deadlock in the negotiation and it was not resolved and consummated on the period expected, private respondent can not now claim that petitioner has a duty to extend the profit sharing benefit to the union members. The Court holds that it is the prerogative of management to regulate, according to its discretion and judgment, all aspects of employment. This flows from the established rule that labor law does not authorize the of the employer in the conduct of its business. 6 such management prerogative may be availed of without fear of any liability so long as it is exercised in good faith for the advancement of the

employers' interest and not for the purpose of defeating or circumventing the rights of employees under special laws or valid agreement and are not exercised in a malicious, harsh, oppressive, vindictive or wanton manner or out of malice or spite. 7 The grant by petitioner of profit sharing benefits to the employees outside the "bargaining unit" falls under the ambit of its managerial prerogative. It appears to have been done in good faith and without ulterior motive. More so when as in this case there is a clause in the CBA where the employees are classified into those who are members of the union and those who are not. In the case of the union members, they derive their benefits from the terms and conditions of the CBA contract which constitute the law between the contracting parties. 8 Both the employer and the union members are bound by such agreement. However, the court serves notice that it will not hesitate to strike down any act of the employer that tends to be discriminatory against union members. It is only because of the peculiar circumstances of this case showing there is no such intention that this court ruled otherwise. WHEREFORE, the petition is GRANTED and the award of respondent Voluntary Arbitrator dated March 20,1989 is hereby REVERSED AND SET ASIDE being null and void, without pronouncement as to costs. SO ORDERED. Narvasa, Cruz, Grio-Aquino and Medialdea, JJ., concur. Footnotes 1 Pages 32-34, Rollo. 2 Pages 11-12, Rollo. 3 Article 1, Section 1, CBA; page 4, Rollo. 4 Pages 4-5, Rollo. 5 Caltex Phils. vs. Phil. Labor Organization, Caltex Chapter, 92 Phil. 1014,1018 (1953). 6 NLU vs. Insular-Yebana Tobacco Corporation, 2 SCRA 924,931 (1961); Republic Savings Bank vs. CIR, 21 SCRA 226,235-236 (1967). 7 PRC vs. Garcia, 18 SCRA 107, 110 (1966); and LVN vs. LVN Employees Association, 35 SCRA 147,156 (1970). 8 Mactan Workers Union vs. Aboitiz, 45 SCRA 577, 581-582 (1977). Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

G.R. No. L-45402 April 30, 1987 ROMEO DABUET, GAMIK BARTOLOME, SALVADOR ABESAMIS and MARIANO MALONZO, and ROCHE PRODUCTS LABOR UNION, petitioners, vs. ROCHE PHARMACEUTICALS, INC., ERIC MENTHA, REYNALDO FORMELOZA, and the OFFICE OF THE PRESIDENT, respondents. PADILLA, J.: This is a petition for review of the decision of the Office of the President in NLRC Case No. C-5190, ordering the respondent Roche Pharmaceuticals, Inc. to pay the individual petitioners separation pay, in lieu of reinstatement with back wages. The facts of the case which led to the filing of this petition are, as follows: On 1 March 1973, herein individual petitioners who were an officers of the Roche Products Labor Union, the labor organization existing in the firm, and with whom the respondent company had a collective bargaining agreement which was due for re-negotiation that month, wrote the respondent company expressing the grievances of the union and seeking a formal conference with management regarding the previous dismissal of the union's president and vice-president. A meeting was, accordingly, arranged and set for 12 March 1973. At said meeting, however, instead of discussing the problems affecting the labor union and management, Mr. Eric Mentha, the company's general manager, allegedly

berated the petitioners for writing said letter and called the letter and the person who prepared it as "stupid." Feeling that he was the one alluded to, since he had prepared the letter, counsel for the labor union filed a case for grave slander against Mr. Mentha. The charge was based on the affidavit executed by the petitioners. The company and Mentha, in turn, filed a complaint for perjury against petitioners alleging that their affidavit contained false statements. The respondent company, furthermore, construed the execution by petitioners of the affidavit as an act of breach of trust and confidence and inimical to the interest of the company, for which they were suspended. Subsequently, the respondent company filed with the NLRC a petition for clearance to terminate their employment. The petitioners filed an opposition thereto and, at the same time, filed charges of unfair labor practice, union busting, and harassment against the company, Eric Mentha, and Reynaldo Formeloza, the company's Finance/Administrative Manager. 1 After due proceedings, the compulsory arbitrator found that the petitioners' dismissal was without justifiable cause, but that there was no unfair labor practice committed and directed that petitioners be paid separation pay. 2 Petitioners filed a motion for reconsideration and/or appeal to the NLRC which agreed with the findings of the arbitrator that the petitioners' dismissal was without just and valid cause. However, it disagreed with the arbitrator on the relief granted. The NLRC ordered the reinstatement of the petitioners with two (2) months salary as back wages. 3 Both parties appealed to the Secretary of Labor who set aside the decision of the NLRC and entered another one ordering the payment of severance pay only. 4 The petitioners appealed to the Office of the President, and on 27 April 1976, the latter rendered a decision finding the respondents guilty of unfair labor practice and directing the reinstatement of the petitioners with back wages from the time of their suspension until actually reinstated, without loss of seniority rights. The respondent company was, likewise, ordered to extend to the petitioners all fringe benefits to which they are entitled had they not been dismissed. 5 The respondent company filed a motion for reconsideration of the decision, and on 16 November 1976, the Office of the President granted the motion and reversed its previous decision of 27 April 1976. It ruled that, while the petitioners' dismissal was not for just and valid cause, no unfair labor practice had been committed. Consequently, it directed that petitioners be paid only separation pay in an amount double those awarded by the compulsory arbitrator and Secretary of Labor. 6 Hence, the present recourse to this Court. The determinative issue raised in the petition is whether or not the respondent company, in terminating the employment of the petitioners without just and lawful cause, committed an unfair labor practice. We have carefully examined the records of the case and we are convinced that the respondent company had committed unfair labor practice in dismissing the petitioners without just and valid cause. In Republic Savings Bank vs. CIR, 7 where the dismissed employees had written a letter decried by the Bank as patently libelous for alleging immorality, nepotism and favoritism on the part of the Bank president, thus amounting to behavior necessitating their dismissal, the Court declared: ... Assuming that the workers acted in their individual capacities when they wrote the letter-charge they were nonetheless protected for they were engaged in concerted activity, in the exercise of their right to self-organization that includes concerted activity for mutual aid and protection, interference with which constitutes an unfair labor practice under section 4(a) (1). This is the view of some members of this Court. For, as has been aptly stated, the joining in protests or demands, even by a small group of employees, if in furtherance of their interests as such, is a concerted activity protected by the Industrial Peace Act. It is not necessary that union activity be involved or that collective bargaining be contemplated. Where, as in this case, the letter written by and for the union addressed to management referred to employee grievances and/or, labor-management issues and the employees concerned were all officers of the union, then seeking a renegotiation of the collective bargaining agreement, a fact which respondent company does not deny, there should, all the more, be a recognition of such letter as an act for the mutual aid, protection and benefit of the employees concerned. This recognition, in turn, should extend to petitioners' execution of an affidavit in support of the charge of slander against private respondent, Eric Mentha, for calling the union's lawyer, who prepared the letter, and the contents thereof as "stupid."

Breach of trust and confidence, the grounds alleged for herein petitioners' dismissal, "must not be indiscriminately used as a shield to dismiss an employee arbitrarily. For who can stop the employer from filing an the charges in the books for the simple exercise of it, and then hide behind the pretext of loss of confidence which can be proved by mere preponderance of evidence." 8 Besides, there is nothing in the record to show that the charge of perjury filed by private respondents against the petitioners has prospered in any conclusive manner. We, thus, hold that respondent company's act in dismissing the Petitioners, who then constituted the remaining and entire officialdom of the Roche Products Labor Union, after the union's president and vice-president had been earlier dismiss and when the collective bargaining agreement in the company was about to be renegotiated, was an unfair labor practice under Sec. 4(a) (1) of the Industrial Peace Act. Their dismissal, under the circumstances, amounted to interference with, and restraint or coercion of, the petitioners in the exercise of their right to engage in concerted activities for their mutual aid and protection As the respondent company was guilty of unfair labor practice, reinstatement of the dismissed employees should follow as a matter of right. It is an established rule that an employer who commits an unfair labor practice may be required to reinstate, with full back wages, the workers affected by such act, the amount not to exceed back wages for three (3) years. 9 The respondents claim however, that the Supreme Court has no jurisdiction to take cognizance of the instant petition. They contend that pursuant to Art. 222, (should be Art. 223) of the Labor Code. the Office of the President is the final appellate authority within the adjudicative machinery for handling labor disputes and no law, order or regulation provides for any appeal therefrom to the Supreme Court. To be sure, Art. 223 of the Labor Code. while providing ex.pressly that decisions of the Secretary of Labor may be appealed to the Office of the president, does not provide for review of the decisions Of the Office of the President by the Supreme Court. This does not mean, however, that the power Of judicial review does not extend to decisions of the Office of the President. In San Miguel Corp. vs. Secretary of Labor, 10 where the same issue was the Court categorically decisive that there is an underlying power in the courts to scrutinize the acts of agencies exercising quasi-judicial or legislative power on questions of law and jurisdiction even though no right of review is given by the statute. The Court therein said: Yanglay raised a jurisdictional question which was not brought up by respondent public officials. He contends that this Court has no jurisdiction to review the decisions of the NLRC and the Secretary of labor 'under the principle of separation of powers' and that judicial review is not provided for in Presidential Decree No. 21. That contention is a flagrant error. "It is generally understood that as to administrative agencies exercising quasi-judicial or legislative power there is an underlying power in the courts to scrutinize the acts of such agencies on questions of law and jurisdiction even though no right of review is given by statute" (73 C.J.S. 506, note 56). The purpose of judicial review is to keep the administrative agency within its jurisdiction and protect substantial rights of parties affected by its decisions' (73 C.J.S. 504, Sec. 166). It is part of the system of checks and balances which restricts the separation of powers and forestalls arbitrary and unjust adjudications. Judicial review is proper in case of lack of jurisdiction, grave abuse of discretion, error of law, fraud or collusion (Timbancaya vs. Vicente, 62 O.G. 9424; Macatangay vs. Secretary of Public Works and Communications, 63 O.G. 11236; Ortua vs. Singson Encarnacion, 59 Phil. 440). In Macailing vs. Andrada, 11 the Court also ruled that judicial review of administrative decisions is available even if the statute does not provide for judicial review. The Court said: In the matter of judicial review of administrative decisions, some statutes especially provide for such judicial review; others are silent. Mere silence, however, does not necessarily imply that judicial review is unavailable. Modes of judicial review vary according to the statutes; appeal petition for review or a writ of certiorari No general rule applies to all the various administrative agencies. Where the law stands mute, the accepted view is that the extraordinary remedies in the Rules of Court are still available. Accordingly, we restate that this Court, in the exercise of its power of judicial review, may review decisions of the Office of the President on questions of law and jurisdiction, when properly raised. This

does not mean judicial supremacy over the Office of the President but the performance by this Court of a duty specifically enjoined upon it by the Constitution, 12 as part of a system of checks and balances. The checkered circumstances under which the decisions in this case were made, notably, that two varying rulings were rendered by different officials of the Office of the President, within a short period of time, also constrained us to review the case on a question of law. WHEREFORE, the judgment appealed from should be, as it is, hereby reversed and set aside and another one entered, ordering the respondent company to reinstate the petitioners to their former positions, with three (3) years back wages and without loss of seniority rights. The respondent company is further directed to extend to said petitioners fringe benefits they are entitled to had they not been dismissed. In the event that reinstatement is no longer feasible, the respondent company should pay, in addition, severance pay of one (1) month for every year of service based upon the highest salary eceived. SO ORDERED. Fernan (Chairman), Gutierrez, Jr., Bidin and Cortes, JJ., concur. Footnotes 1 Rollo, pp. 20-21. 2 Id., pp. 21-22 3 Id., pp. 22-23. 4 Id., p. 23. 5 Id., p. 34. 6 Id., p. 38. 7 128 Phil. 230. 8 Callanta vs. Carnation (Phil) Inc., G.R. No. 70615, October 28, 1986. 9 National Federation of labor Unions (NAFLU) vs. Ople, G.R. No. 68661, July 22, 1986, 143 SCRA 124 and other cast cited therein. 10 G.R. No. L-39195, May 16, 1975, 64 SCRA 56, 60. 11 G.R. No. L-21607, Jan. 30, 1970, 31 SCRA 126, 129. 12 Art. VIII, Sec. 1, 1987 Constitution. Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-25291 January 30, 1971 THE INSULAR LIFE ASSURANCE CO., LTD., EMPLOYEES ASSOCIATION-NATU, FGU INSURANCE GROUP WORKERS and EMPLOYEES ASSOCIATION-NATU, and INSULAR LIFE BUILDING EMPLOYEES ASSOCIATION-NATU, petitioners, vs. THE INSULAR LIFE ASSURANCE CO., LTD., FGU INSURANCE GROUP, JOSE M. OLBES and COURT OF INDUSTRIAL RELATIONS, respondents. Lacsina, Lontok and Perez and Luis F. Aquino for petitioners. Francisco de los Reyes for respondent Court of Industrial Relations. Araneta, Mendoza and Papa for other respondents. CASTRO, J.: Appeal, by certiorari to review a decision and a resolution en banc of the Court of Industrial Relations dated August 17, 1965 and October 20, 1965, respectively, in Case 1698-ULP. The Insular Life Assurance Co., Ltd., Employees Association-NATU, FGU Insurance Group Workers & Employees Association-NATU, and Insular Life Building Employees Association-NATU (hereinafter referred to as the Unions), while still members of the Federation of Free Workers (FFW), entered into separate collective bargaining agreements with the Insular Life Assurance Co., Ltd. and the FGU Insurance Group (hereinafter referred to as the Companies). Two of the lawyers of the Unions then were Felipe Enaje and Ramon Garcia; the latter was formerly the secretary-treasurer of the FFW and acting president of the Insular Life/FGU unions and the Insular Life

Building Employees Association. Garcia, as such acting president, in a circular issued in his name and signed by him, tried to dissuade the members of the Unions from disaffiliating with the FFW and joining the National Association of Trade Unions (NATU), to no avail. Enaje and Garcia soon left the FFW and secured employment with the Anti-Dummy Board of the Department of Justice. Thereafter, the Companies hired Garcia in the latter part of 1956 as assistant corporate secretary and legal assistant in their Legal Department, and he was soon receiving P900 a month, or P600 more than he was receiving from the FFW. Enaje was hired on or about February 19, 1957 as personnel manager of the Companies, and was likewise made chairman of the negotiating panel for the Companies in the collective bargaining with the Unions. In a letter dated September 16, 1957, the Unions jointly submitted proposals to the Companies for a modified renewal of their respective collective bargaining contracts which were then due to expire on September 30, 1957. The parties mutually agreed and to make whatever benefits could be agreed upon retroactively effective October 1, 1957. Thereafter, in the months of September and October 1957 negotiations were conducted on the Union's proposals, but these were snagged by a deadlock on the issue of union shop, as a result of which the Unions filed on January 27, 1958 a notice of strike for "deadlock on collective bargaining." Several conciliation conferences were held under the auspices of the Department of Labor wherein the conciliators urged the Companies to make reply to the Unions' proposals en toto so that the said Unions might consider the feasibility of dropping their demand for union security in exchange for other benefits. However, the Companies did not make any counter-proposals but, instead, insisted that the Unions first drop their demand for union security, promising money benefits if this was done. Thereupon, and prior to April 15, 1958, the petitioner Insular Life Building Employees Association-NATU dropped this particular demand, and requested the Companies to answer its demands, point by point, en toto. But the respondent Insular Life Assurance Co. still refused to make any counter-proposals. In a letter addressed to the two other Unions by the joint management of the Companies, the former were also asked to drop their union security demand, otherwise the Companies "would no longer consider themselves bound by the commitment to make money benefits retroactive to October 1, 1957." By a letter dated April 17, 1958, the remaining two petitioner unions likewise dropped their demand for union shop. April 25, 1958 then was set by the parties to meet and discuss the remaining demands. From April 25 to May 6, 1958, the parties negotiated on the labor demands but with no satisfactory result due to a stalemate on the matter of salary increases. On May 13, 1958 the Unions demanded from the Companies final counter-proposals on their economic demands, particularly on salary increases. Instead of giving counter-proposals, the Companies on May 15, 1958 presented facts and figures and requested the Unions to submit a workable formula which would justify their own proposals, taking into account the financial position of the former. Forthwith the Unions voted to declare a strike in protest against what they considered the Companies' unfair labor practices. Meanwhile, eighty-seven (87) unionists were reclassified as supervisors without increase in salary nor in responsibility while negotiations were going on in the Department of Labor after the notice to strike was served on the Companies. These employees resigned from the Unions. On May 20, 1958 the Unions went on strike and picketed the offices of the Insular Life Building at Plaza Moraga. On May 21, 1958 the Companies through their acting manager and president, the respondent Jose M. Olbes (hereinafter referred to as the respondent Olbes), sent to each of the strikers a letter (exhibit A) quoted verbatim as follows: We recognize it is your privilege both to strike and to conduct picketing. However, if any of you would like to come back to work voluntarily, you may: 1. Advise the nearest police officer or security guard of your intention to do so. 2. Take your meals within the office. 3. Make a choice whether to go home at the end of the day or to sleep nights at the office where comfortable cots have been prepared. 4. Enjoy free coffee and occasional movies. 5. Be paid overtime for work performed in excess of eight hours. 6. Be sure arrangements will be made for your families. The decision to make is yours whether you still believe in the motives of the strike or in the fairness of the Management.

The Unions, however, continued on strike, with the exception of a few unionists who were convinced to desist by the aforesaid letter of May 21, 1958. From the date the strike was called on May 21, 1958, until it was called off on May 31, 1958, some management men tried to break thru the Unions' picket lines. Thus, on May 21, 1958 Garcia, assistant corporate secretary, and Vicente Abella, chief of the personnel records section, respectively of the Companies, tried to penetrate the picket lines in front of the Insular Life Building. Garcia, upon approaching the picket line, tossed aside the placard of a picketer, one Paulino Bugay; a fight ensued between them, in which both suffered injuries. The Companies organized three bus-loads of employees, including a photographer, who with the said respondent Olbes, succeeded in penetrating the picket lines in front of the Insular Life Building, thus causing injuries to the picketers and also to the strike-breakers due to the resistance offered by some picketers. Alleging that some non-strikers were injured and with the use of photographs as evidence, the Companies then filed criminal charges against the strikers with the City Fiscal's Office of Manila. During the pendency of the said cases in the fiscal's office, the Companies likewise filed a petition for injunction with damages with the Court of First Instance of Manila which, on the basis of the pendency of the various criminal cases against striking members of the Unions, issued on May 31, 1958 an order restraining the strikers, until further orders of the said court, from stopping, impeding, obstructing, etc. the free and peaceful use of the Companies' gates, entrance and driveway and the free movement of persons and vehicles to and from, out and in, of the Companies' building. On the same date, the Companies, again through the respondent Olbes, sent individually to the strikers a letter (exhibit B), quoted hereunder in its entirety: The first day of the strike was last 21 May 1958. Our position remains unchanged and the strike has made us even more convinced of our decision. We do not know how long you intend to stay out, but we cannot hold your positions open for long. We have continued to operate and will continue to do so with or without you. If you are still interested in continuing in the employ of the Group Companies, and if there are no criminal charges pending against you, we are giving you until 2 June 1958 to report for work at the home office. If by this date you have not yet reported, we may be forced to obtain your replacement. Before, the decisions was yours to make. So it is now. Incidentally, all of the more than 120 criminal charges filed against the members of the Unions, except three (3), were dismissed by the fiscal's office and by the courts. These three cases involved "slight physical injuries" against one striker and "light coercion" against two others. At any rate, because of the issuance of the writ of preliminary injunction against them as well as the ultimatum of the Companies giving them until June 2, 1958 to return to their jobs or else be replaced, the striking employees decided to call off their strike and to report back to work on June 2, 1958. However, before readmitting the strikers, the Companies required them not only to secure clearances from the City Fiscal's Office of Manila but also to be screened by a management committee among the members of which were Enage and Garcia. The screening committee initially rejected 83 strikers with pending criminal charges. However, all non-strikers with pending criminal charges which arose from the breakthrough incident were readmitted immediately by the Companies without being required to secure clearances from the fiscal's office. Subsequently, when practically all the strikers had secured clearances from the fiscal's office, the Companies readmitted only some but adamantly refused readmission to 34 officials and members of the Unions who were most active in the strike, on the ground that they committed "acts inimical to the interest of the respondents," without however stating the specific acts allegedly committed. Among those who were refused readmission are Emiliano Tabasondra, vice president of the Insular Life Building Employees' Association-NATU; Florencio Ibarra, president of the FGU Insurance Group Workers & Employees Association-NATU; and Isagani Du Timbol, acting president of the Insular Life Assurance Co., Ltd. Employees Association-NATU. Some 24 of the above number were ultimately notified months later that they were being dismissed retroactively as of June 2, 1958 and given separation pay checks computed under Rep. Act 1787, while others (ten in number) up to now have not been readmitted although there have been no formal dismissal notices given to them.

On July 29, 1958 the CIR prosecutor filed a complaint for unfair labor practice against the Companies under Republic Act 875. The complaint specifically charged the Companies with (1) interfering with the members of the Unions in the exercise of their right to concerted action, by sending out individual letters to them urging them to abandon their strike and return to work, with a promise of comfortable cots, free coffee and movies, and paid overtime, and, subsequently, by warning them that if they did not return to work on or before June 2, 1958, they might be replaced; and (2) discriminating against the members of the Unions as regards readmission to work after the strike on the basis of their union membership and degree of participation in the strike. On August 4, 1958 the Companies filed their answer denying all the material allegations of the complaint, stating special defenses therein, and asking for the dismissal of the complaint. After trial on the merits, the Court of Industrial Relations, through Presiding Judge Arsenio Martinez, rendered on August 17, 1965 a decision dismissing the Unions' complaint for lack of merit. On August 31, 1965 the Unions seasonably filed their motion for reconsideration of the said decision, and their supporting memorandum on September 10, 1965. This was denied by the Court of Industrial Relations en banc in a resolution promulgated on October 20, 1965. Hence, this petition for review, the Unions contending that the lower court erred: 1. In not finding the Companies guilty of unfair labor practice in sending out individually to the strikers the letters marked Exhibits A and B; 2. In not finding the Companies guilty of unfair labor practice for discriminating against the striking members of the Unions in the matter of readmission of employees after the strike; 3. In not finding the Companies guilty of unfair labor practice for dismissing officials and members of the Unions without giving them the benefit of investigation and the opportunity to present their side in regard to activities undertaken by them in the legitimate exercise of their right to strike; and 4. In not ordering the reinstatement of officials and members of the Unions, with full back wages, from June 2, 1958 to the date of their actual reinstatement to their usual employment. I. The respondents contend that the sending of the letters, exhibits A and B, constituted a legitimate exercise of their freedom of speech. We do not agree. The said letters were directed to the striking employees individually by registered special delivery mail at that without being coursed through the Unions which were representing the employees in the collective bargaining. The act of an employer in notifying absent employees individually during a strike following unproductive efforts at collective bargaining that the plant would be operated the next day and that their jobs were open for them should they want to come in has been held to be an unfair labor practice, as an active interference with the right of collective bargaining through dealing with the employees individually instead of through their collective bargaining representatives. (31 Am. Jur. 563, citing NLRB v. Montgomery Ward & Co. [CA 9th] 133 F2d 676, 146 ALR 1045) Indeed, it is an unfair labor practice for an employer operating under a collective bargaining agreement to negotiate or to attempt to negotiate with his employees individually in connection with changes in the agreement. And the basis of the prohibition regarding individual bargaining with the strikers is that although the union is on strike, the employer is still under obligation to bargain with the union as the employees' bargaining representative (Melo Photo Supply Corporation vs. National Labor Relations Board, 321 U.S. 332). Indeed, some such similar actions are illegal as constituting unwarranted acts of interference. Thus, the act of a company president in writing letters to the strikers, urging their return to work on terms inconsistent with their union membership, was adjudged as constituting interference with the exercise of his employees' right to collective bargaining (Lighter Publishing, CCA 7th, 133 F2d 621). It is likewise an act of interference for the employer to send a letter to all employees notifying them to return to work at a time specified therein, otherwise new employees would be engaged to perform their jobs. Individual solicitation of the employees or visiting their homes, with the employer or his representative urging the employees to cease union activity or cease striking, constitutes unfair labor practice. All the above-detailed activities are unfair labor practices because they tend to undermine the concerted activity of the employees, an activity to which they are entitled free from the employer's molestation.1

Moreover, since exhibit A is a letter containing promises of benefits to the employees in order to entice them to return to work, it is not protected by the free speech provisions of the Constitution (NLRB v. Clearfield Cheese Co., Inc., 213 F2d 70). The same is true with exhibit B since it contained threats to obtain replacements for the striking employees in the event they did not report for work on June 2, 1958. The free speech protection under the Constitution is inapplicable where the expression of opinion by the employer or his agent contains a promise of benefit, or threats, or reprisal (31 Am. Jur. 544; NLRB vs. Clearfield Cheese Co., Inc., 213 F2d 70; NLRB vs. Goigy Co., 211 F2d 533, 35 ALR 2d 422). Indeed, when the respondents offered reinstatement and attempted to "bribe" the strikers with "comfortable cots," "free coffee and occasional movies," "overtime" pay for "work performed in excess of eight hours," and "arrangements" for their families, so they would abandon the strike and return to work, they were guilty of strike-breaking and/or union-busting and, consequently, of unfair labor practice. It is equivalent to an attempt to break a strike for an employer to offer reinstatement to striking employees individually, when they are represented by a union, since the employees thus offered reinstatement are unable to determine what the consequences of returning to work would be. Likewise violative of the right to organize, form and join labor organizations are the following acts: the offer of a Christmas bonus to all "loyal" employees of a company shortly after the making of a request by the union to bargain; wage increases given for the purpose of mollifying employees after the employer has refused to bargain with the union, or for the purpose of inducing striking employees to return to work; the employer's promises of benefits in return for the strikers' abandonment of their strike in support of their union; and the employer's statement, made about 6 weeks after the strike started, to a group of strikers in a restaurant to the effect that if the strikers returned to work, they would receive new benefits in the form of hospitalization, accident insurance, profit-sharing, and a new building to work in.2 Citing paragraph 5 of the complaint filed by the acting prosecutor of the lower court which states that "the officers and members of the complainant unions decided to call off the strike and return to work on June 2, 1958 by reason of the injunction issued by the Manila Court of First Instance," the respondents contend that this was the main cause why the strikers returned to work and not the letters, exhibits A and B. This assertion is without merit. The circumstance that the strikers later decided to return to work ostensibly on account of the injunctive writ issued by the Court of First Instance of Manila cannot alter the intrinsic quality of the letters, which were calculated, or which tended, to interfere with the employees' right to engage in lawful concerted activity in the form of a strike. Interference constituting unfair labor practice will not cease to be such simply because it was susceptible of being thwarted or resisted, or that it did not proximately cause the result intended. For success of purpose is not, and should not, be the criterion in determining whether or not a prohibited act constitutes unfair labor practice. The test of whether an employer has interfered with and coerced employees within the meaning of subsection (a) (1) is whether the employer has engaged in conduct which it may reasonably be said tends to interfere with the free exercise of employees' rights under section 3 of the Act, and it is not necessary that there be direct evidence that any employee was in fact intimidated or coerced by statements of threats of the employer if there is a reasonable inference that anti-union conduct of the employer does have an adverse effect on self-organization and collective bargaining. (Francisco, Labor Laws 1956, Vol. II, p. 323, citing NLRB v. Ford, C.A., 1948, 170 F2d 735). Besides, the letters, exhibits A and B, should not be considered by themselves alone but should be read in the light of the preceding and subsequent circumstances surrounding them. The letters should be interpreted according to the "totality of conduct doctrine," ... whereby the culpability of an employer's remarks were to be evaluated not only on the basis of their implicit implications, but were to be appraised against the background of and in conjunction with collateral circumstances. Under this "doctrine" expressions of opinion by an employer which, though innocent in themselves, frequently were held to be culpable because of the circumstances under which they were uttered, the history of the particular employer's labor relations or anti-union bias or because of their connection with an established collateral plan of coercion or interference. (Rothenberg on Relations, p. 374, and cases cited therein.) It must be recalled that previous to the petitioners' submission of proposals for an amended renewal of their respective collective bargaining agreements to the respondents, the latter hired Felipe Enage and Ramon Garcia, former legal counsels of the petitioners, as personnel manager and assistant corporate

secretary, respectively, with attractive compensations. After the notice to strike was served on the Companies and negotiations were in progress in the Department of Labor, the respondents reclassified 87 employees as supervisors without increase in salary or in responsibility, in effect compelling these employees to resign from their unions. And during the negotiations in the Department of Labor, despite the fact that the petitioners granted the respondents' demand that the former drop their demand for union shop and in spite of urgings by the conciliators of the Department of Labor, the respondents adamantly refused to answer the Unions' demands en toto. Incidentally, Enage was the chairman of the negotiating panel for the Companies in the collective bargaining between the former and the Unions. After the petitioners went to strike, the strikers were individually sent copies of exhibit A, enticing them to abandon their strike by inducing them to return to work upon promise of special privileges. Two days later, the respondents, thru their president and manager, respondent Jose M. Olbes, brought three truckloads of non-strikers and others, escorted by armed men, who, despite the presence of eight entrances to the three buildings occupied by the Companies, entered thru only one gate less than two meters wide and in the process, crashed thru the picket line posted in front of the premises of the Insular Life Building. This resulted in injuries on the part of the picketers and the strike-breakers.lwph1.t Then the respondents brought against the picketers criminal charges, only three of which were not dismissed, and these three only for slight misdemeanors. As a result of these criminal actions, the respondents were able to obtain an injunction from the court of first instance restraining the strikers from stopping, impeding, obstructing, etc. the free and peaceful use of the Companies' gates, entrance and driveway and the free movement of persons and vehicles to and from, out and in, of the Companies' buildings. On the same day that the injunction was issued, the letter, Exhibit B, was sent again individually and by registered special delivery mail to the strikers, threatening them with dismissal if they did not report for work on or before June 2, 1958. But when most of the petitioners reported for work, the respondents thru a screening committee of which Ramon Garcia was a member refused to admit 63 members of the Unions on the ground of "pending criminal charges." However, when almost all were cleared of criminal charges by the fiscal's office, the respondents adamantly refused admission to 34 officials and union members. It is not, however, disputed that all-non-strikers with pending criminal charges which arose from the breakthrough incident of May 23, 1958 were readmitted immediately by the respondents. Among the non-strikers with pending criminal charges who were readmitted were Generoso Abella, Enrique Guidote, Emilio Carreon, Antonio Castillo, Federico Barretto, Manuel Chuidian and Nestor Cipriano. And despite the fact that the fiscal's office found no probable cause against the petitioning strikers, the Companies adamantly refused admission to them on the pretext that they committed "acts inimical to the interest of the respondents," without stating specifically the inimical acts allegedly committed. They were soon to admit, however, that these alleged inimical acts were the same criminal charges which were dismissed by the fiscal and by the courts.. Verily, the above actuations of the respondents before and after the issuance of the letters, exhibit A and B, yield the clear inference that the said letters formed of the respondents scheme to preclude if not destroy unionism within them. To justify the respondents' threat to dismiss the strikers and secure replacements for them in order to protect and continue their business, the CIR held the petitioners' strike to be an economic strike on the basis of exhibit 4 (Notice of Strike) which states that there was a "deadlock in collective bargaining" and on the strength of the supposed testimonies of some union men who did not actually know the very reason for the strike. It should be noted that exhibit 4, which was filed on January 27, 1958, states, inter alia: TO: BUREAU OF LABOR RELATIONS DEPARTMENT OF LABOR MANILA Thirty (30) days from receipt of this notice by the Office, this [sic] unions intends to go on strike against THE INSULAR LIFE ASSURANCE CO., LTD. Plaza Moraga, Manila THE FGU INSURANCE GROUP Plaza Moraga, Manila INSULAR LIFE BUILDING ADMINISTRATION Plaza Moraga, Manila . for the following reason: DEADLOCK IN COLLECTIVE BARGAINING...

However, the employees did not stage the strike after the thirty-day period, reckoned from January 27, 1958. This simply proves that the reason for the strike was not the deadlock on collective bargaining nor any lack of economic concessions. By letter dated April 15, 1958, the respondents categorically stated what they thought was the cause of the "Notice of Strike," which so far as material, reads: 3. Because you did not see fit to agree with our position on the union shop, you filed a notice of strike with the Bureau of Labor Relations on 27 January 1958, citing `deadlock in collective bargaining' which could have been for no other issue than the union shop." (exhibit 8, letter dated April 15, 1958.) The strike took place nearly four months from the date the said notice of strike was filed. And the actual and main reason for the strike was, "When it became crystal clear the management double crossed or will not negotiate in good faith, it is tantamount to refusal collectively and considering the unfair labor practice in the meantime being committed by the management such as the sudden resignation of some unionists and [who] became supervisors without increase in salary or change in responsibility, such as the coercion of employees, decided to declare the strike." (tsn., Oct. 14, 1958, p. 14.) The truth of this assertion is amply proved by the following circumstances: (1) it took the respondents six (6) months to consider the petitioners' proposals, their only excuse being that they could not go on with the negotiations if the petitioners did not drop the demand for union shop (exh. 7, respondents' letter dated April 7, 1958); (2) when the petitioners dropped the demand for union shop, the respondents did not have a counter-offer to the petitioners' demands. Sec. 14 of Rep. Act 875 required the respondents to make a reply to the petitioners' demands within ten days from receipt thereof, but instead they asked the petitioners to give a "well reasoned, workable formula which takes into account the financial position of the group companies." (tsn., Sept. 8, 1958, p. 62; tsn., Feb. 26, 1969, p. 49.) II. Exhibit H imposed three conditions for readmission of the strikers, namely: (1) the employee must be interested in continuing his work with the group companies; (2) there must be no criminal charges against him; and (3) he must report for work on June 2, 1958, otherwise he would be replaced. Since the evidence shows that all the employees reported back to work at the respondents' head office on June 2, 1953, they must be considered as having complied with the first and third conditions. Our point of inquiry should therefore be directed at whether they also complied with the second condition. It is not denied that when the strikers reported for work on June 2, 1958, 63 members of the Unions were refused readmission because they had pending criminal charges. However, despite the fact that they were able to secure their respective clearances 34 officials and union members were still refused readmission on the alleged ground that they committed acts inimical to the Companies. It is beyond dispute, however, that non-strikers who also had criminal charges pending against them in the fiscal's office, arising from the same incidents whence the criminal charges against the strikers evolved, were readily readmitted and were not required to secure clearances. This is a clear act of discrimination practiced by the Companies in the process of rehiring and is therefore a violation of sec. 4(a) (4) of the Industrial Peace Act. The respondents did not merely discriminate against all the strikers in general. They separated the active from the less active unionists on the basis of their militancy, or lack of it, on the picket lines. Unionists belonging to the first category were refused readmission even after they were able to secure clearances from the competent authorities with respect to the criminal charges filed against them. It is significant to note in this connection that except for one union official who deserted his union on the second day of the strike and who later participated in crashing through the picket lines, not a single union officer was taken back to work. Discrimination undoubtedly exists where the record shows that the union activity of the rehired strikers has been less prominent than that of the strikers who were denied reinstatement. So is there an unfair labor practice where the employer, although authorized by the Court of Industrial Relations to dismiss the employees who participated in an illegal strike, dismissed only the leaders of the strikers, such dismissal being evidence of discrimination against those dismissed and constituting a waiver of the employer's right to dismiss the striking employees and a condonation of the fault committed by them." (Carlos and Fernando, Labor and Social Legislation, p. 62, citing Phil. Air Lines, Inc. v. Phil. Air Lines Emloyees Association, L-8197, Oct. 31, 1958.) It is noteworthy that perhaps in an anticipatory effort to exculpate themselves from charges of discrimination in the readmission of strikers returning to work the respondents delegated the power to readmit to a committee. But the respondent Olbes had chosen Vicente Abella, chief of the personnel records section, and Ramon Garcia, assistant corporate secretary, to screen the unionists reporting back

to work. It is not difficult to imagine that these two employees having been involved in unpleasant incidents with the picketers during the strike were hostile to the strikers. Needless to say, the mere act of placing in the hands of employees hostile to the strikers the power of reinstatement, is a form of discrimination in rehiring. Delayed reinstatement is a form of discrimination in rehiring, as is having the machinery of reinstatement in the hands of employees hostile to the strikers, and reinstating a union official who formerly worked in a unionized plant, to a job in another mill, which was imperfectly organized. (Morabe, The Law on Strikes, p. 473, citing Sunshine Mining Co., 7 NLRB 1252; Cleveland Worsted Mills, 43 NLRB 545; emphasis supplied.) Equally significant is the fact that while the management and the members of the screening committee admitted the discrimination committed against the strikers, they tossed back and around to each other the responsibility for the discrimination. Thus, Garcia admitted that in exercising for the management the authority to screen the returning employees, the committee admitted the non-strikers but refused readmission to the strikers (tsn., Feb. 6, 1962, pp. 15-19, 23-29). Vicente Abella, chairman of the management's screening committee, while admitting the discrimination, placed the blame therefor squarely on the management (tsn., Sept. 20, 1960, pp. 7-8, 14-18). But the management, speaking through the respondent Olbes, head of the Companies, disclaimed responsibility for the discrimination. He testified that "The decision whether to accept or not an employee was left in the hands of that committee that had been empowered to look into all cases of the strikers." (tsn., Sept. 6, 1962, p. 19.) Of course, the respondents through Ramon Garcia tried to explain the basis for such discrimination by testifying that strikers whose participation in any alleged misconduct during the picketing was not serious in nature were readmissible, while those whose participation was serious were not. (tsn., Aug. 4, 1961, pp. 48-49, 56). But even this distinction between acts of slight misconduct and acts of serious misconduct which the respondents contend was the basis for either reinstatement or discharge, is completely shattered upon a cursory examination of the evidence on record. For with the exception of Pascual Esquillo whose dismissal sent to the other strikers cited the alleged commission by them of simple "acts of misconduct." III. Anent the third assignment of error, the record shows that not a single dismissed striker was given the opportunity to defend himself against the supposed charges against him. As earlier mentioned, when the striking employees reported back for work on June 2, 1958, the respondents refused to readmit them unless they first secured the necessary clearances; but when all, except three, were able to secure and subsequently present the required clearances, the respondents still refused to take them back. Instead, several of them later received letters from the respondents in the following stereotyped tenor: This will confirm the termination of your employment with the Insular Life-FGU Insurance Group as of 2 June 1958. The termination of your employment was due to the fact that you committed acts of misconduct while picketing during the last strike. Because this may not constitute sufficient cause under the law to terminate your employment without pay, we are giving you the amount of P1,930.32 corresponding to one-half month pay for every year of your service in the Group Company. Kindly acknowledge receipt of the check we are sending herewith. Very truly yours, (Sgd.) JOSE M. OLBES President, Insurance Life Acting President, FGU. The respondents, however, admitted that the alleged "acts of misconduct" attributed to the dismissed strikers were the same acts with which the said strikers were charged before the fiscal's office and the courts. But all these charges except three were dropped or dismissed. Indeed, the individual cases of dismissed officers and members of the striking unions do not indicate sufficient basis for dismissal. Emiliano Tabasondra, vice-president of the petitioner FGU Insurance Group Workers & Employees Association-NATU, was refused reinstatement allegedly because he did not report for duty on June 2, 1958 and, hence, had abandoned his office. But the overwhelming evidence adduced at the trial and which the respondents failed to rebut, negates the respondents' charge that he had abandoned his job. In

his testimony, corroborated by many others, Tabasondra particularly identified the management men to whom he and his group presented themselves on June 2, 1958. He mentioned the respondent Olbes' secretary, De Asis, as the one who received them and later directed them when Olbes refused them an audience to Felipe Enage, the Companies' personnel manager. He likewise categorically stated that he and his group went to see Enage as directed by Olbes' secretary. If Tabasondra were not telling the truth, it would have been an easy matter for the respondents to produce De Asis and Enage who testified anyway as witnesses for the respondents on several occasions to rebut his testimony. The respondents did nothing of the kind. Moreover, Tabasondra called on June 21, 1958 the respondents' attention to his non-admission and asked them to inform him of the reasons therefor, but instead of doing so, the respondents dismissed him by their letter dated July 10, 1958. Elementary fairness required that before being dismissed for cause, Tabasondra be given "his day in court." At any rate, it has been held that mere failure to report for work after notice to return, does not constitute abandonment nor bar reinstatement. In one case, the U.S. Supreme Court held that the taking back of six of eleven men constituted discrimination although the five strikers who were not reinstated, all of whom were prominent in the union and in the strike, reported for work at various times during the next three days, but were told that there were no openings. Said the Court: ... The Board found, and we cannot say that its finding is unsupported, that, in taking back six union men, the respondent's officials discriminated against the latter on account of their union activities and that the excuse given that they did not apply until after the quota was full was an afterthought and not the true reason for the discrimination against them. (NLRB v. Mackay Radio & Telegraph Co., 304 U.S. 333, 58 Sup. Ct. 904, 82 L. Ed. 1381) (Mathews, Labor Relations and the Law, p. 725, 728) The respondents' allegation that Tabasondra should have returned after being refused readmission on June 2, 1958, is not persuasive. When the employer puts off reinstatement when an employee reports for work at the time agreed, we consider the employee relieved from the duty of returning further. Sixto Tongos was dismissed allegedly because he revealed that despite the fact that the Companies spent more than P80,000 for the vacation trips of officials, they refused to grant union demands; hence, he betrayed his trust as an auditor of the Companies. We do not find this allegation convincing. First, this accusation was emphatically denied by Tongos on the witness stand. Gonzales, president of one of the respondent Companies and one of the officials referred to, took a trip abroad in 1958. Exchange controls were then in force, and an outgoing traveller on a combined business and vacation trip was allowed by the Central Bank, per its Circular 52 (Notification to Authorized Agent Banks) dated May 9, 1952, an allocation of $1,000 or only P2,000, at the official rate of two pesos to the dollar, as pocket money; hence, this was the only amount that would appear on the books of the Companies. It was only on January 21, 1962, per its Circular 133 (Notification to Authorized Agent Banks), that the Central Bank lifted the exchange controls. Tongos could not therefore have revealed an amount bigger than the above sum. And his competence in figures could not be doubted considering that he had passed the board examinations for certified public accountants. But assuming arguendo that Tongos indeed revealed the true expenses of Gonzales' trip which the respondents never denied or tried to disprove his statements clearly fall within the sphere of a unionist's right to discuss and advertise the facts involved in a labor dispute, in accordance with section 9(a)(5) of Republic Act 875 which guarantees the untramelled exercise by striking employees of the right to give "publicity to the existence of, or the fact involved in any labor dispute, whether by advertising, speaking, patrolling or by any method not involving fraud or violence." Indeed, it is not only the right, it is as well the duty, of every unionist to advertise the facts of a dispute for the purpose of informing all those affected thereby. In labor disputes, the combatants are expected to expose the truth before the public to justify their respective demands. Being a union man and one of the strikers, Tongos was expected to reveal the whole truth on whether or not the respondent Companies were justified in refusing to accede to union demands. After all, not being one of the supervisors, he was not a part of management. And his statement, if indeed made, is but an expression of free speech protected by the Constitution. Free speech on both sides and for every faction on any side of the labor relation is to me a constitutional and useful right. Labor is free ... to turn its publicity on any labor oppression, substandard wages, employer unfairness, or objectionable working conditions. The employer, too, should be free to answer and to turn publicity on the records of the leaders of the unions which seek the confidence of his men ...

(Concurring opinion of Justice Jackson in Thomas v. Collins, 323 U.S. 516, 547, 65 Sup. Ct. 315, 89 L. Ed. 430.) (Mathews, Labor Relations and the Law, p. 591.) The respondents also allege that in revealing certain confidential information, Tongos committed not only a betrayal of trust but also a violation of the moral principles and ethics of accountancy. But nowhere in the Code of Ethics for Certified Public Accountants under the Revised Rules and Regulations of the Board of Accountancy formulated in 1954, is this stated. Moreover, the relationship of the Companies with Tongos was that of an employer and not a client. And with regard to the testimonies of Juan Raymundo and Antolin Carillo, both vice-presidents of the Trust Insurance Agencies, Inc. about the alleged utterances made by Tongos, the lower court should not have given them much weight. The firm of these witnesses was newly established at that time and was still a "general agency" of the Companies. It is not therefore amiss to conclude that they were more inclined to favor the respondents rather than Tongos. Pacifico Ner, Paulino Bugay, Jose Garcia, Narciso Dao, Vicente Alsol and Hermenigildo Ramirez, opined the lower court, were constructively dismissed by non-readmission allegedly because they not only prevented Ramon Garcia, assistant corporate secretary, and Vicente Abella, chief of the personnel records section of the Companies, from entering the Companies' premises on May 21, 1958, but they also caused bruises and abrasions on Garcia's chest and forehead acts considered inimical to the interest of the respondents. The Unions, upon the other hand, insist that there is complete lack of evidence that Ner took part in pushing Garcia; that it was Garcia who elbowed his way through the picket lines and therefore Ner shouted "Close up," which the picketers did; and that Garcia tossed Paulino Bugay's placard and a fight ensued between them in which both suffered injuries. But despite these conflicting versions of what actually happened on May 21, 1958, there are grounds to believe that the picketers are not responsible for what happened.lwph1.t The picketing on May 21, 1958, as reported in the police blotter, was peaceful (see Police blotter report, exh. 3 in CA-G.R. No. 25991-R of the Court of Appeals, where Ner was acquitted). Moreover, although the Companies during the strike were holding offices at the Botica Boie building at Escolta, Manila; Tuason Building at San Vicente Street, Manila; and Ayala, Inc. offices at Makati, Rizal, Garcia, the assistant corporate secretary, and Abella, the chief of the personnel records section, reported for work at the Insular Life Building. There is therefore a reasonable suggestion that they were sent to work at the latter building to create such an incident and have a basis for filing criminal charges against the petitioners in the fiscal's office and applying for injunction from the court of first instance. Besides, under the circumstances the picketers were not legally bound to yield their grounds and withdraw from the picket lines. Being where the law expects them to be in the legitimate exercise of their rights, they had every reason to defend themselves and their rights from any assault or unlawful transgression. Yet the police blotter, about adverted to, attests that they did not resort to violence. The heated altercations and occasional blows exchanged on the picket line do not affect or diminish the right to strike. Persuasive on this point is the following commentary: . We think it must be conceded that some disorder is unfortunately quite usual in any extensive or long drawn out strike. A strike is essentially a battle waged with economic weapons. Engaged in it are human beings whose feelings are stirred to the depths. Rising passions call forth hot words. Hot words lead to blows on the picket line. The transformation from economic to physical combat by those engaged in the contest is difficult to prevent even when cool heads direct the fight. Violence of this nature, however much it is to be regretted, must have been in the contemplation of the Congress when it provided in Sec. 13 of Act 29 USCA Sec. 163, that nothing therein should be construed so as to interfere with or impede or diminish in any way the right to strike. If this were not so, the rights afforded to employees by the Act would indeed be illusory. We accordingly recently held that it was not intended by the Act that minor disorders of this nature would deprive a striker of the possibility of reinstatement. (Republic Steel Corp. v. N. L. R. B., 107 F2d 472, cited in Mathews, Labor Relations and the Law, p. 378) Hence the incident that occurred between Ner, et al. and Ramon Garcia was but a necessary incident of the strike and should not be considered as a bar to reinstatement. Thus it has been held that: Fist-fighting between union and non-union employees in the midst of a strike is no bar to reinstatement. (Teller, Labor Disputes and Collective Bargaining, Vol. II, p. 855 citing Stackpole Carbon, Co. 6 NLRB 171, enforced 105 F2d 167.)

Furthermore, assuming that the acts committed by the strikers were transgressions of law, they amount only to mere ordinary misdemeanors and are not a bar to reinstatement. In cases involving misdemeanors the board has generally held that unlawful acts are not bar to reinstatement. (Teller, Labor Disputes and Collective Bargaining, Id., p. 854, citing Ford Motor Company, 23 NLRB No. 28.) Finally, it is not disputed that despite the pendency of criminal charges against non-striking employees before the fiscal's office, they were readily admitted, but those strikers who had pending charges in the same office were refused readmission. The reinstatement of the strikers is thus in order. [W]here the misconduct, whether in reinstating persons equally guilty with those whose reinstatement is opposed, or in other ways, gives rise to the inference that union activities rather than misconduct is the basis of his [employer] objection, the Board has usually required reinstatement." (Teller, supra, p. 853, citing the Third Annual Report of NLRB [1938], p. 211.) Lastly, the lower Court justified the constructive dismissal of Florencio Ibarra allegedly because he committed acts inimical to the interest of the respondents when, as president of the FGU Workers and Employees Association-NATU, he advised the strikers that they could use force and violence to have a successful picket and that picketing was precisely intended to prevent the non-strikers and company clients and customers from entering the Companies' buildings. Even if this were true, the record discloses that the picket line had been generally peaceful, and that incidents happened only when management men made incursions into and tried to break the picket line. At any rate, with or without the advice of Ibarra, picketing is inherently explosive. For, as pointed out by one author, "The picket line is an explosive front, charged with the emotions and fierce loyalties of the union-management dispute. It may be marked by colorful name-calling, intimidating threats or sporadic fights between the pickets and those who pass the line." (Mathews, Labor Relations and the Law, p. 752). The picket line being the natural result of the respondents' unfair labor practice, Ibarra's misconduct is at most a misdemeanor which is not a bar to reinstatement. Besides, the only evidence presented by the Companies regarding Ibarra's participation in the strike was the testimony of one Rodolfo Encarnacion, a former member of the board of directors of the petitioner FGU Insurance Group Workers and Employees Union-NATU, who became a "turncoat" and who likewise testified as to the union activities of Atty. Lacsina, Ricardo Villaruel and others (annex C, Decision, p. 27) another matter which emphasizes the respondents' unfair labor practice. For under the circumstances, there is good ground to believe that Encarnacion was made to spy on the actvities of the union members. This act of the respondents is considered unjustifiable interference in the union activities of the petitioners and is unfair labor practice. It has been held in a great number of decisions at espionage by an employer of union activities, or surveillance thereof, are such instances of interference, restraint or coercion of employees in connection with their right to organize, form and join unions as to constitute unfair labor practice. ... "Nothing is more calculated to interfere with, restrain and coerce employees in the exercise of their right to self-organization than such activity even where no discharges result. The information obtained by means of espionage is in valuable to the employer and can be used in a variety of cases to break a union." The unfair labor practice is committed whether the espionage is carried on by a professional labor spy or detective, by officials or supervisory employees of the employer, or by fellow employees acting at the request or direction of the employer, or an exemployee..." (Teller, Labor Disputes and Collective Bargaining, Vol. II, pp. 765-766, and cases cited.) . IV. The lower court should have ordered the reinstatement of the officials and members of the Unions, with full back wages from June 2, 1958 to the date of their actual reinstatement to their usual employment. Because all too clear from the factual and environmental milieu of this case, coupled with settled decisional law, is that the Unions went on strike because of the unfair labor practices committed by the respondents, and that when the strikers reported back for work upon the invitation of the respondents they were discriminatorily dismissed. The members and officials of the Unions therefore are entitled to reinstatement with back pay. [W]here the strike was induced and provoked by improper conduct on the part of an employer amounting to an 'unfair labor practice,' the strikers are entitled to reinstatement with back pay. (Rothenberg on Labor Relations, p. 418.)

[A]n employee who has been dismissed in violation of the provisions of the Act is entitled to reinstatement with back pay upon an adjudication that the discharge was illegal." (Id., citing Waterman S. S. Corp. v. N. L. R. B., 119 F2d 760; N. L. R. B. v. Richter's Bakery, 140 F2d 870; N. L. R. B. v. Southern Wood Preserving Co., 135 F. 2d 606; C. G. Conn, Ltd. v. N. L. R. B., 108 F2d 390; N. L. R. B. v. American Mfg. Co., 106 F2d 61; N. L. R. B. v. Kentucky Fire Brick Co., 99 F2d 99.) And it is not a defense to reinstatement for the respondents to allege that the positions of these union members have already been filled by replacements. [W]here the employers' "unfair labor practice" caused or contributed to the strike or where the 'lock-out' by the employer constitutes an "unfair labor practice," the employer cannot successfully urge as a defense that the striking or lock-out employees position has been filled by replacement. Under such circumstances, if no job sufficiently and satisfactorily comparable to that previously held by the aggrieved employee can be found, the employer must discharge the replacement employee, if necessary, to restore the striking or locked-out worker to his old or comparable position ... If the employer's improper conduct was an initial cause of the strike, all the strikers are entitled to reinstatement and the dismissal of replacement employees wherever necessary; ... . (Id., p. 422 and cases cited.) A corollary issue to which we now address ourselves is, from what date should the backpay payable to the unionists be computed? It is now a settled doctrine that strikers who are entitled to reinstatement are not entitled to back pay during the period of the strike, even though it is caused by an unfair labor practice. However, if they offer to return to work under the same conditions just before the strike, the refusal to re-employ or the imposition of conditions amounting to unfair labor practice is a violation of section 4(a) (4) of the Industrial Peace Act and the employer is liable for backpay from the date of the offer (Cromwell Commercial Employees and Laborers Union vs. Court of Industrial Relations, L-19778, Decision, Sept. 30, 1964, 12 SCRA 124; Id., Resolution on motion for reconsideration, 13 SCRA 258; see also Mathews, Labor Relations and the Law, p. 730 and the cited cases). We have likewise ruled that discriminatorily dismissed employees must receive backpay from the date of the act of discrimination, that is, from the date of their discharge (Cromwell Commercial Employees and Laborers Union vs. Court of Industrial Relations, supra). The respondents notified the petitioner strikers to report back for work on June 2, 1958, which the latter did. A great number of them, however, were refused readmission because they had criminal charges against them pending before the fiscal's office, although non-strikers who were also facing criminal indictments were readily readmitted. These strikers who were refused readmission on June 2, 1958 can thus be categorized as discriminatorily dismissed employees and are entitled to backpay from said date. This is true even with respect to the petitioners Jose Pilapil, Paulino Bugay, Jr. and Jose Garcia, Jr. who were found guilty only of misdemeanors which are not considered sufficient to bar reinstatement (Teller, Labor Disputes and Collective Bargaining, p. 854), especially so because their unlawful acts arose during incidents which were provoked by the respondents' men. However, since the employees who were denied readmission have been out of the service of the Companies (for more than ten years) during which they may have found other employment or other means of livelihood, it is only just and equitable that whatever they may have earned during that period should be deducted from their back wages to mitigate somewhat the liability of the company, pursuant to the equitable principle that no one is allowed to enrich himself at the expense of another (Macleod & Co. of the Philippines v. Progressive Federation of Labor, 97 Phil. 205 [1955]). The lower court gave inordinate significance to the payment to and acceptance by the dismissed employees of separation pay. This Court has ruled that while employers may be authorized under Republic Act 1052 to terminate employment of employees by serving the required notice, or, in the absence thereof, by paying the required compensation, the said Act may not be invoked to justify a dismissal prohibited by law, e.g., dismissal for union activities. ... While Republic Act No. 1052 authorizes a commercial establishment to terminate the employment of its employee by serving notice on him one month in advance, or, in the absence thereof, by paying him one month compensation from the date of the termination of his employment, such Act does not give to the employer a blanket authority to terminate the employment regardless of the cause or purpose behind such termination. Certainly, it cannot be made use of as a cloak to circumvent a final

order of the court or a scheme to trample upon the right of an employee who has been the victim of an unfair labor practice. (Yu Ki Lam, et al. v. Nena Micaller, et al., 99 Phil. 904 [1956].) Finally, we do not share the respondents' view that the findings of fact of the Court of Industrial Relations are supported by substantial and credible proof. This Court is not therefore precluded from digging deeper into the factual milieu of the case (Union of Philippine Education Employees v. Philippine Education Company, 91 Phil. 93; Lu Do & Lu Ym Corporation v. Philippine-Land-Air-Sea Labor Union, 11 SCRA 134 [1964]). V. The petitioners (15 of them) ask this Court to cite for contempt the respondent Presiding Judge Arsenio Martinez of the Court of Industrial Relations and the counsels for the private respondents, on the ground that the former wrote the following in his decision subject of the instant petition for certiorari, while the latter quoted the same on pages 90-91 of the respondents' brief: . ... Says the Supreme Court in the following decisions: In a proceeding for unfair labor practice, involving a determination as to whether or not the acts of the employees concerned justified the adoption of the employer of disciplinary measures against them, the mere fact that the employees may be able to put up a valid defense in a criminal prosecution for the same acts, does not erase or neutralize the employer's right to impose discipline on said employees. For it is settled that not even the acquittal of an employee of the criminal charge against him is a bar to the employer's right to impose discipline on its employees, should the act upon which the criminal charged was based constitute nevertheless an activity inimical to the employer's interest... The act of the employees now under consideration may be considered as a misconduct which is a just cause for dismissal. (Lopez, Sr., et al. vs. Chronicle Publication Employees Ass'n. et al., G.R. No. L-20179-81, December 28, 1964.) (emphasis supplied) The two pertinent paragraphs in the above-cited decision * which contained the underscored portions of the above citation read however as follows: Differently as regard the dismissal of Orlando Aquino and Carmelito Vicente, we are inclined to uphold the action taken by the employer as proper disciplinary measure. A reading of the article which allegedly caused their dismissal reveals that it really contains an insinuation albeit subtly of the supposed exertion of political pressure by the Manila Chronicle management upon the City Fiscal's Office, resulting in the nonfiling of the case against the employer. In rejecting the employer's theory that the dismissal of Vicente and Aquino was justified, the lower court considered the article as "a report of some acts and omissions of an Assistant Fiscal in the exercise of his official functions" and, therefore, does away with the presumption of malice. This being a proceeding for unfair labor practice, the matter should not have been viewed or gauged in the light of the doctrine on a publisher's culpability under the Penal Code. We are not here to determine whether the employees' act could stand criminal prosecution, but only to find out whether the aforesaid act justifies the adoption by the employer of disciplinary measure against them. This is not sustaining the ruling that the publication in question is qualified privileged, but even on the assumption that this is so, the exempting character thereof under the Penal Code does not necessarily erase or neutralize its effect on the employer's interest which may warrant employment of disciplinary measure. For it must be remembered that not even the acquittal of an employee, of the criminal charges against him, is a bar to the employer's right to impose discipline on its employees, should the act upon which the criminal charges was based constitute nevertheless an activity inimical to the employer's interest. In the herein case, it appears to us that for an employee to publish his "suspicion," which actually amounts to a public accusation, that his employer is exerting political pressure on a public official to thwart some legitimate activities on the employees, which charge, in the least, would sully the employer's reputation, can be nothing but an act inimical to the said employer's interest. And the fact that the same was made

in the union newspaper does not alter its deleterious character nor shield or protect a reprehensible act on the ground that it is a union activity, because such end can be achieved without resort to improper conduct or behavior. The act of the employees now under consideration may be considered as a misconduct which is a just cause for dismissal.** (Emphasis ours) It is plain to the naked eye that the 60 un-underscored words of the paragraph quoted by the respondent Judge do not appear in the pertinent paragraph of this Court's decision in L-20179-81. Moreover, the first underscored sentence in the quoted paragraph starts with "For it is settled ..." whereas it reads, "For it must be remembered ...," in this Court's decision. Finally, the second and last underlined sentence in the quoted paragraph of the respondent Judge's decision, appears not in the same paragraph of this Court's decision where the other sentence is, but in the immediately succeeding paragraph. This apparent error, however, does not seem to warrant an indictment for contempt against the respondent Judge and the respondents' counsels. We are inclined to believe that the misquotation is more a result of clerical ineptitude than a deliberate attempt on the part of the respondent Judge to mislead. We fully realize how saddled with many pending cases are the courts of the land, and it is not difficult to imagine that because of the pressure of their varied and multifarious work, clerical errors may escape their notice. Upon the other hand, the respondents' counsels have the prima facie right to rely on the quotation as it appears in the respondent Judge's decision, to copy it verbatim, and to incorporate it in their brief. Anyway, the import of the underscored sentences of the quotation in the respondent Judge's decision is substantially the same as, and faithfully reflects, the particular ruling in this Court's decision, i.e., that "[N]ot even the acquittal of an employee, of the criminal charges against him, is a bar to the employer's right to impose discipline on its employees, should the act upon which the criminal charges were based constitute nevertheless an activity inimical to the employer's interest." Be that as it may, we must articulate our firm view that in citing this Court's decisions and rulings, it is the bounden duty of courts, judges and lawyers to reproduce or copy the same word-for-word and punctuation mark-for-punctuation mark. Indeed, there is a salient and salutary reason why they should do this. Only from this Tribunal's decisions and rulings do all other courts, as well as lawyers and litigants, take their bearings. This is because the decisions referred to in article 8 of the Civil Code which reads, "Judicial decisions applying or interpreting the laws or the Constitution shall form a part of the legal system of the Philippines," are only those enunciated by this Court of last resort. We said in no uncertain terms in Miranda, et al. vs. Imperial, et al. (77 Phil. 1066) that "[O]nly the decisions of this Honorable Court establish jurisprudence or doctrines in this jurisdiction." Thus, ever present is the danger that if not faithfully and exactly quoted, the decisions and rulings of this Court may lose their proper and correct meaning, to the detriment of other courts, lawyers and the public who may thereby be misled. But if inferior courts and members of the bar meticulously discharge their duty to check and recheck their citations of authorities culled not only from this Court's decisions but from other sources and make certain that they are verbatim reproductions down to the last word and punctuation mark, appellate courts will be precluded from acting on misinformation, as well as be saved precious time in finding out whether the citations are correct. Happily for the respondent Judge and the respondents' counsels, there was no substantial change in the thrust of this Court's particular ruling which they cited. It is our view, nonetheless, that for their mistake, they should be, as they are hereby, admonished to be more careful when citing jurisprudence in the future. ACCORDINGLY, the decision of the Court of Industrial Relations dated August 17, 1965 is reversed and set aside, and another is entered, ordering the respondents to reinstate the dismissed members of the petitioning Unions to their former or comparatively similar positions, with backwages from June 2, 1958 up to the dates of their actual reinstatements. Costs against the respondents. Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Fernando, Teehankee, Barredo, Villamor and Makasiar, JJ., concur. Zaldivar, J., took no part. Footnotes 1 Cf. Chicago Apparatus Company, 12 NLRB 1002; Fruehauf Trailer Co., 1 NLRB 68; Remington Rand, Inc., 2 NLRB 626; Metropolitan Engineering Co., 4 NLRB 542; Ritzwoller Company, 11 NLRB 79; American Mfg. Co., 5 NLRB 443; Ralph A. Fruendich, Inc., 2 NLRB 802).

2 See Robert Bros., Inc., 8 NLRB 925; Hercules Campbell Body, Inc., 7 NLRB 431; Aronson Printing Co., 13 NLRB 799; E.A. Laboratories, Inc., 88 NLRB 673; Star Beef Company, 92 NLRB 1018; Jackson Press, Inc., 96 NLRB 132. * As reproduced on pp. 123-127 of the mimeographed and paperbound Supreme Court decisions for December 1964. ** Id., p. 126. (The entire decision may now be found in printed form in 12 SCRA 699-700.) Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-28607 May 31, 1971 SHELL OIL WORKERS' UNION, petitioner, vs. SHELL COMPANY OF THE PHILIPPINES, LTD., and THE COURT OF INDUSTRIAL RELATIONS, respondents. J.C. Espinas, B. C. Pineda, J. J. de la Rosa & Associates for petitioner. Siguion Reyna, Montecillo, Belo & Ongsiako for respondent Company. FERNANDO, J.: The insistence on the part of respondent Shell Company of the Philippines to dissolve its security guard section, stationed at its Pandacan Installation notwithstanding its being embraced in, and its continuance as such thus assured by an existing collective bargaining contract, resulted in a strike called by petitioner Shell Oil Workers' Union, hereinafter to be designated as the Union, certified a month later on June 27, 1967 by the President to respondent Court of Industrial Relations. Against its decision declaring the strike illegal primarily on the ground that such dissolution was a valid exercise of a management prerogative, this appeal is taken. With due Recognition that the system of industrial democracy fostered in the regime of unionization and collective bargaining leaves room for the free exercise of management rights, but unable to close our eyes to the violation of a contract still in force implicit in such dissolution thus giving rise to an unfair labor practice, we cannot sustain respondent Court of Industrial Relations. Consequently, the harsh and unwarranted sanction imposed, the dismissal of the security guards and the officers of the Union, cannot stand. Insofar, however, as individual liability is deemed incurred for serious acts of violence, whether committed by a leader or member of the Union, we leave things as adjudged. The deep-rooted differences between the parties that led to the subsequent strike were made clear in the presidential certification. As set forth in the opening paragraph of the decision now on appeal: "Before this Court for resolution is the labor dispute between the petitioner Shell Oil Workers' Union, Union for brevity, and the respondent Shell Company of the Philippines Limited, Company for short, which was certified to this Court on June 27, 1967 by the Office of the President of the Republic of the Philippines pursuant to the provision of Section 10 of Republic Act No. 875. Said dispute ... 'was a result of the transfer by the Company of the eighteen (18) security guards to its other department and the consequent hiring of a private security agency to undertake the work of said security guards.'" 1 The respective contentions of the parties were then taken up. Petitioner "filed the petition on July 7, 1967 alleging, among others, that the eighteen (18) security guards affected are part of the bargaining unit and covered by the existing collective bargaining contract, and as such, their transfers and eventual dismissals are illegal being done in violation of the existing contract. It, therefore, prayed that said security guards be reinstated with full back wages from the time of their dismissal up to the time of their actual reinstatement." 2 Then came a summary of the stand Of Shell Company: "For hours hereafter, respondent Company filed its Answer [to] the material allegations in the Union's petition and adverted that the issues in this case are: (1) whether or not the Company commits unfair labor practice in contracting out its security service to an independent professional security agency and assigning the 18 guards to other sections of the Company; (2) whether or not the dismissal of the 18 security guards are justified; and (3) whether or not (the strike called by the Union on May 25, 1967 is legal. As special and affirmative defenses, the Company maintained that in contracting out the security service and redeploying the 18

security guards affected, it was merely performing its legitimate prerogative to adopt the most efficient and economical method of operation; that said guards were transferred to other sections with increase, except for four (4) guards, in rates of pay and with transfer bonus; the said action was motivated by business consideration in line with past established practice and made after notice to and discussion with the Union; that the 18 guards concerned were dismiss for wilfully refusing to obey the transfer order; and that the strike staged by the Union on May 25, 1967 is illegal. Primarily, Company prayed, among others, for the dismissal of the Union's petition and the said Union's strike be declared illegal followed by the termination of the employee status of those responsible and who participated in said illegal strike." 3 The move for the dissolution of the security section by reassigning the guards to other positions and contracting out such service to an outside security agency had its origins as far back as 1964. A study made by the Shell Company for the purpose of improving the productivity, organization and efficiency of its Pandacan Installation recommended its dissolution. If an outside agency to perform such service were to be hired, there would be a savings of P96,000.00 annually in addition to further economy consequent on the elimination to overtime an administration expenses. Its implementation was scheduled for 1965. 4 There was then, in July 1966, a joint consultation by the Union and management on the matter. At that stage, it would appear that there was no serious opposition to such a move provided it be done gradually and in close consultation with the Union. There was even an offer if cooperation as long as a scheme for retirement of the security guards affected or their redeployment would be followed. 5 The tentative character of such proposed dissolution was made evident by the fact however that on August 26, 1966, a collective bargaining contract was executed between the Union and the Shell Company effective from the first of the month of that year to December 31, 1969. It contained the usual grievance procedure and no strike clauses. 6 More relevant to the case before this Court, however, was the inclusion of the category of the security guards in such collective bargaining contract. This was stressed in the brief for the petitioner where specific mention is made of the agreement covering rank and file personnel regularly employed by the Company, included in which is the work area covered by the Pandacan Installation. 7 There was likewise specific reference to such positions in the wage schedule for hourly-rated categories appearing in an appendix thereof. 8 Mention was expressly made in another appendix of the regular remuneration as well as premium pay and night compensation. 9 Nonetheless, Shell Company was bent on doing away with the security guard section, to be replaced by an outside security agency. That was communicated to the Union in a panel to panel meeting on May 3, 1967. A counter-offer on the part of the Union to reduce the working days per week of the guards from six to five was rejected by Shell Company on the ground of its being unusual and impracticable. Two days later, there was a meeting of the Union where a majority of the members made clear that should there be such a replacement of the company guards by a private security agency, there would be a strike. It was noted in the decision that when the strike vote was taken, of 243 members, 226 were for the approval of a motion to that effect. 10 On the afternoon of May 24, 1967, a notice of reassignment effective at 8:00 o'clock the next morning was handed to the guards affected. At 10:00 o'clock that evening, there was a meeting by the Union attended by ten officers and a majority of the members wherein it was agreed viva voce that if there would be an implementation of the circular dissolving the security section to be replaced by guards from an outside agency, the Union would go on strike immediately. 11 The strike was declared at half-past 7:00 o'clock in the morning of May 25, 1967 when security guards from an outside agency were trying to pass the main gate of the Shell Company to their work. With the picket line established, they were unable to enter. Efforts were made by the Conciliation Service of the Department of Labor to settle the matter, but they were unsuccessful. 12 It was not until June 27, 1967, however, that the Presidential certification came. 13 There was a return to work order on July 6, 1967 by respondent Court, by virtue of which pending the resolution of the case, the Shell Company was not to lockout the employees involved and the employees in turn were not to strike. The decision of respondent Court was rendered on August 5, 1967. It declared that no unfair labor practice was committed by Shell Company in dissolving its security guards from an outside agency, as such a step was well within management prerogative. Hence for it, the strike was illegal, there being no compliance with the statutory requisites before an economic strike could be staged. Respondent Court sought to reinforce such a conclusion by a finding that its purpose was not justifiable and that it was moreover carried out with violence. There was thus a failure on its part to accord due weight to the terms of an existing collective bargaining agreement. Accordingly as was made clear in the opening paragraph of this opinion we view matters differently. The strike cannot be declared illegal, there being a violation of the collective bargaining agreement by Shell Company. Even if it were otherwise, however, this Court

cannot lend sanction of its approval to the outright dismissal of all union officers, a move that certainly would have the effect of considerably weakening a labor organization, and thus in effect frustrate the policy of the Industrial Peace Act to encourage unionization. To the extent, however, that the serious acts of violence occurring in the course of the strike could be made the basis for holding responsible a leader or a member of the Union guilty of their commission, what was decided by respondent Court should not be disturbed. 1. It is the contention of Shell Company, sustained by respondent Court, that the dissolution of the security guard section to be replaced by an outside agency is a management prerogative. The Union argues otherwise, relying on the assurance of the continued existence of a security guard section at least during the lifetime of the collective bargaining agreement. The second, third and fourth assignment of errors, while they could have been more felicitously worded, did attack the conclusion reached by respondent Court as contrary to and in violation of the existing contract. It is to be admitted that the stand of Shell Company as to the scope of management prerogative is not devoid of plausibility if it were not bound by what was stipulated. The growth of industrial democracy fostered by the institution of collective bargaining with the workers entitled to be represented by a union of their choice, has no doubt contracted the sphere of what appertains solely to the employer. It would be going too far to assert, however, that a decision on each and every aspect of the productive process must be reached jointly by an agreement between labor and management. Essentially, the freedom to manage the business remains with management. It still has plenty of elbow room for making its wishes prevail. In much the same way that labor unions may be expected to resist to the utmost what they consider to be an unwelcome intrusion into their exclusive domain, they cannot justly object to management equally being jealous of its prerogatives. More specifically, it cannot be denied the faculty of promoting efficiency and attaining economy by a study of what units are essential for its operation. To it belongs the ultimate determination of whether services should be performed by its personnel or contracted to outside agencies. it is the opinion of the Court, that while management has the final say on such matter, the labor union is not to be completely left out. What was done by Shell Company in informing the Union as to the step it was intending to take on the proposed dissolution of the security guard section to be replaced by an outside agency is praiseworthy. There should be mutual consultation eventually deference is to be paid to what management decides. Thereby, in the words of Chief Justice Warren, there is likely to be achieved "peaceful accommodation of conflicting interest." 14 In this particular case though, what was stipulated in an existing collective bargaining contract certainly precluded Shell Company from carrying out what otherwise would have been within its prerogative if to do so would be violative thereof. 2. The crucial question thus is whether the then existing collective bargaining contract running for three years from August 1, 1966 to December 31, 1969 constituted a bar to such a decision reached by management? The answer must be in the affirmative. As correctly stressed in the brief for the petitioner, there was specific coverage concerning the security guard section in the collective bargaining contract. It is found not only in the body thereof but in the two appendices concerning the wage schedules as well as the premium pay and the night compensation to which the personnel in such section were entitled. 15 It was thus an assurance of security of tenure, at least, during the lifetime of the agreement. Nor is it a sufficient answer, as set forth in the decision of respondent Court, that while such a section would be abolished, the guards would not be unemployed as they would be transferred to another position with an increase in pay and with a transfer bonus. For what is involved is the integrity of the agreement reached, the terms of which should be binding of both parties. One of them may be released, but only with the consent of the other. The right to object belongs to the latter, and if exercised, must be respected. Such a state of affairs should continue during the existence of the contract. Only thus may there be compliance with and fulfillment of the covenants in a valid subsisting agreement. What renders the stand of Shell Company even more vulnerable is the fact that as set forth in its brief and as found by respondent Court as far back as 1964, it had already been studying the matter of dissolving the security guard section and contracting out such service to an outside agency. Apparently, it had reached a decision to that effect for implementation the next year. In July 1966, there was a joint consultation between it and the Union on the matter. Nonetheless on August 26, 1966, a collective bargaining contract was entered into which, as indicated above, did assure the continued existence of the security guard section. The Shell Company did not have to agree to such a stipulation. Or it could have reserved the right to effect a dissolution and reassign the guards. It did not do so. Instead, when it decided to take such a step resulting in the strike, it would rely primarily on provisions in the collective

bargaining contract couched in general terms, merely declaratory of certain management prerogatives. Considering the circumstances of record, there can be no justification then for Shell Company's insistence on pushing through its project of such dissolution without thereby incurring a violation of the collective bargaining agreement. 3. The Shell Company, in failing to manifest fealty to what was stipulated in an existing collective bargaining contract, was thus guilty of an unfair labor practice. Such a doctrine first found expression in Republic Savings Bank v. Court of Industrial Relations, 16 the opinion of the Court being penned by Justice Castro. There was a reiteration of such a view in Security Bank Employees Union v. Security Bank and Trust Company. 17 Thus: "It being expressly provided in the industrial Peace Act that [an] unfair labor practice is committed by a labor union or its agent by its refusal 'to bargain collectively with the employer' and this Court having decided in the Republic Savings Bank case that collective bargaining does not end with the execution of an agreement, being a continuous process, the duty to bargain necessarily imposing on the parties the obligation to live up to the terms of such a collective bargaining agreement if entered into, it is undeniable that non-compliance therewith constitutes an unfair labor practice." 18 4. Accordingly, the unfair labor practice strike called by the Union did have the impress of validity. Rightly labor is justified in making use of such a weapon in its arsenal to counteract what is clearly outlawed by the Industrial Peace Act. That would be one way to assure that the objectives of unionization and collective bargaining would not be thwarted. It could, of course, file an unfair labor practice case before the Court of Industrial Relations. It is not precluded, however, from relying on its own resources to frustrate such an effort on the part of employer. So we have consistently held and for the soundest of reasons. 19 There is this categorial pronouncement from the present Chief Justice: "Again, the legality of the strike follows as a corollary to the finding of fact, made in the decision appealed from which is supported by substantial evidence to the effect that the strike had triggered by the Company's failure to abide by the terms and conditions of its collective bargaining agreement with the Union, by the discrimination, resorted to by the company, with regard to hire and tenure of employment, and the dismissal of employees due to union activities, as well as the refusal of the company to bargain collectively in good faith." 20 As a matter of fact, this Court has gone even further. It is not even required that there be in fact an unfair labor practice committed by the employer. It suffices, if such a belief in good faith is entertained by labor, as the inducing factor for staging a strike. So it was clearly stated by the present Chief Justice while still an Associate Justice of this Court: "As a consequence, we hold that the strike in question had been called to offset what petitioners were warranted in believing in good faith to be unfair labor practices on the part of Management, that petitioners were not bound, therefore, to wait for the expiration of thirty (30) days from notice of strike before staging the same, that said strike was not, accordingly, illegal and that the strikers had not thereby lost their status as employees of respondents herein." 21 5. It would thus appear that the decision now on appeal did not reflect sufficient awareness of authoritative pronouncements coming from this Court. What is worse, certain portions thereof yield the impression that an attitude decidedly unsympathetic to labors resort to strike is evident. Such should not be the case. The right to self-organization so sedulously guarded by the Industrial Peace Act explicitly includes the right "to engage in concerted activities for the purpose of collective bargaining and to the mutual aid or protection." 22 From and after June 17, 1953 then, there cannot be the least doubt that a strike as form of concerted activity has the stamp of legitimacy. As a matter of law, even under the regime of compulsary arbitration under the Court of Industrial Relations Act, 23 a strike was by no means a forbidden weapon. Such is the thought embodied in the opinion of Justice Laurel in Rex Taxicab Company v. Court of Industrial Relations. 24 Thus: "In other words, the employee, tenant or laborer is inhibited from striking or walking out of his employment only when so enjoined by the Court of Industrial Relations and after a dispute has been submitted thereto and pending award or decision by the court of such dispute. It follows that, as in the present case, the employees or laborers may strike before being ordered not to do so and before an industrial dispute is submitted to the Court of Industrial Relations, subject to the power of the latter, after hearing when public interest so requires or when the dispute cannot, in its opinion, be promptly decided or settled, to order them to return, with the consequence that if the strikers fail to return to work, when so ordered, the court may authorize the employer to accept other employees or laborers." 25 Former Chief Justice Paras, in a case not too long before enactment of the Industrial Peace Act, had occasion to repeat such a view. Thus: "As a matter of fact, a strike may not be staged only when, during the pendency of an industrial dispute, the Court of industrial Relations has issued the proper

injunction against the laborers (section 19, Commonwealth Act No. 103, as amended). Capital need not, however, be apprehensive about the recurrence of strikes in view of the system of compulsory arbitration by the Court of Industrial Relations." 26 A strike then, in the apt phrase of Justice J.B.L. Reyes, is "an institutionalized factor of democratic growth." 27 This is to foster industrial democracy. Implicit in such a concept is the recognization that concerning the ends which labor considers worth while, its wishes are ordinarily entitled to respect. Necessarily so, the choice as to when such an objective may be attained by striking likewise belongs to it. There is the rejection of the concept that an outside authority, even if governmental, should make the decisions for it as to ends which are desirable and how they may be achieved. The assumption is that labor can be trusted to determine for itself when the right to strike may be availed of in order to attain a successful fruition in their disputes with management. It is true that there is a requirement, in the Act that before the employees may do so, they must file with the Conciliation Service of the Department of Labor a notice of their intention to strike. 28 Such a requisite however, as has been repeatedly declared by this Court, does not have to be complied with in case of unfair labor practice strike, which certainly is entitled to greater judicial protection if the Industrial Peace Act is to be rendered meaningful. What has been said thus far would demonstrate the unwarranted deviation of the decision now on appeal from what is indicated by the law and authoritative decisions. 6. Respondent Court was likewise impelled to consider the strike illegal because of the violence that attended it. What is clearly within the law is the concerted activity of cessation of work in order that a union's economic demands may be granted or that an employer cease and desist from an unfair labor practice. That the law recognizes as a right. There is though a disapproval of the utilization of force to attain such an objective. For implicit in the very concept of a legal order is the maintenance of peaceful ways. A strike otherwise valid, if violent in character may be placed beyond the pale. Care is to be taken, however, especially where an unfair labor practice is involved, to avoid stamping it with illegality just because it is tainted by such acts. To avoid rendering illusory the recognition of the right to strike, responsibility in such a case should be individual and not collective. A different conclusion would be called for, of course, if the existence of force while the strike lasts is pervasive and widespread, consistently and deliberately resorted to as a matter of policy. It could be reasonably concluded then that even if justified as to ends it becomes illegal because of the means employed. Respondent Court must have unduly impressed by the evidence submitted by the Shell Company to the effect that the strike was marred by acts of force, intimidation and violence on the evening of June 14 and twice in the mornings of June 15 and 16, 1967 in Manila. Attention was likewise called to the fact that even on the following day, with police officials stationed at the strike-bound area, molotov bombs did explode and the streets were obstructed with wooden planks containing protruding nails. Moreover, in the branches of the Shell Company in Iloilo City as well as in Bacolod, on dates unspecified, physical injuries appeared to have been inflicted on management personnel. Respondent Court in the appealed decision did penalize with loss of employment the ten individuals responsible for such acts. Nor is it to be lost sight of that before the certification on June 27, 1967, one month had elapsed during which the Union was on strike. Except on those few days specified then, the Shell Company could not allege that the strike was conducted in a manner other than peaceful. Under the circumstances, it would be going too far to consider that it thereby became illegal. This is not by any means to condone the utilization of force by labor to attain its objectives. It is only to show awareness that is labor conflicts, the tension that fills the air as well as the feeling of frustration and bitterness could break out in sporadic acts of violence. If there be in this case a weighing of interests in the balance, the ban the law imposes on unfair labor practices by management that could provoke a strike and its requirement that it be conducted peaceably, it would be, to repeat, unjustified, considering all the facts disclosed, to stamp the strike with illegality. It is enough that individual liability be incurred by those guilty of such acts of violence that call for loss of employee status. Such an approach is reflected in our recent decisions. As was realistically observed by the present Chief Justice, it is usually attended by "the excitement, the heat and the passion of the direct participants in the labor dispute, at the peak thereof ...." 29 Barely four months ago, in Insular Life Assurance Co., Ltd. Employees Association v. Insular life Assurance Co., Ltd., 30 there is the recognition by this Court, speaking through Justice Castro, of picketing as such being "inherently explosive." 31 It is thus clear that not every form of violence suffices to affix the seal of illegality on a strike or to cause the loss of employment by the guilty party.

7. In the light of the foregoing, there being a valid unfair labor practice strike, the loss of employment decreed by respondent Court on all the Union officers cannot stand. The premise on which such penalty was decreed was the illegality of the strike. We rule differently. Hence, its imposition is unwarranted. It is to be made clear, however, that because of the commission of specific serious acts of violence, the Union's President, Gregorio Bacsa, as well as its Assistant Auditor, Conrado Pea, did incur such a penalty. 32 On this point, it may be observed further that even if there was a mistake in good faith by the Union that an unfair labor practice was committed by the Shell Company when such was not the case, still the wholesale termination of employee status of all the officers of the Union, decreed by respondent Court, hardly commends itself for approval. Such a drastic blow to a labor organization, leaving it leaderless, has serious repercussions. The immediate effect is to weaken the Union. New leaders may of course emerge. It would not be unlikely, under the circumstances, that they would be less than vigorous in the prosecution of labor's claims. They may be prove to fall victims to counsels of timidity and apprehension. At the forefront of their consciousness must be an awareness that a mistaken move could well mean their discharge from employment. That would be to render the right to self-organization illusory. The plain and unqualified constitutional command of protection to labor should not be lost sight of. 33 The State is thus under obligation to lend its aid and its succor to the efforts of its labor elements to improve their economic condition. It is now generally accepted that unionization is a means to such an end. It should be encouraged. Thereby, labor's strength, what there is of it, becomes solidified. It can bargain as a collectivity. Management then will not always have the upper hand nor be in a position to ignore its just demands. That, at any rate, is the policy behind the Industrial Peace Act. The judiciary and administrative agencies in consrtruing it must ever be conscious of its implications. Only thus may there be fidelity to what is ordained by the fundamental law. For if it were otherwise, instead of protection, there would be neglect or disregard. That is ito negate the fundamental principle that the Constitution is the supreme law. WHEREFORE, the decision of respondent Court of Industrial Relations of August 5, 1967 is reversed, the finding of illegality of the strike declared by the Shell Oil Workers' Union on May 25, 1967 not being in accordance with law. Accordingly, the dismissal by the Shell Company on May 27, 1967 of the eighteen security guards, 34 with the exception of Ernesto Crisostomo, who was found guilty of committing a serious act of violence is set aside and they are declared reinstated. The continuance of their status such is, however, dependent on whether or not a security guard section is provided for in the collective bargaining contract entered into after the expiration of the contract that expired on December 31, 1969. The loss of employee status of the officers of the Union, 35 decreed by respondent Court in its decision, is likewise set aside, except as to Gregorio Bacsa and Conrado Pena, both of whom did commit serious acts of violence. The termination of the employment status of Nestor Samson, Jose Rey, Romeo Rosales, Antonio Labrador and Sesinando Romero, who committed acts of violence not serious in character, is also set aside, but while allowed to be reinstated, they are not entitled to back pay. Ricardo Pagsibigan and Daniel Barraquel, along with the aforesaid Gregorio Baesa, Conrado Pea and Ernesto Crisostomo, were legally penalized with dismissal because of the serious acts of violence committed by them in the course of the strike. The rest of the employees laid off should be reinstated with back pay to be counted from the date they were separated by virtue of the appealed decision, from which should be deducted whatever earnings may have been received by such employees during such period. The case is hereby remanded to respondent Court for the implementation of this decision. In ascertaining the back wages to which the security guards are entitled, it must likewise be ascertained whether or not the security guard section is continued after December 31, 1969. Without costs. Concepcion, C.J., Zaldivar, Teehankee, Villamor and Makasiar, JJ., concur. Castro, J., took no part.

Separate Opinions BARREDO, J., concurring: To be sure, a dissent from the opinion ably written by Our learned colleague, Justice Fernando, may not be entirely without some degree of plausibility. To begin with, the basic conclusion of fact of the Court of Industrial Relations in the appealed decision, which by law and the previously unbroken line of decisions of this Court on the point, We cannot lightly set aside, seem to be logical and supported by evidence not

seriously disputed. Withal, when it is considered that there is nothing in the record to show that in acting as it did in this case, respondent Shell Company, Ltd. was not, actuated by any anti-union, much less antilabor motive but by purely economic reasons of sound management, and, in fact, petitioner does not even suggest any such purpose, one must have to hesitate and deliberate long and hard before giving assent to a pronouncement that this respondent is guilty of unfair labor practice, such as to legalize the strike declared by petitioner against it. I take it, however, that in a larger sense this is a policy decision, and all things considered, particularly the constitutional injunctions on social justice and protection to labor, I prefer to err, since the juridical considerations and equities in this case appear to my mind and conscience to be in equipoise, on the side of labor, who, as I see it, acted in the same good faith that management did. I must hasten to add though, that in thus referring to labor, I do not have in mind the union leaders involved in this case to whom the Court of Industrial Relations has attributed personal reasons for their attitude, but I am thinking more of those security guards who felt uncertain about ultimate consequences of their transfer ordered by respondent and naturally found nothing to hold on was the protection of the collective bargaining agreement which they had a right to assume insured the substantial continuance of the terms and conditions of their employment contemplated in said agreement at the time it was entered into. Contrary to the conclusion of the distinguished writer of the main opinion, I regret to say that the record amply supports the finding of the Industrial Court that the transfer of the eighteen security guards concerned was not a violation of the collective bargaining agreement between petitioner and said respondent. The more I go over the considerations of the appealed decision, the more I am convinced not only that the move was never tinged by any anti- labor hue but also that respondent had from the very beginning taken petitioner and its duly authorities representatives in its long study and deliberation of the problem, which took years, and had, in fact, consulted them on various aspects thereof. It is not denied that the maintenance of security is not the only aspect of its multifarious departments it has decided to contract out; petitioner did not object to the previous ones. Indeed, it is safe, to conjecture that petitioner has always seen the point of respondent, principally the economy it would achieve and the consequent benefits labor might gain thereby. In this connection, I particularly note that there is nothing in the record indicating that there is factual basis for petitioner's claim that the security guards herein involved would surely suffer economic loss as a result of their questioned transfer; respondent made it plain that overtime and other benefits accruing to them as security guards would likewise be given to them in their new positions. And in answer to petitioner's almost rhetorical question, why were said guards being given additional hourly pay and lump sum bonuses, if respondent did not feel, that their rights were being violated, it is perhaps not unreasonable to suppose that management simply felt that as the company was to save money by contracting out its security maintenance, it was but proper that the affected sector of labor' should share a part of its savings. All these, however, do not mean, on the other hand, that petitioner's strike should necessarily be held to be illegal. It is always a wholesome attitude in cases of this nature to give but secondary importance to strict technicalities, whether of substantive or remedial law, and to constantly bear in mind the human values involved which are beyond pecuniary estimation. As a general rule, labor's most potent and effective weapon is the strike, and it is but natural that when things appear to be dimming on the negotiation tables, labor should almost instinctively take a striking posture. In other words, the determination of the legality or illegality of a strike, particularly in this enlightened era of progressive thinking on labor-management relations is something that cannot be achieved by mere straight-jacketed legalistic argumentation and rationalization; the process is broader and deeper than that, for to do justice in deciding such an issue, it is imperative that utmost consideration should be given to the particular circumstances of each case, with a view to having the most comprehensive understanding of the motivations of the parties, in the light of human needs on the part of labor, and in the perspective of the orderly and economical conduct of business and industry, on the part of management. In this particular case, for instance, I cannot agree that respondent has violated its collective bargaining agreement with petitioner, but, on the other hand, I am not ready to conclude that for this reason, the strike here in question was consequently illegal. I hold that the two strike votes taken by the members of the petitioning union were both premised on the sincere and honest belief that there was a legal breach of the said agreement. That now I find, as the Industrial Court did, that technically and in truth, there was no such infringement did not of necessity stamp the said strike with the stigma of illegality. It may not be amiss to add at this juncture, to allay and disabuse possible apprehension that the main opinion may conceivably produce in some quarters, that I do not discern in it any prejudice on the part of

Justice Fernando, strictly pro-labor and anti-management. Precisely, I am giving my concurrence to the judgment in this case because I am convinced that, fundamentally he has also viewed the situation at hand in the light of the above considerations, even if our respective approaches and articulation of views have to differ, since I do not own all the perspectives whence he gives support to his conclusions, because I personally do not find any necessity to resort to other authorities, when I feel that plain reasoning, predicated on commonly accepted principles and reliance on one's proper sense of justice can suffice for the occasion. I also concur in the sanctions ordered in the main opinion. The Court has individualized the respective responsibilities of the strikers herein involved because such exactly is what the justice of the situation demands. The reinstatement of those relatively innocent cannot be but only fair and equitable and the approval of the lay-off of those found to have acted beyond the requirements of the circumstances is founded on sound policy. In simple terms, I hold that the mere fact that a strike is not illegal, and I want to emphasize here that there is, in my opinion, a large shade of difference between a strike that is really justified and legal and one that is merely held not to be illegal, cannot be an excuse for resort to violence. Even picketing which is the sister remedy of strikes is not supposed to be completely unrestrained and unrestricted, and unprovoked violence, threats and duress of more or less grave nature employed by strikers against person and property are twice removed from what can be judicially tolerated. Separate Opinions BARREDO, J., concurring: To be sure, a dissent from the opinion ably written by Our learned colleague, Justice Fernando, may not be entirely without some degree of plausibility. To begin with, the basic conclusion of fact of the Court of Industrial Relations in the appealed decision, which by law and the previously unbroken line of decisions of this Court on the point, We cannot lightly set aside, seem to be logical and supported by evidence not seriously disputed. Withal, when it is considered that there is nothing in the record to show that in acting as it did in this case, respondent Shell Company, Ltd. was not, actuated by any anti-union, much less antilabor motive but by purely economic reasons of sound management, and, in fact, petitioner does not even suggest any such purpose, one must have to hesitate and deliberate long and hard before giving assent to a pronouncement that this respondent is guilty of unfair labor practice, such as to legalize the strike declared by petitioner against it. I take it, however, that in a larger sense this is a policy decision, and all things considered, particularly the constitutional injunctions on social justice and protection to labor, I prefer to err, since the juridical considerations and equities in this case appear to my mind and conscience to be in equipoise, on the side of labor, who, as I see it, acted in the same good faith that management did. I must hasten to add though, that in thus referring to labor, I do not have in mind the union leaders involved in this case to whom the Court of Industrial Relations has attributed personal reasons for their attitude, but I am thinking more of those security guards who felt uncertain about ultimate consequences of their transfer ordered by respondent and naturally found nothing to hold on was the protection of the collective bargaining agreement which they had a right to assume insured the substantial continuance of the terms and conditions of their employment contemplated in said agreement at the time it was entered into. Contrary to the conclusion of the distinguished writer of the main opinion, I regret to say that the record amply supports the finding of the Industrial Court that the transfer of the eighteen security guards concerned was not a violation of the collective bargaining agreement between petitioner and said respondent. The more I go over the considerations of the appealed decision, the more I am convinced not only that the move was never tinged by any anti- labor hue but also that respondent had from the very beginning taken petitioner and its duly authorities representatives in its long study and deliberation of the problem, which took years, and had, in fact, consulted them on various aspects thereof. It is not denied that the maintenance of security is not the only aspect of its multifarious departments it has decided to contract out; petitioner did not object to the previous ones. Indeed, it is safe, to conjecture that petitioner has always seen the point of respondent, principally the economy it would achieve and the consequent benefits labor might gain thereby. In this connection, I particularly note that there is nothing in the record indicating that there is factual basis for petitioner's claim that the security guards herein involved would surely suffer economic loss as a result of their questioned transfer; respondent made it plain that overtime and other benefits accruing to them as security guards would likewise be given to them in their new positions. And in answer to petitioner's almost rhetorical question, why were said

guards being given additional hourly pay and lump sum bonuses, if respondent did not feel, that their rights were being violated, it is perhaps not unreasonable to suppose that management simply felt that as the company was to save money by contracting out its security maintenance, it was but proper that the affected sector of labor' should share a part of its savings. All these, however, do not mean, on the other hand, that petitioner's strike should necessarily be held to be illegal. It is always a wholesome attitude in cases of this nature to give but secondary importance to strict technicalities, whether of substantive or remedial law, and to constantly bear in mind the human values involved which are beyond pecuniary estimation. As a general rule, labor's most potent and effective weapon is the strike, and it is but natural that when things appear to be dimming on the negotiation tables, labor should almost instinctively take a striking posture. In other words, the determination of the legality or illegality of a strike, particularly in this enlightened era of progressive thinking on labor-management relations is something that cannot be achieved by mere straight-jacketed legalistic argumentation and rationalization; the process is broader and deeper than that, for to do justice in deciding such an issue, it is imperative that utmost consideration should be given to the particular circumstances of each case, with a view to having the most comprehensive understanding of the motivations of the parties, in the light of human needs on the part of labor, and in the perspective of the orderly and economical conduct of business and industry, on the part of management. In this particular case, for instance, I cannot agree that respondent has violated its collective bargaining agreement with petitioner, but, on the other hand, I am not ready to conclude that for this reason, the strike here in question was consequently illegal. I hold that the two strike votes taken by the members of the petitioning union were both premised on the sincere and honest belief that there was a legal breach of the said agreement. That now I find, as the Industrial Court did, that technically and in truth, there was no such infringement did not of necessity stamp the said strike with the stigma of illegality. It may not be amiss to add at this juncture, to allay and disabuse possible apprehension that the main opinion may conceivably produce in some quarters, that I do not discern in it any prejudice on the part of Justice Fernando, strictly pro-labor and anti-management. Precisely, I am giving my concurrence to the judgment in this case because I am convinced that, fundamentally he has also viewed the situation at hand in the light of the above considerations, even if our respective approaches and articulation of views have to differ, since I do not own all the perspectives whence he gives support to his conclusions, because I personally do not find any necessity to resort to other authorities, when I feel that plain reasoning, predicated on commonly accepted principles and reliance on one's proper sense of justice can suffice for the occasion. I also concur in the sanctions ordered in the main opinion. The Court has individualized the respective responsibilities of the strikers herein involved because such exactly is what the justice of the situation demands. The reinstatement of those relatively innocent cannot be but only fair and equitable and the approval of the lay-off of those found to have acted beyond the requirements of the circumstances is founded on sound policy. In simple terms, I hold that the mere fact that a strike is not illegal, and I want to emphasize here that there is, in my opinion, a large shade of difference between a strike that is really justified and legal and one that is merely held not to be illegal, cannot be an excuse for resort to violence. Even picketing which is the sister remedy of strikes is not supposed to be completely unrestrained and unrestricted, and unprovoked violence, threats and duress of more or less grave nature employed by strikers against person and property are twice removed from what can be judicially tolerated. Footnotes 1 Decision, Annex F, Brief for the Petitioner, pp. 84-85. 2 Ibid., p. 85. 3 Ibid., pp. 85-86. 4 Brief for the Respondent, pp. 4 and 5. 5 Decision, Annex F, Brief for the Petitioner, p. 88. 6 Ibid. 7 Brief for the Petitioner, pp. 20-21. 8 Ibid., p. 21. 9 Ibid. 10 Decision, Annex F, Brief for the Petitioner, pp. 95-96. 11 Ibid., p. 96. 12 Ibid., pp. 96-97.

13 Ibid., p. 77. The decision under review speaks of the efforts exerted by the Union leaders who were also prominent personalities in the Shell Terminal Employees Savings and Loans Association to avoid the contemplated strike if further financial concessions were to be extended to them. Since, however, it is obvious from the decision itself that the strike was approved not once but twice by the Union membership, its cause being due to the dissolution of the security guard section as noted in the Presidential certification and the pleadings of the parties, no legal relevance is to be attributed to such activities on the part of the Union leaders in the consideration of the crucial issues passed by this litigation. 14 Fibreboard Corp. v. National Labor Relations Board, 379 US 203 (1964). The relevant portion of Chief Justice Warren's opinion is well-worth quoting: "The Company was concerned with the high cost of its maintenance operation. It was induced to contract out the work by assurances from independent contractors that economies could be derived by reducing the work force, decreasing fringe benefits, and eliminating overtime payments. These have long been regarded as matters peculiarly suitable for resolution within the collective bargaining framework, and industrial experience demonstrates that collective negotiation has been highly successful in achieving peaceful accommodation of the conflicting interests. Yet, it is contended that when an employer can effect cost savings in these respects by contracting the work out, there is no need to attempt to achieve similar economies through negotiation with existing employees or to provide them with an opportunity to negotiate a mutually acceptable alternative. The short answer is that, although it is not possible to say whether a satisfactory solution could be reached, national labor policy is founded upon the congressional determination that the chances are good enough to warrant subjecting such issues to the process of collective negotiation." At pp. 212213. 15 Brief for the Petitioner, pp. 20-21. 16 L-20303, Sept. 27, 1967, 21 SCRA 226. 17 L-28536, April 30, 1968, 23 SCRA 503. 18 Ibid., p. 512. 19 Cf. Phil. Marine Radio Officers' Assn. v. Court of Industrial Relations, 102 Phil. 373 (1957); San Carlos Milling Co., Inc. v. Court of Industrial Relations, L-15453, March 17, 1961 1 SCRA 734; Consolidated Labor Assn. of the Phil. v. Marsman and Co., Inc., L-17038, July 31, 1964, 11 SCRA 589; Phil. Steam Navigation Co. v. Phil. Marine Officers Guild, L-20667, Oct. 29, 1965, 15 SCRA 174; Ferrer v. Court of Industrial Relations, L-24267, May 31, 1966, 17 SCRA 352; Cromwell Commercial Co., Inc. v. Cromwell Commercial Employees and Laborers Union, L-19777, Feb. 20, 1967, 19 SCRA 398; Cebu Portland Cement Co. v. Cement Workers' Union, L-25032, Oct. 14, 1968, 25 SCRA 504. 20 Cromwell Commercial Co., Inc. v. Cromwell Commercial Employees and Laborers Union, L-19177, Feb. 20, 1967, 19 SCRA 398, 400-401. 21 Ferrer v. Court of Industrial Relations, L-24267, May 31, 1966, 17 SCRA 352, 360. The Ferrer doctrine was followed in Norton & Harrison Co. & Jackbilt Concrete Blocks Co. Labor Union v. Norton Harrison Co. & Jackbilt Concrete Blocks Co., Inc., L-18461, Feb. 10, 1967, 19 SCRA 310. 22 Section 3 of the Industrial Peace Act reads in full: "Employees shall have the right to self-organization and to form, join or assist labor organizations of their own choosing for the purpose of collective bargaining through representatives of their own choosing and to engage in concerted activities for the purpose of collective bargaining and other mutual aid or protection. Individuals employed as supervisors shall not be eligible for membership in a labor organization of employees under their supervision but may form separate organizations of their own." 23 Commonwealth Act No. 103 as amended, October 29, 1936. 24 70 Phil. 621 (1940). 25 Ibid., pp. 629-630. 26 Dee C. Chuan & Sons v. Court of Industrial Relations, 85 Phil. 365, 368 (1950). 27 San Carlos Milling Co., Inc. v. Court of Industrial Relations, L-15453, March 17, 1961, 1 SCRA 734, 740. 28 Section 14 of the Industrial Peace Act provides in full: "(a) Whenever a party desires to negotiate an agreement, it shall serve a written notice upon the other party, with a statement of its proposals. The other party shall make a reply thereto not later than ten days from receipt of such proposals. (b) In case differences shall arise on the basis of such proposals and reply, either party may request a conference which shall begin not later than ten days from the making of such request. Both parties shall endeavor in

such conference to settle the dispute amicably and expeditiously. (c) If the dispute is not settled by conference and the Conciliations Service of the Department of Labor intervenes in the dispute, it shall be the duty of each party to participate fully and promptly in such meetings and conferences as the Service may undertake. (d) Before an employer may lockout his employees or the employees may strike, either party as the case may be, must file with the Conciliation Service thirty days prior thereto a notice of their intention to strike or lockout the employees. Such notice shall be in a form to be prescribed by the Chief of the Conciliation Service." 29 Ferrer v. Court of Industrial Relations, L-24267, May 31, 1966, 17 SCRA 352, 360. 30 L-25291, January 30, 1971, 37 SCRA 244. 31 Ibid., p. 273. Mathews on Labor Relations and the Law was cited to this effect: "For as pointed out by one author, "The picket line is an explosive front, charged with the emotions and fierce loyalties of the union-management dispute. It may be marked by colorful name calling, intimidating threats or sporadic fights between the pickets and those who pass the line.' "Teller was likewise cited to the effect that fist fighting between union and non-union employees in the midst of a strike is no bar to reinstatement. At p. 272. 32 It would likewise follow that no punitive sanction should be imposed on the eighteen security guards except for Ernesto Crisostomo who was rightfully held accountable for the act of violence attributed to him. 33 Art. XIV, See. 6 of the Constitution reads as follows: "The State shall afford protection to labor, especially to working women and minors, and shall regulate the relations between landowner and tenant, and between labor and capital in industry and agriculture. The State may provide for compulsory arbitration." 34 The eighteen security guards are: E. Crisostomo, P. Falculan B. Bicomong F. Flores, L. Francisco, B. Velasco, D. Pascual, J. Suarez, J. Tuazon, A. Jimenez, J. Linsangan, F. Solis P. Carillo, V. Diaz, F. Bernardo, E. Mendoza C. Bonus, and G. de Jesus. 35 The thirteen officers of the Union are: G. Bacsa, E. Gaspar, E. Ocampo, D. Sahagun, J. Pilande, R. Constantino, C. Pena, P. Calaunan, N. Samson, J. Rey, P. Sawyer, A. Talastas and J. Belangoy. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 121315 July 19, 1999 COMPLEX ELECTRONICS EMPLOYEES ASSOCIATION (CEEA) represented by its union president CECILIA TALAVERA, GEORGE ARSOLA, MARIO DIAGO AND SOCORRO BONCAYAO, petitioners, vs. THE NATIONAL LABOR RELATIONS COMMISSION, COMPLEX ELECTRONICS CORPORATION, IONICS CIRCUIT, INC., LAWRENCE QUA, REMEDIOS DE JESUS, MANUEL GONZAGA, ROMY DELA ROSA, TERESITA ANDINO, ARMAN CABACUNGAN, GERRY GABANA, EUSEBIA MARANAN and BERNADETH GACAD, respondents. G.R. No. 122136 July 19, 1999 COMPLEX ELECTRONICS CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, COMPLEX ELECTRONICS EMPLOYEES ASSOCIATION (CEEA), represented by Union President, CECILIA TALAVERA, respondents. KAPUNAN, J.: These consolidated cases filed by Complex Electronics Employees Association (G.R. No. 121315) and Complex Electronics Corporation (G.R. No. 122136) assail the Decision of the NLRC dated March 10, 1995 which set aside the Decision of the Labor Arbiter dated April 30, 1993. The antecedents of the present petitions are as follows:

Complex Electronics Corporation (Complex) was engaged in the manufacture of electronic products. It was actually a subcontractor of electronic products where its customers gave their job orders, sent their own materials and consigned their equipment to it. The customers were foreign-based companies with different product lines and specifications requiring the employment of workers with specific skills for each product line. Thus, there was the AMS Line for the Adaptive Micro System, Inc., the Heril Line for Heril Co., Ltd., the Lite-On Line for the Lite-On Philippines Electronics Co., etc. The rank and file workers of Complex were organized into a union known as the Complex Electronics Employees Association, herein referred to as the Union. On March 4, 1992, Complex received a facsimile message from Lite-On Philippines Electronics Co., requiring it to lower its price by 10%. The full text reads as follows: This is to inform your office that Taiwan required you to reduce your assembly cost since it is higher by 50% and no longer competitive with that of mainland China. It is further instructed that Complex Price be patterned with that of other sources, which is 10% lower. Please consider and give us your revised rates soon. 1 Consequently, on March 9, 1992, a meeting was held between Complex and the personnel of the Lite-On Production Line. Complex informed its Lite-On personnel that such request of lowering their selling price by 10% was not feasible as they were already incurring losses at the present prices of their products. Under such circumstances, Complex regretfully informed the employees that it was left with no alternative but to close down the operations of the Lite-On Line. The company, however, promised that: 1) Complex will follow the law by giving the people to be retrenched the necessary 1 month notice. Hence, retrenchment will not take place until after 1 month from March 09, 1992. 2) The Company will try to prolong the work for as many people as possible for as long as it can by looking for job slots for them in another line if workload so allows and if their skills are compatible with the line requirement. 3) The company will give the employees to be retrenched a retrenchment pay as provided for by law i.e. half a month for every year of service in accordance with Article 283 of the Labor Code of Philippines. 2 The Union, on the other hand, pushed for a retrenchment pay equivalent to one (1) month salary for every year of service, which Complex refused. On March 13, 1992, Complex filed a notice of closure of the Lite-On Line with the Department of Labor and Employment (DOLE) and the retrenchment of the ninety-seven (97) affected employees. 3 On March 25, 1993, the Union filed a notice of strike with the National Conciliation and Mediation Board (NCMB).1wphi1.nt Two days thereafter, or on March 27, 1993, the Union conducted a strike vote which resulted in a "yes" vote. In the evening of April 6, 1992, the machinery, equipment and materials being used for production at Complex were pulled-out from the company premises and transferred to the premises of Ionics Circuit, Inc. (Ionics) at Cabuyao, Laguna. The following day, a total closure of company operation was effected at Complex. A complaint was, thereafter, filed with the Labor Arbitration Branch of the NLRC for unfair labor practice, illegal closure/illegal lockout, money claims for vacation leave, sick leave, unpaid wages, 13th month pay, damages and attorney's fees. The Union alleged that the pull-out of the machinery, equipment and materials from the company premises, which resulted to the sudden closure of the company was in violation of Section 3 and 8, Rule XIII, Book V of the Labor Code of the Philippines 4 and the existing CBA. Ionics was impleaded as a party defendant because the officers and management personnel of Complex were also holding office at Ionics with Lawrence Qua as the President of both companies. Complex, on the other hand, averred that since the time the Union filed its notice of strike, there was a significant decline in the quantity and quality of the products in all of the production lines. The delivery schedules were not met prompting the customers to lodge complaints against them. Fearful that the machinery, equipment and materials would be rendered inoperative and unproductive due to the impending strike of the workers, the customers ordered their pull-out and transfer to Ionics. Thus, Complex was compelled to cease operations. Ionics contended that it was an entity separate and distinct from Complex and had been in existence since July 5, 1984 or eight (8) years before the labor dispute arose at Complex. Like Complex, it was also engaged in the semi-conductor business where the machinery, equipment and materials were consigned to them by their customers. While admitting that Lawrence Qua, the President of Complex was also the President of Ionics, the latter denied having Qua as their owner since he had no recorded subscription of

P1,200,00.00 in Ionics as claimed by the Union. Ionics further argued that the hiring of some displaced workers of Complex was an exercise of management prerogatives. Likewise, the transfer of the machinery, equipment and materials from Complex was the decision of the owners who were common customers of Complex and Ionics. On April 30, 1993, the Labor Arbiter rendered a decision the dispositive portion of which reads: WHEREFORE, all the foregoing premises being considered, judgment is hereby rendered ordering the respondent Complex Electronics Corporation and/or Ionics Circuit Incorporated and/or Lawrence Qua, to reinstate the 531 above-listed employees to their former position with all the rights, privileges and benefits appertaining thereto, and to pay said complainants-employees the aggregate backwages amounting P26,949,891.80 as of April 6, 1993 and to such further backwages until their actual reinstatement. In the event reinstatement is no longer feasible for reasons not attributable to the complainants, said respondents are also liable to pay complainants-employees their separation pay to be computed at the rate of one (1) month pay for every year of service, a fraction of at least six (6) months to be considered as one whole year. Further, the aforenamed three (3) respondents are hereby ordered to pay jointly and solidarily the complainants-employees an aggregate moral damages in the amount of P1,062,000.00 and exemplary damages in the aggregate sum of P531,000.00. And finally, said respondents are ordered to pay attorney's fees equivalent to ten percent (10%) of whatever has been adjudicated herein in favor of the complainants. The charge of slowdown strike filed by respondent Complex against the union is hereby dismissed for lack of merit. SO ORDERED. 5 Separate appeals were filed by Complex, Ionics and Lawrence Qua before the respondent NLRC which rendered the questioned decision on March 10, 1995, the decretal portion of which states: WHEREFORE, premises considered, the assailed decision is hereby ordered vacated and set aside, and a new one entered ordering respondent Complex Electronics Corporation to pay 531 complainants equivalent to one month pay in lieu of notice and separation pay equivalent to one month pay for every year of service and a fraction of six months considered as one whole year. Respondents Ionics Circuit Incorporated and Lawrence Qua are hereby ordered excluded as parties solidarily liable with Complex Electronics Corporation. The award of moral damages is likewise deleted for lack of merit. Respondent Complex, however, is hereby ordered to pay attorney's fees equivalent to ten (10%) percent of the total amount of award granted the complainants. SO ORDERED. 6 Complex, Ionics and the Union filed their motions for reconsideration of the above decision which were denied by the respondent NLRC in an Order dated July 11, 1995. 7 Hence these petitions. In G.R. No. 121315, petitioner Complex Electronics Employees Association asseverates that the respondent NLRC erred when it: I SET ASIDE THE DECISION DATED APRIL 30, 1993 ISSUED BY THE HON. LABOR ARBITER JOSE DE VERA. II EXCLUDED PRIVATE RESPONDENTS IONICS CIRCUITS, INCORPORATED AND LAWRENCE QUA AS PARTIES SOLIDARILY LIABLE WITH COMPLEX ELECTRONICS CORPORATION. III FOUND THAT COMPLEX ELECTRONICS CORPORATION WAS NOT GUILTY OF ILLEGAL CLOSURE AND ILLEGAL DISMISSAL OF THE PETITIONERS. IV REMOVED THE AWARD FOR BACKWAGES, REINSTATEMENT AND DAMAGES IN THE DECISION DATED APRIL 30, 1993 ISSUED BY THE HON. LABOR ARBITER JOSE DE VERA.
8

On the other hand, in G.R. No. 122136, petitioner Complex Electronics Corporation raised the following issues, to wit: I

PUBLIC RESPONDENT NLRC ACTED IN GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF OR IN EXCESS OF JURISDICTION IN PROMULGATING ITS DECISION AND ORDER DATED 10 MARCH 1995, AND 11 JULY 1995, RESPECTIVELY, THE SAME BEING IN CONTRAVENTION OF THE EXPRESS MANDATE OF THE LAW GOVERNING THE PAYMENT OF ONE MONTH PAY IN LIEU OF NOTICE, SEPARATION PAY AND ATTORNEY'S FEES. II THERE IS NO APPEAL, NOR ANY PLAIN, SPEEDY AND ADEQUATE REMEDY IN THE ORDINARY COURSE OF LAW. 9 On December 23, 1996, the Union filed a motion for consolidation of G.R. No. 122136 with G.R. No. 121315. 10 The motion was granted by this Court in a Resolution dated June 23, 1997. 11 On November 10, 1997, the Union presented additional documentary evidence which consisted of a newspaper clipping in the Manila Bulletin, dated August 18, 1997 bearing the picture of Lawrence Qua with the following inscription: RECERTIFICATION. The Cabuyao (Laguna) operation of Ionic Circuits, Inc. consisting of plants 2, 3, 4 and 5 was recertified to ISO 9002 as electronics contract manufacturer by the TUV, a rating firm with headquarters in Munich, Germany. Lawrence Qua, Ionics president and chief executive officer, holds the plaque of recertification presented by Gunther Theisz (3rd from left), regional manager of TUV Products Services Asia during ceremonies held at Sta. Elena Golf Club. This is the first of its kind in the country that four plants were certified at the same time. 12 The Union claimed that the said clipping showed that both corporations, Ionics and Complex are one and the same. In answer to this allegation, Ionics explained that the photo which appeared at the Manila Bulletin issue of August 18, 1997 pertained only to respondent Ionics' recertification of ISO 9002. There was no mention about Complex Electronics Corporation. Ionics claimed that a mere photo is insufficient to conclude that Ionics and Complex are one and the same. 13 We shall first delve on the issues raised by the petitioner Union. The Union anchors its position on the fact that Lawrence Qua is both the president of Complex and Ionics and that both companies have the same set of Board of Directors. It claims that business has not ceased at Complex but was merely transferred to Ionics, a runaway shop. To prove that Ionics was just a runaway shop, petitioner asserts that out of the 80,000 shares comprising the increased capital stock of Ionics, it was Complex that owns majority of said shares with P1,200,000.00 as its capital subscription and P448,000.00 as its paid up investment, compared to P800,000.00 subscription and P324,560.00 paidup owing to the other stockholders, combined. Thus, according to the Union, there is a clear ground to pierce the veil of corporate fiction. The Union further posits that there was an illegal lockout/illegal dismissal considering that as of March 11, 1992, the company had a gross sales of P61,967,559 from a capitalization of P1,500,000.00. It even ranked number thirty among the top fifty corporations in Muntinlupa. Complex, therefore, cannot claim that it was losing in its business which necessitated its closure. With regards to Lawrence Qua, petitioner maintains that he should be made personally liable to the Union since he was the principal player in the closure of the company, not to mention the clandestine and surreptitious manner in which such closure was carried out, without regard to their right to due process. The Union's contentions are untenable. A "runaway shop" is defined as an industrial plant moved by its owners from one location to another to escape union labor regulations or state laws, but the term is also used to describe a plant removed to a new location in order to discriminate against employees at the old plant because of their union activities. 14 It is one wherein the employer moves its business to another location or it temporarily closes its business for anti-union purposes. 15 A "runaway shop" in this sense, is a relocation motivated by antiunion animus rather than for business reasons. In this case, however, Ionics was not set up merely for the purpose of transferring the business of Complex. At the time the labor dispute arose at Complex, Ionics was already existing as an independent company. As earlier mentioned, it has been in existence since July 5, 1984. It cannot, therefore, be said that the temporary closure in Complex and its subsequent transfer of business to Ionics was for anti-union purposes. The Union failed to show that the primary reason for the closure of the establishment was due to the union activities of the employees.

The mere fact that one or more corporations are owned or controlled by the same or single stockholder is not a sufficient ground for disregarding separate corporate personalities. Thus, in Indophil Textile Mill Workers Union vs. Calica, 16 we ruled that: [I]n the case at bar, petitioner seeks to pierce the veil of corporate entity of Acrylic, alleging that the creation of the corporation is a devise to evade the application of the CBA between petitioner Union and private respondent company. While we do not discount the possibility of the similarities of the businesses of private respondent and Acrylic, neither are we inclined to apply the doctrine invoked by petitioner in granting the relief sought. The fact that the businesses of private respondent and Acrylic are related, that some of the employees of the private respondent are the same persons manning and providing for auxiliary services to the units of Acrylic, and that the physical plants, offices and facilities are situated in the same compound, it is our considered opinion that these facts are not sufficient to justify the piercing of the corporate veil of Acrylic. Likewise, in Del Rosario vs. National Labor Relations Commission, 17 the Court stated that substantial identity of the incorporators of two corporations does not necessarily imply that there was fraud committed to justify piercing the veil of corporate fiction. In the recent case of Santos vs. National Labor Relations Commission, 18 we also ruled that: The basic rule is still that which can be deduced from the Court's pronouncement in Sunio vs. National Labor Relations Commission, thus: . . . . . Mere ownership by a single stockholder or by another corporation of all or nearly all of the capital stock of a corporation is not of itself sufficient ground for disregarding the separate corporate personality. Ionics may be engaged in the same business as that of Complex, but this fact alone is not enough reason to pierce the veil of corporate fiction of the corporation. Well-settled is the rule that a corporation has a personality separate and distinct from that of its officers and stockholders. This fiction of corporate entity can only be disregarded in certain cases such as when it is used to defeat public convenience, justify wrong, protect fraud, or defend crime. 19 To disregard said separate juridical personality of a corporation, the wrongdoing must be clearly and convincingly established. 20 As to the additional documentary evidence which consisted of a newspaper clipping filed by petitioner Union, we agree with respondent Ionics that the photo/newspaper clipping itself does not prove that Ionics and Complex are one and the same entity. The photo/newspaper clipping merely showed that some plants of Ionics were recertified to ISO 9002 and does not show that there is a relation between Complex and Ionics except for the fact that Lawrence Qua was also the president of Ionics. However, as we have stated above, the mere fact that both of the corporations have the same president is not in itself sufficient to pierce the veil of corporate fiction of the two corporations. We, likewise, disagree with the Union that there was in this case an illegal lockout/illegal dismissal. Lockout is the temporary refusal of employer to furnish work as a result of an industrial or labor dispute. 21 It may be manifested by the employer's act of excluding employees who are union members. 22 In the present case, there was a complete cessation of the business operations at Complex not because of the labor dispute. It should be recalled that, before the labor dispute, Complex had already informed the employees that they would be closing the Lite-On Line. The employees, however, demanded for a separation pay equivalent to one (1) month salary for every year of service which Complex refused to give. When Complex filed a notice of closure of its Lite-On Line, the employees filed a notice of strike which greatly alarmed the customers of Complex and this led to the pull-out of their equipment, machinery and materials from Complex. Thus, without the much needed equipment, Complex was unable to continue its business. It was left with no other choice except to shut down the entire business. The closure, therefore, was not motivated by the union activities of the employees, but rather by necessity since it can no longer engage in production without the much needed materials, equipment and machinery. We quote with approval the findings of the respondent NLRC on this matter: At first glance after reading the decision a quo, it would seem that the closure of respondent's operation is not justified. However, a deeper examination of the records along with the evidence, would show that the closure, although it was done abruptly as there was no compliance with the 30-day prior notice requirement, said closure was not intended to circumvent the provisions of the Labor Code on termination of employment. The closure of operation by Complex on April 7, 1992 was not without valid reasons. Customers of respondent alarmed by the pending labor dispute and the imminent strike to be foisted by the union, as shown by their strike vote, directed respondent Complex to pull-out its equipment, machinery and materials to other safe bonded warehouse. Respondent being mere consignees of the equipment, machinery and materials were without any recourse but to oblige the customers'

directive. The pull-out was effected on April 6, 1992. We can see here that Complex's action, standing alone, will not result in illegal closure that would cause the illegal dismissal of the complainant workers. Hence, the Labor Arbiter's conclusion that since there were only two (2) of respondent's customers who have expressed pull-out of business from respondent Complex while most of the customer's have not and, therefore, it is not justified to close operation cannot be upheld. The determination to cease operation is a prerogative of management that is usually not interfered with by the State as no employer can be required to continue operating at a loss simply to maintain the workers in employment. That would be taking of property without due process of law which the employer has the right to resist. (Columbia Development Corp. vs. Minister of Labor and Employment, 146 SCRA 42). As to the claim of petitioner Union that Complex was gaining profit, the financial statements for the years 1990, 1991 and 1992 issued by the auditing and accounting firm Sycip, Gorres and Velayo readily show that Complex was indeed continuously experiencing deficit and losses. 23 Nonetheless, whether or not Complex was incurring great losses, it still one of the management's prerogative to close down its business as long as it is done in good faith. Thus, in Catatista et al., vs. NLRC and Victorias Milling Co., Inc. 24 we ruled: In any case, Article 283 of the Labor Code is clear that an employer may close or cease his business operations or undertaking even if he is not suffering from serious business losses or financial reverses, as long as he pays his employees their termination pay in the amount corresponding to their length of service. It would indeed, be stretching the intent and spirit of the law if we were to unjustly interfere in management's prerogative to close or cease its business operations just because said business operations or undertaking is not suffering from any loss. Going now to the issue of personal liability of Lawrence Qua, it is settled that in the absence of malice or bad faith, a stockholder or an officer of a corporation cannot be made personally liable for corporate liabilities. 25 In the present case, while it may be true that the equipment, materials and machinery were pulled-out of Complex and transferred to Ionics during the night, their action was sufficiently explained by Lawrence Qua in his Comment to the petition filed by the Union. We quote: The fact that the pull-out of the machinery, equipment and materials was effected during nighttime is not per se an indicia of bad faith on the part of respondent Qua since he had no other recourse, and the same was dictated by the prevailing mood of unrest as the laborers were already vandalizing the equipment, bent on picketing the company premises and threats to lock out the company officers were being made. Such acts of respondent Qua were, in fact, made pursuant to the demands of Complex's customers who were already alarmed by the pending labor dispute and imminent strike to be stage by the laborers, to have their equipment, machinery and materials pull out of Complex. As such, these acts were merely done pursuant to his official functions and were not, in any way, made with evident bad faith. 26 We perceive no intention on the part of Lawrence Qua and the other officers of Complex to defraud the employees and the Union. They were compelled to act upon the instructions of their customers who were the real owners of the equipment, materials and machinery. The prevailing labor unrest permeating within the premises of Complex left the officers with no other choice but to pull them out of Complex at night to prevent their destruction. Thus, we see no reason to declare Lawrence Qua personally liable to the Union. Anent the award of damages, we are inclined to agree with the NLRC that there is no basis for such award. We again quote the respondent NLRC with favor: By and large, we cannot hold respondents guilty of unfair labor practice as found by the Labor Arbiter since the closure of operation of Complex was not established by strong evidence that the purpose of said closure was to interfere with the employees' right to self-organization and collective bargaining. As very clearly established, the closure was triggered by the customers' pull-out of their equipment, machinery and materials, who were alarmed by the pending labor dispute and the imminent strike by the union, and as a protection to their interest pulled-out of business from Complex who had no recourse but to cease operation to prevent further losses. The indiscretion committed by the Union in filing the notice of strike, which to our mind is not the proper remedy to question the amount of benefits due the complainants who will be retrenched at the closure of the Lite-On Line, gave a wrong signal to customers of Complex, which consequently resulted in the loss of employment of not only a few but to all the of the workers. It may be worth saying that the right to strike should only be a remedy of last resort and must not be used as a show of force against the employer. 27 We shall now go to the issues raised by Complex in G.R. No. 122136.

Complex claims that the respondent NLRC erred in ordering them to pay the Union one (1) month pay as indemnity for failure to give notice to its employees at least thirty (30) days before such closure since it was quite clear that the employees were notified of the impending closure of the Lite-On Line as early as March 9, 1992. Moreover, the abrupt cessation of operations was brought about by the sudden pull-out of the customers which rendered it impossible for Complex to observe the required thirty (30) days notice. Art. 283 of the Labor Code provides that: Art. 283. Closure of establishment and reduction of personnel. The employer may also terminate the employment of any employee due to the installation of labor saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the intended date thereof . . . . (Emphasis ours.) The purpose of the notice requirement is to enable the proper authorities to determine after hearing whether such closure is being done in good faith, i.e., for bona fide business reasons, or whether, to the contrary, the closure is being resorted to as a means of evading compliance with the just obligations of the employer to the employees affected. 28 While the law acknowledges the management prerogative of closing the business, it does not, however, allow the business establishment to disregard the requirements of the law. The case of Magnolia Dairy Products v. NLRC 29 is quite emphatic about this: The law authorizes an employer, like the herein petitioners, to terminate the employment of any employee due to the installation of labor saving devices. The installation of these devices is a management prerogative, and the courts will not interfere with its exercise in the absence of abuse of discretion, arbitrariness, or maliciousness on the part of management, as in this case. Nonetheless, this did not excuse petitioner from complying with the required written notice to the employee and to the Department of Labor and Employment (DOLE) at least one month before the intended date of termination. This procedure enables an employee to contest the reality or good faith character of the asserted ground for the termination of his services before the DOLE. The failure of petitioner to serve the written notice to private respondent and to the DOLE, however, does not ipso facto make private respondent's termination from service illegal so as to entitle her to reinstatement and payment of backwages. If at all, her termination from service is merely defective because it was not tainted with bad faith or arbitrariness and was due to a valid cause. The well settled rule is that the employer shall be sanctioned for non-compliance with the requirements of, or for failure to observe due process in terminating from service its employee. In Wenphil Corp. v. NLRC, we sanctioned the employer for this failure by ordering it to indemnify the employee the amount of P1,000.00. Similarly, we imposed the same amount as indemnification in Rubberworld (Phils.), Inc. v. NLRC, and, Aurelio v. NLRC and Alhambra Industries, Inc. v. NLRC. Subsequently, the sum of P5,000.00 was awarded to an employee in Worldwide Papermills, Inc. v. NLRC, and P2,000.00 in Sebuguero, et al., v. NLRC, et al. Recently, the sum of P5,000.00 was again imposed as indemnify against the employer. We see no valid and cogent reason why petitioner should not be likewise sanctioned for its failure to serve the mandatory written notice. Under the attendant facts, we find the amount of P5,000.00, to be just and reasonable. We, therefore, find no grave abuse of discretion on the part of the NLRC in ordering Complex to pay one (1) month salary by way of indemnity. It must be borne in mind that what is at stake is the means of livelihood of the workers so they are at least entitled to be formally informed of the management decisions regarding their employment. 30 Complex, likewise, maintains that it is not liable for the payment for the payment of separation pay since Article 283 of the Labor Code awards separation pay only in cases of closure not due to serious business reversals. In this case, the closure of Complex was brought about by the losses being suffered by the corporation. We disagree. Art. 283 further provides: . . . . In case of termination due to the installation of labor saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in case of cessation of operations of establishment or undertaking not due to serious business

losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least onehalf (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year. It is settled that in case of closures or cessation of operation of business establishments not due to serious business losses or financial reverses, 31 the employees are always given separation benefits. In the instant case, notwithstanding the financial losses suffered by Complex, such was, however, not the main reason for its closure. Complex admitted in its petition that the main reason for the cessation of the operations was the pull-out of the materials, equipment and machinery from the premises of the corporation as dictated by its customers. It was actually still capable of continuing the business but opted to close down to prevent further losses. Under the facts and circumstances of the case, we find no grave abuse of discretion on the part of the public respondent in awarding the employees one (1) month pay for every year of service as termination pay.1wphi1.nt WHEREFORE, premises considered, the assailed decision of the NLRC is AFFIRMED. SO ORDERED. Davide, Jr., C.J., Melo, Pardo and Ynares-Santiago, JJ., concur. Footnotes 1 Rollo, of G.R. No. 122636, p. 270. 2 Id., at 271. 3 NLRC Decision dated March 10, 1995, rollo of G.R. No. 121315, p. 78. 4 Sec. 3. Notice of strike or lockout. In cases of bargaining deadlocks, a notice of strike or lockout shall be filed with the regional branch of the Board at least thirty (30) days before the intended dated thereof, a copy of said notice having been served on the other party concerned. In case of unfair labor practices, the period of notice shall be fifteen (15) days. However, in case of unfair labor practice involving the 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 fifteen-day cooling-off period shall not apply and the union may take action immediately after the strike vote is conducted and the results thereof submitted to the Department of Labor and Employment. Sec. 8. Declaration of strike and lockout. Should the dispute remain unsettled after the lapse of the requisite number of days from the filing of the notice of strike or lockout and the results of the election required in the preceding section, the labor union may strike or the employer may lockout its workers. The regional branch or the Board shall continue mediating and conciliating. 5 Rollo of G.R. 121315, pp. 72-73. 6 Id., at 99-100. 7 Id., at 102-106. 8 Id., at 31. 9 Rollo of G.R. No. 122136, p. 21. 10 Rollo of G.R. 121315, pp. 273-274. 11 Rollo of G.R. No. 122136, p. 597. 12 Rollo of G.R. 121315, pp. 383-386. 13 Id., at 287-291. 14 See Textile Workers Union v. Darlington Mfg. Co., 380 US 263, 12 L Ed. 2d 827, 85, S Ct 994. 15 William P. Statsky, WEST'S LEGAL THESAURUS/DICTIONARY, Special Deluxe Edition, p. 671. 16 205 SCRA 697 [1992]. 17 187 SCRA 777 [1990]. 18 254 SCRA 673 [1996]. 19 Concept Builders, Inc. v. National Labor Relations Commission, 257 SCRA 149 [1996]; Philippine International Bank v. Court of Appeals, 252 SCRA 259 [1996]; Yu v. National Labor Relations Commission, 245 SCRA 134 [1995]. 20 Matuguina Integrated Wood Products, Inc. v. Court of Appeals, 263 SCRA 490 [1896]. 21 Art. 212 (p), LABOR CODE OF THE PHILIPPINES. 22 Sta. Mesa Slipways & Engineering Co. v. CIR, 48 O.G. 3353, as cited in II C.A. Azucena, THE LABOR CODE WITH COMMENTS AND CASES, Revised 1993 Ed., p. 296. 23 Records pp. 427-434. 24 247 SCRA 46 [1995]. 25 AHS/Philippines, Inc. vs. Court of Appeals, 257 SCRA 319 [1996].

26 Rollo of G.R. No. 121315, p. 182. 27 Id., at 97-98. 28 Coca Cola Bottlers (Phils.), Inc. v. NLRC, 194 SCRA 592 [1991]. 29 252 SCRA 483 [1996]. 30 PAL v. NLRC, 225 SCRA 301 [1993]. 31 North Davao Mining Corp. vs. NLRC, 254 SCRA 721, [1996]; See also: State Investment House, Inc. vs. court of Appeals, 206 SCRA 348, [1992]; Mindanao Terminal and Brokerage Service, Inc. vs. The Hon. Minister of Labor and Employment, 238 SCRA 77, [1994]. Republic of the Philippines SUPREME COURT Baguio City THIRD DIVISION G.R. No. 113907 April 20, 2001 MALAYANG SAMAHAN NG MGA MANGGAGAWA SA M. GREENFIELD (MSMG-UWP), ITS PRESIDENT BEDA MAGDALENA VILLANUEVA, MARIO DAGANIO, DONATO GUERRERO, BELLA P. SANCHEZ, ELENA TOBIS, RHODA TAMAYO, LIWAYWAY MALLILIN, ELOISA SANTOS, DOMINADOR REBULLO, JOSE IRLAND, TEOFILA QUEJADA, VICENTE SAMONTINA, FELICITAS DURIAN, ANTONIO POLDO, ANGELINA TUGNA, SALVADOR PENALOSA, LUZVIMINDA TUBIG, ILUMINADA RIVERA, ROMULO SUMILANG, NENITA BARBELONIA, LEVI BASILIA, RICARDO PALAGA, MERCY ROBLES, LEODEGARIO GARIN, DOMINGO ECLARINAL, MELCHOR GALLARDO, MARCELO GARIN, ROSALINA BAUTISTA, MARY ANN TALIGATOS, ALEJANDRO SANTOS, ANTONIO FRAGA, LUZ GAPULTOS, MAGDALENA URSUA, EUGENIO ORDAN, LIGAYA MANALO, PEPITO DELA PAZ, PERLITA DIMAQUIAT, MYRNA VASQUEZ, FLORENTINA SAMPAGA, ARACELI FRAGA, MAXIMINA FAUSTINO, MARINA TAN, OLIGARIO LOMO, PRECILA EUSEBIO, SUSAN ABOGANO, CAROLINA MANINANG, GINA GLIFONIA, OSCAR SOTTO, CELEDONA MALIGAYA, EFREN VELASQUEZ, DELIA ANOVER, JOSEPHINE TALIMORO, MAGDALENA TABOR, NARCISA SARMIENTO, SUSAN MACASIEB, FELICIDAD SISON, PRICELA CARTA, MILA MACAHILIG, CORAZON NUNALA, VISITACION ELAMBRE, ELIZABETH INOFRE, VIOLETA BARTE, LUZVIMINDA VILLOSA, NORMA SALVADOR, ELIZABETH BOGATE, MERLYN BALBOA, EUFRECINA SARMIENTO, SIMPLICIA BORLEO, MATERNIDAD DAVID, LAILA JOP, POTENCIANA CULALA, LUCIVITA NAVARRO, ROLANDO BOTIN, AMELITA MAGALONA, AGNES CENA, NOLI BARTOLAY, DANTE AQUINO, HERMINIA RILLON, CANDIDA APARIJADO, LYDIA JIMENEZ, ELIZABETH ANOCHE, ALDA MURO, TERESA VILLANUEVA, TERESITA RECUENCO, ELIZA SERRANO, ESTELLA POLINAR, GERTRUDES NUNEZ, FELIPE BADIOLA, ROSLYN FERNANDEZ, OSCAR PAGUTA, NATIVIDAD BALIWAS, ELIZABETH BARCIBAL, CYNTHIA ESTELLER, TEODORA SANTOS, ALICIA PILAR, MILA PATENO, GLORIA CATRIZ, MILA MACAHILIG, ADELAIDA DE LEON, ROSENDO EDILO, ARSENIA ESPIRITU, NUMERIANO CABRERA, CONCEPCION ARRIOLA, PAULINA DIMAPASOK, ANGELA SANGCO, PRESILA ARIAS, ZENAIDA NUNES, EDITHA IGNACIO, ROSA GUIRON, TERESITA CANETA, ALICIA ARRO, TEOFILO RUWETAS, CARLING AGCAOILI, ROSA NOLASCO, GERLIE PALALON, CLAUDIO DIRAS, LETICIA ALBOS, AURORA ALUBOG, LOLITA ACALEN, GREGORIO ALIVIO, GUILLERMO ANICETA, ANGELIE ANDRADA, SUSAN ANGELES, ISABELITA AURIN, MANUELA AVELINA, CARLING AGCAOILI, TERESITA ALANO, LOLITA AURIN, EMMABETH ARCIAGA, CRESENCIA ACUNA, LUZVMINDA ABINES, FLORENCIA ADALID, OLIVIA AGUSTIN, EVANGELINE ALCORAN, ROSALINA ALFERES, LORNA AMANTE, FLORENTINA AMBITO, JULIETA AMANONCO, CARMEN AMARILLO, JOSEFINA AMBAGAN, ZENAIDA ANALYA, MARIA ANGLO, EDITHA ANTA ZO, MARY JANE ANTE, ANDREA AQUINO, ROWENA ARABIT, MARIETA ARAGON, REBECCA ARCENA, LYDIA ARCIDO, FERNANDO ARENAS, GREGORIO ARGUELLES, EDITHA ARRIOLA, EMMA ATIENZA, EMMA

ATIENZA, TEODY ATIENZA, ELIZABETH AUSTRIA, DIOSA AZARES, SOLIDA AZAINA, MILAGROS BUAG, MARIA BANADERA, EDNALYN BRAGA, OFELIA BITANGA, FREDISMINDA BUGUIS, VIOLETA BALLESTEROS, ROSARIO BALLADJAY BETTY BORIO, ROMANA BAUTISTA, SUSARA BRAVO, LILIA BAHINGTING, ENIETA BALDOZA, DAMIANA BANGCORE, HERMINIA BARIL, PETRONA BARRIOS, MILAGROS BARRAMEDA, PERLA BAUTISTA, CLARITA BAUTISTA, ROSALINA BAUTISTA, ADELINA BELGA, CONSOLACION BENAS, MARIA BEREZO, MERCEDES BEREBER, VIOLETA BISCOCHO, ERNESTO BRIONES, ALVINA BROSOTO, AGUSTINA BUNYI, CARMEN BUGNOT, ERLINDA BUENAFLOR, LITA BAQUIN, CONSEJO BABOL, CRISANTA BACOLOD, CELIA DE BACTAT, MAZIMA BAGA, ELENA BALADAD, ROSARIO BALADJAY, AMALIA BALAGTAS, ANITA BALAGTAS, MARIA BALAKIT, RUFINA BALATAN, REBECCA BALDERAMA, AMELIA BALLESTER, BELEN BARQUIO, BERNANDITA BASILIDES, HELEN BATO, HELEN BAUTISTA, ROMANA BAUTISTA, ALMEDA BAYTA, AVELINA BELAYON, NORMA DE BELEN, THELMA DE BELEN, JOCELYN BELTRAN, ELENA BENITEZ, VIRGINIA BERNARDINO, MERLINA BINUYAG, LINA BINUYA, BLESILDA BISNAR, SHIRLEY BOLIVAR, CRESENTACION MEDLO, JOCELYN BONIFACIO, AMELIA BORBE, AMALIA BOROMEO, ZENAIDA BRAVO, RODRIGO BEULDA, TERESITA MENDEZ, ELENA CAMAN, LALIANE CANDELARIA, MARRY CARUJANO, REVELINA CORANES, MARITESS CABRERA, JUSTINA CLAZADA, APOLONIA DELA CRUZ, VICTORIA CRUZ, JOSEFINA DELA CRUZ, MARITESS CATANGHAL, EDNA CRUZ, LUCIA DE CASTRO, JOSIE CARIASO, OFELIA CERVANTES, MEDITA CORTADO, AMALIA CASAJEROS, LUCINA CASTILIO, EMMA CARPIO, ANACORITA CABALES, YOLANDA CAMO, MILA CAMAZUELA, ANITA CANTO, ESTELA CANCERAN, FEMENCIA CANCIO, CYNTHIA CAPALAD, MERLE CASTILLO, JESUSA CASTRO, CECILIA CASTILLO, SILVERITA CASTRODES, VIVIAN CELLANO, NORMA CELINO, TERESITA CELSO, GLORIA COLINA, EFIPANIA CONSTANTINO, SALVACION CONSULTA, MEDITA CORTADO, AIDA CRUZ, MARISSA DELA CRUZ, EDITO CORCILLES, JELYNE CRUZ, ROSA CORPOS, ROSITA CUGONA, ELSIE CABELLES, EMMA CADUT, VICTORIA CALANZA, BARBARA CALATA, IMELDA CALDERON, CRISTINA CALIDGUID, EMMALINDA CAMALON, MARIA CAMERINO, CARMENCITA CAMPO, CONNIE CANEZO, LOURDES CAPANANG, MA. MILAGROS CAPILI, MYRNA T. CAPIRAL, FLOR SAMPAGA, SUSAN B. CARINO, ROSARIO CARIZON, VIRGINIA DEL CARMEN, EMMA CARPIO, PRESCILA CARTA, FE CASERO, LUZ DE CASTRO, ANNA CATARONGAN, JOSEFINA CASTISIMO, JOY MANALO, EMMIE CAWALING, JOVITA CARA, MARINA CERBITO, MARY CAREJANO, ESTELA R. CHAVEZ, CONCEPCION PARAJA, GINA CLAUDIO, FLORDELIZA CORALES, EDITO CORCIELER, ROSA C. CORROS, AMELIA CRUZ, JELYNE CRUZ, WILFREDO DELA CRUZ, REINA CUEVAS, MARILOU DEJECES, JOSEPHINE DESACULA, EDITHA DEE, EDITHA DIAZ, VIRGIE DOMONDON, CELSA DOROPAW, VIOLETA DUMELINA, MARIBEL DIMATATAC, ELBERTO DAGANIO, LETECIA DAGOHOY, DINDO DALUZ, ANGELITA DANTES, GLORIA DAYO, LUCIA DE CASTRO, CARLITA DE GUZMAN, CARMEN DELA CRUZ, MERCY DE LEON, MARY DELOS REYES, MARIETA DEPITO, MATILDE DIBLAS, JULIETA DIMAYUGA, TEODORA DIMAYUGA, YOLANDA DOMDOM, LUCITA DONATO, NELMA DORADO, RITA DORADO, SUSAN DUNTON, HERMINIA SAN ESTEBAN, AMALI EUGENIO, OLIVIA EUSOYA, ERNESTO ESCOBIN, EVELYN ESCUREL, LYDIA ESCOBIN, VICENTE E. ELOIDA, ELENA EGAR, GLORIA ERENO, NORMA ESPIRIDION, ARSENIA ESPIRITU, AURORA ESTACIO, DEMETRIA ESTONELO, MILAGROS FONSEGA, LYDIA FLORENTINO, JULIA FARABIER, TRINIDAD FATALLA, IMELDA FLORES, JESSINA FRANCO, MA. CRISTINA FRIJAS, ESPECTACION FERRER, BERDENA FLORES, LEONILA FRANCISCO, BERNARDA FAUSTINO, DOLORES FACUNDO, CRESTITA FAMILARAN, EMELITA FIGUERAS, MA. VIRGINIA FLORENDO, AURORA FRANCISCO, MA. JESUSA FRANCISCO, NENITA FUENTES, MARILOU GOLINGAN, JUANITA GUERRERO, LYDIA GUEVARRA, SOCORRO GONZAGA, PATRICIA GOMEO, ROSALINDA GALAPIN, CARMELITA GALVEZ, TERESA GLE, SONIA GONZALES, PRIMITA GOMEZ, THERESA GALUA, JOSEFINA GELUA, BRENDA GONZAGA, FLORA GALLARDO, LUCINDA GRACILLA,

VICTORIA GOZUM, NENITA GAMAO, EDNA GARCIA, DANILO GARCIA, ROSARIO GIRAY, ARACELI GOMEZ, JOEMARIE GONZAGA, NELIA GONZAGA, MARY GRANCE GOZON, CARMEN GONZALES, MERLITA GREGORIO, HERMINIA GONZALES, CARLITA DE GUZMAN, MODESTA GABRENTINA, EDITHA GADDI, SALVACIO GALIAS, MERLINDA GALIDO, MELINDA GAMIT, JULIETA GARCIA, EMELITA GAVINO, CHARITO GILLIA, GENERA GONEDA, CRESTITA GONZALES, HERMINIA GONZALES, FRANCISCA GUILING, JULIAN HERNANDEZ, GLECERIA HERRADURA, SUSANA HIPOLITO, NERISSA HAZ, SUSAN HERNAEZ, APOLONIA ISON, SUSAN IBARRA, LUDIVINA IGNACIO, CHOLITA INFANTE, JULIETA ITURRIOS, ANITA IBO, MIRASOL INGALLA, JULIO JARDINIANO, MERLITA JULAO, JULIETA JULIAN, MARIBETH DE JOSE, JOSEPHINE JENER, IMELDA JATAP, JULIETA JAVIER, SALOME JAVIER, VICTORIA JAVIER, SALVACION JOMOLO, EDNA JARNE, LYDIA JIMENEZ, TERESITA DE JUAN, MARILYN LUARCA, ROSITA LOSITO, ROSALINA LUMAYAG, LORNA LARGA, CRESTETA DE LEON, ZENAIDA LEGASPI, ADELAIDA LEON, IMELDA DE LEON, MELITINA LUMABI, LYDIA LUMABI, ASUNCION LUMACANG, REGINA LAPIADRIO, MELANIA LUBUGUAN, EVANGELINE LACAP, PELAGIA LACSI, LORNA LAGUI, VIRGIE LAITAN, VIRGINIA LEE, CRESTELITA DE LEON, FELICISIMA LEONERO, DIOSA LOPE, ANGELITA LOPEZ, TERESITA LORICA, JUANITA MENDIETA, JUANITA MARANQUEZ, JANET MALIFERO, INAS MORADOS, MELANIE MANING, LUCENA MABANGLO, CLARITA MEJIA, IRENE MENDOZA, LILIA MORTA, VIGINIA MARAY, CHARITO MASINAHON, FILMA MALAYA, LILIA MORTA, VIRGINIA MARAY, CHARITO MASINAHON, FILMA MALAYA, LILIA MORTA, ROSITA MATIBAG, LORENZA MLINA, SABINA DEL MUNDO, EDITHA MUYCO, NARCISA MABEZA, MA. FE MACATANGAY, CONCEPCION MAGDARAOG, IMELDA MAHIYA, ELSA MALLARI, LIGAYA MANAHAN, SOLEDA MANLAPAS, VIRGINIA MAPA, JOSEI MARCOS, LIBRADA MARQUEZ, VIRGINIA MAZA, JULIANITA MENDIETA, EDILBERTA MENDOZA, IRENE MERCADO, HELEN MEROY, CRISTINA MEJARES, CECILIA MILLET, EMELITA MINON, JOSEPHINE MIRANA, PERLITA MIRANO, EVANGELINE MISBAL, ELEANOR MORALES, TERESITA MORILLA, LYDIA NUDO, MYRIAM NAVAL, CAROLINA NOLIA, ALICIA NUNEZ, MAGDALENA NAGUIDA, ELSA NICOL, LILIA NACIONALES, MA. LIZA MABO, REMEDIOS NIEVES, MARGARITA NUYLAN, TERESITA NIEVES, PORFERIA NARAG, RHODORA NUCASA, CORAZON OCRAY, LILIA OLIMPO, VERONA OVERENCIA, FERMIN OSENA, FLORENCIA OLIVAROS, SOLEDAD OBEAS, NARISSA OLIVEROS, PELAGIA ORTEGA, SUSAN ORTEGA, CRISTINA PRENCIPE, PURITA PENGSON, REBECCA PACERAN, EDNA PARINA, MARIETA PINAT, EPIFANIA PAJERLAN, ROSALINA PASIBE, CECILIA DELA PAZ, LORETA PENA, APOLONIA PALCONIT, FRANCISCO PAGUIO, LYDIA PAMINTAHON, ELSIE PACALDO, TERESITA PADILLA, MYRNA PINEDA, MERCEIDTA PEREZ, NOVENA PORLUCAS, TERESITA PODPOD, ADORACION PORNOBI, ALICIA PERILLO, HELEN JOY PENDAL, LOURDES PACHECO, LUZVIMINDA PAGALA, LORETA PAGAPULAN, FRANCISCO PAGUIO, PRISCO PALACA, FLORA PAMINTUAN, NOEMI PARISALES, JOSEPHINE PATRICIO, CRISTINA PE BENITO, ANGELA PECO, ANGELITA PENA, ESTER PENONES, NORMA PEREZ, MAURA PERSEVERANCIA, MARINA PETILLA, JOSIE PIA, ZULVILITA PIODO, REBECCA PACERAN, CLARITA POLICARPIO, MAXIMO POTENTO, PORFIRIO POTENTO, FLORDELIZA PUMARAS, FERNANDO QUEVEDO, JULIANA QUINDOZA, CHARITO QUIROZ, CARMELITA ROSINO, RODELIA RAYONDOYON, FLORENCIA RAGOS, REBECCA ROSALES, ROSALYN RIVERO, FRANCISCO RUIZ, FRANCIA ROSERO, EMELY RUBIO, EDILBERTO RUIO, JUANA RUBY, RAQUEL REYES, MERCY ROBLES, ESTELA RELANO, ROSITA REYES NIMFA RENDON, EPIFANIO RAMIRO, MURIEL REALCO, BERNARDITA RED, LEONITA RODIL, BENITA REBOLA, DELMA REGALARIO, LENY REDILLAS, JULIETA DELA ROSA, FELICITAS DELA ROSA, SUSAN RAFALLO, ELENA RONDINA, NORMA RACELIS, JOSEPHINE RAGEL, ESPERANZA RAMIREZ, LUZVIMINDA RANADA, CRISTINA RAPINSAN, JOCELYN RED, ORLANDO REYES, TERESITA REYES, ANGELITA ROBERTO, DELIA ROCHA, EDLTRUDES ROMERO, MELECIA ROSALES, ZENAIDA ROTAO, BELEN RUBIS, FE RUEDA, SYLVIA

SONGCAYAWON, CRISTINA SANANO, NERCISA SARMIENTO, HELEN SIBAL, ESTELITA SANTOS, NORMA SILVESTRE, DARLITA SINGSON, EUFROCINA SARMIENTO, MYRNA SAMSON, EMERLINA SADIA, LORNA SALAZAR, AVELINA SALVADOR, NACIFORA SALAZAR, TITA SEUS, MARIFE SANTOS, GRACIA SARMIENTO, ANGELITA SUMANGIL, ELIZABETH SICAT, MA. VICTORIA SIDELA, ANALITA SALVADOR, MARITES SANTOS, VIRGINIA SANTOS, THELMA SARONG, NILDA SAYAT, FANCITA SEGUNDO, FYNAIDA SAGUI, EDITHA SALAZAR, EDNA SALZAR, EMMA SALENDARIO, SOLEDAD SAMSON, EDNA SAN DIEGO, TERESITA SAN GABRIEL, GERTRUDES SAN JOSE, EGLECERIA OSANCHEZ, ESTRELLA SANCHEZ, CECILIA DELOS SANTOS, LUISA SEGOVIA, JOCELYN SENDING ELENA SONGALIA, FELICITAS SORIANO, OFELIA TIBAYAN, AIDA TIRNIDA, MONICA TIBAYAN, CRISTETA TAMBARAN, GLORIA TACDA, NENVINA, FELINA TEVES, ANTONINA DELA TORRE, MAXIMA TANILON, NENA TABAT, ZOSIMA TOLOSA, MARITA TENOSO, IMELDA TANIO, LUZ TANIO, EVANGELINE TAYO, JOSEFINA TINGTING, ARSENIA TISOY, MAGDALENA TRAJANO, JOSEFINA UBALDE, GINA UMALI, IRMA VALENZUELA, FELY VALDEZ, PAULINA VALEZ, ROSELITA VALLENTE, LOURDES VELASCO, AIDA VILLA, FRANCISCA VILLARITO, ZENAIDA VISMONTE, DELIA VILLAMIEL, NENITA VASQUEZ, JOCELYN VILLASIS, FERMARGARITA VARGAS, CELIA VALLE, MILA CONCEPCION VIRAY, DOMINGA VALDEZ, LUZVIMINDA VOCINA, MADELINE VIVERO, RUFINA VELASCO, AUREA VIDALEON, GLORIA DEL VALLE, THELMA VALLOYAS, CYNTHIA DELA VEGA, ADELA VILLAGOMEZ, TERESITA VINLUAN, EUFEMIA VITAN, GLORIA VILLAFLORES, EDORACION VALDEZ, ANGELITA VALDEZ, ILUMINADA VALENCI, MYRNA VASQUEZ, EVELYN VEJERAMO, TEODORA VELASQUEZ, EDAN VILLANUEVA, PURITA VILLASENOR, SALVADOR WILSON, EMELINA YU, ADELFA YU, ANA ABRIGUE, VIRGINIA ADOBAS, VICTORIA ANTIPUESTO, MERCEDITA CASTILLO, JOCELYN CASTRO, CREMENIA DELA CRUZ, JOSEPHINE IGNACIO, MELITA ILILANGOS, LIGAYA LUMAYAT, DELIA LUMBES, ROSITA LIBRADO, DELIA LAGRAMADA, GEMMA MAGPANTAY, EMILY MENDOZA, FIDELA PANGANIBAN, LEONOR RIZALDO, ILUMINDA RIVERA, DIVINA SAMBAYAN, ELMERITA SOLAYAO, NANCY SAMALA, JOSIE SUMARAN, LUZVIMINDA ABINES, ALMA ACOL, ROBERTO ADRIATICO, GLORIA AGUINALDO, ROSARIO ALEYO, CRISTETA ALEJANDRO, LILIA ALMOGUERA, CARMEN AMARILLO, TRINIDAD ARDANIEL, CERINA AVENTAJADO, ZENAIDA AVAYA, LOLITA ARABIS, MARIA ARSENIA, SOFIA AGUINALDO, SALVE ABAD, JOSEFINA AMBANGAN EMILIA AQUINO, JOSEFINA AQUINO, JULIANA AUSAN, AMERCIANA ACOSTA, CONCEPCION ALEROZA, DIANA ADOVOS, FELY ADVINCULA, SEOMINTA ARIAS, JOSEPHINE ARCEDE, NORMA AMISTOSO, PRESENTACION ALONOS, EMMA ATIENZA, LEONIDA AQUINO, ANITA ARILLON, ADELAIDA ARELLANO, NORMA AMISTOSO, JOSEPHINE ARCEDE, SEMIONITA ARIAS, JOSEFINA BANTUG, LOLITA BARTE, HERMINIA BASCO, MARGARITA BOTARDO, RUFINO BUGNOT, LOLITA BUSTILLO, ISABEL BALAKIT, ROSARIO BARRERO, TESSIE BALBOS, NORMA BENISANO, GUILLERMA BRUGES, BERNADETTE BARTOLOME, SHIRLEY BELMONTE, MERONA BELZA, AZUCENA BERNALES, JOSE BASCO, NIMPHA BANTOG, BENILDA BUBAN, REGINA BUBAN, SALOME BARRAMEDA, IRENE BISCO, FELICITAS BAUTISTA, VIOLETA BURA, LINA BINUYA, BIBIANA BAARDE, ELSA BAES, ANASTACIA BELONZO, SONIA BENOYO, ELIZABETH BACUNGAN, PATRICIA BARRAMEDA, ERLINDA BARCELONA, EMMA BANICO, APOLONIA BUNAO, LUCITA BOLEA, PACIFICA BARCELONA, EDITHA BASIJAN, RENITA BADAMA, ELENA BALADAD, CRESENCIA BAJO, BERNADITA BASILID, MELINDA BEATO, YOLANDA BATANES, EDITHA BORILLA, ANITA BAS, ELSA CALIPUNDAN, MARIA CAMERINO, VIRGINIA CAMPOSANO, MILAGROS CAPILI, CARINA CARINO, EUFEMIA CASIHAN, NENITA CASTRO, FLORENCIA CASUBUAN, GIRLIE CENTENO, MARIANITA CHIQUITO, IMELDA DELA CRUZ, TEODOSIA CONG, TEOFILA CARACOL, TERESITA CANTA, IRENEA CUNANAN, JULITA CANDILOSAS, VIOLETA CIERES, MILAGROS DELA CRUZ, FLOREPES CAPULONG, CARMENCITA CAMPO, MARILYN CARILLO, RUTH DELA CRUZ, RITA

CIJAS, LYDIA CASTOR, VIRGIE CALUBAD, EMELITA CABERA, CRISTETA CRUZ, ERLINDA COGADAS, IMELDA CALDERON, SUSIE LUZ CEZAR, ESTELA CHAVEZ, NORMA CABRERA, ELDA DAGATAN, LEONISA DIMACUNA, ELDA DAGATAN, LEONISA DIMACUNA, ERNA DUGTONG, FLORDELISA DIGMA, VIRGILIO DADIOS, LOLITA DAGTA, ADELAIDA DORADO, CELSA DATUMANONG, VIRGINIA DOCTOLERO, EDNA SAN DIEGO, JULIETA DANG, JULIETA DORANTINAO, LOLITA DAGANO, JUDITH DIAZ, MARIA ENICANE, MARITA ESCARDE, ENRIMITA ESMAYOR, ROSARIO EPIRITU, REMEDIOS EMBOLTORIO, IRENE ESTUITA, TERESITA ERESE, ERMELINDA ELEZO, MARIA ESTAREJA, MERLITA ESQUERRA, YOLANDA FELICITAS, FRUTO FRANCIA, MARTHA FRUTO, LILIA FLORES, SALVACION FORTALESA, JUDITH FAJARDO, SUSANA FERNANDO, EDWIN FRANCISCO, NENITA GREGORY, ROSA CAMILO, MARIVIC GERRARDO, CHARITA GOREMBALEM, NORMA GRANDE, DOLORES GUTIERREZ, CHARLIE GARCIA, LUZ GALVEZ, ADELAIDA GAMILLA, LUZ GAPULTOS, ERLINDA GARCIA, HELEN GARCIA, ERLINDA GAUDIA, FRANCISCA GUILING, MINTA HERRERA, ASUNCION HONOA, JUAN HERNANDEZ, LUCERIA ANNA MAE HERNANDEZ, JULIANA HERNANDEZ, EDITHA IGNACIO, ANITA INOCENCIO, EULALIA INSORIO, ESTELITA IRLANDA, MILAGROS IGNACIO, LINDA JABONILLO, ADELIMA JAEL, ROWENA JARABJO, ROBERT JAVILINAR, CLARITA JOSE, CARMENCITA JUNDEZ, SOFIA LALUCIS, GLORIA LABITORIA, ANGELITA LODES, ERLINDA LATOGA, EVELYN LEGASPI, ROMEO LIMCHOCO, JESUS LARA, ESTRELLA DE LUNA, LORETA LAREZA, JOSEPHINE ALSCO, MERCY DE LEON, CONSOLACION LIBAO, MARILYN LIWAG, TERESITA LIZAZO, LILIA MACAPAGAL, SALVACION MACAREZA, AMALIA MADO, TERESITA MADRIAGA, JOVITA MAGNAYE, JEAN MALABAD, FRANCISCA MENDOZA, NELCITA MANGANTANG, TERESITA NELLA, GENEROZA MERCADO, CRISTETA MOJANA, BERNARDA MONGADO, LYDIA MIRANDA, ELISA MADRILEJOS, LOIDA MAGSINO, AMELIA MALTO, JULITA MAHIBA, MYRNA MAYORES, LUISA MARAIG, FLORENCIA MARAIG, EMMA MONZON, IMELDA MAGDANGAN, VICTORIA MARTIN, NOEMI MANGUILLO, BASILIZA MEDINA, VICTORIO MERCADO, ESTELA MAYPA, EMILIA MENDOZA, LINA MAGPANTAY, FELICIANA MANLOLO, ELENA MANACOP, WILMA MORENO, JUANA MENDOZA, EVELYN DEL MUNDO, ROSIE MATUTINA, MATILDE MANALO, TERESITA MENDEZ, FELIPINA MAGONCIA, MARIA MANZANO, LIGAYA MANALO, LETICIA MARCHA, MARINA MANDIGMA, LETICIA MANDASOC, PRESCILLA MARTINEZ, JULIA MENDOZA, PACITA MAGALLANES, ANGELINA MARJES, SHIRLEY MELIGRITO, IRENE MERCADO, ELISA MAATUBANG, MARCELINA NICOLAS, AGUSTINA NICOLAS, ROSA NOLASCO, WILMA NILAYE, VIOLETA ORACION, ANGELA OSTAYA, JUANITA OSAYOS, MAGDALENA OCAMPO, MARDIANA OCTA, ROSELA OPAO, LIBRADA OCAMPO, YOLANDA OLIVER, MARCIA ORLANDA, PAGDUNAN, RITA PABILONA, MYRA PALACA, BETHLEHEM PALINES, GINA PALIGAR, NORMA PALIGAR, DELMA PEREZ, CLAUDIA PRADO, JULIE PUTONG, LUDIVINA PAGSALINGAN, MERLYN PANALIGAN, VIOLETA PANAMBITAN, NOREN PAR, ERLINDA PARAGAS, MILA PARINO, REBECCA PENAFLOR, IMELDA PENAMORA, JERMICILLIN PERALTA, REBECCA PIAPES, EDITHA PILAR, MAROBETH PILLADO, DISCORO PIMENTEL, AURORA LAS PINAS, EVANGELINA PINON, MA. NITA PONDOC, MA. MERCEDES PODPOD, ANGELITO PANDEZ, LIGAYA PIGTAIN, LEONILA QUIAMBAO, ELENA QUINO, MARITESS QUIJANO, CHOLITA REBUENO, LOLITA REYES, JOCELYN RAMOS, ROSITA RAMIREZ, ELINORA RAMOS, ISABEL RAMOS, ANNABELLE RESURRECCION, EMMA REYES, ALILY ROXAS, MARY GRACE DELOS REYES, JOCELYN DEL ROSARIO, JOSEFINA RABUSA, ANGELITA ROTAIRO, SAMCETA ROSETA, EDERLINA RUIZ, ZENAIDA ROSARIO, BENITA REBOLA, ROSITA REVILLA, ROSITA SANTOS, ROWENA SALAZAR, EMILYN SARMIENTO, ANA SENIS, ELOISA SANTOS, NARCISA SONGLIAD, ELMA SONGALIA, AMPARA SABIO, JESSIE SANCHEZ, VIVIAN SAMILO, GLORIA SUMALINOG, ROSALINA DELOS SANTOS, MARIETA SOMBRERO, HELEN SERRETARIO, TEODORO SULIT, BELLA SONGUINES, LINDA SARANTAN, ESTELLA SALABAR, MILAGROS SISON, GLORIA TALIDAGA, CECILIA TEODORO, ROMILLA

TUAZON, AMELITA TABULAO, MACARIA TORRES, LUTGARDA TUSI, ESTELLA TORREJOS, VICTORIA TAN, MERLITA DELA VEGA, WEVINA ORENCIA, REMEDIOS BALECHA, TERESITA TIBAR, LACHICA LEONORA, JULITA YBUT, JOSEFINA ZABALA, WINNIE ZALDARIAGA, BENHUR ANTENERO, MARCELINA ANTENERO, ANTONINA ALAPAN, EDITHA ANTOZO, ROWENA ARABIT, ANDRA AQUINO, TERESITA ANGULO, MARIA ANGLO, MYRNA ALBOS, ELENITA AUSTRIA, ANNA ABRIGUE, VIRGINIA ADOBAS, VICTORIA ANTIPUESTO, REMEDIOS BOLECHE, MACARIA BARRIOS, THELMA BELEN, ESTELLA BARRETTO, JOCELYN CHAVEZ, VIRGINIA CAPISTRANO, BENEDICTA CINCO, YOLLY CATPANG, REINA CUEVAS, VICTORIA CALANZA, FE CASERO, ROBERTA CATALBAS, LOURDES CAPANANG, CLEMENCIA CRUZ, JOCELYN COSTO, MERCEDITA CASTILLO, EDITHA DEE, LUCITA DONATO, NORMA ESPIRIDION, LORETA FERNANDEZ, AURORA FRANCISCO, VILMA FAJARDO, MODESTA GABRENTINA, TERESITA GABRIEL, SALVACION GAMBOA, JOSEPHINE IGNACIO, SUSAN IBARRA, ESPERANZA JABSON, OSCAR JAMBARO, ROSANNA JARDIN, CORAZON JALOCON, ZENAIDA LEGASPI, DELLA LAGRAMADA, ROSITA LIBRANDO, LIGAYA LUMAYOT, DELIA LUMBIS, LEONORA LANCHICA, RELAGIA LACSI, JOSEFINA LUMBO, VIOLETA DE LUNA, EVELYN MADRID, TERESITA MORILLA, GEMMA MAGPANTAY, EMILY MENDOZA IRENEA MEDINA, NARCISA MABEZA, ROSANNA MEDINA, DELIA MARTINEZ, ROSARIO MAG-ISA, EDITHA MENDOZA, EDILBERTA MENDOZA, FIDELA PANGANIBAN, OFELIA PANGANIBAN, AZUCENA POSTOO, LOURDES PACHECO, LILIA PADILLA, MARISSA PEREZ, FLORDELIZA PUMARES, LUZ REYES, NORMA RACELIS, LEONOR RIZALDO, JOSIE SUMASAR, NANCY SAMALA, EMERLITA SOLAYAO, MERCEDITA SAMANIEGO, BLANDINA SIMBULAN, JOCELYN SENDING, LUISITA TABERRERO, TERESITA TIBAR, ESTERLINA VALDEZ, GLORIA VEJERANO, ILUMINADA VALENCIA, MERLITA DELA VEGA, VIRGIE LAITAN, JULIET VILLARAMA, LUISISTA OCAMPO, NARIO ANDRES, ANSELMA TULFO, GLORIA MATEO, FLANIA MENDOZA, CONNIE CANGO, EDITHA SALAZAR, MYRNA DELOS SANTOS, TERESITA SERGIO, CHARITO GILLA, FLORENTINA HERNAEZ, BERNARDINO VIRGINIA, AMPO ANACORITA, SYLVIA POASADAS, ESTRELLA ESPIRITU, CONCORDIA LUZURIAGA, MARINA CERBITO, EMMA REYES, NOEMI PENISALES, CLARITA POLICARPIO, BELEN BANGUIO, HERMINIA ADVINCULA, LILIA MORTA, REGINA LAPIDARIO, LORNA LARGA, TERESITA VINLUAN, MARITA TENOSO, NILDS SAYAT, THELMA SARONG, DELMA REGALIS, SUSAN RAFAULO, ELENA RONDINA, MYRNA PIENDA, VIOLETA DUMELINA, FLORENCIA ADALID, FILMA MELAYA, ERLINDA DE BAUTISTA, MATILDE DE BLAS, DOLORES FACUNDO, REBECCA LEDAMA, MA. FE MACATANGAY, EMELITA MINON, NORMA PAGUIO, ELIZA VASQUEZ, GLORIA VILLARINO, MA. JESUS FRANCISCO, TERESITA GURPIDO, LIGAYA MANALO, FE PINEDA, MIRIAM OCMAR, LUISA SEGOVIA, TEODY ATIENZA, SOLEDA AZCURE, CARMEN DELA CRUZ, DMETRIA ESTONELO, MA. FLORIDA LOAZNO, IMELDA MAHIYA, EDILBERTA MENDOZA, SYLVIA POSADAS, SUSANA ORTEGA, JOSEPHINE D. TALIMORO, TERESITA LORECA, ARSENIA TISOY, LIGAYA MANALO, TERESITA GURPIO, FE PINEDA, and MARIA JESUS FRANCISCO, petitioners, vs. HON. CRESENCIO J. RAMOS, NATIONAL LABOR RELATIONS COMMISSION, M. GREENFIELD (B), INC., SAUL TAWIL, CARLOS T. JAVELOSA, RENATO C. PUANGCO, WINCEL LIGOT, MARCIANO HALOG, GODOFREDO PACENO, SR., GERVACIO CASILLANO, LORENZO ITAOC, ATTY. GODOFREDO PACENO, JR., MARGARITO CABRERA, GAUDENCIO RACHO, SANTIAGO IBANEZ, AND RODRIGO AGUILING, respondents. RESOLUTION GONZAGA-REYES, J.: Before us is petitioners' motion for partial reconsideration of our decision dated February 28, 2000,1 the dispositive portion of which reads:2 "WHEREFORE, the petition is GRANTED; the decision of the National Labor Relations Commission in Case No. NCR-00-09-04199-89 is REVERSED and SET ASIDE; and the respondent company is

hereby ordered to immediately reinstate the petitioners to their respective positions. Should reinstatement be not feasible, month salary for every year of service. Since petitioners least 30 days prior to their termination, following the recent ruling in the case of Ruben Serrano vs. National Labor Relations Commission and Isetann Department Store, the respondent company is hereby ordered to pay full backwages to petitioner-employees while the Federation is also ordered to pay full backwages to petitioner-union officers who were dismissed upon its instigation. Since the dismissal of petitioners was without cause, backwages shall be computed from the time the herein petitioner employees and union officers were dismissed until their actual reinstatement. Should reinstatement be not feasible, their backwages shall be computed from the time petitioners were terminated until the finality of this decision. Costs against the respondent company.1wphi1.nt SO ORDERED." Petitioners allege that this Court committed patent and palpable error in holding the "the respondent company officials cannot be held personally liable for damages on account of employees' dismissal because the employer corporation has a personality separate and distinct from its officers who merely acted as its agents" whereas the records clearly established that respondent company officers Saul Tawil, Carlos T. Javelosa and Renato C. Puangco have caused the hasty, arbitrary and unlawful dismissal of petitioners from work; that as top officials of the respondent company who handed down the decision dismissing the petitioners, they are responsible for acts of unfair labor practice; that these respondent corporate officers should not be considered as mere agents of the company but the wrongdoers. Petitioners further contend that while the case was pending before the public respondents, the respondent company, in the early part of February 1990, began removing its machineries and equipment from its plant located at Merville Park, Paranaque and began diverting jobs intended for the regular employees to its sub-contractor/satellite branches;3 that the respondent company officials are also the officers and incorporators of these satellite companies as shown in their articles of incorporation and the general information sheet. They added that during their ocular inspection of the plant site of the respondent company, they found that the same is being used by other unnamed business entities also engaged in the manufacture of garments. Petitioners further claim that the respondent company no longer operates its plant site as M. Greenfield thus it will be very difficult for them to fully enforce and implement the court's decision. In their subsequent motion filed on the same day, petitioners also pray for the (A) inclusion of the names of employees listed in Annex "D" of the petition which they inadvertently omitted in the caption of the case, to wit: (1) Amores, Imelda (2) Andres, Josefina (3) Aragon, Felicidad (4) Arias, Genevive (5) Arroyo, Salvacion (6) Arceo, Elizabeth (7) Anonuevo, Monica (8) Abellada, Josefina (9) Advincula, Harmelina (10) Ajayo, Rosario (11) Alilay, Marilyn (12) Almario, Anliza (13) Almario, Angelita (14) Almazan, Marilou (15) Almonte, Rosalina (16) Alvaran, Marites (17) Alvarez, Edna (18) Ampo, Anacorita (19) Aquino, Leonisa (20) Bactat, Celia (21) Carpio, Azucena G. (22) Cruz, Amelia (23) Glifonia, Eugenia (24) Escurel, Evelyn F. (25) Hilario, Bonifacio G. (26) Payuan, Adoracion (27) Perez, Mercedita (28) Rempis, Zenaida (29) Rosario, Margie del (30) Salvador, Norma (31) Sambayanan, Olivia (32) Tiaga, Aida (33) Torbela, Maria (34) Trono, Nenevina (35) Varona, Asuncion (36) Vasquez, Elisa M. (37) Villanueva, Milagros (38) Villapondo, Eva C. (39) Villon, Adeliza T.; (B) correction of their own typographical errors of the names of employees appearing in the caption, which should be as follows: Manuela Avelin, Belen Barquio, Lita Buquid, Violeta C. Ciervo, Marilou Dejocos, Maximina Faustino, Primitiva Gomez, Myrna Palaca, Mercedita Perez, Rebecca Poceran, Amorlita Rotairo, Emma Saludario, Tita Senis, Salvacion Wilson,4 Anita Ahillon, Gregoria Arguelles, Tessie Balbis, Betty Borja, Rodrigo Buella, Celsa Doropan, Maria Enicame, Josephine Lasco, Julita Maniba, Juanita Osuyos, Juana Overencio, Azucena Postigo, Cristina Rapinan, Roselyn Rivero, Edeltrudes Romero, Rodelia Royandoyon, Fausta Segundo, Teodora Sulit, Elena Tebis, Paulina Valdez, 5 Susan Abogona, Diana Adovas, Carmen Rosimo Basco, Macaria Barrion, Maria Fe Berezo, Matilde de Blas, Rufina Bugnot, Aurora Bravo, Jovita Cera, Precila Carta, Amalia Eugenio, Milagros Fonseca, Jose Irlanda, Rowena Jarabejo, Regina Lapidario, Josie Marcos, Shirley Melegrito, Noemi Menguillo, Teresita Nierves, Ricardo Paloga, Florenia Ragos, Leonila Rodil, Emma Saludario, Narcisa Songuad, Josie Sumarsar, Evangeline Tayco;6 {C) inclusion of other employees similarly situated whose names were not included in Annex "D" or in the caption of the case, to wit: (1) Dionisa Aban, (2) Alicia Aragon, (3) Vicky Francia, (4) Nelita F. Gelongos, (5) Erlinda San Juan, (6) Erlinda Baby Patungan Manalo, (7) Jenette Patungan,7 (8) Blandina Simbahan,8 (9) Asuncion Varona,9 (10) Josefina Andres, (11) Teresita Arales, (12) Alice Artikulo, (13) Esther Cometa, (14) Eliza Cabiting, (15) Erlinda Dalut, (16) Edna Fernandez, (17)

Emily Inocencio, (18) Esperanza Jalocon, (19) Imelda Jarabe, (20) Mercedes Pabadora, (21) Venerado Pastoral, (22) Cristina Perlas, (23) Margie del Rosario.10 In their Comment, the Solicitor General interposes no objection to petitioners' prayer for the inclusion of omitted and similarly situated employees and the correction of employees' names in the caption of the case. On the other hand, private respondent company officials Carlos Javelosa arid Remedios Caoleng, in their Comment, state that considering that petitioners admitted having knowledge of the fact that private respondent officers are also holding key positions in the alleged satellite companies, they should have presented the pertinent evidence with the public respondents; thus it is too late for petitioners to require this Court to admit and evaluate evidence not presented during the trial; that the supposed proof of satellite companies hardly constitute newly discovered evidence. Respondent officials interpose no objection to the inclusion of employees inadvertently excluded in the caption of the case but object to the inclusion of employees who were allegedly similarly situated for the reason that these employees had not been parties to the case, hence should not be granted any relief from the court. Respondent company failed to file its comment.11 Petitioners' contention that respondent company officials should be made personally liable for damages on account of petitioners' dismissal is not impressed with merit. A corporation is a juridical entity with legal personality separate and distinct from those acting for and in its behalf and, in general from the people comprising it.12 The rule is that obligations incurred by the corporation, acting through its directors, officers and employees are its sole liabilities.13 True, solidary liabilities may at times be incurred but only when exceptional circumstances warrant such as, generally, in the following cases: 14 1. When directors and trustees or, in appropriate cases, the officers of a corporation (a) Vote for or assent to patently unlawful acts of the corporation; (b) act in bad faith or with gross negligence in directing the corporate affairs; (c) are guilty of conflict of interest to the prejudice of the corporation, its stockholders or members, and other persons.15 (2) When a director or officer has consented to the issuance of watered stocks or who, having knowledge thereof, did not forthwith file with the corporate secretary his written objection thereto.16 (3) When a director, trustee or officer as contractually agreed or stipulated to hold himself personally and solidarily liable with the Corporation.17 (4) When a director, trustee or officer is made, by specific provision of law, personally liable for his corporate action.18 In labor cases, particularly, the Court has held corporate directors and officers solidarily liable with the corporation for the termination of employment of corporate employees done with malice or in bad faith.19 Bad faith or negligence is a question of fact and is evidentiary. 20 It has been held that bad faith does not connote bad judgement or negligence; it imports a dishonest purpose or some moral obliquity and conscious doing of wrong; it means breach of known duty thru some motive or interest or ill will; it partakes of the nature of fraud.21 In the instant case, there is nothing substantial on record to show that respondent officers acted in patent bad faith or were guilty of gross negligence in terminating the services of petitioners so as to warrant personal liability. As held in Sunio vs. NLRC,22 "We now come to the personal liability of petitioner, Sunio, who was made jointly and severally responsible with petitioner company and CIPI for the payment of the backwages of private respondents. This is reversible error. The Assistant Regional Director's Decision failed to disclose the reason why he was made personally liable. Respondents, however, alleged as grounds thereof, his being the owner of one half (1/2) interest of said corporation, and his alleged arbitrary dismissal of private respondents. Petitioner Sunio was impleaded in the Complaint in his capacity as several Manager of petitioner corporation. There appears to be no evidence on record that he acted maliciously or in bad faith in terminating the services of private respondents. His act, therefore, was within the scope of his authority and was a corporate act. It is basic that a corporation is invested by law with a personality separate and distinct from those of the persons composing it as well as from that of any other legal entity to which it may be related. Mere ownership by a single stockholder or by another corporation of all or nearly all of the capital stock of a corporation is not of itself sufficient ground for disregarding the separate corporate personality. Petitioner Sunio, therefore, should nor have been made personally answerable for the payment of private respondents ' back salaries."

Petitioners' claim that the jobs intended for the respondent company's regular employees were diverted, to its satellite companies where the respondent company officers are holding key positions is not substantiated and was raised for the first time in this motion for reconsideration. Even assuming that the respondent company officials are also officers and incorporators of the satellite companies, such circumstance does not in itself amount to fraud. The documents attached to petitioners' motion for reconsideration show that these satellite companies23 were established prior to the filing of petitioners' complaint against private respondents with the Department of Labor and Employment on September 6, 1989 and that these corporations have different sets of incorporators aside from the respondent officers and are holding their principal offices at different locations. Substantial identity of incorporators between respondent company and these satellite companies does not necessarily imply fraud.24 In such a case, respondent company's corporate personality remains inviolable.25 Although there were earlier decisions of this Court in labor cases where corporate officers were held to be personally liable for the payment of wages and other money claims to its employees, we find those rulings inapplicable to this case. In La Campana Coffee Factory, Inc. vs. Kaisahan ng Manggagawa sa La Campana (KKM},26 La Campana Coffee Factory, Inc. and La Campana Gaugau Packing were substantially owned by the same person. They had one office, one management, and a single payroll for both businesses. The laborers of the gaugau factory and the coffee factory were also interchangeable, i.e., the workers in one factory worked also in the other factory. In Claparols vs. Court of Industrial Relations,27 , the Claparol Steel and Nail Plant which was ordered to pay its workers backwages, ceased operations on June 30, 1957 and was succeeded on the next day, July 1, 1957 by the Claparols Steel Corporation. Both corporations were substantially owned and controlled by the same person and there was no break or cessation in operations. Moreover, all the assets of the steel and nail pant were transferred to the new corporation. Notably, in the above-mentioned cases, a new corporation was created, owned by the same family, engaged in the same business and operating in the same compound, a situation which is not obtaining in the instant case. In AC Ransom Labor Union-CCLU vs. NLRC,28 the Court ruled that under the Minimum Wage Law, the responsible officer of an employer corporation can be held personally liable for non-payment of backwages for "if the policy of the law were otherwise, the corporation employer would have devious ways for evading of back wages." This Court said: "In the instant case, it would appear that RANSOM; in 1969, foreseeing the possibility or probability of payment of backwages to the 22 strikers, organized ROSARIO to replace RANSOM, with the latter to be eventually phased out if the 22 strikers win their case. RANSOM actually ceased operations on May 1, 1973, after the December 19, 1972 Decision of the Court of Industrial Relations was promulgated against RANSOM." Clearly, the situation in AC Ransom does not obtain in this case, where the alleged satellite companies were established even prior to the filing of petitioners' complaint with the Department of Labor. Petitioners' prayer for the inclusion of employees listed in Annex "D" whose names were admittedly inadvertently excluded in the caption of the case and for the correction of typographical errors of the employees' names appearing in the caption, is well taken and is hereby granted. However, petitioners' prayer for the inclusion of other employees allegedly similarly situated but whose names were not included either in Annex "D" or in the caption of the case must be denied. A judgment cannot bind persons who are not parties to the action.29 It is elementary that strangers to a case are not bound by the judgment rendered by the court and such judgment is not available as an adjudication either against or in favor of such other person.30 Petitioners failed to explain why these employees allegedly similarly situated were not included in the submitted list filed before us. Such inclusion would be tantamount to a substantial amendment which cannot be allowed at this late stage of the proceedings as it will definitely work to the prejudice and disadvantage of the private respondents.31 WHEREFORE, petitioners' motion for reconsideration is partially granted so as to include the names of employees listed in Annex "D" which petitioners inadvertently omitted in the caption of this case, to wit: (1) Amores, Imelda (2) Andres, Josefina (3)Aragon, Felicidad (4) Arias, Genevive (5) Arroyo, Salvacion (6) Arceo, Elizabeth (7) Anonuevo, Monica (8) Abellada, Josefina (9) Advincula, Harmelina (10) Ajayo, Rosario (11) Alilay, Marilyn (12) Almario, An1iza (13) A1mario, Angelita (14) Almazan, Marilou (15) Almonte, Rosalina (16) Alvaran, Marites (17) Alvarez, Edna (18) Ampo, Anacorita (19) Aquino , Leonisa (20) Bactat, Celia (21) Carpio, Azucena G. (22) Cruz, Amelia (23) Glifonia, Eugenia (24) Escurel, Evelyn F. (25) Hilario, Bonifacio G. (26) Payuan, Adoracion (27) Perez, Mercedita (28) Rempis, Zenaida (29)

Rosario, Margie del (30) Salvador, Norma (31) Sambayanan, Olivia (32) Tiaga, Aida (33) Torbela, Maria (34) Trono, Nenevina (35) Varona, Asuncion (36) Vasquez, Elisa M. (37) Villanueva, Milagros (38) Villapondo, Eva C. (39) Villon, Adeliza T.; and to correct the typographical errors of the names of employees appearing in the caption, as follows: Manuela Avelin, Belen Barquio, Lita Buquid, Violeta C. Ciervo, Marilou Dejocos, Maximina Faustino, Primitiva Gomez, Myrna Palaca, Mercedita Perez, Rebecca Poceran, Amorlita Rotairo, Emma Saludario, Tita Senis, Salvacion Wilson, Anita Ahillon, Gregoria Arguelles, Tessie Balbis, Betty Borja, Rodrigo Buella, Celsa Doropan, Maria Enicame, Josephine Lasco, Julita Maniba, Juanita Osuyos, Juana Overencio, Azucena Postigo, Cristina Rapinan, Roselyn Rivero, Edeltrudes Romero, Rodelia Royandoyon, Fausta Segundo, Teodora Sulit, Elena Tebis, Paulina Valdez, Susan Abogona, Diana Adovas, Carmen Rosimo Basco, Macaria Barrion, Maria Fe Berezo, Matilde de Blas, Rufina Bugnot, Aurora Bravo, Jovita Cera, Precila Carta, Amalia Eugenio, Milagros Fonseca, Jose Irlanda, Rowena Jarabejo, Regina Lapidario, Josie Marcos, Shirley Melegrito, Noemi Menguillo, Teresita Nierves, Ricardo Paloga, Florenia Ragos, Leonila Rodil, Emma Saludario, Narcisa Songuad, Josie Sumarsar, Evangeline Tayco. SO ORDERED. Melo, Sandoval-Gutierrez, JJ., concur. Vitug, Panganiban, JJ, reiterate separate opinion in Serrano v. NLRC, GR No. 117040. Footnote 1 Justice Purisima retired on October 28, 2000; the motion for reconsideration was raffled to herein ponente. 2 Rollo, pp. 1691-1692; Decision, pp. 46-47. 3 Hannahs Garment Corporation, Design Logistics, Inc., Blusa Inc., Quality Garments, Inc., Greenfield and Santiago, Subscriber's Fashion Link Corporation, Danielles Embroidery Inc. 4 Motion dated April 4, 2000. 5 Supplemental motion dated May 31, 2000. 6 Compliance dated October 13, 2000. 7 Listed in the motion dated April 4, 2000; Reiterated in the pleading dated August 3, 2000. 8 Listed in Annex "D". 9 Ibid. 10 Supplemental motion dated May 31, 2000. 11 The copy of the resolution dated July 5, 2000 requiring respondent M. Greenfield to inform the Court of the name and address of its new counsel was returned unserved with post master notation, "RTS, Moved left no address", hence this Court resolved that the July 5 resolution was deemed served on respondents. 12 Santos vs. NLRC, 254 SCRA 673. 13 Ibid. 14 MAM Realty Development Corporation vs. NLRC, 244 SCRA 797 citing Tramat Merchantile Inc. vs. CA, 238 SCRA 14. 15 Ibid citing Section 31, Corporation Code. 16 Ibid citing Section 65, Corporation Code. 17 Ibid citing De Asis and Co., Inc., vs. CA, 136 SCRA 599. 18 Ibid citing Article 144, Corporation Code; see also Section 13, PD 115 (Trust Receipt Law). 19 MAM Realty Development Corp. vs. NLRC, supra; Sunio vs. NLRC, 127 SCRA 390; General Banking and Trust Co., et al. Vs. CA and Manuel E Batucan, 135 SCRA 569. 20 National Food Authority vs. CA, 311 SCRA 700. 21 Board of Liquidators vs. Kalaw, 20 SCRA 987, 1007. 22 127 SCRA 390, 397-39. 23 Hannah's Garment Corp. incorporated in January 14, 1987, Annex "C"; Design Logistics in February 1988, Annex "B", Blusa Inc. amended articles of incorporation in August 1988, Annex "D"; Fashion Link October 4, 1988, Annex "E"; Danielle's Embroidery in August 4, 1989, Annex "A"; S.R. Garments Inc. in August 7, 1989, Annex "F" (Petitioners' evidence). 24 Del Rosario vs. NLRC, 187 SCRA 777. 25 Ibid. 26 93 Phil 160 cited in Del Rosario vs. NLRC, supra. 27 65 SCRA 613, cited in Del Rosario vs. NLRC, supra.

142 SCRA 269. Matuguina Integrated Wood Products, Inc., vs. CA, 263 SCRA 490 citing Buazon vs. CA, 220 SCRA 182. 30 Ibid. 31 Barrel Development Corporation vs. CA, 223 SCRA 268 citing Sharrer vs. Palma 22 SCRA 934; Philippine Banking Corporation vs. IAC, et. al., 187 SCRA 257.
28 29

Republic of the Philippines SUPREME COURT Baguio City FIRST DIVISION G.R. No. 118506 April 18, 1997 NORMA MABEZA, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, PETER NG/HOTEL SUPREME, respondents. KAPUNAN, J.: This petition seeking the nullification of a resolution of public respondent National Labor Relations Commission dated April 28, 1994 vividly illustrates why courts should be ever vigilant in the preservation of the constitutionally enshrined rights of the working class. Without the protection accorded by our laws and the tempering of courts, the natural and historical inclination of capital to ride roughshod over the rights of labor would run unabated. The facts of the case at bar, culled from the conflicting versions of petitioner and private respondent, are illustrative. Petitioner Norma Mabeza contends that around the first week of May, 1991, she and her co-employees at the Hotel Supreme in Baguio City were asked by the hotel's management to sign an instrument attesting to the latter's compliance with minimum wage and other labor standard provisions of law. 1 The instrument provides: 2 JOINT AFFIDAVIT We, SYLVIA IGANA, HERMINIGILDO AQUINO, EVELYN OGOY, MACARIA JUGUETA, ADELAIDA NONOG, NORMA MABEZA, JONATHAN PICART and JOSE DIZON, all of legal ages (sic), Filipinos and residents of Baguio City, under oath, depose and say: 1. That we are employees of Mr. Peter L. Ng of his Hotel Supreme situated at No. 416 Magsaysay Ave., Baguio City. 2. That the said Hotel is separately operated from the Ivy's Grill and Restaurant; 3. That we are all (8) employees in the hotel and assigned in each respective shifts; 4. That we have no complaints against the management of the Hotel Supreme as we are paid accordingly and that we are treated well. 5. That we are executing this affidavit voluntarily without any force or intimidation and for the purpose of informing the authorities concerned and to dispute the alleged report of the Labor Inspector of the Department of Labor and Employment conducted on the said establishment on February 2, 1991. IN WITNESS WHEREOF, we have hereunto set our hands this 7th day of May, 1991 at Baguio City, Philippines. (Sgd.) (Sgd.) (Sgd.) SYLVIA IGAMA HERMINIGILDO AQUINO EVELYN OGOY (Sgd.) (Sgd.) (Sgd.) MACARIA JUGUETA ADELAIDA NONOG NORMA MABEZA. (Sgd.) (Sgd.) JONATHAN PICART JOSE DIZON SUBSCRIBED AND SWORN to before me this 7th day of May, 1991, at Baguio City, Philippines. Asst. City Prosecutor

Petitioner signed the affidavit but refused to go to the City Prosecutor's Office to swear to the veracity and contents of the affidavit as instructed by management. The affidavit was nevertheless submitted on the same day to the Regional Office of the Department of Labor and Employment in Baguio City. As gleaned from the affidavit, the same was drawn by management for the sole purpose of refuting findings of the Labor Inspector of DOLE (in an inspection of respondent's establishment on February 2, 1991) apparently adverse to the private respondent. 3 After she refused to proceed to the City Prosecutor's Office on the same day the affidavit was submitted to the Cordillera Regional Office of DOLE petitioner avers that she was ordered by the hotel management to turn over the keys to her living quarters and to remove her belongings from the hotel premises. 4 According to her, respondent strongly chided her for refusing to proceed to the City Prosecutor's Office to attest to the affidavit. 5 She thereafter reluctantly filed a leave of absence from her job which was denied by management. When she attempted to return to work on May 10, 1991, the hotel's cashier, Margarita Choy, informed her that she should not report to work and, instead, continue with her unofficial leave of absence. Consequently, on May 13, 1991, three days after her attempt to return to work, petitioner filed a complaint for illegal dismissal before the Arbitration Branch of the National Labor Relations Commission CAR Baguio City. In addition to her complaint for illegal dismissal, she alleged underpayment of wages, non-payment of holiday pay, service incentive leave pay, 13th month pay, night differential and other benefits. The complaint was docketed as NLRC Case No. RAB-CAR-05-0198-91 and assigned to Labor Arbiter Felipe P. Pati. Responding to the allegations made in support of petitioner's complaint for illegal dismissal, private respondent Peter Ng alleged before Labor Arbiter Pati that petitioner "surreptitiously left (her job) without notice to the management" 6 and that she actually abandoned her work. He maintained that there was no basis for the money claims for underpayment and other benefits as these were paid in the form of facilities to petitioner and the hotel's other employee. 7 Pointing to the Affidavit of May 7, 1991, the private respondent asserted that his employees actually have no problems with management. In a supplemental answer submitted eleven (11) months after the original complaint for illegal dismissal was filed, private respondent raised a new ground, loss of confidence, which was supported by a criminal complaint for Qualified Theft he filed before the prosecutor's office of the City of Baguio against petitioner on July 4, 1991. 8 On May 14, 1993, Labor Arbiter Pati rendered a decision dismissing petitioner's complaint on the ground of loss of confidence. His disquisitions in support of his conclusion read as follows: It appears from the evidence of respondent that complainant carted away or stole one (1) blanket, 1 piece bedsheet, 1 piece thermos, 2 pieces towel (Exhibits "9", "9-A," "9-B," "9-C" and "10" pages 12-14 TSN, December 1, 1992). In fact, this was the reason why respondent Peter Ng lodged a criminal complaint against complainant for qualified theft and perjury. The fiscal's office finding a prima facie evidence that complainant committed the crime of qualified theft issued a resolution for its filing in court but dismissing the charge of perjury (Exhibit "4" for respondent and Exhibit "B-7" for complainant). As a consequence, complainant was charged in court for the said crime (Exhibit "5" for respondent and Exhibit "B-6" for the complainant). With these pieces of evidence, complainant committed serious misconduct against her employer which is one of the just and valid grounds for an employer to terminate an employee (Article 282 of the Labor Code as amended). 9 On April 28, 1994, respondent NLRC promulgated its assailed Resolution 10 affirming the Labor Arbiter's decision. The resolution substantially incorporated the findings of the Labor Arbiter. 11 Unsatisfied, petitioner instituted the instant special civil action for certiorari under Rule 65 of the Rules of Court on the following grounds: 12 1. WITH ALL DUE RESPECT, THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION COMMITTED A PATENT AND PALPABLE ERROR AMOUNTING TO GRAVE ABUSE OF DISCRETION IN ITS FAILURE TO CONSIDER THAT THE ALLEGED LOSS OF CONFIDENCE IS A FALSE CAUSE AND AN AFTERTHOUGHT ON THE PART OF THE RESPONDENT-EMPLOYER TO JUSTIFY, ALBEIT ILLEGALLY, THE DISMISSAL OF THE COMPLAINANT FROM HER EMPLOYMENT; 2. WITH ALL DUE RESPECT, THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION COMMITTED A PATENT AND PALPABLE ERROR AMOUNTING TO GRAVE ABUSE OF DISCRETION IN ADOPTING THE RULING OF THE LABOR ARBITER THAT

THERE WAS NO UNDERPAYMENT OF WAGES AND BENEFITS ON THE BASIS OF EXHIBIT "8" (AN UNDATED SUMMARY OF COMPUTATION PREPARED BY ALLEGEDLY BY RESPONDENT'S EXTERNAL ACCOUNTANT) WHICH IS TOTALLY INADMISSIBLE AS AN EVIDENCE TO PROVE PAYMENT OF WAGES AND BENEFITS; 3. WITH ALL DUE RESPECT, THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION COMMITTED A PATENT AND PALPABLE ERROR AMOUNTING TO GRAVE ABUSE OF DISCRETION IN FAILING TO CONSIDER THE EVIDENCE ADDUCED BEFORE THE LABOR ARBITER AS CONSTITUTING UNFAIR LABOR PRACTICE COMMITTED BY THE RESPONDENT. The Solicitor General, in a Manifestation in lieu of Comment dated August 8, 1995 rejects private respondent's principal claims and defenses and urges this Court to set aside the public respondent's assailed resolution. 13 We agree. It is settled that in termination cases the employer bears the burden of proof to show that the dismissal is for just cause, the failure of which would mean that the dismissal is not justified and the employee is entitled to reinstatement. 14 In the case at bar, the private respondent initially claimed that petitioner abandoned her job when she failed to return to work on May 8, 1991. Additionally, in order to strengthen his contention that there existed sufficient cause for the termination of petitioner, he belatedly included a complaint for loss of confidence, supporting this with charges that petitioner had stolen a blanket, a bedsheet and two towels from the hotel. 15 Appended to his last complaint was a suit for qualified theft filed with the Baguio City prosecutor's office. From the evidence on record, it is crystal clear that the circumstances upon which private respondent anchored his claim that petitioner "abandoned" her job were not enough to constitute just cause to sanction the termination of her services under Article 283 of the Labor Code. For abandonment to arise, there must be concurrence of two things: 1) lack of intention to work; 16 and 2) the presence of overt acts signifying the employee's intention not to work. 17 In the instant case, respondent does not dispute the fact that petitioner tried to file a leave of absence when she learned that the hotel management was displeased with her refusal to attest to the affidavit. The fact that she made this attempt clearly indicates not an intention to abandon but an intention to return to work after the period of her leave of absence, had it been granted, shall have expired. Furthermore, while absence from work for a prolonged period may suggest abandonment in certain instances, mere absence of one or two days would not be enough to sustain such a claim. The overt act (absence) ought to unerringly point to the fact that the employee has no intention to return to work, 18 which is patently not the case here. In fact, several days after she had been advised to take an informal leave, petitioner tried to resume working with the hotel, to no avail. It was only after she had been repeatedly rebuffed that she filed a case for illegal dismissal. These acts militate against the private respondent's claim that petitioner abandoned her job. As the Solicitor General in his manifestation observed: Petitioner's absence on that day should not be construed as abandonment of her job. She did not report because the cashier told her not to report anymore, and that private respondent Ng did not want to see her in the hotel premises. But two days later or on the 10th of May, after realizing that she had to clarify her employment status, she again reported for work. However, she was prevented from working by private respondents. 19 We now come to the second cause raised by private respondent to support his contention that petitioner was validly dismissed from her job. Loss of confidence as a just cause for dismissal was never intended to provide employers with a blank check for terminating their employees. Such a vague, all-encompassing pretext as loss of confidence, if unqualifiedly given the seal of approval by this Court, could readily reduce to barren form the words of the constitutional guarantee of security of tenure. Having this in mind, loss of confidence should ideally apply only to cases involving employees occupying positions of trust and confidence or to those situations where the employee is routinely charged with the care and custody of the employer's money or property. To the first class belong managerial employees, i.e., those vested with the powers or prerogatives to lay down management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees or effectively recommend such managerial actions; and to the second class belong cashiers, auditors, property custodians, etc., or those who, in the normal and routine exercise of

their functions, regularly handle significant amounts of money or property. Evidently, an ordinary chambermaid who has to sign out for linen and other hotel property from the property custodian each day and who has to account for each and every towel or bedsheet utilized by the hotel's guests at the end of her shift would not fall under any of these two classes of employees for which loss of confidence, if ably supported by evidence, would normally apply. Illustrating this distinction, this Court in Marina Port Services, Inc. vs. NLRC, 20 has stated that: To be sure, every employee must enjoy some degree of trust and confidence from the employer as that is one reason why he was employed in the first place. One certainly does not employ a person he distrusts. Indeed, even the lowly janitor must enjoy that trust and confidence in some measure if only because he is the one who opens the office in the morning and closes it at night and in this sense is entrusted with the care or protection of the employer's property. The keys he holds are the symbol of that trust and confidence. By the same token, the security guard must also be considered as enjoying the trust and confidence of his employer, whose property he is safeguarding. Like the janitor, he has access to this property. He too, is charged with its care and protection. Notably, however, and like the janitor again, he is entrusted only with the physical task of protecting that property. The employer's trust and confidence in him is limited to that ministerial function. He is not entrusted, in the Labor Arbiter's words, with the duties of safekeeping and safeguarding company policies, management instructions, and company secrets such as operation devices. He is not privy to these confidential matters, which are shared only in the higher echelons of management. It is the persons on such levels who, because they discharge these sensitive duties, may be considered holding positions of trust and confidence. The security guard does not belong in such category. 21 More importantly, we have repeatedly held that loss of confidence should not be simulated in order to justify what would otherwise be, under the provisions of law, an illegal dismissal. "It should not be used as a subterfuge for causes which are illegal, improper and unjustified. It must be genuine, not a mere afterthought to justify an earlier action taken in bad faith." 22 In the case at bar, the suspicious delay in private respondent's filing of qualified theft charges against petitioner long after the latter exposed the hotel's scheme (to avoid its obligations as employer under the Labor Code) by her act of filing illegal dismissal charges against the private respondent would hardly warrant serious consideration of loss of confidence as a valid ground for dismissal. Notably, the Solicitor General has himself taken a position opposite the public respondent and has observed that: If petitioner had really committed the acts charged against her by private respondents (stealing supplies of respondent hotel), private respondents should have confronted her before dismissing her on that ground. Private respondents did not do so. In fact, private respondent Ng did not raise the matter when petitioner went to see him on May 9, 1991, and handed him her application for leave. It took private respondents 52 days or up to July 4, 1991 before finally deciding to file a criminal complaint against petitioner, in an obvious attempt to build a case against her. The manipulations of private respondents should not be countenanced. 23 Clearly, the efforts to justify petitioner's dismissal on top of the private respondent's scheme of inducing his employees to sign an affidavit absolving him from possible violations of the Labor Code taints with evident bad faith and deliberate malice petitioner's summary termination from employment. Having said this, we turn to the important question of whether or not the dismissal by the private respondent of petitioner constitutes an unfair labor practice. The answer in this case must inevitably be in the affirmative. The pivotal question in any case where unfair labor practice on the part of the employer is alleged is whether or not the employer has exerted pressure, in the form of restraint, interference or coercion, against his employee's right to institute concerted action for better terms and conditions of employment. Without doubt, the act of compelling employees to sign an instrument indicating that the employer observed labor standards provisions of law when he might have not, together with the act of terminating or coercing those who refuse to cooperate with the employer's scheme constitutes unfair labor practice. The first act clearly preempts the right of the hotel's workers to seek better terms and conditions of employment through concerted action. We agree with the Solicitor General's observation in his manifestation that "[t]his actuation . . . is analogous to the situation envisaged in paragraph (f) of Article 248 of the Labor Code" 24 which distinctly makes it an unfair labor practice "to dismiss, discharge or otherwise prejudice or discriminate against an employee for having given or being about to give testimony" 25 under the Labor Code. For in not giving

positive testimony in favor of her employer, petitioner had reserved not only her right to dispute the claim and proffer evidence in support thereof but also to work for better terms and conditions of employment. For refusing to cooperate with the private respondent's scheme, petitioner was obviously held up as an example to all of the hotel's employees, that they could only cause trouble to management at great personal inconvenience. Implicit in the act of petitioner's termination and the subsequent filing of charges against her was the warning that they would not only be deprived of their means of livelihood, but also possibly, their personal liberty. This Court does not normally overturn findings and conclusions of quasi-judicial agencies when the same are ably supported by the evidence on record. However, where such conclusions are based on a misperception of facts or where they patently fly in the face of reason and logic, we will not hesitate to set aside those conclusions. Going into the issue of petitioner's money claims, we find one more salient reason in this case to set things right: the labor arbiter's evaluation of the money claims in this case incredibly ignores existing law and jurisprudence on the matter. Its blatant one-sidedness simply raises the suspicion that something more than the facts, the law and jurisprudence may have influenced the decision at the level of the Arbiter. Labor Arbiter Pati accepted hook, line and sinker the private respondent's bare claim that the reason the monetary benefits received by petitioner between 1981 to 1987 were less than minimum wage was because petitioner did not factor in the meals, lodging, electric consumption and water she received during the period in her computations. 26 Granting that meals and lodging were provided and indeed constituted facilities, such facilities could not be deducted without the employer complying first with certain legal requirements. Without satisfying these requirements, the employer simply cannot deduct the value from the employee's ages. First, proof must be shown that such facilities are customarily furnished by the trade. Second, the provision of deductible facilities must be voluntarily accepted in writing by the employee. Finally, facilities must be charged at fair and reasonable value. 27 These requirements were not met in the instant case. Private respondent "failed to present any company policy or guideline to show that the meal and lodging . . . (are) part of the salary;" 28 he failed to provide proof of the employee's written authorization; and, he failed to show how he arrived at the valuations. 29 Curiously, in the case at bench, the only valuations relied upon by the labor arbiter in his decision were figures furnished by the private respondent's own accountant, without corroborative evidence. On the pretext that records prior to the July 16, 1990 earthquake were lost or destroyed, respondent failed to produce payroll records, receipts and other relevant documents, where he could have, as has been pointed out in the Solicitor General's manifestation, "secured certified copies thereof from the nearest regional office of the Department of Labor, the SSS or the BIR." 30 More significantly, the food and lodging, or the electricity and water consumed by the petitioner were not facilities but supplements. A benefit or privilege granted to an employee for the convenience of the employer is not a facility. The criterion in making a distinction between the two not so much lies in the kind (food, lodging) but the purpose. 31 Considering, therefore, that hotel workers are required to work different shifts and are expected to be available at various odd hours, their ready availability is a necessary matter in the operations of a small hotel, such as the private respondent's hotel. It is therefore evident that petitioner is entitled to the payment of the deficiency in her wages equivalent to the full wage applicable from May 13, 1988 up to the date of her illegal dismissal. Additionally, petitioner is entitled to payment of service incentive leave pay, emergency cost of living allowance, night differential pay, and 13th month pay for the periods alleged by the petitioner as the private respondent has never been able to adduce proof that petitioner was paid the aforestated benefits. However, the claims covering the period of October 1987 up to the time of filing the case on May 13, 1988 are barred by prescription as P.D. 442 (as amended) and its implementing rules limit all money claims arising out of employer-employee relationship to three (3) years from the time the cause of action accrues. 32 We depart from the settled rule that an employee who is unjustly dismissed from work normally should be reinstated without loss of seniority rights and other privileges. Owing to the strained relations between petitioner and private respondent, allowing the former to return to her job would only subject her to possible harassment and future embarrassment. In the instant case, separation pay equivalent to one month's salary for every year of continuous service with the private respondent would be proper, starting with her job at the Belfront Hotel.

In addition to separation pay, backwages are in order. Pursuant to R.A. 6715 and our decision in Osmalik Bustamante, et al. vs. National Labor Relations Commission, 33 petitioner is entitled to full backwages from the time of her illegal dismissal up to the date of promulgation of this decision without qualification or deduction. Finally, in dismissal cases, the law requires that the employer must furnish the employee sought to be terminated from employment with two written notices before the same may be legally effected. The first is a written notice containing a statement of the cause(s) for dismissal; the second is a notice informing the employee of the employer's decision to terminate him stating the basis of the dismissal. During the process leading to the second notice, the employer must give the employee ample opportunity to be heard and defend himself, with the assistance of counsel if he so desires. Given the seriousness of the second cause (qualified theft) of the petitioner's dismissal, it is noteworthy that the private respondent never even bothered to inform petitioner of the charges against her. Neither was petitioner given the opportunity to explain the loss of the articles. It was only almost two months after petitioner had filed a complaint for illegal dismissal, as an afterthought, that the loss was reported to the police and added as a supplemental answer to petitioner's complaint. Clearly, the dismissal of petitioner without the benefit of notice and hearing prior to her termination violated her constitutional right to due process. Under the circumstance an award of One Thousand Pesos (P1,000.00) on top of payment of the deficiency in wages and benefits for the period aforestated would be proper. WHEREFORE, premises considered, the RESOLUTION of the National Labor Relations Commission dated April 24, 1994 is REVERSED and SET ASIDE, with costs. For clarity, the economic benefits due the petitioner are hereby summarized as follows: 1) Deficiency wages and the applicable ECOLA from May 13, 1988 up to the date of petitioner's illegal dismissal; 2) Service incentive leave pay; night differential pay and 13th month pay for the same period; 3) Separation pay equal to one month's salary for every year of petitioner's continuous service with the private respondent starting with her job at the Belfront Hotel; 4) Full backwages, without qualification or deduction, from the date of petitioner's illegal dismissal up to the date of promulgation of this decision pursuant to our ruling in Bustamante vs. NLRC. 34 5) P1,000.00. ORDERED. Padilla, Bellosillo and Vitug, JJ., concur. Hermosisima, Jr., J., is on leave. Footnotes 1 Rollo, p. 5. Petitioner was employed by the private respondent originally at his Belfront Hotel but was later pulled out for work at the Hotel Supreme, owned by the former. 2 Id., at 6. 3 Rollo, p. 6. 4 Id., at 24. 5 Rollo, p. 7. 6 Id., at 31. 7 Id., at 23-24. 8 Rollo, p. 22. 9 Id., at 24. 10 Id., at 30-36. 11 Ibid. 12 Rollo, p. 4. 13 Id., at 64-83. 14 Polymedic General Hospital vs. NLRC, 134 SCRA 420, 424 (1985); Molave Tours Corporation vs. NLRC, 250 SCRA 325, 329 (1995). 15 Rollo, p. 32. 16 Dagupan Bus Co., Inc. vs. NLRC, 191 SCRA 328 (1990). 17 Asphalt and Cement Pavers, Inc. vs. Leogardo, Jr., 162 SCRA 312 (1988). 18 Flexo Manufacturing Corporation vs. NLRC, 135 SCRA 145 (1985). 19 Rollo, p. 72. 20 193 SCRA 420, 426 (1991). 21 Ibid.

22 General Bank and Trust Co. vs. Court of Appeals, 135 SCRA 569, 578 (1985). 23 Rollo, p.73. 24 Rollo, p. 78. 25 Labor Code, art. 248 (f). 26 Rollo, p. 26. 27 Labor Code, art. 97 (f). 28 Rollo, p. 80. 29 Ibid. 30 Rollo, p. 80. 31 States Marine Corporation vs. Cebu Seamen's Association, Inc., 7 SCRA 294, 301 (1963). 32 Omnibus Rules Implementing the Labor Code, Book VII, Rule II, sec. 1. 33 G.R. No. 111651, November 28, 1996. 34 Ibid.