G.R. No.

L-21278

December 27, 1966

FEATI UNIVERSITY, petitioner,

vs.
HON. JOSE S. BAUTISTA, Presiding Judge of the Court of Industrial Relations and FEATI UNIVERSITY
FACULTY CLUB-PAFLU, respondents.
ZALDIVAR, J.:
This Court, by resolution, ordered that these three cases be considered together, and the parties were allowed to
file only one brief for the three cases.
On January 14, 1963, the President of the respondent Feati University Faculty Club-PAFLU hereinafter
referred to as Faculty Club wrote a letter to Mrs. Victoria L. Araneta, President of petitioner Feati University
hereinafter referred to as University informing her of the organization of the Faculty Club into a registered labor
union. The Faculty Club is composed of members who are professors and/or instructors of the University. On
January 22, 1963, the President of the Faculty Club sent another letter containing twenty-six demands that have
connection with the employment of the members of the Faculty Club by the University, and requesting an answer
within ten days from receipt thereof. The President of the University answered the two letters, requesting that she
be given at least thirty days to study thoroughly the different phases of the demands. Meanwhile counsel for the
University, to whom the demands were referred, wrote a letter to the President of the Faculty Club demanding
proof of its majority status and designation as a bargaining representative. On February 1, 1963, the President of
the Faculty Club again wrote the President of the University rejecting the latter's request for extension of time, and
on the same day he filed a notice of strike with the Bureau of Labor alleging as reason therefor the refusal of the
University to bargain collectively. The parties were called to conferences at the Conciliation Division of the Bureau
of Labor but efforts to conciliate them failed. On February 18, 1963, the members of the Faculty Club declared a
strike and established picket lines in the premises of the University, resulting in the disruption of classes in the
University. Despite further efforts of the officials from the Department of Labor to effect a settlement of the
differences between the management of the University and the striking faculty members no satisfactory
agreement was arrived at. On March 21, 1963, the President of the Philippines certified to the Court of Industrial
Relations the dispute between the management of the University and the Faculty Club pursuant to the provisions
of Section 10 of Republic Act No. 875.
In connection with the dispute between the University and the Faculty Club and certain incidents related to said
dispute, various cases were filed with the Court of Industrial Relations hereinafter referred to as CIR. The three
cases now before this Court stemmed from those cases that were filed with the CIR.
CASE NO. G.R. NO. L-21278
On May 10, 1963, the University filed before this Court a "petition for certiorari and prohibition with writ of
preliminary injunction", docketed as G.R. No. L-21278, praying: (1) for the issuance of the writ of preliminary
injunction enjoining respondent Judge Jose S. Bautista of the CIR to desist from proceeding in CIR Cases Nos.
41-IPA, 1183-MC, and V-30; (2) that the proceedings in Cases Nos. 41-IPA and 1183-MC be annulled; (3) that the
orders dated March 30, 1963 and April 6, 1963 in Case No. 41-IPA, the order dated April 6, 1963 in Case No.
1183-MC, and the order dated April 29, 1963 in Case No. V-30, all be annulled; and (4) that the respondent Judge
be ordered to dismiss said cases Nos. 41-IPA, 1183-MC and V-30 of the CIR.
On May 10, 1963, this Court issued a writ of preliminary injunction, upon the University's filing a bond of
P1,000.00, ordering respondent Judge Jose S. Bautista as Presiding Judge of the CIR, until further order from this
Court, "to desist and refrain from further proceeding in the premises (Cases Nos. 41-IPA, 1183-MC and V-30 of
the Court of Industrial Relations)."1 On December 4, 1963, this Court ordered the injunction bond increased to
P100,000.00; but on January 23, 1964, upon a motion for reconsideration by the University, this Court reduced
the bond to P50,000.00.

A brief statement of the three cases CIR Cases 41-IPA, 1183-MC and V-30 involved in the Case G.R. No. L21278, is here necessary.
CIR Case No. 41-IPA, relates to the case in connection with the strike staged by the members of the Faculty Club.
As we have stated, the dispute between the University and the Faculty Club was certified on March 21, 1963 by
the President of the Philippines to the CIR. On the strength of the presidential certification, respondent Judge
Bautista set the case for hearing on March 23, 1963. During the hearing, the Judge endeavored to reconcile the
part and it was agreed upon that the striking faculty members would return to work and the University would
readmit them under a status quo arrangement. On that very same day, however, the University, thru counsel filed
a motion to dismiss the case upon the ground that the CIR has no jurisdiction over the case, because (1) the
Industrial Peace Act is not applicable to the University, it being an educational institution, nor to the members of
the Faculty Club, they being independent contractors; and (2) the presidential certification is violative of Section
10 of the Industrial Peace Act, as the University is not an industrial establishment and there was no industrial
dispute which could be certified to the CIR. On March 30, 1963 the respondent Judge issued an order denying the
motion to dismiss and declaring that the Industrial Peace Act is applicable to both parties in the case and that the
CIR had acquired jurisdiction over the case by virtue of the presidential certification. In the same order, the
respondent Judge, believing that the dispute could not be decided promptly, ordered the strikers to return
immediately to work and the University to take them back under the last terms and conditions existing before the
dispute arose, as per agreement had during the hearing on March 23, 1963; and likewise enjoined the University,
pending adjudication of the case, from dismissing any employee or laborer without previous authorization from the
CIR. The University filed on April 1, 1963 a motion for reconsideration of the order of March 30, 1963 by the
CIR en banc, and at the same time asking that the motion for reconsideration be first heard by the CIR en banc.
Without the motion for reconsideration having been acted upon by the CIR en banc, respondent Judge set the
case for hearing on the merits for May 8, 1963. The University moved for the cancellation of said hearing upon the
ground that the court en banc should first hear the motion for reconsideration and resolve the issues raised
therein before the case is heard on the merits. This motion for cancellation of the hearing was denied. The
respondent Judge, however, cancelled the scheduled hearing when counsel for the University manifested that he
would take up before the Supreme Court, by a petition for certiorari, the matter regarding the actuations of the
respondent Judge and the issues raised in the motion for reconsideration, specially the issue relating to the
jurisdiction of the CIR. The order of March 30, 1963 in Case 41-IPA is one of the orders sought to be annulled in
the case, G.R. No. L-21278.
Before the above-mentioned order of March 30, 1963 was issued by respondent Judge, the University had
employed professors and/or instructors to take the places of those professors and/or instructors who had struck.
On April 1, 1963, the Faculty Club filed with the CIR in Case 41-IPA a petition to declare in contempt of court
certain parties, alleging that the University refused to accept back to work the returning strikers, in violation of the
return-to-work order of March 30, 1963. The University filed, on April 5,1963, its opposition to the petition for
contempt, denying the allegations of the Faculty Club and alleging by way of special defense that there was still
the motion for reconsideration of the order of March 30, 1963 which had not yet been acted upon by the CIR en
banc. On April 6, 1963, the respondent Judge issued an order stating that "said replacements are hereby warned
and cautioned, for the time being, not to disturb nor in any manner commit any act tending to disrupt the effectivity
of the order of March 30,1963, pending the final resolution of the same." 2 On April 8, 1963, there placing
professors and/or instructors concerned filed, thru counsel, a motion for reconsideration by the CIR en banc of the
order of respondent Judge of April 6, 1963. This order of April 6, 1963 is one of the orders that are sought to be
annulled in case G.R. No. L-21278.
CIR Case No. 1183-MC relates to a petition for certification election filed by the Faculty Club on March 8, 1963
before the CIR, praying that it be certified as the sole and exclusive bargaining representative of all the employees
of the University. The University filed an opposition to the petition for certification election and at the same time a
motion to dismiss said petition, raising the very same issues raised in Case No. 41-IPA, claiming that the petition
did not comply with the rules promulgated by the CIR; that the Faculty Club is not a legitimate labor union; that the
members of the Faculty Club cannot unionize for collective bargaining purposes; that the terms of the individual
contracts of the professors, instructors, and teachers, who are members of the Faculty Club, would expire on

March 25 or 31, 1963; and that the CIR has no jurisdiction to take cognizance of the petition because the
Industrial Peace Act is not applicable to the members of the Faculty Club nor to the University. This case was
assigned to Judge Baltazar Villanueva of the CIR. Before Judge Villanueva could act on the motion to dismiss,
however, the Faculty Club filed on April 3, 1963 a motion to withdraw the petition on the ground that the labor
dispute (Case No. 41-IPA) had already been certified by the President to the CIR and the issues raised in Case
No. 1183-MC were absorbed by Case No. 41-IPA. The University opposed the withdrawal, alleging that the issues
raised in Case No. 1183-MC were separate and distinct from the issues raised in Case No. 41-IPA; that the
questions of recognition and majority status in Case No. 1183-MC were not absorbed by Case No. 41-IPA; and
that the CIR could not exercise its power of compulsory arbitration unless the legal issue regarding the existence
of employer-employee relationship was first resolved. The University prayed that the motion of the Faculty Club to
withdraw the petition for certification election be denied, and that its motion to dismiss the petition be heard. Judge
Baltazar Villanueva, finding that the reasons stated by the Faculty Club in the motion to withdraw were well taken,
on April 6, 1963, issued an order granting the withdrawal. The University filed, on April 24, 1963, a motion for
reconsideration of that order of April 6, 1963 by the CIR en banc. This order of April 6, 1963 in Case No. 1183-MC
is one of the orders sought to be annulled in the case, G.R. No. L-21278, now before Us.
CIR Case No. V-30 relates to a complaint for indirect contempt of court filed against the administrative officials of
the University. The Faculty Club, through the Acting Chief Prosecutor of the CIR, filed with the CIR a complaint
docketed as Case No. V-30, charging President Victoria L. Araneta, Dean Daniel Salcedo, Executive VicePresident Rodolfo Maslog, and Assistant to the President Jose Segovia, as officials of the University, with indirect
contempt of court, reiterating the same charges filed in Case No. 41-IPA for alleged violation of the order dated
March 30, 1963. Based on the complaint thus filed by the Acting Chief Prosecutor of the CIR, respondent Judge
Bautista issued on April 29, 1963 an order commanding any officer of the law to arrest the above named officials
of the University so that they may be dealt with in accordance with law, and the same time fixed the bond for their
release at P500.00 each. This order of April 29, 1963 is also one of the orders sought to be annulled in the case,
G.R. No. L-2l278.
The principal allegation of the University in its petition for certiorari and prohibition with preliminary injunction in
Case G.R. No. L-21278, now before Us, is that respondent Judge Jose S. Bautista acted without, or in excess of,
jurisdiction, or with grave abuse of discretion, in taking cognizance of, and in issuing the questioned orders in, CIR
Cases Nos. 41-IPA 1183-MC and V-30. Let it be noted that when the petition for certiorari and prohibition with
preliminary injunction was filed on May 10, 1963 in this case, the questioned order in CIR Cases Nos. 41-IPA,
1183-MC and V-30 were still pending action by the CIR en banc upon motions for reconsideration filed by the
University.
On June 10, 1963, the Faculty Club filed its answer to the petition for certiorari and prohibition with preliminary
injunction, admitting some allegations contained in the petition and denying others, and alleging special defenses
which boil down to the contentions that (1) the CIR had acquired jurisdiction to take cognizance of Case No. 41IPA by virtue of the presidential certification, so that it had jurisdiction to issue the questioned orders in said Case
No. 41-IPA; (2) that the Industrial Peace Act (Republic Act 875) is applicable to the University as an employer and
to the members of the Faculty Club as employees who are affiliated with a duly registered labor union, so that the
Court of Industrial Relations had jurisdiction to take cognizance of Cases Nos. 1183-MC and V-30 and to issue the
questioned orders in those two cases; and (3) that the petition for certiorari and prohibition with preliminary
injunction was prematurely filed because the orders of the CIR sought to be annulled were still the subjects of
pending motions for reconsideration before the CIR en banc when said petition for certiorari and prohibition with
preliminary injunction was filed before this Court.
IN VIEW OF THE FOREGOING, the petition for certiorari and prohibition with preliminary injunction in Case G.R.
No. L-21278 is dismissed and the writs prayed for therein are denied. The writ of preliminary injunction issued in
Case G.R. No. L-21278 is dissolved. The orders and resolutions appealed from, in Cases Nos. L-21462 and L21500, are affirmed, with costs in these three cases against the petitioner-appellant Feati University. It is so
ordered.

CASE DIGEST
FACTS:
January 14, 1963: the President of Feati University Faculty Club (PAFLU) wrote a letter to Mrs. Victoria L.
Araneta, President of Feati University informing her that it registered as a labor union.
January 22, 1963: PAFLU sent a letter with 26 demands in relation to their employment and requesting
an answer within 10 days from receipt thereof.
Araneta answered the letters, requesting that she be given at least 30 days to study thoroughly the
different phases of the demands. Meanwhile counsel for Feati, wrote a letter to the President of PAFLU
demanding proof of its majority status and designation as a bargaining representative
February 1, 1963: the President of PAFLU rejected the extension of time and filed a notice of strike with
the Bureau of Labor due to Featis refusal to bargain collectively.
Conciliation Division of the Bureau of Labor made efforts to conciliate them but failed.
February 18, 1963: PAFLU declared a strike and established picket lines in the premises of Feati resulting
in the disruption of classes in the University.
March 21, 1963: the President of the Philippines certified to the Court of Industrial Relations (CIR) the
dispute between Feati and PAFLU pursuant to the provisions of Section 10 of Republic Act No. 875.

3 cases were filed with the CIR

41-IPA PAFLUs petition to declare in contempt of court since Feati refused to accept
them back to work in violation of the return-to-work order of March 30, 1963 and has employed professors
and/or instructors to take their places

1183-MC PAFLUs petition for certification election praying that it be certified as the sole
and exclusive bargaining representative

Later withdrawn since the Case 41-IPA had already been certified by the
President to the CIR and has absorbed the issues herein

V-30 PAFLUs complaint for indirect contempt of court filed against the
administrative officials of the Feati reiterating Case 41-IPA
May 10, 1963: Feati filed before the SC a petition for certiorari and prohibition with writ of preliminary
injunction which was issued upon the Feati's filing a bond of P50,000 (increased from P1,000), ordering
CIR Judge Jose S. Bautista to desist and refrain from further proceeding
March 23, 1963: On the strength of the presidential certification, Judge Bautista set the case for hearing

Feati, thru counsel filed a motion to dismiss the case upon the ground that the CIR has no
jurisdiction over the case, because:
1. the Industrial Peace Act is NOT applicable to the University, it being an educational institution, nor to the
members of the Faculty Club, they being independent contractors
2. the presidential certification is violative of Section 10 of the Industrial Peace Act, as the University is not an
industrial establishment and there was no industrial dispute which could be certified to the CIR
Judge Bautista denied the motion to dismiss and ordered the strikers to return immediately to work and
the University to take them back under the last terms and conditions existing before the dispute arose
Without the motion for reconsideration having been acted upon by the CIR en banc, Judge Bautista set
the case for hearing on the merits for May 8, 1963 but was cancelled upon Featis petition for certiorari
alleging that Judge Jose S. Bautista acted without, or in excess of, jurisdiction, or with grave abuse of
discretion, in taking cognizance of, and in issuing the questioned orders in, CIR Cases Nos. 41-IPA 1183MC and V-30

Feati claims that it is not an employer within the contemplation of R.A. 875, because it is not an
industrial establishment

Feati also claims that it is only a lessee of the services of its professors and/or instructors
pursuant to a contract of services entered into between them because the University does not exercise
control over their work

ISSUES: W/N Feati can be considered an employer and PAFLU as an employee to be covered by R.A. 875 and
have right to unionize

o
o
o
o
o
o
o

HELD: YES. petition for certiorari and prohibition with preliminary injunction in Case G.R. No. L-21278 is
dismissed
Section 2(c) of R.A. 875:
The term employer include any person acting in the interest of an employer, directly or indirectly, but shall not
include any labor organization (otherwise than when acting as an employer) or any one acting in the capacity or
agent of such labor organization.
Congress did not intend to give a complete definition of "employer", but rather that such definition should be
complementary to what is commonly understood as employer
Act itself specifically enumerated those who are not included in the term "employer" and educational institutions
are not included; hence, they can be included in the term "employer". However, those educational institutions that
are not operated for profit are not within the purview of Republic Act No. 875.
Feati realizes profits and parts of such earning is distributed as dividends to private stockholders or individuals
It embraces not only those who are usually and ordinarily considered employees, but also those who have ceased
as employees as a consequence of a labor dispute.
employee must be one who is engaged in the service of another; who performs services for another; who
works for salary or wages
"workers" limited to those performing physical labor
embrace stenographers and bookkeepers
Teachers are not included
Feati controls the work of the members of its faculty
prescribes the courses or subjects that professors teach, and when and where to teach
professors' work is characterized by regularity and continuity for a fixed duration
professors are compensated for their services by wages and salaries, rather than by profits
professors and/or instructors cannot substitute others to do their work without the consent of the university
professors can be laid off if their work is found not satisfactory
Moreover, even if university professors are considered independent contractors, still they would be
covered by Rep. Act No. 875

professors, instructors or teachers of private educational institutions who teach to earn a living
are entitled to the protection of our labor laws and one such law is Republic Act No. 875.
The term "labor dispute" includes any controversy concerning terms, tenure or conditions of employment,
or concerning the association or representation of persons in negotiating, fixing, maintaining, changing, or
seeking to arrange terms or conditions of employment regardless of whether the disputants stand in
proximate relation of employer and employees.
To certify a labor dispute to the CIR is the prerogative of the President under the law (Because the strike
declared by the members of the minority union threatens a major industry of 18,000 students which
affects the national interest), and this Court will not interfere in, much less curtail, the exercise of that
prerogative. The jurisdiction of the CIR in a certified case is exclusive. The parties involved in the case
may appeal to the Supreme Court from the order or orders thus issued by the CIR.
Section 10 of Republic Act No. 875 empowers the Court of Industrial Relations to issue an order "fixing
the terms of employment." This clause is broad enough to authorize the Court to order the strikers to
return to work and the employer to readmit them
The return-to-work order cannot be considered as an impairment of the contract entered into with the
replacements. Besides, labor contracts must yield to the common good and such contracts are subject to
the special laws on labor unions, collective bargaining, strikes and similar subjects
G.R. No. L-21278 December 27, 1966
FEATI UNIVERSITY, petitioner,
vs.
HON. JOSE S. BAUTISTA, Presiding Judge of the Court of Industrial Relations and FEATI UNIVERSITY
FACULTY CLUB-PAFLU, respondents.
Facts:

The private respondent wrote a letter to president of petitioner informing her of the organization of the Faculty
Club into a registered labor union.
President of the Faculty Club sent another letter containing twenty-six demands that have connection with the
employment of the members of the Faculty Club by the University, and requesting an answer within ten days from
receipt thereof. The President of the University answered the two letters, requesting that she be given at least
thirty days to study thoroughly the different phases of the demands.
Meanwhile counsel for the University, to whom the demands were referred, wrote a letter to the President of the
Faculty Club demanding proof of its majority status and designation as a bargaining representative.
President of the Faculty Club filed a notice of strike with the Bureau of Labor alleging as reason therefore the
refusal of the University to bargain collectively.
The parties were called to conferences but efforts to conciliate them failed.
Members of the Faculty Club declared a strike and established picket lines in the premises of the University,
resulting in the disruption of classes in the University. President of the Philippines certified to the Court of
Industrial Relations the dispute between the management of the University and the Faculty Club pursuant to the
provisions of Section 10 of Republic Act No. 875.
The Judge endeavored to reconcile the part and it was agreed upon that the striking faculty members would
return to work and the University would readmit them under a status quo arrangement. On that very same day,
however, the University, thru counsel filed a motion to dismiss the case upon the ground that the CIR has no
jurisdiction over the case, because (1) the Industrial Peace Act is not applicable to the University, it being an
educational institution, nor to the members of the Faculty Club, they being independent contractors; and (2) the
presidential certification is violative of Section 10 of the Industrial Peace Act, as the University is not an industrial
establishment and there was no industrial dispute which could be certified to the CIR.
The respondent judge denied the motion to dismiss. The University filed a motion for reconsideration by the
CIRen banc, without the motion for reconsideration having been acted upon by the CIR en banc, respondent
Judge set the case for hearing but the University moved the cancellation of the said hearing upon the ground that
the court en banc should first hear the motion for reconsideration and resolve the issues raised therein before the
case is heard on the merits but denied.
Faculty Club filed with the CIR in Case 41-IPA a petition to declare in contempt of court certain parties, alleging
that the University refused to accept back to work the returning strikers, in violation of the return-to-work order.
The University filed its opposition to the petition for contempt by way of special defense that there was still the
motion for reconsideration which had not yet been acted upon by the CIR en banc. Hence, this petition.
Issue:
Whether or not FEATI is an employer within the purview of the Industrial Peace Act.
Held:
The Supreme Court denied the petition. Based on RA 875 Section 2(c) The term employer include any person
acting in the interest of an employer, directly or indirectly, but shall not include any labor organization (otherwise
than when acting as an employer) or any one acting in the capacity or agent of such labor organization.
In this case, the University is operated for profit hence included in the term of employer. Professors and
instructors, who are under contract to teach particular courses and are paid for their services, are employees

under the Industrial Peace Act.

Professors and instructors are not independent contractors. university controls the work of the members of its
faculty; that a university prescribes the courses or subjects that professors teach, and when and where to teach;
that the professors work is characterized by regularity and continuity for a fixed duration; that professors are
compensated for their services by wages and salaries, rather than by profits; that the professors and/or instructors
cannot substitute others to do their work without the consent of the university; and that the professors can be laid
off if their work is found not satisfactory. All these indicate that the university has control over their work; and
professors are, therefore, employees and not independent contractors.

G.R. No. L-33705 April 15, 1977

AIR LINE PILOTS ASSOCIATION OF THE PHILIPPINES (GASTON GROUP), petitioner,
vs.
THE COURT OF INDUSTRIAL RELATIONS and AIR LINES PILOTS ASSOCIATION OF THE PHILIPPINES
(GOMEZ GROUP), respondents.
CASTRO, C.J.:
These are two petitions for certiorari (L-33705 and L-35206), consolidated for purposes of decision because they
involve more or less the same parties and interlocking issues.
In L-33705 the petitioner Air Line Pilots Association of the Philippines (Gaston group) maintains that the Court of
Industrial Relations acted without jurisdiction in passing upon (1) the question of which, in a certification
proceeding, between the set of officers elected by the group of Philippine Air Lines pilots headed by Captain Felix
Gaston, on the one hand, and the set of officers elected by the group headed by Captain Ben Hur Gomez, on the
other, is the duly elected set of officers of the Air Line Pilots Association of the Philippines, and (2) the question of
which, between the two groups, is entitled to the name, office and funds of the said Association.
In L-35206 the individual petitioners (numbering 127) and the Air Line Pilots Association of the Philippines
(hereinafter referred to as ALPAP) (Gaston maintain that the industrial Court acted without jurisdiction and with
grave abuse of descretion in promulgating its resolution dated June 19, 1972 which suspended the hearing of the
said petitioners' plea below for reinstatement and/or return to work in the Philippine Air Lines (hereinafter referred
to as PAL) or, alternatively, the payment of their retirement and/or separation pay, as the case may be, until this
Court, shall have decided L-33705.
L-33705
On January 2, 1971, the Air Line Pilots Association of the Philippines, represented by Ben Hur Gomez who
claimed to be its President, filed a petition with the Court of Industrial Relations praying for certification as the sole
and exclusive collective bargaining representative of "all the pilots now under employment by the Philippine Air
Lines, Inc, and are on active flight and/or operational assignments." The petition which was docketed in the sala of
Judge Joaquin M. Salvador as Case 2939-MC was opposed in the name of the same association by Felix C.
Gaston (who also claimed to be its President) on the ground that the industrial court has no jurisdiction over the
subject-matter o" the petition "because a certification proceeding in the Court of Industrial Relations is not the
proper forum for the adjudication of the question as to who is the lawful president of a legitimate labor
organization."
On May 29, 1971, after hearing the petition, Judge Salvador rendered a decision certifying the
... ALPAP composed only of pilots employed by PAL with Capt. Ben Hur Gomez as its president,
as the sole and exclusive Bargaining representative of all the pilots employed by PAL and are on
active flights and/or operational assignments, and as such is entitled to all the rights and
privileges of a legitimate labor organization, including the right to its office and its union funds.

The following circumstances were cited by Judge Salvador to justify the conclusions reached by him in his
decision, namely:
(a) that there has been no certification election within the Period of 12 months prior to the date the petition for
certification was filed;
(b) that the PAL entered into a collective bargaining agreement with ALPAP for "pilots in the employ of the
Company" only for the duration of the period from February 1, 1969 to January 31, 1972:
(c) that PAL pilots belonging to the Gaston, group, in defiance of court orders issued in Case 101-IPA(B) (see L35206, infra) retired/resigned en masse from the PAL and retired/resigned accompanied this with actual acts of
not reporting for work;
(d) that the pilots affiliated with the Gaston group tried to then deposits and other funds from the ALPAP
Cooperative Credit union on the ground that they have already retired/resigned from PAL;
(e) that some of the members of the Gaston Group joined another airline after their retirement/resignation;
(f) that the Gaston group claimed before the industrial court that the order enjoining them from retiring or resigning
constituted a violation of the prohibition against involuntary servitude (see L-35206, infra);
(g) that the contention that the mess retirement or resignation was merely an involuntary protest by those affiliated
with the Gaston group is not borne out by the evidence as, aside their aforementioned acts, the said group of
pilots even filed a civil complaint against the PAL in which the cessation of their employment with PAL was
strongly expressed by them.
It appears that prior to the filing of the certification petition below, a general ALPAP membership meeting was held
on October 30, 1970, at which 221 out of 270 members adopted a resolution amending ALPAP's constitution and
by-laws by providing in a new section thereof that
Any active member who shall be forced to retire or forced to resign or otherwise terminated for
union activities as solely determine' by the Association shall have the option to either continue to
be and remain as an active member in good standing or to resign in writing his active
membership with the Association. ...
According to ALPAP (Gaston), the foregoing amendment was adopted "In anticipation on the fact that they may be
forced to resign or retire because of their 'union activities.' At this period of time, PAL and ALPAP were locked
in a labor dispute certified by the President to the Industrial court and docketed as Case 101-IPA(B) (see L35206, infra).
On December 12, 1970, despite a no-work-stoppage order of the industrial court, a substantial majority of ALPAP
members filed letters of retirement/resignation from the PAL.
Thereafter, on December 18-22, 1970, an election of ALPAP officers was held. resulting in the election of Felix C.
Gaston as President by 180 votes. Upon the other hand, on December 23, 1970, about 45 pilots who did not
tender their retirement or resignation the PAL gathered at the house of Atty. Morabe and elected Ben Hur Gomez
as ALPAP President.
On June 3, 1971, ALPAP (Gaston) filed an opposition in Case 101-IPAB to an urgent ex parte motion of the PAL to
enjoin the members of ALPAP from retiring or resigning en masse It was claimed by ALPAP (Gaston) that
1. Insofar as herein oppositors are concerned, the allegations of respondent that their
'resignations' and 'retirements' are sham resignations and retirements and that 'There is no
honest or genuine desire to terminate the employee relationship with PAL are completely false.
Their bona fide intention to terminate their employer-employee relationship with PAL is
conclusively shown by the fact that they have not sought reinstatement in or re-employment by
PAL and also by the fact that they are either seeking employment in another airline company;

2. Respondent in effect recognized such bona fide intention of the herein oppositors as shown by
the fact that it accepted said resignations and retirements and did not initiate any contempt
proceedings against them; and
3. The action of herein oppositors in filing their resignations and retirements was a legitimate
exercise of their legal and constitutional rights and the same, therefore, cannot be considered as
a valid ground to deprive them of benefits which they had already earned including, among
others, retirement benefits to which they are entitled under the provisions of an existing contract
between petitioner and respondent. Such deprivation would constitute impairment of the
obligations of contract.
On June 15, 1971, the industrial court en banc, acting on a motion for reconsideration filed by ALPAP (Gaston) in
Case 2939-MC against the decision of Judge Salvador, denied the same. The said court's resolution was then
appealed to this Court (L-33705).
L-35206
On October 3, 1970, the President of the Philippines certified a labor dispute between members of ALPAP and the
PAL to the Court of Industrial Relations. The dispute which had to do with union economic demands was docketed
as Case No. 101-IPA(B) and was assigned to Judge Ansberto P. Paredes.
On October 7, 1970, after conferring with both parties for two days, Judge Paredes issued a return-to-work order,
the pertinent portions of which read as follows:
PALEA and ALPAP, their officers and members, and i 11 employees who have joined the present
strike which resulted from the labor disputes certified by the President to the Court, or who have
not reported for work as a result of the strikes, are hereby ordered forthwith to call off the strikes
and lift the picket lines ... and return to work not later than Friday, October 9, 1970, and
management to admit them back to work under the same terms and conditions of employment
existing before the strikes, including what has been earlier granted herein.
PAL is ordered not to suspend, dismiss or lay-off any employee as a result of these strikes. Read
into this order is the provision of Section 19, C.A. 103, as amended, for the guidance of the
parties,
xxx xxx xxx
Failure to comply with any provision of this Order shall constitute contempt of court, and the
employee failing or refusing to work by October 9, 1970, without justifiable cause, shall
immediately be replaced by PAL, and may not be reinstated without prior Court order and on
justifiable grounds.
On October 10, 1970, Judge Paredes, having been informed that the strikes had not been called off, issued
another order directing the strikers to lift their pickets and return to work and explaining that his order of October
7, 1970 partook of the nature of amandatory injunction under the doctrine laid down in Philippine Association of
Free Labor Union (PAFLU) vs. Hon, Joaquin M. Salvador, et al., (L-29471 and L-29487, September 28, 1968).
The strike, however, continued until the industrial court en banc denied, on October 19, 1970, ALPAP's motion for
reconsideration of the said orders.
On October 22, 1970, the strikers returned to work, except (according to the PAL) two pilots, one of them being
Felix C. Gaston who allegedly refused to take the flights assigned to him. Due to his refusal, among other
reasons, PAL terminated Gaston's services on October 27, 1970. His dismissal was reported to the industrial
court on October 29, 1970. Thereafter, the court a quo set the validity of Gaston's dimissal for hearing, but, on
several occassions, he refused to submit his side before the hearing examiner, claiming that his case would be
prosecuted through the proper forum at the proper time.

On November 24, 1970, the PAL filed an urgent ex parte motion with the industrial court to enjoin the members of
ALPAP from proceeding with their intention to retire or resign en masse. On November 26, 1970, Judge Paredes
issued an order commanding ALAPAP members
... not to strike or in any way cause any stoppage in the operation and service of PAL, under pain
of dismisal and forfeiture of rights, and privilieges accruing to their respective employments
should they disregard this Order; and PAL is also ordered not to lockout any of such members
and officers of ALPAP under pain of contempt and cancellation of its franchise.
ALPAP filed a motion for the reconsideration of the foregoing order claiming, among other, that it subjected them
to involuntary servitude:
It is crystal-clear that the disputed Order in effect compels the members of petiitioner to work
against their will. Stated differently, the members of petitioner association are bieng perced or
forced by the Trial Court to be in a state of slavery for the beneift of respondent corporation. In
this regard, therefore, the Trial Court grossly violated a Constitutional mandate which states:
No involuntary servitude in any form shall exist except as a punishment for c rime whereof the
party shall have been duly convicted. (Article III, Section 1 (13)).
The constitutional provision does not provide any condition as to the cause or causes of the
unwillingness to work. Suffice it to say that an employee for whatever reason of his own. cannot
be compelled and forced to work against his will.
The court a quo however, denied the foregoing motion for reconsideration on December 11, 1970.
Just the same, on December 12, 1970, a substantial majority of the members of ALPAP staged a mass
resignation and/or retirement from PAL
In vigorous protest to your provocative harrassment, unfair labor tactics, the contemptuous
lockout of our co-members and your vicious and vindictive attitude towards labor most
exemplified by the illegal termination of the services of our President, Capt, Felix C. Gaston
The mentioned individual letters of retirement/resignation were accepted by PAL on December 14, 1970, with the
caveat that the pilots concerned will not be entitled to any benefit or privilege to which they may otherwise be
entitled by reason of their employment with the PAL, as the pilots' acts constituted R violation of the November 26,
1970 order of the industrial court.
On December 28, 1970, Ben Hur Gomez, alleging that he was elected President of ALPAP by its members who
did not join the mass resignation and retirement, filed a motion in Case 101 IPA by praying that he be allowed to
represent the ALPAP which was theretofore represented by Capt. Felix Gaston because the pilots who retired or
resigned from PAL ceased to be employees Thereof and no longer have any interest in the subject-matter of the
said case. This was later converted into a motion to intervene on February 9, 1971.
On September 1, 1971, Felix Gaston filed a motion for Contempt against PAL stating that his dismissal from PAL
on October 27, 1970 was without just cause and violation of the Order of the industrial court dated October 7,
1970 as well as section 19 of C.A. 103. He prayed that he be reinstated.
On October 23, 1971, twenty-one pilots who filed their retirement. from PAL filed a petition in the 'Industrial court
praying also that they be readmitted to PAL or, failing so, that they be allowed to retire with the benefits provided
for under the PAL Retirement Plan or, if they are not yet e i b e to under said Plan, that they be given separation
pay, In their petition for reinstatement, said Pilots (who were later joined by other pilots similarly situated)
alleged, inter alia
1. That they are some of the employees of the respondent company and members of the
petitioner union who resigned en masse or retired en masse from the respondent after having
been led to believe in good faith by Capt. Felix Gaston who was then the uncontested president
of the petitioner union and their counsel that such a mass resignation or mass retirement was a

valid exercise of their right to protest the dismissal of Capt. Gaston in connection with the
Certified dispute that was pending before the Court.
2. That later on they came to know that such a mass resignation or surpass retirement was
enjoined by this Honorable Court 'under the pain of' dismissal and forfeiting of rights and
privileges accruing to their respective employment if they disregarded such order of injunction,
3. That they did not deliberately disregard such injunction order and if they failed to comply with it
within a reasonable time, it was because they were made to believe and assured by their leader
that such resignation or retirement was a lawful exercise of concerted action that the full
consequences of such act was not explained to them by counsel: and in addition, they were told
that those who returned to the company would be expelled from the union, and suffer the
corresponding penalty.
xxx xxx xxx
ALPAP (Gomez) opposed the foregoing petitions. In this connection, the records disclose that on August 20,
1971, 89 of the pilots who retired en masse from PAL filed a complaint with the Court of First Instance of Manila in
Case 15084 for the recovery of retirement benefits due them under the PAL Retirement Plan. The complaint was
dismissed by the trial, court on PAL's motion. The records, however, do not disclose the reason for the said
dismissal.
On December 23, 1971, Judge Paredes issued an order deferring action on the motion to dismiss the petitions for
reinstatement on the ground that the matters alleged in the said petitions would required the submission of proof.
ALPAP (Gomez,) filed a motion for reconsideration of this order but the same was denied by the industrial court
en banc for being pro forma.
On February 1, 1972, ALPAP (Gaston) joined and consolidated the mentioned petitions for reinstatement, The
same was opposed by both PAL and ALPAP (Gomez),
On March 24, 1972, ALPAP (Gomez) filed a motion to suspend the proceedings in Case 101-IPA(B) until the
prejudicial question of who should prosecute the main case (Case 101-IPA) is resolved. On April 18, 1972, Judge
Paredes issued an order deferring the hearing of the main case until this Court shall have decided L-33705, but
allowing other matters, including the consolidated petition for reinstatement, to be heard.
On. May 5, 1972, ALPAP (Gomez) filed another motion to suspend the hearing on the mentioned petition for
reinstatement on the ground that this Court's decision in L-33705 should be awaited. ALPAP (Gaston) opposed
that motion on the ground that the matter had already been denied twice and the order setting the case for
hearing was merely. On May 15, 1972, Judge Paredes denied the said motion to suspend the hearing on the
petition for reinstatement unless a countermanding Order is issued by a higher Court."
On May 18, 1972, ALPAP (Gomez) filed a motion for reconsideration of Judge Paredes' order, alleging that
employee status of those who resigned or retired en masse was an issue in mentioned Case 2939-MC decision
on which is still pending consideration before Court in L-33705.
On June 19, 1972, the industrial court en banc passed a resolution reversing Judge Paredes' order on the ground
that the question of the employee status of the pilots who were seeking reinstatement with PAL has already been
raised squarely in Case 2939-MC and resolved by the said tribunal found that the said pilots have already lost
their employee status as a consequence of their resignations and/or retirement from PAL which had been duly
accepted by the latter.
DISCUSSION
In 'Its brief before this Court, ALPAP (Gaston) states that it goes not question the recognition extended by PAL to
ALPAP (Gomez ) the collective bargaining agent of all PAL pilots on active flight duty. Neither does it dispute the
assumption by ALPAP (Gomez) of the authority to manage and administer the collective bargaining agreement
between ALPAP and PAL (which at any rate had expired on January 31, 1972) nor the right of ALPAP (Gomez) to
negotiate and conclude any other collective bargaining agreement with PAL. What it disputes, however, is the

authorization given by the industrial court to ALPAP (Gomez), in a certification proceeding, to take over the
corporate name, office and funds of ALPAP.
This Court has always stressed that a certification proceeding is not a litigation, in the sense in which this term is
ordinarily understood, but an investigation of a non-adversary, fact finding character in which the Court of
Industrial Relations plays the part of a disinterested investigator seeking merely to ascertain the desires of
employees as to the matter of their representation (National Labor Union vs. Go Soc and Sons, 23 SCRA 436;
Benguet Consolidated, Inc. vs. Bobok Lumber Jack Ass'n., L-11029, May 23, 1958; Bulakena Restaurant and
Caterer vs. C.I.R., 45 SCRA 95; LVN Pictures, Inc. vs. Philippine Musicians Guild (FFW) and C.I.R., 1 SCRA 132).
Such being the nature of a certification proceeding, we find no cogent reason that should prevent the industrial
court, in such a proceeding, from inquiring into and satisfying itself about matters which may be relevant and
crucial. though seemingly beyond the purview of such a proceeding, to the complete realization of the well-known
purposes of a certification case.
Such a situation may arise, as it did in the case at bar, where a group of pilots of a particular airline, allegedly
anticipation their forced retirement or resignation on account of strained relations with the airline arising from
unfulfilled economic demands, decided to adopt an amendment to their organization's constitution and by-laws in
order to enable them to retain their membership standing therein even after the termination of their employment
with the employer concerned. The industrial court definitely should be allowed ample discretion to secure a
disclosure of circumstances which will enable it to act fairly in a certification case.
This Court nonetheless finds, after a close and dispassionate study of the facts on record, that the industrial
court's conclusion, that the mentioned amendment to the ALPAP constitution and by-laws is illegal (a) because it
was not adopted in accordance with the procedure prescribed and (b) because member of labor organization
cannot adopt an amendment to their fundamental charter so as to include non employees (of PAL) as member, is
erroneous.
We have made a careful examination of the records of L-33705 and we find the adoption of the resolution
introducing the questioned amendment to be substancial compliance with the ALPAP constitution and by-law.
Indeed, there is no refutation of the act that 221out of the 270 members of ALPAP did cast their votesin favor of
the said amendment on October 30, 1970 at the ALPAP general membership meeting.
Their Court cannot likewise subcribe to the restrictive interpretation made by the court below of the term "labor
organization," which Section 2(e) of R.A. 875 defines as any union or association of employees which exist, in
whole or in part, for the purpose of the collective bargaining or dealing with employers concerning terms and
conditions of employment." The absence of the condition which the court below would attach to the statutory
concept of a labor organization, as being limited to the employees of particular employer, is quite evident from the
law. The emphasis of Industrial Peace Act is clearly on the pourposes for which a union or association of
employees established rather than that membership therein should be limited only to the employees of a
particular employer. Trite to say, under Section 2(h) of R.A 875 "representative" is define as including "a legitimate
labor organization or any officer or agent of such organization, whether or not employed by the employer or
employeewhom he represents." It cannot be overemphasized likewise that labor dispute can exist "regardless of
whether the disputants stand in the proximate relation of employer and employee. (Section 2(j), R.a. 875).
There is, furthermore, nothing in the constitution and by-laws of ALPAP which indubitably restricts membership
therein to PAL pilots alone. 1 Although according to ALPAP (Gomez there has never been an instance when a
non-PAL pilot became a member of ALPAP, the complete lack of any such precondition for ALPAP membership
cannot but be interpreted as an unmistakable authority for the association to accept pilots into its fold though they
may not be under PAL's employ.
The fundamental assumptions relied upon by the industrial court as bases for authorizing ALPAP (Gomez) to take
over the office and funds of ALPAP being, in this Court's opinion, erroneous, and, in the absence of any serious
dispute that on December 18-22, 1970 Felix C. Gaston, and four other pilots, were elected by the required
majority of ALPAP members as officers of their association, this Court hereby rules that the mentioned
authorization to ALPAP (Gomez) to take over the office, funds and name of ALPAP was done with grave abuse of
discretion.
Moreover, this Court cannot hold as valid and binding the election of Ben Hur Gomez as President of ALPAP. He
was elected at a meeting of only 45 ALPAP members called just one day after the election of Felix C. Gaston as

President of ALPAP who, as shown, received a majority of 180 votes out of a total membership of 270. tender the
provisions of section 4, article in of the Constitution and By-Laws of ALPAP, duly elected officers of that
association shall remain in office for ac least one year;
The term of office of the officers of the Association shall start on the first day of the fiscal year of
the Association. It shall continue for one year or until they are re-elected or until their successors
have been elected or appointed and takes office in accordance with the Constitution and by-laws.
While this Court considers the ruling of the court below, on the matter of who has the exclusive rights to the office,
funds and name of ALPAP, as having been erroneously made, we cannot hold, however, that those belonging to
the group of ALPAP (Gomez) do not possess any right at all over the office, funds and name of ALPAP of which
they are also members.
In our opinion, it is perfectly within the powers and prerogatives of a labor organization, through its duly elected
officers, to authorize a segment of that organization to bargain collectively with a particular employer, particularly
where those constituting the segment share a common and distinguishable interest, apart from the rest of their
fellow union members, on matters that directly affect the terms and conditions of their particular employment. As
the circumstances pertinent to the case at bar presently stand, ALPAP (Gaston) has extended recognition to
ALPAP (Gomez) to enter and conclude collective bargaining contracts with PAL. Having given ALPAP (Gomez)
this authority, it would be clearly unreasonable on the part of ALPAP (Gaston) to disallow the former a certain use
of the office, funds and name of ALPAP when such use is necessary or would be required to enable ALPAP
(Gomez) to exercise, in a proper manner, its delegated authority to bargain collectively with PAL. Clearly, an
intelligently considered adjustment of grievances and integration of the diverse and varying interests that not
infrequently and, often, unavoidably permeate the membership of a labor organization, will go a long way, in
achieving peace and harmony within the ranks of ALPAP. Of course, in the eventuality that the pilots presently
employed by PAL and who subscribe to the leadership of Ben Hur Gomez should consider it to their better interest
to have their own separate office, name and union funds, nothing can prevent them from setting up a separate
labor union. In that eventuality, whatever vested rights, interest or participation they may have in the assets,
including cash funds, of ALPAP as a result of their membership therein should properly be liquidated in favor of
such withdrawing members of the association.
On the matter of whether the industrial court also abuse its authority for allowing ALPAP (Gomez) to appropriate
the ALPAP name, it does not appear that the herein petitioner has shown below any exclusive franchise or right to
the use of that name. Hence, there is no proper basis for correcting the action taken by the court below on this
regard.
L-35206
The threshold issue posed in L-35206 is whether the Court of Industrial Relations acted without jurisdiction and
with grave abuse of discretion in promulgating the resolution dated June 19, 1972 suspending hearings on the
mentioned petition for reinstatement until this Court shall have decided L-33705.
We find no merit to the charge made.
While it is correct, as submitted by ALPAP (Gaston), that in the 1971 case of Philippine Federation of Petroleum
Workers (PFPW) vs. CIR (37 SCRA 716) this Court held that in a certified labor dispute all issues involved in the
same should be determined in the case where the certified dispute was docketed and that the parties should not
be permitted to isolate other germane issues or demands and reserve them for determination in the other cases
pending before other branches of the industrial court, non-compliance with this rule is at best an error in
procedure, rather than of jurisdiction, which is not beyond the power of this Court to review where sufficient
reasons exists, a situation not obtaining in the case at bar.
After a thoroughgoing study of the records of these two consolidated petitions, this Court finds that the matter of
the reinstatement of the pilots who retired or resigned from PAL was ventilated fully and adequately in the
certification case in all its substantive aspects, including the allegation of the herein petitioners that they were
merely led to believe in good faith that in retiring or resigning from PAL they were simply exercising their rights to
engage in concerted activity. In the light of the circumstances thus found below it can be safely concluded that the
mass retirement and resignation action of the herein petitioners was intentionally planned to abort the effects of
the October 7, 10 and 19, 1970 return-to-work orders of the industrial court (which they, in fact, ignored for more

than a week) by placing themselves beyond the jurisdictional control of the said court through the umbrella of the
constitutional, prohibition against involuntary servitude, thereby enabling them to pursue their main pressure
objective of grounding most, if not all, PAL flight operations. Clearly, the powers given to the industrial court in a
certified labor dispute will be meaningless and useless to pursue where its jurisdiction cannot operate.
We cannot consequently disagree with the court a quo when it concluded that the actuations of the herein
petitioners after they retired and resigned en masse their retrieval of deposits and other funds from the ALPAP
Cooperative Credit Union on the ground that they have already retired or resigned, their employment with another
airline, the filing of a civil suit for the recovery of their retirement pay where they invoked the Provision against
involuntary servitude to obtain payment thereof, and their repeated manifestations before the industrial court that
their retirement and resignation were not sham, but voluntary, and intentional are, in the aggregate, indubitable
indications that the said pilots did retire/resign from PAL with full awareness of the Likely consequences of their
acts. Their protestations of good faith, after nearly a year of underscoring the fact that they were no longer
employed with PAL, cannot but appear to a reasonable mind as a late and regrettable ratiocination.
Parenthetically, contrary to ALPAP (Gaston)'s argument that the pilots' retirement' resignation was a legitimate
concerted activity , citing Section 2(1) of the Industrial Peace Act which defines "strike" as "any temporary
stoppage of work by the concerted action of employees as a result of an industrial dispute," it is worthwhile to
observe that as the law defines it, a strike means only a "temporary stoppage of work." What the mentioned pilots
did, however, cannot be considered, in the opinion of this Court, as mere "temporary stoppage of work." What
they contemplated was evidently a permanent cut-off of employment relationship with their erstwhile employer, the
Philippine Air Lines. In any event, the dispute below having been certified as existing in an industry indispensable
to the national interest, the said pilots' rank disregard for the compulsory orders of the industrial court and their
daring and calculating venture to disengage themselves from that court's jurisdiction, for the obvious purpose of
satisfying their narrow economic demands to the prejudice of the public interest, are evident badges of bad faith.
A legitimate concerted activity is a matter that cannot be used to circumvent judicial orders or be tossed around
like a plaything Definitely, neither employers nor employees should be allowed to make of judicial authority a nowyouve-got-it-now-you-dont affair. The courts cannot hopefully effectuate and vindicate the sound policies of the
Industrial Peace Act and all our labor laws if employees, particularly those who on account of their highly,
advanced technical background and relatively better life status are far above the general working class spectrum,
will be permitted to defy and invoke the jurisdiction of the courts whenever the alternative chosen will serve to
feather their pure and simple economic demands.
ACCORDINGLY, in L-33705 the resolution of the Court of Industrial Relations dated June 15, 1971 upholding the
decision of Judge Joaquin M. Salvador dated May 29, 1971 is hereby modified in accordance with the foregoing
opinion. Felix 6. Gaston or whoever may be the incumbent President of ALPAP is hereby ordered to give to any
member withdrawing his membership from ALPAP whatever right, interest or participation such member may have
in the assets, including cash funds, of ALPAP as a result of his membership in that association.
In L-35206, the petition assailing the resolution of the Court of Industrial Relations dated June 19, 1972, is hereby
dismissed for lack of merit insofar as the petitioners' allegations of their right to reinstatement with PAL is
concerned. With reference to the alternative action, re: payment of their claims for retirement or separation pay,
the Secretary of Labor, in accordance with the applicable procedure prescribed by law, is hereby ordered to
determine whether such claim is in order, particularly in view of the caveat made by PAL, in accepting the
petitioners' individual letters of retirement/resignation, that said petitioners shall not be entitled to any benefit or
privilege to which they may otherwise be entitled by reason of their employment with PAL as the former's acts
constituted a violation of the order of the industrial court dated November 26, 1970.
Without costs in both instances.
Barredo, Makasiar, Antonio, Muoz Palma, Concepcion, Jr., and Martin, JJ., concur.
Fernando, J, concurs in the opinion of the Chief Justice in L-33705 and in the opinion of Justice Teehankee in L35206.
Aquino, J., took no part.

Separate Opinions

TEEHANKEE, J., concurring:

In L-33705, a certification proceeding, I concur with the ruling 1 that there is nothing in the law which supports
respondent court's restrictive interpretation that would limit membership in a labor organization to the employees
of a particular employer, (for such an archaic view would be practically a death blow to the cause of unionism and
would fragment unions into as many employers that there may be); and that specifically in the case of ALPAP (Air
Line Pilots Association of the Philippines) there is nothing in its Constitution and by-laws that would restrict its
membership to Philippine Air Lines, Inc. (PAL) pilots alone. (Obviously, the organizational set up was for ALPAP
as a union to be composed of all airline pilots in the Philippines regardless of employer, patterned after the ALPAP
(Air Line Pilots Association) in the United States which has a reputed membership of 46,000 with locals
established by the members at their respective companies of employment).
The Court therefore properly upheld the election of the Gaston faction by a clear majority of the ALPAP
membership (1221 out of 270) as against the Gomez faction of 45 members; recognized Gaston's election as
president of ALPAP as against the rump election of Gomez to the same position; and ruled out respondent court's
action of authorizing the Gomez faction to take over the office, funds and name of ALPAP as a grave abuse of
discretion and a nullity.
Of course, only the pilots actually in the employ of the PAL to the exclusion of those who had resigned or retired or
otherwise been separated from its employment could take part in the PAL certification election. Under normal
circumstances, the ALPAP as the duly organized labor union (composed of both factions) would manage and
administer the collective bargaining agreement arrived at between employer and employees.
But this did not hold true in the present case, since in effect the Gomez faction consisting of pilots who continued
in the employ of PAL and did not follow the action of the majority composing the Gaston faction of resigning and
retiring en masse from their employment separated themselves from ALPAP and were granted separate
recognition by PAL as the ALPAP (Gomez) faction constituting the exclusive collective bargaining representation
for the pilots who continued in its employ, The original union ALPAP as headed by Gaston on concedes this and
makes it quite clear in its brief that it does not question the recognition extended by PAL to the Gomez faction nor
the latter's right to manage and administer the collective bargaining agreement and to negotiate and conclude any
other collective bargaining agreement with PAL.
The actual dispute was thus reduced to whether the Gomez faction in separating themselves from ALPAP as
headed by Gaston could take over and appropriate the corporate name, office and funds of ALPAP, as authorized
by respondent court.
Such take-over or appropriation of ALPAP by the Gomez faction could not be validly done nor authorized by
respondent court, as now ruled by this Court. But since ALPAP does recognize the right of the Gomez faction to
separate and secede from ALPAP and for the members of the Gomez faction composed of pilots who have
remained in the employ of PAL to form their own union, the Court's judgment has ordered ALPAP as headed by
Gaston as the recognized president thereof or his duly elected successor to give to any withdrawing member i.e.
the members of the Gomez faction "whatever right. interest or participation such member may have in the assets,
including cash funds of ALPAP as a result of his membership in that association."
I take this to mean that ALPAP is thereby ordered to liquidate the membership of each withdrawing member
although ALPAP is a non-stock association) and give him the equivalent of the net book value in cash of his
aliquot share in the net asset of ALPAP as of the date of withdrawal of de facto of the Gomez faction which may
be fixed as December 23, 1970, the late when Ben Hur Gomez was elected as president of his faction by ALPAP
members who did no join the mass resignation of retirement, I believe that in fairness the Equivalent value of any
use made by the Gomez faction of the ALPAP office and funds from and after their date of withdrawal (which
obviously was in and for their own exclusive interest and benefit) should in turn be offset against whatever may be
determined to be the collective value of their ALPAP membership as of the date of their withdrawal on December
23, 1970.

In L-35206, the judgment penned by the Chief Justice rejects the petitioners-pilots' petition for readmission to PAL
and their rounds in support thereof, inter alia, that they were led to believe in good faith by their union president
Gaston and their counsel that their mass resignation and retirement were a valid exercise of' their right to protest
the dismissal of Gaston notwithstanding the pendency of their certified dispute in the industrial court, that they
were assured by their leader that it was a lawful exercise of concerted action, that the full consequences of such
act were not explained to them by counsel and that they had so acted under threat of expulsion from the union
(which appear to be borne out by the fact that within the year after finally appreciating the full consequences of
their illconceived mass protest reitrement and resignation they sought to withdraw the same and petitioned for
readmission in line with the return-to-work orders).
The principal ground for the Court's judgment cannot be faulted, to wit, that such action of mass retirement and
resignation which plainly intended to abort the effects of the indusgtrial court's return-to-work orders and to place
petitioners-pilots beyond the court's return-to-work orders and to place petitioners-pilots beyond the court's
jurisdictional control, after the President had certified the labor dispute thereto for compulsory arbitration in the
public interest, could not be sanctioned nor tolerated since "clearly, the powers given to the industrial court in a
certified labor dispute will be meaningless and useless to pursue where its jurisdiction cannot operate. 2
Still, since the industrial court en banc set aside Judge Paredes' orders to receive proof on the pilots' petitions for
reinstatement on the basis inter alia of the Gomez factions' contention that the prejudicial question of who of the
two faction's contention that the prejudicial question of who of the two factions should prosecute the main case
(the labor dispute) should first be resolved in the certification case pending as Case L-33705 before theis
Court 3 and since the matters raised in the petition for reinstatement were quite serious and did required the
submission of proof as held by Judge Paredes in the December 23, 1971 order, the question of merit of the pilots'
rank-and-file petitions for reinstatement could perhaps have been deferred and likewise remanded to the National
Labor Relations Commission since after all their alternative prayer for payment of their claims for retirement or
speration pay is being remanded to the National Labor Relations Commission "to determine whether such claim is
in order" by receiving the proof of the parties and such proof covers the very same matters raised as
supporting grounds and reasons in the petitions for reinstatment.
After all, if the pilots duly substantiated with convincing proof their allegations in support of their petitions for
reinstatement that they had been misled and/or coerced by their leader and counsel into presenting their mass
retirement and resignation without the full consequences having been explained to them the pilots would be in the
same situation of rank-and-file members of a union who engage in an illegal strike, in which case under this
Court's liberal and compassionate doctrine, only the leaders (and those who actually resorted to violence which is
of no application here) would receive the capital of dismissal unless this Court were somehow to make an
exception of the pilots and exclude them from the application of this established doctrine because "of their highly
advanced technical background and relatively better life status far above the general working class
spectrum." 4
Withal, the Court's decision requires the National Labor Relations Commission with reference to the pilots'
alternative claims for retirement or separation pay "to determine whether such claim is in order, particularly in view
of the caveat made by PAL, in accepting the petitioners' individual letters of retirement/resignation, that said
petitioners shall not be entitled to any benefit or privilege to which they may otherwise be entitled by reason of
their employment with PAL as the former's acts constituted a violation of the order of the industrial court dated
November 26, 1970."
The said November 26, 1970 order commanded ALPAP members "not to strike or in any way Cause any
stoppage in the operation and service of PAL, under pain of dismissal and forfeiture of rights and
privileges accruing to their respective employments should they disregard this Order; and PAL is also ordered not
to lockout any of such members and officers of ALPAP under pain of contempt and cancellation of its franchise.
I venture to suggest as a specific guideline 5 for the National Labor Relations Commission's consideration (in
order to expedite settlement of the case and assuage the anxieties of petitioners and their families) that the
pending question appears to be one of law, whose resolution would not be affected by the proof that may be
submitted to the said commission upon remand of the case.
The question of law is: was it within the industrial court's power as provided in Judge Paredes' above-quoted
order to order "forfeiture of rights and privileges accruing to their respective employments" should they disregard
his return-to-work order? It should be noted that the PAL in accepting the letters of retirement/resignation made
the caveat that the pilots concerned would forfeit any retirement benefit or privilege that they would otherwise be

entitled to by reason of their employment with PAL, as their acts constituted a violation of the cited return-to-work
order, thus indicating that were it not for such order, PAL would have no basis for imposing any forfeiture of
earned retirement privileges since it was in turn accepting the pilots' retirement and resignation.
If the industrial court had no such power to order forfeiture of the pilots' retirement/resignation privileges and
benefits for violation of its return to work order, then there would be no legal basis for the denial of such retirement
privileges and benefits.
That the industrial court had such power is open to grave doubts. For disregard and violation of the return to work
order, the industrial court could impose the capital penalty of dismissal from employment. True, the pilots carried
out an advised mass retirement/resignation to abort the effects of the return-to-work order but the effectiveness of
the penalty of dismissal is borne out by the fact that within the year the pilots had come to realize and regret the
futility of their act and were seeking readmission Then again, the industrial Court had the power of contempt it
could have declared the mass retirement illegal as this Court has in fact so declared and used its coercive power
of contempt under Rule 71, section 7 by requiring imprisonment of the petitioners until they purged themselves of
contempt by complying with the return-to-work order.
But to declare the forfeiture of retirement privileges and benefits which the petitioners had earned and would
otherwise be entitled to by reason of their years of employment of PAL appears to be beyond the coercive as well
as punitive powers of the industrial court in the same way that is threatened cancellation of PAL's franchise as
granted by Congress for violation of the lockout prohibition aspect of the same order was beyond its powers.
The end result, then, would be that assuming that petitioners had willfully violated the rertun-to-work order of
November 26, 1970 and had not ben misled into presenting their mass retirement/resignation, such violation
could not legally result in a forfeiture of their retirement prvileges and benefits as decreed in the order since such
forfeiture was beyond the industrial court's power and authorituy. Their loss of employment and the denial of their
readmission certainly constitute sufficient punshment and vindication of the court's authority. All the more so would
such non-forteiture of earned reirement privileges and benefits be in consonance with fairness and equity should
the pilots duly establish the factual averments of thier cited petition for readmission and for payment of their said
privileges and benefits.

G.R. No. 93117 August 1, 1995

LOPEZ SUGAR CORPORATION, petitioner,
vs.
HON. SECRETARY OF LABOR AND EMPLOYMENT, NATIONAL CONGRESS OF UNIONS IN THE SUGAR
INDUSTRY OF THE PHILIPPINES (NACUSIP) and COMMERCIAL AND AGRO-INDUSTRIAL LABOR
ORGANIZATION (CAILO), respondents.
VITUG, J.:
The decision of public respondent, assailed in this petition for certiorari, is anchored on Article 257 of the Labor
Code, as amended, which provides:
Art. 257. Petitions in unorganized establishments. In any establishment where there is no
certified bargaining agent, a certification election shall automatically be conducted by the MedArbiter upon the filing of a petition by a legitimate labor organization.
The Med-Arbiter, sustained by the Secretary of Labor and Employment, has ruled that the above
provision is mandatory and gives him no other choice than to conduct a certification election upon the
receipt of the corresponding petition.
On 26 July 1989, private respondent National Congress of Unions in the Sugar Industry of the Philippines-TUCP
("NACUSIP-TUCP") filed with the Department of Labor and Employment ("DOLE") Regional Office No. VI,
Bacolod City, a petition for direct certification or for certification election to determine the sole and exclusive

collective bargaining representative of the supervisory employees of herein petitioner, Lopez Sugar Corporation
("LSC"), at its sugar central in Fabrica, Sagay, Negros Occidental.
In its petition, docketed Case No. RO6-MA-021-89, NACUSIP-TUCP averred that it was a legitimate national
labor organization; that LSC was employing 55 supervisory employees, the majority of whom were members of
the union; that no other labor organization was claiming membership over the supervisory employees; that there
was no existing collective bargaining agreement covering said employees; and that there was no legal
impediment either to a direct certification of NACUSIP-TUCP or to the holding of a certification election. 1
In its comment and opposition, dated 14 August 1989, LSC contended, among other things, that the petition was
bereft of any legal or factual basis; that the petition was nothing more than a useless scrap of paper designed to
harass the company; and that its employees above the rank-and-file category were in truth unaware of the
petition. 2
On 18 August 1989, the Commercial and Agro-Industrial Labor Organization ("CAILO"), a registered labor
organization also claiming to count substantial membership among the LSC supervisory employees, moved to
intervene. 3 The motion was granted. 4
On 22 August 1989, NACUSIP-TUCP submitted Charter Certificate No. 003-89, dated 20 July 1989, of the
NACUSIP-TUCP Lopez Sugar Central Supervisory Chapter. 5 LSC, on its part, submitted a list of its employees
above the rank-and-file status preparatory to the inclusion/exclusion proceedings. 6
On 13 September 1989, one Carlos S. Gevero, asserting a right to represent the "supervisors of LSC," filed a
motion to dismiss the petition for lack of interest on the part of the supervisory employees. 7
At the hearing of 20 September 1989, both NACUSIP-TUCP and CAILO failed to appear. Hearing was re-set for
29 September 1989 8 but, again, neither NACUSIP-TUCP nor CAILO appeared. On 16 October 1989,
nonetheless, Med-Arbiter Felizardo T. Serapio issued an Order 9 granting the petition. He ruled that under Article
257 of the Labor Code, as amended, the Med-Arbiter was left with no option but to order the conduct of a
certification election immediately upon the filing of the petition, holding that the subsequent disaffiliation or
withdrawals of members did not adversely affect the standing of the petition. The dispositive portion of his Order
read:
VIEWED IN THE LIGHT OF THE FOREGOING, the petition for certification election among the
supervisory employees of the Lopez Sugar Central, filed by the NACUSIP-TUCP is, as it is
hereby GRANTED with the following choices:
1) National Congress of Unions in the Sugar Industry of the Phils. (NACUSIP-TUCP);
2) Commercial and Agro-Industrial Labor Organization (CAILO);
3) No Union.
The designated representation officer is hereby directed to call the parties to a pre-election
conference to thresh out the mechanics of the certification election, including the inclusion and
exclusion of voters and to conduct the election within twenty (20) days from receipt by the parties
of this Order. The list submitted by the Employer (LSC Employees other than rank and file) shall
be used to determine the eligible voters.
SO ORDERED. 10
LSC appealed to the DOLE and asseverated that the order was a patent nullity and that the Med-Arbiter
acted with grave abuse of discretion. 11
In denying the appeal, the Secretary of Labor, in his Decision of 06 March 1990, has likewise ruled that the
holding by the Med-Arbiter of a certification election is mandatory under Article 257 of the Labor Code; that the
subsequent withdrawals and disauthorization/disaffiliation of some supervisory personnel in the petition for

certification election could not bar its being granted; and that a certification election is still the most appropriate
means to finally settle the issue of representation. 12
Hence, this petition for certiorari; it is argued that
Public Respondent Honorable Secretary of Labor and Employment (has) committed grave abuse
of discretion amounting to lack of jurisdiction when it refused to dismiss a petition for certification
election despite clear lack of legal and factual basis for holding the same. 13
The Solicitor General agrees with public respondent in arguing that the tenor of Article 257 (supra) of the Labor
Code is one of command. He cites paragraph 2, Section 6, Rule V, Book V, of the Implementing Rules and
Regulations of the Labor Code, to the effect that once "a petition (is) filed by a legitimate organization involving an
unorganized establishment, the Med-Arbiter shall immediately order the conduct of a certification election," which
is designed, he continues, to give substance to the workers' right to self- organization. 14 Petitioner promptly retorts
that it has no quarrel with public respondent on the objectives of the law but it points out that the application of
Article 257 clearly must first be occasioned by a genuine petition from a legitimate labor organization.
Not too long ago, the Court already had an opportunity to pass upon this very issue in Progressive Development
Corporation vs. Secretary, Department of Labor and Employment, 15 where we said:
But while Article 257 cited by the Solicitor General directs the automatic conduct of a certification
election in an unorganized establishment, it also requires that the petition for certification election
must be filed by a legitimate labor organization. Article 242 enumerates the exclusive rights of a
legitimate labor organization among which is the right to be certified as the exclusive
representative of all the employees in an appropriate collective bargaining unit for purposes of
collective bargaining.
Meanwhile, Article 212(h) defines a legitimate labor organization as "any labor organization duly
registered with the DOLE and includes any branch or local thereof." (Emphasis supplied) Rule I,
Section 1(j), Book V of the Implementing Rules likewise defines a legitimate labor organization as
"any labor organization duly registered with the DOLE and includes any branch, local or
affiliate thereof." (Emphasis supplied)
Indeed, the law did not reduce the Med-Arbiter to an automaton which can instantly be set to impulse by the mere
filing of a petition for certification election. He is still tasked to satisfy himself that all the conditions of the law are
met, and among the legal requirements is that the petitioning union must be a legitimate labor organization in
good standing.
The petition for certification election, in the case at bench, was filed by the NACUSIP-TUCP, a national labor
organization duly registered with the DOLE render Registration Certificate No. FED-402-6390-IP. The legitimate
status of NACUSIP-TUCP might be conceded; being merely, however, an agent for the local organization (the
NACUSIP-TUCP Lopez Sugar Central Supervisory Chapter), the federation's bona fide status alone would not
suffice. The local chapter, as its principal, should also be a legitimate labor organization in good standing.
Accordingly, in Progressive Development, we elucidated:
In the case of union affiliation with a federation, the documentary requirements are found in Rule
II, Section 3(e), Book V of the implementing Rules, which we again quote as follows:
(c) The local or chapter of a labor federation or national union shall have and maintain a
constitution and by-laws, set of officers and books of accounts. For reporting purposes, the
procedure governing the reporting of independently registered unions, federations or national
unions shall be observed. (Emphasis supplied)
Since the "procedure governing the reporting of independently registered unions" refers to the
certification and attestation requirements contained in Article 235, paragraph 2, it follows that the
constitution and by-laws, set of officers and books of accounts submitted by the local and chapter
must likewise comply with these requirements. The same rationale for requiring the submission of
duly subscribed documents upon union registration exists in the case of union affiliation.
Moreover, there is greater reason to exact compliance with the certification and attestation

requirements because, as previously mentioned, several requirements applicable to independent

union registration are no longer required in the case of the formation of a local or chapter. The
policy of the law in conferring greater bargaining power upon labor unions must be balanced with
the policy of providing preventive measures against the commission of fraud.
A local or chapter therefore becomes a legitimate labor organization only upon submission of the
following to the BLR:
1) A charter certificate, within 30 days from its issuance by the labor federation or national union,
and
2) The constitution and by-laws, a statement on the set of officers, and the books of accounts all
of which are certified under oath by the secretary or treasurer, as the case may be, of such local
or chapter, and attested to by its president.
Absent compliance with these mandatory requirements, the local or chapter does not become a
legitimate labor organization. 16
The only document extant on record to establish the legitimacy of the NACUSIP-TUCP Lopez Sugar Central
Supervisory Chapter is a charter certificate and nothing else. The instant petition, at least for now, must thus be
GRANTED.
WHEREFORE, the assailed Decision of the Secretary of Labor, dated 06 March 1990, affirming that of the MedArbiter, is ANNULLED and SET ASIDE. The petition for certification election is dismissed. No costs.
SO ORDERED.

G.R. No. 87700 June 13, 1990

SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO, DANIEL S.L. BORBON II, HERMINIA REYES,
MARCELA PURIFICACION, ET AL., petitioners,
vs.
HON. JESUS G. BERSAMIRA, IN HIS CAPACITY AS PRESIDING JUDGE OF BRANCH 166, RTC, PASIG,
and SAN MIGUEL CORPORATION, respondents.
Romeo C. Lagman for petitioners.
Jardeleza, Sobrevinas, Diaz, Mayudini & Bodegon for respondents.
MELENCIO-HERRERA, J.:
Respondent Judge of the Regional Trial Court of Pasig, Branch 166, is taken to task by petitioners in this special
civil action for certiorari and Prohibition for having issued the challenged Writ of Preliminary Injunction on 29
March 1989 in Civil Case No. 57055 of his Court entitled "San Miguel Corporation vs. SMCEU-PTGWO, et als."
Petitioners' plea is that said Writ was issued without or in excess of jurisdiction and with grave abuse of discretion,
a labor dispute being involved. Private respondent San Miguel Corporation (SanMig. for short), for its part,
defends the Writ on the ground of absence of any employer-employee relationship between it and the contractual
workers employed by the companies Lipercon Services, Inc. (Lipercon) and D'Rite Service Enterprises (D'Rite),
besides the fact that the Union is bereft of personality to represent said workers for purposes of collective
bargaining. The Solicitor General agrees with the position of SanMig.
The antecedents of the controversy reveal that:

Sometime in 1983 and 1984, SanMig entered into contracts for merchandising services with Lipercon and D'Rite
(Annexes K and I, SanMig's Comment, respectively). These companies are independent contractors duly licensed
by the Department of Labor and Employment (DOLE). SanMig entered into those contracts to maintain its
competitive position and in keeping with the imperatives of efficiency, business expansion and diversity of its
operation. In said contracts, it was expressly understood and agreed that the workers employed by the
contractors were to be paid by the latter and that none of them were to be deemed employees or agents of
SanMig. There was to be no employer-employee relation between the contractors and/or its workers, on the one
hand, and SanMig on the other.
Petitioner San Miguel Corporation Employees Union-PTWGO (the Union, for brevity) is the duly authorized
representative of the monthly paid rank-and-file employees of SanMig with whom the latter executed a Collective
Bargaining Agreement (CBA) effective 1 July 1986 to 30 June 1989 (Annex A, SanMig's Comment). Section 1 of
their CBA specifically provides that "temporary, probationary, or contract employees and workers are excluded
from the bargaining unit and, therefore, outside the scope of this Agreement."
In a letter, dated 20 November 1988 (Annex C, Petition), the Union advised SanMig that some Lipercon and
D'Rite workers had signed up for union membership and sought the regularization of their employment with SMC.
The Union alleged that this group of employees, while appearing to be contractual workers supposedly
independent contractors, have been continuously working for SanMig for a period ranging from six (6) months to
fifteen (15) years and that their work is neither casual nor seasonal as they are performing work or activities
necessary or desirable in the usual business or trade of SanMig. Thus, it was contended that there exists a "laboronly" contracting situation. It was then demanded that the employment status of these workers be regularized.
On 12 January 1989 on the ground that it had failed to receive any favorable response from SanMig, the Union
filed a notice of strike for unfair labor practice, CBA violations, and union busting (Annex D, Petition).
On 30 January 1989, the Union again filed a second notice of strike for unfair labor practice (Annex F, Petition).
As in the first notice of strike. Conciliatory meetings were held on the second notice. Subsequently, the two (2)
notices of strike were consolidated and several conciliation conferences were held to settle the dispute before the
National Conciliation and Mediation Board (NCMB) of DOLE (Annex G, Petition).
Beginning 14 February 1989 until 2 March 1989, series of pickets were staged by Lipercon and D'Rite workers in
various SMC plants and offices.
On 6 March 1989, SMC filed a verified Complaint for Injunction and Damages before respondent Court to enjoin
the Union from:
a. representing and/or acting for and in behalf of the employees of LIPERCON and/or D'RITE for
the purposes of collective bargaining;
b. calling for and holding a strike vote, to compel plaintiff to hire the employees or workers of
LIPERCON and D'RITE;
c. inciting, instigating and/or inducing the employees or workers of LIPERCON and D'RITE to
demonstrate and/or picket at the plants and offices of plaintiff within the bargaining unit referred to
in the CBA,...;
d. staging a strike to compel plaintiff to hire the employees or workers of LIPERCON and D'RITE;
e. using the employees or workers of LIPERCON AND D'RITE to man the strike area and/or
picket lines and/or barricades which the defendants may set up at the plants and offices of
plaintiff within the bargaining unit referred to in the CBA ...;
f. intimidating, threatening with bodily harm and/or molesting the other employees and/or contract
workers of plaintiff, as well as those persons lawfully transacting business with plaintiff at the work
places within the bargaining unit referred to in the CBA, ..., to compel plaintiff to hire the
employees or workers of LIPERCON and D'RITE;

g. blocking, preventing, prohibiting, obstructing and/or impeding the free ingress to, and egress
from, the work places within the bargaining unit referred to in the CBA .., to compel plaintiff to hire
the employees or workers of LIPERCON and D'RITE;
h. preventing and/or disrupting the peaceful and normal operation of plaintiff at the work places
within the bargaining unit referred to in the CBA, Annex 'C' hereof, to compel plaintiff to hire the
employees or workers of LIPERCON and D'RITE. (Annex H, Petition)
Respondent Court found the Complaint sufficient in form and substance and issued a Temporary Restraining
Order for the purpose of maintaining the status quo, and set the application for Injunction for hearing.
In the meantime, on 13 March 1989, the Union filed a Motion to Dismiss SanMig's Complaint on the ground of
lack of jurisdiction over the case/nature of the action, which motion was opposed by SanMig. That Motion was
denied by respondent Judge in an Order dated 11 April 1989.
After several hearings on SanMig's application for injunctive relief, where the parties presented both testimonial
and documentary evidence on 25 March 1989, respondent Court issued the questioned Order (Annex A, Petition)
granting the application and enjoining the Union from Committing the acts complained of, supra. Accordingly, on
29 March 1989, respondent Court issued the corresponding Writ of Preliminary Injunction after SanMig had
posted the required bond of P100,000.00 to answer for whatever damages petitioners may sustain by reason
thereof.
In issuing the Injunction, respondent Court rationalized:
The absence of employer-employee relationship negates the existence of labor dispute. Verily,
this court has jurisdiction to take cognizance of plaintiff's grievance.
The evidence so far presented indicates that plaintiff has contracts for services with Lipercon and
D'Rite. The application and contract for employment of the defendants' witnesses are either with
Lipercon or D'Rite. What could be discerned is that there is no employer-employee relationship
between plaintiff and the contractual workers employed by Lipercon and D'Rite. This, however,
does not mean that a final determination regarding the question of the existence of employeremployee relationship has already been made. To finally resolve this dispute, the court must
extensively consider and delve into the manner of selection and engagement of the putative
employee; the mode of payment of wages; the presence or absence of a power of dismissal; and
the Presence or absence of a power to control the putative employee's conduct. This
necessitates a full-blown trial. If the acts complained of are not restrained, plaintiff would,
undoubtedly, suffer irreparable damages. Upon the other hand, a writ of injunction does not
necessarily expose defendants to irreparable damages.
Evidently, plaintiff has established its right to the relief demanded. (p. 21, Rollo)
Anchored on grave abuse of discretion, petitioners are now before us seeking nullification of the challenged Writ.
On 24 April 1989, we issued a Temporary Restraining Order enjoining the implementation of the Injunction issued
by respondent Court. The Union construed this to mean that "we can now strike," which it superimposed on the
Order and widely circulated to entice the Union membership to go on strike. Upon being apprised thereof, in a
Resolution of 24 May 1989, we required the parties to "RESTORE the status quo ante declaration of strike" (p.
2,62 Rollo).
In the meantime, however, or on 2 May 1989, the Union went on strike. Apparently, some of the contractual
workers of Lipercon and D'Rite had been laid off. The strike adversely affected thirteen (13) of the latter's plants
and offices.
On 3 May 1989, the National Conciliation and Mediation Board (NCMB) called the parties to conciliation. The
Union stated that it would lift the strike if the thirty (30) Lipercon and D'Rite employees were recalled, and
discussion on their other demands, such as wage distortion and appointment of coordinators, were made.
Effected eventually was a Memorandum of Agreement between SanMig and the Union that "without prejudice to
the outcome of G.R. No. 87700 (this case) and Civil Case No. 57055 (the case below), the laid-off individuals ...
shall be recalled effective 8 May 1989 to their former jobs or equivalent positions under the same terms and

conditions prior to "lay-off" (Annex 15, SanMig Comment). In turn, the Union would immediately lift the pickets and
return to work.
After an exchange of pleadings, this Court, on 12 October 1989, gave due course to the Petition and required the
parties to submit their memoranda simultaneously, the last of which was filed on 9 January 1990.
The focal issue for determination is whether or not respondent Court correctly assumed jurisdiction over the
present controversy and properly issued the Writ of Preliminary Injunction to the resolution of that question, is the
matter of whether, or not the case at bar involves, or is in connection with, or relates to a labor dispute. An
affirmative answer would bring the case within the original and exclusive jurisdiction of labor tribunals to the
exclusion of the regular Courts.
Petitioners take the position that 'it is beyond dispute that the controversy in the court a quo involves or arose out
of a labor dispute and is directly connected or interwoven with the cases pending with the NCMB-DOLE, and is
thus beyond the ambit of the public respondent's jurisdiction. That the acts complained of (i.e., the mass
concerted action of picketing and the reliefs prayed for by the private respondent) are within the competence of
labor tribunals, is beyond question" (pp. 6-7, Petitioners' Memo).
On the other hand, SanMig denies the existence of any employer-employee relationship and consequently of any
labor dispute between itself and the Union. SanMig submits, in particular, that "respondent Court is vested with
jurisdiction and judicial competence to enjoin the specific type of strike staged by petitioner union and its officers
herein complained of," for the reasons that:
A. The exclusive bargaining representative of an employer unit cannot strike to compel the
employer to hire and thereby create an employment relationship with contractual workers,
especially were the contractual workers were recognized by the union, under the governing
collective bargaining agreement, as excluded from, and therefore strangers to, the bargaining
unit.
B. A strike is a coercive economic weapon granted the bargaining representative only in the event
of a deadlock in a labor dispute over 'wages, hours of work and all other and of the employment'
of the employees in the unit. The union leaders cannot instigate a strike to compel the employer,
especially on the eve of certification elections, to hire strangers or workers outside the unit, in the
hope the latter will help re-elect them.
C. Civil courts have the jurisdiction to enjoin the above because this specie of strike does not
arise out of a labor dispute, is an abuse of right, and violates the employer's constitutional liberty
to hire or not to hire. (SanMig's Memorandum, pp. 475-476, Rollo).
We find the Petition of a meritorious character.
A "labor dispute" as defined in Article 212 (1) of the Labor Code includes "any controversy or matter concerning
terms and conditions of employment or the association or representation of persons in negotiating, fixing,
maintaining, changing, or arranging the terms and conditions of employment, regardless of whether the disputants
stand in the proximate relation of employer and employee."
While it is SanMig's submission that no employer-employee relationship exists between itself, on the one hand,
and the contractual workers of Lipercon and D'Rite on the other, a labor dispute can nevertheless exist
"regardless of whether the disputants stand in the proximate relationship of employer and employee" (Article 212
[1], Labor Code, supra) provided the controversy concerns, among others, the terms and conditions of
employment or a "change" or "arrangement" thereof (ibid). Put differently, and as defined by law, the existence of
a labor dispute is not negative by the fact that the plaintiffs and defendants do not stand in the proximate relation
of employer and employee.
That a labor dispute, as defined by the law, does exist herein is evident. At bottom, what the Union seeks is to
regularize the status of the employees contracted by Lipercon and D'Rite in effect, that they be absorbed into the
working unit of SanMig. This matter definitely dwells on the working relationship between said employees vis-a-vis
SanMig. Terms, tenure and conditions of their employment and the arrangement of those terms are thus involved
bringing the matter within the purview of a labor dispute. Further, the Union also seeks to represent those

workers, who have signed up for Union membership, for the purpose of collective bargaining. SanMig, for its part,
resists that Union demand on the ground that there is no employer-employee relationship between it and those
workers and because the demand violates the terms of their CBA. Obvious then is that representation and
association, for the purpose of negotiating the conditions of employment are also involved. In fact, the injunction
sought by SanMig was precisely also to prevent such representation. Again, the matter of representation falls
within the scope of a labor dispute. Neither can it be denied that the controversy below is directly connected with
the labor dispute already taken cognizance of by the NCMB-DOLE (NCMB-NCR- NS-01- 021-89; NCMB NCR
NS-01-093-83).
Whether or not the Union demands are valid; whether or not SanMig's contracts with Lipercon and D'Rite
constitute "labor-only" contracting and, therefore, a regular employer-employee relationship may, in fact, be said
to exist; whether or not the Union can lawfully represent the workers of Lipercon and D'Rite in their demands
against SanMig in the light of the existing CBA; whether or not the notice of strike was valid and the strike itself
legal when it was allegedly instigated to compel the employer to hire strangers outside the working unit; those
are issues the resolution of which call for the application of labor laws, and SanMig's cause's of action in the Court
below are inextricably linked with those issues.
The precedent in Layno vs. de la Cruz (G.R. No. L-29636, 30 April 1965, 13 SCRA 738) relied upon by SanMig is
not controlling as in that case there was no controversy over terms, tenure or conditions, of employment or the
representation of employees that called for the application of labor laws. In that case, what the petitioning union
demanded was not a change in working terms and conditions, or the representation of the employees, but that its
members be hired as stevedores in the place of the members of a rival union, which petitioners wanted
discharged notwithstanding the existing contract of the arrastre company with the latter union. Hence, the ruling
therein, on the basis of those facts unique to that case, that such a demand could hardly be considered a labor
dispute.
As the case is indisputably linked with a labor dispute, jurisdiction belongs to the labor tribunals. As explicitly
provided for in Article 217 of the Labor Code, prior to its amendment by R.A. No. 6715 on 21 March 1989, since
the suit below was instituted on 6 March 1989, Labor Arbiters have original and exclusive jurisdiction to hear and
decide the following cases involving all workers including "1. unfair labor practice cases; 2. those that workers
may file involving wages, hours of work and other terms and conditions of employment; ... and 5. cases arising
from any violation of Article 265 of this Code, including questions involving the legality of striker and lockouts. ..."
Article 217 lays down the plain command of the law.
The claim of SanMig that the action below is for damages under Articles 19, 20 and 21 of the Civil Code would not
suffice to keep the case within the jurisdictional boundaries of regular Courts. That claim for damages is
interwoven with a labor dispute existing between the parties and would have to be ventilated before the
administrative machinery established for the expeditious settlement of those disputes. To allow the action filed
below to prosper would bring about "split jurisdiction" which is obnoxious to the orderly administration of justice
(Philippine Communications, Electronics and Electricity Workers Federation vs. Hon. Nolasco, L-24984, 29 July
1968, 24 SCRA 321).
We recognize the proprietary right of SanMig to exercise an inherent management prerogative and its best
business judgment to determine whether it should contract out the performance of some of its work to
independent contractors. However, the rights of all workers to self-organization, collective bargaining and
negotiations, and peaceful concerted activities, including the right to strike in accordance with law (Section 3,
Article XIII, 1987 Constitution) equally call for recognition and protection. Those contending interests must be
placed in proper perspective and equilibrium.
WHEREFORE, the Writ of certiorari is GRANTED and the Orders of respondent Judge of 25 March 1989 and 29
March 1989 are SET ASIDE. The Writ of Prohibition is GRANTED and respondent Judge is enjoined from taking
any further action in Civil Case No. 57055 except for the purpose of dismissing it. The status quo ante declaration
of strike ordered by the Court on 24 May 1989 shall be observed pending the proceedings in the National
Conciliation Mediation Board-Department of Labor and Employment, docketed as NCMB-NCR-NS-01-02189 and
NCMB-NCR-NS-01-093-83. No costs.
SO ORDERED.

G.R. No. 103560 July 6, 1995

GOLD CITY INTEGRATED PORT SERVICE, INC. (INPORT), petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION (Fifth Division) ADELO EBUNA, EMMANUEL VALMORIDA,
RODOLFO PEREZ, ROGER ZAGADO, MARCOS GANZAN, AND REY VALLE, (WILFREDO DAHAN,
ROGELIO VILLAFUERTE, WILFREDO AMPER, RICARDO ABA, YOLITO AMBUS, FIDEL CALIO, VICENTE
CAHATOL, SOTECO CUENCA, NICOLAS DALAGUAN, BALBINO FAJARDO, ROLANDO JAMILA, RICARDO
LAURETO, RUDY LAURETO, QUIRICO LEJANIO, OSCAR LAPINIG, FELIPE LAURETE, JESUSTUDY
OMISOL, ZOSIMO OMISOL, PEDRO SUAREZ, SATURNINO SISIBAN and MANUEL YANEZ), respondents.
G.R. No. 103599 July 6, 1995
ADELO EBUNA, WILFREDO DAHAN, RICARDO LAURETO, REY VALLE, VICENTE CAHATOL, MARCOS
GANZAN, RODOLFO PEREZ, ROEL SAA, ROGELIO VILLAFUERTE, MANUEL YANEZ, WILFREDO AMPER,
QUIRECO LEJANO, EMMANUEL VALMORIA, ROLANDO JAMILLA, NICOLAS DALAGUAN, BALBINO
FAJARDO, PEDRO SUAREZ, ELPIDIO ESTROGA, RUBEN PAJO, JESUSTODY OMISOL, RICARDO ABA,
FIDEL CALIO, SATURNINO SESYBAN, RUDY LAURETO, OSCAR LAPINIG, FELIPE LAURENTE, ROGER
ZAGADO, SOTECO CUENCA, FIDEL ESLIT, ZOSIMO OMISOL, ANGEL BERNIDO, and MICHAEL
YAGOTYOT, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, FIFTH DIVISION, and GOLD CITY INTEGRATED PORT
SERVICES, INC. (INPORT), respondents.

ROMERO, J.:
Should separation pay and backwages be awarded by public respondent NLRC to participants of an illegal strike?
This is the core issue to be decided in these two petitions.
Gold City Integrated Port Service, Inc. (INPORT) filed a petition for certiorari against the National Labor Relations
Commission (NLRC) assailing the latter's decision in "Gold City Integrated Port Services, Inc. v. Adelo Ebuna, et
al." (NLRC RAB X Case No. 5-0405-85) with twenty-seven private respondents (G.R. No. 103599). 1 This petition
has been consolidated with G.R. No. 103599 where the petitioners are the private respondents in instant case
and the private respondent is INPORT. For the sake of clarity, INPORT shall be denominated in the case at bench
as the petitioner and the employees as private respondents.
Instant case arose from the following facts:
Early in the morning of April 30, 1985, petitioner's employees stopped working and gathered in a mass action to
express their grievances regarding wages, thirteenth month pay and hazard pay. Said employees were all
members of the Macajalar Labor Union Federation of Free Workers (MLU-FFW) with whom petitioner had an
existing collective bargaining agreement.
Petitioner was engaged in stevedoring and arrastre services at the port of Cagayan de Oro. The strike paralyzed
operations at said port.
On the same morning, the strikers filed individual notices of strike ("Kaugalingon nga Declarasyon sa Pag-Welga")
with the then Ministry of Labor and Employment.
With the failure of conciliation conferences between petitioner and the strikers, INPORT filed a complaint before
the Labor Arbiter for Illegal Strike with prayer for a restraining order/preliminary injunction.
On May 7, 1985, the National Labor Relations Commission issued a temporary restraining order. Thereafter,
majority of the strikers returned to work, leaving herein private respondents who continued their protest. 2

Counsel for private respondents filed a manifestation that petitioner required prior screening conducted by the
MLU-FFW before the remaining strikers could be accepted back to work.
Meanwhile, counsel for the Macajalar Labor Union (MLU-FFW) filed a "Motion to Drop Most of the Party
Respondents From the Above Entitled Case." The 278 employees on whose behalf the motion was filed, claimed
that they were duped or tricked into signing the individual notices of strike. After discovering this deception and
verifying that the strike was staged by a minority of the union officers and members and without the approval of, or
consultation with, majority of the union members, they immediately withdrew their notice of strike and returned to
work.
The petitioner INPORT, not having interposed any objection, the Labor Arbiter, in his decision dated July 23, 1985,
granted their prayer to be excluded as respondents in the complaint for illegal strike. Moreover, petitioner's
complaint was directed against the 31 respondents who did not return to work and continued with the strike.
For not having complied with the formal requirements in Article 264 of the Labor Code, 3 the strike staged by
petitioner's workers on April 30, 1985 was found by the Labor Arbiter to be illegal. 4 The workers who participated
in the illegal strike did not, however, lose their employment, since there was no evidence that they participated in
illegal acts. After noting that petitioner accepted the other striking employees back to work, the Labor Arbiter held
that the private respondents should similarly be allowed to return to work without having to undergo the required
screening to be undertaken by their union (MLU-FFW).
As regards the six private respondents who were union officers, the Labor Arbiter ruled that they could not have
possibly been "duped or tricked" into signing the strike notice for they were active participants in the conciliation
meetings and were thus fully aware of what was going on. Hence, said union officers should be accepted back to
work after seeking reconsideration from herein petitioner. 5
The dispositive portion of the decision reads:
IN VIEW OF THE FOREGOING, it is hereby ordered that the strike undertaken by the officers and
majority union members of Macajalar Labor Union-FFW is ILLEGAL contrary to Article 264 of the Labor
Code, as amended. Our conclusion on the employment status of the illegal strikers is subject to our
discussion above. 6
Both petitioner and private respondents filed motions for reconsideration, which public respondent NLRC treated
as appeals. 7
On January 14, 1991, the NLRC affirmed with modification 8 the Arbiter's decision. It held that the concerted action
by the workers was more of a "protest action" than a strike. Private respondents, including the six union officers,
should also be allowed to work unconditionally to avoid discrimination. However, in view of the strained relations
between the parties, separation pay was awarded in lieu of reinstatement. The decretal portion of the Resolution
reads:
WHEREFORE, the decision appealed from is Affirmed with modification in accordance with the foregoing
resolution. Complainant INPORT is hereby ordered, in lieu of reinstatement, to pay respondents the
equivalent of twelve (12) months salaries each as separation pay. Complainant is further ordered to pay
respondents two (2) years backwages based on their last salaries, without qualification or deduction. The
appeal of complainant INPORT is Dismissed for lack of merit. 9
Upon petitioner's motion for reconsideration, public respondent modified the above resolution on December 12,
1991. 10
The Commission ruled that since private respondents were not actually terminated from service, there was no
basis for reinstatement. However, it awarded six months' salary as separation pay or financial assistance in the
nature of "equitable relief." The award for backwages was also deleted for lack of factual and legal basis. In lieu of
backwages, compensation equivalent to P1,000.00 was given.
The dispositive portion of the assailed Resolution reads:

WHEREFORE, the resolution of January 14, 1991 is Modified reducing the award for separation pay to
six (6) months each in favor of respondents, inclusive of lawful benefits as well as those granted under
the CBA, if any, based on the latest salary of respondents, as and by way of financial assistance while the
award for backwages is Deleted and Set Aside. In lieu thereof, respondents are granted compensation for
their sudden loss of employment in the sum of P1,000.00 each. The motion of respondents to implead
PPA as third-party respondent is Noted. Except for this modification the rest of the decision sought to be
reconsidered shall stand. 11
In the instant petitions for certiorari, petitioner alleges that public respondent Commission committed grave abuse
of discretion in awarding private respondents separation pay and backwages despite the declaration that the
strike was illegal.
On the other hand, private respondents, in their petition, assail the reduction of separation pay and deletion of
backwages by the NLRC as constituting grave abuse of discretion.
They also allege that the Resolution of January 14, 1991 could not be reconsidered after the unreasonable length
of time of eleven months.
Before proceeding with the principal issues raised by the parties, it is necessary to clarify public respondent's
statements concerning the strike staged by INPORT's employees.
In its resolution dated January 14, 1991, the NLRC held that the facts prevailing in the case at bench require a
relaxation of the rule that the formal requisites for a declaration of a strike are mandatory. Furthermore, what the
employees engaged in was more of a spontaneous protest action than a strike. 12
Nevertheless, the Commission affirmed the Labor Arbiter's decision which declared the strike illegal.
A strike, considered as the most effective weapon of labor, 13 is defined as any temporary stoppage of work by the
concerted action of employees as a result of an industrial or labor dispute. 14 A labor dispute includes any
controversy or matter concerning terms or conditions of employment or the association or representation of
persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment,
regardless of whether or not the disputants stand in the proximate relation of employers and employees. 15
Private respondents and their co-workers stopped working and held the mass action on April 30, 1985 to press for
their wages and other benefits. What transpired then was clearly a strike, for the cessation of work by concerted
action resulted from a labor dispute.
The complaint before the Labor Arbiter involved the legality of said strike. The Arbiter correctly ruled that the strike
was illegal for failure to comply with the requirements of Article 264 (now Article 263) paragraphs (c) and (f) of the
Labor Code. 16
The individual notices of strike filed by the workers did not conform to the notice required by the law to be filed
since they were represented by a union (MLU-FFW) which even had an existing collective bargaining agreement
with INPORT.
Neither did the striking workers observe the strike vote by secret ballot, cooling-off period and reporting
requirements.
As we stated in the case of National Federation of Sugar Workers v. Ovejera, 17 the language of the law leaves no
room for doubt that the cooling-off period and the seven-day strike ban after the strike-vote report were intended
to be mandatory. 18
Article 265 of the Labor Code reads, inter alia:
(i)t SHALL be unlawful for any labor organization . . . to declare a strike . . . without first having filed the
notice required in the preceding Article or without the necessary strike vote first having been obtained and
reported to the Ministry. (Emphasis ours)

In explaining the above provision, we said:

In requiring a strike notice and a cooling-off period, the avowed intent of the law is to provide an
opportunity for mediation and conciliation. It thus directs the MOLE to exert all efforts at mediation
and conciliation to effect a voluntary settlement' during the cooling-off period. . . .
xxx xxx xxx
The cooling-off period and the 7-day strike ban after the filing of a strike-vote report, as
prescribed in Art. 264 of the Labor Code, are reasonable restrictions and their imposition is
essential to attain the legitimate policy objectives embodied in the law. We hold that they
constitute a valid exercise of the police power of the state. 19
From the foregoing, it is patent that the strike on April 30, 1985 was illegal for failure to comply with the
requirements of the law.
The effects of such illegal strikes, outlined in Article 265 (now Article 264) of the Labor Code, make a
distinction between workers and union officers who participate therein.
A union officer who knowingly participates in an illegal strike and any worker or union officer who
knowingly participates in the commission of illegal acts during a strike may be declared to have lost their
employment status. 20 An ordinary striking worker cannot be terminated for mere participation in an illegal
strike. There must be proof that he committed illegal acts during a strike. A union officer, on the other
hand, may be terminated from work when he knowingly participates in an illegal strike, and like other
workers, when he commits an illegal act during a strike.
In the case at bench, INPORT accepted the majority of the striking workers, including union officers, back
to work. Private respondents were left to continue with the strike after they refused to submit to the
"screening" required by the company. 21
The question to be resolved now is what these remaining strikers, considering the circumstances of the
case, are entitled to receive under the law, if any.
Are they entitled, as they claim, to reinstatement or separation pay and backwages?
In his decision, the Labor Arbiter ordered INPORT to reinstate/accept the remaining workers as well as to
accept the remaining union officers after the latter sought reconsideration from INPORT. 22
The NLRC on January 14, 1991, modified the above decision by ordering INPORT to pay private
respondents the equivalent of twelve months in salary as separation pay in lieu of reinstatement and two
years' backwages. 23
On reconsideration, public respondent modified its original award and reduced the separation pay to six
months, deleted the award for backwages and instead awarded P1,000.00 as compensation for their
sudden loss of employment. 24
Under the law, an employee is entitled to reinstatement and to his full backwages when he is unjustly
dismissed. 25
Reinstatement means restoration to a state or condition from which one had been removed or separated.
Reinstatement and backwages are separate and distinct reliefs given to an illegally dismissed
employee. 26
Separation pay is awarded when reinstatement is not possible, due, for instance, to strained relations
between employer and employee.
It is also given as a form of financial assistance when a worker is dismissed in cases such as the
installation of labor saving devices, redundancy, retrenchment to prevent losses, closing or cessation of

operation of the establishment, or in case the employee was found to have been suffering from a disease
such that his continued employment is prohibited by law. 27
Separation pay is a statutory right defined as the amount that an employee receives at the time of his
severance from the service and is designed to provide the employee with the wherewithal during the
period that he is looking for another employment. 28 It is oriented towards the immediate future, the
transitional period the dismissed employee must undergo before locating a replacement job. 29
Hence, an employee dismissed for causes other than those cited above is not entitled to separation
pay. 30Well-settled is it that separation pay shall be allowed only in those instances where the employee is
validly dismissed
for causes other than serious misconduct or those reflecting on his moral character. 31
Backwages, on the other hand, is a form of relief that restores the income that was lost by reason of
unlawful dismissal. 32
It is clear from the foregoing summary of legal provisions and jurisprudence that there must generally be
unjust or illegal dismissal from work, before reinstatement and backwages may be granted. And in cases
where reinstatement is not possible or when dismissal is due to valid causes, separation pay may be
granted.
Private respondents contend that they were terminated for failure to submit to the controversial
"screening" requirement.
Public respondent Commission took the opposite view and held:
As the evidence on record will show, respondents were not actually terminated from the service.
They were merely made to submit to a screening committee as a prerequisite for readmission to
work. While this condition was found not wholly justified, the fact remains that respondents who
are resistant to such procedure are partly responsible for the delay in their readmission back to
work. Thus, We find justifiable basis in further modifying our resolution of January 14, 1991 in
accordance with the equities of the case.
We shall therefore recall the award for backwages for lack of factual and legal basis. The award
for separation pay shall likewise (be) reasonably reduced. Normally, severance benefit is granted
as an alternative remedy to reinstatement. And since there is no dismissal to speak of, there is no
basis for awarding reinstatement as a legal remedy. In lieu thereof, We shall grant herein
respondents separation pay as and by way of financial assistance in the nature of an "equitable
relief". 33
We find that private respondents were indeed dismissed when INPORT refused to accept them back to
work after the former refused to submit to the "screening" process.
Applying the law (Article 264 of the Labor Code) which makes a distinction, we differentiate between the
union members and the union officers among private respondents in granting the reliefs prayed for.
Under Article 264 of the Labor Code, a worker merely participating in an illegal strike may not be
terminated from his employment. It is only when he commits illegal acts during a strike that he may be
declared to have lost his employment status. Since there appears no proof that these union members
committed illegal acts during the strike, they cannot be dismissed. The striking union members among
private respondents are thus entitled to reinstatement, there being no just cause for their dismissal.
However, considering that a decade has already lapsed from the time the disputed strike occurred, we
find that to award separation pay in lieu of reinstatement would be more practical and appropriate.
No backwages will be awarded to private respondent-union members as a penalty for their participation in
the illegal strike. Their continued participation in said strike, even after most of their co-workers had
returned to work, can hardly be rewarded by such an award.

The fate of private respondent-union officers is different. Their insistence on unconditional reinstatement
or separation pay and backwages is unwarranted and unjustified. For knowingly participating in an illegal
strike, the law mandates that a union officer may be terminated from employment. 34
Notwithstanding the fact that INPORT previously accepted other union officers and that the screening
required by it was uncalled for, still it cannot be gainsaid that it possessed the right and prerogative to
terminate the union officers from service. The law, in using the word may, grants the employer the option
of declaring a union officer who participated in an illegal strike as having lost his employment. 35
Moreover, an illegal strike which, more often than not, brings about unnecessary economic disruption and
chaos in the workplace should not be countenanced by a relaxation of the sanctions prescribed by law.
The union officers are, therefore, not entitled to any relief.
However, the above disquisition is now considered moot and academic and cannot be effected in view of
a manifestation filed by INPORT dated May 15, 1987. 36 In said Manifestation, it attached a Certification
by the President of the Macajalar Labor Union (MLU-FFW) to the effect that the private
respondents/remaining strikers have ceased to be members of said union. The MLU-FFW had an existing
collective bargaining agreement with INPORT containing a union security clause. Article 1, Section 2(b) of
the CBA provides:
The corporation shall discharge, dismiss or terminate any employee who may be a member of the
Union but loses his good standing with the Union and or corporation, upon proper notice of such
fact made by the latter; provided, however, . . . after they shall have received the regular
appointment as a condition for his continued employment with the corporation. . . . 37
Since private respondents (union members) are no longer members of the MLU, they cannot be
reinstated. In lieu of reinstatement, which was a proper remedy before May 1987 when they were
dismissed from the union, we award them separation pay. We find that to award one month salary for
every year of service until 1985, after April of which year they no longer formed part of INPORT's
productive work force partly through their own fault, is a fair settlement.
Finally, there is no merit in INPORT's statement that a Resolution of the NLRC cannot be modified upon
reconsideration after the lapse of an unreasonable period of time. Under the present circumstances, a
period of eleven months is not an unreasonable length of time. The Resolution of the public respondent
dated January 14, 1991 did not acquire finality in view of the timely filing of a motion for reconsideration.
Hence, the Commission's modified Resolution issued on December 12, 1991 is valid and in accordance
with law.
In sum, reinstatement and backwages or, if no longer feasible, separation pay, can only be granted if
sufficient bases exist under the law, particularly after a showing of illegal dismissal. However, while the
union members may thus be entitled under the law to be reinstated or to receive separation pay, their
expulsion from the union in accordance with the collective bargaining agreement renders the same
impossible.
The NLRC's award of separation pay as "equitable relief" and P1,000.00 as compensation should be
deleted, these being incompatible with our findings detailed above.
WHEREFORE, from the foregoing premises, the petition in G.R. No. 103560 ("Gold City Integrated Port
Service Inc. v. National Labor Relations Commission, et al.") is GRANTED. One month salary for each
year of service until 1985 is awarded to private respondents who were not union officers as separation
pay. The petition in G.R. No. 103599 ("Adelo Ebuna, et al. v. National Labor Relations Commission, et
al.") is DISMISSED for lack of merit. No costs.
SO ORDERED.

G.R. No. L-37662 August 30, 1974

RADIO COMMUNICATIONS OF THE PHILIPPINES, INC. (RCPI), petitioner,
vs.
PHILIPPINE COMMUNICATIONS ELECTRONICS & ELECTRICITY WORKERS' FEDERATION (FCWF),
RADIO COMMUNICATIONS OF THE PHILIPPINES, INC. EMPLOYEES UNION (RCPIEU) COURT OF
INDUSTRIAL RELATIONS (CIR) and SPECIAL SHERIFF OF THE COURT OF INDUSTRIAL
RELATIONS, respondents.
Vicente R. Acsay for petitioner. Ceferino R. Magat for respondent Federation (FCWF). Ricardo L. Moldez for
respondent Union (RCPIEU).
Jose K. Manguiat, Jr. for respondent Court.

FERNANDO, J.:pp
The deficiency of this petition, rather marked in character, seeking as it does to set aside an alias writ of execution
of a return-to-work order of respondent Court Of Industrial Relations, 1 issued as far back as 1968, was sought to
be remedied by the invocation of Presidential Decree No. 2l. 2 This is shown in its prefatory statement: "Aside from
the far reaching effects a decision on the issues ventilated here will have on future cases, this case has important
implications because it involves the application and reconciliation of the provisions of Presidential Decree No. 21
in relation to the enforcement and execution of a "return to work" order, subject matter of this petition." 3 The
reliance is misplaced. It is to misread what it provides and to lose sight of what it seeks to attain. Precisely the
norm therein set forth assures further protection to labor. It certainly would stultify its purpose if it can be utilized
as a weapon against the very employees, who for a period of six years had been denied what was granted them
by an order, which on its face was immediately executory. The petition must fail.
The undisputed facts would dislose why stress was laid on the aforesaid Presidential Decree. It has all the
appearances of a last-ditch attempt. From the very petition itself, it may be gleaned that as far back as September
19, 1967, respondent Philippine Communications Electronics and Electricity Workers' Federation presented to the
petitioner a set of proposals to be embodied in a collective bargaining agreement. As the response was negative,
the main ground being that there was already an existing collective labor contract, an impasse resulted. It was
sought to be resolved by the Bureau of Labor Relations of the Department of Labor acting as conciliator. The
attempt was unsuccessful. 4 A strike was declared on November 17, 1967. The respondent Court took over as
there was an element of an unfair labor practice. In addition, on January 3, 1968, the Secretary of Labor sent a
communication to respondent Court endorsing the labor dispute under Section 16(c) of the Minimum Wage
Law. 5 There was on February 15, 1968 a motion filed by respondent labor Union seeking an order of
reinstatement pending the resolution of the case on the merits. It was granted by respondent Court in a resolution
of April 23, 1968. 6 Apparently, the return-to-work order was not complied with, as on December 27, 1969, a writ of
execution was issued by the Clerk of Court of respondent Court requiring the reinstatement of the strikers without
loss of seniority. 7 Various legal moves were further resorted to by petitioner with the result of further delaying the
implementation of the return-to-work order. 8 That led to the issuance of the order of February 15, 1973, where it
took note of the obvious inability of respondent labor union to submit documentary exhibits in support of the
objection to the reinstatement, with the additional period of grace to do so until February 3, 1973, within which to
submit his offer of exhibits in writing and the counsel for now respondent union three days after receipt of the offer
in writing within which to file his objections. Then the order continued: "Considering that February 3, 1973 had
already lapsed without respondents having as yet submitted its offer of exhibits, despite the so many chances
given to it, there is now valid reason to grant the urgent motion of petitioner." 9 The case was thus deemed
submitted for resolution. Then came the resolution of October 5, 1973 which is the basis of the alias writ of
execution. Its dispositive portion reads as follows: "[Wherefore], the employees numbering 167, each one named
in the dispositive portion of the above report from pp. 11 to 14 hereof, are those who struck against the company
on November 17, 1967 and who are referred to in the Resolution issued on April 23, 1968, and who should be readmitted to their respective work during the pendency of this case. The Clerk of Court is hereby directed to issue
immediately an alias and/or amended writ of execution incorporating therein the names of the aforementioned
strikers." 10 A bare recital of the above facts renders undeniable the far-from-commendable efforts of petitioner to

set at naught a return-to-work order. Considering that it is of a peremptory character and that its execution was
long overdue, the challenged actuation of respondent Court had all the earmarks of legality. Nor should the
invocation of Presidential Decree No. 21 change matters any. As earlier pointed out, the misinterpretation sought
to be fastened by petitioner on it would frustrate the salutary objective of an executive determination to foster
further the welfare of labor. This petition, as made mention of at the outset, must fail.
1. The core of the controversy is the enforcement of a return-to-work order pending the final outcome of a case
with respondent Court. It is, in the categorical language of Chief Justice Makalintal, speaking for the Court
in Philippine Air Lines Employees' Association v. Philippine Air Lines, Inc., 11 immediately effective and executory,
notwithstanding the fact that a motion for its reconsideration has been filed." 12 He cited in support of the above
view the cases of Bachrach Transportation Company, Inc. v. Rural Transit Shop Employees
Association, 13 Philippine Long Distance Telephone Company v. Free Telephone Workers Union, 14 and Philippine
Association of Free Labor Unions v. Salvador. 15 Its very nature, according to him, "lends itself to no other
construction." 16 In the Philippine Air Lines Employees Association v. Philippine Air Lines, Inc., case, there was a
Presidential certification. It does not call for a different conclusion, just because this case lacks that feature. In the
recently decided Philippine American Management Company, Inc. v. Philippine American Management
Employees Association, 17 it was made clear that the certification need not be presidential but could proceed from
the Secretary of Labor in accordance with his powers under the Minimum Wage Law. So it happened in this case.
The attempt to cast doubt therefore on the validity of the alias writ of execution is doomed to futility. What was
done by respondent Court was precisely to accord respect to authoritative pronouncements of this Tribunal.
2. Petitioner would allege, too late, defenses that go into the merits. Even assuming their plausibility, it would be to
lose sight of the fact that the return-to-work order was temporary in character pending the final outcome of a
controversy. It would be again to disregard controlling precedents if, as petitioner would urge on respondent
Court, the return-to-work order failed to take into consideration what it was pleased to call the termination of
employment of some of those therein covered. For it has been the constant holding of this Tribunal from the
leading case of Rex Taxicab Company v. Court of Industrial Relations, 18 that there can be no inference of
separation from the service arising from the mere fact of participation in a strike. As was stressed by Justice
Laurel: "With reference to the contention that the drivers in question, by declaring a strike, either voluntarily
ceased to be employees of the petitioner or gave just cause for their separation, it need only be stated that the
declaration of a strike does not amount to a renunciation of the employment relation ... ." 19 In affirming the above
principle, he cited two American Supreme Court decisions: National Labor Relations Board v. Mackay Radio and
Telegraph Co. 20 and National Labor Relations v. Forestall Metallurgical Corporation. 21 Since then, the doctrine
has been reiterated time and time again. 22 3. The flimsy and insubstantial character of the petition is thus
exposed. It sought to escape the fate thus foreordained by inviting the attention of this Tribunal to what it referred
to as legal complications arising from the enforcement of the writ of execution when considered in connection with
Presidential Decree No. 21. 23 After noting that it had to get replacements during the pendency of this case, now
still unresolved after five long years, it cited Section 11 of Presidential Decree No. 21: "No employer may shut
down his establishment or dismiss or terminate the services of regular employees with at least one year of service
without the written clearance of the Secretary of Labor." It would thus be faced, according to its petition, "with the
legal problem of being exposed to violating the provisions of said decree. This is so, because in the process of
complying immediately with the alias writ of execution, for every number of petitioners who shall be reinstated to
their former positions, the corresponding number of employees who are now holding such positions will be laid off.
And laying off or dismissals cannot be done without the written clearance of the Secretary of Labor. It is foreseen
also that written clearance shall treat of individual cases of employees to be laid off. The process therefore will
involve the [employee] presenting himself to be returned to work, and the securing of the written clearance for the
dismissal of the employee whom he will replace." 24 It would be hard put, according to it, to make a choice
between a possible charge for contempt on the one hand, and arrest and detention on the other, if it would appear
that there was a violation of Presidential Decree No. 21. The dilemma is more apparent than real. There is no
conflict between the aforesaid presidential decree and the return-to-work order. This is not the occasion to pass
upon the possible adverse effects, if any, on the situation of the replacements. It might be mentioned that under
the circumstances, their tenure could be made to depend on the outcome of the pending case and whatever valid
orders may be issued in the meanwhile by respondent Court. 25 At any rate, it goes without saying that whatever
rights they have must be respected. It certainly does not rule out giving force and effect to an order of the labor
tribunal, unfortunately until now disregarded. Even on the assumption, then, that difficulties would be attendant on
the faithful observance of the return-to-work order, petitioner has nobody to became but itself. As far back as April
23, 1968, its obligation was clear Instead of yielding obedience, it employed dilatory tactics to delay its
implementation. It cannot thereafter just simply fold its hands and assert that it still should be allowed to persist in
conduct marked by obstinacy. it could amount, if it were otherwise, to a party benefiting from its own defiance of a
lawful order.

Nor is this the only objection to such a contention reached by petitioner. It could be that it is not fully cognizant of
the pernicious consequences which it would spawn if accorded acceptance. A presidential decree intended to
ameliorate still further the conditions of labor would be subjected to an interpretation not for its benefit but to
enable an employer to continue with a conduct that cannot be characterized as other than a disdainful indifference
to a valid order. If, as seems to be implied in its petition, it is likewise concerned with the fate of the replacements,
there is nothing to prevent it from continuing their employment. That would be, in a way, to atone for its
intransigence. What is more, it would be to accord genuine respect for the intent of Presidential Decree No. 21.
What cannot be overemphasized is that such a decree which has received the imprimatur of the present
Constitution 26 in consonance with the much more detailed provision therein contained, intended to make a reality
of governmental efforts to, protect labor. It is worded thus:" The State shall afford protection to labor, promote full
employment and equality in employment, ensure equal work opportunities regardless of sex, race, or creed, and
regulate the relations between workers and employers. The State shall assure the rights of workers to selforganization, collective bargaining, security of tenure, and just and humane conditions of work. The State may
provide for compulsory arbitration." 27
WHEREFORE, the petition for certiorari is dismissed. This decision is executory. Respondent Court should take
the necessary steps to implement this decision with all promptness and dispatch. Costs against petitioner.
G.R. No. L-54334 January 22, 1986
KIOK LOY, doing business under the name and style SWEDEN ICE CREAM PLANT, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC) and PAMBANSANG KILUSAN NG PAGGAWA
(KILUSAN), respondents.
Ablan and Associates for petitioner.
Abdulcadir T. Ibrahim for private respondent.

CUEVAS, J.:
Petition for certiorari to annul the decision 1 of the National Labor Relations Commission (NLRC) dated July 20,
1979 which found petitioner Sweden Ice Cream guilty of unfair labor practice for unjustified refusal to bargain, in
violation of par. (g) of Article 249 2 of the New Labor Code, 3 and declared the draft proposal of the Union for a
collective bargaining agreement as the governing collective bargaining agreement between the employees and
the management.
The pertinent background facts are as follows:
In a certification election held on October 3, 1978, the Pambansang Kilusang Paggawa (Union for short), a
legitimate late labor federation, won and was subsequently certified in a resolution dated November 29, 1978 by
the Bureau of Labor Relations as the sole and exclusive bargaining agent of the rank-and-file employees of
Sweden Ice Cream Plant (Company for short). The Company's motion for reconsideration of the said resolution
was denied on January 25, 1978.
Thereafter, and more specifically on December 7, 1978, the Union furnished 4 the Company with two copies of its
proposed collective bargaining agreement. At the same time, it requested the Company for its counter proposals.
Eliciting no response to the aforesaid request, the Union again wrote the Company reiterating its request for
collective bargaining negotiations and for the Company to furnish them with its counter proposals. Both requests
were ignored and remained unacted upon by the Company.
Left with no other alternative in its attempt to bring the Company to the bargaining table, the Union, on February
14, 1979, filed a "Notice of Strike", with the Bureau of Labor Relations (BLR) on ground of unresolved economic
issues in collective bargaining. 5

Conciliation proceedings then followed during the thirty-day statutory cooling-off period. But all attempts towards
an amicable settlement failed, prompting the Bureau of Labor Relations to certify the case to the National Labor
Relations Commission (NLRC) for compulsory arbitration pursuant to Presidential Decree No. 823, as amended.
The labor arbiter, Andres Fidelino, to whom the case was assigned, set the initial hearing for April 29, 1979. For
failure however, of the parties to submit their respective position papers as required, the said hearing was
cancelled and reset to another date. Meanwhile, the Union submitted its position paper. The Company did not,
and instead requested for a resetting which was granted. The Company was directed anew to submit its financial
statements for the years 1976, 1977, and 1978.
The case was further reset to May 11, 1979 due to the withdrawal of the Company's counsel of record, Atty.
Rodolfo dela Cruz. On May 24, 1978, Atty. Fortunato Panganiban formally entered his appearance as counsel for
the Company only to request for another postponement allegedly for the purpose of acquainting himself with the
case. Meanwhile, the Company submitted its position paper on May 28, 1979.
When the case was called for hearing on June 4, 1979 as scheduled, the Company's representative, Mr. Ching,
who was supposed to be examined, failed to appear. Atty. Panganiban then requested for another postponement
which the labor arbiter denied. He also ruled that the Company has waived its right to present further evidence
and, therefore, considered the case submitted for resolution.
On July 18, 1979, labor arbiter Andres Fidelino submitted its report to the National Labor Relations Commission.
On July 20, 1979, the National Labor Relations Commission rendered its decision, the dispositive portion of which
reads as follows:
WHEREFORE, the respondent Sweden Ice Cream is hereby declared guilty of unjustified refusal
to bargain, in violation of Section (g) Article 248 (now Article 249), of P.D. 442, as amended.
Further, the draft proposal for a collective bargaining agreement (Exh. "E ") hereto attached and
made an integral part of this decision, sent by the Union (Private respondent) to the respondent
(petitioner herein) and which is hereby found to be reasonable under the premises, is hereby
declared to be the collective agreement which should govern the relationship between the parties
herein.
SO ORDERED. (Emphasis supplied)
Petitioner now comes before Us assailing the aforesaid decision contending that the National Labor Relations
Commission acted without or in excess of its jurisdiction or with grave abuse of discretion amounting to lack of
jurisdiction in rendering the challenged decision. On August 4, 1980, this Court dismissed the petition for lack of
merit. Upon motion of the petitioner, however, the Resolution of dismissal was reconsidered and the petition was
given due course in a Resolution dated April 1, 1981.
Petitioner Company now maintains that its right to procedural due process has been violated when it was
precluded from presenting further evidence in support of its stand and when its request for further postponement
was denied. Petitioner further contends that the National Labor Relations Commission's finding of unfair labor
practice for refusal to bargain is not supported by law and the evidence considering that it was only on May 24,
1979 when the Union furnished them with a copy of the proposed Collective Bargaining Agreement and it was
only then that they came to know of the Union's demands; and finally, that the Collective Bargaining Agreement
approved and adopted by the National Labor Relations Commission is unreasonable and lacks legal basis.
The petition lacks merit. Consequently, its dismissal is in order.
Collective bargaining which is defined as negotiations towards a collective agreement, 6 is one of the democratic
frameworks under the New Labor Code, designed to stabilize the relation between labor and management and to
create a climate of sound and stable industrial peace. It is a mutual responsibility of the employer and the Union
and is characterized as a legal obligation. So much so that Article 249, par. (g) of the Labor Code makes it an
unfair labor practice for an employer to refuse "to meet and convene promptly and expeditiously in good faith for
the purpose of negotiating an agreement with respect to wages, hours of work, and all other terms and conditions
of employment including proposals for adjusting any grievance or question arising under such an agreement and
executing a contract incorporating such agreement, if requested by either party.

While it is a mutual obligation of the parties to bargain, the employer, however, is not under any legal duty to
initiate contract negotiation. 7 The mechanics of collective bargaining is set in motion only when the following
jurisdictional preconditions are present, namely, (1) possession of the status of majority representation of the
employees' representative in accordance with any of the means of selection or designation provided for by the
Labor Code; (2) proof of majority representation; and (3) a demand to bargain under Article 251, par. (a) of the
New Labor Code . ... all of which preconditions are undisputedly present in the instant case.
From the over-all conduct of petitioner company in relation to the task of negotiation, there can be no doubt that
the Union has a valid cause to complain against its (Company's) attitude, the totality of which is indicative of the
latter's disregard of, and failure to live up to, what is enjoined by the Labor Code to bargain in good faith.
We are in total conformity with respondent NLRC's pronouncement that petitioner Company is GUILTY of unfair
labor practice. It has been indubitably established that (1) respondent Union was a duly certified bargaining agent;
(2) it made a definite request to bargain, accompanied with a copy of the proposed Collective Bargaining
Agreement, to the Company not only once but twice which were left unanswered and unacted upon; and (3) the
Company made no counter proposal whatsoever all of which conclusively indicate lack of a sincere desire to
negotiate. 8 A Company's refusal to make counter proposal if considered in relation to the entire bargaining
process, may indicate bad faith and this is specially true where the Union's request for a counter proposal is left
unanswered. 9 Even during the period of compulsory arbitration before the NLRC, petitioner Company's approach
and attitude-stalling the negotiation by a series of postponements, non-appearance at the hearing conducted, and
undue delay in submitting its financial statements, lead to no other conclusion except that it is unwilling to
negotiate and reach an agreement with the Union. Petitioner has not at any instance, evinced good faith or
willingness to discuss freely and fully the claims and demands set forth by the Union much less justify its
opposition thereto. 10
The case at bar is not a case of first impression, for in the Herald Delivery Carriers Union (PAFLU) vs. Herald
Publications 11the rule had been laid down that "unfair labor practice is committed when it is shown that the
respondent employer, after having been served with a written bargaining proposal by the petitioning Union, did not
even bother to submit an answer or reply to the said proposal This doctrine was reiterated anew in Bradman vs.
Court of Industrial Relations 12 wherein it was further ruled that "while the law does not compel the parties to reach
an agreement, it does contemplate that both parties will approach the negotiation with an open mind and make a
reasonable effort to reach a common ground of agreement
As a last-ditch attempt to effect a reversal of the decision sought to be reviewed, petitioner capitalizes on the
issue of due process claiming, that it was denied the right to be heard and present its side when the Labor Arbiter
denied the Company's motion for further postponement.
Petitioner's aforesaid submittal failed to impress Us. Considering the various postponements granted in its behalf,
the claimed denial of due process appeared totally bereft of any legal and factual support. As herein earlier stated,
petitioner had not even honored respondent Union with any reply to the latter's successive letters, all geared
towards bringing the Company to the bargaining table. It did not even bother to furnish or serve the Union with its
counter proposal despite persistent requests made therefor. Certainly, the moves and overall behavior of
petitioner-company were in total derogation of the policy enshrined in the New Labor Code which is aimed
towards expediting settlement of economic disputes. Hence, this Court is not prepared to affix its imprimatur to
such an illegal scheme and dubious maneuvers.
Neither are WE persuaded by petitioner-company's stand that the Collective Bargaining Agreement which was
approved and adopted by the NLRC is a total nullity for it lacks the company's consent, much less its argument
that once the Collective Bargaining Agreement is implemented, the Company will face the prospect of closing
down because it has to pay a staggering amount of economic benefits to the Union that will equal if not exceed its
capital. Such a stand and the evidence in support thereof should have been presented before the Labor Arbiter
which is the proper forum for the purpose.
We agree with the pronouncement that it is not obligatory upon either side of a labor controversy to precipitately
accept or agree to the proposals of the other. But an erring party should not be tolerated and allowed with
impunity to resort to schemes feigning negotiations by going through empty gestures. 13 More so, as in the instant
case, where the intervention of the National Labor Relations Commission was properly sought for after
conciliation efforts undertaken by the BLR failed. The instant case being a certified one, it must be resolved by the
NLRC pursuant to the mandate of P.D. 873, as amended, which authorizes the said body to determine the
reasonableness of the terms and conditions of employment embodied in any Collective Bargaining Agreement. To

that extent, utmost deference to its findings of reasonableness of any Collective Bargaining Agreement as the
governing agreement by the employees and management must be accorded due respect by this Court.
WHEREFORE, the instant petition is DISMISSED. The temporary restraining order issued on August 27, 1980, is
LIFTED and SET ASIDE.
No pronouncement as to costs.
SO ORDERED.

G.R. No. 93983 June 29, 1992

DAVAO INTEGRATED PORT AND STEVEDORING SERVICES CORPORATION, petitioner,
vs.
ALFREDO C. OLVIDA IN HIS CAPACITY AS VOLUNTARY ARBITRATOR, AND THE ASSOCIATION OF
TRADE UNIONS (ATU-TUCP)., respondents.

GRIO-AQUINO, J.:p
This petition for certiorari with prayer for the issuance of a temporary restraining order impugns the Decision
dated May 19, 1990 of the Voluntary Arbitrator, Alfredo C. Olvida, in "Association or Trade Unions (ATU-TUCP) vs.
Davao Integrated Port and Stevedoring Services Corporation" (Case No. AC-220-RBXI-03-001-90 in the National
Conciliation and Mediation Board, Regional Branch XI. Davao City).
The controversy centers on the interpretation of two provisions of the five-year Collective Bargaining Agreement
(effective April 15, 1989 up to April 14, 1994) between the petitioner, Davao Integrated Port and Stevedoring
Services Corporation (or "DIPSSC"), and the respondent, Association of Trade Unions [ATU-TUCP] (the Union,
for short). Those provisions are:
1. ARTICLE VIII SICK, VACATION AND EMERGENCY LEAVES.
Sec. 4 Emergency Leaves. The Company agrees to grant a maximum or six
(6) days Emergency Leave with pay per calendar year to all regular field workers,
covered by this agreement who have rendered at least six months of service
(including overtime) per calendar year, are members of the Regular Labor Pool,
upon prior approval by the company. Said Emergency Leave is not cumulative
(sic) nor commutable." (pp. 46-47, Rollo; Emphasis supplied.)
ARTICLE XVII SPECIAL PROVISIONS.
Sec. 4 Union Education and Training Fund. The Company agrees to contribute
twelve thousand (P12,000.00) pesos per year to the Union Education and
Training Fund. (p. 48, Rollo.)

The controversy arose when petitioner, through its new Assistant General Manager Benjamin Marzo, insisted that
the above provisions are to be interpreted as:
1. Under Article VIII, Section 4 (Emergency Leave) that before the intermittent field workers
who are members of the Regular Labor Pool can avail of the six (6) days Emergency Leave
provided in this provision, the workers must have rendered at least six months of service per
calendar year regardless of their employment status (i.e., regular or probationary). Thus, all
regular (non-intermittent) field workers, who belong to the Regular Labor Pool must have
rendered at least six months of service per calendar year to be entitled to the six days Emergency
Leave Pay. Petitioner pointed out that the phrase "per calendar year" is used twice in Section 4,
the first of which modifies the word "pay" and the second modifies the phrase "who or rendered at
least six months of service." (pp. 130-131.) The entitlement and enjoyment of the emergency
leave must be strictly availed in the calendar year on which the six months service was rendered.
2. Under Article XVII, Section 4 (Union Education and Training Fund) petitioner required that
the Union should first prepare and submit a seminar program before it can avail of the Education
and Training Fund of P12,000.00 per annum.
After due hearing, respondent Arbitrator rendered a decision on May 19, 1990, upholding the union's
interpretations of Article VIII, Section 4 and Article XVII, Section 4, of the Collective Bargaining Agreement. The
dispositive portion of the decision reads:
1. The first sentence of Article VIII, Section 4 which read: "The Company agrees to grant
maximum or six (6) days Emergency Leave with pay per calendar year to all regular field
workers" refers to all non-intermittent regular field workers who reported for work everyday and
therefore the requirement of six (6) months or 1,248 hours does not apply; whereas, the next
sentences which stated the following: "covered by this agreement who have rendered at least six
months (including overtime) per calendar year, are members of the Regular Labor Pool, upon
prior approval by the company." refers to intermittent workers/members of the Regular Labor
Pool, whose work depends upon the arrival of vessels in the wharf and therefore must comply
[with] the requirement in the agreement, and so before it can avail of the six (6) days Emergency
Leave with pay must first rendered at least six months (including overtime) per calendar year.
Once the 1,248 hours (6 months) is complied subject workers can avail the benefit anytime an
Emergency occurred and the same condition of 1,248 hours shall no longer apply in the
succeeding calendar years.
2. With respect to the other provision of Article XVII, Section 4 of the new CBA Union
Education and Training Fund since the language of the agreement is clear and simple the
respondent company shall comply [with] its obligation by contributing to the Union Education and
Training Fund the amount of Twelve Thousand (P12,000.00) pesos per year at the beginning of
each and every year and/or P1,000.00 at the end of each and every month during the lifetime of
the CBA at the option of the respondent company. Any post signing condition impose by either or
the parties that may affect the spontaneous implementation of Article XVII, Section 4 is foreign to
the language of the contract. (pp. 139-140. Rollo.)
In this petition for certiorari, petitioner assails the respondent Arbitrator's construction of Section 4, Article VII (on
emergency leave) and Section 4, Article XVII (on the Union Education and Training Fund) of the CBA.
After deliberating on the divergent views of the parties on the aforementioned controversial provisions of the CBA,
the Court finds the petitioner's interpretation of Section 4, Article VIII (emergency leave) more logical than the
Arbitrator's and the Union's. The provision of the CBA is clear: (1) the employee must be a member of the Regular
Labor Pool; (2) he is entitled to only six (6) days emergency leave with pay per calendar year; and (3) he must
have rendered service for at least six (6) months during the year when he took his emergency leave. The
emergency leave may be staggered or it may last for any number of days as emergencies arise but the employee
is entitled only to six (6) days of emergency leave "with pay" per year. Since the emergency leave is allowed to
enable the employee to attend to an emergency in his family or household, it may be taken at any time during the
calendar year but he must render at least six months service for that year to be entitled to collect his wages for the
six (6) days of his emergency leave. Since emergencies are unexpected and unscheduled happenings, it would
be absurd to require the employee to render six (6) months service before being entitled to take a six-day

emergency leave with pay for it would mean that no emergency leave can be taken by an employee during the
first six months of a calendar year.
With regard to the provision on Union Education and Training Fund in Section 4, Article XVII of the CBA, the
petitioner's requirement that the Union submit a seminar program for each calendar year before it may claim the
company's P12,000 yearly donation to the fund, is not warranted by the terms of the CBA. The Arbitrator did not
abuse his discretion in ruling that the respondent company should comply with its obligation to contribute to the
Union Education and Training Fund the amount of Twelve Thousand (P12,000.00) pesos per year by paying said
amount to the Union at the beginning of each and every year, or contributing P1,000.00 at the end of each and
every month during the lifetime or the CBA, at the option of the company. As correctly observed by the Arbitrator,
the employer's demand for the submission of a seminar program "is foreign to the language of the contract" with
the union.
WHEREFORE, the petition for certiorari is GRANTED. Section 4, Article VIII of the CBA is interpreted to mean
that any employee who is a member of the Regular Labor Pool is entitled to six (6) days emergency leave with
pay per calendar year provided he has rendered at least six (6) months service during the year when he took his
emergency leave. The decision of the respondent Voluntary Arbitrator is AFFIRMED in other respects. No costs.
SO ORDERED.
G.R. No. L-49046 January 26, 1988
SATURNO A. VICTORIA, petitioner,
vs.
HON. AMADO G. INCIONG, DEPUTY MINISTER, and FAR EAST BROADCASTING COMPANY,
INC., respondents.

FERNAN, J.:
Petition for review of the Order of the then Acting Secretary of Labor Amado G. Inciong dated June 6, 1978, in
NLRC Case No. RB-1764-75, reversing the decision of the National Labor Relations Commission dated
November 17, 1976 and holding that, under the law and facts of the case, there was no necessity for private
respondent to obtain a clearance for the termination of petitioner's employment under Article 257 [b] of the Labor
Code, as amended, and that a mere report of such termination was sufficient, under Section 11 [f]. Rule XIV of the
Rules and Regulations implementing said Code.
Petitioner Saturno Victoria was employed on March 17, 1956 by private respondent Far East Broadcasting
Company, Incorporated as a radio transmitter operator. Sometime in July 1971, he and his co-workers organized
the Far East Broadcasting Company Employees Association. After registering their association with the then
Department of Labor, they demanded recognition of said association by the company but the latter refused on the
ground that being a non-profit, non-stock, non-commercial and religious corporation, it is not covered by Republic
Act 875, otherwise known as the Industrial Peace Act, the labor law enforced at that time.
Several conciliation meetings were held at the Department of Labor and in those meetings, the Director of Labor
Relations Edmundo Cabal advised the union members that the company could not be forced to recognize them or
to bargain collectively with them because it is a non-profit, non-commercial and religious organization.
Notwithstanding such advice, the union members led by Saturno Victoria as its president, declared a strike and
picketed the company's premises on September 6, 1972 for the purpose of seeking recognition of the labor union.
As a countermeasure, the company filed a case for damages with preliminary injunction against the strikers
before the then Court of First Instance of Bulacan docketed as Civil Case No. 750-V. Said court issued an
injunction enjoining the three-day-old strike staged against the company. The complaint was later amended
seeking to declare the strike illegal.
Upon the declaration of martial law on September 21, 1972 and the promulgation of Presidential Decree No. 21
creating the National Labor Relations Commission, the ad hoc National Labor Relations Commission took

cognizance of the strike through NLRC Case No. 0021 entitled "Far East Broadcasting Company Employees
Association, complainant versus Far East Broadcasting Company, respondent" and NLRC Case No. 0285 entitled
"Generoso Serino, complainant, versus Far East Broadcasting Company, respondent", both cases for
reinstatement due to the company's return to accept the union's offer to return to work during the pendency of the
case in the Court of First Instance.
On December 28, 1972, Arbitrator Flavio Aguas rendered a joint decision in the two cases mentioned above
recognizing the jurisdiction of the Court of First Instance of Bulacan, the dispositive portion reading as follows:
IN VIEW WHEREOF, and in the interest of justice and equity, it is hereby directed that:
1. That striking members of the Far East Broadcasting Company Employees Association return to
their respective positions in the corporation;
2. The respondent Far East Broadcasting Company Incorporated to accept back the returning
strikers without loss in rank seniority or status;
3. The workers shall return to work within [10] days from receipt of this resolution otherwise they
shall be deemed to have forfeited such right;
4. The respondent shall report compliance with this decision within fifteen [15] days from receipt
hereof.
This Order shall, however, be without prejudice to whatever decision the Court of First Instance of
Bulacan may promulgate in Civil Case No. 750-V and to the requirements the existing order may
need of people working with the mass media of communications.
IT IS SO ORDERED. 1
The decision of the arbitrator was successively appealed to the ad hoc National Labor Relations Commission, the
Secretary of Labor and the Office of the President of the Philippines, and was affirmed in all instances.
On April 23, 1975, the Court of First Instance of Bulacan rendered judgment, to wit:
WHEREFORE, judgment is hereby rendered:
1. Making injunction against defendants permanent;
2. Declaring that this Court has jurisdiction to try and hear the instant case despite Section 2 of
Presidential Decree No. 2;
3. Declaring that plaintiff Far East Broadcasting Company is a non-profit organization since it
does not declare dividends;
4. Declaring that the strike admitted by the defendants to have been declared by them is illegal
inasmuch as it was for the purpose of compelling the plaintiff-company to recognize their labor
union which could not be legally done because the plaintiffs were not covered by Republic Act
875;
5. Declaring that the evidence presented is insufficient to show that defendants caused the
damage to the plaintiff consequent on the destruction of its relays and its antennas as well as its
transmission lines.
SO ORDERED. 2
On April 24, 1975, by virtue of the above decision, the company notified Saturno Victoria that he is dismissed
effective April 26, 1975. Thereupon, he filed Case No. RB-IV-1764 before the National Labor Relations

Commission, Regional Branch IV against the company alleging violation of article 267 of the Labor Code which
requires clearance from the Secretary of Labor for every shutdown of business establishments or dismissal of
employees. On February 27, 1976, Labor Arbiter Manuel B. Lorenzo rendered a decision in petitioner's favor
declaring the dismissal to be illegal, thereby ordering reinstatement with fun backwages. On appeal, the arbiter's
decision was aimed by the National Labor Relations Commission. But when the commission's decision was in
turn appealed to the Secretary of Labor, it was set aside and in lieu thereof the questioned Order dated June 6,
1978 was issued.
In view of its brevity and for a better understanding of the reasons behind it, We quote the disputed Order in full:
ORDER
This is an appeal by respondent from the Decision of the National Labor Relations Commission,
dated November 17, 1976.
The Commission upheld the Decision of the labor arbiter dated February 27, 1976 ordering
respondent to reinstate with full backwages herein complainant Saturno A. Victoria based on the
finding that respondent did not file any application for clearance to terminate the services of
complainant before dismissing him from his employment.
Briefly the facts of this case are as follows:
Complainant Saturno Victoria is the president of the Far East Broadcasting Company Employees
Union. On September 8, 1972, the said union declared a strike against respondent company. On
September 11, 1972, respondent filed with the Court of First Instance of Bulacan, Civil Case No.
750-V, for the issuance of an injunction and a prayer that the strike be declared illegal.
On October 24, 1972, complainant together with the other strikers filed with the ad hoc National
Labor Relations Commission Case Nos. 0021 and 0285 for reinstatement. The Arbitrator
rendered a decision in said case on December 28, 1972, wherein he ordered respondent to
reinstate complainants subject to the following condition:
"This Order shall, however, be without prejudice to whatever decision the Court
of First Instance may promulgate on Civil Case No. 750-V and to the
requirements the existing order may need of people working with the mass media
of communications."
Since said decision was affirmed by the NLRC, the Secretary of Labor, and the Office of the
President of the Philippines, complainants were reinstated pursuant thereto.
In a Decision dated April 23, 1975, in Civil Case No. 750-V, promulgated by the Court of First
Instance of Bulacan, the strike staged by herein complainant and the other strikers was declared
illegal. Based on said Decision, respondent dismissed complainant from his employment. Hence,
complainant filed the instant complaint for illegal dismissal.
Under the aforecited facts, we do not agree with the ruling of the Commission now subject of this
appeal that an application for clearance to terminate herein complainant is mandatory on the part
of respondent before terminating complainant's services. We believe that what would have been
necessary was a report as provided for under Section 11 [f] Rule XIV, Book V of the Rules and
Regulations Implementing the Labor Code. Moreover, even if an application for clearance was
flied, this Office would have treated the same as a report. Otherwise, it would render nugatory the
Decision of the Arbitrator dated December 28, 1972 in Case Nos. 0021 and 0285 which was
affirmed by the Commission, the Secretary of Labor and the Office of the President of the
Philippines, ordering his temporary reinstatement, subject to whatever Decision the CFI of
Bulacan may promulgate in Civil Case No. 750-V. It could be clearly inferred from said CFI
Decision that if the strike is declared illegal, the strikers will be considered to have lost their
employment status under the then existing laws and jurisprudence, otherwise strikers could stage
illegal strike with impunity. Since the strike was declared illegal, respondent acted in good faith
when it dispensed with the services of herein complainant.

For failure of respondent to file the necessary report and based on equitable considerations,
complainant should be granted separation pay equivalent to one-half month salary for every year
of service.
WHEREFORE, let the decision of the National Labor Relations Commission dated November 17,
1976 be, as it is hereby, set aside and a new judgment is entered, ordering respondent to give
complainant separation pay equivalent to one-half month salary for every year of service.
SO ORDERED. 3
Petitioner elevates to Us for review on certiorari the aforequoted Order seeking to persuade this Court that then
Acting Secretary of Labor Amado G. Inciong committed reversible error in holding that, under the law and facts of
this case, a mere report of the termination of the services of said petitioner was sufficient. Petitioner assigns the
following errors:
I
WHETHER OR NOT A CLEARANCE FROM THE SECRETARY OF LABOR IS STILL NECESSARY BEFORE
THE PETITIONER HEREIN COULD BE DISMISSED CONSIDERING THE RESTRICTIVE CONDITION IN THE
DECISION OF THE COMPULSORY ARBITRATOR IN NLRC CASE NOS. 0021 AND 0285.
II
WHETHER OR NOT THE DECISION OF THE COURT OF FIRST INSTANCE OF BULACAN IN CIVIL CASE NO.
750-V IPSO FACTO GAVE THE RESPONDENT COMPANY AUTHORITY TO DISMISS HEREIN PETITIONER
WITHOUT ANY CLEARANCE FROM THE SECRETARY OF LABOR. 4
The substantive law on the matter enforced during the time of petitioner's dismissal was Article 267 [b] of the
Labor Code [in conjunction with the rules and regulations implementing said substantive law.] Article 267 reads:
No employer that has no collective bargaining agreement may shut down his establishment or
dismiss or terminate the service of regular employees with at least one [1] year of service except
managerial employees as defined in this book without previous written clearance from the
Secretary of Labor.
Petitioner maintains that the abovecited provision is very clear. It does not make any distinction as to the ground
for dismissal. Whether or not the dismissal sought by the employer company is for cause, it is imperative that the
company must apply for a clearance from the Secretary of Labor.
In a recent case 5 penned by Justice Abraham F. Sarmiento promulgated on June 30, 1987, we had occasion to
rule in agreement with the findings of then Presidential Assistant for Legal Affairs Ronaldo Zamora that the
purpose in requiring a prior clearance from the Secretary of Labor in cases of shutdown or dismissal of
employees, is to afford the Secretary ample opportunity to examine and determine the reasonableness of the
request.
The Solicitor General, in relation to said pronouncement and in justification of the Acting Labor Secretary's
decision makes the following observations:
It is true that article 267 [b] of the Labor Code requires that before any business establishment is
shut down or any employee is dismissed, written clearance from the Secretary of Labor must first
be obtained. It is likewise true that in the case of petitioner, there was no written clearance in the
usual form. But while there may not have been strict compliance with Article 267 there was
substantial compliance. The Secretary of Labor twice manifested his conformity to petitioner's
dismissal.
The first manifestation of acquiescence by the Secretary of Labor to the dismissal of petitioner
was his affirmance of the decision of the arbitrator in NLRC Case Nos. 0021 and 0285. The
arbitrator ordered the reinstatement of the strikers but subject to the decision of the CFI of

Bulacan in Civil Case No. 750-V. The Secretary of Labor affirmed the decision of the arbitrator. In
effect, therefore, the Secretary of Labor issued a carte blanche to the CFI of Bulacan to either
dismiss or retain petitioner.
The second manifestation was his decision in NLRC Case No. RB-IV-1764-65 wherein he said
that clearance for the dismissal of petitioner was not required, but only a report; that even if an
application for clearance was filed, he would have treated it as a mere report. While this is
not prior clearance in the contemplation of Article 267, it is at least a ratification of the dismissal of
petitioner. 6
We agree with the Solicitor General. Technically speaking, no clearance was obtained by private respondent from
the then Secretary of Labor, the last step towards full compliance with the requirements of law on the matter of
dismissal of employees. However, the rationale behind the clearance requirement was fully met. The Secretary of
Labor was apprised of private respondent's intention to terminate the services of petitioner. This in effect is an
application for clearance to dismiss petitioner from employment. The affirmance of the restrictive condition in the
dispositive portion of the labor arbiter's decision in NLRC Case Nos. 0021 and 0285 by the Secretary of Labor
and the Office of the President of the Philippines, signifies a grant of authority to dismiss petitioner in case the
strike is declared illegal by the Court of First Instance of Bulacan. Consequently and as correctly stated by the
Solicitor General, private respondent acted in good faith when it terminated the employment of petitioner upon a
declaration of illegality of the strike by the Court of First Instance of Bulacan. Moreover, the then Secretary of
Labor manifested his conformity to the dismissal, not once, but twice. In this regard, the mandatory rule on
clearance need not be applied.
The strike staged by the union in 1972 was a futile move. The law then enforced, Republic Act 875 specifically
excluded respondent company from its coverage. Even if the parties had gone to court to compel recognition, no
positive relief could have been obtained since the same was not sanctioned by law. Because of this, there was no
necessity on the part of private respondent to show specific acts of petitioner during the strike to justify his
dismissal.
This is a matter of responsibility and of answerability. Petitioner as a union leader, must see to it that the policies
and activities of the union in the conduct of labor relations are within the precepts of law and any deviation from
the legal boundaries shall be imputable to the leader. He bears the responsibility of guiding the union along the
path of law and to cause the union to demand what is not legally demandable, would foment anarchy which is a
prelude to chaos.
Petitioner should have known and it was his duty to impart this imputed knowledge to the members of the union
that employees and laborers in non- profit organizations are not covered by the provisions of the Industrial Peace
Act and the Court of Industrial Relations [in the case at bar, the Court of First Instance] has no jurisdiction to
entertain petitions of labor unions or organizations of said non-profit organizations for certification as the exclusive
bargaining representatives of said employees and laborers. 7
As a strike is an economic weapon at war with the policy of the Constitution and the law at that time, a resort
thereto by laborers shall be deemed to be a choice of remedy peculiarly their own and outside of the statute, and
as such, the strikers must accept all the risks attendant upon their choice. If they succeed and the employer
succumbs, the law will not stand in their way in the enjoyment of the lawful fruits of their victory. But if they fail,
they cannot thereafter invoke the protection of the law for the consequences of their conduct unless the right they
wished vindicated is one which the law will, by all means, protect and enforce. 8
We further agree with the Acting Secretary of Labor that what was required in the case of petitioner's dismissal
was only a report as provided under Section 11 [f] of Rule XIV of the Rules and Regulations implementing the
Labor Code which provides:
Every employer shall submit a report to the Regional Office in accordance with the form
presented by the Department on the following instances of termination of employment,
suspension, lay-off or shutdown which may be effected by the employer without prior clearance
within five [5] days thereafter:
xxx xxx xxx

[f] All other terminations of employment, suspension, lay-offs or shutdowns, not otherwise
specified in this and in the immediately preceding sections.
To hold otherwise would render nugatory the conditions set forth in the decision of Labor Arbiter Aguas on the
basis of which petitioner was temporarily reinstated.
Inasmuch as there was a valid and reasonable ground to dismiss petitioner but no report as required by the
implementing rules and regulations of the Labor Code was filed by respondent Company with the then
Department of Labor, petitioner as held by the Acting Secretary of Labor, is entitled to separation pay equivalent to
one-half month salary for every year of service.
WHEREFORE, the petition is dismissed. The decision of the acting Secretary of Labor is AFFIRMED in toto.
SO ORDERED.