LABOR CASE DIGEST 4-18-2017

EMPLOYEES UNION OF BAYER V. BAYER PHILIPPINES (G.R. NO. 162943 :

DECEMBER 6, 2010)

FACTS: Petitioner Employees Union of Bayer Philippines (EUBP) is the exclusive

bargaining agent of all rank-and-file employees of Bayer Philippines. During
negotiations, EUBP rejected Bayers proposal which resulted in a bargaining
deadlock. Subsequently, EUBP staged a strike, prompting the Secretary of Labor to
assume jurisdiction over the dispute. Pending resolution of the dispute, respondent
Remigio and 27 other union members accepted Bayers wage-increase proposal
without any authority from their union leaders. The DOLE Secretary issued an
arbitral award ordering EUBP and Bayer to execute a CBA.

Meanwhile, the rift between Facundos EUBP leadership and Remigios group
broadened. Six months from the signing of the new CBA, Remigio solicited
signatures from union members in support of a resolution containing the decision of
the signatories to: (1) disaffiliate from FFW, (2) rename the union as Reformed
Employees Union of Bayer Philippines (REUBP), (3) adopt a new constitution and by-
laws for the union, (4) abolish all existing officer positions in the union and elect a
new set of interim officers, and (5) authorize REUBP to administer the CBA between
EUBP and Bayer. The said resolution was signed by 147 of the 257 local union
members.

Both groups sought recognition from Bayer and demanded remittance of the union
dues collected from its rank-and-file members. Bayer responded by deciding not to
deal with either of the two groups, and by placing the union dues collected in a trust
account until the conflict between the two groups is resolved. EUBP filed a
complaint for unfair labor practice (first ULP complaint) against Bayer for non-
remittance of union dues. While the ULP case was still pending and despite EUBPs
repeated request for a grievance conference, Bayer decided to turn over the
collected union dues to REUBP.

Aggrieved by the said development, EUBP lodged a complaint against Remigios

group before the DOLE, praying for their expulsion from EUBP for commission of
"acts that threaten the life of the union. Labor Arbiter dismissed the first ULP
complaint for lack of jurisdiction. Petitioners filed a second ULP complaint against
herein respondents. Petitioners complained that Bayer refused to remit the collected
union dues to EUBP despite several demands sent to the management and that the
latter opted to negotiate instead with Remigios group.

REUBP and Bayer agreed to sign a new CBA. In response, petitioners immediately
filed an urgent motion for the issuance of a restraining order/injunction before the
NLRC and the Labor Arbiter against respondents. Labor Arbiter dismissed EUBPs
second ULP complaint for lack of jurisdiction. Aggrieved by the Labor Arbiters
decision to dismiss the second ULP complaint, petitioners appealed the said
decision, but the NLRC denied the appeal. The CA sustained both the Labor Arbiter
and the NLRCs rulings.
ISSUE: Whether or not the act of the management of Bayer in dealing and
negotiating with Remigios splinter group despite its validly existing CBA with EUBP
can be considered unfair labor practice.

HELD: The petition is partly meritorious. It must be remembered that a CBA is

entered into in order to foster stability and mutual cooperation between labor and
capital. An employer should not be allowed to rescind unilaterally its CBA with the
duly certified bargaining agent it had previously contracted with, and decide to
bargain anew with a different group if there is no legitimate reason for doing so and
without first following the proper procedure. If such behavior would be tolerated,
bargaining and negotiations between the employer and the union will never be
truthful and meaningful, and no CBA forged after arduous negotiations will ever be
honored or be relied upon.

This is the reason why it is axiomatic in labor relations that a CBA entered into by a
legitimate labor organization that has been duly certified as the exclusive
bargaining representative and the employer becomes the law between them.
Additionally, in the Certificate of Registration issued by the DOLE, it is specified that
the registered CBA serves as the covenant between the parties and has the force
and effect of law between them during the period of its duration. Compliance with
the terms and conditions of the CBA is mandated by express policy of the law
primarily to afford protection to labor and to promote industrial peace. Thus, when a
valid and binding CBA had been entered into by the workers and the employer, the
latter is behooved to observe the terms and conditions thereof bearing on union
dues and representation. If the employer grossly violates its CBA with the duly
recognized union, the former may be held administratively and criminally liable for
unfair labor practice.

C. ALCANTARA & SONS V. CA, ET AL. (G.R. NO. 155109 : MARCH 14, 2012)

FACTS: The negotiation between CASI and the Union on the economic provisions of
the CBA ended in a deadlock prompting the Union to stage a strike, however the
strike was later declared by the LA to be illegal in violation of the CBAs no strike-no
lockout provision. Consequently, the Union officers were deemed to have forfeited
their employment with the company and made them liable for actual damages plus
interest and attorneys fees, while the Union members were ordered to be
reinstated without backwages there being no proof that they actually committed
illegal acts during the strike.

Notwithstanding the provision of the Labor Code mandating that the reinstatement
aspect of the decision be immediately executory, the LA refused to reinstate the
dismissed Union members. On November 8, 1999, the NLRC affirmed the LA
decision insofar as it declared the strike illegal and ordered the Union officers
dismissed from employment and liable for damages but modified the same by
considering the Union members to have been validly dismissed from employment
for committing prohibited and illegal acts.
On petition for certiorari, the CA annulled the NLRC decision and reinstated that of
the LA. Aggrieved, CASI, the Union and the Union officers and members elevated
the matter to the Court.

During the pendency of the cases, the affected Union members who were ordered
reinstated filed with the LA a motion for reinstatement pending appeal and the
computation of their backwages. However the LA awarded separation pay and other
benefits. On appeal, the NLRC denied the Union members claim for separation pay,
accrued wages and other benefits. Upon elevation to the CA, the appellate court
held that reinstatement pending appeal applies only to illegal dismissal cases under
Article 223 of the Labor Code and not to cases under Article 263. Hence, the
petition by the Union and its officers and members in G.R. No. 179220.

The Court agreed with the CA on the illegality of the strike as well as the
termination of the Union officers, but disagreed with the CA insofar as it affirmed
the reinstatement of the Union members. The Court, instead, sustained the
dismissal not only of the Union officers but also the Union members who, during the
illegal strike, committed prohibited acts by threatening, coercing, and intimidating
non-striking employees, officers, suppliers and customers; obstructing the free
ingress to and egress from the company premises; and resisting and defying the
implementation of the writ of preliminary injunction issued against the strikers.

The Court further held that the terminated Union members, who were ordered
reinstated by the LA, should have been immediately reinstated due to the
immediate executory nature of the reinstatement aspect of the LA decision. In view,
however, of CASIs failure to reinstate the dismissed employees, the Court ordered
CASI to pay the terminated Union members their accrued backwages from the date
of the LA decision until the eventual reversal by the NLRC of the order of
reinstatement. In addition to the accrued backwages, the Court awarded separation
pay equivalent to one-half month salary for every year of service to the company up
to the date of their termination. Hence, this motion for partial reconsideration by the
petitioner.

ISSUE:

(1) Whether or not the petitioner is liable to pay the accrued wages of the
dismissed employees?
(2) Whether or not the Court erred in awarding separation pay to the dismissed
union officers and employees?

HELD: The motion for partial reconsideration is partly granted.

For the 1st issue, Article 264 (a) of the Labor Code provides for the liabilities of the
Union officers and members participating in illegal strikes and/or committing illegal
acts. Thus, the said provision sanctions the dismissal of a Union officer who
knowingly participates in an illegal strike or who knowingly participates in the
commission of illegal acts during a lawful strike. In case at bar, the Union officers
were in clear breach of the above provision of law when they knowingly participated
in the illegal strike.
As to the Union members, the same provision of law provides that a member is
liable when he knowingly participates in the commission of illegal acts during a
strike. SC finds no reason to reverse the conclusion of the Court that CASI presented
substantial evidence to show that the striking Union members committed the
following prohibited acts: (a) They threatened, coerced, and intimidated non-striking
employees, officers, suppliers and customers;(b) They obstructed the free ingress to
and egress from the company premises; and (c) They resisted and defied the
implementation of the writ of preliminary injunction issued against the strikers.

The commission of the above prohibited acts by the striking Union members
warrants their dismissal from employment.

Records also show that the LA found the strike illegal and sustained the dismissal of
the Union officers, but ordered the reinstatement of the striking Union members for
lack of evidence showing that they committed illegal acts during the illegal strike.
This decision, however, was later reversed by the NLRC. Pursuant to Article 223of
the Labor Code and well-established jurisprudence, the decision of the LA
reinstating a dismissed or separated employee, insofar as the reinstatement aspect
is concerned, shall immediately be executory, pending appeal. The employee shall
either be admitted back to work under the same terms and conditions prevailing
prior to his dismissal or separation, or, at the option of the employee, merely
reinstated in the payroll. It is obligatory on the part of the employer to reinstate and
pay the wages of the dismissed employee during the period of appeal until reversal
by the higher court. If the employer fails to exercise the option of re-admitting the
employee to work or to reinstate him in the payroll, the employer must pay the
employees salaries during the period between the LAs order of reinstatement
pending appeal and the resolution of the higher court overturning that of the LA.

In the case at bar, CASI is liable to pay the striking Union members their accrued
wages for four months and nine days, which is the period from the notice of the LAs
order of reinstatement until the reversal thereof by the NLRC.

As for the 2nd issue, separation pay may be 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.It 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. It is oriented towards
the immediate future, the transitional period the dismissed employee must undergo
before locating a replacement job.As a general rule, when just causes for
terminating the services of an employee exist, the employee is not entitled to
separation pay because lawbreakers should not benefit from their illegal acts.The
rule, however, is subject to exceptions.

In the case at bar, not only did the Court declare the strike illegal, rather, it also
found the Union officers to have knowingly participated in the illegal strike. Worse,
the Union members committed prohibited acts during the strike. Thus, the awards
of separation pay as a form of financial assistance is deleted.

BANK OF THE PHILIPPINE ISLANDS V. BPI EMPLOYEES UNION DAVAO

CHAPTER FEDERATION OF UNIONS IN BPI UNIBANK (G.R. NO. 164301,
AUGUST 10, 2010)

FACTS: BSP approved the Articles of Merger executed by and between BPI, herein
petitioner, and Far East Bank and Trust Company (FEBTC) and was approved by the
SEC. The Articles of Merger and Plan of Merger did not contain any specific
stipulation with respect to the employment contracts of existing personnel of the
non-surviving entity which is FEBTC. Pursuant to the said Article and Plan of Merger,
all the assets and liabilities of FEBTC were transferred to and absorbed by BPI as the
surviving corporation. FEBTC employees, including those in its different branches
across the country, were hired by BPI as its own employees, with their status and
tenure recognized and salaries and benefits maintained.

ISSUE: Whether or not employees are ipso jure absorbed in a merger of the two
corporations.

HELD: The SC rules NO. Human beings are never embraced under the term assets
and liabilities. Moreover, BPIs absorption of former FEBTC employees was neither
by operation of law nor by legal consequence of contract. There was no
government regulation or law that compelled the merger of the two banks or the
absorption of the employees of the dissolved corporation by the surviving
corporation. Had there been such law or regulation, the absorption of employees
would have been mandatory on the surviving corporation. In the case at bar, the
merger was voluntarily entered into by both banks presumably for some mutually
acceptable consideration.

SC cannot uphold the reasoning that the general stipulation regarding transfer of
FEBTC assets and liabilities to BPI as set forth in the Articles of Merger necessarily
includes the transfer of all FEBTC employees into the employ of BPI and neither BPI
nor the FEBTC employees allegedly could do anything about it. Even if it is so, it
does not follow that the absorbed employees should not be subject to the terms and
conditions of employment obtaining in the surviving corporation.

Furthermore, SC believes that it is contrary to public policy to declare the former

FEBTC employees as forming part of the assets or liabilities of FEBTC that were
transferred and absorbed by BPI in the Articles of Merger. A corporation cannot
unilaterally transfer its employees to another employer like chattel. Certainly, if BPI
as an employer had the right to choose who to retain among FEBTCs employees,
FEBTC employees had the concomitant right to choose not to be absorbed by BPI.
Even though FEBTC employees had no choice or control over the merger of their
employer with BPI, they had a choice whether or not they would allow themselves to
be absorbed by BPI. Certainly nothing prevented the FEBTCs employees from
resigning or retiring and seeking employment elsewhere instead of going along with
the proposed absorption.

Employment is a personal consensual contract and absorption by BPI of a former

FEBTC employee without the consent of the employee is in violation of an
individuals freedom to contract. It would have been a different matter if there was
an express provision in the articles of merger that as a condition for the merger, BPI
was being required to assume all the employment contracts of all existing FEBTC
employees with the conformity of the employees. In the absence of such a
provision in the articles of merger, then BPI clearly had the business management
decision as to whether or not employ FEBTCs employees. FEBTC employees
likewise retained the prerogative to allow themselves to be absorbed or not;
otherwise, that would be tantamount to involuntary servitude.

EXODUS INTERNATIONAL & JAVALERA V. BISCOCHO, PEREDA, MARIANO,

BELLITA & BOBILLO (G.R. NO. 166109 : FEBRUARY 23, 2011)

FACTS: Petitioner Exodus International Construction Corporation is a duly licensed

labor contractor for the painting of residential houses, condominium units and
commercial buildings.

In the furtherance of its business, Exodus hired respondents as painters on different

dates. Guillermo, Fernando, Ferdinand, and Miguel filed a complaint for illegal
dismissal and non-payment of holiday pay, SIL pay, 13th month pay and night-shift
differential pay.

The LA rendered a decision exonerating petitioners from the charge of illegal

dismissal as respondents chose not to report for work. However, she allowed the
claims for holiday pay, service incentive leave pay and 13th month pay. Decision
was affirmed by the NLRC and the CA. They held that in a situation where the
employer has complete control over the records and could thus easily rebut any
monetary claims against it but opted not to lift any finger, the burden is on the
employer and not on the complainants.

ISSUE: Whether or not the CA erred and committed grave abuse of discretion in
ordering the reinstatement of respondents to their former positions and affirming
the award granted by the lower tribunals.

HELD: The petition is partly meritorious. In illegal dismissal cases, it is incumbent

upon the employees to first establish the fact of their dismissal before the burden is
shifted to the employer to prove that the dismissal was legal. Here, there was no
evidence that respondents were dismissed nor were they prevented from returning
to their work. It was only respondents unsubstantiated conclusion that they were
dismissed.

Clearly therefore, there was no dismissal, much less illegal, and there was also no
abandonment of job to speak of. The Labor Arbiter is therefore correct in ordering
that respondents be reinstated but without any backwages.

However, petitioners are of the position that the reinstatement of respondents to

their former positions, which were no longer existing, is impossible, highly unfair
and unjust. Petitioners are misguided. They forgot that there are two types of
employees in the construction industry. The first is referred to as project employees
or those employed in connection with a particular construction project or phase
thereof and such employment is coterminous with each project or phase of the
project to which they are assigned. The second is known as non-project employees
or those employed without reference to any particular construction project or phase
of a project. The second category is where respondents are classified.

QUIRICO LOPEZ V. ALTURAS GROUP OF COMPANIES AND/OR MARLITO UY

(G.R. NO. 191008 : APRIL 11, 2011)

FACTS: Petitioner Lopez was hired by respondent Alturas Group in 1997 as truck
driver. Sometime in November 2007, he was dismissed after he was allegedly
caught by respondents security guard in the act of attempting to smuggle out 60
kilos of scrap iron worth P840 aboard respondents Isuzu Cargo Aluminum Van that
was then assigned to him. When questioned, petitioner allegedly admitted to the
security guard that he was taking out the scrap iron of which he would make axes.
Petitioner, in compliance with the Show Cause Notice dated December 5, 2007
issued by respondent companys HRD Manager, denied the allegations by a
handwritten explanation. Finding petitioners explanation unsatisfactory, respondent
company terminated his employment by Notice of Termination effective December
14, 2007 on the grounds of loss of trust and confidence, and of violation of company
rules and regulations. In issuing the Notice, respondent company also took into
account the result of an investigation showing that petitioner had been smuggling
out its cartons which he had sold, in conspiracy with one Maritess Alaba, for his own
benefit to thus prompt it to file a criminal case for Qualified Theft against him before
RTC- Bohol. It had in fact earlier filed another criminal case for Qualified Theft
against petitioner arising from the theft of the scrap iron.

ISSUE: Whether or not petitioner was not afforded procedural due process.

HELD: SC has held that there is no violation of due process even if no hearing was
conducted, where the party was given a chance to explain his side of the
controversy. What is frowned upon is the denial of the opportunity to be heard.
Petitioner was given the opportunity to explain his side when he was informed of the
charge against him and required to submit his written explanation with which he
complied.

The above rulings are a clear recognition that the employer may provide an
employee with ample opportunity to be heard and defend himself with the
assistance of a representative or counsel in ways other than a formal hearing. The
employee can be fully afforded a chance to respond to the charges against him,
adduce his evidence or rebut the evidence against him through a wide array of
methods, verbal or written.

After receiving the first notice apprising him of the charges against him, the
employee may submit a written explanation and offer evidence in support thereof,
like relevant company records and the sworn statements of his witnesses. For this
purpose, he may prepare his explanation personally or with the assistance of a
representative or counsel. He may also ask the employer to provide him copy of
records material to his defense. His written explanation may also include a request
that a formal hearing or conference be held. In such a case, the conduct of a formal
hearing or conference becomes mandatory, just as it is where there exist
substantial evidentiary disputes or where company rules or practice requires an
actual hearing as part of employment pre-termination procedure.

The right to counsel and the assistance of one in investigations involving

termination cases is neither indispensable nor mandatory, except when the
employee himself requests for one or that he manifests that he wants a formal
hearing on the charges against him.

SAMAHANG MANGGAGAWA V. CHARTER CHEMICAL & COATING (G.R. NO.

169717 : MARCH 16, 2011)
FACTS: Samahang Manggagawa sa Charter Chemical Solidarity of Unions in the
Philippines for Empowerment and Reforms (petitioner union) filed a petition for
certification election among the regular rank-and-file employees of Charter
Chemical and Coating Corporation (respondent company) with the Mediation
Arbitration Unit of the DOLE. Respondent company opposedon the ground that
petitioner union is not a legitimate labor organization because of failure to comply
with the documentation requirements set by law the charter certificate was not
executed under oath, and the inclusion of supervisory employees within petitioner
union. The Med-Arbiter dismissed the petition. The DOLE, on appeal, granted the
petition for certification election but the CA reversed the DOLE decision. The
appellate court gave credence to the findings of the Med-Arbiter.

Petitioner union claims that the litigation of the issue as to its legal personality to
file the subject petition for certification election is barred by the Decision of the
DOLE. In this decision, the DOLE ruled that petitioner union complied with all the
documentation requirements and that there was no independent evidence
presented to prove an illegal mixture of supervisory and rank-and-file employees in
petitioner union. After the promulgation of this Decision, respondent company did
not move for reconsideration, thus, this issue must be deemed settled.

ISSUE: Whether or not petitioner union has legal personality to file for a petition for
certification election.

HELD: Court of Appeals decision is granted. The right to file a petition for
certification election is accorded to a labor organization provided that it complies
with the requirements of law for proper registration. The inclusion of supervisory
employees in a labor organization seeking to represent the bargaining unit of rank-
and-file employees does not divest it of its status as a legitimate labor organization.

Petitioner unions charter certificate need not be executed under oath.

Consequently, it validly acquired the status of a legitimate labor organization upon
submission of (1) its charter certificate,(2) the names of its officers, their addresses,
and its principal office,and (3) its constitution and by-laws the last two requirements
having been executed under oath by the proper union officials as borne out by the
records.

Petitioner union correctly argues that its legal personality cannot be collaterally
attacked in the certification election proceedings.
LEGEND INTERNATIONAL RESORTS V. KML-INDEPENDENT (G.R. NO.
169754 : FEBRUARY 23, 2011)

FACTS: KML filed with the Med-Arbitration Unit of the DOLE, San Fernando,
Pampanga, a Petition for Certification Election. LEGEND moved to dismiss the
petition alleging that KML is not a legitimate labor organization because its
membership is a mixture of rank and file and supervisory employees in violation of
Article 245 of the Labor Code. KML argued that even if 41 of its members are indeed
supervisory employees and therefore excluded from its membership, the
certification election could still proceed because the required number of the total
rank and file employees necessary for certification purposes is still sustained. KML
also claimed that its legitimacy as a labor union could not be collaterally attacked in
the certification election proceedings but only through a separate and independent
action for cancellation of union registration.

The Med-Arbiter rendered judgment dismissing for lack of merit the petition for
certification election. Since Article 245 of the Labor Code expressly prohibits
supervisory employees from joining the union of rank and file employees, the Med-
Arbiter concluded that KML is not a legitimate labor organization.

The Office of the Secretary of DOLE rendered its Decision granting KMLs appeal
thereby reversing and setting aside the Med-Arbiters Decision. The Office of the
Secretary of DOLE held that KMLs legitimacy as a union could not be collaterally
attacked. It declared that any violation of the provision of Article 245 does not ipso
facto render the existence of the labor organization illegal.

LEGEND filed a Petition for Certiorari with the Court of Appeals , which found no
grave abuse of discretion on the part of the Office of the Secretary of DOLE.
LEGEND filed a Petition for Certiorari with the Court of Appeals. held that the issue
on the legitimacy of KML as a labor organization has already been settled with
finality in Case No. RO300-0108-CP-001. The March 26, 2002 Decision of the Bureau
of Labor Relations upholding the legitimacy of KML as a labor organization had long
become final and executory for failure of LEGEND to appeal the same.

ISSUE: Whether or not the the CA erred in denying the petition for certiorari.

HELD: The petition is partly meritorious. Records show that (in the cancellation of
registration case) LEGEND has timely filed on September 6, 2002 a petition
forcertiorari before the Court of Appeals which was docketed as CA-G.R. SP No.
72659 assailing the March 26, 2002 Decision of the Bureau of Labor Relations.

However, a certification election may still be conducted during the pendency of the
cancellation proceedings. This is because at the time the petition for certification
was filed, the petitioning union is presumed to possess the legal personality to file
the same. There is therefore no basis for LEGENDs assertion that the cancellation of
KMLs certificate of registration should retroact to the time of its issuance or that it
effectively nullified all of KMLs activities, including its filing of the petition for
certification election and its demand to collectively bargain. Also, the legitimacy of
the legal personality of KML cannot be collaterally attacked in a petition for
certification election proceeding. Petition is partly granted. The CA Decision insofar
as it affirms the Secretary's Decision is affirmed.

YOLITO FADRIQUELAN, ET AL. VS. MONTEREY FOODS CORPORATION (G.R.

NO. 178409 : 8 JUNE 2011)

FACTS: The CBA between Buklod ng Manggagawa sa Monterey-Ilaw at Buklod ng

Manggagawa (Union) and Monterey Foods Corporation (Company) expired on 30
April 2002.

On 28 March 2003, the negotiation for a new CBA reached a deadlock with the
union filing for a notice of strike with the NCMB. The company filed with the DOLE a
petition for assumption of jurisdiction. As a result, the Labor Secretary assumed
jurisdiction on May 12, 2003 and enjoined the union from holding any strike.

Subsequently union filed a second notice of strike, on the grounds of alleged unfair
labor practices by the company resulting in the charging of intentional acts of
slowdown by the company against the union officers. On June 16, the company sent
new notices to the union officers, informing them of their termination. The union
filed a third notice of strike which was subsumed by the DOLE under the first and
the second notices.

The company then filed a petition for certification of the labor dispute to the NLRC
for compulsory arbitration but was denied the motion. On November 20, 2003, the
DOLE upheld the companys termination of the 17 union officers. Consequently
union appealed the decision to the Court of Appeals, which on May 29, 2006 upheld
the termination of the 10 union officers but declared illegal the rest.

ISSUES:

(1) Whether or not the CA erred in holding that slowdowns actually transpired
at the companys farms.

(2) Whether or not the CA erred in holding that union officers committed
illegal acts that warranted their dismissal from work.

HELD:

(1) No. The CA was correct seeing that the union held its assemblies to supposedly
inform their members of the developments of the CBA at the same time and the
same day (May 26, 2003, 7:00am at the Cavite and Batangas farms) along with
separate company farms causing a significant delay of work.
In a slowdown strike, employees do not walk out of their jobs to hurt the company.
They need only to stop work or reduce the rate of their work while generally
remaining in their assigned posts.

The law is explicit: no strike shall be declared after the Secretary of Labor has
assumed jurisdiction over a labor dispute. A strike conducted after such assumption
is illegal and any union officer who knowingly participates in the same may be
declared as having lost his employment.

(2) A distinction lies between ordinary workers liability and union officers. The
ordinary worker cannot be terminated for merely participating in the strike as there
must be proof that he committed illegal acts during its conduct. A union officer,
however, can be terminated upon mere proof that he knowingly participated in the
illegal strike.

VICTORY LINER VS. PABLO RACE (G.R. No. 164820, March 28, 2007)

FACTS: Respondent Pablo Race was employed by Petitioner Victory Liner, Inc. as a
bus driver for the Alaiminos, Pangasinan Cubao, Quezon City evening route. On
August 24, 1994, Races bus figured in an accident, wherein Race suffered a
fractured leg, for which he was confined in the hospital until October 10, 1994.
Subsequently, on November 10, 1994, Race was confined again for further
treatment for another month; Victory Liner shouldered all of Races medical
expenses for both instances.

On January of 1998, Race reported for work, but was informed that he was
considered resigned, and was offered consideration of Php50000.00, which he
rejected. On December of 1998, Victory Liner reiterated that he was regarded as
resigned, this time, offering him Php100000.00, which he again rejected. Many
months later, on June 1999, Race sent a letter to Victory Liner demanding
employment-related money claims; however Victory Liner gave no response.

This prompted Race to file on September 1, 1999 a complaint before the Labor
Arbiter for unfair labor practice, illegal dismissal, underpayment of wages,
nonpayment of overtime and holiday premium, service incentive leave pay,
vacation and sick leave benefits, 13th month pay, excessive deduction of
withholding tax and SSS premium; and moral and exemplary damages and
attorneys fees.

Labor Arbiter dismisses the complaint, stating that the prescriptive period for filing
a case for illegal dismissal had elapsedconsidered dismissed as of November
1994. Upon appeal to NLRC, the Commission reversed the Labor Arbiter, holding
that the cause of action accrued in January 1998, when Race reported for work but
was rejected, NLRC also stated that Victory Liner failed to accord Race due process
in terminating his employment.

ISSUE: Whether or not the cause of action for illegal dismissal had prescribed.
HELD: The Court rules no; the cause of action accrued in January 1998. Victory Liner
insists that Race already abandoned his work and ceased to be its employee since
November 1994. Among other arguments, under the 4-fold test of employer-
employee relationship: Victory claimed that it no longer paid Race wages nor
exercised control over him since November 1994.

If reckoning period is counted from when the written demand was made by Race,
the 4-year prescriptive period would be indeterminate, contrary to the spirit of the
law. In illegal dismissal cases, the employee concerned is given a period of four
years from the time of his dismissal within which to institute a complaint.
Additionally , under Art. 1146 of the Civil Code, actions based upon an injury to the
rights of the plaintiff must be brought within four years.

Employment is a property rightwithin the protection of a constitutional

guarantee of due process of law. Therefore, when one is arbitrarily and unjustly
deprived of his job or means of livelihood, the action instituted to contest the
legality of ones dismissal from employment constitutes, an action predicated "upon
an injury to the rights of the plaintiff. The four-year prescriptive period shall
commence to run only upon the accrual of a cause of action of the workerthe time
the employment of the worker was unjustly terminated. Race was not unjustly
terminated on November 10, 1994; at that time, he was still confined for further
treatment of his fractured left leg, thus, he must be considered as merely on sick
leave.

Neither could be deemed as illegally dismissed from work upon his release in
December 1994 up to December 1997. Race still reported for work to the petitioner
and was granted sick and disability leave by Victory Liner for that period. Race must
be considered as unjustly terminated in January 1998 since this was the first time
he was informed by the Victory Liner that he was deemed resigned from his work.

Consequently, Races filing of complaint for illegal dismissal on September 1, 1999

was well within the four-year prescriptive period. It must also be noted that from
November 10, 1994 up to December 1997, Victory Liner never formally informed
the respondent of the fact of his dismissal.

Moveover, Race did not abandon his work for lack of the 2 factors that constitute
abandonment: (1) Failure to report for work or absence without valid or justifiable
reason; and (2) A clear intention to sever employer-employee relationship.

Similarly, the employer-employee relationship between the petitioner and

respondent cannot be deemed to have been extinguished on November 10, 1994,
since Race reported for work to the petitioner after his release from the hospital a
month later; he was also granted a 120-day sick leave and disability leave; and also
availed himself of the services of the Victory Liners physician on two occasions
after his release.

Victory Liner failed to establish the fact that Race ceased to be its employee on 10
November 1994, except for its flimsy reason that the sick leave, disability leave and
physician consultations were given to the respondent as mere accommodations for
a former employee.

MAGDALA MULTIPURPOSE & LIVELIHOOD COOPERATIVE AND SANLOR

MOTORS CORP. VS. KILUSANG MANGGAGAWA ETC ET.AL. (G.R. 191138-39,
OCTOBER 19, 2011)

FACTS: Respondent Kilusang Manggagawa ng LGS, Magdala Multipurpose and

Livelihood Coop. (KMLMS) is the union operating in Magdala Multipurpose &
Livelihood Coop. and Sanlor Motors Corp (petitioners). On Mar. 5, 2002, KMLMS filed
a notice of strike. Subsequently, on Apr. 8, 2002 KMLMS conducted a strike-vote, but
only acquired legal personality the following day (Apr. 9) when its registration as an
independent labor organization was granted by the DOLE.

Ten days later, or on Apr. 19, KMLMS became officially affiliated as a local chapter of
the Pambansang Kaisahan ng Manggagagwang Pilipino. Then on May 6, 2002,
KMLMS staged a strike, where several prohibited and illegal acts were committed.

The respondent cooperative and the company filed a Petition to Declare the Strike
Illegal before the NLRC, on the grounds of lack of valid notice of strike, ineffective
conduct of a strike-vote, and commission of prohibited and illegal acts.

The LA holds that the strike was illegal; and points out that 41 workers was declared
to have forfeited their employment status. Upon appeal, the NLRC modifies the
decision of the LA by holding that aside from the 41 workers, 7 more workers was
declared to have forfeited their employment. Upon elevation to the CA, it affirmed
the NLRC decision in toto.

Petitioners argue that an additional 73 union members should be declared to have

lost their employment and that CA erred in refusing to award damages and
attorneys fees, being that the strike nearly crippled the business.

ISSUE: Whether or not the May 6, 2002 strike was illegal.

HELD: The SC rules in the affirmative. There is no question that the strike was illegal
because: (1) When KMLMS filed the notice of strike on March 5 or 14, it had not
yet acquired legal personality and, thus, could not legally represent the eventual
union and its members. (2) When KMLMS conducted the strike-vote on Apr. 8, there
was still no union to speak of, since KMLMS only acquired legal personality as an
independent LLO the next day or Apr. 9.

The mandatory notice of strike and the conduct of the strike-vote report were
ineffective for having been filed and conducted before KMLMS acquired legal
personality as an LLO, violating Art. 263(c), (d) and (f) of the Labor Code and Rule
XXII, Book V of the Omnibus Rules.

Art. 263 (c): the duly certified or recognized bargaining agent may file a
notice of strike []in absence of a duly certified or recognized bargaining
agent, the notice of strike may befiled by any legitimate labor organization in
behalf of its members.

It is, thus clear that the filing of the notice of strike and the conduct of the strike-
vote by KMLMS did not comply with the aforequoted mandatory requirements of law
and its implementing rules. Consequently, the May 6, 2002 strike is illegal.

Furthermore, the SC points out that the striking members committed prohibited acts
as provided under Art. 264, and such findings was based on substantial evidence:
Police Blotter Certifications, including a complaint for Grave Coercion, affidavits
from several workers and one proprietor who were prevented from entering the
company premises, countless photographs which show the striking workers blocking
the gates of the company.

In determining the proper sanctions, the SC cannot agree with the CA's view that
there is no substantial proof of the identity of the other 72 striking union members
who committed prohibited and illegal activities.

After poring over the attachments to the pleadings, SC finds that petitioners have
substantially proved the identity of 72 other union members through the substantial
evidence plus (a) Photographs submitted by petitioners graphically depict and show
the identities of the union members who committed and illegal acts, and (b)
identities were substantially proved through eyewitnesses who personally knew and
recognized the members.
ANTONIO CARAG VS NLRC ET. AL. (G.R NO. 147590, APRIL 2, 2007)

FACTS: National Federation of Labor Unions (NAFLU) and Mariveles Apparel

Corporation Labor Union (MACLU), on behalf of all of MACs rank and file employees,
filed a complaint against MAC for illegal dismissal brought about by its illegal
closure of business. They included in their complaint Mariveles Apparel
Corporations Chairman of the Board and herein petitioner Antonio Carag in order to
be solidarily liable for the illegal dismissal and illegal closure of business. According
to the Labor Union of MAC, the Corporation suddenly closed its business without
following the notice, as laid down in the Labor Code. The Labor Arbiter decided in
favor of the Labor Union, holding that Antonio Carag, being the owner of the
corporation, be solidarily liable for the payment of separation pay and backwages of
the rank and file employees. Carag questioned the decision of the Labor Arbiter,
alleging that the Corporation and its officers have separate and distinct personality
and the latter cannot be held liable solidarily in cases of payment of damages.
ISSUE: Whether or not Carag be held solidarily liable for the payment of the illegally
dismissed employees.

HELD: The Supreme Court held that the general rule is that a director is not
personally liable for the debts of the corporation, which has a separate legal
personality of its own. Section 31 of the Corporation Code lays down the exceptions
to the rule, as follows:

Liability of directors, trustees or officers. - Directors or trustees who

wilfully and knowingly vote for or assent to patently unlawful acts of the
corporation or who are guilty of gross negligence or bad faith in directing the
affairs of the corporation or acquire any personal or pecuniary interest in
conflict with their duty as such directors or trustees shall be liable jointly and
severally for all damages resulting therefrom suffered by the corporation, its
stockholders or members and other persons.

Section 31 makes a director personally liable for corporate debts if he willfully and
knowingly votes for or assents to patently unlawful acts of the corporation. Section
31 also makes a director personally liable if he is guilty of gross negligence or bad
faith in directing the affairs of the corporation.

In the case at bar, complainants did not allege in their complaint that Carag wilfully
and knowingly voted for or assented to any patently unlawful act of MAC. Also, the
complainants did not present any evidence showing that Carag wilfully and
knowingly voted for or assented to any patently unlawful act of MAC. Neither did
Labor Arbiter Ortiguerra make any finding to this effect in her Decision.

For a wrongdoing to make a director personally liable for debts of the corporation,
the wrongdoing approved or assented to by the director must be a patently unlawful
act. Mere failure to comply with the notice requirement of labor laws on company
closure or dismissal of employees does not amount to a patently unlawful act.
Patently unlawful acts are those declared unlawful by law which imposes penalties
for commission of such unlawful acts. There must be a law declaring the act
unlawful and penalizing the act. Wherefore, Antonio Carag is not liable to the debt
of the Corporation as to the illegally dismissed employees of MAC.

FABELA VS. SAN MIGUEL CORPORATION (G.R. NO. 150658. FEB. 9, 2007)

FACTS: In this case, SMC claimed that the hiring of route salesmen, like petitioner
Fabela and others, was not intended to be permanent. SMC was undergoing a
gradual transition from route system to a new system of selling and delivering its
products the Pre-Selling System in which the salesmen under the earlier system
would be replaced by Accounts Specialists which called for upgraded qualifications.

While some of the qualified regular salesmen were readily upgraded to the position
of Accounts Specialist, SMC argued that it still had to sell its beer products using the
conventional routing system during the transition stage, thus giving rise to the need
for temporary employees. The route salesmen then existing were required to
undergo a training program to determine whether they possessed or could be
trained as Accounts Specialists. Hence, it claimed that the hiring of petitioners and
others for a fixed period was coterminous with the completion of the transition
period and Training Program for all prospective Accounts Specialists.

ISSUE: Was there a valid fixed period employment?

HELD: Although Article 280 of the Labor Code does not expressly recognize
employment for a fixed period, which is distinct from employment which has been
fixed for a specific project or undertaking, it has been clarified that employment for
a fixed period is not in itself illegal. Even if the duties of an employee consist of
activities usually necessary or desirable in the usual business of the employer, it
does not necessarily follow that the parties are forbidden from agreeing on a period
of time for the performance of such activities through a contract of employment for
a fixed term.

SMCs contention that there are fixed periods stated in the contracts of employment
does not lie. The ruling in Brent instructs that a contract of employment stipulating
a fixed-term, even if clear as regards the existence of a period, is invalid if it can be
shown that the same was executed with the intention of circumventing security of
tenure, and should thus be ignored.

Indeed, substantial evidence exists in the present case showing that the subject
contracts were utilized to deprive petitioners of their security of tenure. The
contract of employment of petitioner Fabela, for instance, states that the transition
period from the Route System to the Pre-Selling System would be twelve (12)
months from April 4, 1995. It bears noting, however, that petitioner Fabela, besides
being hired again for another fixed period of four (4) months after the lapse in April
1996 of the one-year contract, had already been working for respondent SMC on a
fixed-term basis as early as 1992, or one year before respondent SMC even began
its shift to the Pre-selling System in 1993.

A fixed-term employment is valid only under certain circumstances, such as when

the employee himself insists upon the period, or where the nature of the
engagement is such that, without being seasonal or for a specific project, a definite
date of termination is a sine qua non.