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Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 155109 September 29, 2010

C. ALCANTARA & SONS, INC., Petitioner,


vs.
COURT OF APPEALS, LABOR ARBITER ANTONIO M. VILLANUEVA, LABOR
ARBITER ARTURO L. GAMOLO, SHERIFF OF NLRC RAB-XI-DAVAO CITY,
NAGKAHIUSANG MAMUMUO SA ALSONS-SPFL (NAMAAL-SPFL),
FELIXBERTO IRAG, JOSHUA BARREDO, ERNESTO CUARIO, EDGAR
MONDAY, EDILBERTO DEMETRIA, HERMINIO ROBILLO, ROMULO LUNGAY,
MATROIL DELOS SANTOS, BONERME MATURAN, RAUL CANTIGA, EDUARDO
CAMPUSO, RUDY ANADON, GILBERTO GABRONINO, BONIFACIO SALVADOR,
CIRILO MINO, ROBERTO ABONADO, WARLITO MONTE, PEDRO ESQUIERDO,
ALFREDO TROPICO, DANILO MEJOS, HECTOR ESTUITA, BARTOLOME
CASTILLANES, EDUARDO CAPUYAN, SATURNINO CAGAS, ALEJANDRO
HARDER, EDUARDO LARENA, JAIME MONTEDERAMOS, ERMELANDO
BASADRE, REYNALDO LIMPAJAN, ELPIDIO LIBRANZA, TEDDY SUELO, JOSE
AMOYLIN, TRANQUILINO ORALLO, CARLOS BALDOS, MANOLITO
SABELLANO, CARMELITO TOBIAS, PRIMITIVO GARCIA, JUANITO
ALDEPOLLA, LUDIVICO ABAD, WENCISLAO INGHUG, RICARDO ALTO,
EPIFANIO JARABAY, FELICIANO AMPER, ALEXANDER JUDILLA, ROBERTO
ANDRADE, ALFREDO LESULA, JULIO ANINO, BENITO MAGPUSAO, PEDRO
AQUINO, EDDIE MANSANADES, ROMEO ARANETA, ARGUILLAO MANTICA,
CONSTANCIO ARNAIZ, ERNESTO HOTOY, JUSTINO ASCANO, RICARDO
MATURAN, EDILBERTO YAMBAO, ANTONIO MELARGO, JESUS BERITAN,
ARSENIO MELICOR, DIOSDADO BONGABONG, LAURO MONTENEGRO,
CARLITO BURILLO, LEO MORA, PABLO BUTIL, ARMANDO GUCILA,
JEREMIAH CAGARA, MARIO NAMOC, CARLITO CAL, GERWINO NATIVIDAD,
ROLANDO CAPUYAN, EDGARDO ORDIZ, LEONARDO CASURRA, PATROCINIO
ORTEGA, FILEMON CESAR, MARIO PATAN, ROMEO COMPRADO, JESUS
PATOC, RAMON CONSTANTINO, ALBERTO PIELAGO, SAMUEL DELA LLANA,
NICASIO PLAZA, ROSALDO DAGONDON, TITO GUADES, BONIFACIO
DINAGUDOS, PROCOPIO RAMOS, JOSE EBORAN, ROSENDO SAJOL,
FRANCISCO EMPUERTO, PATRICIO SALOMON, NESTOR ENDAYA, MARIO
SALVALEON, ERNESTO ESTILO, BONIFACIO SIGUE, VICENTE FABROA,
JAIME SUCUAHI, CELSO HUISO, ALEX TAUTO-AN, SATURNINO YAGON,
CLAUDIO TIROL, SULPECIO GAGNI, JOSE TOLERO, FERVIE GALVEZ,
ALFREDO TORALBA and EDUARDO GENELSA, Respondents.

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G.R. No. 155135

NAGKAHIUSANG MAMUMUO SA ALSONS-SPFL (NAMAAL-SPFL),


FELIXBERTO IRAG, JOSHUA BARREDO, ERNESTO CUARIO, EDGAR
MONDAY, EDILBERTO DEMETRIA, HERMINIO ROBILLO, ROMULO LUNGAY,
MATROIL DELOS SANTOS, BONERME MATURAN, RAUL CANTIGA, EDUARDO
CAMPUSO, RUDY ANADON, GILBERTO GABRONINO, BONIFACIO SALVADOR,
CIRILO MINO, ROBERTO ABONADO, WARLITO MONTE, PEDRO ESQUIERDO,
ALFREDO TROPICO, DANILO MEJOS, HECTOR ESTUITA, BARTOLOME
CASTILLANES, EDUARDO CAPUYAN, SATURNINO CAGAS, ALEJANDRO
HARDER, EDUARDO LARENA, JAIME MONTEDERAMOS, ERMELANDO
BASADRE, REYNALDO LIMPAJAN, ELPIDIO LIBRANZA, TEDDY SUELO, JOSE
AMOYLIN, TRANQUILINO ORALLO, CARLOS BALDOS, MANOLITO
SABELLANO, CARMELITO TOBIAS, PRIMITIVO GARCIA, JUANITO
ALDEPOLLA, LUDIVICO ABAD, WENCISLAO INGHUG, RICARDO ALTO,
EPIFANIO JARABAY, FELICIANO AMPER, ALEXANDER JUDILLA, ROBERTO
ANDRADE, ALFREDO LESULA, JULIO ANINO, BENITO MAGPUSAO, PEDRO
AQUINO, EDDIE MANSANADES, ROMEO ARANETA, ARGUILLAO MANTICA,
CONSTANCIO ARNAIZ, ERNESTO HOTOY, JUSTINO ASCANO, RICARDO
MATURAN, EDILBERTO YAMBAO, ANTONIO MELARGO, JESUS BERITAN,
ARSENIO MELICOR, DIOSDADO BONGABONG, LAURO MONTENEGRO,
CARLITO BURILLO, LEO MORA, PABLO BUTIL, ARMANDO GUCILA,
JEREMIAH CAGARA, MARIO NAMOC, CARLITO CAL, GERWINO NATIVIDAD,
ROLANDO CAPUYAN, JUANITO NISNISAN, AURELIO CARIN, PRIMO OPLIMO,
ANGELITO CASTANEDA, EDGARDO ORDIZ, LEONARDO CASURRA,
PATROCINIO ORTEGA, FILEMON CESAR, MARIO PATAN, ROMEO
COMPRADO, JESUS PATOC, RAMON CONSTANTINO, MANUEL PIAPE, ROY
CONSTANTINO, ALBERTO PIELAGO, SAMUEL DELA LLANA, NICASIO PLAZA,
ROSALDO DAGONDON, TITO GUADES, BONIFACIO DINAGUDOS, PROCOPIO
RAMOS, JOSE EBORAN, ROSENDO SAJOL, FRANCISCO EMPUERTO,
PATRICIO SALOMON, NESTOR ENDAYA, MARIO SALVALEON, ERNESTO
ESTILO, BONIFACIO SIGUE, VICENTE FABROA, JAIME SUCUAHI, CELSO
HUISO, ALEX TAUTO-AN, SATURNINO YAGON, CLAUDIO TIROL, SULPECIO
GAGNI, JOSE TOLERO, FERVIE GALVEZ, ALFREDO TORALBA and EDUARDO
GENELSA, Petitioners,
vs.
C. ALCANTARA & SONS, INC., EDITHA I. ALCANTARA, ATTY. NELIA A.
CLAUDIO, CORNELIO E. CAGUIAT, JESUS S. DELA CRUZ, ROLANDO Z.
ANDRES and JOSE MA. MANUEL YRASUEGUI,Respondents.

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G.R. No. 179220

NAGKAHIUSANG MAMUMUO SA ALSONS-SPFL (NAMAAL-SPFL), and its


members whose names are listed below, Petitioners,
vs.
C. ALCANTARA & SONS, INC., Respondent.

DECISION

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

The Facts and the Case

C. Alcantara & Sons, Inc., (the Company) is a domestic corporation engaged in the
manufacture and processing of plywood. Nagkahiusang Mamumuo sa Alsons-SPFL
(the Union) is the exclusive bargaining agent of the Companys rank and file
employees. The other parties to these cases are the Union officers 1 and their striking
members.2

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

During the strike, the Company filed a petition for the issuance of a writ of
preliminary injunction with prayer for the issuance of a temporary restraining order
(TRO) Ex Parte3 with the National Labor Relations Commission (NLRC) to enjoin the
strikers from intimidating, threatening, molesting, and impeding by barricade the
entry of non-striking employees at the Companys premises. The NLRC first issued a
20-day TRO and, after hearing, a writ of preliminary injunction, enjoining the Union
and its officers and members from performing the acts complained of. But several
attempts to implement the writ failed. Only the intervention of law enforcement units
made such implementation possible. Meantime, the Union filed a petition 4 with the
Court of Appeals (CA), questioning the preliminary injunction order. On February 8,
1999 the latter court dismissed the petition. The Union did not appeal from such
dismissal.

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

On June 29, 1999 the Labor Arbiter rendered a decision, 6 declaring the Unions strike
illegal for violating the CBAs no strike, no lockout, provision. As a consequence, the
Labor Arbiter held that the Union officers should be deemed to have forfeited their
employment with the Company and that they should pay actual damages
ofP3,825,000.00 plus 10% interest and attorneys fees. With respect to the striking
Union members, finding no proof that they actually committed illegal acts during the
strike, the Labor Arbiter ordered their reinstatement without backwages. The Labor
Arbiter denied the Unions counterclaim for lack of merit.

On June 29, 1999 the terminated Union members promptly filed a motion for their
immediate reinstatement but the Labor Arbiter did not act on the same. At any rate,
the Company did not reinstate them. Both parties appealed 7 the Labor Arbiters
decision to the NLRC. The Company impugned the Labor Arbiters decision insofar
as it ordered the reinstatement of the terminated Union members. The Union, on the
other hand, questioned the declaration of illegality of the strike as well as the
dismissal of its officers and the order for them to pay damages.

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

The Union filed a petition for certiorari 9 with the CA, questioning the NLRC decision.
Finding merit in the petition, the CA rendered a decision on March 20,
2002,10 annulling the NLRC decision and reinstating that of the Labor Arbiter. The
Company and the Union with its officers and members filed separate petitions for
review of the CA decision in G.R. 155109 and 155135, respectively.

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

Both parties appealed the Labor Arbiters resolution 12 to the NLRC. Initially, in its
resolution dated April 30, 2003,13 the NLRC declared the Labor Arbiters resolution of
November 21, 2002 void for lack of factual and legal basis but ordered the Company
to pay the affected employees accrued wages and 13th month pay considering the
Companys refusal to reinstate them pending appeal. On motion for reconsideration
by both parties, however, the NLRC issued a resolution on August 29,
2003,14 modifying its earlier resolution by deleting the grant of accrued wages and
13th month pay to the subject employees, thus denying their motion for computation.

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

The Issues Presented

The issues presented in these cases are:

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

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

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

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

5. Whether or not the terminated Union members are entitled to accrued


backwages and separation pay.

The Rulings of the Court

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

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

No law or public policy prohibits the Union and the Company from mutually waiving
the strike and lockout maces available to them to give way to voluntary arbitration.
Indeed, no less than the 1987 Constitution recognizes in Section 3, Article XIII,
preferential use of voluntary means to settle disputes. Thus
The State shall promote the principle of shared responsibility between workers and
employers and the preferential use of voluntary modes in settling disputes, including
conciliation, and shall enforce their mutual compliance therewith to foster industrial
peace.

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

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

As regards the rank and file Union members, Article 264 of the Labor Code provides
that termination from employment is not warranted by the mere fact that a union
member has taken part in an illegal strike. It must be shown that such a union
member, clearly identified, performed an illegal act or acts during the strike. 20
1avvphi1

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

The striking Union members allegedly committed the following prohibited acts:

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.

Cornelio Caguiat, Ruben Tungapalan, and Eufracio Rabusa depicted the above
prohibited acts in their affidavits and testimonies. The Sheriff of the NLRC said in his
Report21 that, in the course of his implementation of the writ of injunction, he
observed that the striking employees blocked the exit lane of the Alson drive with
their tent. Tungapalan, a non-striking employee, identified the Union members who
threatened and coerced him. Indeed, he filed criminal actions against them. Lastly,
the photos taken of the strike show the strikers, properly identified, committing the
acts complained of. These constitute substantial evidence in support of the
termination of the subject Union members.
The mere fact that the criminal complaints against the terminated Union members
were subsequently dismissed for one reason or another does not extinguish their
liability under the Labor Code. Nor does such dismissal bar the admission of the
affidavits, documents, and photos presented to establish their identity and guilt
during the hearing of the petition to declare the strike illegal. The technical grounds
that the Union interposed for denying admission of the photos are also not binding
on the NLRC.22

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

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

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

Both parties appealed the Labor Arbiters above ruling 23 to the NLRC. But, as it
turned out the NLRC did not also favor reinstatement. It instead ordered the
Company to pay the terminated Union members their accrued wages and 13th
month pay considering its refusal to reinstate them pending appeal. On motion for
reconsideration, however, the NLRC reconsidered and deleted altogether the grant
of accrued wages and 13th month pay. The Union appealed the NLRC ruling to the
CA on behalf of its terminated members but the CA denied their appeal.

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

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

Here, although the Labor Arbiter failed to act on the terminated Union members
motion for reinstatement pending appeal, the Company had the duty under Article
223 to immediately reinstate the affected employees even if it intended to appeal
from the decision ordaining such reinstatement. The Companys failure to do so
makes it liable for accrued backwages until the eventual reversal of the order of
reinstatement by the NLRC on November 8, 1999, 24 a period of four months and nine
days.1avvphi1

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

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

WHEREFORE, the Court DENIES the petition of the Nagkahiusang Mamumuo sa


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

Further, the Court PARTIALLY GRANTS the petition of the Nagkahiusang


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

SO ORDERED.

ROBERTO A. ABAD
Associate Justice

WE CONCUR:
ANTONIO T. CARPIO
Associate Justice

ANTONIO EDUARDO B. NACHURA DIOSDADO M. PERALTA


Associate Justice Associate Justice

JOSE CATRAL MENDOZA


Associate Justice

ATT E STAT I O N

I attest that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.

ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division

C E RTI F I CATI O N

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairpersons
Attestation, I certify that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the Courts
Division.

RENATO C. CORONA
Chief Justice