216 Philtread v.

NLRC
GR 102185, February 15, 1993

Facts:
 ADFLO-Philtread (aka Union) filed a notice of strike against Philtread, for alleged discrimination, union busting,
non-granting of merit increases, and other acts of ULP
 In reaction, Philtread filed a Notice of Lockout, claiming it was the union which was guilty of ULP for
violation of the CBA
 Philtread also filed clearance to terminate all the union officials
 Philtread announced that all salaried/supervising union EEs would not be allowed into the work premises, and
Philtread then advertised job vacancies in the Manila Bulleting
 Union retaliated by picketing and filling a complaint for illegal dismissal of union officers
 Philtread later filed criminal charges for libel against 36 union officers who distributed leaflets imputing
defects in the company’s products
 Union then files a petition for the SOLE to assume jurisdiction
 SOLE certified the case to the NLRC for compulsory arbitration; and SOLE ordered the parties to return to
work, and the management to accept them back to the same terms and conditions prior to the dispute
 Philtread partially complied: it accepted back workers, but it did not accept back the 36 workers who were
charged with libel
 Philtread said it would not reinstate these workers until the labor dispute is resolved
 Union thus files a motion for execution of the SOLE’s return-to-work order;
 NLRC grants the union’s motion and orders Philtread to accept back these 36 workers
 But Philtread refused to accept them back, and sought a TRO/certiorari/prohibition with the SC
 Meanwhile, both Philtread and the Union requested conciliation meetings presided by NLRC Commissioner
Veloso
 Commissioner Veloso proposed a “deferred” execution of the return to work order, and in exchange, Philtread
would grant financial concessions to the workers.
 Based on a letter from some EEs, Commissioner Veloso’s proposal for a deferred execution of the return to
work order was accepted by a majority of the EEs themselves
 But the Union’s counsel decided to re-file its previous motion for execution of the return-to-work order
 So, the NLRC finally decided to rule on the dispute. Instead of acting on the Union’s motion for execution,
the NLRC resolved the dispute altogether:
o NLRC did not reinstate the 36 EEs, but gave them backwages
o Dismissed all other claims
 Both parties filed Motions for Reconsideration
 Philtread files a MR, because the award of backwages was without legal basis, and because the 2 months’
separation pay was excessive
 Union files a MR, because the decision was premature, because the Union was still trying to prove that
the EEs did not actually agree to the deferment of the return-to-work order.
 Union claims the NLRC order was issued in denial of the Union’s right to due process

 Issue: Was the Union denied due process? NO

 The Union cannot claim a denial of due process, because the employees themselves already accepted the
deferred return-to-work order
 In fact, when the Union re-filed its motion to execute the return-to-work order, a majority of the employees
objected to such re-filing, since these employees preferred the financial concessions to be given out by the
employer
 Furthermore, the NLRC found that Philtread complied with the necessary procedural requirements of a valid
lockout
 NLRC also found that Philtread was able to show that it was resorting to a lockout because industrial peace
could not bee obtained as long as the locked-out employees remained part of the business

 Issue: Was the NLRC correct in not ordering reinstatement (only backwages)? YES. The NLRC was
correct.
 It was the workers who sought the return to work order, and as such, they could also waive it
 This waiver was present when the workers accepted a “deferred” return-to-work order in exchange for
financial concessions

 Issue: Are backwages proper? YES.

 Although there was proper filing of the lockout, Philtread was penalized for not immediately complying with
the return-to-work order
 A return-to-work order is immediately executory, and can be enforced even pending the case against the 36
locked out employees, since the order is aimed at maintaining the status quo
 Hence, backwages are to be awarded to the locked out employees from the time the return-to-work order was
issued until the the acceptance of the deferred return-to-work order
 Issue: Was the award of 2 months per year of service excessive? YES.
 Although Philtread is liable for not immediately complying with the return-to-work order, the amount of 2
months per year of services was excessive
 In the CBA between the parties, the awards for backwages for retrenchments, retirement, death or disability
range only between ½ month to 1 ½ months per year of services
 Awarding 2 months per year of services would send signlas that disloyalty, destabilization and formenting of
labor unrest is rewarded
 The award should be reduced to only 1 month per year of service.