BLR Case No.
A-8-49-97, which affirmed the February 11, 1997 Decision of Med-
[G.R. No. 131235. November 16, 1999]
UST FACULTY UNION (USTFU), GIL Y. GAMILLA, CORAZON QUI, NORMA
CALAGUAS, IRMA POTENCIANO, LUZ DE GUZMAN, REMEDIOS
GARCIA, RENE ARNEJO, EDITHA OCAMPO, CESAR REYES,
CELSO NIERRA, GLICERIA BALDRES, MA. LOURDES MEDINA,
HIDELITA GABO, MAFEL YSRAEL, LAURA ABARA, NATIVIDAD
SANTOS, FERDINAND LIMOS, CARMELITA ESPINA, ZENAIDA
FAMORCA, PHILIP AGUINALDO, BENEDICTA ALAVA and
LEONCIO CASAL, petitioners vs. Dir. BENEDICTO ERNESTO R.
BITONIO JR. of the Bureau of Labor Relations, Med-Arbiter TOMAS F.
FALCONITIN of The National Capital Region, Department of Labor and
Employment (DOLE), EDUARDO J. MARIO JR., MA. MELVYN
ALAMIS, NORMA COLLANTES, URBANO ALABAGIA, RONALDO
ASUNCION, ZENAIDA BURGOS, ANTHONY CURA, FULVIO M.
GUERRERO, MYRNA HILARIO, TERESITA MEER, FERNANDO
PEDROSA, NILDA REDOBLADO, RENE SISON, EVELYN TIROL and
ROSIE ALCANTARA, respondents.
DECISION
PANGANIBAN, J.:
There is a right way to do the right thing at the right time for the right
reasons,[1] and in the present case, in the right forum by the right parties. While
grievances against union leaders constitute legitimate complaints deserving appropriate
redress, action thereon should be made in the proper forum at the proper time and after
observance of proper procedures. Similarly, the election of union officers should be
conducted in accordance with the provisions of the unions constitution and bylaws, as
well as the Philippine Constitution and the Labor Code. Specifically, while all legitimate
faculty members of the University of Santo Tomas (UST) belonging to a collective
bargaining unit may take part in a duly convened certification election, only bona fide
members of the UST Faculty Union (USTFU) may participate and vote in a legally called
election for union officers. Mob hysteria, however well-intentioned, is not a substitute for
the rule of law.
The Case
The Petition for Certiorari before us assails the August 15, 1997 Resolution[2] of
Director Benedicto Ernesto R. Bitonio Jr. of the Bureau of Labor Relations (BLR) in
Arbiter Tomas F. Falconitin. The med-arbiters Decision disposed as follows:
WHEREFORE, premises considered, judgment is hereby rendered declaring the election
of USTFU officers conducted on October 4, 1996 and its election results as null and void
ab initio.
Accordingly, respondents Gil Gamilla, et al are hereby ordered to cease and desist from
acting and performing the duties and functions of the legitimate officers of [the]
University of Santo Tomas Faculty Union (USTFU) pursuant to [the] unions constitution
and by-laws (CBL).
The Temporary Restraining Order (TRO ) issued by this Office on December 11, 1996 in
connection with the instant petition, is hereby made and declared permanent. [3]
Likewise challenged is the October 30, 1997 Resolution [4]of Director Bitonio,
which denied petitioners Motion for Reconsideration.
The Facts
The factual antecedents of the case are summarized in the assailed Resolution as
follows:
Petitioners-appellees [herein Private Respondents] Marino, et. al. (appellees) are duly
elected officers of the UST Faculty Union (USTFU). The union has a subsisting five-year
Collective Bargaining Agreement with its employer, the University of Santo Tomas
(UST). The CBA was registered with the Industrial Relations Division, DOLE-NCR, on
20 February 1995. It is set to expire on 31 May 1998.
On 21 September 1996, appellee Collantes, in her capacity as Secretary General of
USTFU, posted a notice addressed to all USTFU members announcing a general
assembly to be held on 05 October 1996. Among others, the general assembly was called
to elect USTFUs next set of officers. Through the notice, the members were also
informed of the constitution of a Committee on Elections (COMELEC) to oversee the
elections. (Annex B, petition)
On 01 October 1996, some of herein appellants filed a separate petition with the Med-
Arbiter, DOLE-NCR, directed against herein appellees and the members of the
COMELEC. Docketed as Case No. NCR-OD-M-9610-001, the petition alleged that the
COMELEC was not constituted in accordance with USTFUs constitution and by-laws
(CBL) and that no rules had been issued to govern the conduct of the 05 October 1996
election.
On 02 October 1996, the secretary general of UST, upon the request of the various UST
faculty club presidents (See paragraph VI, Respondents Comment and Motion to
Dismiss), issued notices allowing all faculty members to hold a convocation on 04
October 1996 (See Annex C Petition; Annexes 4 to 10, Appeal). Denominated as [a]
general faculty assembly, the convocation was supposed to discuss the state of the
unratified UST-USTFU CBA and status and election of USTFU officers (Annex 11,
Appeal)
On 04 October 1996, the med-arbiter in Case No. NCR-OD-M-9610-001 issued a
temporary restraining order against herein appellees enjoining them from conducting the
election scheduled on 05 October 1996.
Also on 04 October 1996, and as earlier announced by the UST secretary general, the
general faculty assembly was held as scheduled. The general assembly was attended by
members of the USTFU and, as admitted by the appellants, also by 'non-USTFU
members [who] are members in good standing of the UST Academic Community
Collective Bargaining Unit' (See paragraph XI, Respondents Comment and Motion to
Dismiss). On this occasion, appellants were elected as USTFUs new set of officers by
acclamation and clapping of hands (See paragraphs 40 to 50, Annex '12', Appeal).
The election of the appellants came about upon a motion of one Atty. Lopez, admittedly
not a member of USTFU, that the USTFU CBL and 'the rules of the election be
suspended and that the election be held [on] that day' (See --paragraph 39, Idem.)
On 11 October 1996, appellees filed the instant petition seeking injunctive reliefs and the
nullification of the results of the 04 October 1996 election.Appellees alleged that the
holding of the same violated the temporary restraining order issued in Case No. NCR-
OD-M-9610-001. Accusing appellants of usurpation, appellees characterized the election
as spurious for being violative of USTFUs CBL, specifically because the general
assembly resulting in the election of appellants was not called by the Board of Officers of
the USTFU; there was no compliance with the ten-day notice rule required by Section 1,
Article VIII of the CBL; the supposed elections were conducted without a COMELEC
being constituted by the Board of Officers in accordance with Section 1, Article IX of the
CBL; the elections were not by secret balloting as required by Section 1, Article V and
Section 6, Article IX of the CBL, and, the general assembly was convened by faculty
members some of whom were not members of USTFU, so much so that non-USTFU
members were allowed to vote in violation of Section 1, Article V of the CBL.
On 24 October 1996, appellees filed another urgent ex-parte motion for a temporary
restraining order, this time alleging that appellants had served the former a notice to
vacate the union office. For their part, appellants moved to dismiss the original petition
and the subsequent motion on jurisdictional grounds. Both the petition and the motion
were captioned to be for Prohibition, Injunction with Prayer for Preliminary Injunction
and Temporary Restraining Order. According to the appellants, the med-arbiter has no
jurisdiction over petitions for prohibition, 'including the ancillary remedies of restraining
order and/or preliminary injunction, which are merely incidental to the main petition for
PROHIBITION' (Paragraph XVIII3, Respondents Comment and Motion to
Dismiss). Appellants also averred that they now constituted the new set of union officers
having been elected in accordance with law after the term of office of appellees had
expired. They further maintained that appellees scheduling of the 5 October 1996
elections was illegal because no rules and regulations governing the elections were
promulgated as required by USTFUs CBL and that one of the members of the
COMELEC was not a registered member of USTFU. Appellants likewise noted that the
elections called by the appellees should have been postponed to allow the promulgation
of rules and regulations and to 'insure a free, clean, honest and orderly elections and to
afford at the same time the greater majority of the general membership to participate' (See
paragraph V, Idem). Finally, appellants contended that the holding of the general faculty
assembly on 04 October 1996 was under the control of the Council of College/Faculty
Club Presidents in cooperation with the USTFU Reformist Alliance and that they
received the Temporary Restraining Order issued in Case No. NCR-OD-M-9610-001
only on 07 October 1996 and were not aware of the same on 04 October 1996.
On 03 December 1996, appellants and UST allegedly entered into another CBA covering
the period from 01 June 1996 to 31 May 2001 (Annex 11, appellants Rejoinder to the
Reply and Opposition).
Consequently, appellees again moved for the issuance of a temporary restraining order to
prevent appellants from making further representations that [they] had entered into a new
agreement with UST. Appellees also reiterated their earlier stand that appellants were
usurping the formers duties and functions and should be stopped from continuing such
acts.
On 11 December 1996, over appellants insistence that the issue of jurisdiction should first
be resolved, the med-arbiter issued a temporary restraining order directing the
respondents to cease and desist from performing any and all acts pertaining to the duties
and functions of the officers and directors of USTFU.
In the meantime, appellants claimed that the new CBA was purportedly ratified by an
overwhelming majority of USTs academic community on 12 December 1996 (Annexes 1
to 10, Idem). For this reason, appellants moved for the dismissal of what it denominated
as appellees petition for prohibition on the ground that this had become moot and
academic.[5]
Petitioners appealed the med-arbiters Decision to the labor secretary,[6] who
transmitted the records of the case to the Bureau of Labor Relations which, under
Department Order No. 9, was authorized to resolve appeals of intra-union cases,
consistent with the last paragraph of Article 241 of the Labor Code. [7]
The Assailed Ruling
Agreeing with the med-arbiter that the USTFU officers purported election held on
October 4, 1994 was void for having been conducted in violation of the unions
Constitution and Bylaws (CBL), Public Respondent Bitonio rejected petitioners
contention that it was a legitimate exercise of their right to self-organization. He ruled
that the CBL, which constituted the covenant between the union and its members, could
not be suspended during the October 4, 1996 general assembly of all faculty members,
since that assembly had not been convened or authorized by the USTFU.
Director Bitonio likewise held that the October 4, 1996 election could not be
legitimized by the recognition of the newly elected set of officers by UST or by the
alleged ratification of the new CBA by the general membership of the USTFU. Ruled
Respondent Bitonio:
"This submission is flawed. The issue at hand is not collective bargaining representation
but union leadership, a matter that should concern only the members of USTFU. As
pointed out by the appellees, the privilege of determining who the union officers will be
belongs exclusively to the members of the union. Said privilege is exercised in an
election proceeding in accordance with the union's CBL and applicable law.
To accept appellants' claim to legitimacy on the foregoing grounds is to invest in
appellants the position, duties, responsibilities, rights and privileges of USTFU officers
without the benefit of a lawful electoral exercise as defined in USTFU's CBL and Article
241(c) of the Labor Code. Not to mention the fact that labor laws prohibit the employer
from interfering with the employees in the latter' exercise of their right to self-
organization. To allow appellants to become USTFU officers on the strength of
management's recognition of them is to concede to the employer the power of
determining who should be USTFU's leaders. This is a clear case of interference in the
exercise by USTFU members of their right to self-organization.[8]
Hence, this Petition.[9]
The Issues
The main issue in this case is whether the public respondent committed grave abuse
of discretion in refusing to recognize the officers elected during the October 4, 1996
general assembly. Specifically, petitioners in their Memorandum urge the Court to
resolve the following questions:[10]
(1) Whether the Collective Bargaining Unit of all the faculty members in that General
Faculty Assembly had the right in that General Faculty Assembly to suspend the
provisions of the Constitution and By-Laws of the USTFU regarding the elections of
officers of the union[.]
(2) Whether the suspension of the provisions of the Constitution and By-Laws of the
USTFU in that General Faculty Assembly is valid pursuant to the constitutional right of
the Collective Bargaining Unit to engage in peaceful concerted activities for the purpose
of ousting the corrupt regime of the private respondents[.]
(3) Whether the overwhelming ratification of the Collective Bargaining Agreement
executed by the petitioners in behalf of the USTFU with the University of Santo Tomas
has rendered moot and academic the issue as to the validity of the suspension of the
Constitution and By-Laws and the elections of October 4, 1996 in the General Faculty
Assembly[.]
The Courts Ruling
The petition is not meritorious. Petitioners fail to convince this Court that Director
Bitonio gravely abused his discretion in affirming the med-arbiter and in refusing to
recognize the binding effect of the October 4, 1996 general assembly called by the UST
administration.
First Issue: Right to Self-Organization and Union Membership
At the outset, the Court stresses that National Federation of Labor (NFL) v.
Laguesma[11] has held that challenges against rulings of the labor secretary and those
acting on his behalf, like the director of labor relations, shall be acted upon by the Court
of Appeals, which has concurrent jurisdiction with this Court over petitions
for certiorari. However, inasmuch as the memoranda in the instant case have been filed
prior to the promulgation and finality of our Decision in NFL, we deem it proper to
resolve the present controversy directly, instead of remanding it to the Court of
Appeals. Having disposed of the foregoing procedural matter, we now tackle the issues in
the present case seriatim.
Self-organization is a fundamental right guaranteed by the Philippine Constitution
and the Labor Code. Employees have the right to form, join or assist labor organizations
for the purpose of collective bargaining or for their mutual aid and protection. [12] Whether
employed for a definite period or not, any employee shall be considered as such,
beginning on his first day of service, for purposes of membership in a labor union. [13]
Corollary to this right is the prerogative not to join, affiliate with or assist a labor
union.[14] Therefore, to become a union member, an employee must, as a rule, not only
signify the intent to become one, but also take some positive steps to realize that
intent. The procedure for union membership is usually embodied in the unions
constitution and bylaws.[15] An employee who becomes a union member acquires the
rights and the concomitant obligations that go with this new status and becomes bound by
the unions rules and regulations.
When a man joins a labor union (or almost any other democratically controlled group),
necessarily a portion of his individual freedom is surrendered for the benefit of all
members. He accepts the will of the majority of the members in order that he may derive
the advantages to be gained from the concerted action of all. Just as the enactments of the
legislature bind all of us, to the constitution and by-laws of the union (unless contrary to
good morals or public policy, or otherwise illegal), which are duly enacted through
democratic processes, bind all of the members. If a member of a union dislikes the
provisions of the by-laws, he may seek to have them amended or may withdraw from the
union; otherwise, he must abide by them. It is not the function of courts to decide the
wisdom or propriety of legitimate by-laws of a trade union.
On joining a labor union, the constitution and by-laws become a part of the members
contract of membership under which he agrees to become bound by the constitution and
governing rules of the union so far as it is not inconsistent with controlling principles of
law. The constitution and by-laws of an unincorporated trade union express the terms of a
contract, which define the privileges and rights secured to, and duties assumed by, those
who have become members. The agreement of a member on joining a union to abide by
its laws and comply with the will of the lawfully constituted majority does not require a
member to submit to the determination of the union any question involving his personal
rights.[16]
Petitioners claim that the numerous anomalies allegedly committed by the private
respondents during the latters incumbency impelled the October 4, 1996 election of the
new set of USTFU officers. They assert that such exercise was pursuant to their right to
self-organization.
Petitioners frustration over the performance of private respondents, as well as their
fears of a fraudulent election to be held under the latters supervision, could not justify the
method they chose to impose their will on the union. Director Bitonio aptly elucidated:[17]
The constitutional right to self-organization is better understood in the context of ILO
Convention No. 87 (Freedom of Association and Protection of Right to Organize), to
which the Philippines is signatory. Article 3 of the Convention provides that workers
organizations shall have the right to draw up their constitution and rules and to elect their
representatives in full freedom, free from any interference from public authorities. The
freedom conferred by the provision is expansive; the responsibility imposed on union
members to respect the constitution and rules they themselves draw up equally so. The
point to be stressed is that the unions CBL is the fundamental law that governs the
relationship between and among the members of the union. It is where the rights, duties
and obligations, powers, functions and authority of the officers as well as the members
are defined. It is the organic law that determines the validity of acts done by any officer
or member of the union. Without respect for the CBL, a union as a democratic institution
degenerates into nothing more than a group of individuals governed by mob rule.
Union Election vs. Certification Election
A union election is held pursuant to the unions constitution and bylaws, and the
right to vote in it is enjoyed only by union members. A union election should be
distinguished from a certification election, which is the process of determining, through
secret ballot, the sole and exclusive bargaining agent of the employees in the appropriate
bargaining unit, for purposes of collective bargaining. [18] Specifically, the purpose of a
certification election is to ascertain whether or not a majority of the employees wish to be
represented by a labor organization and, in the affirmative case, by which particular labor
organization.[19]
In a certification election, all employees belonging to the appropriate bargaining
unit can vote.[20] Therefore, a union member who likewise belongs to the appropriate
bargaining unit is entitled to vote in said election. However, the reverse is not always
true; an employee belonging to the appropriate bargaining unit but who is not a member
of the union cannot vote in the union election, unless otherwise authorized by the
constitution and bylaws of the union. Verily, union affairs and elections cannot be
decided in a non-union activity.
In both elections, there are procedures to be followed. Thus, the October 4, 1996
election cannot properly be called a union election, because the procedure laid down in
the USTFUs CBL for the election of officers was not followed. It could not have been a
certification election either, because representation was not the issue, and the proper
procedure for such election was not followed. The participation of non-union members in
the election aggravated its irregularity.
Second Issue: USTFUs Constitution and ByLaws Violated
The importance of a unions constitution and bylaws cannot be
overemphasized. They embody a covenant between a union and its members and
constitute the fundamental law governing the members rights and obligations. [21] As such,
the unions constitution and bylaws should be upheld, as long as they are not contrary to
law, good morals or public policy.
We agree with the finding of Director Bitonio and Med-Arbiter Falconitin that the
October 4, 1996 election was tainted with irregularities because of the following reasons.
First, the October 4, 1996 assembly was not called by the USTFU. It was merely a
convocation of faculty clubs, as indicated in the memorandum sent to all faculty
members by Fr. Rodel Aligan, OP, the secretary general of the University of Santo
Tomas.[22] It was not convened in accordance with the provision on general membership
meetings as found in the USTFUs CBL, which reads:
ARTICLE VIII-MEETINGS OF THE UNION
Section 1. The Union shall hold regular general membership meetings at least once every
three (3) months. Notices of the meeting shall be sent out by the Secretary-General at
least ten (10) days prior to such meetings by posting in conspicuous places, preferably
inside Company premises, said notices. The date, time and place for the meetings shall be
determined by the Board of Officers.[23]
Unquestionably, the assembly was not a union meeting. It was in fact a gathering
that was called and participated in by management and non-union members. By no legal
fiat was such assembly transformed into a union activity by the participation of some
union members.
Second, there was no commission on elections to oversee the election, as mandated
by Sections 1 and 2 of Article IX of the USTFUs CBL, which provide:
ARTICLE IX - UNION ELECTION
Section 1. There shall be a Committee on Election (COMELEC) to be created by the
Board of Officers at least thirty (30) days before any regular or special election. The
functions of the COMELEC include the following:
a) Adopt and promulgate rules and regulations that will ensure a free, clean,
honest and orderly election, whether regular or special;
b) Pass upon qualifications of candidates;
c) Rule on any question or protest regarding the conduct of the election
subject to the procedure that may be promulgated by the Board of
Officers; and
d) Proclaim duly elected officers.
Section 2. The COMELEC shall be composed of a chairman and two members all of
whom shall be appointed by the Board of Officers.
xxx xxx xxx[24]
Third, the purported election was not done by secret balloting, in violation of
Section 6, Article IX of the USTFUs CBL, as well as Article 241 (c) of the Labor Code.
The foregoing infirmities considered, we cannot attribute grave abuse of discretion
to Director Bitonios finding and conclusion. In Rodriguez v. Director, Bureau of Labor
Relations,[25] we invalidated the local union elections held at the wrong date without prior
notice to members and conducted without regard for duly prescribed ground rules. We
held that the proceedings were rendered void by the lack of due process -- undue haste,
lack of adequate safeguards to ensure integrity of the voting, and the absence of the
notice of the dates of balloting.
Third Issue: Suspension of USTFUs CBL
Petitioners contend that the October 4, 1996 assembly suspended the unions
CBL. They aver that the suspension and the election that followed were in accordance
with their constituent and residual powers as members of the collective bargaining unit to
choose their representatives for purposes of collective bargaining. Again they cite the
numerous anomalies allegedly committed by the private respondents as USTFU
officers. This argument does not persuade.
First, as has been discussed, the general faculty assembly was not the proper forum
to conduct the election of USTFU officers. Not all who attended the assembly were
members of the union; some, apparently, were even disqualified from becoming union
members, since they represented management.Thus, Director Bitonio correctly observed:
Further, appellants cannot be heard to say that the CBL was effectively suspended during
the 04 October 1996 general assembly. A union CBL is a covenant between the union
and its members and among members (Johnson and Johnson Labor Union-FFW, et al. v.
Director of Labor Relations, 170 SCRA 469). Where ILO Convention No. 87 speaks of a
unions full freedom to draw up its constitution and rules, it includes freedom from
interference by persons who are not members of the union. The democratic principle that
governance is a matter for the governed to decide upon applies to the labor movement
which, by law and constitutional mandate, must be assiduously insulated against
intrusions coming from both the employer and complete strangers if the 'protection to
labor clause' of the constitution is to be guaranteed. By appellants own evidence, the
general faculty assembly of 04 October 1996 was not a meeting of USTFU. It was
attended by members and non-members alike, and therefore was not a forum appropriate
for transacting union matters. The person who moved for the suspension of USTFUs
CBL was not a member of USTFU. Allowing a non-union member to initiate the
suspension of a unions CBL, and non-union members to participate in a union election on
the premise that the unions CBL had been suspended in the meantime, is incompatible
with the freedom of association and protection of the right to organize.
If there are members of the so-called academic community collective bargaining unit who
are not USTFU members but who would nevertheless want to have a hand in USTFUs
affairs, the appropriate procedure would have been for them to become members of
USTFU first. The procedure for membership is very clearly spelled out in Article IV of
USTFUs CBL. Having become members, they could then draw guidance from Ang
Malayang Manggagawa Ng Ang Tibay v. Ang Tibay, 103 Phil. 669. Therein the Supreme
Court held that if a member of the union dislikes the provisions of the by-laws he may
seek to have them amended or may withdraw from the union; otherwise he must abide by
them. Under Article XVII of USTFUs CBL, there is also a specific provision for
constitutional amendments. What is clear therefore is that USTFUs CBL provides for
orderly procedures and remedies which appellants could have easily availed [themselves]
of instead of resorting to an exercise of their so-called residual power'.[26]
Second, the grievances of the petitioners could have been brought up and resolved
in accordance with the procedure laid down by the unions CBL[27]and by the Labor
Code.[28] They contend that their sense of desperation and helplessness led to the October
4, 1996 election. However, we cannot agree with the method they used to rectify years of
inaction on their part and thereby ease bottled-up frustrations, as such method was in total
disregard of the USTFUs CBL and of due process. The end never justifies the means.
We agree with the solicitor generals observation that the act of suspending the
constitution when the questioned election was held is an implied admission that the
election held on that date [October 4, 1996] could not be considered valid under the
existing USTFU constitution xxx.[29]
 The ratification of the new CBA executed between the petitioners and the
University of Santo Tomas management did not validate the void October 4, 1996
election. Ratified were the terms of the new CBA, not the issue of union leadership -- a
matter that should be decided only by union members in the proper forum at the proper
time and after observance of proper procedures.

Epilogue

In dismissing this Petition, we are not passing upon the merits of the
mismanagement allegations imputed by the petitioners to the private respondents; these
are not at issue in the present case. Petitioners can bring their grievances and resolve their
differences with private respondents in timely and appropriate proceedings. Courts will
not tolerate the unfair treatment of union members by their own leaders. When the latter
abuse and violate the rights of the former, they shall be dealt with accordingly in the
proper forum after the observance of due process.
WHEREFORE, the Petition is hereby DISMISSED and the assailed
Resolutions AFFIRMED. Costs against petitioners.
SO ORDERED.
SECOND DIVISION
[G.R. No. 135806. August 8, 2002]
TOYOTA MOTORS PHILIPPINES CORPORATION LABOR
UNION, petitioner, vs. TOYOTA MOTOR PHILIPPINES
CORPORATION EMPLOYEES AND WORKERS UNION, TOYOTA
MOTOR PHILIPPINES CORPORATION, and THE SECRETARY OF
LABOR AND EMPLOYMENT, respondents.
DECISION
BELLOSILLO, J.:
This is a petition for certiorari under Rule 65 of the Rules of Court, as amended,
seeking to set aside the Resolution of 5 June 1998 and the Order of 10 August 1998 both
issued by respondent Secretary of Labor and Employment in OS-A-5-58-98 (NCR-OD-
M-9704-0311) which affirmed the decision of the Med-Arbiter dated 24 February
1998. The assailed decision dismissed both the Petition for Certification Election filed by
respondent Toyota Motor Philippines Corp. Employees and Workers Union
(TMPCEWU) and the Petition-in-Interventionfiled by petitioner Toyota Motor
Philippines Corp. Labor Union (TMPCLU).
On 24 April 1997 respondent TMPCEWU filed a Petition for Certification
Election before the Med-Arbitration Unit of the DOLE-National Capital Region (DOLE-
NCR) seeking to represent the rank-and-file employees of the manufacturing division
from Levels 1 to 4 of Toyota Motor Philippines Corp. (TMPC).
On 13 May 1997, while the case was pending hearing, petitioner TMPCLU
claiming to be the legitimate labor organization, filed a Motion to Intervene with
Opposition to the Certification Election praying that it be allowed to intervene and,
thereafter, the petition by TMPCEWU be denied for lack of merit. It claimed that the
petition was premature due to an earlier resolution by the Secretary of Labor ordering the
conduct of a certification election among the rank-and-file employees of TMPC
represented by petitioner which was the subject of certiorari proceedings before the
Supreme Court and still awaiting final resolution at the time; and, that the collective
bargaining unit which respondent TMPCEWU sought to represent violated the "single or
employer" unit policy since it excluded the rank-and-file employees in the other divisions
and departments in respondent TMPC.[1]
In its motion petitioner TMPCLU outlined the antecedent events prior to the
TMPCEWU's filing of its Petition for Certification Election on 24 April 1997 thus -
1. On 26 November 1992 it (TMPCLU) filed a petition for certification election before
Med-Arbiter Paterno D. Adap, docketed as NCR-OD-M-9211-053;
2. On 8 March 1993 Med-Arbiter Adap dismissed TMPCLU's petition on the ground that
the labor organization's membership was composed of supervisory and rank-and-file
employees in violation of Art. 245 of the Labor Code, and that at the time of the filing of
its petition, TMCPLU had not even acquired legal personality yet;
3. On appeal, the Secretary of Labor, in a Resolution dated 9 November 1993 signed by
Undersecretary Bienvenido E. Laguesma, set aside the Med-Arbiter's Order and directed
the holding of a certification election among the regular rank-and-file employees of
TMPC. In setting aside the assailed order, the Office of the Secretary argued that:
Contrary to the allegation of herein respondent-appellee, petitioner-appellant was already
a legitimate labor organization at the time of the filing of the petition on 26 November
1992. Records show that on 24 November 1992 or two (2) days before the filing of the
said petition, it was issued a certificate of registration.
4. Acting on TMPC's motion for reconsideration the Secretary of Labor set aside his
earlier resolution and ordered the remand of the case to the Med-Arbiter concluding that
the issues raised by TMPC both on appeal and its motion for reconsideration were factual
issues requiring further hearing and production of evidence;
5. Pursuant to the order above-mentioned, the Med-Arbiter on 28 September 1994
dismissed TMPCLU's petition for certification election for failure of petitioner to acquire
legal personality at the time of the filing of the said petition;
6. The motion for reconsideration filed by TMPCLU before the Secretary of Labor,
which was treated as an appeal from the order of the Med-Arbiter dated 28 September
1994, was granted and the said order was set aside. In lieu thereof, a new order was
issued giving due course to the petition and directing the conduct of a certification
election among the rank-and-file employees of TMPC;
7. The Secretary of Labor, in his order dated 14 July 1995, denied for lack of merit the
motion for reconsideration filed by TMPC;
8. On 20 April 1996 the Secretary of Labor issued a new resolution directing the conduct
of a certification election among the rank-and-file employees of TMPC; and
9. TMPC lodged a special civil action for certiorari before the Supreme Court assailing
the 20 April 1996 Resolution of the Secretary of Labor; and on 19 February 1997, the
Supreme Court[2] set aside the assailed Resolution of the Secretary of Labor and
reinstated the Order of the Med-Arbiter dated 28 September 1994. In its decision, the
Supreme Court ruled that since TMPCLU's membership list contained the names of at
least twenty-seven (27) supervisory employees in Level Five positions, "the union could
not, prior to purging itself of its supervisory employee members, attain the status of a
legitimate labor organization. Not being one, it cannot possess the requisite personality to
file a petition for certification election."
 At the time respondent TMPCEWU filed its Petition for Certification Election on
24 April 1997 the decision of the Supreme Court had not ripened into a final and
executory judgment. Thus petitioner invoked as among the grounds for opposition thereto
in its Motion to Intervene with Opposition to the Petition for Certification Election that
the "pending proceeding before the Supreme Court may be said to be a pre-judicial
question which should be resolved first before the instant petition can prosper." [3]
TMPC also filed a similar comment on 9 June 1997. Hence, on 2 July 1997, the
Med-Arbiter ordered the provisional dismissal of TMPCEWU's Petition for Certification
Election pending a final ruling by the Supreme Court on the Petition for Certification
Election.
On 3 June 1997 the decision of the Supreme Court dated 19 February 1997 became
final and executory.
In view of respondent TMPCEWU's revival of its Petition for Certification
Election, petitioner also filed on 30 October 1997 its Petition-in-Intervention[4] alleging
that (a) it was representing only the rank-and-file employees; (b) it enjoys the support of
the regular rank-and-file workers at large in TMPC, an unorganized establishment, and
not only among the rank-and-file employees in the manufacturing division thereof; (c)
while respondent TMPCEWU professed itself as a legitimate labor organization, there
was serious doubt on such claim inasmuch as there was a pending petition for the
cancellation of its certification of registration on the ground of fraud; (d) respondent
TMPCEWU's representation of the rank-and-file employees, Levels 1 to 4, within the
manufacturing division only to the exclusion of those in the other departments and
divisions violated the "single or employer" unit policy; and, (e) the establishment of the
proposed bargaining unit in the manufacturing division composed of employees from
Levels 1 to 4, should respondent's petition be allowed, would induce the proliferation of
unions in a single employer.[5]
On 24 February 1998 the Med-Arbiter rendered a decision dismissing for lack of
merit TMPCEWU's Petition for Certification Election, since it failed to include all rank-
and-file employees from Levels 1 to 4 in other departments of TMPC in violation of
the "one-union in one-company" policy and likewise dismissing TMPCLU's Petition-in-
Intervention for lack of legal personality.[6] Anent the issue on whether TMPCLU has the
legal personality to file the Petition-in-Intervention, the Med-Arbiter explained thus -
The uncontroverted fact in this case is that at the time intervenor TMPCLU filed its
application for registration and subsequently thereafter was issued a certificate of
registration on November 24, 1992 (Annex A, Intervenor's petition-in-intervention), its
union membership is (sic) composed of supervisory and rank-and-file employees.
From this we could infer that the registration certificate issued by the Department of
Labor and Employment is void ab initio because at the time of the issuance the
constitution of intervenor union TMPCLU is (sic) a mixture of supervisory and rank-and-
file employees as per finding of fact of Med-Arbiter Paterno Adap in his Order dated
March 8, 1993 (Annex A, respondent's Answer to Petition-in-Intervention).
On 14 March 1998, dissatisfied with the unfavorable decision, petitioner appealed
to the Secretary of Labor contending that contrary to the finding of the Med-Arbiter it
had the legal personality to intervene in the certification election proceedings as shown
by its Certificate of Registration No. NCR-UR-11-996-92.
In a Resolution dated 5 June 1998, the Secretary of Labor justified his affirmance of
the Med-Arbiter's decision in this wise -[7]
On the first ground raised on appeal, it is true that the employer is a mere by-stander
during the conduct of a certification election. Prior to the election, however, the employer
is not precluded from ascertaining the legitimacy of the union in order that it can be
assured that the union it will be dealing with is a duly registered labor organization which
legally represents the bargaining unit sought to be represented. There is therefore no error
in allowing the employer to question the status of appellant as in the case at bar.
On the second issue, it had earlier been finally ruled by the Supreme Court (G.R. No
121084) involving herein employer and appellant that since the bargaining unit of the
rank-in-file which TMPCLU is seeking to represent is a mixture of supervisory
employees which is prohibited under Article 245 of the Labor Code, as amended, the
union prior to purging itself of supervisory employees-members, had not attained the
status of a legitimate labor organization. Appellant now simply asserts that it has purged
its membership of supervisory employees and therefore is now a legitimate labor
organization of the rank-and-file employees. Appellant has not however shown that it
registered anew because admittedly some of its officers are supervisory employees. The
need to register anew is necessary and the purging by itself of its officers who are holding
supervisory position is imperative.One of the requirements for registration is the
submission of the list of officers. Under the circumstances obtaining, appellant has not as
yet attained the status of a legitimate labor organization. It has therefore no legal
authority to oppose the instant petition.
On 10 August 1998 the Secretary issued an Order denying petitioner's motion for
reconsideration; hence, petitioner now comes to us assailing the aforementioned
Resolution and Order of the Secretary of Labor arguing that -
First. At the time it filed its Petition-in-Intervention on 30 October 1997 it was
clothed with legal personality as a bona fide labor union.Petitioner contended that when it
filed the Motion to Intervene with Opposition to the Petition for Certification
Election filed by TMPCEWU and its Petition-in-Intervention, it did have a Certificate of
Registration No. NCR-UR-1199692 which was based on its compliance with the
requisites for union registration. Hence, it had the legal personality when it filed
the Petition-in-Intervention and had all the rights as well as obligations of a legitimate
labor organization. There was therefore no necessity for petitioner to register anew when
it was already a registered labor organization.
Second. The Med-Arbiter had no authority to declare that petitioner's certificate of
registration was void ab initio in a certification election proceeding; neither was the
representation proceedings before the Med-Arbiter the appropriate remedy to ventilate
such issue.
 To buttress its stance, petitioner drew attention to the fact that the Implementing
Rules of the Labor Code of the Philippines, particularly Book V, Rule 1, Sec. 1 (kk)
thereof, and the Med-Arbiter's authority were limited to hearing, conciliating, mediating
and deciding representation cases, internal union and intra-union disputes. Considering
that the case before the Med-Arbiter was a Petition for Certification Election by
respondent TMPCEWU, the only task of the Med-Arbiter was to determine the
employees' choice of their bargaining representative, and nothing more.
Third. The Supreme Court in Toyota Motor Philippines v. Toyota Motor
Corporation Philippines Labor Union and Secretary of Labor, [8]limited the finding of
petitioner's lack of personality only to the time when it filed its Petition for Certification
Election.
In this regard, petitioner decries the decision of the Secretary of Labor affirming
that of the Med-Arbiter on the basis of the ruling in the aforecited case. It must be
stressed, according to petitioner, that contrary to the interpretation given by the Med-
Arbiter as affirmed by the Secretary of Labor, the Supreme Court's ruling that it did not
have legal personality was limited to the time when it filed its Petition for Certification
Election on 26 November 1992. Neither did the Supreme Court, in that case, rule on the
validity of the certificate of registration.
More importantly, according to petitioner, it was erroneous for the Secretary to
assume that inasmuch as petitioner failed to purge itself of its supervisory employee-
members when it filed its previous Petition for Certification Election on 26 November
1992, it could not have possessed the appropriate legal personality when it filed
its Petition-in-Intervention on 30 October 1997. The truth of the matter is that with the
purging completed, absent any finding of the Supreme Court or any other court or
tribunal declaring the invalidity of the certificate of registration, petitioner possessed the
legal personality when it filed its Petition-in-Intervention.
This Court is called upon to resolve the issue of whether petitioner had legal
personality on 30 October 1997 when it filed its Petition-in-Intervention. Corollary
thereto, should petitioner register anew despite its alleged purging of the supervisory
employee-members as directed by this Court in Toyota Motor Philippines Corporation v.
Toyota Motor Philippines Corporation Labor Union [9] and the issuance in its favor of a
certificate of registration after it was found to have violated Art. 245 of the Labor Code?
To find solution to the question in the instant case, we need only refer to the earlier
case of Toyota Motor Philippines Corporation v. Toyota Motor Philippines Corporation
Labor Union and the Secretary of Labor and Employment,[10] which sprang from
a Petition for Certification Election filed by TMPCLU among the rank-and-file
employees of TMPC. On 8 March 1993, however, its petition was dismissed by the Med-
Arbiter for the reason that the labor organization's membership was composed of
supervisory and rank-and-file employee-members. On appeal, the Secretary of Labor
remanded the case to the Med-Arbiter upon his finding that factual issues remained
unresolved. Pursuant to the order of the Secretary of Labor, the Med-Arbiter, in his
decision dated 28 September 1994, dismissed TMPCLU's Petition for Certification
Election on the basis of the following factual findings:
(T)he (in)controvertible fact is that petitioner could not have been issued its Certificate of
Registration on November 24, 1992 when it applied for registration only on November
23, 1992 as shown by the official receipt of payment of filing fee. As Enrique Nalus,
Chief LEO, this office, would attest in his letter dated September 8, 1994 addressed to
Mr. Porfirio T. Reyes, Industrial Relations Officer of Respondent company, in response
to a query posed by the latter, it is unlikely that an application for registration is approved
on the date that it is filed or the day thereafter as the processing course had to pass
through routing, screening, and assignment, evaluation, review and initialing, and
approval/disapproval procedure, among others, that a 30-day period is provided for under
the Labor Code for this purpose, let alone opposition thereto by interested parties which
must be also given due course."
Another evidence which petitioner presented is the "Union Registration 1992
Logbook of IRD" and the entry date 25 November 1992 as allegedly the date of the
release of its registration certificate. On the other hand, respondent company presented a
certified true copy of an entry on page 265 of the Union Registration Logbook showing
the pertinent facts about petitioner but which did not show that petitioner's registration
was issued on or before 26 November 1992.
The Med-Arbiter also found that TMPCLU had not acquired legal personality for
the reason that its composition, being a mixture of supervisory and rank-and-file
employees, was in direct violation of Art. 245 of the Labor Code. [11]
Although there is a divergence of factual backdrops between Toyota Motor
Philippines Corporation v. Toyota Motor Philippines Corporation Labor Union and the
Secretary of Labor and Employment[12] and the instant petition in the sense that in the
former the filing of a Petition for Certification Election by petitioner gave rise to the
controversy while the present case arose from the filing of a Petition-in-Intervention, the
bottom-line issue in both cases nonetheless involves the legitimacy of petitioner
TMPCLU to file petitions.
We recall that in the first Toyota case, although there was no categorical
pronouncement on the validity of petitioner's certificate of registration considering that
we deemed it entirely irrelevant in the light of the finding that petitioner was not entirely
a rank-and-file labor organization, we sustained however in the same decision the entire
factual findings of the Med-Arbiter when we observed -
The foregoing discussion, therefore, renders entirely irrelevant the technical issue raised
as to whether or not respondent union was in possession of the status of a legitimate labor
organization at the time of filing, when, as petitioner vigorously claims, the former was
still at the stage of processing of its application for recognition as a legitimate labor
organization. The union's composition being in violation of the Labor Code's prohibition
of unions composed of supervisory and rank-and-file employees, it could not possess the
requisite personality to file for recognition as a legitimate labor organization. In any case,
the factual issue, albeit ignored by the public respondents assailed Resolution, was
adequately threshed out in the Med-Arbiters September 28, 1994 Order (underscoring
supplied).
 In effect therefore, we already impressed our stamp of approval on the factual
findings of the Med-Arbiter in his 28 September 1994 decision, i.e., that petitioner had no
valid certificate of registration and therefore no legal personality to file the Petition for
Certification Election and in the absence of any attempt on its part to rectify the legal
infirmity, likewise the disputed Petition-in-Intervention.
It is thus fatuous on petitioner's part to resurrect the issue of legitimacy in the
instant case notwithstanding our earlier ruling sustaining the factual findings of the Med-
Arbiter.
We cannot also accede to petitioner's submission that the issuance of a certificate of
registration in its favor is an adequate and unassailable proof that it possesses the
requisite legal personality to file a Petition for Certification Election. Not necessarily. As
we emphasized in Progressive Development Corp. - Pizza Hut v. Laguesma,[13] if a labor
organizations application for registration is vitiated by falsification and serious
irregularities, a labor organization should be denied recognition as a legitimate labor
organization. And if a certificate of registration has been issued, the propriety of its
registration could be assailed directly through cancellation of registration proceedings in
accordance with Arts. 238 and 239 of the Labor Code, or indirectly, by challenging its
petition for the issuance of an order for certification election. We believe the procedural
requirements to impugn the registration by petitioner were more than adequately
complied with as shown in the 1997 case of Toyota Motor Philippines Corporation v.
Toyota Motor Philippines Corporation Labor Union.[14]
There is no reason to belabor the primordial importance of strictly complying with
the registration requirements of the Labor Code. As we have explained in a long line of
cases, the activities of labor organizations, associations and unions are impressed with
public interest, hence, must be protected.
WHEREFORE the petition is DISMISSED for lack of merit. Accordingly, the
assailed Resolution dated 5 June 1998 and Order dated 10 August 1998 of the Secretary
of Labor and Employment affirming the decision of the Med-Arbiter dated 24 February
1998 which dismissed both the Petition for Certification Election filed by respondent
Toyota Motor Philippines Corp. Employees and Workers Union (TMPCEWU) and
the Petition-in-Intervention of petitioner Toyota Motor Philippines Corp. Labor Union
(TMPCLU) are AFFIRMED.
SO ORDERED.
[G.R. No. 122226. March 25, 1998]
UNITED PEPSI-COLA SUPERVISORY UNION (UPSU), petitioner, vs. HON.
BIENVENIDO E. LAGUESMA and PEPSI-COLA PRODUCTS,
PHILIPPINES, INC. respondents.
DECISION
MENDOZA, J.:
Petitioner is a union of supervisory employees. It appears that on March 20, 1995
the union filed a petition for certification election on behalf of the route managers at
Pepsi-Cola Products Philippines, Inc. However, its petition was denied by the med-arbiter
and, on appeal, by the Secretary of Labor and Employment, on the ground that the route
managers are managerial employees and, therefore, ineligible for union membership
under the first sentence of Art. 245 of the Labor Code, which provides:
Ineligibility of managerial employees to join any labor organization; right of supervisory
employees. Managerial employees are not eligible to join, assist or form any labor
organization. Supervisory employees shall not be eligible for membership in a labor
organization of the rank-and-file employees but may join, assist or form separate labor
organizations of their own.
Petitioner brought this suit challenging the validity of the order dated August 31,
1995, as reiterated in the order dated September 22, 1995, of the Secretary of Labor and
Employment. Its petition was dismissed by the Third Division for lack of showing that
respondent committed grave abuse of discretion. But petitioner filed a motion for
reconsideration, pressing for resolution its contention that the first sentence of Art. 245 of
the Labor Code, so far as it declares managerial employees to be ineligible to form, assist
or join unions, contravenes Art. III 8 of the Constitution which provides:
The right of the people, including those employed in the public and private sectors, to
form unions, associations, or societies for the purposes not contrary to law shall not be
abridged.
For this reason, the petition was referred to the Court en banc.
The Issues in this Case
Two question are presented by the petition: (1) whether the route managers at
Pepsi-Cola Products Philippines, Inc. are managerial employees and (2) whether Art.
245, insofar as it prohibits managerial employees from forming, joining or assisting labor
unions, violates Art. III, 8 of the Constitution.
In resolving these issues it would be useful to begin by defining who are managerial
employees and considering the types of managerial employees.
Types of Managerial Employees
The term manager generally refers to anyone who is responsible for subordinates
and other organization resources.[1] As a class, managers constitute three levels of a
pyramid:
Top Management
_________________
Middle Management
_________________
First Line
Management
(also called Supervisor)
____________________
____________________
Operatives
Or Operating Employees
FIRST-LINE MANAGERS The lowest level in an organization at which individuals are
responsible for the work of others is called first-line or first-level management. First-line
managers direct operating employees only; they do not supervise other
managers. Example of first-line managers are the foreman or production supervisor in a
manufacturing plant, the technical supervisor in a research department, and the clerical
supervisor in a large office. First-level managers are often called supervisors.
MIDDLE MANAGERS The term middle management can refer to more than one level in
an organization. Middle managers direct the activities of other managers and sometimes
also those of operating employees. Middle managers principal responsibilities are to
direct the activities that implement their organizations policies and to balance the
demands of their superiors with the capacities of their subordinates.A plant manager in an
electronics firm is an example of a middle manager.
TOP MANAGERS Composed of a comparatively small group of executives, top
management is responsible for the overall management of the organization. It establishes
operating policies and guides the organizations interactions with its environment. Typical
titles of top managers are chief executive officer, president, and senior vice-
president. Actual titles vary from one organization to another and are not always a
reliable guide to membership in the highest management classification. [2]
As can be seen from this description, a distinction exist between those who have the
authority to devise, implement and control strategic and operational policies (top and
middle managers) and those whose task is simply to ensure that such polices are carried
out by the rank-and-file employees of an organization (first-level
managers/supervisors). What distinguishes them from the rank-and file employees is that
they act in the interest of the employer in supervising such rank-and-file employees.
Managerial employees may therefore be said to fall into two distinct categories: the
managers per se, who compose the former group described above, and the supervisors
who form the latter group. Whether they belong to the first or second category, managers,
vis--vis employers, are, likewise, employees.[3]
The first question is whether route managers are managers are managerial
employees or supervisors.
Previous Administrative Determinations of the Question Whether Route Managers are Managerial Employees
It appears that this question was the subject of two previous determinations by the
Secretary of Labor and Employment, in accordance with which this case was decided by
the med-arbiter.
In Case No. OS-MA-10318-91, entitled Workerss Alliance Trade Union (WATU)
v. Pepsi-Cola Products Philippines, Inc., decided on November 13, 1991, the Secretary of
Labor found:
We examined carefully the pertinent job description of the subject employees and other
documentary evidence on record vis--vis paragraph (m), Article 212 of the Labor Code,
as amended, and we find that only those employees occupying the position of route
manager and accounting manager are managerial employees. The rest i.e. quality control
manager, yard/transport manager and warehouse operations manager are supervisory
employees.
To qualify as managerial employee, there must be a clear showing of the exercise of
managerial attributes under paragraph (m), Article 212 of the Labor Code as
amended. Designations or titles of positions are not controlling. In the instant case,
nothing on record will support the claim that the quality control manager, yard/transport
manager and warehouse operations manager are vested with said attributes. The
warehouse operations manager, for example, merely assists the plant finance manager in
planning, organizing, directing and controlling all activities relative to development and
implementation of an effective management control information system at the sale
offices. The exercise of authority of the quality control manager, on the other hand, needs
the concurrence of the manufacturing manager
As to the route managers and accounting manager, we are convinced that they are
managerial employees. Their job descriptions clearly reveal so.
On July 6, 1992, this finding was reiterated in Case No. OS-A-3-71-92, entitled In
Re: Petition for Direct Certification and/or Certification Election-Route
Managers/Supervisory Employees of Pepsi-Cola Products Phils. Inc., as follows:
The issue brought before us is not of first impression. At one time, we had the occasion to
rule upon the status of route manager in the same company vis a vis the issue as to
whether or not it is supervisory employee or a managerial employee. In the case
of Workers Alliance Trade Unions (NATU) vs. Pepsi Cola Products, Phils., Inc. (OS-
MA-A-10-318-91), 15 November 1991, we ruled that a route manager is a managerial
employee within the context of the definition of the law, and hence, ineligible to join,
form or assist a union. We have once more passed upon the logic of our Decision
aforecited in the light of the issues raised in the instant appeal, as well as the available
documentary evidence on hand, and have come to the view that there is no cogent reason
to depart from our earlier holding. Route Managers are, by the very nature of their
functions and the authority they wield over their subordinates, managerial
employees. The prescription found in Art. 245 of the Labor Code, as amended therefore,
clearly applies to them.[4]4
Citing our ruling in Nasipit Lumber Co. v. National Labor Relations
Commission,[5]5 however, petitioner argues that these previous administrative
determinations do not have the effect of res judicata in this case, because "labor relations
proceedings" are "non-litigious and summary in nature without regard to legal
technicalities."[6] Nasipit Lumber Co. involved a clearance to dismiss an employee issued
by the Department of Labor. The question was whether in a subsequent proceeding for
illegal dismissal, the clearance was res judicata. In holding it was not, this Court made it
clear that it was referring to labor relations proceedings of a non-adversary character,
thus:
The requirement of a clearance to terminate employment was a creation of the
Department of labor to carry out the Labor Code provisions on security of tenure and
termination of employment. The proceeding subsequent to the filing of an application for
clearance to terminate employment was outlined in Book V, Rule XIV of the Rules and
Regulations Implementing the Labor Code. The fact that said rule allowed a procedure
for the approval of the clearance with or without the opposition of the employee
concerned (Secs. 7 & 8), demonstrates the non-litigious and summary nature of the
proceeding. The clearance requirement was therefore necessary only as an expeditious
shield against arbitrary dismissal without the knowledge and supervision of the
Department of Labor. Hence, a duly approved clearance implied that the dismissal was
legal or for cause (Sec. 2).[7]v. National Labor Relations Commission, 177 SCRA 93, 100 A Manager achieves objectives through others.
(1989).7
As a Route Manager, your purpose is to meet the sales plan; and you achieve
But the doctrine of res judicata certainly applies to adversary administrative this objective through the skillful MANAGEMENT OF YOUR JOB AND
proceedings. As early as 1956, in Brillantes v. Castro,[8]8 we sustained the dismissal of an THE MANAGEMENT OF YOUR PEOPLE.
action by a trial court on the basis of a prior administrative determination of the same
case by the Wage Administration Service, applying the principle of res These then are your functions as Pepsi-Cola Route Manager. Within these
judicata. Recently, in Abad v. NLRC[9]9 we applied the related doctrine of stare decisis in functions - managing your job and managing your people - you are
holding that the prior determination that certain jobs at the Atlantic Gulf and Pacific Co. accountable to your District Manager for the execution and completion of
were project employments was binding in another case involving another group of various tasks and activities which will make it possible for you to achieve
employees of the same company. Indeed, in Nasipit Lumber Co., this Court clarified your sales objectives.
toward the end of its opinion that "the doctrine of res judicata applies . . . to judicial or
quasi judicial proceedings and not to the exercise of administrative powers."[10]v. National
B. PRINCIPAL ACCOUNTABILITIES
Labor Relations Commission, supra note 7.10 Now proceedings for certification election,
such as those involved in Case No. OS-M-A-10-318-91 and Case No. OS-A-3-71-92, are
quasi judicial in nature and, therefore, decisions rendered in such proceedings can attain 1.0 MANAGING YOUR JOB
finality.[11]v. B.F. Goodrich (Marikina Factory) Confidential and Salaries Employees
Union-NATU, 49 SCRA 532 (1973).11 The Route Manager is accountable for the following:
Thus, we have in this case an expert's view that the employees concerned are
managerial employees within the purview of Art. 212 which provides: 1.1 SALES DEVELOPMENT

(m) "managerial employee" is one who is vested with powers or prerogatives to lay down 1.1.1 Achieve the sales plan.
and execute management policies and/or to hire, transfer, suspend, lay off, recall,
discharge, assign or discipline employees. Supervisory employees are those who, in the 1.1.2 Achieve all distribution and new account objectives.
interest of the employer, effectively recommend such managerial actions if the exercise
of such authority is not merely routinary or clerical in nature but requires the use of 1.1.3 Develop new business opportunities thru personal contacts with
independent judgment. All employees not falling within any of the above definitions are dealers.
considered rank-and-file employees for purposes of this Book.
1.1.4 Inspect and ensure that all merchandizing [sic] objectives are
At the very least, the principle of finality of administrative determination compels respect achieved in all outlets.
for the finding of the Secretary of Labor that route managers are managerial employees as
defined by law in the absence of anything to show that such determination is without
substantial evidence to support it. Nonetheless, the Court, concerned that employees who 1.1.5 maintain and improve productivity of all cooling equipment and
are otherwise supervisors may wittingly or unwittingly be classified as managerial kiosks.
personnel and thus denied the right of self- organization, has decided to review the record
of this case. 1.1.6 Execute and control all authorized promotions.

1.1.7 Develop and maintain dealer goodwill.

DOLE's Finding that Route Managers are Managerial Employees Supported by Substantial Evidence in the Record

1.1.8 Ensure all accounts comply with company suggested retail pricing.

The Court now finds that the job evaluation made by the Secretary of Labor is 1.1.9 Study from time to time individual route coverage and productivity
indeed supported by substantial evidence. The nature of the job of route managers is for possible adjustments to maximize utilization of resources.
given in a four-page pamphlet, prepared by the company, called "Route Manager Position
Description," the pertinent parts of which read: 1.2 Administration

A. BASIC PURPOSE
 1.2.1 Ensure the proper loading of route trucks before check-out and the
proper sorting of bottles before check-in.
1.2.2 Ensure the upkeep of all route sales reports and all other related
reports and forms required on an accurate and timely basis.
1.2.3 Ensure proper implementation of the various company policies and
procedures incl. but not limited to shakedown; route
shortage; progressive discipline; sorting; spoilages;
credit/collection; accident; attendance.
1.2.4 Ensure collection of receivables and delinquent accounts.
2.0 MANAGING YOUR PEOPLE
The Route Manager is accountable for the following:
2.1 Route Sales Team Development
2.1.1 Conduct route rides to train, evaluate and develop all assigned
route salesmen and helpers at least 3 days a week, to be
supported by required route ride documents/reports & back
check/spot check at least 2 days a week to be supported by
required documents/reports.
2.1.2 Conduct sales meetings and morning huddles. Training should
focus on the enhancement of effective sales and
merchandizing [sic] techniques of the salesmen and
helpers. Conduct group training at least 1 hour each week on
a designated day and of specific topic.
2.2 Code of Conduct
2.2.1 Maintain the company's reputation through strict adherence to
PCPPI's code of conduct and the universal standards of
unquestioned business ethics.[12]12
Earlier in this opinion, reference was made to the distinction between managers per
se (top managers and middle managers) and supervisors (first-line managers). That
distinction is evident in the work of the route managers which sets them apart from
supervisors in general. Unlike supervisors who basically merely direct operating
employees in line with set tasks assigned to them, route managers are responsible for the
success of the company's main line of business through management of their respective
sales teams. Such management necessarily involves the planning, direction, operation and
evaluation of their individual teams and areas which the work of supervisors does not
entail.
The route managers cannot thus possibly be classified as mere supervisors because
their work does not only involve, but goes far beyond, the simple direction or supervision
of operating employees to accomplish objectives set by those above them. They are not
mere functionaries with simple oversight functions but business administrators in their
own right. An idea of the role of route managers as managers per se can be gotten from a
memo sent by the director of metro sales operations of respondent company to one of the
route managers. It reads:[13]
03 April 1995
To : CESAR T. REOLADA
From : REGGIE M. SANTOS
Subj : SALARY INCREASE
Effective 01 April 1995, your basic monthly salary of P11,710 will be increased
to P12,881 or an increase of 10%. This represents the added managerial
responsibilities you will assume due to the recent restructuring and streamlining of
Metro Sales Operations brought about by the continuous losses for the last nine (9)
months.
Let me remind you that for our operations to be profitable, we have to sustain the
intensity and momentum that your group and yourself have shown last March. You
just have to deliver the desired volume targets, better negotiated concessions,
rationalized sustaining deals, eliminate or reduced overdues, improved
collections, more cash accounts, controlled operating expenses,etc. Also, based
on the agreed set targets, your monthly performance will be closely monitored.
You have proven in the past that your capable of achieving your targets thru
better planning, managing your group as a fighting team, and thru aggressive
selling. I am looking forward to your success and I expect that you just have to
exert your doubly best in turning around our operations from a losing to a
profitable one!
Happy Selling!!
(Sgd.) R.M. SANTOS
The plasticized card given to route managers, quoted in the separate opinion
of Justice Vitug, although entitled "RM's Job Description," is only a summary of
performance standards. It does not show whether route managers are managers per se or
supervisors. Obviously, these performance standards have to be related to the specific
tasks given to route managers in the four-page "Route Manager Position Description,"
and, when this is done, the managerial nature of their jobs is fully revealed. Indeed, if
any, the card indicates the great latitude and discretion given to route managers - from
servicing and enhancing company goodwill to supervising and auditing accounts, from
trade (new business) development to the discipline, training and monitoring of
performance of their respective sales teams, and so forth, - if they are to fulfill the
company's expectations in the "key result areas."
Article 212(m) says that "supervisory employees are those who, in the interest of
the employer, effectively recommend such managerial actions if the exercise of such
authority is not merely routinary or clerical in nature but requires the use of independent
judgment." Thus, their only power is to recommend. Certainly, the route managers in this
case more than merely recommend effective management action.They perform
operational, human resource, financial and marketing functions for the company, all of
which involve the laying down of operating policies for themselves and their teams. For
example, with respect to marketing, route managers, in accordance with B.1.1.1 to
B.1.1.9 of the Route Managers Job Description, are charged, among other things, with
expanding the dealership base of their respective sales areas, maintaining the goodwill of
current dealers, and distributing the company's various promotional items as they see
fit. It is difficult to see how supervisors can be given such responsibility when this
involves not just the routine supervision of operating employees but the protection and
expansion of the company's business vis-a-vis its competitors.
While route managers do not appear to have the power to hire and fire people (the
evidence shows that they only "recommended" or "endorsed" the taking of disciplinary
action against certain employees), this is because this is a function of the Human
Resources or Personnel Department of the company. [14]14 And neither should it be
presumed that just because they are given set benchmarks to observe, they are ipso
facto supervisors. Adequate control methods (as embodied in such concepts as
"Management by Objectives [MBO]" and "performance appraisals") which require
a delineation of the functions and responsibilities of managers by means of ready
reference cards as here, have long been recognized in management as effective tools for
keeping businesses competitive.
This brings us to the second question, whether the first sentence of Art. 245 of the
Labor Code, prohibiting managerial employees from forming, assisting or joining any
labor organization, is constitutional in light of Art. III, 8 of the Constitution which
provides:
The right of the people, including those employed in the public and private sectors, to
form unions, associations, or societies for purposes not contrary to law shall not be
abridged.
As already stated, whether they belong to the first category (managers per se) or the
second category (supervisors), managers are employees. Nonetheless, in the United
States, as Justice Puno's separate opinion notes, supervisors have no right to form
unions. They are excluded from the definition of the term "employee" in 2(3) of the
Labor-Management Relations Act of 1947.[15]v. Bell Aerospace Co., 416 U.S. 281, n 11,
40 L.Ed.2d 134, 147, n. 11 (1974), thus:
Supervisors are management people. They have distinguished themselves in their
work. They have demonstrated their ability to take care of themselves without depending
upon the pressure of collective action. No one forced them to become supervisors. They
abandoned the "collective security" of the rank and file voluntarily, because they believed
the opportunities thus opened to them to be more valuable to them than such "security". It
seems wrong, and it is wrong, to subject people of this kind, who have demonstrated their
initiative, their ambition and their ability to get ahead, to the leveling processes of
seniority, uniformity and standardization that the Supreme Court recognizes as being
fundamental principles of unionism. (J.I. Case Co. v. National Labor Relations Board,
321 U.S. 332, 88 L.Ed. 762, 64 S. Ct. 576 (1994). It is wrong for the foremen, for it
discourages the things in them that made them foremen in the first place. For the same
reason, that it discourages those best qualified to get ahead, it is wrong for industry, and
particularly for the future strength and productivity of our country.15 In the Philippines,
the question whether managerial employees have a right of self-organization has arisen
with respect to first-level managers or supervisors, as shown by a review of the course of
labor legislation in this country.
Right of Self-Organization of Managerial Employees under Pre-Labor Code Laws
Before the promulgation of the Labor Code in 1974, the field of labor relations was
governed by the Industrial Peace Act (R.A. No. 875).
In accordance with the general definition above, this law defined "supervisor" as
follows:
SECTION 2. . . .
(k) "Supervisor" means any person having authority in the interest of an employer, to
hire, transfer, suspend, lay-off, recall, discharge, assign, recommend, or discipline other
employees, or responsibly to direct them, and to adjust their grievances, or effectively to
recommend such acts, if, in connection with the foregoing, the exercise of such authority
is not of a merely routinary or clerical nature but requires the use of independent
judgment.[16]16
The right of supervisors to form their own organizations was affirmed:
SEC. 3. Employees' Right to Self-Organization. -- Employees shall have the right to self-
organization and to form, join or assist labor organizations of their own choosing for the
purpose of collective bargaining through representatives of their own choosing and to
engage in concerted activities for the purpose of collective bargaining and other mutual
aid and protection. Individuals employed as supervisors shall not be eligible for
membership in a labor organization of employees under their supervision but may form
separate organizations of their own.[17]
For its part, the Supreme Court upheld in several of its decisions the right of supervisors
to organize for purposes of labor relations.[18]v.Filoil Supervisory and Confidential
Employees Association, 6 SCRA 522 (1972); Kapisanan ng mga Manggagawa sa Manila
Railroad Co. v.CIR, 106 Phil 607 (1959).18
 Although it had a definition of the term "supervisor," the Industrial Peace Act did Sales Supervisor
not define the term "manager." But, using the commonly-understood concept of Supervisory Assistant
"manager," as above stated, it is apparent that the law used the term "supervisors" to refer Jr. Supervisory Assistant
to the sub-group of "managerial employees" known as front-line managers. The other Credit Assistant
sub-group of "managerial employees," known as managers per se, was not covered. Lab. Supvr. - Pandacan
Jr. Sales Engineer B
However, in Caltex Filipino Managers and Supervisors Association v. Court of Operations Assistant B
Industrial Relations,[19]J.)19 the right of all managerial employees to self-organization Field Engineer
was upheld as a general proposition, thus: Sr. Opers. Supvr. - MIA A/S
Purchasing Assistant
It would be going too far to dismiss summarily the point raised by respondent Company - Jr. Construction Engineer
that of the alleged identity of interest between the managerial staff and the employing St. Sales Supervisor
firm. That should ordinarily be the case, especially so where the dispute is between Deport Supervisor A
management and the rank and file. It does not necessarily follow though that what binds Terminal Accountant B
the managerial staff to the corporation forecloses the possibility of conflict between Merchandiser
them. There could be a real difference between what the welfare of such group requires Dist. Sales Prom. Supvr.
and the concessions the firm is willing to grant. Their needs might not be attended to then Instr. - Merchandising
in the absence of any organization of their own. Nor is this to indulge in empty Asst. Dist. Accountant B
theorizing. The record of respondent Company, even the very case cited by it, is proof Sr. Opers. Supervisor
enough of their uneasy and troubled relationship.Certainly the impression is difficult Jr. Sales Engineer A
to erase that an alien firm failed to manifest sympathy for the claims of its Filipino Asst. Bulk Ter. Supt.
executives. To predicate under such circumstances that agreement inevitably marks their Sr. Opers. Supvr.
relationship, ignoring that discord would not be unusual, is to fly in the face of reality. Credit Supervisor A
Asst. Stores Supvr. A
. . . The basic question is whether the managerial personnel can organize. What Ref. Supervisory Draftsman
respondent Company failed to take into account is that the right to self-organization is not Refinery Shift Supvr. B
merely a statutory creation. It is fortified by our Constitution. All are free to exercise such Asst. Supvr. A - Operations (Refinery)
right unless their purpose is contrary to law. Certainly it would be to attach unorthodoxy Refinery Shift Supvr. B
to, not to say an emasculation of, the concept of law if managers as such were precluded Asst. Lab. Supvr. A (Refinery)
from organizing. Having done so and having been duly registered, as did occur in this St. Process Engineer B (Refinery)
case, their union is entitled to all the rights under Republic Act No. 875. Considering Asst. Supvr. A - Maintenance (Refinery)
what is denominated as unfair labor practice under Section 4 of such Act and the facts set Asst. Supvr. B - Maintenance (Refinery)
forth in our decision, there can be only one answer to the objection raised that no unfair Supervisory Accountant (Refinery)
labor practice could be committed by respondent Company insofar as managerial Communications Supervisor (Refinery)
personnel is concerned. It is, as is quite obvious, in the negative.[20]20 Finally, also deemed included are all other employees excluded from the rank and
file unions but not classified as managerial or otherwise excludable by law or
applicable judicial precedents.
Actually, the case involved front-line managers or supervisors only, as the plantilla
of employees, quoted in the main opinion, [21]J.) (emphasis added).21 clearly indicates:

Right of Self-Organization of Managerial Employees under the Labor Code

CAFIMSA members holding the following Supervisory Payroll Position Title are
Recognized by the Company

Thus, the dictum in the Caltex case which allowed at least for the theoretical
Payroll Position Title
unionization of top and middle managers by assimilating them with the supervisory group
under the broad phrase "managerial personnel," provided the lynchpin for later laws
Assistant to Mgr. - National Acct. Sales denying the right of self-organization not only to top and middle management employees
Jr. Sales Engineer but to front line managers or supervisors as well. Following the Caltex case, the Labor
Retail Development Asst. Code, promulgated in 1974 under martial law, dropped the distinction between the first
Staff Asst. - 0 Marketing

and second sub-groups of managerial employees. Instead of treating the terms
"supervisor" and "manager" separately, the law lumped them together and called them
"managerial employees," as follows:
ART. 212. Definitions . . . .
(k) "Managerial Employee" is one who is vested with powers or prerogatives to lay down
and execute management policies and/or to hire, transfer, suspend, lay off, recall,
discharge, assign or discipline employees, or to effectively recommend such managerial
actions. All employees not falling within this definition are considered rank and file
employees for purposes of this Book.[22]22
The definition shows that it is actually a combination of the commonly understood
definitions of both groups of managerial employees, grammatically joined by the phrase
"and/or."
This general definition was perhaps legally necessary at that time for two reasons.
First, the 1974 Code denied supervisors their right to self-organize as theretofore
guaranteed to them by the Industrial Peace Act. Second, it stood the dictum in the Caltex
case on its head by prohibiting all types of managers from forming unions. The explicit
general prohibition was contained in the then Art. 246 of the Labor Code.
The practical effect of this synthesis of legal concepts was made apparent in the
Omnibus Rules Implementing the Labor Code which the Department of Labor
promulgated on January 19, 1975. Book V, Rule II, 11 of the Rules provided:
Supervisory unions and unions of security guards to cease operation. - All existing
supervisory unions and unions of security guards shall, upon the effectivity of the Code,
cease to operate as such and their registration certificates shall be deemed automatically
cancelled.However, existing collective agreements with such unions, the life of which
extends beyond the date of effectivity of the Code, shall be respected until their expiry
date insofar as the economic benefits granted therein are concerned.
Members of supervisory unions who do not fall within the definition of managerial
employees shall become eligible to join or assist the rank and file labor organization, and
if none exists, to form or assist in the forming of such rank and file organization. The
determination of who are managerial employees and who are not shall be the subject of
negotiation between representatives of the supervisory union and the employer. If no
agreement is reached between the parties, either or both of them may bring the issue to
the nearest Regional Office for determination.
The Department of Labor continued to use the term "supervisory unions" despite
the demise of the legal definition of "supervisor" apparently because these were the
unions of front line managers which were then allowed as a result of the statutory grant of
the right of self-organization under the Industrial Peace Act. Had the Department of
Labor seen fit to similarly ban unions of top and middle managers which may have been
formed following the dictum in Caltex, it obviously would have done so. Yet it did not,
apparently because no such unions of top and middle managers really then existed.
Real Intent of the 1986 Constitutional Commission
This was the law as it stood at the time the Constitutional Commission considered
the draft of Art. III, 8. Commissioner Lerum sought to amend the draft of what was later
to become Art. III, 8 of the present Constitution:
MR. LERUM. My amendment is on Section 7, page 2, line 19, which is to insert between
the words "people" and "to" the following:WHETHER EMPLOYED BY THE STATE
OR PRIVATE ESTABLISHMENTS. In other words, the section will now read as
follows: "The right of the people WHETHER EMPLOYED BY THE STATE OR
PRIVATE ESTABLISHMENTS to form associations, unions, or societies for purposes
not contrary to law shall not be abridged."[23]23
Explaining his proposed amendment, he stated:
MR. LERUM. Under the 1935 Bill of Rights, the right to form associations is granted to
all persons whether or not they are employed in the government. Under that provision, we
allow unions in the government, in government-owned and controlled corporations and in
other industries in the private sector, such as the Philippine Government Employees'
Association, unions in the GSIS, the SSS, the DBP and other government-owned and
controlled corporations. Also, we have unions of supervisory employees and of security
guards. But what is tragic about this is that after the 1973 Constitution was approved and
in spite of an express recognition of the right to organize in P.D. No. 442, known as the
Labor Code, the right of government workers, supervisory employees and security guards
to form unions was abolished.
And we have been fighting against this abolition. In every tripartite conference attended
by the government, management and workers, we have always been insisting on the
return of these rights. However, both the government and employers opposed our
proposal, so nothing came out of this until this week when we approved a provision
which states:
Notwithstanding any provision of this article, the right to self-organization shall not be
denied to government employees.
We are afraid that without any corresponding provision covering the private sector, the
security guards, the supervisory employees or majority employees [sic] will still be
excluded, and that is the purpose of this amendment.
I will be very glad to accept any kind of wording as long as it will amount to absolute
recognition of private sector employees, without exception, to organize.
THE PRESIDENT. What does the Committee say?
FR. BERNAS. Certainly, the sense is very acceptable, but the point raised by
Commissioner Rodrigo is well-taken. Perhaps, we can lengthen this a little bit more to
read: "The right of the people WHETHER UNEMPLOYED OR EMPLOYED BY
STATE OR PRIVATE ESTABLISHMENTS."
I want to avoid also the possibility of having this interpreted as applicable only to the
employed.
MR. DE LOS REYES. Will the proponent accept an amendment to the amendment,
Madam President?
MR. LERUM. Yes, as long as it will carry the idea that the right of the employees in the
private sector is recognized.[24]
Lerum thus anchored his proposal on the fact that (1) government employees,
supervisory employees, and security guards, who had the right to organize under the
Industrial Peace Act, had been denied this right by the Labor Code, and (2) there was a
need to reinstate the right of these employees. In consonance with his objective to
reinstate the right of government, security, and supervisory employees to organize,
Lerum then made his proposal:
MR. LERUM. Mr. Presiding Officer, after a consultation with several Members of this
Commission, my amendment will now read as follows:"The right of the people
INCLUDING THOSE EMPLOYED IN THE PUBLIC AND PRIVATE SECTORS to
form associations, unions, or societies for purposes not contrary to law shall not be
abridged. In proposing that amendment I ask to make of record that I want the following
provisions of the Labor Code to be automatically abolished, which read:
ART. 245. Security guards and other personnel employed for the protection and security
of the person, properties and premises of the employers shall not be eligible for
membership in a labor organization.
ART. 246. Managerial employees are not eligible to join, assist, and form any labor
organization.
THE PRESIDING OFFICER (Mr. Bengzon). What does the Committee say?
FR. BERNAS. The Committee accepts.
THE PRESIDING OFFICER. (Mr. Bengzon) The Committee has accepted the
amendment, as amended.
Is there any objection? (Silence) The Chair hears none; the amendment, as amended, is
approved.[25]
The question is what Commissioner Lerum meant in seeking to "automatically
abolish" the then Art. 246 of the Labor Code. Did he simply want "any kind of wording
as long as it will amount to absolute recognition of private sector employees, without
exception, to organize"?[26] Or, did he instead intend to have his words taken in the
context of the cause which moved him to propose the amendment in the first place,
namely, the denial of the right of supervisory employees to organize, because he said,
"We are afraid that without any corresponding provision covering the private sector,
security guards, supervisory employees or majority [of] employees will still be excluded,
and that is the purpose of this amendment"? [27]
It would seem that Commissioner Lerum simply meant to restore the right of
supervisory employees to organize. For even though he spoke of the need to "abolish"
Art. 246 of the Labor Code which, as already stated, prohibited "managerial employees"
in general from forming unions, the fact was that in explaining his proposal, he
repeatedly referred to "supervisory employees" whose right under the Industrial Peace
Act to organize had been taken away by Art. 246. It is noteworthy that Commissioner
Lerum never referred to the then definition of "managerial employees" in Art. 212(m) of
the Labor Code which put together, under the broad phrase "managerial employees,"top
and middle managers and supervisors. Instead, his repeated use of the term "supervisory
employees," when such term then was no longer in the statute books, suggests a frame of
mind that remained grounded in the language of the Industrial Peace Act.
Nor did Lerum ever refer to the dictum in Caltex recognizing the right of all
managerial employees to organize, despite the fact that the Industrial Peace Act did not
expressly provide for the right of top and middle managers to organize. If Lerum was
aware of the Caltex dictum, then his insistence on the use of the term "supervisory
employees" could only mean that he was excluding other managerial employees from his
proposal. If, on the other hand, he was not aware of the Caltex statement sustaining the
right to organize to top and middle managers, then the more should his repeated use of
the term "supervisory employees" be taken at face value, as it had been defined in the
then Industrial Peace Act.
At all events, that the rest of the Commissioners understood his proposal to refer
solely to supervisors and not to other managerial employees is clear from the following
account of Commissioner Joaquin G. Bernas, who writes:
In presenting the modification on the 1935 and 1973 texts, Commissioner Eulogio R.
Lerum explained that the modification included three categories of workers: (1)
government employees, (2) supervisory employees, and (3) security guards. Lerum made
of record the explicit intent to repeal provisions of P.D. 442, the Labor Code. The
provisions referred to were:
ART. 245. Security guards and other personnel employed for the protection and security
of the person, properties and premises of the employers shall not be eligible for
membership in a labor organization.
ART. 246. Managerial employees are not eligible to join, assist, and form any labor
organization.[28]28
Implications of the Lerum Proposal
In sum, Lerum's proposal to amend Art. III, 8 of the draft Constitution by including
labor unions in the guarantee of organizational right should be taken in the context of
statements that his aim was the removal of the statutory ban against security guards and
supervisory employees joining labor organizations. The approval by the Constitutional
Commission of his proposal can only mean, therefore, that the Commission intended the
absolute right to organize of government workers, supervisory employees, and security
guards to be constitutionally guaranteed. By implication, no similar absolute
constitutional right to organize for labor purposes should be deemed to have been granted
to top-level and middle managers. As to them the right of self-organization may be
regulated and even abridged conformably to Art. III, 8.
Constitutionality of Art. 245
Finally, the question is whether the present ban against managerial employees, as
embodied in Art. 245 (which superseded Art. 246) of the Labor Code, is valid. This
provision reads:
ART. 245. Ineligibility of managerial employees to join any labor organization; right of
supervisory employees. - Managerial employees are not eligible to join, assist or form any
labor organization. Supervisory employees shall not be eligible for membership in a labor
organization of the rank-and-file employees but may join, assist or form separate labor
organizations of their own.[29]29
This provision is the result of the amendment of the Labor Code in 1989 by R.A.
No. 6715, otherwise known as the Herrera-Veloso Law.Unlike the Industrial Peace Act
or the provisions of the Labor Code which it superseded, R.A. No. 6715 provides
separate definitions of the terms "managerial" and "supervisory employees," as follows:
ART. 212. Definitions. . . .
(m) "managerial employee" is one who is vested with powers or prerogatives to lay
down and execute management policies and/or to hire transfer, suspend, lay off, recall,
discharge, assign or discipline employees. Supervisory employees are those who, in the
interest of the employer, effectively recommend such managerial actions if the exercise
of such authority is not merely routinary or clerical in nature but requires the use of
independent judgment. All employees not falling within any of the above definitions are
considered rank-and-file employees for purposes of this Book.
Although the definition of "supervisory employees" seems to have been unduly
restricted to the last phrase of the definition in the Industrial Peace Act, the legal
significance given to the phrase "effectively recommends" remains the same. In fact, the
distinction between top and middle managers, who set management policy, and front-line
supervisors, who are merely responsible for ensuring that such policies are carried out by
the rank and file, is articulated in the present definition.[30]30 When read in relation to this
definition in Art. 212(m), it will be seen that Art. 245 faithfully carries out the intent of
the Constitutional Commission in framing Art. III, 8 of the fundamental law.
Nor is the guarantee of organizational right in Art. III, 8 infringed by a ban against
managerial employees forming a union. The right guaranteed in Art. III, 8 is subject to
the condition that its exercise should be for purposes "not contrary to law." In the case of
Art. 245, there is a rational basis for prohibiting managerial employees from forming or
joining labor organizations. As Justice Davide, Jr., himself a constitutional commissioner,
said in his ponencia in Philips Industrial Development, Inc. v. NLRC:[31]31
In the first place, all these employees, with the exception of the service engineers and the
sales force personnel, are confidential employees. Their classification as such is not
seriously disputed by PEO-FFW; the five (5) previous CBAs between PIDI and PEO-
FFW explicitly considered them as confidential employees. By the very nature of their
functions, they assist and act in a confidential capacity to, or have access to confidential
matters of, persons who exercise managerial functions in the field of labor relations. As
such, the rationale behind the ineligibility of managerial employees to form, assist or
joint a labor union equally applies to them.
In Bulletin Publishing Co., Inc. v. Hon. Augusto Sanchez, this Court elaborated on this
rationale, thus:
". . . The rationale for this inhibition has been stated to be, because if these managerial
employees would belong to or be affiliated with a Union, the latter might not be assured
of their loyalty to the Union in view of evident conflict of interests. The Union can also
become company-dominated with the presence of managerial employees in Union
membership."[32]
To be sure, the Court in Philips Industrial was dealing with the right of confidential
employees to organize. But the same reason for denying them the right to organize
justifies even more the ban on managerial employees from forming unions. After all,
those who qualify as top or middle managers are executives who receive from their
employers information that not only is confidential but also is not generally available to
the public, or to their competitors, or to other employees. It is hardly necessary to point
out that to say that the first sentence of Art. 245 is unconstitutional would be to contradict
the decision in that case.
WHEREFORE, the petition is DISMISSED.
SO ORDERED.
G.R. No. L-67158, 67159, 67160, 67161, & 67162 May 30, 1988
CLLC E.G. GOCHANGCO WORKERS UNION, CORNELIO L. PANGILINAN,
LEO TROPACIO, OLIMPIO GUMIN, JUANITO SUBA, ROLANDO SANTOS,
RUBEN BUELA, ODILON LISING, REYNALDO DAYRIT, ROGELIO
MANGUERRA, ORLANDO NACU, DIOSILINO PERDON, ERNESTO
GALANG, ORLANDO PANGILINAN, JESUS SEMBRANO, RENATO
CASTANEDA, EDILBERTO BINGCANG, ERNESTO CAPIO, RUFO A.
BUGAYONG, RICARDO S. DOMINGO, TERESITO CULLARIN, ISRAEL
VINO, ERNESTO RAMIREZ, ROMEO S. GINA, ARNEL CALILUNG, PEDRO
A. SANTOS, RODOLFO CAPITLY, BUENAVENTURA B. PUNO, EDILBERTO
QUIAMBAO, FERNANDO LISING, ERNESTO M. TUAZON, MARCELO
LANGUNSAD, MARCELINO VALERIO, SERAFIN PAWA, JESUS S.
DAQUIGAN, and ISMAEL CAYANAN, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC), and e.g.
GOCHANGCO, INC., respondents.
Navarro, Angeles, Anero & Falcon Law Notice for petitioners.
The Solicitor General, Isagani M. Jungco, and Bernardo P. Fernandez for respondents.
SARMIENTO, J.:
The cases before the Court pit labor against management, in which, on not a few
occasions, it is labor that has cause for complaint.
The Solicitor General states the facts as follows:
xxx xxx xxx
1. Petitioner union is a local chapter of the Central Luzon Labor
Congress (CLLC), a legitimate labor federation duly registered with
the Ministry of Labor and Employment (MOLE), while the individual
petitioners are former employees of private respondent who were
officers and members of the petitioner union.
2. Private respondent is a corporation engaged in packing and crating,
general hauling, warehousing, sea van and freight forwarding,
3. Sometime in January 1980, the majority of the rank and file
employees of respondent firm organized the e.g. Gochangco Workers
Union as an affiliate of the CLLC. On January 23, 1980, the union
filed a petition for certification election under R03-LRD (MA) Case
No. 178-80. The MOLE Region 111 office set the hearing for the
petition on February 27,1980.
4. On February 7,1980, the CLLC national president wrote the general
manager of respondent firm informing him of the organization of the
union and requesting for a labor management conference to normalize
employer-employee relations (Annex "D," Case 486-80).
5. On February 26,1980, the, union sent a written notice to respondent
firm requesting permission for certain member officers and members
of the union to attend the hearing of the petition for certification
election. The management refused to acknowledge receipt of said
notice (Annex "E," Case 486-80).
6. On February 28, 1980, private respondent preventively suspended
the union officers and members who attended the hearing namely:
Cornelio Pangilinan, president; Leo Tropics, vice- president; Olimpio
Gumin, treasurer; Buenaventura Puno, director; Reynaldo Dayrit, sgt-
at-arms; Ernesto Ramirez; Ernesto Galang; Odilon Lising; Jesus
Daquigan; and Edilberto Quiambao. The common ground alleged by
private respondent for its action was "abandonment of work on
February 27, 1980." On the same date, all the gate passes of all the
above-mentioned employees to Clark Air Base were confiscated by a
Base guard.
7. Claiming that private respondent instigated the confiscation of their
gate passes to prevent them from performing their duties and that
respondent firm did not pay them their overtime pay, 13th month pay
and other benefits, petitioner union and its members filed a complaint
for constructive lockout and unfair labor practice against private
respondent, docketed as R03-AB Case No. 486-80 on March 10, 1980.
8. On March 12, 1980, private respondent filed an application for
clearance to dismiss Cornelio Pangilinan, Leo Tropics, Olimpio
Gumin, Reynaldo Dayrit, Odilon Lising, Edilberto Quiambao; Ernesto
Ramirez, Ernesto Galang, Buenaventura Puno, Arnel Calilung, Romeo
Guina, docketed as R03-AB Case No. 556-80. Subsequently private
respondent filed another clearance to dismiss Jesus Daquigan, Serafin
Pawa and Rufo Bugayong, docketed as R03-A-B Case No. 55780.
9. On April 22,1980, petitioner Ricardo Dormingo who was
preventively suspended on April 17, 1980 filed a complaint for unfair
labor practice against the latter, docketed as R03-AB Case No. 55880.
10. On April 30, 1980, the services of nine (9) more union members,
namely: Ernesto Tuason, Israel Vino, Pedro Santos, Juanita Suba,
Edilberto Sarmiento, Diosalino Pandan, Antonio Razon, Benjamin
Capiz and Jesus Sembrano, were terminated by private respondent on
the ground that its contract with the U.S. Air Force had expired. The
rune employees filed a complaint for illegal dismissal against private
respondents on June 2, 1980. docketed as R03-AB Case No. 663-80.

11. On May 9, 1980, private respondent filed with MOLE, Region III,
a Notice of Termination of Contract together with a list of employees
affected by the expiration of the contract, among them, the 39
individual petitioners herein.

12. All the aforementioned cases were consolidated and assigned to

Labor Arbiter Andres Palumbarit.

13. After heating, Labor Arbiter Federico S. Bernardo who took over
the cases from Arbiter Palumbarit rendered a decision dated July 2,
1982, the dispositive portion of which reads:

WHEREFORE, In view of all the foregoing, the instant complaint of

complainants is hereby granted and the respondent's application for
clearance is hereby denied.

The respondent is hereby ordered:

1. To reinstate all the suspended/dismissed

employees to their former positions without loss of
seniority rights and other privileges, with full
backwages including cost of emergency living 2. To restore transportation privilege as being
allowance from the date of their extended before the filing of the instant case; and
suspension/dismissal up to the supposed date of
actual reinstatement, as follows:
3. If their reinstatement is no longer possible due to
closure of the establishment, in addition to the
payment of their full backwages and cost of living
allowance, to pay their respective separation pay as
provided for under the Labor Code.

14. Private respondent appealed to the NLRC which rendered the

questioned decision on May 31, 1983 as follows:

WHEREFORE, in the light of foregoing premises, the appealed

decision is hereby set aside and another one issued dismissing the
above-entitled cases filed by the complainants-appellees for lack of
merit and granting the application for clearance to terminate the
services of individual complainants-appellees filed by respondent-
appellant.
 15. Petitioners moved for a reconsideration of the above decision on
July 12, 1983 which NLRC denied in a resolution dated December
6,1983.
16. Hence, this petition. 1
xxx xxx xxx
The petitioners assign three errors in support of their petition:
I.
THAT PUBLIC RESPONDENT GRAVELY ABUSED ITS DISCRETION AND
SERIOUSLY COMMITTED ERRORS IN LAW IN CONSIDERING PRIVATE
RESPONDENTS EVIDENCE INTRODUCED FOR THE FIRST TIME ON APPEAL,
AND PUBLIC RESPONDENT NLRC HAS SERIOUSLY COMMITTED ERRORS IN
GIVING DUE COURSE TO PRIVATE RESPONDENT APPEAL FROM THE
DECISION OF LABOR ARBITER FEDERICO S. BERNARDO, ALTHOUGH SAID
APPEAL WAS NOT VALIDLY PERFECTED ON TIME;
II.
THAT PUBLIC RESPONDENT NLRC COMMITTED SERIOUS ERRORS IN LAW
IN RENDERING A DECISION THAT IS CONTRARY TO THE EVIDENCE ON
RECORD(S); and
III.
THAT PUBLIC RESPONDENT NLRC COMMITTED AN ERROR IN NOT
AWARDING BACK WAGES TO THE INDIVIDUAL PETITIONERS FOR REFUSAL
OF PRIVATE RESPONDENT TO REINSTATE THEM AFTER RENDERING OF
THE DECISION OF LABOR ARBITER FEDERICO S. BERNARDO AND AFTER
SAID LABOR ARBITER ORDERED PRIVATE RESPONDENT TO REINSTATE
THEM. 2
On the first issue, the petitioners submit that the motion for reconsideration, treated
subsequently as an appeal, 3 of the private respondent had been filed beyond the ten-day
period prescribed by the Labor Code, in the absence of any statement thereon as to
material dates. The respondent Commission ruled that it was, on the strength of receipts
in possession of the Labor Department disclosing such dates and showing that said appeal
had been seasonably filed. As a matter of practice, and in connection with ordinary civil
cases, this Court has assumed a stance of liberality towards the application of the material
data rule, if it in be otherwise verified from other evidence that the appeal had been
perfected within the time prescribed. 4 We see no reason why we should hold otherwise
as far as labor cases are concerned. Accordingly, we yield to the respondent
Commission's finding that the e.g. Gochangco, Inc. had filed its appeal on time. It may be
further noted that the petitioners themselves can offer no proof, other than vague
inferences from circumstances, of the belated appeal they allege.
This is not to say, however, that such an appeal has judgment. The Solicitor General
himself urges that we grant that, petition and hence, reverse the respondent Commission.
But apart from such urgings, the records themselves show that a reversal is in order.
We are convinced that the respondent company is indeed guilty of an unfair labor
practice. It is no coincidence that at the time said respondent issued its suspension and
termination orders, the petitioners were in the midst of a certification election preliminary
to a labor management conference, purportedly, "to normalize employer-employee
relations." 5 It was within the legal right of the petitioners to do so, 6 the exercise of which
was their sole prerogative, 7 and in which management may not as a rule interfere. 8 In
this connection, the respondent company deserves our strongest condemnation for
ignoring the petitioners' request for permission for some time out to attend to the hearing
of their petition before the med-arbiter. It is not only an act of arrogance, but a brazen
interference as well with the employees right to self-organization, contrary to the
prohibition of the Labor Code against unfair labor practices. 9
But as if to add insult to injury, the company suspended the petitioners on the ground of
"abandonment of work" 10on February 27, 1980, the date on which, apparently, the pre-
election conference had been scheduled. (The petitioners sought permission on February
26, 1980 while the suspension order was issued on February 28, 1980.) What unfolds
here is a clear effort by management to punish the petitioners for their union activities.
As a consequence of such a suspension, the Clark Air Base guards confiscated the
employees' gate passes, and banned them from the base premises. We cannot be befooled
by the company's pretenses that "[t]he subsequent confiscation by the Americans of the
complainants' passes is beyond the powers of management." To start with, those passes
would not have been confiscated had not management ordered the suspension. As put by
the Solicitor General, "the U.S. Air Force authorities could not have known who were
supposed to report for work on February 27, 1980," 12and who were under suspension.
Conversely, in the absence of such a suspension order, there was no ground to seize such
gate passes. Base guards, by themselves, cannot bar legitimate employees without the
'proper sanction of such employees'employers.
What disturbs us even more, however, is the perplexing gullibility with which the
respondent National Labor Relations Commission would fall for such an indefensible
position. Said the Commission: "So, with their gate passes confiscated, even if
management will reinstate them, without the gate passes, they cannot enter the US Clark
Airforce Base and perform their jobs, for the gate pass is a pre-requisite for their entrance
for employment." 13 For surely, and as we stated, the petitioners were dispossessed of
those gate passes precisely because of the suspension meted out against them. It is not the
other way around, as the Commission would have us behave, for the confiscation of such
passes would not furnish a ground for suspension. Reinstatement then would have
deprived the base gullibility guards any right to hold on to such passes any further. In the
absence of superior orders, mere base guards are bereft of any discretion to act on such
matters.
In finding the petitioners' suspension illegal, with more reason do we hold their
subsequent dismissal to be illegal. We are not persuaded by the respondent firm's
argument that final termination should be effected as the contract has expired." 14 What
impresses us is the Solicitor General's submission that the petitioners were regular
employees and as such, their tenure did not end with the expiration of the contract. We
quote:
The records show that petitioners were do so, 6 The ar employees
whose employment did not terminate with the expiration of private
respondent's contract with the U.S. Air Force. In their position paper
in the arbitration proceedings, they averred that been employer
employed by private respondent for six (6) months or more before
they were terminated as follows:
As regular employees, the petitioners' tenure are secure, and their dismissal must be
premised on a just cause. 16
We find none here. What we find, instead, are flimsy attempts by the respondent
company to discredit the person of the petitioners' counsel, or their officers, and other
resorts to argumenta ad hominem. 17
There is no merit in the claim that the petitioners' terms were coterminous with the
duration of the contract. There is nothing in the records that would show that the
petitioners were parties to that contract. It appears furthermore that the petitioners 18 were
in the employ of the respondent company long before that contract was concluded. They
were not contract workers whose work terms are tied to the agreement, but were, rather,
regular employees of their employer who entered into that contract.
But even if dismissal were warranted, the same nonetheless faces our disapproval in the
absence of a proper clearance then required under the Labor Code. 19 It is true that efforts
were undertaken to seek such a clearance, yet there is no showing that it was issued. That
still taints the dismissal with the vice of illegality.
The Court likewise rejects the claims of an alleged waiver by the petitioners of their
economic demands, in the light of an alleged order issued by Labor Arbiter Luciano
Aquino in connection with another case(s) involving the same parties. (It was Labor
Arbiter Federico Bernardo who penned the unfair labor practice/illegal dismissal case.)
The Honorable Aquino's disposition reads:
The records show that a "Waiver of Claims, Rights and Interest" was
filed by above-named petitioners stating, among other things, that said
petitioners are waiving their claims, rights and interests against the
respondents.
ACCORDINGLY, let the above-entitled cases be DISMISSED in
view of the waiver made by the petitioners. 20
Acting on these allegations, the respondent Commission, baring its
clear bias for management, ruled that the petitioners had waived their
claims. Thus:
xxx xxx xxx
With respect to the second issue, that is, whether or not the waiver of
rights and interests executed by Fernando do so, 6 The G Lising,
Odilon do so, 6 The G Lising, Jose C. Tiamzon, Ernesto Tuazon,
Pedro Santos, Ruben Buela, Eduardo Alegado, Estrael Vino, Rogelio
Manguerra, Edilberto Bingcang, Olimpio Gumin, Leo Tropico,
Orlando Nacu, Rodolfo T. Capitly and Juanito Suba, are valid, the
alleged president of complainant-appellee union Benigno Navarro, Sr.,
contends that Id Atty. Solomon has no authority to appear floor and in
behalf of individual complainants-appellees who waived their rights
and interests in these cases since there was no authority from him.
Records, however, disclose that said Atty. Solomon had been the
attorney of record for complainants-appellees since the inception of
these cases, and, therefore, is authority to represent them cannot be
questioned- not even by Ministry. Navarro who allegedly took over
the presidency of complainant-appellee union after the disappearance
of the former president, Mr. Ficardo Alconga, Sr. And besides, the
waiver of rights and interests were personally executed by the
signatories therein and all that Atty. Solomon did was to assist them. 21
xxx xxx xxx
We find this puzzling for clearly, Labor Arbiter Aquino's resolution refers to other
cases22 and not the instant unfair labor practice controversy. The Commission cannot
feign simple mistake for such a lapse. Wittingly or unwittingly, it had made itself a Dawn
of the respondent corporation or otherwise had yielded to its influence. The Court
rebukes Atty. Isagani M. Jungco counsel for the respondent company, for his
unbecoming act and the individual members of the Commission itself, for besmirching
the integrity of the Commission.
In any event, we have held that unfair labor practice cases are not, in view of the public
interest involved, subject to compromises. 23 Furthermore, these alleged waivers do not
appear to have been presented in the first instance. They cannot be introduced for the first
time on appeal.
We come, finally, to the respondent company's liability for backwages and for emergency
cost of living allowances (ECOLA). In its appeal, the company denies any liability,
pointing to "[r]epresentative samples of the documents evidencing payment was likewise
submitted due to the voluminous records which cannot be all produced." 24 The
Commission accepted this argument, noting that 'these xerox copies of payment of
allowances, were never spurned by complainants-appellees." 25 The Solicitor General
observes, on the other hand, that these alleged documents were never presented at the
hearing but surfaced only on appeal. 26 Indeed, there is no reference in the Labor Arbiter's 4. Ordering it to PAY them the sum of FIVE THOUSAND (P5,000.00) PESOS EACH,
decision to these documents, and apparently, the respondent firm entered the same in as and for exemplary damages; and
evidence at the appeal level only. As we have declared, a party is barred from introducing
fresh matters at the appellate stage. Besides, and as the Solicitor General points out, "the 5. Ordering it to PAY them the sum of TWENTY THOUSAND (P20,000.00) PESOS as
ECOLA awarded to petitioners in the decision of the Labor Arbiter include only those and for attorney's fees.
that pertain to them from the time of their dismissal up to July 1, 1982 " 27 the date the
Labor Arbiter ordered their reinstatement. 28 Accordingly, we rule the respondent
This Decision is IMMEDIATELY EXECUTORY.
corporation liable for such unpaid claims.

Costs against the private respondent.

Before Batas Blg. 70 29 was enacted into law, unfair labor practices were considered
administrative offenses, 30 and have been held akin to tort, 31 wherein damages are
payable. We therefore not only order herein the reinstatement of the petitioners and the IT IS SO ORDERED.
payment of backwages (including cost-of-living allowances) to them, but impose as well
moral and exemplary damages. With respect to backwages, we hold the respondent e.g.
Gochangco, Inc. liable, in line with the recommendation of the Solicitor General and in
accordance with accepted practice, for backwages equivalent to three (3) years without
qualification or deduction. 32

As for moral damages, we hold the said respondent liable therefor under the provisions of
Article 2220 of the Civil Code providing for damages for "breaches of contract where the
defendant acted fraudulently or in bad faith." We deem just and proper the sum of
P5,000.00 each in favor of the terminated workers, in the concept of such damages.

We likewise grant unto said workers another P5,000.00 each to answer for exemplary
damages based on the provisions of Articles 2229 and 2231 and/or 2232 of the Civil
Code. For "act[ing] in gross and evident bad faith in refusing to satisfy the [petitioners']
plainly valid, just and demandable claim[s] " 33 the respondent firm is further condemned
to pay attorney's fees. The Court considers the total sum of P20,000.00 fair and
reasonable.

If only for emphasis, the new Constitution considers "labor as a primary social economic
force." 34 As the conscience of the government, it is this Court's sworn duty to ensure that
none trifles with labor rights.

WHEREFORE, the petition is GRANTED. The decision of the public respondent, the
National Labor Relations Commission, is REVERSED and SET ASIDE. Judgment is
hereby rendered:

1. Ordering the private respondent, e.g. Gochangco, Inc., to REINSTATE the terminated
workers;

2. Ordering the private respondent to PAY them backwages equivalent to three (3) years
without qualification or deduction;

3. Ordering it to PAY them the sum of FIVE THOUSAND (P5,000.00) PESOS EACH,
as and for moral damages;
G.R. No. L-25291 January 30, 1971
THE INSULAR LIFE ASSURANCE CO., LTD., EMPLOYEES ASSOCIATION-
NATU, FGU INSURANCE GROUP WORKERS and EMPLOYEES
ASSOCIATION-NATU, and INSULAR LIFE BUILDING EMPLOYEES
ASSOCIATION-NATU, petitioners,
vs.
THE INSULAR LIFE ASSURANCE CO., LTD., FGU INSURANCE GROUP,
JOSE M. OLBES and COURT OF INDUSTRIAL RELATIONS, respondents.
Lacsina, Lontok and Perez and Luis F. Aquino for petitioners.
Francisco de los Reyes for respondent Court of Industrial Relations.
Araneta, Mendoza and Papa for other respondents.
CASTRO, J.:
Appeal, by certiorari to review a decision and a resolution en banc of the Court of
Industrial Relations dated August 17, 1965 and October 20, 1965, respectively, in Case
1698-ULP.
The Insular Life Assurance Co., Ltd., Employees Association-NATU, FGU Insurance
Group Workers & Employees Association-NATU, and Insular Life Building Employees
Association-NATU (hereinafter referred to as the Unions), while still members of the
Federation of Free Workers (FFW), entered into separate collective bargaining
agreements with the Insular Life Assurance Co., Ltd. and the FGU Insurance Group
(hereinafter referred to as the Companies).
Two of the lawyers of the Unions then were Felipe Enaje and Ramon Garcia; the latter
was formerly the secretary-treasurer of the FFW and acting president of the Insular
Life/FGU unions and the Insular Life Building Employees Association. Garcia, as such
acting president, in a circular issued in his name and signed by him, tried to dissuade the
members of the Unions from disaffiliating with the FFW and joining the National
Association of Trade Unions (NATU), to no avail.
Enaje and Garcia soon left the FFW and secured employment with the Anti-Dummy
Board of the Department of Justice. Thereafter, the Companies hired Garcia in the latter
part of 1956 as assistant corporate secretary and legal assistant in their Legal Department,
and he was soon receiving P900 a month, or P600 more than he was receiving from the
FFW. Enaje was hired on or about February 19, 1957 as personnel manager of the
Companies, and was likewise made chairman of the negotiating panel for the Companies
in the collective bargaining with the Unions.
In a letter dated September 16, 1957, the Unions jointly submitted proposals to the
Companies for a modified renewal of their respective collective bargaining contracts
which were then due to expire on September 30, 1957. The parties mutually agreed and
to make whatever benefits could be agreed upon retroactively effective October 1, 1957.
Thereafter, in the months of September and October 1957 negotiations were conducted
on the Union's proposals, but these were snagged by a deadlock on the issue of union
shop, as a result of which the Unions filed on January 27, 1958 a notice of strike for
"deadlock on collective bargaining." Several conciliation conferences were held under the
auspices of the Department of Labor wherein the conciliators urged the Companies to
make reply to the Unions' proposals en toto so that the said Unions might consider the
feasibility of dropping their demand for union security in exchange for other benefits.
However, the Companies did not make any counter-proposals but, instead, insisted that
the Unions first drop their demand for union security, promising money benefits if this
was done. Thereupon, and prior to April 15, 1958, the petitioner Insular Life Building
Employees Association-NATU dropped this particular demand, and requested the
Companies to answer its demands, point by point, en toto. But the respondent Insular Life
Assurance Co. still refused to make any counter-proposals. In a letter addressed to the
two other Unions by the joint management of the Companies, the former were also asked
to drop their union security demand, otherwise the Companies "would no longer consider
themselves bound by the commitment to make money benefits retroactive to October 1,
1957." By a letter dated April 17, 1958, the remaining two petitioner unions likewise
dropped their demand for union shop. April 25, 1958 then was set by the parties to meet
and discuss the remaining demands.
From April 25 to May 6, 1958, the parties negotiated on the labor demands but with no
satisfactory result due to a stalemate on the matter of salary increases. On May 13, 1958
the Unions demanded from the Companies final counter-proposals on their economic
demands, particularly on salary increases. Instead of giving counter-proposals, the
Companies on May 15, 1958 presented facts and figures and requested the Unions to
submit a workable formula which would justify their own proposals, taking into account
the financial position of the former. Forthwith the Unions voted to declare a strike in
protest against what they considered the Companies' unfair labor practices.
Meanwhile, eighty-seven (87) unionists were reclassified as supervisors without increase
in salary nor in responsibility while negotiations were going on in the Department of
Labor after the notice to strike was served on the Companies. These employees resigned
from the Unions.
On May 20, 1958 the Unions went on strike and picketed the offices of the Insular Life
Building at Plaza Moraga.
On May 21, 1958 the Companies through their acting manager and president, the
respondent Jose M. Olbes (hereinafter referred to as the respondent Olbes), sent to each
of the strikers a letter (exhibit A) quoted verbatim as follows:
 We recognize it is your privilege both to strike and to conduct
picketing.
However, if any of you would like to come back to work voluntarily,
you may:
1. Advise the nearest police officer or security guard of your intention
to do so.
2. Take your meals within the office.
3. Make a choice whether to go home at the end of the day or to sleep
nights at the office where comfortable cots have been prepared.
4. Enjoy free coffee and occasional movies.
5. Be paid overtime for work performed in excess of eight hours.
6. Be sure arrangements will be made for your families.
The decision to make is yours — whether you still believe in the
motives of the strike or in the fairness of the Management.
The Unions, however, continued on strike, with the exception of a few unionists who
were convinced to desist by the aforesaid letter of May 21, 1958.
From the date the strike was called on May 21, 1958, until it was called off on May 31,
1958, some management men tried to break thru the Unions' picket lines. Thus, on May
21, 1958 Garcia, assistant corporate secretary, and Vicente Abella, chief of the personnel
records section, respectively of the Companies, tried to penetrate the picket lines in front
of the Insular Life Building. Garcia, upon approaching the picket line, tossed aside the
placard of a picketer, one Paulino Bugay; a fight ensued between them, in which both
suffered injuries. The Companies organized three bus-loads of employees, including a
photographer, who with the said respondent Olbes, succeeded in penetrating the picket
lines in front of the Insular Life Building, thus causing injuries to the picketers and also
to the strike-breakers due to the resistance offered by some picketers.
Alleging that some non-strikers were injured and with the use of photographs as
evidence, the Companies then filed criminal charges against the strikers with the City
Fiscal's Office of Manila. During the pendency of the said cases in the fiscal's office, the
Companies likewise filed a petition for injunction with damages with the Court of First
Instance of Manila which, on the basis of the pendency of the various criminal cases
against striking members of the Unions, issued on May 31, 1958 an order restraining the
strikers, until further orders of the said court, from stopping, impeding, obstructing, etc.
the free and peaceful use of the Companies' gates, entrance and driveway and the free
movement of persons and vehicles to and from, out and in, of the Companies' building.
On the same date, the Companies, again through the respondent Olbes, sent individually
to the strikers a letter (exhibit B), quoted hereunder in its entirety:
The first day of the strike was last 21 May 1958.
Our position remains unchanged and the strike has made us even more
convinced of our decision.
We do not know how long you intend to stay out, but we cannot hold
your positions open for long. We have continued to operate and will
continue to do so with or without you.
If you are still interested in continuing in the employ of the Group
Companies, and if there are no criminal charges pending against you,
we are giving you until 2 June 1958 to report for work at the home
office. If by this date you have not yet reported, we may be forced to
obtain your replacement.
Before, the decisions was yours to make.
So it is now.
Incidentally, all of the more than 120 criminal charges filed against the members of the
Unions, except three (3), were dismissed by the fiscal's office and by the courts. These
three cases involved "slight physical injuries" against one striker and "light coercion"
against two others.
At any rate, because of the issuance of the writ of preliminary injunction against them as
well as the ultimatum of the Companies giving them until June 2, 1958 to return to their
jobs or else be replaced, the striking employees decided to call off their strike and to
report back to work on June 2, 1958.
However, before readmitting the strikers, the Companies required them not only to secure
clearances from the City Fiscal's Office of Manila but also to be screened by a
management committee among the members of which were Enage and Garcia. The
screening committee initially rejected 83 strikers with pending criminal charges.
However, all non-strikers with pending criminal charges which arose from the
breakthrough incident were readmitted immediately by the Companies without being
required to secure clearances from the fiscal's office. Subsequently, when practically all
the strikers had secured clearances from the fiscal's office, the Companies readmitted
only some but adamantly refused readmission to 34 officials and members of the Unions
who were most active in the strike, on the ground that they committed "acts inimical to
the interest of the respondents," without however stating the specific acts allegedly
committed. Among those who were refused readmission are Emiliano Tabasondra, vice
president of the Insular Life Building Employees' Association-NATU; Florencio Ibarra,
president of the FGU Insurance Group Workers & Employees Association-NATU; and
Isagani Du Timbol, acting president of the Insular Life Assurance Co., Ltd. Employees
Association-NATU. Some 24 of the above number were ultimately notified months later
that they were being dismissed retroactively as of June 2, 1958 and given separation pay
checks computed under Rep. Act 1787, while others (ten in number) up to now have not
been readmitted although there have been no formal dismissal notices given to them.
On July 29, 1958 the CIR prosecutor filed a complaint for unfair labor practice against
the Companies under Republic Act 875. The complaint specifically charged the
Companies with (1) interfering with the members of the Unions in the exercise of their
right to concerted action, by sending out individual letters to them urging them to
abandon their strike and return to work, with a promise of comfortable cots, free coffee
and movies, and paid overtime, and, subsequently, by warning them that if they did not
return to work on or before June 2, 1958, they might be replaced; and (2) discriminating
against the members of the Unions as regards readmission to work after the strike on the
basis of their union membership and degree of participation in the strike.
On August 4, 1958 the Companies filed their answer denying all the material allegations
of the complaint, stating special defenses therein, and asking for the dismissal of the
complaint.
After trial on the merits, the Court of Industrial Relations, through Presiding Judge
Arsenio Martinez, rendered on August 17, 1965 a decision dismissing the Unions'
complaint for lack of merit. On August 31, 1965 the Unions seasonably filed their motion
for reconsideration of the said decision, and their supporting memorandum on September
10, 1965. This was denied by the Court of Industrial Relations en banc in a resolution
promulgated on October 20, 1965.
Hence, this petition for review, the Unions contending that the lower court erred:
1. In not finding the Companies guilty of unfair labor practice in
sending out individually to the strikers the letters marked Exhibits A
and B;
2. In not finding the Companies guilty of unfair labor practice for
discriminating against the striking members of the Unions in the
matter of readmission of employees after the strike;
3. In not finding the Companies guilty of unfair labor practice for
dismissing officials and members of the Unions without giving them
the benefit of investigation and the opportunity to present their side in
regard to activities undertaken by them in the legitimate exercise of
their right to strike; and
4. In not ordering the reinstatement of officials and members of the
Unions, with full back wages, from June 2, 1958 to the date of their
actual reinstatement to their usual employment.
I. The respondents contend that the sending of the letters, exhibits A and B, constituted a
legitimate exercise of their freedom of speech. We do not agree. The said letters were
directed to the striking employees individually — by registered special delivery mail at
that — without being coursed through the Unions which were representing the employees
in the collective bargaining.
The act of an employer in notifying absent employees individually
during a strike following unproductive efforts at collective bargaining
that the plant would be operated the next day and that their jobs were
open for them should they want to come in has been held to be an
unfair labor practice, as an active interference with the right of
collective bargaining through dealing with the employees individually
instead of through their collective bargaining representatives. (31 Am.
Jur. 563, citing NLRB v. Montgomery Ward & Co. [CA 9th] 133 F2d
676, 146 ALR 1045)
Indeed, it is an unfair labor practice for an employer operating under a collective
bargaining agreement to negotiate or to attempt to negotiate with his employees
individually in connection with changes in the agreement. And the basis of the
prohibition regarding individual bargaining with the strikers is that although the union is
on strike, the employer is still under obligation to bargain with the union as the
employees' bargaining representative (Melo Photo Supply Corporation vs. National
Labor Relations Board, 321 U.S. 332).
Indeed, some such similar actions are illegal as constituting unwarranted acts of
interference. Thus, the act of a company president in writing letters to the strikers, urging
their return to work on terms inconsistent with their union membership, was adjudged as
constituting interference with the exercise of his employees' right to collective bargaining
(Lighter Publishing, CCA 7th, 133 F2d 621). It is likewise an act of interference for the
employer to send a letter to all employees notifying them to return to work at a time
specified therein, otherwise new employees would be engaged to perform their jobs.
Individual solicitation of the employees or visiting their homes, with the employer or his
representative urging the employees to cease union activity or cease striking, constitutes
unfair labor practice. All the above-detailed activities are unfair labor practices because
they tend to undermine the concerted activity of the employees, an activity to which they
are entitled free from the employer's molestation.1
Moreover, since exhibit A is a letter containing promises of benefits to the employees in
order to entice them to return to work, it is not protected by the free speech provisions of
the Constitution (NLRB v. Clearfield Cheese Co., Inc., 213 F2d 70). The same is true
with exhibit B since it contained threats to obtain replacements for the striking employees
in the event they did not report for work on June 2, 1958. The free speech protection
under the Constitution is inapplicable where the expression of opinion by the employer or
his agent contains a promise of benefit, or threats, or reprisal (31 Am. Jur. 544; NLRB vs.
Clearfield Cheese Co., Inc., 213 F2d 70; NLRB vs. Goigy Co., 211 F2d 533, 35 ALR 2d
422).
Indeed, when the respondents offered reinstatement and attempted to "bribe" the strikers
with "comfortable cots," "free coffee and occasional movies," "overtime" pay for "work
performed in excess of eight hours," and "arrangements" for their families, so they would
abandon the strike and return to work, they were guilty of strike-breaking and/or union-
busting and, consequently, of unfair labor practice. It is equivalent to an attempt to break
a strike for an employer to offer reinstatement to striking employees individually, when
they are represented by a union, since the employees thus offered reinstatement are
unable to determine what the consequences of returning to work would be.
Likewise violative of the right to organize, form and join labor organizations are the
following acts: the offer of a Christmas bonus to all "loyal" employees of a company
shortly after the making of a request by the union to bargain; wage increases given for the
purpose of mollifying employees after the employer has refused to bargain with the
union, or for the purpose of inducing striking employees to return to work; the employer's
promises of benefits in return for the strikers' abandonment of their strike in support of
their union; and the employer's statement, made about 6 weeks after the strike started, to
a group of strikers in a restaurant to the effect that if the strikers returned to work, they
would receive new benefits in the form of hospitalization, accident insurance, profit-
sharing, and a new building to work in.2
Citing paragraph 5 of the complaint filed by the acting prosecutor of the lower court
which states that "the officers and members of the complainant unions decided to call off
the strike and return to work on June 2, 1958 by reason of the injunction issued by the
Manila Court of First Instance," the respondents contend that this was the main cause
why the strikers returned to work and not the letters, exhibits A and B. This assertion is
without merit. The circumstance that the strikers later decided to return to work
ostensibly on account of the injunctive writ issued by the Court of First Instance of
Manila cannot alter the intrinsic quality of the letters, which were calculated, or which
tended, to interfere with the employees' right to engage in lawful concerted activity in the
form of a strike. Interference constituting unfair labor practice will not cease to be such
simply because it was susceptible of being thwarted or resisted, or that it did not
proximately cause the result intended. For success of purpose is not, and should not, be
the criterion in determining whether or not a prohibited act constitutes unfair labor
practice.
The test of whether an employer has interfered with and coerced
employees within the meaning of subsection (a) (1) is whether the
employer has engaged in conduct which it may reasonably be said
tends to interfere with the free exercise of employees' rights under
section 3 of the Act, and it is not necessary that there be direct
evidence that any employee was in fact intimidated or coerced by
statements of threats of the employer if there is a reasonable inference
that anti-union conduct of the employer does have an adverse effect on
self-organization and collective bargaining. (Francisco, Labor Laws
1956, Vol. II, p. 323, citing NLRB v. Ford, C.A., 1948, 170 F2d 735).
Besides, the letters, exhibits A and B, should not be considered by themselves alone but
should be read in the light of the preceding and subsequent circumstances surrounding
them. The letters should be interpreted according to the "totality of conduct doctrine,"
... whereby the culpability of an employer's remarks were to be
evaluated not only on the basis of their implicit implications, but were
to be appraised against the background of and in conjunction with
collateral circumstances. Under this "doctrine" expressions of opinion
by an employer which, though innocent in themselves, frequently were
held to be culpable because of the circumstances under which they
were uttered, the history of the particular employer's labor relations or
anti-union bias or because of their connection with an established
collateral plan of coercion or interference. (Rothenberg on Relations,
p. 374, and cases cited therein.)
It must be recalled that previous to the petitioners' submission of proposals for an
amended renewal of their respective collective bargaining agreements to the respondents,
the latter hired Felipe Enage and Ramon Garcia, former legal counsels of the petitioners,
as personnel manager and assistant corporate secretary, respectively, with attractive
compensations. After the notice to strike was served on the Companies and negotiations
were in progress in the Department of Labor, the respondents reclassified 87 employees
as supervisors without increase in salary or in responsibility, in effect compelling these
employees to resign from their unions. And during the negotiations in the Department of
Labor, despite the fact that the petitioners granted the respondents' demand that the
former drop their demand for union shop and in spite of urgings by the conciliators of the
Department of Labor, the respondents adamantly refused to answer the Unions'
demands en toto. Incidentally, Enage was the chairman of the negotiating panel for the
Companies in the collective bargaining between the former and the Unions. After the
petitioners went to strike, the strikers were individually sent copies of exhibit A, enticing
them to abandon their strike by inducing them to return to work upon promise of special
privileges. Two days later, the respondents, thru their president and manager, respondent
Jose M. Olbes, brought three truckloads of non-strikers and others, escorted by armed
men, who, despite the presence of eight entrances to the three buildings occupied by the
Companies, entered thru only one gate less than two meters wide and in the process,
crashed thru the picket line posted in front of the premises of the Insular Life Building.
This resulted in injuries on the part of the picketers and the strike-
breakers.lâwphî1.ñèt Then the respondents brought against the picketers criminal
charges, only three of which were not dismissed, and these three only for slight
misdemeanors. As a result of these criminal actions, the respondents were able to obtain
an injunction from the court of first instance restraining the strikers from stopping,
impeding, obstructing, etc. the free and peaceful use of the Companies' gates, entrance
and driveway and the free movement of persons and vehicles to and from, out and in, of
the Companies' buildings. On the same day that the injunction was issued, the letter,
Exhibit B, was sent — again individually and by registered special delivery mail — to the
strikers, threatening them with dismissal if they did not report for work on or before June
2, 1958. But when most of the petitioners reported for work, the respondents thru a
screening committee — of which Ramon Garcia was a member — refused to admit 63
members of the Unions on the ground of "pending criminal charges." However, when
almost all were cleared of criminal charges by the fiscal's office, the respondents
adamantly refused admission to 34 officials and union members. It is not, however,
disputed that all-non-strikers with pending criminal charges which arose from the
breakthrough incident of May 23, 1958 were readmitted immediately by the respondents.
Among the non-strikers with pending criminal charges who were readmitted were
Generoso Abella, Enrique Guidote, Emilio Carreon, Antonio Castillo, Federico Barretto,
Manuel Chuidian and Nestor Cipriano. And despite the fact that the fiscal's office found
no probable cause against the petitioning strikers, the Companies adamantly refused
admission to them on the pretext that they committed "acts inimical to the interest of the
respondents," without stating specifically the inimical acts allegedly committed. They
were soon to admit, however, that these alleged inimical acts were the same criminal
charges which were dismissed by the fiscal and by the courts..
Verily, the above actuations of the respondents before and after the issuance of the letters,
exhibit A and B, yield the clear inference that the said letters formed of the respondents
scheme to preclude if not destroy unionism within them.
To justify the respondents' threat to dismiss the strikers and secure replacements for them
in order to protect and continue their business, the CIR held the petitioners' strike to be an
economic strike on the basis of exhibit 4 (Notice of Strike) which states that there was a
"deadlock in collective bargaining" and on the strength of the supposed testimonies of
some union men who did not actually know the very reason for the strike. It should be
noted that exhibit 4, which was filed on January 27, 1958, states, inter alia:
TO: BUREAU OF LABOR RELATIONS
DEPARTMENT OF LABOR
MANILA
Thirty (30) days from receipt of this notice by the Office, this [sic]
unions intends to go on strike against
THE INSULAR LIFE ASSURANCE CO., LTD.
Plaza Moraga, Manila
THE FGU INSURANCE GROUP
Plaza Moraga, Manila
INSULAR LIFE BUILDING ADMINISTRATION
Plaza Moraga, Manila .
for the following reason: DEADLOCK IN COLLECTIVE
BARGAINING...
However, the employees did not stage the strike after the thirty-day period, reckoned
from January 27, 1958. This simply proves that the reason for the strike was not the
deadlock on collective bargaining nor any lack of economic concessions. By letter dated
April 15, 1958, the respondents categorically stated what they thought was the cause of
the "Notice of Strike," which so far as material, reads:
3. Because you did not see fit to agree with our position on the union
shop, you filed a notice of strike with the Bureau of Labor Relations
on 27 January 1958, citing `deadlock in collective bargaining' which
could have been for no other issue than the union shop." (exhibit 8,
letter dated April 15, 1958.)
The strike took place nearly four months from the date the said notice of strike was filed.
And the actual and main reason for the strike was, "When it became crystal clear the
management double crossed or will not negotiate in good faith, it is tantamount to refusal
collectively and considering the unfair labor practice in the meantime being committed
by the management such as the sudden resignation of some unionists and [who] became
supervisors without increase in salary or change in responsibility, such as the coercion of
employees, decided to declare the strike." (tsn., Oct. 14, 1958, p. 14.) The truth of this
assertion is amply proved by the following circumstances: (1) it took the respondents six
(6) months to consider the petitioners' proposals, their only excuse being that they could
not go on with the negotiations if the petitioners did not drop the demand for union shop
(exh. 7, respondents' letter dated April 7, 1958); (2) when the petitioners dropped the
demand for union shop, the respondents did not have a counter-offer to the petitioners'
demands. Sec. 14 of Rep. Act 875 required the respondents to make a reply to the
petitioners' demands within ten days from receipt thereof, but instead they asked the
petitioners to give a "well reasoned, workable formula which takes into account the
financial position of the group companies." (tsn., Sept. 8, 1958, p. 62; tsn., Feb. 26, 1969,
p. 49.)
II. Exhibit H imposed three conditions for readmission of the strikers, namely: (1) the
employee must be interested in continuing his work with the group companies; (2) there
must be no criminal charges against him; and (3) he must report for work on June 2,
1958, otherwise he would be replaced. Since the evidence shows that all the employees
reported back to work at the respondents' head office on June 2, 1953, they must be
considered as having complied with the first and third conditions.
Our point of inquiry should therefore be directed at whether they also complied with the
second condition. It is not denied that when the strikers reported for work on June 2,
1958, 63 members of the Unions were refused readmission because they had pending
criminal charges. However, despite the fact that they were able to secure their respective
clearances 34 officials and union members were still refused readmission on the alleged
ground that they committed acts inimical to the Companies. It is beyond dispute,
however, that non-strikers who also had criminal charges pending against them in the
fiscal's office, arising from the same incidents whence the criminal charges against the
strikers evolved, were readily readmitted and were not required to secure clearances. This
is a clear act of discrimination practiced by the Companies in the process of rehiring and
is therefore a violation of sec. 4(a) (4) of the Industrial Peace Act.
The respondents did not merely discriminate against all the strikers in general. They
separated the active from the less active unionists on the basis of their militancy, or lack
of it, on the picket lines. Unionists belonging to the first category were refused
readmission even after they were able to secure clearances from the competent authorities
with respect to the criminal charges filed against them. It is significant to note in this
connection that except for one union official who deserted his union on the second day of
the strike and who later participated in crashing through the picket lines, not a single
union officer was taken back to work. Discrimination undoubtedly exists where the
record shows that the union activity of the rehired strikers has been less prominent than
that of the strikers who were denied reinstatement.
So is there an unfair labor practice where the employer, although
authorized by the Court of Industrial Relations to dismiss the
employees who participated in an illegal strike, dismissed only the
leaders of the strikers, such dismissal being evidence of discrimination
against those dismissed and constituting a waiver of the employer's
right to dismiss the striking employees and a condonation of the fault
committed by them." (Carlos and Fernando, Labor and Social
Legislation, p. 62, citing Phil. Air Lines, Inc. v. Phil. Air Lines
Emloyees Association, L-8197, Oct. 31, 1958.)
It is noteworthy that — perhaps in an anticipatory effort to exculpate themselves from
charges of discrimination in the readmission of strikers returning to work — the
respondents delegated the power to readmit to a committee. But the respondent Olbes had
chosen Vicente Abella, chief of the personnel records section, and Ramon Garcia,
assistant corporate secretary, to screen the unionists reporting back to work. It is not
difficult to imagine that these two employees — having been involved in unpleasant
incidents with the picketers during the strike — were hostile to the strikers. Needless to
say, the mere act of placing in the hands of employees hostile to the strikers the power of
reinstatement, is a form of discrimination in rehiring.
Delayed reinstatement is a form of discrimination in rehiring, as is
having the machinery of reinstatement in the hands of employees
hostile to the strikers, and reinstating a union official who formerly
worked in a unionized plant, to a job in another mill, which was
imperfectly organized. (Morabe, The Law on Strikes, p. 473, citing
Sunshine Mining Co., 7 NLRB 1252; Cleveland Worsted Mills, 43
NLRB 545; emphasis supplied.)
Equally significant is the fact that while the management and the members of the
screening committee admitted the discrimination committed against the strikers, they
tossed back and around to each other the responsibility for the discrimination. Thus,
Garcia admitted that in exercising for the management the authority to screen the
returning employees, the committee admitted the non-strikers but refused readmission to
the strikers (tsn., Feb. 6, 1962, pp. 15-19, 23-29). Vicente Abella, chairman of the
management's screening committee, while admitting the discrimination, placed the blame
therefor squarely on the management (tsn., Sept. 20, 1960, pp. 7-8, 14-18). But the
management, speaking through the respondent Olbes, head of the Companies, disclaimed
responsibility for the discrimination. He testified that "The decision whether to accept or
not an employee was left in the hands of that committee that had been empowered to look
into all cases of the strikers." (tsn., Sept. 6, 1962, p. 19.)
Of course, the respondents — through Ramon Garcia — tried to explain the basis for
such discrimination by testifying that strikers whose participation in any alleged
misconduct during the picketing was not serious in nature were readmissible, while those
whose participation was serious were not. (tsn., Aug. 4, 1961, pp. 48-49, 56). But even
this distinction between acts of slight misconduct and acts of serious misconduct which
the respondents contend was the basis for either reinstatement or discharge, is completely
shattered upon a cursory examination of the evidence on record. For with the exception
of Pascual Esquillo whose dismissal sent to the other strikers cited the alleged
commission by them of simple "acts of misconduct."
III. Anent the third assignment of error, the record shows that not a single dismissed
striker was given the opportunity to defend himself against the supposed charges against
him. As earlier mentioned, when the striking employees reported back for work on June
2, 1958, the respondents refused to readmit them unless they first secured the necessary
clearances; but when all, except three, were able to secure and subsequently present the
required clearances, the respondents still refused to take them back. Instead, several of
them later received letters from the respondents in the following stereotyped tenor:
This will confirm the termination of your employment with the Insular
Life-FGU Insurance Group as of 2 June 1958.
The termination of your employment was due to the fact that you
committed acts of misconduct while picketing during the last strike.
Because this may not constitute sufficient cause under the law to
terminate your employment without pay, we are giving you the
amount of P1,930.32 corresponding to one-half month pay for every
year of your service in the Group Company.
Kindly acknowledge receipt of the check we are sending
herewith.Very truly yours,(Sgd.) JOSE M. OLBES
President, Insurance Life
Acting President, FGU.
The respondents, however, admitted that the alleged "acts of misconduct" attributed to
the dismissed strikers were the same acts with which the said strikers were charged
before the fiscal's office and the courts. But all these charges except three were dropped
or dismissed.
Indeed, the individual cases of dismissed officers and members of the striking unions do
not indicate sufficient basis for dismissal.
Emiliano Tabasondra, vice-president of the petitioner FGU Insurance Group Workers &
Employees Association-NATU, was refused reinstatement allegedly because he did not
report for duty on June 2, 1958 and, hence, had abandoned his office. But the
overwhelming evidence adduced at the trial and which the respondents failed to rebut,
negates the respondents' charge that he had abandoned his job. In his testimony,
corroborated by many others, Tabasondra particularly identified the management men to
whom he and his group presented themselves on June 2, 1958. He mentioned the
respondent Olbes' secretary, De Asis, as the one who received them and later directed
them — when Olbes refused them an audience — to Felipe Enage, the Companies'
personnel manager. He likewise categorically stated that he and his group went to see
Enage as directed by Olbes' secretary. If Tabasondra were not telling the truth, it would
have been an easy matter for the respondents to produce De Asis and Enage — who
testified anyway as witnesses for the respondents on several occasions — to rebut his
testimony. The respondents did nothing of the kind. Moreover, Tabasondra called on
June 21, 1958 the respondents' attention to his non-admission and asked them to inform
him of the reasons therefor, but instead of doing so, the respondents dismissed him by
their letter dated July 10, 1958. Elementary fairness required that before being dismissed
for cause, Tabasondra be given "his day in court."
At any rate, it has been held that mere failure to report for work after notice to return,
does not constitute abandonment nor bar reinstatement. In one case, the U.S. Supreme
Court held that the taking back of six of eleven men constituted discrimination although
the five strikers who were not reinstated, all of whom were prominent in the union and in
the strike, reported for work at various times during the next three days, but were told that
there were no openings. Said the Court:
... The Board found, and we cannot say that its finding is unsupported,
that, in taking back six union men, the respondent's officials
discriminated against the latter on account of their union activities and
that the excuse given that they did not apply until after the quota was
full was an afterthought and not the true reason for the discrimination
against them. (NLRB v. Mackay Radio & Telegraph Co., 304 U.S.
333, 58 Sup. Ct. 904, 82 L. Ed. 1381) (Mathews, Labor Relations and
the Law, p. 725, 728)
The respondents' allegation that Tabasondra should have returned after being refused
readmission on June 2, 1958, is not persuasive. When the employer puts off reinstatement
when an employee reports for work at the time agreed, we consider the employee
relieved from the duty of returning further.
Sixto Tongos was dismissed allegedly because he revealed that despite the fact that the
Companies spent more than P80,000 for the vacation trips of officials, they refused to
grant union demands; hence, he betrayed his trust as an auditor of the Companies. We do
not find this allegation convincing. First, this accusation was emphatically denied by
Tongos on the witness stand. Gonzales, president of one of the respondent Companies
and one of the officials referred to, took a trip abroad in 1958. Exchange controls were
then in force, and an outgoing traveller on a combined business and vacation trip was
allowed by the Central Bank, per its Circular 52 (Notification to Authorized Agent
Banks) dated May 9, 1952, an allocation of $1,000 or only P2,000, at the official rate of
two pesos to the dollar, as pocket money; hence, this was the only amount that would
appear on the books of the Companies. It was only on January 21, 1962, per its Circular
133 (Notification to Authorized Agent Banks), that the Central Bank lifted the exchange
controls. Tongos could not therefore have revealed an amount bigger than the above sum.
And his competence in figures could not be doubted considering that he had passed the
board examinations for certified public accountants. But assuming arguendo that Tongos
indeed revealed the true expenses of Gonzales' trip — which the respondents never
denied or tried to
disprove — his statements clearly fall within the sphere of a unionist's right to discuss
and advertise the facts involved in a labor dispute, in accordance with section 9(a)(5) of
Republic Act 875 which guarantees the untramelled exercise by striking employees of the
right to give "publicity to the existence of, or the fact involved in any labor dispute,
whether by advertising, speaking, patrolling or by any method not involving fraud or
violence." Indeed, it is not only the right, it is as well the duty, of every unionist to
advertise the facts of a dispute for the purpose of informing all those affected thereby. In
labor disputes, the combatants are expected to expose the truth before the public to justify
their respective demands. Being a union man and one of the strikers, Tongos was
expected to reveal the whole truth on whether or not the respondent Companies were
justified in refusing to accede to union demands. After all, not being one of the
supervisors, he was not a part of management. And his statement, if indeed made, is but
an expression of free speech protected by the Constitution.
Free speech on both sides and for every faction on any side of the
labor relation is to me a constitutional and useful right. Labor is free ...
to turn its publicity on any labor oppression, substandard wages,
employer unfairness, or objectionable working conditions. The
employer, too, should be free to answer and to turn publicity on the
records of the leaders of the unions which seek the confidence of his
men ... (Concurring opinion of Justice Jackson in Thomas v. Collins,
323 U.S. 516, 547, 65 Sup. Ct. 315, 89 L. Ed. 430.) (Mathews, Labor
Relations and the Law, p. 591.)
The respondents also allege that in revealing certain confidential information, Tongos
committed not only a betrayal of trust but also a violation of the moral principles and
ethics of accountancy. But nowhere in the Code of Ethics for Certified Public
Accountants under the Revised Rules and Regulations of the Board of Accountancy
formulated in 1954, is this stated. Moreover, the relationship of the Companies with
Tongos was that of an employer and not a client. And with regard to the testimonies of
Juan Raymundo and Antolin Carillo, both vice-presidents of the Trust Insurance
Agencies, Inc. about the alleged utterances made by Tongos, the lower court should not
have given them much weight. The firm of these witnesses was newly established at that
time and was still a "general agency" of the Companies. It is not therefore amiss to
conclude that they were more inclined to favor the respondents rather than Tongos.
Pacifico Ner, Paulino Bugay, Jose Garcia, Narciso Daño, Vicente Alsol and
Hermenigildo Ramirez, opined the lower court, were constructively dismissed by non-
readmission allegedly because they not only prevented Ramon Garcia, assistant corporate
secretary, and Vicente Abella, chief of the personnel records section of the Companies,
from entering the Companies' premises on May 21, 1958, but they also caused bruises
and abrasions on Garcia's chest and forehead — acts considered inimical to the interest of
the respondents. The Unions, upon the other hand, insist that there is complete lack of
evidence that Ner took part in pushing Garcia; that it was Garcia who elbowed his way
through the picket lines and therefore Ner shouted "Close up," which the picketers did;
and that Garcia tossed Paulino Bugay's placard and a fight ensued between them in which
both suffered injuries. But despite these conflicting versions of what actually happened
on May 21, 1958, there are grounds to believe that the picketers are not responsible for
what happened.lâwphî1.ñèt The picketing on May 21, 1958, as reported in the police
blotter, was peaceful (see Police blotter report, exh. 3 in CA-G.R. No. 25991-R of the
Court of Appeals, where Ner was acquitted). Moreover, although the Companies during
the strike were holding offices at the Botica Boie building at Escolta, Manila; Tuason
Building at San Vicente Street, Manila; and Ayala, Inc. offices at Makati, Rizal, Garcia,
the assistant corporate secretary, and Abella, the chief of the personnel records section,
reported for work at the Insular Life Building. There is therefore a reasonable suggestion
that they were sent to work at the latter building to create such an incident and have a
basis for filing criminal charges against the petitioners in the fiscal's office and applying
for injunction from the court of first instance. Besides, under the circumstances the
picketers were not legally bound to yield their grounds and withdraw from the picket
lines. Being where the law expects them to be in the legitimate exercise of their rights,
they had every reason to defend themselves and their rights from any assault or unlawful
transgression. Yet the police blotter, about adverted to, attests that they did not resort to
violence.
The heated altercations and occasional blows exchanged on the picket line do not affect
or diminish the right to strike. Persuasive on this point is the following commentary: .
We think it must be conceded that some disorder is unfortunately quite
usual in any extensive or long drawn out strike. A strike is essentially
a battle waged with economic weapons. Engaged in it are human
beings whose feelings are stirred to the depths. Rising passions call
forth hot words. Hot words lead to blows on the picket line. The
transformation from economic to physical combat by those engaged in
the contest is difficult to prevent even when cool heads direct the fight.
Violence of this nature, however much it is to be regretted, must have
been in the contemplation of the Congress when it provided in Sec. 13
of Act 29 USCA Sec. 163, that nothing therein should be construed so
as to interfere with or impede or diminish in any way the right to
strike. If this were not so, the rights afforded to employees by the Act
would indeed be illusory. We accordingly recently held that it was not
intended by the Act that minor disorders of this nature would deprive a
striker of the possibility of reinstatement. (Republic Steel Corp. v. N.
L. R. B., 107 F2d 472, cited in Mathews, Labor Relations and the
Law, p. 378)
Hence the incident that occurred between Ner, et al. and Ramon Garcia was but a
necessary incident of the strike and should not be considered as a bar to reinstatement.
Thus it has been held that:
Fist-fighting between union and non-union employees in the midst of a strike is no bar to
reinstatement. (Teller, Labor Disputes and Collective Bargaining, Vol. II, p.
855 citing Stackpole Carbon, Co. 6 NLRB 171, enforced 105 F2d 167.)
Furthermore, assuming that the acts committed by the strikers were transgressions of law,
they amount only to mere ordinary misdemeanors and are not a bar to reinstatement.
In cases involving misdemeanors the board has generally held that unlawful acts are not
bar to reinstatement. (Teller, Labor Disputes and Collective Bargaining, Id., p.
854, citing Ford Motor Company, 23 NLRB No. 28.)
Finally, it is not disputed that despite the pendency of criminal charges against non-
striking employees before the fiscal's office, they were readily admitted, but those strikers
who had pending charges in the same office were refused readmission. The reinstatement
of the strikers is thus in order.
[W]here the misconduct, whether in reinstating persons equally guilty
with those whose reinstatement is opposed, or in other ways, gives rise
to the inference that union activities rather than misconduct is the basis
of his [employer] objection, the Board has usually required
reinstatement." (Teller, supra, p. 853, citing the Third Annual Report
of NLRB [1938], p. 211.)
Lastly, the lower Court justified the constructive dismissal of Florencio Ibarra allegedly
because he committed acts inimical to the interest of the respondents when, as president
of the FGU Workers and Employees Association-NATU, he advised the strikers that they
could use force and violence to have a successful picket and that picketing was precisely
intended to prevent the non-strikers and company clients and customers from entering the
Companies' buildings. Even if this were true, the record discloses that the picket line had
been generally peaceful, and that incidents happened only when management men made
incursions into and tried to break the picket line. At any rate, with or without the advice
of Ibarra, picketing is inherently explosive. For, as pointed out by one author, "The picket
line is an explosive front, charged with the emotions and fierce loyalties of the union-
management dispute. It may be marked by colorful name-calling, intimidating threats or
sporadic fights between the pickets and those who pass the line." (Mathews, Labor
Relations and the Law, p. 752). The picket line being the natural result of the
respondents' unfair labor practice, Ibarra's misconduct is at most a misdemeanor which is
not a bar to reinstatement. Besides, the only evidence presented by the Companies
regarding Ibarra's participation in the strike was the testimony of one Rodolfo
Encarnacion, a former member of the board of directors of the petitioner FGU Insurance
Group Workers and Employees Union-NATU, who became a "turncoat" and who
likewise testified as to the union activities of Atty. Lacsina, Ricardo Villaruel and others
(annex C, Decision, p. 27) — another matter which emphasizes the respondents' unfair
labor practice. For under the circumstances, there is good ground to believe that
Encarnacion was made to spy on the actvities of the union members. This act of the
respondents is considered unjustifiable interference in the union activities of the
petitioners and is unfair labor practice.
 It has been held in a great number of decisions at espionage by an
employer of union activities, or surveillance thereof, are such
instances of interference, restraint or coercion of employees in
connection with their right to organize, form and join unions as to
constitute unfair labor practice.
... "Nothing is more calculated to interfere with, restrain and coerce
employees in the exercise of their right to self-organization than such
activity even where no discharges result. The information obtained by
means of espionage is in valuable to the employer and can be used in a
variety of cases to break a union." The unfair labor practice is
committed whether the espionage is carried on by a professional labor
spy or detective, by officials or supervisory employees of the
employer, or by fellow employees acting at the request or direction of
the employer, or an ex-employee..." (Teller, Labor Disputes and
Collective Bargaining, Vol. II, pp. 765-766, and cases cited.) .
IV. The lower court should have ordered the reinstatement of the officials and members
of the Unions, with full back wages from June 2, 1958 to the date of their actual
reinstatement to their usual employment. Because all too clear from the factual and
environmental milieu of this case, coupled with settled decisional law, is that the Unions
went on strike because of the unfair labor practices committed by the respondents, and
that when the strikers reported back for work — upon the invitation of the respondents —
they were discriminatorily dismissed. The members and officials of the Unions therefore
are entitled to reinstatement with back pay.
[W]here the strike was induced and provoked by improper conduct on
the part of an employer amounting to an 'unfair labor practice,' the
strikers are entitled to reinstatement with back pay. (Rothenberg on
Labor Relations, p. 418.)
[A]n employee who has been dismissed in violation of the provisions
of the Act is entitled to reinstatement with back pay upon an
adjudication that the discharge was illegal." (Id., citing Waterman S.
S. Corp. v. N. L. R. B., 119 F2d 760; N. L. R. B. v. Richter's Bakery,
140 F2d 870; N. L. R. B. v. Southern Wood Preserving Co., 135 F. 2d
606; C. G. Conn, Ltd. v. N. L. R. B., 108 F2d 390; N. L. R. B. v.
American Mfg. Co., 106 F2d 61; N. L. R. B. v. Kentucky Fire Brick
Co., 99 F2d 99.)
And it is not a defense to reinstatement for the respondents to allege that the positions of
these union members have already been filled by replacements.
[W]here the employers' "unfair labor practice" caused or contributed
to the strike or where the 'lock-out' by the employer constitutes an
"unfair labor practice," the employer cannot successfully urge as a
defense that the striking or lock-out employees position has been filled
by replacement. Under such circumstances, if no job sufficiently and
satisfactorily comparable to that previously held by the aggrieved
employee can be found, the employer must discharge the replacement
employee, if necessary, to restore the striking or locked-out worker to
his old or comparable position ... If the employer's improper conduct
was an initial cause of the strike, all the strikers are entitled to
reinstatement and the dismissal of replacement employees wherever
necessary; ... . (Id., p. 422 and cases cited.)
A corollary issue to which we now address ourselves is, from what date should the
backpay payable to the unionists be computed? It is now a settled doctrine that strikers
who are entitled to reinstatement are not entitled to back pay during the period of the
strike, even though it is caused by an unfair labor practice. However, if they offer to
return to work under the same conditions just before the strike, the refusal to re-employ
or the imposition of conditions amounting to unfair labor practice is a violation of section
4(a) (4) of the Industrial Peace Act and the employer is liable for backpay from the date
of the offer (Cromwell Commercial Employees and Laborers Union vs. Court of
Industrial Relations, L-19778, Decision, Sept. 30, 1964, 12 SCRA 124; Id., Resolution on
motion for reconsideration, 13 SCRA 258; see also Mathews, Labor Relations and the
Law, p. 730 and the cited cases). We have likewise ruled that discriminatorily dismissed
employees must receive backpay from the date of the act of discrimination, that is, from
the date of their discharge (Cromwell Commercial Employees and Laborers Union vs.
Court of Industrial Relations, supra).
The respondents notified the petitioner strikers to report back for work on June 2, 1958,
which the latter did. A great number of them, however, were refused readmission because
they had criminal charges against them pending before the fiscal's office, although non-
strikers who were also facing criminal indictments were readily readmitted. These
strikers who were refused readmission on June 2, 1958 can thus be categorized as
discriminatorily dismissed employees and are entitled to backpay from said date. This is
true even with respect to the petitioners Jose Pilapil, Paulino Bugay, Jr. and Jose Garcia,
Jr. who were found guilty only of misdemeanors which are not considered sufficient to
bar reinstatement (Teller, Labor Disputes and Collective Bargaining, p. 854), especially
so because their unlawful acts arose during incidents which were provoked by the
respondents' men. However, since the employees who were denied readmission have
been out of the service of the Companies (for more than ten years) during which they
may have found other employment or other means of livelihood, it is only just and
equitable that whatever they may have earned during that period should be deducted from
their back wages to mitigate somewhat the liability of the company, pursuant to the
equitable principle that no one is allowed to enrich himself at the expense of another
(Macleod & Co. of the Philippines v. Progressive Federation of Labor, 97 Phil. 205
[1955]).
The lower court gave inordinate significance to the payment to and acceptance by the
dismissed employees of separation pay. This Court has ruled that while employers may
be authorized under Republic Act 1052 to terminate employment of employees by
serving the required notice, or, in the absence thereof, by paying the required
compensation, the said Act may not be invoked to justify a dismissal prohibited by law,
e.g., dismissal for union activities.
... While Republic Act No. 1052 authorizes a commercial
establishment to terminate the employment of its employee by serving
notice on him one month in advance, or, in the absence thereof, by
paying him one month compensation from the date of the termination
of his employment, such Act does not give to the employer a blanket
authority to terminate the employment regardless of the cause or
purpose behind such termination. Certainly, it cannot be made use of
as a cloak to circumvent a final order of the court or a scheme to
trample upon the right of an employee who has been the victim of an
unfair labor practice. (Yu Ki Lam, et al. v. Nena Micaller, et al., 99
Phil. 904 [1956].)
Finally, we do not share the respondents' view that the findings of fact of the Court of
Industrial Relations are supported by substantial and credible proof. This Court is not
therefore precluded from digging deeper into the factual milieu of the case (Union of
Philippine Education Employees v. Philippine Education Company, 91 Phil. 93; Lu Do &
Lu Ym Corporation v. Philippine-Land-Air-Sea Labor Union, 11 SCRA 134 [1964]).
V. The petitioners (15 of them) ask this Court to cite for contempt the respondent
Presiding Judge Arsenio Martinez of the Court of Industrial Relations and the counsels
for the private respondents, on the ground that the former wrote the following in his
decision subject of the instant petition for certiorari, while the latter quoted the same on
pages 90-91 of the respondents' brief: .
... Says the Supreme Court in the following decisions:
In a proceeding for unfair labor practice, involving
a determination as to whether or not the acts of the
employees concerned justified the adoption of the
employer of disciplinary measures against them,
the mere fact that the employees may be able to put
up a valid defense in a criminal prosecution for the
same acts, does not erase or neutralize the
employer's right to impose discipline on said
employees. For it is settled that not even the
acquittal of an employee of the criminal charge
against him is a bar to the employer's right to
impose discipline on its employees, should the act
upon which the criminal charged was based
constitute nevertheless an activity inimical to the
employer's interest... The act of the employees now
under consideration may be considered as a
misconduct which is a just cause for dismissal.
(Lopez, Sr., et al. vs. Chronicle Publication
Employees Ass'n. et al., G.R. No. L-20179-81,
December 28, 1964.) (emphasis supplied)
The two pertinent paragraphs in the above-cited decision * which contained the
underscored portions of the above citation read however as follows:
Differently as regard the dismissal of Orlando Aquino and Carmelito
Vicente, we are inclined to uphold the action taken by the employer as
proper disciplinary measure. A reading of the article which allegedly
caused their dismissal reveals that it really contains an insinuation
albeit subtly of the supposed exertion of political pressure by the
Manila Chronicle management upon the City Fiscal's Office, resulting
in the non-filing of the case against the employer. In rejecting the
employer's theory that the dismissal of Vicente and Aquino was
justified, the lower court considered the article as "a report of some
acts and omissions of an Assistant Fiscal in the exercise of his official
functions" and, therefore, does away with the presumption of malice.
This being a proceeding for unfair labor practice, the matter should not
have been viewed or gauged in the light of the doctrine on a
publisher's culpability under the Penal Code. We are not here to
determine whether the employees' act could stand criminal
prosecution, but only to find out whether the aforesaid act justifies the
adoption by the employer of disciplinary measure against them. This is
not sustaining the ruling that the publication in question is qualified
privileged, but even on the assumption that this is so, the exempting
character thereof under the Penal Code does not necessarily erase or
neutralize its effect on the employer's interest which may warrant
employment of disciplinary measure. For it must be remembered that
not even the acquittal of an employee, of the criminal charges against
him, is a bar to the employer's right to impose discipline on its
employees, should the act upon which the criminal charges was based
constitute nevertheless an activity inimical to the employer's interest.
In the herein case, it appears to us that for an employee to publish his
"suspicion," which actually amounts to a public accusation, that his
employer is exerting political pressure on a public official to thwart
some legitimate activities on the employees, which charge, in the least,
would sully the employer's reputation, can be nothing but an act
inimical to the said employer's interest. And the fact that the same was
made in the union newspaper does not alter its deleterious character
nor shield or protect a reprehensible act on the ground that it is a union
activity, because such end can be achieved without resort to improper
conduct or behavior. The act of the employees now under
consideration may be considered as a misconduct which is a just
cause for dismissal.** (Emphasis ours)
It is plain to the naked eye that the 60 un-underscored words of the paragraph quoted by
the respondent Judge do not appear in the pertinent paragraph of this Court's decision in
L-20179-81. Moreover, the first underscored sentence in the quoted paragraph starts with from June 2, 1958 up to the dates of their actual reinstatements. Costs against the
"For it is settled ..." whereas it reads, "For it must be remembered ...," in this Court's respondents.
decision. Finally, the second and last underlined sentence in the quoted paragraph of the
respondent Judge's decision, appears not in the same paragraph of this Court's decision
where the other sentence is, but in the immediately succeeding paragraph.

This apparent error, however, does not seem to warrant an indictment for contempt
against the respondent Judge and the respondents' counsels. We are inclined to believe
that the misquotation is more a result of clerical ineptitude than a deliberate attempt on
the part of the respondent Judge to mislead. We fully realize how saddled with many
pending cases are the courts of the land, and it is not difficult to imagine that because of
the pressure of their varied and multifarious work, clerical errors may escape their notice.
Upon the other hand, the respondents' counsels have the prima facie right to rely on the
quotation as it appears in the respondent Judge's decision, to copy it verbatim, and to
incorporate it in their brief. Anyway, the import of the underscored sentences of the
quotation in the respondent Judge's decision is substantially the same as, and faithfully
reflects, the particular ruling in this Court's decision, i.e., that "[N]ot even the acquittal of
an employee, of the criminal charges against him, is a bar to the employer's right to
impose discipline on its employees, should the act upon which the criminal charges were
based constitute nevertheless an activity inimical to the employer's interest."

Be that as it may, we must articulate our firm view that in citing this Court's decisions
and rulings, it is the bounden duty of courts, judges and lawyers to reproduce or copy the
same word-for-word and punctuation mark-for-punctuation mark. Indeed, there is a
salient and salutary reason why they should do this. Only from this Tribunal's decisions
and rulings do all other courts, as well as lawyers and litigants, take their bearings. This is
because the decisions referred to in article 8 of the Civil Code which reads, "Judicial
decisions applying or interpreting the laws or the Constitution shall form a part of the
legal system of the Philippines," are only those enunciated by this Court of last resort. We
said in no uncertain terms in Miranda, et al. vs. Imperial, et al. (77 Phil. 1066) that
"[O]nly the decisions of this Honorable Court establish jurisprudence or doctrines in this
jurisdiction." Thus, ever present is the danger that if not faithfully and exactly quoted, the
decisions and rulings of this Court may lose their proper and correct meaning, to the
detriment of other courts, lawyers and the public who may thereby be misled. But if
inferior courts and members of the bar meticulously discharge their duty to check and
recheck their citations of authorities culled not only from this Court's decisions but from
other sources and make certain that they are verbatim reproductions down to the last
word and punctuation mark, appellate courts will be precluded from acting on
misinformation, as well as be saved precious time in finding out whether the citations are
correct.

Happily for the respondent Judge and the respondents' counsels, there was no substantial
change in the thrust of this Court's particular ruling which they cited. It is our view,
nonetheless, that for their mistake, they should be, as they are hereby, admonished to be
more careful when citing jurisprudence in the future. ACCORDINGLY, the decision of
the Court of Industrial Relations dated August 17, 1965 is reversed and set aside, and
another is entered, ordering the respondents to reinstate the dismissed members of the
petitioning Unions to their former or comparatively similar positions, with backwages
G.R. No. L-23010 July 9, 1971
H. ARONSON & CO., INC., THE PHOTO MATERIALS CO., INC. and MEDEL
OFFICE MATERIALS & PAPER CO., INC., petitioners,
vs.
ASSOCIATED LABOR UNION, ALEJANDRO CENIZA, LORENZO SOLON,
LUCAS ATIENZA, HOSPICIO CASTILLO, EULOGIO GERNALE, PETRONIO
BUSTAMANTE, CATALINA ARANAS, MARIA CABATINGAN and THE
COURT OF INDUSTRIAL RELATIONS, respondents.
Vicente L. Faelnar, Manuel Lino G. Faelnar and Humabon G. Orlanes for petitioners.
Seno, Mendoza, Ruiz and Associates for respondents.
DIZON, J.:
Petitioners' appeal from an order of the Court of industrial Relations issued in Case No.
290-ULP-Cebu of November 11, 1963, penned by the then Presiding Judge, Jose S.
Bautista, subsequently affirmed by the court en banc, the dispositive part of which is as
follows:
WHEREFORE, the Court, finding the respondents guilty of unfair
labor practices as charged, orders them to cease and desist from such
acts, and to reinstate complainants Alejandro Ceniza, Lorenzo Solon,
Lucas Atienza, Hospicio Castillo, Eulogio Gernale, Petronio
Bustamante, Catalina Aranas and Maria Cabatingan to their former
positions under the same terms and conditions of employment with
back wages from the time they were illegally dismissed until they are
actually reinstated by employing them either in the Photo Materials
Company, Inc., or Medel Office Materials and Paper Company, Inc.
Upon the filing of a charge for unfair labor practice with the Court of Industrial Relations
by herein respondents against petitioners H. Aronson & Co., Inc. — hereinafter referred
to as Aronson or the Company — and/or Photo Materials & Paper Co., and/or Photo
Materials Company, Inc. — hereinafter referred to as Photo Materials — and Medel
Office Materials and Paper Co., Inc. — also referred to hereinafter as Medel — a
preliminary investigation was had and thereafter the corresponding charge was filed
against them under the provisions of Section 4 (a), sub-sections (1), (2), and (4) of
Republic Act No. 875. After hearing, the parties charged were found guilty. Their motion
for reconsideration having been denied subsequently by the court en banc, they took the
present appeal.
The following facts have been established: Aronson, originally known as Moody
Aronson & Co., Inc., was incorporated in 1920, with an authorized capital stock of
P5000,000.00 and a corporate life of 50 years expiring on May 27, 1970. Its corporate
purpose was to engage, as it actually engaged, in the business of buying, importing and
selling of goods, wares and merchandise, wholesale and retail, including photo materials
and supplies, writing paper, school books, stationery and stationery supplies. In the
course of time it became an Aronson family controlled corporation.
In 1958 its President and General Manager was Francis Aronson, and its Assistant
Manager was Donato Medel. That year thirteen of its twenty-five employees became
members of the respondent Associated Labor Union, among them being the individual
respondents Alejandro Ceniza, Lorenzo Solon, Lucas Atienza, Hospicio Castillo, Eulogio
Gernale, Petronio Bustamante, Catalina Aranas and Maria Cabatingan. In the month of
September of that year, because of the dismissal of Eugenia Solon, a union member, her
co-employees who were union members declared a strike which was soon settled as a
result of concilitation negotiations initiated by the Cebu Regional Office of the
Department of Labor.
Sometime thereafter, the respondent Union and its members made demands for a
collective bargaining agreement with the Company to obtain certain benefits in
connection with their working conditions. When the Company refused to enter into a
collective bargaining agreement, the employees who were union members declared a
second strike in December of that year. After some time the Company management
acceded to their demands and entered into a collective bargaining agreement with them
on January 6, 1959, the same having been renewed March 23, 1960. In this manner the
union members obtained labor benefits consisting of union security clause, security of
employment, conversion of daily to monthly salaries, sick and vacation leaves, medical
and dental care, etc.
On January 6, 1960, management sent to the employees of the Company letters of
termination of employment of the following tenor:
This is to notify you that on July 31, 1961 you will be separated from
the service of this Company. Consequently August 1, 1961 you will no
longer be in the employ of this Company.
Due to poor business, the stockholders desire to dissolve this
Corporation or to discontinue doing business on or about July 31,
1961.
Then on February 13, 1961 Aronson's original Articles of Incorporation were amended so
that, instead of its corporate existence expiring on May 27, 1970, it was made to expire
nine (9) years earlier, or more specifically, on July 31, 1961. On March 9, 1961, or less
than a month after such amendment had been accomplished, Medel was incorporated
with a capital stock of P100,000.00, and on July 17 of the same year, another new
corporation, Photo Materials was also incorporated with an authorized capital stock of
P400,000.00.
The total authorized capital stock of the two new corporations amounting to P500,000.00
was exactly the same authorized capital stock of Aronson. Moreover, Photo Materials
was organized to engage in the business of importing and exporting, buying and selling
goods, specifically photographic equipment and supplies, cameras, graphic art films,
greeting cards, and to maintain a photo processing laboratory and a photo finishing and
photographic studio, while the other new corporation, Medel, was organized to engage in
the business of buying and selling wares and merchandise of all kinds, such as paper and
other office materials. It will thus be seen that the two new corporations were organized
to engage in exactly the same business in which Aronson had been engaged; in other
words, to take over the latter's business.
On July 15, 1961, all the employees of Aronson who were members of the respondent
Union were required to stop working in spite of the fact that, according to the notice of
termination of employment served on them, their services were to be terminated on the
31st of that month. On the other hand, the employees of the Company who were not
members of the respondent Union were allowed to continue working up to that date, and
thereafter they continued working because they were absorbed or re-employed by the
newly organized corporations: Photo Materials and Medel.
There is also sufficient evidence to show that Medel started its business with the stocks
and office equipment of Aronson, and occupied for that purpose one-half of the store and
bodega formerly used by the latter. The other half was used by the other new corporation
— Photo Materials — who started business at the same time as Medel.
It is not disputed that the individual respondents were among the oldest in the service of
Aronson, as may be seen in the following table showing their date of employment, salary
upon termination, and number of years in the service, quoted from the appealed order:
in-interest or subsidiaries of Aronson and that, therefore, there never had existed a
relationship of employer and employee between them, on the one hand, and the
individual respondents, on the other; that, in view of this absence of employer and
employee relationship, Court of Industrial Relations had no jurisdiction over Photo
Materials and Medel; that the law applicable to the facts of this case is Republic Act No.
1052, as amended by Republic Act No. 1787, and not Republic Act No. 875.
The fifth to the seventh assignments of error state another phase of petitioners' position as
follows: that the corporate life of Aronson expired on July 31, 1961; that as a
consequence, the herein individual respondents were legally dismissed from its service as
of that date in accordance with the provisions of Republic Act No. 1052, as amended by
Republic Act No. 1787; that, independently of this, Aronson properly terminated their
services in accordance with the terms of their collective bargaining agreement in force at
that time.
Lastly, in the tenth to the fourteenth assignments of error petitioners contend that the
Court of Industrial Relations erred in finding them guilty of unfair labor practice; in
ordering them to reinstate the respondents named in the appealed order either in Aronson
or in either one of the other two petitioners; and lastly, in ordering them to pay back
wages to the individual respondents.
In view of the issues thus raised, it is quite obvious that the question of whether or not the
shortening of the corporate life or dissolution of Aronson, and the subsequent
incorporation of the other two petitioners were part and parcel of a plan, or were intended
to accomplish the dismissal of the individual respondents. In the light of the facts set
forth above and others to be mentioned hereinafter, We have come to the conclusion that
such was really the case.

No. of Years It is clear from the record that prior to the year 1958 Aronson had no labor trouble worth
Date of Salary upon in the mentioning. That year, however, thirteen of its twenty-five employees became members
Name Employment Termination Service of the respondent Union, and that same year Aronson saw the even tenor of its business
disturbed first, by a strike declared in September 1958 by the union members in protest
1. Hospicio Castillo 12-1-19 P130.00 41 yrs. 7 mos. against the dismissal of Eugenia Solon, and later, by a second strike declared in
2. Alejandro Ceniza 2-18-29 200.00 32 " December 1958 — lasting until January 1959 — as a result of certain demands made
3. Lucas Atienza 7-29-24 127.00 37 " upon the Company by its employees affiliated with the respondent Union.
4. Maria Cabatingan 6- 1-27 170.00 34 "
5. Lorenzo Solon 3-27-32 130.00 29 " 4 " So, on January 6, 1960, Aronson served written notice to its employees of the termination
6. Catalina Aranas 4- 1-33 130.00 28 " 3 " of their services as of July 31, 1961, allegedly due to the desire of its stockholders to
7. Eulogio Gernale 3-21-48 127.00 13 " 4 " dissolve the corporation because of poor business. Then, on February 13, 1961, obviously
8. Petronio Bustamante 1-13-41 120.00 20 " with the end in view of giving the termination of employment the appearance of good
faith and legality, Aronson amended its original Articles of Incorporation to make its
To simplify the discussion of the fourteen errors allegedly committed by the Court of corporate life expire on July 31, 1961 instead of May 27, 1970 as provided for in said
Industrial Relations, We shall divide them into four groups on the basis of the relation original Articles of Incorporation.
existing among the issues raised therein.
Furthermore, evidently to further give a semblance of good faith and legality to the
The first to the fourth, and the eighth to the ninth assignments of error partially state termination of the services of its employees — particularly those affiliated with the
petitioners' position as follows: that Photo Materials and Medel are not mere successors- respondent Union — on March 9, 1961 petitioner Medel was established with a capital
stock of P100,000.00, followed by the incorporation on July 17 of the same year of the
other petitioner Photo Materials with an authorized capital stock of P400,000.00. The
combined capital of the two new corporations was exactly the amount of the capital stock
of Aronson, and the new corporations' corporate purposes were exactly the same as those
of Aronson. Indeed, the facts established by the evidence lead to no other conclusion than
that the two new corporations actually took over the business of Aronson. To these
circumstances so blatantly revealing petitioners' purpose must be added these additional
circumstances: that the new corporations started business a day after the closure of
business of Aronson; that the members of the Aronson family who controlled said
company are in the same controlling position in the two new corporations; and lastly, that
Aronson's employees who were not members of the respondent Union later found
immediate employment with the new corporations.
Petitioners' contention that the dissolution of Aronson was due to "poor business" is,
upon the record, clearly without merit. It was ably disposed of by Judge Bautista in the
appealed order, as follows:
Upon careful and thorough analysis of the evidence adduced and from
the observation by the undersigned of the demeanor and manner of the
witnesses who testified on both sides, the preponderance of evidence
inclines towards the finding that the H. Aronson & Company was not
doing poor business in 1959 or 1960 but on the other hand, it was
making better business than in the preceding two years, 1957 and
1958. In 1957, said Company had suffered a net loss of P6,179.50
(Exhibit "52"). In 1958 the Company recovered amazingly for it had a
net profit of P7,796.60 (Exhibit "53"). In 1959, its net profit increased
to P8,930.23 (Exhibit "34"). And in 1960, it doubled its net profit to
the tune of P16,903.63 (Exhibit "34"). These facts were admitted by
Mr. Francis Aronson on the witness stand (t.s.n., pp. 794-95); he also
admitted as it likewise appears in Exhibit "34", that in 1960, the
Company had a surplus and profit in the total amount of P34,084.46
(t.s.n, p. 682). From these figures it is beyond dispute that the
Company's business improved gradually from 1958 to 1960 as its
profit progressively increased during the period. It is likewise apparent
that its business in 1960 was more profitable than in the previous years
of 1959, 1958 and 1957. Mr. Aronson openly admitted that there was
more reason, from the business point of view, to dissolve the
Company in 1959 than in 1960 (t.s.n., pp. 685-686).
That the Company was not losing or doing poor business in 1960 is
shown by the fact that on April 24, 1960, it increased its personnel by
adding two (2) additional employees, Patricinio Diaza and Roberto
Gorosin (t.s.n., pp. 605-606). Likewise in January, 1960, the Company
gave salary increases to two (2) employees, namely, Juanito Solon and
Andres Tugot (t.s.n., p. 597).
It is true (and the evidence supporting this is uncontradicted) that the
H. Aronson & Company suffered reduction of its import quota
allocations beginning 1960 until its quota was abolished in the second
quarter of 1960. This court can take judicial notice that import quota
allocations were progressively cut down beginning 1961 and 1962 in
order to prepare our international dollar reserve and that this reduction
was general and nationwide for it affected all import business in the
Philippines. But the business engaged in by the H. Aronson &
Company did not entirely depend for its stock upon importation from
abroad. Thus, Mr. Aronson himself admitted that to fill up its
diminishing imported stock and supplies, the Company resorted to
local purchases from local Companies (t.s.n., pp. 672-673). That this
recourse to local purchases after the import quota allocations were
altogether abolished did not as a whole bring about such poor business
as to warrant the immediate dissolution of the Company and the
complete stoppage of its business is clearly indicated by the fact that
on August 1, 1961, Mr. Aronson and the members of his family, who
owned majority if not most of the stocks of the dissolved H. Aronson
& Company, opened up for business the newly incorporated Photo
Materials Co., Inc., engaging in the business of photography and sale
of photographic supplies and equipments which was the same business
carried by the dissolved H. Aronson & Company. As a matter of fact,
this newly-incorporated Photo Materials Company started business
with stocks of photo supplies locally purchased from Kodak
(Philippines) (t.s.n., pp. 672-673). If it were true that the reduction and
ultimate abolition of import quota allocations constituted the important
and immediate cause of the dissolution of the H. Aronson &
Company, then under the substantial ownership and managership of
Mr. Francis Aronson, it cannot be understood why said Mr. Aronson
opened up a business similar to that of H. Aronson & Company which
allegedly depended upon import quota allocations. If at all, the
opening for business of the Photo Materials Company and the Medel
Office Materials and Paper Company for that matter after the
dissolution of the H. Aronson & Company, both of which newly-
opened companies carry on the same business as the H. Aronson &
Company is clear indication that the reduction and abolition of its
import quota allocations did not constitute the primary cause of the
dissolution of the H. Aronson & Company.
The true cause of the termination of the services of the complainants is
their membership with the Associated Labor Union and their union
activities. This finding is supported by the antecedent facts related
above, that is, since its establishment in 1920 the only instance when
the management of the H. Aronson & Company began to find
interference in the conduct of its business affairs was in 1958 when the
Associated Labor Union, to which the complainants are affiliated,
declared two strikes wherein the union decisively got what it wanted
from the reluctant management. Attempts were made by the
management to break the majority then held by the Union but it was
not successful.
Our conclusion, therefore, is that the Court of Industrial Relations had jurisdiction over
the case and the petitioners herein; that it correctly found petitioners guilty of unfair labor
practice, and in granting to the individual respondents the relief set forth in the
dispositive portion of the appealed order (Majestic etc. vs. Court of Industrial Relations,
L-12607, Feb. 28, 1962; Fernando vs. Angat Labor Union, L-17896, May 30, 1962;
PLASLU vs. Sy, L-18476, May 30, 1964; Yu Ki Lam vs. Micaller, L-9565, Sept. 14,
1956; Talisay etc. vs. CIR, et al., 60 O.G. pp. 5143, 5151, Jan. 30, 1960).

WHEREFORE, the appealed order being in accordance with law, the same is, hereby
affirmed, with costs.
G.R. No. L-28607 February 12, 1972
SHELL OIL WORKERS' UNION, Petitioner, vs.SHELL COMPANY OF THE
PHILIPPINES, LTD., and THE COURT OF INDUSTRIAL
RELATIONS, Respondents.
RESOLUTION
FERNANDO, J.:
The decision sought to be reconsidered by respondent Shell Company of the Philippines,
Ltd. upheld the validity of a strike conducted by the Shell Oil Workers' Union and thus
reversed an appealed decision from respondent Court of Industrial Relations. 1It was
arrived at unanimously, although there was a concurring opinion by Justice Antonio
Barredo, with whom Justices J.B.L. Reyes and Querube Makalintal were in agreement.
At that time, Justice Fred Ruiz Castro was on official leave and therefore could not take
part. He has now expressed his conformity with the opinion of the Court as rendered.
Justice Claudio Teehankee, however, would join the two other Justices in support of the
concurring opinion of Justice Barredo. Former Justice Dizon, who concurred in the result,
had since then been retired. After a careful study of the extensive motion for
reconsideration, this Court, in accordance with the two opinions, is once again unanimous
in sustaining the validity of the strike.chanroblesvirtualawlibrarychanrobles virtual law
library
The concurrence by Justice Barredo was prompted by his differing with the majority of
the Court as to the existence of facts in the record which would indicate a violation of the
collective bargaining agreement, thus resulting in the strike by petitioner Union.
Nonetheless, he was likewise for the reversal of the decision of the Court of Industrial
Relations for, as he pointed out: "All these, however do not mean, on the other hand, that
petitioner's strike should necessarily be held to be illegal. It is always a wholesome
attitude in cases of this nature to give but secondary importance to strict technicalities,
whether of substantive or remedial law, and to constantly bear in mind the human values
involved which are beyond pecuniary estimation. As a general rule, labor's most potent
and effective weapon is the strike, and it is but natural that when things appear to be
dimming on the negotiation tables, labor should almost instinctively take a striking
posture. In other words, the determination of the legality or illegality of a strike,
particularly in this enlightened era of progressive thinking on labor-management relations
is something that cannot be achieved by mere straight-jacketed legalistic argumentation
and rationalization; the process is broader and deeper than that, for to do justice in
deciding such an issue, it is imperative that utmost consideration should be given to the
particular circumstances of each case, with a view to having the most comprehensive
understanding of the motivations of the parties, in the light of human needs, on the part of
labor, and in the perspective of the orderly and economical conduct of business and
industry, on the part of management. In this particular case, for instance, I cannot agree
that respondent has violated its collective bargaining agreement with petitioner, but, on
the other hand, I am not ready to conclude that for this reason, the strike here in question
was consequently illegal. I hold that the two strike votes taken by the members of the
petitioning union were both premised on the sincere and honest belief that there was a
legal breach of the said agreement." 2chanrobles virtual law library
Such an approach was reflected in this portion of the opinion of the Court: "As a matter
of fact, this Court has gone even further. It is not even required that there be in fact an
unfair labor practice committed by the employer. It suffices, if such a belief in good faith
is entertained by labor, as the inducing factor for staging a strike. So it was clearly stated
by the present Chief Justice while still an Associate Justice of this Court: "As a
consequence, we hold that the strike in question had been called to offset what petitioners
were warranted in believing in good faith to be unfair labor practices on the part of
Management, that petitioners were not bound, therefore, to wait for the expiration of
thirty (30) days from notice of strike before staging the same, that said strike was not,
accordingly, illegal and that the strikers had not thereby lost their status as employees of
respondents herein." " 3chanrobles virtual law library
In the light of the above, it is apparent why, notwithstanding the vigorous plea made in
the motion for reconsideration, there would be no legal justification for reaching a
different conclusion from that arrived at in our decision of May 31,
1971.chanroblesvirtualawlibrarychanrobles virtual law library
1. More specifically, it is urged on this Court by respondent Shell Company of the
Philippines, Ltd. that the failure to abide by the terms of a collective bargaining
agreement should not be considered an unfair labor practice. It is much too late in the day
for such a contention to be advanced. Such a view runs counter to decisions of this Court
that go back to 1967. The ruling was first announced by this Court through Justice Castro
in Republic Savings Bank v. Court of Industrial Relations. 4It was subsequently followed
in Security Bank Employees Union v. Security Bank and Trust Company; 5Manila Hotel
Company v. Pines Hotel Employees Association 6and Alhambra Industries, Inc. v. Court
of Industrial Relations. 7There is no merit either for the argument advanced in the motion
for reconsideration that the decision in this case would justify violence and thus negate
the rule of law. A more careful reading of what was set forth in our decision should
suffice to demonstrate that such misgivings are unjustified. As was set forth therein:
"Respondent Court was likewise impelled to consider the strike illegal because of the
violence that attended it. What is clearly within the law is the concerted activity of
cessation of work in order that a union's economic demands may be granted or that an
employer cease and desist from an unfair labor practice. That the law recognizes as a
right. There is though a disapproval of the utilization of force to attain such an objective.
For implicit in the very concept of a legal order is the maintenance of peaceful ways. A
strike otherwise valid, if violent in character, may be placed beyond the pale. Care is to
be taken, however, especially where an unfair labor practice is involved, to avoid
stamping it with illegality just because it is tainted by such acts. To avoid rendering
illusory the recognition of the right to strike, responsibility in such a case should be
individual and not collective. A different conclusion would be called for, of course, if the
existence of force while the strike lasts is pervasive and widespread, consistently and
deliberately resorted to as a matter of policy. It could be reasonably concluded then that
even if justified as to ends, it becomes illegal because of the means
employed." 8chanrobles virtual law library
2. There must have been, on the part of respondent Shell Company of the Philippines,
Ltd., a realization that the unanimity displayed by this Court in reaching its conclusion
would, from the realistic standpoint, preclude undue optimism. Thus, there was an
alternative prayer. Respondent Shell Company of the Philippines, Ltd. seeks to have the
twelve officers of the Union denied reinstatement and be given a money award instead,
the employee status of Nestor Samson, Jose Rey, Romeo Rosales, Antonio Labrador and
Sesinando Romero be terminated for committing serious acts of violence, and the
reinstatement of the seventeen security guards be without backpay. While obviously, in
the light of the legal doctrines announced, the reinstatement of the twelve officers of the
Union who were dismissed merely because they were such, as well as that of the security
guards, was a logical and legal consequence of the decision reached, there appears to be
merit in its plea that the employee status of the five above-named individuals be
terminated. A reappraisal of the evidence would indicate that Nestor Samson did beat
driver Arsenio Alejo with such force as to cause him to fall down with his eyes "popping
out." As for Jose Rey and Romeo Rosales, they were among those who attacked Marcos
Prieto, the Company's Iloilo Installation Manager, resulting in the latter's hospitalization
for thirty-two days. The violence exerted by Sesinando Romero and Antonio Labrador,
by design and in concert, upon the two helpless victims, Arturo Mallari, the lorry driver,
and his helper, Avelino Ruiz, were likewise of such magnitude as to entail the loss of
employee status.chanroblesvirtualawlibrarychanrobles virtual law library

WHEREFORE, with the modification of our decision of May 31, 1971 in that by this
Resolution the employee status of Nestor Samson, Jose Rey, Romeo Rosales, Sesinando
Romero and Antonio Labrador is likewise deemed terminated as in the cases of Ricardo
Pagsibigan, Daniel Barraquel, Gregorio Bacsa, Conrado Peña, and Ernesto Crisostomo,
the same is reiterated in all respects, and the motion for reconsideration of respondent
Shell Company of the Philippines, Ltd. is denied.

Concepcion, C.J., Reyes, J.B.L., Makalintal, Zaldivar, Castro, Villamor and Makasiar,
JJ., concur.
G.R. No. 111211. July 24, 1997]
ABS-CBN EMPLOYEES UNION and JOSE ENTRADICHO, petitioners,
vs. NATIONAL LABOR RELATIONS COMMISSION and ABS-CBN
BROADCASTING CORPORATION, respondents.
DECISION
ROMERO, J.:
This petition for certiorari assails the July 12, 1993, decision of the National Labor
Relations Commission (NLRC) reversing the judgment of Labor Arbiter Oswald B.
Lorenzo dated August 31, 1990, but ordering private respondent to pay petitioner the
amount of P1,000.00 as indemnity.
Petitioner Jose Entradicho was employed by respondent ABS-CBN Broadcasting
Corporation (ABS-CBN) as cameraman on September 7, 1987 until his dismissal on
August 4, 1989.
It is undisputed that on July 15, 1989, petitioner did not report for the taping of an
ABS-CBN production entitled Kris at 18. The taping thereof was allegedly delayed,
mishandled and haphazardly done to the damage and prejudice of ABS-CBN. The latters
TV Engineering Director, Fernando Morales, directed petitioner to explain within 48
hours why no action should be taken against him for his absence on said date. He retorted
that he brought his sick daughter to the hospital for immediate medical attention and
borrowed from relatives the necessary funds to answer for the expenses which may be
incurred. Morales accepted his explanation with a stern warning that a repetition of a
similar offense would be meted a corresponding disciplinary action.
On July 16, 1989, however, ABS-CBN's Personnel Manager Hermilindo[1] P.
Ocampo, saw the name of petitioner in the closing credits of the program Supermodels
aired on People's Television 4 (PTV 4),[2] a fact later confirmed by Engr. Tony Lidua of
said station.
With this discovery, Ocampo required petitioner to report to him the circumstances
regarding the July 15, 1989, incident. Petitioner denied deserting his assignment with
ABS-CBN in favor of the production of Supermodels. He admitted, however, that his
fleeting stint with PTV 4 started only late in the afternoon of July 15, 1989, a job he was
forced to accept" because of an urgent financial need "to defray the medical expenses of
his sick child.[3]
On August 2, 1989, petitioner was terminated from his employment on the ground
of acts constituting disloyalty.
In a complaint for illegal dismissal filed by petitioner against ABS-CBN, Labor
Arbiter Oswald B. Lorenzo rendered a decision, the dispositive portion of which reads
thus:
WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered as
follows:
1. Declaring the dismissal of complaint JOSE ENTRADICHO by
respondent firm as having been illegally effected;
2. Ordering respondent firm to immediately reinstate herein
complainant to his former or substantially equivalent position
without loss of seniority rights and benefits previously enjoyed;
3. Ordering respondent to pay complainant his full back wages
from 04 August 1989 up to 31 August 1990 or a total of FORTY-
SIX THOUSAND NINETY-TWO PESOS AND TWENTY-
FOUR CENTAVOS (P46,092.24), or a period of 12.97 months
times P3,556.50 per month;
4. Ordering respondent to pay complainant the amount of ONE
THOUSAND SEVEN HUNDRED SEVENTY EIGHT PESOS
AND TWENTY-FIVE CENTAVOS (P1,778.25), representing his
fifteen (15) days suspension or the equivalent one-half month pay;
5. Ordering respondent to pay complainant for and as attorneys
fees the amount of FOUR THOUSAND SEVEN HUNDRED
EIGHTY SEVEN AND FOUR CENTAVOS (P4,787.04),
representing ten (10) per cent of the total award in this case.
Finally respondent firm is hereby ordered to show compliance of the
immediate reinstatement of complainant ENTRADICHO, either physically or
merely in the payroll at the option of the former within five (5) days from the
receipt of this decision.
On appeal, the NLRC set aside said decision and dismissed the case for lack of
merit, but ABS-CBN was ordered to indemnify petitioner in the amount of P1,000.00 for
its non-observance of due process in the termination of his services. Without filing any
motion for reconsideration of the NLRCs decision, petitioner filed the instant special civil
action.
The petition must be dismissed.
At the outset, the instant petition is procedurally defective for failure of petitioner to
file a motion for reconsideration with the NLRC before availing of the special civil action
of certiorari. In the case of Building Care Corporation v. NLRC,[4] the Court declared
that this premature action constitutes a fatal infirmity thus:
x x x The unquestioned rule in this jurisdiction is that certiorari will lie only if
there is no appeal or any other plain, speedy and adequate remedy in the
ordinary course of law against the acts of public respondent. In the instant
case, the plain and adequate remedy expressly provided by the law was a
motion for reconsideration of the assailed decision, based on palpable or patent
errors, to be made under oath and filed within ten (10) days from receipt of the
questioned decision.
 (T)he filing of such a motion is intended to afford public respondent an
opportunity to correct any actual or fancied error attributed to it by way of a
re-examination of the legal and factual aspects of the case. Petitioners inaction
or negligence under the circumstances is tantamount to a deprivation of the
right and opportunity of the respondent Commission to cleanse itself of an
error unwittingly committed or vindicate itself of an act unfairly imputed. x x
x that the following acts of an employee are subject to disciplinary measures and
x x x And for failure to avail of the correct remedy expressly provided by law,
petitioner has permitted the subject Resolution to become final and executory
after the lapse of the ten day period within which to file such motion for
reconsideration.
A motion for reconsideration is indispensable for it affords the NLRC an
opportunity to rectify errors or mistakes it might have committed before resort to the
courts can be had.[5] We had an occasion to stress this significant matter
in Zapata v. NLRC, [6] where we ruled in this wise:
Petitioner cannot, on its bare and self-serving representation that
reconsideration is unnecessary, unilaterally disregard what the law requires
and deny respondent NLRC its right to review its pronouncements before
being haled to court to account therefor. On policy considerations, such
prerequisite would provide an expeditious termination to labor disputes and
assist in the decongestion of court dockets by obviating improvident and
unnecessary recourse to judicial proceedings. The present case exemplifies the
very contingency sought to be, and which could have been, avoided by the
observance of said rules.
Rule VII, Section 14 of the NLRC Rules of Procedure provides that motions for
reconsideration must be filed within ten (10) calendar days from receipt of the order,
resolution, or decision of the NLRC,[7] a procedure which is jurisdictional. Hence
certiorari, as in this case, will not prosper.[8] Section 1, Rule 65 of the 1997 Rules of Civil
Procedure clearly provides that:
Section 1. Petition for certiorari. When any tribunal, board or officer
exercising judicial or quasi-judicial functions has acted without or in excess of
its or his jurisdiction, or with grave abuse of discretion amounting to lack or
excess of jurisdiction, and there is no appeal, or any plain, speedy, and
adequate remedy in the ordinary course of law, a person aggrieved thereby
may file a verified petition in the proper court, alleging the facts with certainty
and praying that judgment be rendered annulling or modifying the proceedings
of such tribunal, board or officer, and granting such incidental reliefs as law
and justice may require.
xxx xxx xxx.
In the absence of a motion for reconsideration filed within the ten-day reglementary
period, the assailed order, resolution, or decision of the NLRC becomes final and
executory after ten calendar days from receipt thereof.[9]
On the merits, we find no persuasive reason to depart from the NLRCs decision.
It must be noted that under Article XIII, Section 1, paragraph 10 of the ABS-CBN
collective bargaining agreement:
The COMPANY and UNION agree that in order to render efficient, competent
and competitive service to the public, the COMPANY must maintain a high
standard of operation. For this reason, the COMPANY and the UNION agree
shall warrant dismissal.
xxx
(1) Gross inefficiency and acts of disloyalty
x x x (Underscoring supplied).
The NLRC correctly declared that by rendering his services to a business rival,
petitioner was not only guilty of acts of disloyalty but also of serious misconduct and
willful breach of trust which under the Labor Code, as amended, are valid and just
grounds for the termination of an employment.
A dismissal, however, must not only be for a valid or substantial cause; the
employer must also observe the procedural aspect of due process by giving the employee
proper notice and the opportunity to be heard and to defend himself. [10] Rule XIV, section
2 of the implementing Rules and Regulations of the Labor Code provides that:
Notice of Dismissal. Any employer who seeks to dismiss a worker shall
furnish him a written notice stating the particular acts or omissionsconstituting
the grounds for his dismissal. (Underscoring supplied)
xxx xxx xxx"
Hermilindo P. Ocampos memorandum to petitioner was worded in this wise:
You are hereby required to report to the undersigned to answer certain allegations and
statements presented to the attention of Personnel in connection with your absence last
Saturday, July 15, 1989.[11]
We adopt the ruling of the Labor Arbiter on this point. The memorandum hinges
only on allegations and statements supposedly prejudicial to petitioner, without, however,
indicating explicitly the circumstances surrounding the same, thus violating the
aforementioned rule and regulations of the Labor Code. The Labor Code requires the
employer to furnish the employee with a written notice containing a statement of the
cause for termination and to afford said employee ample opportunity to be heard and to
defend himself with the assistance of his representative, if he so desires. Moreover, the
employer is also required to notify the worker in writing of the decision to dismiss him,
stating clearly the reasons therefore.[12]
 As to the consequence of the failure to observe the requirement of due process in
the dismissal of an employee, we ruled in Aurelio v. NLRC,[13] that in case where there
was a valid ground to dismiss an employee but there was non-observance of due process,
this Court held that only a sanction must be imposed upon the employer for failure to
give formal notice and to conduct an investigation required by law before dismissing the
employee in consonance with the ruling in Wenphil v. NLRC, 170 SCRA 69
(1989); Shoemart, Inc. v. NLRC, supra; and in Pacific Mills, Inc. v. Zenaida Alonzo, 199
SCRA 617 (1991). x x x In the Pacific Mills, Inc., and Wenphil cases, this Court awarded
P1,000.00 as penalty for non-observance of due process.
In the recent case of MGG Marine Services, Inc., et. al. v. NLRC,[14] we held that
the failure to show due process taints the dismissal.This does not mean however that the
private respondent would be entitled to back wages or reinstatement or even separation
pay. Under prevailing jurisprudence, one is entitled only to indemnity or damages, the
amount of which depends on the peculiar circumstances of each case.
WHEREFORE, the instant petition is DISMISSED. The decision of the National
Labor Relations Commission dated July 12, 1993, is accordingly AFFIRMED in toto. No
pronouncement as to costs.
SO ORDERED.
EN BANC

[G.R. No. L-18467. September 30, 1963.] LABRADOR, J.:

VICTORIAS MILLING CO., INC., Petitioner, v. VICTORIAS-MANAPLA

WORKERS ORGANIZATION-PAFLU, FREE VISAYAN WORKERS (FFW), ET The above-entitled cases originated from a complaint for unfair labor practice against the
AL., Respondents. Victorias Milling Company, Inc., filed by the acting prosecutor of the Court of Industrial
Relations on March 2, 1960. At the hearing of the charges the parties entered into a
[G.R. No. L-18470. September 30, 1963] stipulation of facts, the most important provisions of which are as follows: On April 6,
1957 the Victorias Milling Company, Inc. and the Free Visayan Workers entered into a
VICTORIAS-MANAPLA ORGANIZATION-PAFLU, Petitioner, v. COURT OF collective bargaining agreement which was to expire on December 31, 1959. The
INDUSTRIAL RELATIONS and FREE VISAYAN WORKERS agreement contains an automatic renewal clause after December 31, 1959. The duration
(FFW), Respondents. of the agreement and the automatic renewal clause are contained in the following
paragraphs of the agreement:jgc:chanrobles.com.ph
Hilado & Hilado and Gonzalo W. Gonzales for petitioner Victoria Milling Co., Inc.
"DURATION OF AGREEMENT"
Atanacio E. Pacis and Cipriano Cid for respondent and petitioner Victorias-
Manapla Workers Organization (PAFLU). "This agreement shall remain in full force and effect until midnight of December 31,
1959, continuing from year to year from the date of the signing hereof, unless either party
Porfirio Casa for respondent Free Visayan Workers (FFW). gives written notice by registered mail no more than seventy-five (75) days nor less than
thirty (30) days prior to December 31, 1959, or each subsequent renewal anniversary date
Mariano B. Tuazon for respondent Court of Industrial Relations. thereafter, to the effect that said party shall modify or terminate the entire agreement, in
which event this agreement shall be considered terminated or open for negotiation.

SYLLABUS
1. LABOR RELATIONS; COLLECTIVE BARGAINING AGREEMENTS; CLOSED
PROVISION; VALIDITY; DISMISSAL OF LABORERS PURSUANT THERETO,
NOT UNFAIR LABOR PRACTICE. — The dismissal by the company of ten of its
employees upon advice of the union with whom the company had a collective bargaining
agreement in pursuance of a closed shop provision of said contract, cannot constitute
unfair labor practice. Such closed shop agreement is valid and binding under our laws.
(Colgate-Palmolive-Peet Co. v. Nat. Labor Relations Bd., Et Al., 338 U.S. 355-365, 94
L.ed. 161).
2. ID.; ID.; ID.; ID.; FREEDOM TO CONTRACT CANNOT BE SUBORDINATED TO
FREEDOM OF LABORERS TO CHOOSE ORGANIZATION THEY DESIRE TO
REPRESENT THEM. — As a matter of principle the provision of the Industrial Peace
Act granting freedom to employees to organize themselves and select their representative
for entering into bargaining agreements, should be subordinated to the constitutional
provision protecting the sanctity of contracts. And even if the legislature had intended to
grant laborers such freedom to choose their union, it can not be paramount to the sanctity
of obligation of contracts; an attempt to override the constitutional provision would be
null and void.
DECISION
"If the notice sent in accordance which the above paragraph affects a portion or portions
of the agreement, the portion or portions not affected shall remain in force during the
renewal period.
"Twenty (20) days after receipt of the notice of modification or termination, the parties
shall meet for the purpose of bargaining with respect to the provisions of this agreement
or parts thereof which have been terminated by either party."cralaw virtua1aw library
Sometime in October, 1957, a petition for certification of elections in the Victorias
Milling Company, Inc. was filed by Victorina A. Combate and 318 others. In this case
before the Industrial Court in May, 1959, the Philippine Association of Free Labor
Unions (PAFLU) intervened. And on August 12, 1960, the Court of Industrial Relations
in the case for certification of elections ordered the holding of a certification of election.
It does not appear from the record that the election has already been made. Neither does
the result thereof appear.
On October 26, 1959 Vicente Convito, President of the Victorias- Manapla Workers
Organization (PAPLU) wrote a communication to the respondent Victorias Milling
Company, Inc., requesting that the company desist from entering into a new agreement
with any union until the question of representation has been determined by the court; that
the majority of the workers of the Victorias Milling Company, Inc. have joined the said
organization (PAFLU). Again on October 29, 1959, Vicente Convito representing the
same Philippine Association of Free Labor Unions wrote a letter to the respondent
company alleging that in view of the affiliation of the workers and laborers with the Free
Visayas Workers and in view of the fact that the latter’s agreement with the respondent
company is bound to expire, certain proposals be taken up for the purpose of collective
bargaining. In answer to the above two communications sent by the President of the
PAFLU the respondent company wrote the representative of the PAFLU as follows: That
in view of the fact that the petition for the certification of elections is still pending and the
issue of the majority representation has not been resolved yet, the respondent company
could not take action on the request for collective bargaining presented by the PAFLU.
The complaint for unfair labor practice arose from the dismissal of 10 employees,
namely, Felino Dalipe, Donato Anazarias, Prudencio Parcon, Celestino Bernila, Remegio
Seballos, Belarmino Bartico, Agustin Dulano, Ignacio Lozano, Loreto Undar, and
William Cevero. These employees were on or before December 31, 1959 members of the
Free Farmers Union or the Federation of Free Workers.
On January 11, 1960, a supplemental agreement having been entered into by the
Victorias Milling Company, Inc. and the Free Visayan Workers providing for wage
increases, the above-named ten dismissed employees had received increases in their pay.
But on February 10, 1960, they resigned or separated from the Free Farmers or Workers
Union and joined the Association of Free Labor Unions (PAFLU). In view of this change
in their affiliation from the Free Farmers Union to the Philippine Association of Free
Labor Unions (PAFLU), which change became known to the respondent company, an
investigation of their membership and change in membership was made. The Free
Visayan Workers Union conducted an investigation of the 10 dismissed employees prior
to their expulsion from the respondent union and its recommendation was for their
dismissal. In this investigation it was found out that they received the wage increases on
January 14, 1960, but changed their affiliation on February 10, 1960, from the Free
Visayan Workers Union to the Philippine Association of Free Labor Unions (PAFLU).
Consequently, with this finding of the change in their membership and in view of the
following portion of the existing agreement between the Free Farmers Union and the
respondent Company:jgc:chanrobles.com.ph
"Section 5(a). All employees who are covered by this agreement as provided for in
Section 4 hereof, who, at the date of the signing of the agreement, are member of the
union, shall remain members in good standing as a condition of continued employment.
Those covered employees who, at the date of the signing of this agreement, are not
members of the Union, shall be required to join and remain members of the Union in
good standing as a condition of continued employment . . . discrimination.
"Any laborer or employee who shall join the union in pursuance of the above requirement
and who thereafter shall resign from the union or is expelled therefrom for any act
contrary to the by-laws, rules and regulation of the Union, shall upon the advise of the
Union to the management of the company be dismissed from his employment. It is to be
understood, however, that the company reserves its right to look into the merits of the
expulsion of the laborer or employee concerned, where his dismissal from the Company
is sought by the Union . . . We do not agree with the court below in its ruling that the recognition and enforcement of
which agreement is a closed-shop agreement, the respondent company, upon advice of
the Free Farmers Union, dismissed the above-mentioned 10 employees. Their dismissal is
the subject of the complaint for unfair labor practice filed by the prosecutor of the Court
of Industrial Relations in these two cases now before the Court.
The facts found by the hearing officer regarding the previous affiliation of the above-
mentioned ten dismissed employees are as follows:jgc:chanrobles.com.ph
"With respect to the individual complainants, except Santiago Palomo and Pedro Moran,
the charges in regard to said persons having been withdrawn (t.s.n. pp, 68-69), all were
former members of the respondent union. On February 11, 1960, they severed their
affiliation with respondent union (Exhibits "A" to "M-9"). Immediately thereafter the
investigating committee of the Victorias Milling Company Unit of the respondent union
started an investigation and its finding forwarded to the Central Board of said respondent
union. (Exhibit "F"). The latter accepted the resignation of the complainants and
recommended their dismissal. (Exhibit "G"). The respondent company in similarly
worded letters dismissed the said complainants based on the union security provisions of
the Collective Bargaining agreement in question (Exhibits "B" to "B" -9"), after proper
investigation (Stipulation No. 9)
"It must be noted that the circumstances mentioned in the preceding paragraph occurred
after the execution of the supplementary agreement and after the period for the
modification and/or termination of the agreement has expired.
"It is also a fact that the herein complainants before their dismissal were members of the
respondent union."cralaw virtua1aw library
The hearing officer in arriving at its recommendation to the court reasoned as
follows:jgc:chanrobles.com.ph
"There reasons for those express prohibitions are apparent. Should the closed shop
provisions for a collective bargaining agreement be given absolute effect, it will maintain
any labor organization in perpetuity despite the manifest wishes of the employees
concerned which is contrary to the letter and spirit of Republic Act No. 875. Just as our
very own system of life guarantees a periodical gauge to determine the people’s free
wishes in those they have elected to govern them through a system of political election,
so must the bargaining representative of the employees be equally determined at an
appropriate time and the Court of Industrial Relations by law is the agency charged with
such function, and the exercise of such choice should likewise be free from
"While this Court is fully aware of the possible levelling of the accusation that we must
not interfere with the closed shop provisions of any validity entered bargaining as the
same might constitute internal union matters, yet such matters, do constitute relations
going deeply into the roots of the right to self-organization which this Court is duty
bound by law to protect and uphold."cralaw virtua1aw library
the closed-shop agreement between the Free Farmers Union and the Victorias Milling
Company, Inc. would tend to perpetuate the labor organization which secured it. This
claim cannot be true because the closed-shop agreement is to be enforced after December
31, 1959, automatically until such time as a new bargaining agreement can be entered
into.

The ruling of the court below suspending the operation of the agreement automatically
renewed, would produce as a result a period of interregnum in which no agreement would
govern at all. There would be a void if we do not authorize enforcement of the automatic
renewal clause adopted in the agreement. Such a situation where no agreement is in force
to govern the relations between laborers and capitalists is unwise, as it would give either
party an opportunity to commit a breach of the law.
Another reason for enforcing the closed-shop agreement is the principle of sanctity or
inviolability of contracts guaranteed by the Constitution. As a matter of principle the
provision of the Industrial Peace Act granting freedom to employees to organize
themselves and select their representative for entering into bargaining agreements, should
be subordinated to the constitutional provision protecting the sanctity of contracts. We
can not conceive how freedom to contract, which should be allowed to be exercised
without limitation may be subordinated to the freedom of laborers to choose the
organization they desire to represent them. And even if the legislature had intended to do
so and made such freedom of the laborer paramount to the sanctity of obligation of
contracts, such attempt to override the constitutional provision would necessarily ipso
facto be null and void.
A case brought on a writ of certiorari to the Supreme Court of the United States
presented the same problem that we now have before us, namely, the effectivity of a
closed-shop agreement as against the freedom of the laborers or employees to choose the
labor organization they want to affiliate with. There it was said that the Act granting the
employer and employees the privilege to enter into a closed-shop agreement, also
recognized the right of the workers to choose their union, but that said right to choose a
labor union is limited by the proviso authorizing parties to enter into a closed-shop
agreement. Hereinbelow is a summary of the facts involved in said case and the reasons
adduced by the court in arriving at its conclusion:chanrob1es virtual 1aw library
Petitioner was engaged in producing glycerin for war purposes. Its employees were at
first represented by a union affiliated with the American Federation of Labor. In 1938 the
International Longshoremen’s and Warehousemen’s Union, affiliated with the Congress
of Industrial Organizations, became the representative of petitioner’s employees. On July
9, 1941, the C. I. O. entered into a collective bargaining contract with petitioner which
contained a closed-shop provision to the effect that new employees shall be hired through
the offices of the Union, provided the latter shall be able to furnish competent workers for
the work required; otherwise, the employer may hire from outside sources, provided that
employees so hired shall make application for membership in the Union within 15 days
of their employment; and that the employees covered by the agreement shall be members
in good standing of the Union. This contract was entered in good faith by the parties and
was of indefinite duration.
On July 24, 1945, the C.I.O. and petitioner entered into a supplemental agreement that
their contract of July 9, 1941, "shall remain in full force and effect" pending approval of
certain agreed-upon items, other than the closed-shop provision, by the War Labor Board.
Shortly after the making of the supplemental agreement, open agitation for a change of
bargaining representative began at a period during which the National Labor Relation
believed was appropriate to seek a redetermination of representatives. On July 31 an
unauthorized strike occurred which lasted two and one-half days, although the C.I.O. had
pledged its membership not to strike during wartime. A group of employees formed an
independent organization which later sought to affiliate with the American Federation of
Labor. Because they were unmindful of the warnings issued by the C. I. O. that
disciplinary action against members would be taken for rival union activity, some 37
employees were suspended and expelled by the C. I. O. and discharged by petitioner
upon demand by the C.I.O. on the ground that they were no longer "members in good
standing" of the C.I.O. as required by the closed-shop contract.
Petitioner was charged with violation of Sec. 8(1) and Sec. 8(3) of the National Labor
Relations Act and found by the National Labor Relations Board guilty thereof and
ordered to reinstate the discharged employees. The Court of Appeals having entered a
decree enforcing the Board’s order, a petition for a writ of certiorari against the judgment
of said court was brought before the Supreme Court of the United States.
SEC. 8(3) referred to above considers as unfair labor practice for an employer to
discriminate in regard to hire or tenure of employment or any term or condition of
employment to encourage or discourage membership in any labor organization, but does
not preclude an employer from making an agreement with labor organization to require
as a condition of employment membership therein, if such labor organization is the
representative of the employees.
Recognizing that the discharges had the effect of interfering with the employees’ right
given by Sec. 7 of the National Labor Relations Act to self-organization and to collective
bargaining through representatives of their own choosing, and that the discharges had the
effect of discriminating, contrary to the prohibition of Sec. 8(3) of said Act, the Supreme
Court nevertheless found that a closed- shop agreement was valid under California law,
and the California Supreme Court, in the case of James v. Marinship (155 P2d 32),
explicitly recognized that a union may expel persons who "have interests inimical to the
union" because of the right of the union to reject or expel persons who refuse to abide by
any reasonable regulation or lawful policy adopted by the union. Citing the case of Davis
v. International Alliance, 141 P2d 486, it stated that under California law, "an
organization has the natural right of self- preservation, and may with propriety expel
members who show their disloyalty by joining a rival organization." The contract was
held to be valid under the Act and under state law.
Upholding the validity of closed-shop agreements the Supreme Court further held that
such agreements protect the integrity of the union and provides stability to labor relations,
to achieve which was the primary objective of Congress in enacting the National Labor
Relations Act. Congress knew that a closed-shop agreement would interfere with freedom
of employees to organize in another union and would, if used, lead inevitably to
discrimination in tenure of employment. Nevertheless, Congress inserted the proviso of
Sec. 8(3) allowing closed shop contracts with full realization that it would be a limitation
on Sec. 7 granting employees the right to self- organization and collective bargaining.
(Colgate-Palmolive-Peet Co. v. Nat. Labor Relations Bd., Et Al., 388 U.S. 355, 365, 94 L
ed. 161).
The above U.S. Supreme Court decision cleared an employer which discharged
employees expelled from the union because of activities for a rival union, from charges
of unfair labor practice, where its action was based on a closed-shop contract with a bona
fide labor union entered into and performed in good faith and valid in the state where
made.

Returning now to the case at bar, as we have found that the dismissal of the employees by
the respondent Victorias Milling Company, Inc. was in pursuance of a clause of an
agreement between said company and the Free Farmers Union, which agreement became
automatically renewed upon its expiration on December 31, 1959 and before a new
bargaining agreement could be arrived at, the action of the respondent company in
enforcing the terms of the closed-shop agreement is a valid exercise of its rights and
obligations under the contract. The dismissal by virtue thereof cannot constitute an unfair
labor practice, as it was in pursuance of an agreement that has been found to be regular
and of a closed-shop agreement which under our laws is valid and binding.

The decision of the lower court declaring that the respondent company was guilty of
unfair labor practice should, therefore, be set aside and the complaint for the said unfair
labor practice dismissed.

The Victorias-Manapla Organization (PAFLU) had also appealed from the decision of
the court below for the reason that it did not grant them pay during the period of the
dismissal of the laborers in question. In view of our ruling that the dismissal was valid,
the appeal for back wages must also be denied. Without costs. So ordered.
G.R. No. L-31195 June 5, 1973
PHILIPPINE BLOOMING MILLS EMPLOYMENT ORGANIZATION,
NICANOR TOLENTINO, FLORENCIO, PADRIGANO RUFINO, ROXAS
MARIANO DE LEON, ASENCION PACIENTE, BONIFACIO VACUNA,
BENJAMIN PAGCU and RODULFO MUNSOD, petitioners,
vs.
PHILIPPINE BLOOMING MILLS CO., INC. and COURT OF INDUSTRIAL
RELATIONS, respondents.
L.S. Osorio & P.B. Castillo and J.C. Espinas & Associates for petitioners.
Demetrio B. Salem & Associates for private respondent.
MAKASIAR, J.:
The petitioner Philippine Blooming Mills Employees Organization (hereinafter referred
to as PBMEO) is a legitimate labor union composed of the employees of the respondent
Philippine Blooming Mills Co., Inc., and petitioners Nicanor Tolentino, Florencio
Padrigano, Rufino Roxas, Mariano de Leon, Asencion Paciente, Bonifacio Vacuna,
Benjamin Pagcu and Rodulfo Munsod are officers and members of the petitioner Union.
Petitioners claim that on March 1, 1969, they decided to stage a mass demonstration at
Malacañang on March 4, 1969, in protest against alleged abuses of the Pasig police, to be
participated in by the workers in the first shift (from 6 A.M. to 2 P.M.) as well as those in
the regular second and third shifts (from 7 A.M. to 4 P.M. and from 8 A.M. to 5 P.M.,
respectively); and that they informed the respondent Company of their proposed
demonstration.
The questioned order dated September 15, 1969, of Associate Judge Joaquin M. Salvador
of the respondent Court reproduced the following stipulation of facts of the parties —
parties —
3. That on March 2, 1969 complainant company learned of the
projected mass demonstration at Malacañang in protest against alleged
abuses of the Pasig Police Department to be participated by the first
shift (6:00 AM-2:00 PM) workers as well as those working in the
regular shifts (7:00 A.M. to 4:00 PM and 8:00 AM to 5:00 PM) in the
morning of March 4, 1969;
4. That a meeting was called by the Company on March 3, 1969 at
about 11:00 A.M. at the Company's canteen, and those present were:
for the Company: (1) Mr. Arthur L. Ang (2) Atty. S. de Leon, Jr., (3)
and all department and section heads. For the PBMEO (1) Florencio
Padrigano, (2) Rufino Roxas, (3) Mariano de Leon, (4) Asencion
Paciente, (5) Bonifacio Vacuna and (6) Benjamin Pagcu.
5. That the Company asked the union panel to confirm or deny said
projected mass demonstration at Malacañang on March 4, 1969.
PBMEO thru Benjamin Pagcu who acted as spokesman of the union
panel, confirmed the planned demonstration and stated that the
demonstration or rally cannot be cancelled because it has already been
agreed upon in the meeting. Pagcu explained further that the
demonstration has nothing to do with the Company because the union
has no quarrel or dispute with Management;
6. That Management, thru Atty. C.S. de Leon, Company personnel
manager, informed PBMEO that the demonstration is an inalienable
right of the union guaranteed by the Constitution but emphasized,
however, that any demonstration for that matter should not unduly
prejudice the normal operation of the Company. For which reason, the
Company, thru Atty. C.S. de Leon warned the PBMEO representatives
that workers who belong to the first and regular shifts, who without
previous leave of absence approved by the Company, particularly , the
officers present who are the organizers of the demonstration, who shall
fail to report for work the following morning (March 4, 1969) shall be
dismissed, because such failure is a violation of the existing CBA and,
therefore, would be amounting to an illegal strike;
7. That at about 5:00 P.M. on March 3, 1969, another meeting was
convoked Company represented by Atty. C.S. de Leon, Jr. The Union
panel was composed of: Nicanor Tolentino, Rodolfo Munsod,
Benjamin Pagcu and Florencio Padrigano. In this afternoon meeting of
March 3, 1969, Company reiterated and appealed to the PBMEO
representatives that while all workers may join the Malacañang
demonstration, the workers for the first and regular shift of March 4,
1969 should be excused from joining the demonstration and should
report for work; and thus utilize the workers in the 2nd and 3rd shifts
in order not to violate the provisions of the CBA, particularly Article
XXIV: NO LOCKOUT — NO STRIKE'. All those who will not
follow this warning of the Company shall be dismiss; De Leon
reiterated the Company's warning that the officers shall be primarily
liable being the organizers of the mass demonstration. The union panel
countered that it was rather too late to change their plans inasmuch as
the Malacañang demonstration will be held the following morning;
and
8. That a certain Mr. Wilfredo Ariston, adviser of PBMEO sent a
cablegram to the Company which was received 9:50 A.M., March 4,
1969, the contents of which are as follows: 'REITERATING
REQUEST EXCUSE DAY SHIFT EMPLOYEES JOINING
 DEMONSTRATION MARCH 4, 1969.' (Pars. 3-8, Annex "F", pp.
42-43, rec.)
Because the petitioners and their members numbering about 400 proceeded with the
demonstration despite the pleas of the respondent Company that the first shift workers
should not be required to participate in the demonstration and that the workers in the
second and third shifts should be utilized for the demonstration from 6 A.M. to 2 P.M. on
March 4, 1969, respondent Company prior notice of the mass demonstration on March 4,
1969, with the respondent Court, a charge against petitioners and other employees who
composed the first shift, charging them with a "violation of Section 4(a)-6 in relation to
Sections 13 and 14, as well as Section 15, all of Republic Act No. 875, and of the CBA
providing for 'No Strike and No Lockout.' " (Annex "A", pp. 19-20, rec.). The charge was
accompanied by the joint affidavit of Arthur L. Ang and Cesareo de Leon, Jr. (Annex
"B", pp. 21-24, rec.). Thereafter, a corresponding complaint was filed, dated April 18,
1969, by Acting Chief Prosecutor Antonio T. Tirona and Acting Prosecutor Linda P.
Ilagan (Annex "C", pp. 25-30, rec.)
In their answer, dated May 9, 1969, herein petitioners claim that they did not violate the
existing CBA because they gave the respondent Company prior notice of the mass
demonstration on March 4, 1969; that the said mass demonstration was a valid exercise
of their constitutional freedom of speech against the alleged abuses of some Pasig
policemen; and that their mass demonstration was not a declaration of strike because it
was not directed against the respondent firm (Annex "D", pp. 31-34, rec.)
After considering the aforementioned stipulation of facts submitted by the parties, Judge
Joaquin M. Salvador, in an order dated September 15, 1969, found herein petitioner
PBMEO guilty of bargaining in bad faith and herein petitioners Florencio Padrigano,
Rufino Roxas, Mariano de Leon, Asencion Paciente, Bonifacio Vacuna, Benjamin Pagcu,
Nicanor Tolentino and Rodulfo Munsod as directly responsible for perpetrating the said
unfair labor practice and were, as a consequence, considered to have lost their status as
employees of the respondent Company (Annex "F", pp. 42-56, rec.)
Herein petitioners claim that they received on September 23, 1969, the aforesaid order (p.
11, rec.); and that they filed on September 29, 1969, because September 28, 1969 fell on
Sunday (p. 59, rec.), a motion for reconsideration of said order dated September 15, 1969,
on the ground that it is contrary to law and the evidence, as well as asked for ten (10)
days within which to file their arguments pursuant to Sections 15, 16 and 17 of the Rules
of the CIR, as amended (Annex "G", pp. 57-60, rec. )
In its opposition dated October 7, 1969, filed on October 11, 1969 (p. 63, rec.),
respondent Company averred that herein petitioners received on September 22, 1969, the
order dated September 17 (should be September 15), 1969; that under Section 15 of the
amended Rules of the Court of Industrial Relations, herein petitioners had five (5) days
from September 22, 1969 or until September 27, 1969, within which to file their motion
for reconsideration; and that because their motion for reconsideration was two (2) days
late, it should be accordingly dismissed, invoking Bien vs. Castillo,1 which held among
others, that a motion for extension of the five-day period for the filing of a motion for
reconsideration should be filed before the said five-day period elapses (Annex "M", pp.
61-64, rec.).
Subsequently, herein petitioners filed on October 14, 1969 their written arguments dated
October 11, 1969, in support of their motion for reconsideration (Annex "I", pp. 65-73,
rec.).
In a resolution dated October 9, 1969, the respondent en banc dismissed the motion for
reconsideration of herein petitioners for being pro forma as it was filed beyond the
reglementary period prescribed by its Rules (Annex "J", pp. 74-75, rec.), which herein
petitioners received on October 28, 196 (pp. 12 & 76, rec.).
At the bottom of the notice of the order dated October 9, 1969, which was released on
October 24, 1969 and addressed to the counsels of the parties (pp. 75-76, rec.), appear the
requirements of Sections 15, 16 and 17, as amended, of the Rules of the Court of
Industrial Relations, that a motion for reconsideration shall be filed within five (5) days
from receipt of its decision or order and that an appeal from the decision, resolution or
order of the C.I.R., sitting en banc, shall be perfected within ten (10) days from receipt
thereof (p. 76, rec.).
On October 31, 1969, herein petitioners filed with the respondent court a petition for
relief from the order dated October 9, 1969, on the ground that their failure to file their
motion for reconsideration on time was due to excusable negligence and honest mistake
committed by the president of the petitioner Union and of the office clerk of their
counsel, attaching thereto the affidavits of the said president and clerk (Annexes "K", "K-
1" and "K-2", rec.).
Without waiting for any resolution on their petition for relief from the order dated
October 9, 1969, herein petitioners filed on November 3, 1969, with the Supreme Court,
a notice of appeal (Annex "L", pp. 88-89, rec.).
I
There is need of briefly restating basic concepts and principles which underlie the issues
posed by the case at bar.
(1) In a democracy, the preservation and enhancement of the dignity and worth of the
human personality is the central core as well as the cardinal article of faith of our
civilization. The inviolable character of man as an individual must be "protected to the
largest possible extent in his thoughts and in his beliefs as the citadel of his person." 2
(2) The Bill of Rights is designed to preserve the ideals of liberty, equality and security
"against the assaults of opportunism, the expediency of the passing hour, the erosion of
small encroachments, and the scorn and derision of those who have no patience with
general principles."3
In the pithy language of Mr. Justice Robert Jackson, the purpose of the Bill of Rights is to
withdraw "certain subjects from the vicissitudes of political controversy, to place them
beyond the reach of majorities and officials, and to establish them as legal principles to
be applied by the courts. One's rights to life, liberty and property, to free speech, or free
press, freedom of worship and assembly, and other fundamental rights may not be
submitted to a vote; they depend on the outcome of no elections." 4 Laski proclaimed that
"the happiness of the individual, not the well-being of the State, was the criterion by
which its behaviour was to be judged. His interests, not its power, set the limits to the
authority it was entitled to exercise."5
(3) The freedoms of expression and of assembly as well as the right to petition are
included among the immunities reserved by the sovereign people, in the rhetorical
aphorism of Justice Holmes, to protect the ideas that we abhor or hate more than the ideas
we cherish; or as Socrates insinuated, not only to protect the minority who want to talk,
but also to benefit the majority who refuse to listen.6 And as Justice Douglas cogently
stresses it, the liberties of one are the liberties of all; and the liberties of one are not safe
unless the liberties of all are protected.7
(4) The rights of free expression, free assembly and petition, are not only civil rights but
also political rights essential to man's enjoyment of his life, to his happiness and to his
full and complete fulfillment. Thru these freedoms the citizens can participate not merely
in the periodic establishment of the government through their suffrage but also in the
administration of public affairs as well as in the discipline of abusive public officers. The
citizen is accorded these rights so that he can appeal to the appropriate governmental
officers or agencies for redress and protection as well as for the imposition of the lawful
sanctions on erring public officers and employees.
(5) While the Bill of Rights also protects property rights, the primacy of human rights
over property rights is recognized.8 Because these freedoms are "delicate and vulnerable,
as well as supremely precious in our society" and the "threat of sanctions may deter their
exercise almost as potently as the actual application of sanctions," they "need breathing
space to survive," permitting government regulation only "with narrow specificity." 9
Property and property rights can be lost thru prescription; but human rights are
imprescriptible. If human rights are extinguished by the passage of time, then the Bill of
Rights is a useless attempt to limit the power of government and ceases to be an
efficacious shield against the tyranny of officials, of majorities, of the influential and
powerful, and of oligarchs — political, economic or otherwise.
In the hierarchy of civil liberties, the rights of free expression and of assembly occupy a
preferred position as they are essential to the preservation and vitality of our civil and
political institutions; 10 and such priority "gives these liberties the sanctity and the
sanction not permitting dubious intrusions." 11
The superiority of these freedoms over property rights is underscored by the fact that a
mere reasonable or rational relation between the means employed by the law and its
object or purpose — that the law is neither arbitrary nor discriminatory nor oppressive —
would suffice to validate a law which restricts or impairs property rights. 12 On the other
hand, a constitutional or valid infringement of human rights requires a more stringent
criterion, namely existence of a grave and immediate danger of a substantive evil which
the State has the right to prevent. So it has been stressed in the main opinion of Mr.
Justice Fernando in Gonzales vs. Comelec and reiterated by the writer of the opinion
in Imbong vs. Ferrer. 13 It should be added that Mr. Justice Barredo in Gonzales vs.
Comelec, supra, like Justices Douglas, Black and Goldberg in N.Y. Times Co. vs.
Sullivan, 14 believes that the freedoms of speech and of the press as well as of peaceful
assembly and of petition for redress of grievances are absolute when directed against
public officials or "when exercised in relation to our right to choose the men and women
by whom we shall be governed," 15 even as Mr. Justice Castro relies on the balancing-of-
interests test. 16 Chief Justice Vinson is partial to the improbable danger rule formulated
by Chief Judge Learned Hand, viz. — whether the gravity of the evil, discounted by its
improbability, justifies such invasion of free expression as is necessary to avoid the
danger. 17
II
The respondent Court of Industrial Relations, after opining that the mass demonstration
was not a declaration of strike, concluded that by their "concerted act and the occurrence
temporary stoppage of work," herein petitioners are guilty bargaining in bad faith and
hence violated the collective bargaining agreement with private respondent Philippine
Blooming Mills Co., inc.. Set against and tested by foregoing principles governing a
democratic society, such conclusion cannot be sustained. The demonstration held
petitioners on March 4, 1969 before Malacañang was against alleged abuses of some
Pasig policemen, not against their employer, herein private respondent firm, said
demonstrate was purely and completely an exercise of their freedom expression in
general and of their right of assembly and petition for redress of grievances in particular
before appropriate governmental agency, the Chief Executive, again the police officers of
the municipality of Pasig. They exercise their civil and political rights for their mutual aid
protection from what they believe were police excesses. As matter of fact, it was the duty
of herein private respondent firm to protect herein petitioner Union and its members fro
the harassment of local police officers. It was to the interest herein private respondent
firm to rally to the defense of, and take up the cudgels for, its employees, so that they can
report to work free from harassment, vexation or peril and as consequence perform more
efficiently their respective tasks enhance its productivity as well as profits. Herein
respondent employer did not even offer to intercede for its employees with the local
police. Was it securing peace for itself at the expenses of its workers? Was it also
intimidated by the local police or did it encourage the local police to terrorize or vex its
workers? Its failure to defend its own employees all the more weakened the position of its
laborers the alleged oppressive police who might have been all the more emboldened
thereby subject its lowly employees to further indignities.
In seeking sanctuary behind their freedom of expression well as their right of assembly
and of petition against alleged persecution of local officialdom, the employees and
laborers of herein private respondent firm were fighting for their very survival, utilizing
only the weapons afforded them by the Constitution — the untrammelled enjoyment of
their basic human rights. The pretension of their employer that it would suffer loss or
damage by reason of the absence of its employees from 6 o'clock in the morning to 2
o'clock in the afternoon, is a plea for the preservation merely of their property rights.
Such apprehended loss or damage would not spell the difference between the life and
death of the firm or its owners or its management. The employees' pathetic situation was
a stark reality — abused, harassment and persecuted as they believed they were by the
peace officers of the municipality. As above intimated, the condition in which the
employees found themselves vis-a-vis the local police of Pasig, was a matter that vitally
affected their right to individual existence as well as that of their families. Material loss
can be repaired or adequately compensated. The debasement of the human being broken
in morale and brutalized in spirit-can never be fully evaluated in monetary terms. The
wounds fester and the scars remain to humiliate him to his dying day, even as he cries in
anguish for retribution, denial of which is like rubbing salt on bruised tissues.
As heretofore stated, the primacy of human rights — freedom of expression, of peaceful
assembly and of petition for redress of grievances — over property rights has been
sustained. 18 Emphatic reiteration of this basic tenet as a coveted boon — at once the
shield and armor of the dignity and worth of the human personality, the all-consuming
ideal of our enlightened civilization — becomes Our duty, if freedom and social justice
have any meaning at all for him who toils so that capital can produce economic goods
that can generate happiness for all. To regard the demonstration against police officers,
not against the employer, as evidence of bad faith in collective bargaining and hence a
violation of the collective bargaining agreement and a cause for the dismissal from
employment of the demonstrating employees, stretches unduly the compass of the
collective bargaining agreement, is "a potent means of inhibiting speech" and therefore
inflicts a moral as well as mortal wound on the constitutional guarantees of free
expression, of peaceful assembly and of petition. 19
The collective bargaining agreement which fixes the working shifts of the employees,
according to the respondent Court Industrial Relations, in effect imposes on the workers
the "duty ... to observe regular working hours." The strain construction of the Court of
Industrial Relations that a stipulated working shifts deny the workers the right to stage
mass demonstration against police abuses during working hours, constitutes a virtual
tyranny over the mind and life the workers and deserves severe condemnation.
Renunciation of the freedom should not be predicated on such a slender ground.
The mass demonstration staged by the employees on March 4, 1969 could not have been
legally enjoined by any court, such an injunction would be trenching upon the freedom
expression of the workers, even if it legally appears to be illegal picketing or
strike. 20 The respondent Court of Industrial Relations in the case at bar concedes that the
mass demonstration was not a declaration of a strike "as the same not rooted in any
industrial dispute although there is concerted act and the occurrence of a temporary
stoppage work." (Annex "F", p. 45, rec.).
The respondent firm claims that there was no need for all its employees to participate in
the demonstration and that they suggested to the Union that only the first and regular shift
from 6 A.M. to 2 P.M. should report for work in order that loss or damage to the firm will
be averted. This stand failed appreciate the sine qua non of an effective demonstration
especially by a labor union, namely the complete unity of the Union members as well as
their total presence at the demonstration site in order to generate the maximum sympathy
for the validity of their cause but also immediately action on the part of the corresponding
government agencies with jurisdiction over the issues they raised against the local police.
Circulation is one of the aspects of freedom of expression. 21 If demonstrators are reduced
by one-third, then by that much the circulation of the issues raised by the demonstration
is diminished. The more the participants, the more persons can be apprised of the purpose
of the rally. Moreover, the absence of one-third of their members will be regarded as a
substantial indication of disunity in their ranks which will enervate their position and abet
continued alleged police persecution. At any rate, the Union notified the company two
days in advance of their projected demonstration and the company could have made
arrangements to counteract or prevent whatever losses it might sustain by reason of the
absence of its workers for one day, especially in this case when the Union requested it to
excuse only the day-shift employees who will join the demonstration on March 4, 1969
which request the Union reiterated in their telegram received by the company at 9:50 in
the morning of March 4, 1969, the day of the mass demonstration (pp. 42-43, rec.). There
was a lack of human understanding or compassion on the part of the firm in rejecting the
request of the Union for excuse from work for the day shifts in order to carry out its mass
demonstration. And to regard as a ground for dismissal the mass demonstration held
against the Pasig police, not against the company, is gross vindictiveness on the part of
the employer, which is as unchristian as it is unconstitutional.
III
The respondent company is the one guilty of unfair labor practice. Because the refusal on
the part of the respondent firm to permit all its employees and workers to join the mass
demonstration against alleged police abuses and the subsequent separation of the eight (8)
petitioners from the service constituted an unconstitutional restraint on the freedom of
expression, freedom of assembly and freedom petition for redress of grievances, the
respondent firm committed an unfair labor practice defined in Section 4(a-1) in relation
to Section 3 of Republic Act No. 875, otherwise known as the Industrial Peace Act.
Section 3 of Republic Act No. 8 guarantees to the employees the right "to engage in
concert activities for ... mutual aid or protection"; while Section 4(a-1) regards as an
unfair labor practice for an employer interfere with, restrain or coerce employees in the
exercise their rights guaranteed in Section Three."
We repeat that the obvious purpose of the mass demonstration staged by the workers of
the respondent firm on March 4, 1969, was for their mutual aid and protection against
alleged police abuses, denial of which was interference with or restraint on the right of
the employees to engage in such common action to better shield themselves against such
alleged police indignities. The insistence on the part of the respondent firm that the
workers for the morning and regular shift should not participate in the mass
demonstration, under pain of dismissal, was as heretofore stated, "a potent means of
inhibiting speech." 22
Such a concerted action for their mutual help and protection deserves at least equal
protection as the concerted action of employees in giving publicity to a letter complaint
charging bank president with immorality, nepotism, favoritism an discrimination in the
appointment and promotion of ban employees. 23 We further ruled in the Republic
Savings Bank case, supra, that for the employees to come within the protective mantle of
Section 3 in relation to Section 4(a-1) on Republic Act No. 875, "it is not necessary that
union activity be involved or that collective bargaining be contemplated," as long as the
concerted activity is for the furtherance of their interests. 24
As stated clearly in the stipulation of facts embodied in the questioned order of
respondent Court dated September 15, 1969, the company, "while expressly
acknowledging, that the demonstration is an inalienable right of the Union guaranteed by
the Constitution," nonetheless emphasized that "any demonstration for that matter should
not unduly prejudice the normal operation of the company" and "warned the PBMEO
representatives that workers who belong to the first and regular shifts, who without
previous leave of absence approved by the Company, particularly the officers present
who are the organizers of the demonstration, who shall fail to report for work the
following morning (March 4, 1969) shall be dismissed, because such failure is a violation
of the existing CBA and, therefore, would be amounting to an illegal strike (;)" (p. III,
petitioner's brief). Such threat of dismissal tended to coerce the employees from joining
the mass demonstration. However, the issues that the employees raised against the local
police, were more important to them because they had the courage to proceed with the
demonstration, despite such threat of dismissal. The most that could happen to them was
to lose a day's wage by reason of their absence from work on the day of the
demonstration. One day's pay means much to a laborer, more especially if he has a family
to support. Yet, they were willing to forego their one-day salary hoping that their
demonstration would bring about the desired relief from police abuses. But management
was adamant in refusing to recognize the superior legitimacy of their right of free speech,
free assembly and the right to petition for redress.
Because the respondent company ostensibly did not find it necessary to demand from the
workers proof of the truth of the alleged abuses inflicted on them by the local police, it
thereby concedes that the evidence of such abuses should properly be submitted to the
corresponding authorities having jurisdiction over their complaint and to whom such
complaint may be referred by the President of the Philippines for proper investigation and
action with a view to disciplining the local police officers involved.
On the other hand, while the respondent Court of Industrial Relations found that the
demonstration "paralyzed to a large extent the operations of the complainant company,"
the respondent Court of Industrial Relations did not make any finding as to the fact of
loss actually sustained by the firm. This significant circumstance can only mean that the
firm did not sustain any loss or damage. It did not present evidence as to whether it lost
expected profits for failure to comply with purchase orders on that day; or that penalties
were exacted from it by customers whose orders could not be filled that day of the
demonstration; or that purchase orders were cancelled by the customers by reason of its
failure to deliver the materials ordered; or that its own equipment or materials or products
were damaged due to absence of its workers on March 4, 1969. On the contrary, the
company saved a sizable amount in the form of wages for its hundreds of workers, cost of
fuel, water and electric consumption that day. Such savings could have amply
compensated for unrealized profits or damages it might have sustained by reason of the
absence of its workers for only one day.
IV
Apart from violating the constitutional guarantees of free speech and assembly as well as
the right to petition for redress of grievances of the employees, the dismissal of the eight
(8) leaders of the workers for proceeding with the demonstration and consequently being
absent from work, constitutes a denial of social justice likewise assured by the
fundamental law to these lowly employees. Section 5 of Article II of the Constitution
imposes upon the State "the promotion of social justice to insure the well-being and
economic security of all of the people," which guarantee is emphasized by the other
directive in Section 6 of Article XIV of the Constitution that "the State shall afford
protection to labor ...". Respondent Court of Industrial Relations as an agency of the State
is under obligation at all times to give meaning and substance to these constitutional
guarantees in favor of the working man; for otherwise these constitutional safeguards
would be merely a lot of "meaningless constitutional patter." Under the Industrial Peace
Act, the Court of Industrial Relations is enjoined to effect the policy of the law "to
eliminate the causes of industrial unrest by encouraging and protecting the exercise by
employees of their right to self-organization for the purpose of collective bargaining
and for the promotion of their moral, social and economic well-being." It is most
unfortunate in the case at bar that respondent Court of Industrial Relations, the very
governmental agency designed therefor, failed to implement this policy and failed to keep
faith with its avowed mission — its raison d'etre — as ordained and directed by the
Constitution.
V
It has been likewise established that a violation of a constitutional right divests the court
of jurisdiction; and as a consequence its judgment is null and void and confers no rights.
Relief from a criminal conviction secured at the sacrifice of constitutional liberties, may
be obtained through habeas corpus proceedings even long after the finality of the
judgment. Thus, habeas corpus is the remedy to obtain the release of an individual, who
is convicted by final judgment through a forced confession, which violated his
constitutional right against self-incrimination; 25 or who is denied the right to present
evidence in his defense as a deprivation of his liberty without due process of law, 26 even
after the accused has already served sentence for twenty-two years. 27
Both the respondents Court of Industrial Relations and private firm trenched upon these
constitutional immunities of petitioners. Both failed to accord preference to such rights
and aggravated the inhumanity to which the aggrieved workers claimed they had been
subjected by the municipal police. Having violated these basic human rights of the
laborers, the Court of Industrial Relations ousted itself of jurisdiction and the questioned
orders it issued in the instant case are a nullity. Recognition and protection of such
freedoms are imperative on all public offices including the courts 28 as well as private
citizens and corporations, the exercise and enjoyment of which must not be nullified by
mere procedural rule promulgated by the Court Industrial Relations exercising a purely
delegate legislative power, when even a law enacted by Congress must yield to the
untrammelled enjoyment of these human rights. There is no time limit to the exercise of
the freedoms. The right to enjoy them is not exhausted by the delivery of one speech, the
printing of one article or the staging of one demonstration. It is a continuing immunity to
be invoked and exercised when exigent and expedient whenever there are errors to be
rectified, abuses to be denounced, inhumanities to be condemned. Otherwise these
guarantees in the Bill of Rights would be vitiated by rule on procedure prescribing the
period for appeal. The battle then would be reduced to a race for time. And in such a
contest between an employer and its laborer, the latter eventually loses because he cannot
employ the best an dedicated counsel who can defend his interest with the required
diligence and zeal, bereft as he is of the financial resources with which to pay for
competent legal services. 28-a
VI
The Court of Industrial Relations rule prescribes that motion for reconsideration of its
order or writ should filed within five (5) days from notice thereof and that the arguments
in support of said motion shall be filed within ten (10) days from the date of filing of such
motion for reconsideration (Sec. 16). As above intimated, these rules of procedure were
promulgated by the Court of Industrial Relations pursuant to a legislative delegation. 29
The motion for reconsideration was filed on September 29, 1969, or seven (7) days from
notice on September 22, 1969 of the order dated September 15, 1969 or two (2) days late.
Petitioners claim that they could have filed it on September 28, 1969, but it was a
Sunday.
Does the mere fact that the motion for reconsideration was filed two (2) days late defeat
the rights of the petitioning employees? Or more directly and concretely, does the
inadvertent omission to comply with a mere Court of Industrial Relations procedural rule
governing the period for filing a motion for reconsideration or appeal in labor cases,
promulgated pursuant to a legislative delegation, prevail over constitutional rights? The
answer should be obvious in the light of the aforecited cases. To accord supremacy to the
foregoing rules of the Court of Industrial Relations over basic human rights sheltered by
the Constitution, is not only incompatible with the basic tenet of constitutional
government that the Constitution is superior to any statute or subordinate rules and
regulations, but also does violence to natural reason and logic. The dominance and
superiority of the constitutional right over the aforesaid Court of Industrial Relations
procedural rule of necessity should be affirmed. Such a Court of Industrial Relations rule
as applied in this case does not implement or reinforce or strengthen the constitutional
rights affected,' but instead constrict the same to the point of nullifying the enjoyment
thereof by the petitioning employees. Said Court of Industrial Relations rule,
promulgated as it was pursuant to a mere legislative delegation, is unreasonable and
therefore is beyond the authority granted by the Constitution and the law. A period of five
(5) days within which to file a motion for reconsideration is too short, especially for the
aggrieved workers, who usually do not have the ready funds to meet the necessary
expenses therefor. In case of the Court of Appeals and the Supreme Court, a period of
fifteen (15) days has been fixed for the filing of the motion for re hearing or
reconsideration (See. 10, Rule 51; Sec. 1, Rule 52; Sec. 1, Rule 56, Revised Rules of
Court). The delay in the filing of the motion for reconsideration could have been only one
day if September 28, 1969 was not a Sunday. This fact accentuates the unreasonableness
of the Court of Industrial are concerned.
It should be stressed here that the motion for reconsideration dated September 27, 1969,
is based on the ground that the order sought to be reconsidered "is not in accordance with
law, evidence and facts adduced during the hearing," and likewise prays for an extension
of ten (10) days within which to file arguments pursuant to Sections 15, 16 and 17 of the
Rules of the Court of Industrial Relations (Annex "G", pp. 57-60, rec.); although the
arguments were actually filed by the herein petitioners on October 14, 1969 (Annex "I",
pp. 70-73, rec.), long after the 10-day period required for the filing of such supporting
arguments counted from the filing of the motion for reconsideration. Herein petitioners
received only on October 28, 1969 the resolution dated October 9, 1969 dismissing the
motion for reconsideration for being pro forma since it was filed beyond the
reglementary period (Annex "J", pp. 74-75, rec.)
It is true that We ruled in several cases that where a motion to reconsider is filed out of
time, or where the arguments in suppf such motion are filed beyond the 10 day
reglementary period provided for by the Court of Industrial Relations rules, the order or
decision subject of29-a reconsideration becomes final and unappealable. But in all these
cases, the constitutional rights of free expression, free assembly and petition were not
involved.
It is a procedural rule that generally all causes of action and defenses presently available
must be specifically raised in the complaint or answer; so that any cause of action or
defense not raised in such pleadings, is deemed waived. However, a constitutional issue
can be raised any time, even for the first time on appeal, if it appears that the
determination of the constitutional issue is necessary to a decision of the case, the very lis
mota of the case without the resolution of which no final and complete determination of
the dispute can be made. 30 It is thus seen that a procedural rule of Congress or of the
Supreme Court gives way to a constitutional right. In the instant case, the procedural rule
of the Court of Industrial Relations, a creature of Congress, must likewise yield to the
constitutional rights invoked by herein petitioners even before the institution of the unfair
labor practice charged against them and in their defense to the said charge.
In the case at bar, enforcement of the basic human freedoms sheltered no less by the
organic law, is a most compelling reason to deny application of a Court of Industrial
Relations rule which impinges on such human rights. 30-a
It is an accepted principle that the Supreme Court has the inherent power to "suspend its
own rules or to except a particular case from its operation, whenever the purposes of
justice require." 30-b Mr. Justice Barredo in his concurring opinion in Estrada vs. Sto.
Domingo. 30-c reiterated this principle and added that
Under this authority, this Court is enabled to cove with all situations
without concerning itself about procedural niceties that do not square
with the need to do justice, in any case, without further loss of time,
provided that the right of the parties to a full day in court is not
substantially impaired. Thus, this Court may treat an appeal as a
certiorari and vice-versa. In other words, when all the material facts
are spread in the records before Us, and all the parties have been duly
heard, it matters little that the error of the court a quo is of judgment
 or of jurisdiction. We can then and there render the appropriate
judgment. Is within the contemplation of this doctrine that as it is
perfectly legal and within the power of this Court to strike down in an
appeal acts without or in excess of jurisdiction or committed with
grave abuse of discretion, it cannot be beyond the admit of its
authority, in appropriate cases, to reverse in a certain proceed in any
error of judgment of a court a quo which cannot be exactly
categorized as a flaw of jurisdiction. If there can be any doubt, which I
do not entertain, on whether or not the errors this Court has found in
the decision of the Court of Appeals are short of being jurisdiction
nullities or excesses, this Court would still be on firm legal grounds
should it choose to reverse said decision here and now even if such
errors can be considered as mere mistakes of judgment or only as
faults in the exercise of jurisdiction, so as to avoid the unnecessary
return of this case to the lower court for the sole purpose of pursuing
the ordinary course of an appeal. (Emphasis supplied). 30-d
Insistence on the application of the questioned Court industrial Relations rule in this
particular case at bar would an unreasoning adherence to "Procedural niceties" which
denies justice to the herein laborers, whose basic human freedoms, including the right to
survive, must be according supremacy over the property rights of their employer firm
which has been given a full hearing on this case, especially when, as in the case at bar, no
actual material damage has be demonstrated as having been inflicted on its property
rights.
If We can disregard our own rules when justice requires it, obedience to the Constitution
renders more imperative the suspension of a Court of Industrial Relations rule that clash
with the human rights sanctioned and shielded with resolution concern by the specific
guarantees outlined in the organic law. It should be stressed that the application in the
instant case Section 15 of the Court of Industrial Relations rules relied upon by herein
respondent firm is unreasonable and therefore such application becomes unconstitutional
as it subverts the human rights of petitioning labor union and workers in the light of the
peculiar facts and circumstances revealed by the record.
The suspension of the application of Section 15 of the Court of Industrial Relations rules
with reference to the case at is also authorized by Section 20 of Commonwealth Act No.
103, the C.I.R. charter, which enjoins the Court of Industrial Relations to "act according
to justice and equity and substantial merits of the case, without regard to technicalities or
legal forms ..."
On several occasions, We emphasized this doctrine which was re-stated by Mr. Justice
Barredo, speaking for the Court, in the 1970 case of Kapisanan, etc. vs. Hamilton, etc., et.
al., 30-e thus:
As to the point that the evidence being offered by the petitioners in the
motion for new trial is not "newly discovered," as such term is
understood in the rules of procedure for the ordinary courts, We hold
that such criterion is not binding upon the Court of Industrial
Relations. Under Section 20 of Commonwealth Act No. 103, 'The
Court of Industrial Relations shall adopt its, rules or procedure and
shall have such other powers as generally pertain to a court of justice:
Provided, however, That in the hearing, investigation and
determination of any question or controversy and in exercising any
duties and power under this Act, the Court shall act according to
justice and equity and substantial merits of the case, without regard to
technicalities or legal forms and shall not be bound by any technical
rules of legal evidence but may inform its mind in such manner as it
may deem just and equitable.' By this provision the industrial court is
disengaged from the rigidity of the technicalities applicable to
ordinary courts. Said court is not even restricted to the specific relief
demanded by the parties but may issue such orders as may be deemed
necessary or expedient for the purpose of settling the dispute or
dispelling any doubts that may give rise to future disputes. (Ang Tibay
v. C.I.R., G.R. No. 46496, Feb. 17, 1940; Manila Trading & Supply
Co. v. Phil. Labor, 71 Phil. 124.) For these reasons, We believe that
this provision is ample enough to have enabled the respondent court to
consider whether or not its previous ruling that petitioners constitute a
minority was founded on fact, without regard to the technical meaning
of newly discovered evidence. ... (Alonso v. Villamor, 16 Phil. 315;
Chua Kiong v. Whitaker, 46 Phil. 578). (emphasis supplied.)
To apply Section 15 of the Court of Industrial Relations rules with "pedantic rigor" in the
instant case is to rule in effect that the poor workers, who can ill-afford an alert
competent lawyer, can no longer seek the sanctuary of human freedoms secured to them
by the fundamental law, simply because their counsel — erroneously believing that he
received a copy of the decision on September 23, 1969, instead of September 22, 1969 -
filed his motion for reconsideration September 29, 1969, which practically is only one
day late considering that September 28, 1969 was a Sunday.
Many a time, this Court deviated from procedure technicalities when they ceased to be
instruments of justice, for the attainment of which such rules have been devised.
Summarizing the jurisprudence on this score, Mr. Justice Fernando, speaking for a
unanimous Court in Palma vs. Oreta, 30-f Stated:
As was so aptly expressed by Justice Moreland in Alonso v.
Villamor (16 Phil. 315 [1910]. The Villamor decision was cited with
approval in Register of Deeds v. Phil. Nat. Bank, 84 Phil. 600 [1949];
Potenciano v. Court of Appeals, 104 Phil. 156 [1958] and Uy v. Uy,
14243, June 30, 1961, 2 SCRA 675.), decided as far back as 1910,
"technicality. when it deserts its proper-office as an aid to justice and
becomes its great hindrance and chief enemy, deserves scant
consideration from courts." (Ibid., p, 322.) To that norm, this Court
has remained committed. The late Justice Recto in Blanco v. Bernabe,
(63 Phil. 124 [1936]) was of a similar mind. For him the interpretation
of procedural rule should never "sacrifice the ends justice." While
"procedural laws are no other than technicalities" view them in their
 entirety, 'they were adopted not as ends themselves for the compliance
with which courts have organized and function, but as means
conducive to the realization the administration of the law and of
justice (Ibid., p.,128). We have remained steadfastly opposed, in the
highly rhetorical language Justice Felix, to "a sacrifice of substantial
rights of a litigant in altar of sophisticated technicalities with
impairment of the sacred principles of justice." (Potenciano v. Court of
Appeals, 104 Phil. 156, 161 [1958]). As succinctly put by Justice
Makalintal, they "should give way to the realities of the situation."
(Urbayan v. Caltex, L-15379, Aug. 31, 1962, 5 SCRA 1016, 1019). In
the latest decision in point promulgated in 1968, (Udan v. Amon,
(1968, 23 SCRA citing McEntee v. Manotok, L-14968, Oct. 27, 1961,
3 SCRA 272.) Justice Zaldivar was partial to an earlier formulation of
Justice Labrador that rules of procedure "are not to be applied in a
very rigid, technical sense"; but are intended "to help secure
substantial justice." (Ibid., p. 843) ... 30-g
Even if the questioned Court of Industrial Relations orders and rule were to be given
effect, the dismissal or termination of the employment of the petitioning eight (8) leaders
of the Union is harsh for a one-day absence from work. The respondent Court itself
recognized the severity of such a sanction when it did not include the dismissal of the
other 393 employees who are members of the same Union and who participated in the
demonstration against the Pasig police. As a matter of fact, upon the intercession of the
Secretary of Labor, the Union members who are not officers, were not dismissed and
only the Union itself and its thirteen (13) officers were specifically named as respondents
in the unfair labor practice charge filed against them by the firm (pp. 16-20, respondent's
Brief; Annexes "A", "B" and "C", pp. 20-30, rec.). Counsel for respondent firm insinuates
that not all the 400 or so employee participated in the demonstration, for which reason
only the Union and its thirteen (13) officers were specifically named in the unfair labor
practice charge (p. 20, respondent's brief). If that were so, then many, if not all, of the
morning and regular shifts reported for work on March 4, 1969 and that, as a
consequence, the firm continued in operation that day and did not sustain any damage.
The appropriate penalty — if it deserves any penalty at all — should have been simply to
charge said one-day absence against their vacation or sick leave. But to dismiss the eight
(8) leaders of the petitioner Union is a most cruel penalty, since as aforestated the Union
leaders depend on their wages for their daily sustenance as well as that of their respective
families aside from the fact that it is a lethal blow to unionism, while at the same time
strengthening the oppressive hand of the petty tyrants in the localities.
Mr. Justice Douglas articulated this pointed reminder:
The challenge to our liberties comes frequently not from those who
consciously seek to destroy our system of Government, but from men
of goodwill — good men who allow their proper concerns to blind
them to the fact that what they propose to accomplish involves an
impairment of liberty.
... The Motives of these men are often commendable. What we must
remember, however, is thatpreservation of liberties does not depend
on motives. A suppression of liberty has the same effect whether the
suppress or be a reformer or an outlaw. The only protection against
misguided zeal is a constant alertness of the infractions of the
guarantees of liberty contained in our Constitution. Each surrender of
liberty to the demands of the moment makes easier another, larger
surrender. The battle over the Bill of Rights is a never ending one.
... The liberties of any person are the liberties of all of us.
... In short, the Liberties of none are safe unless the liberties of all are
protected.
... But even if we should sense no danger to our own liberties, even if
we feel secure because we belong to a group that is important and
respected, we must recognize that our Bill of Rights is a code of fair
play for the less fortunate that we in all honor and good conscience
must be observe. 31
The case at bar is worse.
Management has shown not only lack of good-will or good intention, but a complete lack
of sympathetic understanding of the plight of its laborers who claim that they are being
subjected to indignities by the local police, It was more expedient for the firm to conserve
its income or profits than to assist its employees in their fight for their freedoms and
security against alleged petty tyrannies of local police officers. This is sheer opportunism.
Such opportunism and expediency resorted to by the respondent company assaulted the
immunities and welfare of its employees. It was pure and implement selfishness, if not
greed.
Of happy relevance is the 1967 case of Republic Savings Bank vs. C.I.R., 32 where the
petitioner Bank dismissed eight (8) employees for having written and published "a
patently libelous letter ... to the Bank president demanding his resignation on the grounds
of immorality, nepotism in the appointment and favoritism as well as discrimination in
the promotion of bank employees." Therein, thru Mr. Justice Castro, We ruled:
It will avail the Bank none to gloat over this admission of the
respondents. Assuming that the latter acted in their individual
capacities when they wrote the letter-charge they were nonetheless
protected for they were engaged in concerted activity, in the exercise
of their right of self organization that includes concerted activity for
mutual aid and protection, (Section 3 of the Industrial Peace Act ...)
This is the view of some members of this Court. For, as has been aptly
stated, the joining in protests or demands, even by a small group of
employees, if in furtherance of their interests as such, is a concerted
activity protected by the Industrial Peace Act. It is not necessary that
 union activity be involved or that collective bargaining be whatever earnings they might have realized from other sources during their separation
contemplated. (Annot., 6 A.L.R. 2d 416 [1949]). from the service.

xxx xxx xxx With costs against private respondent Philippine Blooming Company, Inc.

Instead of stifling criticism, the Bank should have allowed the

respondents to air their grievances.

xxx xxx xxx

The Bank defends its action by invoking its right to discipline for what
it calls the respondents' libel in giving undue publicity to their letter-
charge. To be sure, the right of self-organization of employees is not
unlimited (Republic Aviation Corp. vs. NLRB 324 U.S. 793 [1945]),
as the right of the employer to discharge for cause (Philippine
Education Co. v. Union of Phil. Educ. Employees, L-13773, April 29,
1960) is undenied. The Industrial Peace Act does not touch the normal
exercise of the right of the employer to select his employees or to
discharge them. It is directed solely against the abuse of that right by
interfering with the countervailing right of self organization (Phelps
Dodge Corp. v. NLRB 313 U.S. 177 [1941])...

xxx xxx xxx

In the final sum and substance, this Court is in unanimity that the
Bank's conduct, identified as an interference with the employees' right
of self-organization or as a retaliatory action, and/or as a refusal to
bargain collectively, constituted an unfair labor practice within the
meaning and intendment of section 4(a) of the Industrial Peace Act.
(Emphasis supplied.) 33

If free expression was accorded recognition and protection to fortify labor unionism in
the Republic Savings case, supra, where the complaint assailed the morality and integrity
of the bank president no less, such recognition and protection for free speech, free
assembly and right to petition are rendered all the more justifiable and more imperative in
the case at bar, where the mass demonstration was not against the company nor any of its
officers.

WHEREFORE, judgement is hereby rendered:

(1) setting aside as null and void the orders of the respondent Court of Industrial
Relations dated September 15 and October 9, 1969; and

(2) directing the re instatement of the herein eight (8) petitioners, with full back pay from
the date of their separation from the service until re instated, minus one day's pay and