G.R. Nos.

L-28791-93 August 27, 1973

VALENTIN GUIJARNO, HERMINIGILDO DE JUAN, NICOLAS CASUMPANG, ELEUTERIO

BOBLO, BENITO GUAVEZ, ARSENIO JEMENA, DIMAS BOCBOCILA, NICOLAS ALAMON,
ISMAEL BILLONES, RAYMUNDO ALAMON, SANTIAGO BAÑES, SOFRONIO CONCLARA,
ADRIANO BIÑAS, AURELIO ALAMON, SIMEON BERNIL, RESURRECION DIAZ,
FELICIANO BELGIRA, FEDERICO BOSQUE, and AGOSTO PULMONES, petitioners,
vs.
COURT OF INDUSTRIAL RELATIONS, CENTRAL SANTOS LOPEZ CO., INC. and UNITED
SUGAR WORKERS UNION-ILO respondents.

Pedrito A. Gianzon for petitioners.

Luis H. Garganera for private respondents.

FERNANDO, J.:

The failure of respondent Court of Industrial Relations to order the reinstatement of

petitioners to their employment gave rise to this appeal by way of certiorari. The need for
resort to this Court could have been obviated had there been no such marked inattention to
the authoritative principle that a closed-shop provision of a collective bargaining contract
is not to be applied retroactively for, at the time the decision was rendered on November 2,
1967 and its affirmance by a resolution of respondent Court en banc on January 22, 1968,
such a doctrine was controlling and did call for application. So it was indicated in the
leading case of Confederated Sons of Labor v. Anakan Lumber and Co.,1 a 1960 decision. As a
matter of law then, the stand of petitioners is well-nigh impregnable. It would follow that
their appeal must be sustained and respondent Court must be reversed.

Three unfair labor practice cases for unlawful dismissal allegedly based on legitimate union
activity were filed against respondent Central Santos Lopez Co., Inc. and respondent United
Sugar Workers Union-ILO, with eight of the present petitioners as complainants in the
first,2 six of them in the second,3 and five, in the third.4 There was a consolidated hearing
and a consolidated decision not only for convenience, but also due to there being hardly
any difference as to the nature of the alleged grievance and the defense of management.
There was no question about the expulsion from respondent labor union of the former. In
view of a closed-shop provision in the then existing collective bargaining contract,
respondent Central Santos Lopez Co., Inc. assumed it had to dismiss them. So it was noted
in the decision of the then associate Judge Joaquin M. Salvador of respondent Court. Thus:
"The respondent company, in its answer, alleged that the only reason for the dismissal of
the complainants herein is because their said dismissal was asked by the USWU-ILO of
which union respondent company has a valid and existing collective bargaining contract
with a closed-shop provision to the effect that those laborers who are no longer members
of good standing in the union may be dismissed by the respondent company if their
dismissal is sought by the union; that respondent company has never committed acts of
unfair labor practice against its employees or workers much less against the complainants
herein but that it has a solemn obligation to comply with the terms and conditions of the
contract; and that a closed-shop agreement is sanctioned under this jurisdiction for such
kind of agreement is expressly allowed under the provisions of Republic Act 875 known as
the Industrial Peace Act and the dismissal of complainants is merely an exercise of a right
allowed by said law."5 There was no question, however, as to petitioners having been
employed by such respondent Company long before the collective bargaining contract, the
first instance noted being that of Resurrecion Diaz, who was in the service as far back as
1928;6 Santiago Bañez, as far back as 1929;7 Dimas Bocbocila, as far back as 1933;8 Simeon
Bernil, as far back as 1935;9 Aurelio Alamon, as far back as 1936; 10 Valentin Guijarno, as far
back as 1937; 11 Benito Guavez, as far back as 1938; 12 Raymundo Alamon, as far back as
1939; 13 Eleuterio Boblo, Nicolas Alamon, Sofronio Conclara, Adriano Biñas and Federico
Bosque, as far back as 1947; 14 Herminigildo de Juan and Nicolas Casumpang, as far back as
1948; 15 Agosto Pulmones, as far back as 1949; 16 and Feliciano Belgira, as far back as
1954. 17

In the decision of respondent Court, there was an acknowledgment of the prior existence of
such employment relationship. Nonetheless, the conclusion reached, both by the trial judge
and then by respondent Court en banc was that the dismissal was justifiable under the
closed-shop provision of the collective bargaining agreement. Hence, this petition for
review, which, as noted at the outset, is impressed with merit.

1. The authoritative doctrine that a closed-shop provision in a collective bargaining

agreement is not to be given a retroactive effect so as to preclude its being applied to
employees already in the service, is traceable, as set forth in the opening paragraph of this
opinion, to the leading case of Confederated Sons of Labor v. Anakan Lumber Co. 18 decided
in April of 1960. In discussing the particular stipulation in the contract, it was made clear in
the opinion of the then Justice, later Chief Justice, Concepcion: "In order that an employer
may be deemed bound, under a collective bargaining agreement, to dismiss employees for
non-union membership, the stipulation to this effect must be so clear and unequivocal as to
leave no room for doubt thereon. An undertaking of this nature is so harsh that it must be
strictly construed, and doubts must be resolved against the existence of "closed
shop"." 19 Less than a year later, to be more precise, on January 28, 1961, in Freeman Shirt
Manufacturing Co., Inc. v. Court of Industrial Relations, 20 this Court, speaking through
Justice Gutierrez David, went further. Thus: "The closed-shop agreement authorized under
sec. 4, subsec. a(4) of the Industrial Peace Act above quoted should however, apply to
persons to be hired or to employees who are not yet members of any labor organization. It
is inapplicable to those already in the service who are members of another union. To hold
otherwise, i. e., that the employees in a company who are members of a minority union may
be compelled to disaffiliate from their union and join the majority or contracting union,
would render nugatory the right of all employees to self-organization and to form, join or
assist labor organizations of their own choosing, a right guaranteed by the Industrial Peace
Act (sec. 3, Rep. Act No. 875) as well as by the Constitution (Art. III, sec.
1[6])." 21 Thereafter, in Kapisanan Ng Mga Mangagagawa Ng Alak v. Hamilton Distillery
Company, 22 this Court, again speaking through the former, minced no words in
characterizing a stipulation that would allow a dismissal of those already employed as "null
and void." 23 In 1967, this time already elevated to his position as head of the Court, Chief
Justice Concepcion in Salunga v. Court of Industrial Relations 24 did stress that while
"generally, a state may not compel ordinary voluntary associations to admit thereto any
given individual, because membership therein may be accorded or withheld as a matter of
privilege, the rule is qualified in respect of labor unions holding a monopoly in the supply
of labor, either in a given locality, or as regards a particular employer with which it has a
closed-shop agreement. ... ." 25 He continued: "Consequently, it is well settled that such
unions are not entitled to arbitrarily exclude qualified applicants for membership, and a
closed-shop provision would not justify the employer in discharging, or a union in insisting
upon the discharge of, an employee whom the union thus refuses to admit to membership,
without any reasonable ground therefor. Needless to say, if said unions may be compelled
to admit new members, who have the requisite qualifications, with more reason may the
law and the courts exercise the coercive power when the employee involved is a long
standing union member, who, owing to provocations of union officers, was impelled to
tender his resignation, which he forthwith withdrew or revoked. Surely, he may, at least,
invoke the rights of those who seek admission for the first time, and can not arbitrarily be
denied re-admission." 26

Nothing can be clearer therefore than that this Court looks with disfavor on a provision of
this character being utilized as an excuse for the termination of employment. To complete
the picture, mention should be made of Elegance, Inc. v. Court of Industrial
Relations, 27 where this Court, through the present Acting Chief Justice Makalintal, harked
back to Freeman Shirt Manufacturing Co., Inc. v. Court of Industrial Relations 28 to stress the
point of non-retroactivity. What should be immediately apparent, but unfortunately
respondent Court seemed to have closed its eyes to it, is that when the decision was
rendered by the trial judge on November 2, 1967 and affirmed with the Court sitting en
banc on January 22, 1968, the controlling doctrine to which deference ought to have been
paid was that petitioners should not have been dismissed.

2. Nor is there anything unusual in this Court's adherence with remarkable consistency to
such a basic doctrine. The obligation was categorically imposed on the State, under the
1935 Constitution, to "afford protection to labor, especially to working women and minors
... ." 29 That is to carry out the purpose implicit in one of the five declared principles,
namely, the promotion of social justice "to insure the well-being and economic security of
all the people ... ." 30 It is then the individual employee, as a separate, finite human being,
with his problems and his needs, who must be attended to. He is the beneficiary of the
concern thus made manifest by the fundamental law. The present Constitution is even
more explicit on the matter. The principle that the State shall promote social justice is
categorically based on the concept of insuring "the dignity, welfare, and security of all the
people." 31 Insofar as the provision on the State affording protection to labor is concerned,
it is further required to "promote full employment and equality in employment, ensure
equal work opportunities regardless of sex, race, or creed, and regulate the relations
between workers and employers. The State shall assure the rights of workers to self-
organization, collective bargaining, security of tenure, and just and humane conditions of
work." 32 Where does that leave a labor union, it may be asked. Correctly understood, it is
nothing but the means of assuring that such fundamental objectives would be achieved. It
is the instrumentality through which an individual laborer who is helpless as against a
powerful employer may, through concerted effort and activity, achieve the goal of
economic well-being. That is the philosophy underlying the Industrial Peace Act. 33 For,
rightly has it been said that workers unorganized are weak; workers organized are strong.
Necessarily then, they join labor unions. To further increase the effectiveness of such
organizations, a closed-shop has been allowed. 34 It could happen, though, that such a
stipulation which assures further weight to a labor union at the bargaining table could be
utilized against minority groups or individual members thereof. There are indications that
such a deplorable situation did so manifest itself here. Respondent Court, it would appear,
was not sufficiently alert to such a danger. What is worse, it paid no heed to the controlling
doctrine which is merely a recognition of a basic fact in life, namely, that power in a
collectivity could be the means of crushing opposition and stifling the voices of those who
are in dissent. The right to join others of like persuasion is indeed valuable. An individual
by himself may feel inadequate to meet the exigencies of life or even to express his
personality without the right to association being vitalized. It could happen though that
whatever group may be in control of the organization may simply ignore his most-
cherished desires and treat him as if he counts for naught. The antagonism between him
and the group becomes marked. Dissatisfaction if given expression may be labeled
disloyalty. In the labor field, the union under such circumstances may no longer be a haven
of refuge, but indeed as much of a potential foe as management itself. Precisely with the
Anakan doctrine, such an undesirable eventuality has been sought to be minimized, if not
entirely avoided. There is no justification then, both as a matter of precedent and as a
matter of principle, for the decision reached by respondent Court.

3. Now as to the remedy to which petitioners are entitled. Clearly, they should be reinstated
with back pay. In Salunga v. Court of Industrial Relations, 35 reinstatement was ordered but
it was the labor union that was held liable for the back wages. That is a rule dictated by
fairness because management, in this case respondent Central Santos Lopez Company, Inc.,
would not have taken the action it did had it not been for the insistence of the labor union
seeking to give effect to its interpretation of a closed-shop provision. As we decided then,
so do we now. These words of the Chief Justice in Salunga carry persuasion: "Just the same,
having been denied re-admission into the Union and having been dismissed from the
service owing to an unfair labor practice on the part of the Union, petitioner is entitled to
reinstatement as member of the Union and to his former or substantially equivalent
position in the Company, without prejudice to his seniority and/or rights and privileges,
and with back pay, which back pay shall be borne exclusively by the Union. In the exercise
of its sound judgment and discretion, the lower court may, however, take such measures as
it may deem best, including the power to authorize the Company to make deductions, for
petitioner's benefit, from the sums due to the Union, by way of check off or otherwise, with
a view to executing this decision, and, at the same time effectuating the purposes of the
Industrial Peace Act." 36

WHEREFORE, the decision of respondent Court of November 2, 1967 and the resolution of
respondent Court en banc sustaining the same of January 2, 1968 are hereby reversed.
Respondent Central Lopez Co., Inc. is hereby ordered to reinstate petitioners to the
positions they occupied prior to their illegal dismissal, with back wages to be paid by
respondent United Sugar Workers Union-ILO, deducting therefrom whatever wages they
may have earned in the meanwhile. With costs against private respondents.

G.R. No. 91086 May 8, 1990

VIRGILIO S. CARIÑO petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, HARRISON INDUSTRIAL CORPORATION
and HARRISON INDUSTRIAL WORKERS' UNION, respondents.

Federico C. Leynes for petitioner.

Banzuela, Flores, Miralles, Rañeses Sy, Taquio & Associates for respondent Union.

Armando V. Ampil for respondent Harrison.

RESOLUTION

FELICIANO, J.:

Petitioner asks the Court to declare null and void a Decision dated 26 May 1989 of the
National Labor Relations Commission (NLRC) in NLRC Case No. NCR-00-09-03225-87 and
to reinstate the Decision of the Labor Arbiter which the NLRC had modified.

Petitioner Cariño was the former President of private respondent Harrison Industrial
Workers' Union ("Union"). Because he was widely believed to have grossly mismanaged
Union affairs, the other officers of the Union formed an investigating committee and several
times invited petitioner Cariño to answer the complaints and charges against him. These
charges were, principally:

1. Conspiring with the company during the negotiation of the CBA, resulting in, among
other things, Article 22 entitled "Retirement" which provided for retirement pay of one (1)
day's basic salary for every year of service.

2. Paying attorney's fees to Atty. Federico Leynes, Union counsel, out of Union funds
without obtaining corresponding receipts therefor.

3. Unilaterally increasing the membership dues by an additional P17.00 per member in

order to pay increased attorney's fees.

4. Concealing the CBA, failure to present and to explain the provisions of the same prior to
ratification by the union membership.

5. Refusal to turn over the custody and management of Union funds to the Union treasurer.
Petitioner Cariño, however, failed to respond to the calls or invitations made by the
investigating committee. Finally, the investigation committee caged a general membership
meeting on 11 June 1987. At this general membership meeting, the charges against
petitioner were presented and discussed and the Union decided to file a petition for special
election of its officers.

On 16 June 1987, a petition for special election of officers was filed by the Union with the
Bureau of Labor Relations, Department of Labor and Employment. Several hearings were
field at the BLR always with due notice to petitioner Cariño petitioner, however, failed to
appear even once.

On 5 August 1987, a general Union membership meeting was held for the impeachment of
Cariño. The general membership found Cariño guilty of the above-mentioned charges and
decided to expel him from the Union and to recommend his termination from employment.
Atty. Federico Leynes also ceased to be counsel for the Union.

The Union accordingly informed private respondent Harrison Industrial Corporation

("Company") of the expulsion of petitioner Cariño from the Union and demanded
application of the Union Security Clause of the then existing Collective Bargaining
Agreement (CBA) on 15 September 1987. Petitioner Cariño received a letter of termination
from the Company, effective the next day.

Petitioner Cariño, now represented by Atty. Leynes, the former lawyer of the Union, filed a
complaint for illegal dismissal with the Labor Arbiter.

In a Decision dated 7 October, 1988, the Labor Arbiter held that there was no just cause for
the dismissal of petitioner Cariño, none of the causes for suspension or dismissal of Union
members enumerated in the Union's Constitution and By-Laws being applicable to
petitioner's situation. The Labor Arbiter also held that the manner of petitioner's dismissal
had been in disregard of the requirements of notice and hearing laid down in the Labor
Code. The Labor Arbiter ordered petitioner's reinstatement with full backwages and
payment of attorney's fees, the monetary liability to be borne solidarily by the Company
and the Union.

The Company and the Union went on appeal before the public respondent National Labor
Relations Commission (NLRC). The NLRC, in a Decision promulgated on 26 May 1989,
reversed the Labor Arbiter's award. The NLRC noted that petitioner Cariño had merely
denied the serious charges of mismanagement preferred against him, as set out in the
affidavit of Dante Maroya, the incumbent President of the Union, which affidavit had been
adopted by the Union as its position paper in the proceedings before the Labor Arbiter. The
NLRC held Cariño's silence as "tantamount to [an] admission of guilt" and as constituting
the ultimate cause for his dismissal. However, the NLRC agreed with the Labor Arbiter's
finding that the manner of petitioner Cariño's dismissal was inconsistent with the
requirements of due process. The NLRC accordingly found the Company and the Union
solidarily liable, "by way of penalty and financial assistance", to petitioner Cariño for
payment of separation pay, at the rate of one-half (1/2) month's salary for each year of
service.

In the instant Petition for Certiorari, petitioner Cariño basically seeks reinstatement of the
Decision of the Labor Arbiter.

1. Petitioner Cariño contended that the NLRC had erred in taking cognizance of the Union's
admittedly late appeal. We agree, however, with the Solicitor General that it is a settled
principle of remedial law that reversal of a judgment obtained by a party appealing from it
also benefits a co-party who had not appealed, or who had appealed out of time, where the
rights and liabilities of both parties under the modified decision are so interwoven and
inter-dependent as to be substantively inseparable. 1

In the instant case, the NLRC could take cognizance of the late appeal of the Union,
considering that the lawfulness of petitioner Cariño's dismissal by the Company could be
determined only after ascertaining, among other things, the validity of the Union's act of
expelling Cariño from its membership. In other words, the Company having seasonably
appealed the Labor Arbiter's Decision and the Company's and the Union's liability being
closely intertwined the NLRC could properly take account of the Union's appeal even
though not seasonably filed.

2. The NLRC in effect held that there had been just cause for petitioner Cariño's dismissal.
The Court considers that the NLRC was correct in so holding, considering the following
documentary provisions:

a) Article II, Sections 4 and 5 of the Collective Bargaining Agreement between the Company
and the Union provided as follows:

Sec. 4. Any employee or worker obliged to join the UNION and/or maintain
membership therein under the foregoing sections who fails to do so and/or
maintain such membership shall be dismiss without pay upon formal request
of the UNION.

Sec. 5. Any UNION member may be suspended and/or expelled by the UNION
for:

a) Non-payment of dues or special assessment to the UNION.

b) Organizing or joining another UNION or affiliating with a labor federation.

c) Commission of a crime as defined by the Revised Penal Code against any

UNION officer in relation to activities for and in behalf of the UNION.

d) Participation in an unfair labor practice or any derogatory act against the

UNION or any of its officers or members; and
 e) Involvement in any violation of this Agreement or the UNION's Constitution
and By-Laws.

The UNION assumes full and complete responsibility for all dismiss of any
worker/employee effected by the UNION and conceded in turn, by the COMPANY pursuant
to the provisions hereof.

The UNION shall defend and hold the COMPANY free and harmless against any and all
claims the dismissed worker/employee might bring and/or obtain from the Company for
such dismissal. 2 (Emphasis supplied)

b) The Constitution of the Union contains the following provisions:

(i) Article X Section 5 reads:

ARTICLE X-FEES, DUES SPECIAL ASSESSMENTS, FINES AND OTHER

PAYMENTS

xxx xxx xxx

Sec. 5. Special assessments or other extraordinary fees such as for payment

of attorney's fees shall be made only upon a resolution duly ratified by the
general membership by secret balloting.

xxx xxx xxx

(Emphasis supplied.)

(ii) Article XV entitled "Discipline" provides in Section I thereof that:

Sec. 1. Any individual union members and/or union officer may be

disciplined or expelled from the UNION by the Executive Board if the latter
should find the former guilty of charges, based on the following grounds
preferred officially against him:

a) Non-payment of dues and other assessments for two (2) months;

b) Culpable violation of the Constitution and By Laws;

c) Deliberate refusal to implement policies, rules and regulations decisions

and/or support the programs or projects of the UNION as laid down by its
governing organs or its officers; and

d) Any act inimical to the interest of the UNION and/or its officers, such as but
not limited to rumor mongering which tends to discredit the name and
 integrity of the UNION and/or its officers and creating or causing to create
dissension among the UNION members thereof. 4 (Emphasis supplied.)

Article XVI entitled "Impeachment and Recall" specified, in Section 1 thereof, the grounds
for impeachment or recall of the President and other Union officers, in the following terms:

a) Committing or causing the commission directly or indirectly of acts against

the interest and welfare of the UNION;

b) Malicious attack against the UNION, its officers or against a fellow UNION
officer or member;

c) Failure to comply with the obligation to turn over and return to the UNION
Treasurer within three (3) days are [sic] unexpected sum or sum of money
received an authorized UNION purpose;

d) Gross misconduct unbecoming of a UNION officer;

e) Misappropriation of UNION funds and property. This is without prejudice

to the filing of an appropriate criminal or civil action against the responsible
officer or officers by any interested party

f) Willful violation of any provisions on this Constitution or rules, regulations,

measures, resolution and decisions of the UNION. 5 (Emphasis supplied.)

It appears to the Court that the particular charges raised against petitioner Cariño, set out
earlier, reasonably fall within the underscored provisions of the foregoing documents. The
NLRC impliedly recognized this when it described the charges of mismanagement against
Carino as serious.

The Labor Arbiter, however, also held that petitioner Cariño had been deprived
of procedural due process on the union level in view of alleged failure to comply with the
required procedure, governing impeachment and recall proceedings set out in Article XVI,
Section 2, of the Constitution of the Union. Article XVI, Section 2 reads as follows:

a) Impeachment or recall proceedings shall be initiated by a formal petition

or resolution signed by at least thirty (30%) percent of all bona fide members
of the UNION and addressed to the Chairman of the Executive board.

b) The Board Chairman shall then convene a general membership fee to

consider the impeachment or recall of an officer or a group of officers,
whether elective or appointive

c) UNION officers against whom impeachment or recall charges have been

filed shall be given ample opportunity to defend themselves before any
impeachment or recall vote is finally taken.
 d) A majority of all members of the UNION shall be required to impeach or
recall UNION officers.

e) The UNION officers impeached shall ipso facto be considered resigned or

ousted from office and shall no longer be elected nor appointed to any
position in the UNION.

f) The decision of the general membership on the impeachment or recall

charge shall be final and executory. 6

The NLRC, for its part, noted that while the prescribed procedural steps had not all been
followed or complied with, still,

Be that as it may, the general membership of the Union had spoken and decided
to expel complainant as Union President and member and ultimately, requested
the company to terminate his services per CBA prescription. It is worthy to
note that the charges aired by Mr. Dante Maroya are serious enough for
complainant to specifically respond and explain his side at the arbitral
proceedings below. While it appears that due process was lacking at the plant
level, this was cured by the arbitration process conducted by the Labor
Arbiter. Despite the ample opportunity to explain his side, complainant failed to
do so and instead, relied completely on alleged denial of due process.
Complainant's silence in this respect is tantamount to [an] admission of
guilt. 7 (Emphasis supplied.)

It is true that the impeachment of Cariño had not been initiated by a formal petition or
resolution signed by at least thirty percent (30%) of an the bona fide members of the Union.
A general meeting had, however, been called to take up the charges against petitioner
Carino who had been given multiple opportunities to defend himself before the
investigating committee of the Union officers and before the general Union members as
well as before the Bureau of Labor Relations. Petitioner Cariño, however, chose to
disregard all calls for him to appear and defend himself. At the general membership
meeting, therefore, petitioner Cariño was impeached and ordered recalled
by unanimous vote of the membership. Under these circumstances, failure to comply
literally with step (a) of Article XVI Section 2 of the Union's Constitution must be regarded
as non-material: the prescribed impeachment and recall proceeding had been more than
substantially complied with.

4. Turning now to the involvement of the Company in the dismissal of petitioner Cariño we
note that the Company upon being formally advised in writing of the expulsion of
petitioner Carino from the Union, in turn simply issued a termination letter to Cariño, the
termination being made effective the very next day. We believe that the Company should
have given petitioner Carino an opportunity to explain his side of the controversy with the
Union. Notwithstanding the Unions Security Clause in the CBA, the Company should have
reasonably satisfied itself by its own inquiry that the Union had not been merely acting
arbitrarily and capriciously in impeaching and expelling petitioner Cariño. From what was
already discussed above, it is quite clear that had the Company taken the trouble to
investigate the acts and proceedings of the Union, it could have very easily determined that
the Union had not acted arbitrarily in impeaching and expelling from its ranks petitioner
Cariño. The Company offered the excuse that the Union had threatened to go on strike if its
request had not been forthwith granted. Assuming that such a threat had in fact been made,
if a strike was in fact subsequently called because the Company had insisted on conducting
its own inquiry, the Court considers that such would have been prima facie an illegal strike.
The Company also pleaded that for it to inquire into the lawfulness of the acts of the Union
in this regard would constitute interference by the Company in the administration of Union
affairs. We do not believe so.

In Liberty Cotton Mills Worker's Union, et al. v. Liberty Cotton Mills, et al. 8 the Court held
respondent company to have acted in bad faith in dismissing the petitioner workers
without giving them an opportunity to present their side in their controversy with their
own union.

xxx xxx xxx

It is OUR considered view that respondent company is equally liable for the
payment of backwages for having acted in bad faith in effecting the dismissal
of the individual petitioners. Bad faith on the part of respondent company may
be gleaned from the fact that the petitioner workers were dismissed hastily and
summarily. At best, it was guilty of a tortious act, for which it must assume
solidary liability, since it apparently chose to summarily dismiss the workers at
the union's instance secure in the union's contractual undertaking that the
union would hold it "free from any liability" arising from such dismissal.

xxx xxx xxx

While respondent company, under the Maintenance of Membership

prevision of the Collective Bargaining Agreement, is bound to dismiss any
employee expelled by PAFLU for disloyalty, upon its written request, this
undertaking should not be done hastily and summarily. The company acted in
bad faith in dismissing petitioner workers without giving them the benefit of a
hearing. It did not even bother to inquire from the workers concerned and from
PAFLU itself about the cause of the expulsion of the petitioner workers. Instead,
the company immediately dismissed the workers on May 29, 1964 — in a
span of only one day — stating that it had no alternative but to comply with
its obligation under the Security Agreement in the Collective Bargaining
Agreement thereby disregarding the right of the workers to due process, self-
organization and security of tenure.

xxx xxx xxx

The power to dismiss is a normal prerogative of the employer. However, this

is not without limitations. The employer is bound to exercise caution in
 terminating the services of his employee especially so when it is made upon the
request of a labor union pursuant to the Collective Bargaining Agreement, as in
the instant case. Dismissals must not be arbitrary and capricious. Due process
must be observed in dismissing an employee because it affects not only his
position but also his means of livelihood. Employers should therefore respect
and protect the rights of their employees, which include the right to labor. . . .

xxx xxx xxx

(Emphasis supplied.)

In Manila Cordage Company v. Court of industrial Relations, et al., 10 the Court stressed the
requirement of good faith on the part of the company in dismissing the complainant and in
effect held that precipitate action in dismissing the complainant is indication of lack of good
faith.

xxx xxx xxx

The contention of the petitioners that they acted in good faith in dismissing
the complainants and, therefore, should not be held liable to pay their back
wages has no merit. The dismissal of the complainants by the petitioners was
precipitate and done with undue haste. Considering that the so-called
"maintainance of membership" clause did not clearly give the petitioners the
right to dismiss the complainants if said complainants did not maintain their
membership in the Manco Labor Union, the petitioners should have raised the
issue before the Court of industrial Relations in a petition for permission to
dismiss the complainants.

xxx xxx xxx

(Emphasis supplied.)

5. We conclude that the Company had failed to accord to petitioner Cariño the latter's right
to procedural due process. The right of an employee to be informed of the charges against
him and to reasonable opportunity to present his side in a controversy with either the
Company or his own Union, is not wiped away by a Union Security Clause or a Union Shop
Clause in a CBA. An employee is entitled to be protected not only from a company which
disregards his rights but also from his own Union the leadership of which could yield to the
temptation of swift and arbitrary expulsion from membership and hence dismissal from his
job.

The Court does not believe, however, that the grant of separation pay to petitioner Cariño
was an appropriate response (there having been just cause for the dismissal) to the failure
of the Company to accord him his full measure of due process. Since petitioner Cariño had
clearly disdained answering the charges preferred against him within the Union, there was
no reason to suppose that if the Company had held formal proceedings before dismissing
him, he would have appeared in a Company investigation and pleaded his defenses, if he
had any, against the charges against him. There was no indication that the Company had in
fact conspired with the Union to bring about the expulsion and dismissal of petitioner
Cariño indeed, the Union membership believed it was Cariño who had conspired with the
company in the course of negotiating the CBA. Considering all the circumstances of this
case, and considering especially the nature of the charges brought against petitioner Cariño
before his own Union, the Court believes that a penalty of P5,000 payable to petitioner
Carino should be quite adequate, the penalty to be borne by the Company and the Union
solidarily The Court also considers that because the charges raised against petitioner and
unanswered by him have marked overtones of dishonesty, this is not a case where
"financial (humanitarian) assistance" to the dismissed employee is warranted. 12

WHEREFORE, the Court DISMISSED the Petition for certiorari for lack of merit but
MODIFIED the Decision of the public respondent National Labor Relations Commission
dated 26 May 1989 by eliminating the grant of separation pay and in lieu thereof imposing
a penalty of P5,000.00 payable to the petitioner to be borne solidarily by the Company and
the Union. No pronouncement as to costs.

G.R. No. L-25003 October 23, 1981

LIWAYWAY PUBLICATIONS, INC., Plaintiff-Appellee, vs. PERMANENT CONCRETE
WORKERS UNION, Affiliated with the NATIONAL ASSOCIATION OF TRADE UNIONS,
HERMOGENES ATRAZO, AQUILINO DISTOR, BENJAMIN GUTIERREZ, JOSE RAMOS,
TIBURCIO MARDO, ERNESTO ALMARIO and DOMINGO LEANO, Defendants-Appellants.
GUERRERO, J.:
This is an appeal from the decision of the Court of First Instance of Manila declaring
permanent the writ of preliminary injunction issued in this case and condemning the
defendants (herein appellants) to pay plaintiff (herein appellee), the amount of P10,152.42
with interest thereon at the legal rate from the commencement of this action until fully
paid, P1,000.00 as attorney's fees and costs.chanroblesvirtualawlibrary chanrobles virtual
law library
The case commenced when Liwayway Publications, Inc. brought an action in the CFI-Manila
against Permanent Concrete Workers Union, et al. for the issuance of a writ of preliminary
injunction and for damages it incurred when its employees were prevented from getting
their daily supply of newsprint from its bodega.chanroblesvirtualawlibrarychanrobles
virtual law library
Plaintiff alleged that it is a second sublessee of a part of the premises of the Permanent
Concrete Products, Inc. at 1000 Cordeleria Street, Sta. Mesa, Manila from Don Ramon Roces,
a first lessee from the aforesaid company. The premises of the plaintiff is separated from
the compound of Permanent Concrete Products, Inc. by a concrete and barbed wire fence
with its own entrance and road leading to the national road. This entrance is separate and
distinct from the entrance road of the Permanent Concrete Products, Inc. 1 chanrobles
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Plaintiff further alleged that it has a bodega for its newsprint in the sublet property which it
uses for its printing and publishing business. The daily supply of newsprint needed to feed
its printing plant is taken from this bodega.chanroblesvirtualawlibrary chanrobles virtual
law library
On September 10, 1964, the employees of the Permanent Concrete Products, Inc. who are
representatives and members of the defendant union declared a strike against their
company.chanroblesvirtualawlibrarychanrobles virtual law library
On October 3, 1964 for unknown reasons and without legal justification, Permanent
Concrete Workers Union and its members picketed, stopped and prohibited plaintiff's truck
from entering the compound to load newsprint from its bodega. The union members
intimidated and threatened with bodily harm the employees who were in the
truck.chanroblesvirtualawlibrarychanrobles virtual law library
On October 6, 1964, union members stopped and prohibited the general manager,
personnel manager, bodega-in-charge and other employees of the plaintiff from getting
newsprint in their bodega. 2 chanrobles virtual law library
Plaintiff made repeated demands to the defendants not to intimidate and threaten its
employees with bodily harm and not to blockade, picket or prohibit plaintiff's truck from
getting newsprint in their bodega. Defendants refused and continued to refuse to give in to
the demands of the plaintiff.chanroblesvirtualawlibrary chanrobles virtual law library
As a consequence thereof, plaintiff rented another bodega during the time members of the
defendant union prevented its employees from entering its bodega in the compound of
Permanent Concrete Products, Inc. and thus incurred expenses both in terms of bodega
rentals and in transporting newsprint from the pier to the temporary
bodega.chanroblesvirtualawlibrary chanrobles virtual law library
On December 14, 1964, the lower court issued a writ of preliminary injunction enjoining
the defendants from: chanrobles virtual law library
(a) threatening and intimidating plaintiff's executive officers and their representatives,
who are going to its bodega as well as its employees who are getting newsprint from
it; chanrobles virtual law library
(b) ordering the defendants and their representatives not to blockade and/or picket the
compound and the gate of the plaintiff; chanrobles virtual law library
(c) ordering the defendants not to stop, prohibit, molest and interfere with the free passage
of the plaintiff in going in and out of the bodega.chanroblesvirtualawlibrary chanrobles
virtual law library
Defendant union moved to dismiss the complaint on the following grounds: chanrobles
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1. That this case arose out of a labor dispute involving unfair labor practices and, therefore,
the Court of First Instance where this action was brought has no jurisdiction to issue an
injunction since this case fans within the exclusive jurisdiction of the Court of Industrial
Relations; chanrobles virtual law library
2. That plaintiff is not the real party in interest in whose name the present action may be
prosecuted in accordance with Section 2, Rule 3 of the Rules of
Court.chanroblesvirtualawlibrary chanrobles virtual law library
On the first ground, defendants argued that the Court of Industrial Relations is vested with
the exclusive power to issue injunctions in labor disputes involving unfair labor practices
and that in the long line of decisions, the Supreme Court hat, repeatedly held that ordinary
do not have jurisdiction to issue an injunction in any labor dispute particularly when the
Court of Industrial Relations has already acquired jurisdiction over
it.chanroblesvirtualawlibrary chanrobles virtual law library
As to the second ground, defendants argue that the real party in interest in this case is the
Permanent Concrete Products, Inc. against whom the defendants' strike and picket
activities were directed and confined, and they point to cases between the real parties in
interest, namely: Permanent Concrete products, Inc. on one hand and the Permanent
Concrete Workers Union on the other, pending before the Court of Industrial Relations
docketed therein as CIR Case No. 156-Inj., Charge 212-ULP and Charge No. 1414-
M.C.chanroblesvirtualawlibrary chanrobles virtual law library
Plaintiff Liwayway Publications, Inc. opposed the motion, alleging that: chanrobles virtual
law library
1. There is no employer-employee relationship between the plaintiff and the
defendant; chanrobles virtual law library
2. There is no labor dispute between them; chanrobles virtual law library
3. Plaintiff's compound is separate and distinct from the compound of the company where
the defendant's are employed.chanroblesvirtualawlibrarychanrobles virtual law library
Defendants by way of reply to the abovementioned opposition argued that even if there
was no employer-employee relationship, still the Court of First Instance would have no
jurisdiction to issue an injunction, citing several cases holding that there could be a labor
dispute regardless of whether or not the disputants stand in proximate relation of
employer and employee and that peaceful picketing is an extension of the freedom of
speech guaranteed by the Constitution, 3 a fundamental right granted to labor which cannot
be enjoined.chanroblesvirtualawlibrary chanrobles virtual law library
Since plaintiff averred in its complaint that "it is a second sublessee of a part of the
premises of the Permanent Concrete Products, Inc. at 1000 Cordeleria Street, Sta. Mesa,
Manila from Don Ramon Roces, first lessee from the aforementioned company, defendants
contend that plaintiff has no cause of action against them but against Don Ramon Roces
under the provisions of Article 1654 of the New Civil Code which obliges the lessor to
maintain the lessee in the peaceful and adequate enjoyment of the lease for the entire
duration of the contract.chanroblesvirtualawlibrary chanrobles virtual law library
On October 22, 1964, the lower court issued an order denying the motion to dismiss and
motion to dissolve the writ of preliminary injunction on the ground that there was no labor
dispute between the plaintiff and defendant of which the Court of Industrial Relations may
take cognizance.chanroblesvirtualawlibrary chanrobles virtual law library
On November 16, 1964, the court, on motion of the plaintiff, declared defendants in default.
Defendants prayed for the lifting of the order of default, which plaintiff opposed. In the
order of December 16, 1964, the court denied the motion to lift the order of default, and
subsequently defendants' motion for reconsideration. Thereafter, the court rendered its
decision dated February 16, 1965 which declared permanent the writ of preliminary
injunction and ordered the defendants to pay the plaintiff jointly and severally the amount
of ?10,152.42 with interest thereon at legal rate from the commencement of the action until
fully paid, Pl,000.00 as attorney's fees and the costs. Copy of this decision was received by
defendants on July 20, 1965 and forthwith, defendants filed the notice of appeal on July 26,
1965.chanroblesvirtualawlibrary chanrobles virtual law library
On October 12,1965, Liwayway Publications, Inc. filed with the Supreme Court a petition
praying that a writ of attachment be issued on any sum of money which is owing from the
company to the union and to other defendants to be used to satisfy the judgment in its
favor should the same be affirmed by the Supreme Court.
Defendants filed an opposition to the petition for attachment alleging that even assuming
that there is an amount owing to the union from the company, such would be in the concept
of uncollected wages due the strikers and, therefore, cannot be subject of attachment as
provided by Art. 1708 of the New Civil Code that the laborer's wages shall not be subject to
execution or attachment except for debts incurred for food, shelter, clothing and for
medical attendance.

The Supreme Court denied the above petition for attachment but without prejudice to the
movant seeking remedy in the Court of First
Instance.chanroblesvirtualawlibrary chanrobles virtual law library
The sole issue raised in the instant appeal is whether or not the lower court has jurisdiction
to issue a writ of preliminary injunction considering that there was a labor dispute
between Permanent Concrete Products, Inc. and appellants for alleged unfair labor
practices committed by the former.chanroblesvirtualawlibrary chanrobles virtual law
library
The first question that strikes Us to be of determinative significance is whether or not this
case involves or has arisen out of a labor dispute. If it does, then with certainty, section 9 of
Republic Act 875, the "Industrial Peace Act", would apply. If it does not, then the Rules of
Court will govern the issuance of the writ of preliminary injunction because it will not
partake the nature of a labor injunction which the lower court has no jurisdiction to
issue.chanroblesvirtualawlibrary chanrobles virtual law library
The record before Us reveals that appellant union and its members picketed the gate
leading to appellee's bodega. This gate is about 200 meters from the gate leading to the
premises of the employer of the appellants. Appellee is not in any way related to the
striking union except for the fact that it is the sublessee of a bodega in the company's
compound. The picketers belonging to the appellant union had stopped and prohibited the
truck of the appellee from entering the compound to load newsprint from its bodega, the
union members intimidating and threatening with bodily harm the employees of the
appellee who were in the truck. The union members also stopped and prohibited the
general manager, personnel manager including the man in-charge of the bodega and other
employees of the Liwayway Publications, Inc. from getting newsprint in said bodega. The
business of the appellee is exclusively the publication of the magazines Bannawag Bisaya,
Hiligaynon and Liwayway weekly magazines which has absolutely no relation or
connection whatsoever with the cause of the strike of the union against their company,
much less with the terms, conditions or demands of the strikers. In such a factual situation,
the query to be resolved is whether the appellee is a third party or an "innocent bystander"
whose right has been invaded and, therefore, entitled to protection by the regular
courts.chanroblesvirtualawlibrary chanrobles virtual law library
At this juncture it is well to cite and stress the pronouncements of the Supreme Court on
the right to picket. Thus, in the case of Phil. Association of Free Labor Unions (PAFLU) vs.
Judge Gaudencio Cloribel et al., L-25878, March 28, 1969, 27 SCRA 465, 472, the Supreme
Court, speaking thru Justice J.B.L. Reyes, said: chanrobles virtual law library
The right to picket as a means of communicating the facts of a labor dispute is a phrase of
the freedom of speech guaranteed by the constitution. If peacefully carried out, it cannot be
curtailed even in the absence of employer-employee
relationship.chanroblesvirtualawlibrary chanrobles virtual law library
The right is, however, not an absolute one. While peaceful picketing is entitled to protection
as an exercise of free speech, we believe that courts are not without power to confine or
localize the sphere of communication or the demonstration to the parties to the labor
dispute, including those with related interest, and to insulate establishments or persons
with no industrial connection or having interest totally foreign to the context of the dispute.
Thus, the right may be regulated at the instance of third parties or "innocent. bystanders" if
it appears that the inevitable result of its exercise is to create an impression that a labor
dispute with which they have no connection or interest exists between them and the
picketing union or constitute an invasion of their rights. In one case decided by this Court,
we upheld a trial court's injunction prohibiting the union from blocking the entrance to a
feed mill located within the compound of a flour mill with which the union had a dispute.
Although sustained on a different ground, no connection was found other than their being
situated in the same premises. It is to be noted that in the instances cited, peaceful
picketing has not been totally banned but merely regulated. And in one American case, a
picket by a labor union in front of a motion picture theater with which the union had a
labor dispute was enjoined by the court from being extended in front of the main entrance
of the building housing the theater wherein other stores operated by third persons were
located.
The same case state clearly and succinctly the rationalization for the court's regulation of
the right to picket in the following wise and manner: chanrobles virtual law library
Wellington and Galang are mere 'innocent bystanders'. They are entitled to seek protection
of their rights from the courts and the courts may, accordingly, legally extend the same.
Moreover, PAFLU's right to peacefully picket METBANK is not curtailed by the injunctions
issued by respondent judge. The picket is merely regulated to protect the rights of third
parties. And the reason for this is not far-fetched. If the law fails to afford said protection,
men will endeavor to safeguard their rights by their own might, take the law in their own
hands, and commit acts which lead to breaches of the law. 'This should not be allowed to
happen.
It may be conceded that the appellant Union has a labor dispute with the Permanent
Concrete Products company and that the dispute is pending before the Court of Industrial
Relations docket therein as CIR Case No. 156-Inj., Charge 212-ULP and Charge No. 1414-
M.C. Nonetheless, the rule laid down in the case of National Garment and Textile Workers'
Union (PAFLU) vs. Hon. Hermogenes Caluag, et al. G.R. No. L-9104, September 10, 1956,
cited by the appellants as authority holding that "where the Court of Industrial Relations
has already acquired jurisdiction over two unfair labor practices cases and much later on as
a consequence thereof, the Court of First Instance cannot legally issue a writ of preliminary
injunction against the picketers. Besides, the jurisdiction of the Court of Industrial
Relations is exclusive. (Sec. 5-a, Republic Act 875)" is not controlling, much less applicable
to the instant case where the facts are essentially and materially
different.chanroblesvirtualawlibrary chanrobles virtual law library
Neither is the case of SMB Box factory Workers' Union vs. Hon. Gustavo Victoriano, et al. G.R.
No. L-12820, Dec. 29, 1957, where We held that "the Court of First Instance cannot take
cognizance of an action for injunction where the issue involved is interwoven with unfair
labor practice cases pending in the Court of Industrial Relations," nor the rule laid down
in Erlanger & Galinger, Inc. vs. Erlanger & Galinger Employees Association-NATU, G.R. No. L-
11907, June 24, 1958,104 Phil. 17, holding that "even if no unfair labor practice suit has
been filed at all by any of the parties in the Court of Industrial Relations at the time the
present petition for injunction was filed in the court below, still the latter court would have
no jurisdiction to issue the temporary restraining order prayed for if it is shown to its
satisfaction that the labor dispute arose out of unfair labor practices committed by any of
the parties. The parties would still have to institute the proper action in the Court of
Industrial Relations, and there ask for a temporary restraining order under sec. 9 (d) of the
Industrial peace Act. " chanrobles virtual law library
We cannot agree that the above rules cited by the appellants are controlling in the instant
case for as We said in Phil. Association of Free Labor Unions (PAFLU), et at. vs. Tan, 99 Phil.
854, that "with regard to activities that may be enjoined, in order to ascertain what court
has jurisdiction to issue the injunction, it is necessary to determine the nature of the
controversy, " (emphasis supplied) We find and hold that there is no connection between
the appellee Liwayway publications, Inc. and the striking Union, nor with the company
against whom the strikers staged the strike, and neither are the acts of the driver of the
appellee, its general manager, personnel manager, the man in-charge of the bodega and
other employees of the appellee in reaching the bodega to obtain newsprint therefrom to
feed and supply its publishing business interwoven with the labor dispute between the
striking Union and the Permanent Concrete Products company. If there is a connection
between appellee publishing company and the Permanent Concrete Products company; it is
that both are situated in the same premises, which can hardly be considered as interwoven
with the labor dispute pending in the Court of Industrial Relations between the strikers and
their employer.chanroblesvirtualawlibrary chanrobles virtual law library
The contention of appellants that the court erred in denying their motion to dismiss on the
ground that the complaint states no cause of action, is likewise without
merit.chanroblesvirtualawlibrary chanrobles virtual law library
Article 1654 of the New Civil Code cited by the appellants in support of their motion to
dismiss, which obliges the lessor, among others, to maintain the lessee in the peaceful and
adequate enjoyment of the lease for the entire duration of the contract, and therefore, the
appellee publishing company should have brought its complaint against the first sub-
lessee, Don Ramon Roces, and not against the appellant Union is not in point. The acts
complained of against the striking union members are properly called mere acts of trespass
(perturbacion de mero hecho) such that following the doctrine laid down in Goldstein vs.
Roces, 34 Phil. 562, the lessor shall not be obliged to answer for the mere fact of a trespass
(perturbacion de mero hecho) made by a third person in the use of the estate leased but the
lessee shag have a direct action against the trespasser. The instant case fags squarely under
the provisions of Article 1664 of the New Civil Code which provides as follows: chanrobles
virtual law library
Art. 1664. The lessor is not obliged to answer for a mere act of trespass which a third
person may cause on the use of the thing leased; but the lessee shall have a direct action
against the intruder.chanroblesvirtualawlibrary chanrobles virtual law library
There is a mere act of trespass when the third person claims no right whatever.
The Goldstein doctrine had been reiterated in Reyes vs. Caltex (Phil). Inc., 84 Phil. 654; Lo
Ching, et al. vs. Court of Appeals, et al. 81 Phil. 601; Afesa vs. Ayala y Cia 89 Phil. 292; Vda. de
Villaruel et al. vs. Manila Motor Co., Inc., et al. 104 Phil. 926; Heirs of B.A. Crumb, et al. vs.
Rodriguez, 105 Phil. 391.chanroblesvirtualawlibrary chanrobles virtual law library
The obligation of the lessor under Art. 1654, New Civil Code, to maintain the lessee in the
peaceful and adequate enjoyment of the lease for the entire duration of the contract arises
only when acts, termed as legal trespass (perturbacion de derecho), disturb, dispute, object
to, or place difficulties in the way of the lessee's peaceful enjoyment of the premises that in
some manner or other cast doubt upon the right of the lessor by virtue of which the lessor
himself executed the lease, in which case the lessor is obliged to answer for said act of
trespass.chanroblesvirtualawlibrary chanrobles virtual law library
The difference between simple trespass (perturbacion de mero hecho and legal trespass
(perturbacion de derecho) is simply but - clearly stated in Goldstein vs. Roces case, supra,
thus: chanrobles virtual law library
Briefly, if the act of trespass is not accompanied or preceded by anything which reveals a
really juridic intention on the part of the trespasser, in such wise that the lessee can only
distinguish the material fact, stripped of all legal form or reasons, we understand it to be
trespass in fact only (de mero hecho). (pp. 566-567)
WHEREFORE, IN VIEW OF THE FOREGOING, the decision appealed from is hereby
AFFIRMED in toto. Costs against appellants.chanroblesvirtualawlibrary chanrobles virtual
law library
SO ORDERED.