1ANSWERS OF A BYSTANDER TO THE 2014 BAR QUESTIONS

IN LABOR LAW (With Comments)Hon. Benedict G. Kato Labor Arbiter Law Prof.,

Bar Reviewer, MCLE Lecturer Author

ILinda was employed by Sectarian University (SU) to cook for the members of a religious order who teach and live inside the campus. While performing her assigned task, Linda accidentally burned herself. Because of the extent of her injuries, she went on medical leave. Meanwhile, SU engaged a replacement cook. Linda filed a complaint for illegal dismissal, but her employer SU contended that Linda was not a regular employee but a domestic househelp. Decide. (4%)

ANSWER:Linda is a regular employee. SU’s contention that Linda is a domestic helper is without basis because the latter did not minister to the personal comfort of the members of any household. Although a cook, hence listed, she cannot be classified as a Kasambahay because she rendered services for resident religious teachers in a university which was not a household.

IILucy was one of approximately 500 call center agents at Hambergis, Inc. She was hired as a contractual employee four years ago. Her contracts would be for a duration of five (5) months at a time, usually after a one-month interval. Her re-hiring was contingent on her performance for the immediately preceding contract. Six (6) months after the expiration of her last contract, Lucy went to Hambergis personnel department to inquire why she was not yet being recalled to work. She was told that her performance during her last contract was “below average.” Lucy seeks your legal advice about her chances of getting her job back. What will your advice be? (4%)

ANSWER:I will advise Lucy to file a complaint for constructive dismissal, with prayer for reinstatement, because her floating status has exceeded six (6) months. By virtue of the nature of her job, Lucy attained tenure on the first day of her employment. As a regular employee, therefore, she could only be dismissed for a just or authorized cause. Expiration of her last contract was neither a just nor authorized cause. Hence, she was illegally dismissed. Moreover, her term employment contracts were contracts of adhesion; hence, they should be taken against Hambergis Inc. because of its obvious intent to use periods to bar her regularization.

IIILolong Law Firm (LLF), which employs around 50 lawyers and 100 regular staff, suffered losses for the first time in its history. The management informed its employees that it could no longer afford to provide them free lunch. Consequently, it announced that a nominal fee would henceforth be charged. Was LLF justified in withdrawing this benefit which it had unilaterally been providing to its employees? (1%)

(A) Yes, because it is suffering losses for the first time.(B) Yes, because this is a management prerogative which is not

due to any legal or contractual obligation.(C) No, because this amounts to a diminution of benefits which is

prohibited by the Labor Code.(D) No, because it is a fringe benefit that has already ripened into

a demandable right.

ANSWER:(D)“No, because it is a fringe benefit that has already ripened into a demandable right.”

Note:Not (A) because the losses do not appear to be substantial losses.Not (B) because management prerogative cannot be the source of a unilateral benefit at one point and the very justification for its taking away at another.Not (C) because Article 100 of the Labor Code applies only to benefits enjoyed before or at the time of the effectivity of the Code (Waterfront ruling, 22 Sept. 2010, J Peralta).

IVLinis Manpower, Inc. (LMI) had provided janitorial services to the Philippine Overseas Employment Administration (POEA) since March 2009. Its service contract was renewed every three months. However, in the bidding held in June 2012, LMI was disqualified and excluded. In 2013, six janitors of LMI formerly assigned at POEA filed a complaint for underpayment of wages. Both LMI and POEA were impleaded as respondents. Should POEA, a government agency subject to budgetary appropriations from Congress, be held liable solidarily with LMI for the payment of salary differentials due the complainant? Cite the legal basis of your answer. (4%)

ANSWER:Yes. The POEA, although a government agency, is a statutory employer by operation of Article 106 of the Labor Code, as implemented by D.O. 18-A. As such, it can be held solidarily liable for salary differentials resulting from its job contractor’s underpayment of salaries due its workers (Meralco Industrial Eng’gruling, 14 March 2008).

Comment: Relative to the trilateral relationship between a principal (P), contractor (C) and worker (W), we hardly read that P may be any person –private or public. The Bar question tells us that P may be the POEA, SSS,GSIS or ADB. Article 106, LC, makes no distinction; hence, any person can be a statutory employer. Indeed, only principals of service providers in IT-assisted outsourcing, PCAB-registered contractors, and canteen concessionaires are beyond the reach of D.O. 18-A.

VLiwayway Glass had 600 rank-and-file employees. Three rival unions – A, B, and C participated in the certification elections ordered by the Med-Arbiter. 500 employees voted. The unions obtained the following votes: A-200; B-150; C-50; 90 employees voted “no union”; and 10 were segregated votes. Out of the segregated votes, four (4) were cast by probationary employees and six (6) were cast by dismissed employees whose respective cases are still on appeal. (10%) (A) Should the votes of the probationary and dismissed

employees be counted in the total votes cast for the purpose of determining the winning labor union?

(B) Was there a valid election?(C) Should Union A be declared the winner?(D) Suppose the election is declared invalid, which of the

contending unions should represent the rank-and-file employees?

(E) Suppose that in the election, the unions obtained the following votes: A-250; B-150; C-50; 40 voted “no union”; and 10 were segregated votes.

2Should Union A be certified as the bargaining representative?

ANSWERS:(A) Yes. The segregated votes should be counted as valid votes.

Probationary employees are not among the employees who are ineligible to vote. Likewise, the pendency of the appeal of the six dismissed employees indicates that they have contested their dismissal before a forum of appropriate jurisdiction; hence, they continue to be employees for purposes of voting in a certification election (D.O. 40-03).

(B) Yes. The certification election is valid because it is not a barred election and majority of the eligible voters cast their votes.

(C) No. Union A should not be declared the winner because it failed to garner majority of the valid votes. The majority of 500 votes, representing valid votes, is 251 votes. Since Union A received 200 votes only, it did not win the election.

(E) None of the participating unions can represent the rank-and-file employees for purposes of collective bargaining because none of them enjoys majority representative status.

(F) If the 10 votes were segregated on the same grounds, Union A cannot still be certified as the bargaining representative because its vote of 250 is still short of the majority vote of 251. However, if the 10 votes were validly segregated, majority vote would be 246 votes. Since Union A received more than majority vote then it won the election.

VILina has been working as a steward with a Miami, U.S.A.-based Loyal Cruise Lines for the past 15 years. She was recruited by a local manning agency, Macapagal Shipping, and was made to sign a 10-month employment contract everytime she left for Miami. Macapagal Shipping paid for Lina’s round-trip travel expenses from Manila to Miami. Because of a food poisoning incident which happened during her last cruise assignment, Lina was not re-hired. Lina claims she has been illegally terminated and seeks separation pay. If you were the Labor Arbiter handling the case, how would you decide? (4%)

ANSWER: I will dismiss the complaint for illegal dismissal. Lina is a seafarer. As such, she is a contractual employee who cannot require her employer to enter into another contract of employment with her under the Principle of Freedom of Contracts. In effect, Lina cannot be awarded separation pay. As an alternative relief, separation pay is proper only when there is a finding of illegal dismissal.

VIINon-lawyers can appear before the Labor Arbiter if: (1%)(A) they represent themselves(B) they are properly authorized to represent their legitimate

labor organization or member thereof(C) they are duly-accredited members of the legal aid office

recognized by the DOJ or IBP(D) they appear in cases involving an amount of less than

Php5,000

ANSWER:(A) “They represent themselves.”

Note:Not (B) because it restricts the term “organizations” to legitimate labor organizations.Not (C) because the DOJ is not an accrediting agency.Not (D) because the “not exceeding Ph5,000” is a jurisdictional rule, not a rule on law practice.

VIIIAs a result of a bargaining deadlock between Lazo Corporation and Lazo Employees Union, the latter staged a strike. During the strike, several employees committed illegal acts. Eventually, its members informed the company of their intention to return to work. (6%)(A) Can Lazo Corporation refuse to admit the strikers?(B) Assuming the company admits the strikers, can it later on

dismiss those employees who committed illegal acts?(C) If due to prolonged strike, Lazo Corporation hired

replacements, can it refuse to admit the replaced strikers?

ANSWERS:(A) No. A strike is a temporary stoppage of work only. Therefore,

strikers can go back to their work in the event of a voluntary abandonment of their strike.

(B) After admission, the company can hold the strikers behind the illegalities accountable for their acts. If found to have committed acts justifying a dismissal, said employees can be terminated after due process.

(C) No. The positions left behind by strikers are deemed legally unoccupied. Moreover, the hiring of replacement workers does not terminate employer-employee relationship because a strike is a temporary stoppage of work only. Finally, replacement workers are deemed to have accepted their engagement subject to the outcome of the strike.

IXLuisa Court is a popular chain of motels. It employs over 30 chambermaids who, among others, help clean and maintain the rooms. These chambermaids are part of the union rank-and-file employees which has an existing collective bargaining agreement (CBA) with the company. While the CBA was in force, Luisa Court decided to abolish the position of chambermaids and outsource the cleaning of the rooms to Malinis Janitorial Services, a bona fide independent contractor which has invested in substantial equipment and sufficient manpower. The chambermaids filed a case of illegal dismissal against Luisa Court. In response, the company argued that the decision to outsource resulted from the new management’s directive to streamline operations and save on costs. If you were the Labor Arbiter assigned to the case, how would you decide? (4%)

ANSWER:I would declare the chambermaids to have been illegally dismissed. The chambermaids are regular employees for performing work necessary or desirable to the main trade of the Luisa Court. As such, they enjoy security of tenure. The job contracting arrangement between Luisa Court and Malinis Janitorial Services is prohibited by D.O.18-A because it has the effect of introducing workers to displace Luisa Court’s regular workers.

XLuisa was hired as a secretary by the Asian Development Bank (ADB) in Manila. Luisa’s first boss was a Japanese national whom she got along with. But after two years, the latter was replaced by an arrogant Indian national who did not believe her work output was in accordance with international standards. One day, Luisa submitted a draft report filled with typographical errors to her

3boss. The latter scolded her, but Luisa verbally fought back. The Indian boss decided to terminate her services right then and there. Luisa filed a case for illegal dismissal with the Labor Arbiter claiming arbitrariness and denial of due process. If you were the Labor Arbiter, how would you decide the case? (4%)

ANSWER: I will dismiss the complaint for illegal dismissal. Luisa committed serious misconduct. Her Indian boss, regardless of his arrogant nature, had the clear right to reprimand her for her poor performance. Absent justification for verbally fighting back, Luisa’s act amounted to serious misconduct. Therefore, her dismissal was valid. However, she was not accorded statutory due process. For this reason, I will award her nominal damages of Ph 30,000.

XILionel, an American citizen whose parents migrated to the U.S. from the Philippines, was hired by JP Morgan in New York as a call center specialist. Hearing about the phenomenal growth of the call center industry in his parents’ native land, Lionel sought and was granted a transfer as a call center manager for JP Morgan’s operations in Taguig City. Lionel’s employment contract did not specify a period for his stay in the Philippines. After three years of working in the Philippines, Lionel was advised that he was being recalled to New York and being promoted to the position of director of international call center operations. However, because of certain “family reasons,” Lionel advised the company of his preference to stay in the Philippines. He was dismissed by the company. Lionel now seeks your legal advice on: (6%)(A) whether he has a cause of action(B) whether he can file a case in the Philippines(C) what are his chances of winning

ANSWER:(A) Lionel has a cause of action. He has a right to be secure in his

job; his employer has the correlative obligation to respect that right; his dismissal constitutes a violation of his tenurial right; and said violation caused him legal injury.

(B) Lionel can file an illegal dismissal case in the Philippines. Being a resident corporation, JP Morgan is subject to Philippine Labor Laws. And, although hired abroad, Lionel’s place of work is Taguig. Hence, he can lodge his complaint with the NLRC-NCR which has territorial jurisdiction over his workplace (Sec. 1, Rule IV, NLRC Rules of Procedure, as amended).

(C) Lionel has reasonable chances of winning. His recall to the USA was not a lawful lateral transfer that he could not refuse. On the contrary, it was a scalar transfer amounting to a promotion which he could validly refuse. Absent willful disobedience, therefore, his termination is groundless.

XIIWhich of the following groups does not enjoy the right to self-organization? (1%)(A) those who work in a non-profit charitable institution(B) those who are paid on a piece-rate basis (C) those who work in a corporation with less than 10 employees(D) those who work as legal secretaries

ANSWER:(D). “Those who work as legal secretaries”. Legal secretaries are confidential employees.

Note: Not (A) because, under Article 243 of the Labor Code, employees of charitable, religious, educational and medical institutions are covered employees.Not (B) because piece-raters do not suffer any disqualification.Not (C) because the “less than 10 rule” in the Labor Code affects right to labor standards benefits, in particular holiday pay and service incentive leave (Articles 94 and 95), not right to self-organization.

XIIIDon Luis, a widower, lived alone in a house with a large garden. One day, he noticed that the plants in his garden needed trimming. He remembered that Lando, a 17-year old out-of-school youth, had contacted him in church the other day looking for work. He contacted Lando who immediately attended to Don Luis’s garden and finished the job in three days. (4%)

(A) Is there an employer-employee relationship between Don Luis and Lando?

(B) Does Don Luis need to register Lando with the Social Security System (SSS)?

ANSWER:

(A)There is employer-employee relationship between Don Luis and Lando. Firstly, Lando who was looking for work finally rendered personal services for Don Luis. Secondly, Lando could not have been the master of his time, means and methods under the circumstances(Sec. 8, RA 8282).(B) Don Luis does not need to register Lando with the SSS because he is a purely casual employee, hence outside SSS coverage (RA 8282). Neither should he report Lando for SSS coverage under the Kasambahay Act because, although a gardener, he is an occasional if not sporadic employee. Therefore, he is not a kasambahay who is entitled to SSS coverage (RA 10361).

Comment:The question is tricky. The examiner wants to lead the examinees into considering Lando as a kasambahay because he is listed (gardener), and giving him SSS coverage pursuant to RA 10361. However, Lando is an occasional or sporadic gardener; hence, he is not a kasambahay.

XIVLuisito has been working with Lima Land for 20 years. Wanting to work in the public sector, Luisito applied with and was offered a job at Livecor. Before accepting the offer, he wanted to consult you whether the payments that he and Lima Land had made to the Social Security System (SSS) can be transferred or credited to the Government Service Insurance System (GSIS). What would you advice? (4%)

ANSWER:I would tell Luisito that, under the Limited Portability Law, he will carry with him his creditable service and paid contributions as he moves from one system to the other. Hence, he may accept the job offer without fearing that he would lose his years of service in the private sector. Actually, they can be totalized with his years of service in the public sector in the event that he would not be able to qualify for benefits due solely to insufficiency of creditable service.

4XV

Our Lady of Peace Catholic School Teachers and Employees Labor Union (OLPCS-TELU) is a legitimate labor organization composed of vice-principals, department heads, coordinators, teachers, and non-teaching personnel of Our Lady of Peace Catholic School (OLPCS). OLPCS-TELU subsequently filed a petition for certification election among the teaching and non-teaching personnel of OLPCS before the Bureau of Labor Relations (BLR) of the Department of Labor and Employment (DOLE). The Med-Arbiter subsequently granted the petition and ordered the conduct of a joint certification election for the teaching and non-teaching personnel of OLPCS. May OLPCS-TELU be considered a legitimate labor organization? (5%)

ANSWER:Yes, OLPCS-TELU is a legitimate labor organization. Its mixed-membership which includes supervisors and rank-and-filers does not affect its legitimacy. The only effect of such membership is that the supervisors in the persons of vice-principals and department heads are deemed automatically removed (RA 9481).

Comment: Another tricky question. The body of the problem leads one to “appropriateness of a CBU”. Hence, he might apply the Substantial Mutuality of Interest Principle based on his observation that the employees perform separate but interdependent tasks. Actually, the question is legitimacy of status only (LLO status). So the fact to tackle is mixed-membership.

XVISamahang East Gate Enterprises (SEGE) is a labor organization composed of the rank-and-file employees of East Gate Enterprises (EGE), the leading manufacturer of all types of gloves and aprons. EGE was later requested by SEGE to bargain collectively for better terms and conditions of employment of all the rank-and-file employees of EGE. Consequently, EGE filed a petition for certification election before the Bureau of Labor Relations (BLR). During the proceedings, EGE insisted that it should participate in the certification process. EGE reasoned that since it was the one who filed the petition and considering that the employees concerned were its own rank-and-file employees, it should be allowed to take an active part in the certification process. Is the contention of EGE proper? Explain. (5%)

ANSWER: EGE could file the petition for certification election because it was requested to collectively bargain and it could not do so because SEGE was not the EBR. After it filed the petition, however, it reverted to its standby status. Therefore, it could not interfere with the selection process which was the exclusive prerogative of its workers. It could only participate in the inclusion-exclusion proceedings, and nowhere else.

XVIIPhilhealth is a government-owned and controlled corporation employing thousands of Filipinos. Because of the desire of the employees of Philhealth to obtain better terms and conditions of employment from the government, they formed the Philhealth Employees Association (PEA) and demanded Philhealth to enter into negotiations with PEA regarding terms and conditions of employment which are not fixed by law. (4%)

(A) Are the employees of Philhealth allowed to self-organize and form PEA and thereafter demand Philhealth to enter into negotiations with PEA for better terms and conditions of employment?

(B) In case of unresolved grievances, can PEA resort to strikes, walkouts, and other temporary work stoppages to pressure the government to accede to their demands?

ANSWERS:(A) Under E.O. 180, Philhealth employees can organize. Thru

their organization, they can negotiate with Philhealth over terms and conditions of employment not fixed by its charter, Civil Service Law, or applicable salary standardization law.

(B) No. Although the right to organize implies the right to strike, law may withhold said right. E.O. 180 is that law which withholds from government employees the right to strike. Hence, they cannot resort to strikes and similar concerted activities to compel concessions from the government.

XVIIIThe procedural requirements of a valid strike include: (1%)(A) a claim of either unfair labor practice or deadlock in collective

bargaining.(B) notice of strike filed at least 15 days before a ULP-grounded

strike or at least 30 days prior to the deadlock in a bargaining-grounded strike.

(C) majority of the union membership must have voted to stage the strike with notice thereon furnished to the National Conciliation and Mediation Board (NCMB) at least 24 hours before the strike vote is taken.

(D) strike vote results must be furnished to the NCMB at least seven (7) days before the intended strike.

ANSWER:(A) “A claim of either unfair labor practice or deadlock in

collective bargaining.”

Explanation:Options “B”, “C” and “D” refer to strike procedures. “B” refers to the cooling-off period; “C” to the strike vote; and “D” to the strike ban. What is not expressly referred to in the options is notice of strike. It is this procedural requirement which includes ULP or bargaining deadlock which are the only strike grounds. Hence, it is correct to say that “the procedural requirements of a valid strike include” (see MCQ stem) “a claim for ULP or deadlock in collective bargaining” (Option “A”).

In other words, the procedural requirements of a valid strike are: notice, cooling-off period, strike vote, and strike ban.

It is in the notice that ULP and deadlock in CB are included.

Comment: The question is fantastic. Never imagined before. The examiner used the simple word “include” to hide the answer.

XIXLincoln was in the business of trading broadcast equipment used by television and radio networks. He employed Lionel as his agent. Subsequently, Lincoln set up Liberty Communications to formally engage in the same business. He requested Lionel to be one of the incorporators and assigned to him 100 Liberty shares. Lionel was also given the title Assistant Vice-President for Sales and Head of Technical Coordination.

After several months, there were allegations that Lionel was engaged in “under the table dealings” and received “confidential

5commissions” from Liberty’s clients and suppliers. He was, therefore, charged with serious misconduct and willful breach of trust, and was given 48 hours to present his explanation on the charges. Lionel was unable to comply with the 48-hour deadline and was subsequently barred from entering company premises. Lionel then filed a complaint with the Labor Arbiter claiming constructive dismissal. Among others, the company sought the dismissal of the complaint alleging that the case involved an intra-corporate controversy which was within the jurisdiction of the Regional Trial Court (RTC). If you were the Labor Arbiter assigned to the case, how would you rule on the company’s motion to dismiss? (5%)

ANSWER:I will deny the motion to dismiss. Lionel is not a corporate officer but a corporate employee only because: (a) his office is not a creation of the Corporation Code;(b) it is not shown that his office is a corporate position under

Liberty’s Articles of Incorporation; and (c) it is not shown that there is a board resolution investing his

position with the status of a corporate office.

Absent corporate controversy, the Office of the Labor Arbiter has jurisdiction to hear and resolve Lionel’s complaint for illegal dismissal.

XXLito was anticipating the bonus he would receive for 2013. Aside from the 13th month pay, the company has been awarding him and his other co-employees a two to three months bonus for the last 10 years. However, because of poor over-all sales performance for the year, the company unilaterally decided to pay only a one month bonus in 2013. Is Lito’s employer legally allowed to reduce the bonus? (4%)

ANSWER:Yes. Bonuses enjoyed even for 10 years may be reduced for economic reasons. Article 100 of the Labor Code will not be violated because it applies only to benefits enjoyed before or at the time of the effectivity of the Labor Code (Waterfront ruling).

As to whether the Principle of Grants will be violated, the reduction will not also amount to a violation because benefits given to workers are not raw materials but the product of business success. This policy of balancing employer-employee interests is one of the pillars of labor relations (Prof. C. Azucena).

XXIAn accidental fire gutted the JKL factory in Caloocan. JKL decided to suspend operations and requested its employees to stop reporting for work. After six (6) months, JKL resumed operations but hired a new set of employees. The old set of employees filed a case for illegal dismissal. If you were the Labor Arbiter, how would you decide the case? (4%)

ANSWER:I will decide in favor of the employees. The fire has not resulted in complete destruction of employer-employee relationship. Said relationship has temporarily ceased only. When JKL resumed operations, therefore, it became its obligation to recall its old employees instead of replacing them with new employees. Withholding of work beyond six (6) months amounts to constructive dismissal. Hence, I will order JKL to pay the complainants’ full backwages, separation pay because their positions are occupied already, nominal damages for non-

observance by JKL of prescribed pre-termination procedure, moral and exemplary damages for its bad faith (Lynvil Fishing Enterprises, Inc., et al. vs. Ariola, et al., G.R. No. 181974, 1 February 2012), and 10% attorney’s fees for compelling its employees to litigate against it (Art. 111, LC).

XXIIDespite a reinstatement order, an employer may choose not to reinstate an employee if: (1%)(A) there is a strained employer-employee relationship(B) the position of the employee no longer exists(C) the employer’s business has been closed(D) the employee does not wish to be reinstated.

ANSWER:(A) “There is strained employer-employee relationship.”

Note: Not (B) because the stem implies that the employer has a choice between reinstatement and non-reinstatement. Here, he has no option at all because the position in question no longer exists. Not (C) because the employer has no option due to the closure of his business. Not (D) because the employer cannot choose not to reinstate due to his employee’s decision not to be reinstated.

Comment:This MCQ demonstrates the importance of recognizing the implications of the stem. Since the stem implies that the employer can choose one of two options, none of the items that give him just one choice can be the correct answer.

XXIIILuningning Foods engaged the services of Lamitan Manpower, Inc., a bona fide independent contractor, to provide “tasters” that will check on food quality. Subsequently, these “tasters” joined the union of rank-and-file employees of Luningning and demanded that they be made regular employees of the latter as they are performing functions necessary and desirable to operate the company’s business. Luningning rejected the demand for regularization. On behalf of the “tasters”, the union then filed a notice of strike with the Department of Labor and Employment (DOLE). In response, Luningning sought a restraining order from the Regional Trial Court (RTC) arguing that the DOLE does not have jurisdiction over the case since it does not have an employer-employee relationship with the employees of an independent contractor. If you were the RTC judge, would you issue a restraining order against the union? (4%)

ANSWER:I will not issue a TRO. The dispute brought to the RTC is a labor dispute despite the fact that the disputants may not stand in the proximate relation of employer and employee (Art. 212, LC). Moreover, the issue of regularization is resolvable solely thru the application of labor laws. Under both Reasonable Causal Connection Rule and Reference to Labor Law Rule, the dispute is for labor tribunals to resolve. For lack of jurisdiction, therefore, I will dismiss the case.

XXIVLanz was a strict and unpopular Vice-President for Sales of Lobinsons Land. One day, Lanz shouted invectives against Lee, a poor performing sales associate, calling him, among others, a “brown monkey.” Hurt, Lee decided to file a criminal complaint for grave defamation against Lanz. The prosecutor found probable

6cause and filed an information in court. Lobinsons decided to terminate Lanz for committing a potential crime and other illegal acts prejudicial to business. Can Lanz be legally terminated by the company on these grounds? (4%)

ANSWER:As to the first ground, crime to be a just cause for dismissal must be against the employer, members of his immediate family or representative (Article 288, LC, as renumbered). Since the potential crime of Lanz is not against Lobinsons or its duly authorized representatives, it cannot of itself justify his termination.

As to the second ground, Lanz’s dysfunctional conduct has made the work environment at Lobinsons hostile as to adversely affect other employees, like Lee. Therefore, he can be dismissed on the ground of serious misconduct and loss of trust and confidence.

Comment: There are two separate grounds for dismissal. One is a just cause, the other is not. To the question “Can Lanz be legally terminated on these grounds?”, one should not give an answer that treats the two as though they were one and the same. This is because, based on the crafting of previous questions, it should be obvious that the examiner has a clinical mind.

Alternative Answer: As to the first ground, crime to be a just cause for dismissal must be against the employer, members of his immediate family or representative (Article 288, LC, as renumbered). Since the potential crime of Lanz is not against Lobinsons or its duly authorized representatives, it cannot of itself justify his termination. However, it can be treated as a cause analogous to serious misconduct or loss of trust and confidence. Therefore, Lanz can be dismissed on this ground.

As to the second ground, Lanz’s dysfunctional behavior has made the work environment at Lobinsons hostile as to adversely affect other employees, like Lee. Therefore, he can be dismissed also on the ground of serious misconduct and loss of trust and confidence.

XXVLizzy Lu is a sales associate for Luna Properties. The latter is looking to retrench Lizzy and five other sales associates due to financial losses. Aside from a basic monthly salary, Lizzy and her colleagues receive commissions on the sales they make as well as cost of living and representation allowances. In computing Lizzy’s separation pay, Luna Properties should consider her: (1%)(A) monthly salary only(B) monthly salary plus sales commissions(C) monthly salary plus sales commissions, plus cost of living

allowance(D) monthly salary plus sales commissions, plus cost of living

allowance and representation allowance

ANSWER:(A). “Monthly salary only.”Note:Not (B) because the basis of separation pay under Art. 289 (renumbered), LC, is monthly salary only.Not (C) because monthly salary means basic salary which excludes commissions and allowances.Not (D) because monthly salary excludes commissions and allowances.

XXVILiwanag Corporation is engaged in the power generation business. A stalemate was reached during the collective bargaining negotiations between its management and the union. After following all the requisites provided by law, the union decided to stage a strike. The management sought the assistance of the Secretary of Labor and Employment, who assumed jurisdiction over the strike and issued a return-to-work order. The union defied the latter and continued the strike. Without providing any notice, Liwanag Corporation declared everyone who participated in the strike as having lost their employment. (4%)(A) Was Liwanag Corporation’s action valid?(B) If, before the DOLE Secretary assumed jurisdiction, the

striking union members communicated in writing their desire to return to work, which offer Liwanag Corporation refused to accept, what remedy, if any, does the union have?

ANSWER:(A) Yes, the action of Liwanag Corporation is valid. The DOLE

Secretary can assume jurisdiction in the event of a labor dispute likely to result in a strike in an industry involving national interest, like energy production (Art. 263(g); D.O. 40-H-13). His AJO, once duly served on the union, will produce an injunctive effect. Hence, if ignored, the union’s strike would be illegal even if it may have complied with pre-strike procedure. As a consequence, Liwanag Corporation may declare all the strikers as having lost their employment as a consequence of their intransigence (Sarmiento v. Tuico, 27 June 1988).

(B) The union may file a complaint for illegal lockout, with prayer for immediate reinstatement. The refusal of Liwanag Corporation to admit the strikers back is an illegal lockout because it is not preceded by compliance with prescribed pre-lockout procedure. If the lockout is unreasonably prolonged, the complaint may be amended to charge constructive dismissal.

XXVIIThe jurisdiction of the National Labor Relations Commission does not include: (1%)

(A) exclusive appellate jurisdiction over all cases decided by the Labor Arbiter

(B) exclusive appellate jurisdiction over all cases decided by Regional Directors or hearing officers involving the recovery of wages and other monetary claims and benefits arising from employer-employee relations where the aggregate money claim of each does not exceed five thousand pesos (Php 5,000)

(C) original jurisdiction to act as a compulsory arbitration body over labor disputes certified to it by the Regional Directors

(D) power to issue a labor injunction

ANSWER:(C) Regional Directors do not have assumption power; hence, they

cannot certify cases to the NLRC. Comment: The examiner shows contempt for the human eye.

AN APPEAL TO THE EXAMINERThis bystander initially answered the questions on a blue pad with his pen. It took him 2 ½ hours to answer the 27 questions. This means that the examination was really long. For another 2 hours, or more, he reviewed and edited his raw answers for online sharing. Regardless, he is not totally sure if he has correctly answered all. Therefore, he appeals to the examiner to be liberal. After all, his questions are really for higher forms of life. He did a great job.

7G.R. No. 75271-73 June 27, 1988CATALINO N. SARMIENTO and 71 other striking workers of ASIAN TRANSMISSION CORPORATION, petitioners, vs. THE HON. JUDGE ORLANDO R. TUICO of the Municipal Trial Court of Calamba, Laguna, ROBERTO PIMENTEL, NELSON C. TEJADA, and the COMMANDING OFFICER, 224th PC Company at Los Baños Laguna, respondents.

No. L-77567 June 27, 1988ASIAN TRANSMISSION, CORPORATION (ATC), petitioner, vs. THE NATIONAL LABOR RELATIONS COMMISSION (NLRC), respondent.

Jose C. Espinas for petitioners in G.R. Nos. 75271-73.Augusto Gatmaytan for petitioner ATC.Emilio C. Capulong, Jr. for private respondents in G.R. Nos. 75271-73.

CRUZ, J.:

Two basic questions are presented in these cases, to wit:

1. Whether or not a return-to-work order may be validly issued by the National Labor Relations Commission pending determination of the legality of the strike; and

2. Whether or not, pending such determination, the criminal prosecution of certain persons involved in the said strike may be validly restrained.

The first issue was submitted to the Court in G.R. No. 77567, to which we gave due course on July 1, 1987. 1 The case arose when on May 7, 1986, petitioner Asian Transmission Corporation terminated the services of Catalino Sarmiento, vice-president of the Bisig ng Asian Transmission Labor Union (BATU), for allegedly carrying a deadly weapon in the company premises. 2 As a result, the BATU filed a notice of strike on May 26, 1986, claiming that the ATC had committed an unfair labor practice. 3 The conciliatory conference held on June 5, 1986, failed to settle the dispute. The ATC then filed a petition asking the Ministry of Labor and Employment to assume jurisdiction over the matter or certify the same to the NLRC for compulsory arbitration. 4 Noting that the impending strike would prejudice the national interest as well as the welfare of some 350 workers and their families, the MOLE issued an order on June 3, 1986, certifying the labor dispute to the NLRC. 5 At the same time, it enjoined the management from locking out its employees and the union from declaring a strike or similar concerted action. This order was reiterated on June 13, 1986, upon the representation of the ATC that some 40 workers had declared a strike and were picketing the company premises. 6 Proceedings could not continue in the NLRC, however, because of the acceptance by President Aquino of the resignations of eight of its members, leaving only the vice-chairman in office. 7 For this reason, the MOLE, on September 9, 1986, set aside the orders of June 9 and 13, 1986, and directly assumed jurisdiction of the dispute, at the same time enjoining the company to accept all returning workers. 8 This order was itself set aside on November 24,1986, upon motion of both the BATU and the ATC in view of the appointment of new commissioners in the NLRC. The MOLE then returned the case to the respondent NLRC and directed it to expeditiously resolve all issues relating to the dispute, "adding that the union and the striking workers are ordered to return to work immediately." 9 Conformably, the NLRC issued on January 13, 1987 the following resolution, which it affirmed in its resolution of February 12, 1987, denying the motion for reconsideration:

CERTIFIED CASE No. NCR-NS-5-214-86, entitled Asian Transmission Corporation, Petitioner versus Bisig ng Asian Transmission Labor Union (BATU), et al., Respondents.-Considering that the petitioner, despite the order dated 24 November 1986 of the Acting Minister, "to accept all the returning workers" continues to defy the directive insofar as 44 of the workers are concerned, the Commission, sitting en banc, resolved to order the petitioner to accept the said workers, or, to reinstate them on payroll immediately upon receipt of the resolution.

It is these orders of January 13 and February 12, 1987, that are challenged by the ATC in this petition for certiorari and are the subject of the temporary restraining order issued by this Court on March 23, 1987. 10

The second issue was raised in G.R. Nos. 75271-73, which we have consolidated with the first- mentioned petition because of the Identity of their factual antecedents. This issue was provoked by three criminal complaints filed against the petitioning workers in the municipal trial court of Calamba, Laguna, two by the personnel administrative officer of the ATC and the third by the Philippine Constabulary. The first two complaints, filed on July 11 and July 15, 1986, were for "Violation of Article 265, par. 1, in relation to Article 273 of the Labor Code of the Philippines." 11 The third, filed on July 17, 1986, was for coercion. 12 In all three complaints, the defendants were charged with staging an illegal strike, barricading the gates of the ATC plant and preventing the workers through intimidation, harassment and force from reporting for work. Acting on Criminal Case No. 15984, Judge Orlando Tuico issued a warrant of arrest against the petitioners and committed 72 of them to jail although he later ordered the release of 61 of them to the custody of the municipal mayor of Calamba, Laguna. 13 The petitioners had earlier moved for the lifting of the warrant of arrest and the referral of the coercion charge to the NLRC and, later, for the dismissal of Criminal Cases Nos. 15973 and 15981 on the ground that they came under the primary jurisdiction of the NLRC. 14 As the judge had not ruled on these motions, the petitioners came to this Court in this petition for certiorari and prohibition. On August 12, 1986, we issued a temporary restraining order to prevent Judge Tuico from enforcing the warrant of arrest and further proceeding with the case. 15 This order was reiterated on September 21, 1987, "to relieve tensions that might prevent an amicable settlement of the dispute between the parties in the compulsory arbitration proceedings now going on in the Department of Labor," and made to apply to Judge Paterno Lustre, who had succeeded Judge Tuico. 16

That is the background. Now to the merits.

It is contended by the ATC that the NLRC had no jurisdiction in issuing the return-to-work order and that in any case the same should be annulled for being oppressive and violative of due process.

The question of competence is easily resolved. The authority for the order is found in Article 264(g) of the Labor Code, as amended by B.P. Blg. 227, which provides as follows:

When in his opinion there exists a labor dispute causing or likely to cause strikes or lockouts adversely affecting the national interest, such as may occur in but not limited to public utilities, companies engaged in the generation or distribution of energy, banks, hospitals, and export- oriented industries, including those within export processing zones, the Minister of Labor and Employment shall assume jurisdiction over the dispute and decide it or certify

8the same to the Commission for compulsory arbitration. Such assumption or certification shall have the effect of automatically enjoining the intended or impending strike or lockout as specified in the assumption order. If one has already taken place at the time of assumption or certification, all striking or locked out employees shall immediately return to work and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout. The Minister may seek the assistance of law-enforcement agencies to ensure compliance with this provision as well as such orders as he may issue to enforce the same.

The justification of the MOLE for such order was embodied therein, thus:

Asian Transmission Corporation is an export-oriented enterprise and its annual export amounts to 90% of its sales generating more than twelve (12) million dollars per year. The corporation employs three hundred fifty (350) workers with a total monthly take home pay or approximately P1,300,000.00 a month.

Any disruption of company operations will cause the delay of shipments of export finished products which have been previously committed to customers abroad, thereby seriously hampering the economic recovery program which is being pursued by the government. It wig also affect gravely the livelihood of three hundred fifty (350) families who will be deprived of their incomes.

This Office is therefore of the opinion that a strike or any disruption in the normal operation of the company will adversely affect the national interest. It is in the interest of both labor and management that the dispute be certified for compulsory arbitration to National Labor Relations Commission.

WHEREFORE, this Office hereby certifies the labor dispute to the National Labor Relations Commission in accordance with Article 264(g) of the Labor Code, as amended. In line with this Certification, the management is enjoined from locking out its employees and the union from declaring a strike, or any concerted action which will disrupt the harmonious labor-management relations at the company. 17

There can be no question that the MOLE acted correctly in certifying the labor dispute to the NLRC, given the predictable prejudice the strike might cause not only to the parties but more especially to the national interest. Affirming this fact, we conclude that the return-to-work order was equally valid as a statutory part and parcel of the certification order issued by the MOLE on November 24, 1986. The law itself provides that "such assumption or certification shall have the effect of automatically enjoining the intended or impending strike. If one has already taken place at the time of assumption or certification, all striking or locked out employees shall immediately return to work and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout." The challenged order of the NLRC was actually only an implementation of the above provision of the Labor Code and a reiteration of the directive earlier issued by the MOLE in its own assumption order of September 9, 1986.

It must be stressed that while one purpose of the return-to-work order is to protect the workers who might otherwise be locked out by the employer for threatening or waging the strike, the more important reason is to prevent impairment of the national interest in case the operations of the company are disrupted by a refusal of

the strikers to return to work as directed. In the instant case, stoppage of work in the firm will be hurtful not only to both the employer and the employees. More particularly, it is the national economy that will suffer because of the resultant reduction in our export earnings and our dollar reserves, not to mention possible cancellation of the contracts of the company with foreign importers. It was particularly for the purpose of avoiding such a development that the labor dispute was certified to the NLRC, with the return-to-work order following as a matter of course under the law.

It is also important to emphasize that the return-to-work order not so much confers a right as it imposes a duty; and while as a right it may be waived, it must be discharged as a duty even against the worker's will. Returning to work in this situation is not a matter of option or voluntariness but of obligation. The worker must return to his job together with his co-workers so the operations of the company can be resumed and it can continue serving the public and promoting its interest. That is the real reason such return can be compelled. So imperative is the order in fact that it is not even considered violative of the right against involuntary servitude, as this Court held in Kaisahan ng Mga Manggagawa sa Kahoy v. Gotamco Sawmills. 18 The worker can of course give up his work, thus severing his ties with the company, if he does not want to obey the order; but the order must be obeyed if he wants to retain his work even if his inclination is to strike.

If the worker refuses to obey the return-to-work order, can it be said that he is just suspending the enjoyment of a right and he is entitled to assert it later as and when he sees fit? In the meantime is the management required to keep his position open, unable to employ replacement to perform the work the reluctant striker is unwilling to resume because he is still manning the picket lines?

While the ATC has manifested its willingness to accept most of the workers, and has in fact already done so, it has balked at the demand of the remaining workers to be also allowed to return to work. 19 Its reason is that these persons, instead of complying with the return-to-work order, as most of the workers have done, insisted on staging the restrained strike and defiantly picketed the company premises to prevent the resumption of operations. By so doing, the ATC submits, these strikers have forfeited their right to be readmitted, having abandoned their positions, and so could be validly replaced.

The Court agrees.

The records show that the return-to-work order was first issued on June 3, 1986, and was reiterated on June 13, 1986. The strike was declared thereafter, if we go by the criminal complaints in G.R. Nos. 75271-73, where the alleged acts are claimed to have been done on June 9,1986, and July 15,1986.

These dates are not denied. In fact, the petitioners argue in their pleadings that they were engaged only in peaceful picketing, 20 which would signify that they had not on those dates returned to work as required and had decided instead to ignore the said order. By their own acts, they are deemed to have abandoned their employment and cannot now demand the right to return thereto by virtue of the very order they have defied.

One other point that must be underscored is that the return-to-work order is issued pending the determination of the legality or illegality of the strike. It is not correct to say that it may be enforced only if the strike is legal and may be disregarded if the

9strike is illegal, for the purpose precisely is to maintain the status quo while the determination is being made. Otherwise, the workers who contend that their strike is legal can refuse to return to their work and cause a standstill in the company operations while retaining the positions they refuse to discharge or allow the management to fill. Worse, they win also claim payment for work not done, on the ground that they are still legally employed although actually engaged in activities inimical to their employer's interest.

This is like eating one's cake and having it too, and at the expense of the management. Such an unfair situation surely was not contemplated by our labor laws and cannot be justified under the social justice policy, which is a policy of fairness to both labor and management. Neither can this unseemly arrangement be sustained under the due process clause as the order, if thus interpreted, would be plainly oppressive and arbitrary.

Accordingly, the Court holds that the return-to-work order should benefit only those workers who complied therewith and, regardless of the outcome of the compulsory arbitration proceedings, are entitled to be paid for work they have actually performed. Conversely, those workers who refused to obey the said order and instead waged the restrained strike are not entitled to be paid for work not done or to reinstatement to the positions they have abandoned by their refusal to return thereto as ordered.

Turning now to the second issue, we hold that while as a general rule the prosecution of criminal offenses is not subject to injunction, the exception must apply in the case at bar. The suspension of proceedings in the criminal complaints filed before the municipal court of Calamba, Laguna, is justified on the ground of prematurity as there is no question that the acts complained of are connected with the compulsory arbitration proceedings still pending in the NLRC. The first two complaints, as expressly captioned, are for "violation of Art. 265, par. 2, in relation to Art. 273, of the Labor Code of the Philippines," and the third complaint relates to the alleged acts of coercion committed by the defendants in blocking access to the premises of the ATC. Two of the criminal complaints were filed by the personnel administrative officer of the ATC although he vigorously if not convincingly insists that he was acting in his personal capacity.

In view of this, the three criminal cases should be suspended until the completion of the compulsory arbitration proceedings in the NLRC, conformably to the policy embodied in Circular No. 15, series of 1982, and Circular No. 9, series of 1986, issued by the Ministry of Justice in connection with the implementation of B.P. Blg. 227. 21 These circulars, briefly stated, require fiscals and other government prosecutors to first secure the clearance of the Ministry of Labor and/or the Office of the President "before taking cognizance of complaints for preliminary investigation and the filing in court of the corresponding informations of cases arising out of or related to a labor dispute," including "allegations of violence, coercion, physical injuries, assault upon a person in authority and other similar acts of intimidation obstructing the free ingress to and egress from a factory or place of operation of the machines of such factory, or the employer's premises." It does not appear from the record that such clearance was obtained, conformably to the procedure laid down "to attain the industrial peace which is the primordial objectives of this law," before the three criminal cases were filed.

The Court makes no findings on the merits of the labor dispute and the criminal cases against the workers as these are not in issue in

the petitions before it. What it can only express at this point is the prayerful hope that these disagreements will be eventually resolved with justice to all parties and in that spirit of mutual accommodation that should always characterize the relations between the workers and their employer. Labor and management are indispensable partners in the common endeavor for individual dignity and national prosperity. There is no reason why they cannot pursue these goals with open hands rather than clenched fists, striving with rather than against each other, that they may together speed the dawning of a richer day for all in this amiable land of ours.

WHEREFORE, judgment is hereby rendered as follows:1. In G.R. No. 77567, the petition is DENIED and the challenged

Orders of the NLRC dated January 13, 1986, and February 12, 1986, are AFFIRMED as above interpreted. The temporary restraining order dated March 23, 1987, is LIFTED.

2. In G.R. Nos. 75271-73, the temporary restraining order of August 12,1986, and September 21, 1986, are CONTINUED IN FORCE until completion of the compulsory arbitration proceedings in the NLRC.

No costs. It is so ordered.

Narvasa, Gancayco, Griño-Aquino and Medialdea, JJ., concur.G.R. No. 120751 March 17, 1999PHIMCO INDUSTRIES, INC., petitioner, vs. HONORABLE ACTING SECRETARY OF LABOR JOSE BRILLANTES and PHIMCO INDUSTRIES LABOR ASSOCIATION, respondents. - match factory

PURISIMA, J.:

At bar is a Petition for Certiorari under Rule 65 of the Revised Rules of Court, seeking to set aside the July 7, 1995 Order 1 of the then Acting Secretary Jose Brillantes of the Department of Labor and Employment, in NCMB-NCR-NS-03-122-95, on the ground of grave abuse of discretion amounting to lack or excess of jurisdiction.

The antecedent facts are, as follows:

On March 9, 1995, the private respondent, Phimco Industries Labor Association (PILA), duly certified collective bargaining representative of the daily paid workers of the petitioner, Phimco Industries Inc. (PHIMCO), filed a notice of strike with the National Conciliation and Mediation Board, NCR, against PHIMCO, a corporation engaged in the production of matches, after a deadlock in the collective bargaining and negotiation. On April 21, 1995, when the several conciliation conferences called by the contending parties failed to resolve their differences PILA, composed of 352 2 members, staged a strike.On June 7, 1995, PILA presented a petition for the intervention of the Secretary of Labor in the resolution of the labor dispute, to which petition PHIMCO opposed. Pending resolution of the said petition or on June 26, 1995, to be precise, PHIMCO sent notice of termination to some 47 3 workers including several union officers.

On July 7, 1995, the then Acting Secretary of Labor Jose Brillantes assumed jurisdiction over the labor dispute and issued his Order ruling, thus:

WHEREFORE, ABOVE PREMISES CONSIDERED, and pursuant to Article 263 (g) of the Labor Code, as amended, this office hereby assumes jurisdiction over the dispute at, Phimco industries, Inc.

10Accordingly, all the striking workers, except those who have been handed down termination papers on June 26, 1995, are hereby directed to return to work with twenty-four (24) hours from receipt of this Order and for the Company to accept them back under the same terms and conditions prevailing prior to the strike.

The parties are further ordered to cease and desist from committing any act that will aggravate the situation.

To expedite the resolution of this dispute, the parties are directed to submit their position papers and evidence within ten (10) days from receipt of this Order.

SO ORDERED. 4

On July 12, 1995, petitioner brought the present petition; theorizing, that:

ITHE HONORABLE ACTING SECRETARY JOSE BRILLANTES ACTED WITH THE GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF EXCESS OF JURISDICTION IN ISSUING THE ASSAILED ORDER.

IITHE HONORABLE ACTING SECRETARY JOSE BRILLANTES ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN HE WENT BEYOND THE BASIS FOR ASSUMPTION OF JURISDICTION UNDER ART. 263 OF THE LABOR CODE. 5

On July 31, 1995, two weeks after the filing of the Petition, the public respondent issued another Order 6 temporarily holding in abeyance the implementation of the questioned Order dated July 7, 1995 for a period of thirty (30) day; directing, as follows:

WHEREFORE PREMISES CONSIDERED, the implementation of our Order dated 7 July 1995 hereby temporarily held in abeyance for a period of thirty (30) days effective from receipt thereof pending the private negotiations of the parties for the settlement of their labor dispute. Thereafter, both the Union and the Company are directed to submit to this Office the result of their negotiations for our evaluation and appropriate action.SO ORDERED. 7

The pivotal issue here is: whether or not the public respondent acted with grave abuse of discretion amounting to lack or excess of jurisdiction in assuming jurisdiction over subject labor dispute.

The petition is impressed with merit.

Art. 263, paragraph (g) of the Labor Code, provides:(g) When, in his opinion, there exist a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory arbitration . . .

The Labor Code vests in the Secretary of Labor the discretion to determine what industries are indispensable to the national interest. Accordingly, upon the determination by the Secretary of Labor that such industry is indispensable to the national interest, he will assume jurisdiction over the labor dispute in the said industry. 8 This power, however, is not without any limitation. In upholding the constitutionality of B.P. 130 insofar as it amends Article 264 (g) 9 of the Labor Code, it stressed in the case of Free

telephone Workers Union vs. Honorable Minister of Labor and Employment, et al., 10 the limitation set by the legislature on the power of the Secretary of Labor to assume jurisdiction over a labor dispute, thus:

Batas Pambansa Blg. 130 cannot be any clearer, the coverage being limited to "strikes or lockouts adversely affecting the national interest. 11

In this case at bar, however, the very admission by the public respondent draws the labor dispute in question out of the ambit of the Secretary's prerogative, to wit.

While the case at bar appears on its face not to fall within the strict categorization of cases imbued with "national interest", this office believes that the obtaining circumstances warrant the exercise of the powers under Article 263 (g) of the Labor Code, as amended. 12

The private respondent did not even make any effort to touch on the indispensability of the match factory to the national interest. It must have been aware that a match factory, though of value, can scarcely be considered as an industry "indispensable to the national interest" as it cannot be in the same category as "generation and distribution of energy, or those undertaken by banks, hospitals, and export-oriented industries." 13 Yet, the public respondent assumed jurisdiction thereover, ratiocinating as follows:

For one, the prolonged work disruption has adversely affected not only the protagonists, i.e., the workers and the Company, but also those directly and indirectly dependent upon the unhampered and continued operations of the Company for their means of livelihood and existence. In addition, the entire community where the plant is situated has also been placed in jeopardy. If the dispute at the Company remains unabated, possible loss of employment, not to mention consequent social problems, might result thereby compounding the unemployment problem of the country.

Thus we cannot be unmindful of the possible dire consequences that might ensue if the present dispute is allowed to remain unresolved, particularly when alternative dispute resolution mechanism obtains to dispose of the differences between the parties herein. 14

It is thus evident from the foregoing that the Secretary's assumption of jurisdiction grounded on the alleged "obtaining circumstances" and not on a determination that the industry involved in the labor dispute is one indispensable to the "national interest", the standard set by the legislature, constitutes grave abuse of discretion amounting to lack of or excess of jurisdiction. To uphold the action of the public respondent under the premises would be stretching too far the power of the Secretary of Labor as every case of a strike or lockout where there are inconveniences in the community, or work disruptions in an industry though not indispensable to the national interest, would then come within the Secretary's power. It would be practically allowing the Secretary of Labor to intervene in any Labor dispute at his pleasure. This is precisely why the law sets and defines the standard: even in the exercise of his power of compulsory arbitration under Article 263 (g) of the Labor Code, the Secretary must follow the law. For "when an overzealous official by-passes the law on the pretext of retaining a laudable objective, the intendment or purpose of the law will lose its meaning as the law itself is disregarded" 15

11In light of the foregoing, we hold that the public respondent gravely abused his discretion in assuming jurisdiction over the labor dispute sued upon in the case.

WHEREFORE, the petition is hereby GRANTED; and the assailed Order, dated July 7, 1995, of the Acting Secretary of Labor SET ASIDE. No pronouncement as to costs.

SO ORDERED.

Romero, Vitug, Panganiban and Gonzaga-Reyes, JJ., concur.Panganiban, J., see concurring opinion.

Separate Opinions

PANGANIBAN, J., concurring opinion;

I now agree with Justice Purisima's revised ponencia that the labor secretary acted with grave abuse of discretion in assuming jurisdiction over a labor dispute without any showing that the disputants were engaged in an industry indispensable to national interest. Quite the contrary, the respondent secretary himself admits that the industry, of which petitioner is a part, is not indispensable to national interest. Indeed, a labor dispute must seriously and deleteriously affect an industry indispensable to national interest before the secretary may assume jurisdiction over it.

Art. 263 (g) Requires a Labor Dispute in an

Industry Indispensable to National Interest.

Art. 263 of the Labor Code speaks of the right of workers to engage in concerted activities for their mutual benefit and protection. 1 Concerted activities, like the holding of a strike, are resorted to by employees in their effort to obtain more favorable terms and conditions of work for themselves. Due to its importance, the exercise of such right is limited only by the demands of national interest under paragraph (g) of said article:

(g). When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory arbitration. Such assumption or certification shall have the effect of automatically enjoining the intended or impending strike or lockout as specified in the assumption or certification order. If one has already taken place at the time of assumption or certification, all striking or locked out employees shall immediately return to work and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout. The Secretary of Labor and Employment or the Commission may seek the assistance of law enforcement agencies to ensure compliance with this provision as well as with such orders as he may issue to enforce the same.

xxx xxx xxx

The foregoing notwithstanding, the President of the Philippines shall not be precluded from determining the industries that, in

his opinion, are indispensable to the national interest, and from intervening at any time and assuming jurisdiction over any such labor dispute in order to settle or terminate the same.

From the text and the tenor of the law, it is clear as daylight that the secretary's assumption of jurisdiction over a labor dispute is meant to be used sparingly and only if the national interest demands it. He, like everyone else, must respect labor's paramount right to stage concerted activities.

Jurisprudence Requires National Interest to Justify Assumption of Jurisdiction

Indeed, the Court has consistently ruled that the secretary's assumption of jurisdiction is intended not to interfere with or impede workers' rights, but to obtain speedy settlement of labor disputes and only if national interests will be affected. 2 Admittedly, the Court has allowed the secretary's assumption of jurisdiction in many cases, some of which are worth mentioning to show the care with which such plenary power should be used.

In Philippine School of Business Administration v. Noriel, 3 the Court has declared that the administration of a school is of national interest because" . . . [it] is engaged in the promotion of the physical, intellectual and emotional well-being of the country's youth." Work stoppage at a school unduly prejudices the students and entails great loss to all concerned in terms of time, effort and money.

In Sarmiento v .   Tuico , 4 an enterprise exporting 90 percent of its production and generating more than $12 million dollars per year was declared to be of national interest. Any disruption of operations would have caused the delay of shipments of export consisting of finished products previously committed to customers abroad, a delay that would have hampered the economic recovery program pursued by the government.The manufacture of drugs and pharmaceuticals has also been declared to belong to the same classification. 5Likewise, the operation of an airline that services domestic routes has been deemed to be imbued with national interest. 6 In one case, a company was considered to be indispensable to national interest, as it was responsible for 22 percent of the tire production in the Philippines, and work disruption would have or only aggravated the already worsening unemployment situation but also discouraged foreign and domestic entrepreneurs from further investing in the country. 7

On the other hand, the Court has disallowed the imprudent use of this power in even more cases. Perhaps the most eloquent of these GTE Directories Corporation v. Sanchez, 8 wherein the Court declared the secretary to be without jurisdiction to take over a labor dispute involving a company that produced telephone directories, viz:

The production and publication of telephone directories, which is the principal activity of GTE, can scarcely be described as an industry affecting the national interest. GTE is a publishing firm chiefly dependent on the marketing and sale of advertising space for its not inconsiderable revenues. Its services, while of value, cannot be deemed to be in the same category of such essential activities as "the generation or distribution of energy" or those undertaken by "banks, hospitals, and export-oriented industries." It cannot be regarded as playing as vital a role in communication as other mass media. The small number of

12employees involved in the dispute, the employer's payment of "P10 million in income tax alone to the Philippine Government," and the fact that the "top officers of the union were dismissed during the conciliation process," obviously do not suffice to make the dispute in the case at bar one "adversely affecting the national interest."

The Secretary is Vested with Broad Powers When He Assumes Jurisdiction

When the secretary assumes jurisdiction under Art. 263(g), he is granted "great breadth of discretion" in order to find a solution to a labor dispute. In The Philippine America Management Co., Inc. v. The Philippine American Management Employees Association (PAMEA-FFW), 9 the Court clarified the extent of the powers vested in the then Court of Industrial Relations, as follows:

. . . If the Court of Industrial Relations is granted authority to find a solution in an industrial dispute and such solution consists in the ordering of employees to return back to work, it cannot be contended that the Court of Industrial Relations does not have the power of jurisdiction to carry that solution into effect. And of what use is its power of conciliation and arbitration if it does not have the power and jurisdiction to carry into effect the solution it has adopted. Lastly; if the Court of Industrial Relations has the power to fix the terms and conditions of employment, it certainly can order the return of the workers with or without backpay as a term or condition of the employment.

The most obvious of these powers is the automatic enjoinment of an impending strike or lockout or the lifting thereof if one has already taken place. Assumption of jurisdiction always coexist with an order for workers to return to work immediately and for employers to readmit all workers under the same terms and conditions prevailing before the strike or lockout. Defiance of return-to-work order produces forfeiture of workers' employment. 10 Thus, not only does it diminish the right of labor to strike; it also limits the prerogatives of management to hire workers under its own terms and conditions. 11

The secretary is conferred other powers, including jurisdiction over incidents arising from the labor dispute, in order to avoid the undesirable result of diametrically opposed rulings being issued by the secretary and the labor arbiter. These powers comprehend those that the secretary needs to dispose of the primary dispute effectively and efficiently. 12

The almost unlimited breadth of such powers calls for caution on the part of its possessor add strict scrutiny of the excesses of government on the part of the judiciary.

Precursor of Article 263(g)

The power to restrict strikes and lockouts is of martial law vintage. Before Republic Act. 6715 was enacted, then President Ferdinand Marcos sought to quell mass expressions of dissent, including strikes, through General Order No. 5 which provided:

WHEREAS, Proclamation No. 1081 dated Sept. 21, 1972, was issued by me because of a grave national emergency now prevailing throughout the country which has been brought about by the activities of groups of men now actively engaged in criminal conspiracy to seize political power and state power in the Philippines in order to take over the Government by force and violence, the extent of which has now assumed the

proportion of an actual war against our people and their legitimate Government; andWHEREAS, in order to restore the tranquillity and stability of the nation in the quickest possible manner, it is necessary to prohibit the inhabitants of the country from doing certain acts of undertaking certain activities such as rallies, demonstrations, picketing or strikes in certain vital industries, and other forms of group actions which would cause hysteria or panic among the populace or would incense the people against their legitimate Government, or would generate sympathy for the radical and lawless elements, or would aggravate the already critical political and social turmoil now prevailing throughout the land;NOW, THEREFORE, I, Ferdinand E. Marcos, Commander-in-Chief of all the Armed Forces of the Philippines, and pursuant to Proclamation No. 1081 dated Sept. 21, 1972, do hereby order that henceforth and until otherwise ordered by me or by my duly designated representative, all rallies, demonstrations and other forms of group actions by persons within the geographical limits of the Philippines, including strikes and picketing in vital industries such as in companies engaged in the manufacture or processing as well in the distribution of fuel gas, gasoline, and fuel or lubricating oil, in companies engaged in the production or processing of essential commodities or products for exports, and in companies engaged in banking of any kind, as well as in hospitals and in schools and colleges, are strictly prohibited and any person violating this order shall forthwith be arrested and taken into custody and held for the duration of the national emergency or until he or she is otherwise ordered released by me or by my duly designated representative.

General Order No. 5, which was accompanied by Letter of Instructions No. 368, specifically detailed the vital industries or firms referred to, as follows:

For the guidance of workers and employers, some of whom have been led into filing notices of strikes and lockouts even in vital industries, you are hereby instructed to consider the following as vital industries and companies or firms under PD 823 as amended:

1. Public Utilities:A. Transportation:

1) All land, air and water companies or firms engaged in passenger, freight or tourist transport;2) All brokerage, arrastre, warehousing companies or firms;

B. Communications:1) Wire or wireless telecommunications such as telephone, telegraph, telex, and cable companies or firms;2) Radio and television companies or firms;3) Print Media companies;4) Postal and messengerial service companies;

C. Companies engaged in electric, light, gas, steam and water power generation and distribution and sanitary service companies;D. Other Public Utilities:

1) Ice and Refrigeration plants2. Companies or firms engaged in the manufacture or processing of the following essential commodities:A. Animal feedsB. CementC. Chemicals and fertilizersD. Drugs and medicinesE. Flour

13F. Products which are classified as essential commodities in the list of National Economic and Development Authority except the following: rice, corn, some basic cuts of meat, cooking oil, laundry soap, lumber and plywood, galvanized iron sheets, writing pads and notebooks.G. Iron, steel, copper, tin plates and other basic mineral products;H. MilkI. NewsprintJ. TiresK. SugarL. Textile and garments3. Companies engaged in the production and processing of products for export which are holders of Central Bank or Board of Investment Certificate of Export Orientation, including hotels and restaurants classified as three (3), four (4) or five (5) star by the Department of Tourism;4. Companies engaged in exploration, development, mining, smelting, or refining coal, oil, iron, copper, gold, and other minerals;5. Companies or firms engaged in banking, including:

A. Commercial BanksB. Saving BanksC. Development BanksD. Investment BanksE. Rural BanksF. Savings and Loans AssociationsG. Cooperative BanksH. Credit Unions

6. Companies or firms which are actually engaged in government infrastructure projects and in activities covered by Defense contracts;7. Hospitals as defined in Section 2, Rule 1-A, Book III of the Rules and Regulations Implementing the Labor Code of the Philippines;8. School and Colleges duly recognized by the Government.

The Secretary of Labor may include in/or exclude from the above list any industry, firm, or company as the national interest, national security, or general welfare may require.

When Republic Act 6715 took effect and General Order No. 5 was repealed, there was no more listing of industries indispensable to national interest. The labor and employment secretary was given discretion in determining which industries would qualify as such. But the discretion cannot be abused. It is subject to judicial review.

Under General Order No. 5, the state prohibited the holding of strikes for a stated public purpose: a national emergency and only in enumerated industries considered vital to the ailing economy. Even the height of martial rule in the country, there was no intention to provide a blanket authority to the secretary to assume jurisdiction over labor disputes without any showing that national interest, national security or general welfare demanded it.

Police Power Requires Public Necessity

After martial law was lifted and democracy was restored, the assumption of jurisdiction in Art. 263(g) has now been viewed as an exercise of the police power of the state with the aim of promoting the common good. A prolonged strike or lockout can be inimical to the national economy. 13 Therefore, it is imbued with public necessity and the right of the state and the public to self-

protection. But such public necessity and need for self-protection are absent in labor disputes industries not indispensable to national interest. In the spirit of free enterprise, it is more in keeping with national interest to allow labor to negotiate with management for decent pay and humane working conditions without intervention from the government.

Not Always Beneficial to Labor

Even for labor, it is not always beneficial to allow the secretary's intervention in a labor dispute under Art. 263. Although the intention may be to find a balance between the demands of labor and the resources of management, intervention from the state and the derogation of the right to strike are not always the solutions to the just demands of labor. More often than not, the intervention is more to the advantage of management, which would not incur overhead expenses that would otherwise be wasted during a work stoppage. For the same reason, it does not necessarily follow that intervention works for the protection of labor.

Other Available Remedies

Even without compulsory arbitration, other remedies for resolving their labor disputes are still available to labor and management. Striking employees can file illegal dismissal cases if they are dismissed without cause. On the other hand, management can dismiss employees engaged in illegal strikes, or it can negotiate with those involved in legal strikes.

The Secretary Found No National Interest

As stated earlier, Petitioner PHIMCO is a company which manufactures matches and, thus, does not qualify as one engaged in an "industry indispensable to national interest." The respondent labor and employment secretary admits this facts, expressly declaring that "the case at bar appears on its face not to fall within the strict categorization of cases imbued with "national interest."" He nevertheless assumed jurisdiction over petitioner's labor dispute with PHIMCO Industries Labor Association (PILA), rationalizing thus: 14

While the case at bar appears on its face not to fall within the strict categorization of cases imbued with "national interest", this Office believes that obtaining circumstances warrant the exercise of the powers under Article 263(g) of the Labor Code, as amended.

For one, the prolonged work disruption has adversely affected not only the direct protagonists, i.e., the workers and the Company, but also those directly and indirectly dependent upon the unhampared and continued operations of the Company for their means of livelihood and existence. In addition, the entire community where the plant is situated has also been placed in jeopardy. If the dispute at the Company remains unabated, possible loss of employment, not to mention consequent social problems, might result thereby compounding the unemployment problem of the country.

Thus; we cannot be unmindful of the possible dire consequences that might ensue if the present dispute is allowed to remain unresolved, particularly when an

14alternative dispute resolution mechanism obtains to dispose of the differences between the parties herein.

These excuses fail to show how petitioner falls within the category of "industries indispensable to national interest." The allegation of the public respondent that the "match industry like the textile or garment industry may be classified as export-oriented" is sufficiently rebutted by petitioner's simple argument pointing out that its export is very negligible and would not qualify under the definition of "export-oriented industries" in Section 14, Book V, Rule XIII of the Omnibus Rules Implementing the Labor Code. 15 Besides, such allegation does not appear to be supported by the secretary, who in his assailed Order, found that petitioner's business was not an industry indispensable to national interest.

The case at bar is peculiar in the sense that it was the union (PILA), rather than management, that petitioned the secretary to assume jurisdiction over the controversy. It appears that PILA had lost belief in the efficacy of its own strike and had chosen to seek refuge in the secretary's power of compulsory arbitration. Petitioner, on the other hand, questions the intervention, obviously because it is not amenable to accepting all the returning workers, some of whom were dismissed by reason of the strike. 16 The assumption of jurisdiction merely muddled the issues.How true it is that the road to damnation is paved with good intentions. The secretary's intention to reconcile the disputants may have been noble but it does not imbue the labor dispute with national interest. Neither does it clothe him with power to assume jurisdiction over the case.WHEREFORE, I vote to GRANT the petition.

FIRST DIVISION[G.R. No. 100158. June 29, 1992.]ST. SCHOLASTICA’S COLLEGE, Petitioner, v. HON. RUBEN TORRES, in his capacity as SECRETARY OF LABOR AND EMPLOYMENT, and SAMAHAN NG MANGGAGAWANG PANG-EDUKASYON SA STA. ESKOLASTIKA-NAFTEU, Respondents.

Ernesto R. Arellano for Private Respondent.William T. Chua for Petitioner.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; SECRETARY OF LABOR AND EMPLOYMENT; SCOPE OF POWER TO ASSUME JURISDICTION OVER LABOR DISPUTES CAUSING OR LIKELY TO CAUSE STRIKE OR LOCKOUT IN AN INDUSTRY INDISPENSABLE TO THE NATIONAL INTEREST. — The issue on whether respondent SECRETARY has the power to assume jurisdiction over a labor dispute and its incidental controversies, causing or likely to cause a strike or lockout in an industry indispensable to the national interest, was already settled in International Pharmaceuticals, Inc. v. Secretary of Labor and Employment (G.R. Nos. 92981-83, 9 January 1992). Therein, We ruled that: ". . . [T]he Secretary was explicitly granted by Article 263 (g) of the Labor Code the authority to assume jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, and decide the same accordingly. Necessarily, this authority to assume jurisdiction over the said labor dispute must include and extend to all questions and controversies arising therefrom, including cases over which the Labor Arbiter has exclusive jurisdiction." And rightly so, for, as found in the aforesaid case, Article 217 of the Labor Code did contemplate of exceptions thereto where the SECRETARY is authorized to assume jurisdiction over a labor dispute otherwise belonging exclusively to the Labor Arbiter. This is readily evident from its opening proviso reading" (e)xcept as otherwise provided under this Code . . ."cralaw virtua1aw library

2. ID.; ID.; ID.; REQUISITES BEFORE THE SECRETARY MAY TAKE COGNIZANCE OF AN INCIDENTAL ISSUE OF A LABOR DISPUTES. — Previously, We held that Article 263 (g) of the Labor Code

15was broad enough to give the Secretary of Labor and Employment the power to take jurisdiction over an issue involving unfair labor practice. (Meycuayan College v. Drilon, G.R. No. 81144, 7 May 1990; 185 SCRA 50) At first glance, the rulings above stated seem to run counter to that of PAL v. Secretary of Labor and Employment, (193 SCRA 223), which was cited by petitioner. But the conflict is only apparent, not real. To recall, We ruled in the latter case that the jurisdiction of the Secretary of Labor and Employment in assumption and/or certification cases is limited to the issues that are involved in the disputes or to those that are submitted to him for resolution. The seeming difference is, however, reconcilable. Since the matter on the legality or illegality of the strike was never submitted to him for resolution, he was thus found to have exceeded his jurisdiction when he restrained the employer from taking disciplinary action against employees who staged an illegal strike. Before the Secretary of Labor and Employment may take cognizance of an issue which is merely incidental to the labor dispute, therefore, the same must be involved in the labor dispute itself, or otherwise submitted to him for resolution. If it was not, as was the case in PAL v. Secretary of Labor and Employment, supra, and he nevertheless acted on it, that assumption of jurisdiction is tantamount to a grave abuse of discretion. Otherwise, the ruling in International Pharmaceuticals, Inc. v. Secretary of Labor and Employment, supra, will apply. The submission of an incidental issue of a labor dispute, in assumption and/or certification cases, to the Secretary of Labor and Employment for his resolution is thus one of the instances referred to whereby the latter may exercise concurrent jurisdiction together with the Labor Arbiters.

3. ID.; ID.; ID.; ACADEMIC INSTITUTIONS COVERED. — The assumption of jurisdiction by the Secretary of Labor and Employment over labor disputes involving academic institutions was already upheld in Philippine School of Business Administration v. Noriel (G.R. No. 80648, 15 August 1988, 164 SCRA 402) where We ruled thus: "There is no doubt that the on-going labor dispute at the school adversely affects the national interest. The school is a duly registered educational institution of higher learning with more or less 9,000 students. The on-going work stoppage at the school unduly prejudices the students and will entail great loss in terms of time, effort and money to all concerned. More important, it is not amiss to mention that the school is engaged in the promotion of the physical, intellectual and emotional well-being of the country’s youth." Respondent UNION’s failure to immediately comply with the return-to-work order of 5 November 1990, therefore, cannot be condoned.

4. ID.; ID.; ID.; ID.; PURPOSE THEREOF; CASE AT BAR. — In the instant petition, the COLLEGE in its Manifestation, dated 16 November 1990, asked the "Secretary of Labor to take the appropriate steps under the said circumstances." It likewise prayed in its position paper that respondent SECRETARY uphold its termination of the striking employees. Upon the other hand, the UNION questioned the termination of its officers and members before respondent SECRETARY by moving for the enforcement of the return-to-work orders. There is no dispute then that the issue on the legality of the termination of striking employees was properly submitted to respondent SECRETARY for resolution. Such an interpretation will be in consonance with the intention of our labor authorities to provide workers immediate access to their rights and benefits without being inconvenienced by the arbitration and litigation process that

prove to be not only nerve-wracking, but financially burdensome in the long run. Social justice legislation, to be truly meaningful and rewarding to our workers, must not be hampered in its application by long-winded arbitration and litigation. Rights must be asserted and benefits received with the least inconvenience. For, labor laws are meant to promote, not defeat, social justice (Maternity Children’s Hospital v. Hon. Secretary of Labor, G.R. No. 78909, 30 June 1989; 174 SCRA 632). After all, Art. 4 of the Labor Code does state that all doubts in the implementation and interpretation of its provisions, including its implementing rules and regulations, shall be resolved in favor of labor.

5. ID.; ID.; RETURN TO WORK ORDER THEREOF; IMMEDIATELY EFFECTIVE AND EXECUTORY NOTWITHSTANDING THE FILING OF THE MOTION FOR RECONSIDERATIONS; RATIONALE; CASE AT BAR. — Article 263 (g) of the Labor Code provides that if a strike has already taken place at the time of assumption, "all striking . . . employees shall immediately return to work." This means that by its very terms, a return-to-work order is immediately effective and executory notwithstanding the filing of a motion for reconsideration (University of Sto. Tomas v. NLRC, G.R. No. 89920, 18 October 1990; 190 SCRA 759). It must be strictly complied with even during the pendency of any petition questioning its validity (Union of Filipro Employees v. Nestle’ Philippines, Inc., 192 SCRA 396). After all, the assumption and/or certification order is issued in the exercise of respondent SECRETARY’s compulsive power of arbitration and, until set aside, must therefore be immediately complied with. The rationale for this rule is explained in University of Sto. Tomas v. NLRC, supra, citing Philippine Air Lines Employees Association v. Philippine Air Lines, Inc., 38 SCRA 372 (1971) thus — "To say that its (return-to-work order) effectivity must wait affirmance in a motion for reconsideration is not only to emasculate it but indeed to defeat its import, for by then the deadline fixed for the return to work would, in the ordinary course, have already passed and hence can no longer be affirmed insofar as the time element is concerned."cralaw virtua1aw library

6. ID.; ID.; ID.; ID.; STRIKES DECLARED IN DEFIANCE THERETO; CONSIDERED ILLEGAL; LIABILITY OF PARTICIPANTS. — The respective liabilities of striking union officers and members who failed to immediately comply with the return-to-work order is outlined in Art. 264 of the Labor Code which provides that any declaration of a strike or lockout after the Secretary of Labor and Employment has assumed jurisdiction over the labor dispute is considered an illegal act. Any worker or union officer who knowingly participates in a strike defying a return-to-work order may, consequently, "be declared to have lost his employment status." Section 6, Rule IX, of the New Rules of Procedure of the NLRC, which provides the penalties for defying a certification order of the Secretary of Labor or a return-to-work order of the Commission, also reiterates the same penalty. It specifically states that non-compliance with the aforesaid orders, which is considered an illegal act, "shall authorize the Secretary of Labor and Employment or the Commission . . . to enforce the same under pain of loss of employment status." Under the Labor Code, assumption and/or certification orders are similarly treated. Thus, we held in Sarmiento v. Tuico, 162 SCRA 676, that by insisting on staging the restrained strike and defiantly picketing the company premises to prevent the resumption of operations, the strikers have forfeited their right to be readmitted, having abandoned their positions, and so could be validly replaced.

16

7. ID.; ID.; ID.; ID.; ID.; ID.; EFFECTIVE FROM THE MOMENT THE EMPLOYEE DEFIES THE ORDER. — It is clear from the provisions above quoted that from the moment a worker defies a return-to-work order, he is deemed to have abandoned his job. It is already in itself knowingly participating in an illegal act. Otherwise, the worker will just simply refuse to return to his work and cause a standstill in the company operations while retaining the positions they refuse to discharge or allow the management to fill (Sarmiento v. Tuico, supra). Suffice it to say, in Federation of Free Workers v. Inciong, supra, the workers were terminated from work after defying the return-to-work order for only nine (9) days. It is indeed inconceivable that an employee, despite a return-to-work order, will be allowed in the interim to stand akimbo and wait until five (5) orders shall have been issued for their return before they report back to work. This is absurd.

8. ID.; CONSTRUCTION OF THE RULES THEREOF IN FAVOR OF LABOR; DOES NOT APPLY IN CASE OF WILLFUL DISOBEDIENCE THERETO. — The sympathy of the Court which, as a rule, is on the side of the laboring classes (Reliance Surety & Insurance Co., Inc. v. NLRC, G.R. No. 86917-18, 25 January 1991; 193 SCRA 365), cannot be extended to the striking union officers and members in the instant petition. There was willful disobedience not only to one but two return-to-work orders. Considering that the UNION consisted mainly of teachers, who are supposed to be well-lettered and well-informed, the Court cannot overlook the plain arrogance and pride displayed by the UNION in this labor dispute. Despite containing threats of disciplinary action against some union officers and members who actively participated in the strike, the letter dated 9 November 1990 sent by the COLLEGE enjoining the union officers and members to return to work on 12 November 1990 presented the workers an opportunity to return to work under the same terms and conditions prior to the strike. Yet, the UNION decided to ignore the same. The COLLEGE, correspondingly, had every right to terminate the services of those who chose to disregard the return-to-work orders issued by respondent SECRETARY in order to protect the interests of its students who form part of the youth of the land.

D E C I S I O N- BELLOSILLO, J.:

The principal issue to be resolved in this recourse is whether striking union members terminated for abandonment of work after failing to comply with return-to-work orders of the Secretary of Labor and Employment (SECRETARY, for brevity) should by law be reinstated.

On 20 July 1990, petitioner St. Scholastica’s College (COLLEGE, for brevity) and private respondent Samahan ng Manggagawang Pang-Edukasyon sa Sta. Eskolastika — NAFTEU (UNION, for brevity) initiated negotiations for a first-ever collective bargaining agreement. A deadlock in the negotiations prompted the UNION to file on 4 October 1990 a Notice of Strike with the Department of Labor and Employment (DEPARTMENT, for brevity), docketed as NCMB-NCR-NS-10-826-90.

On 5 November 1990, the UNION declared a strike which analyzed the operations of the COLLEGE. Affecting as it did the interest of the students, public respondent SECRETARY immediately assumed jurisdiction over the labor dispute and issued on the same day, 5 November 1990, a return-to-work order. The following day, 6 November 1990, the UNION was served the Order. On 7 November

1990, instead of returning to work, the UNION filed a motion for reconsideration of the return-to-work order questioning inter alia the assumption of jurisdiction by the SECRETARY over the labor dispute.

On 9 November 1990, the COLLEGE sent individual letters to the striking employees enjoining them to return to work not later than 8.00 o’clock A.M. of 12 November 1990 and, at the same time, giving notice to some twenty-three (23) workers that their return would be without prejudice to the filing of appropriate charges against them. In response, the UNION presented a list of six (6) demands to the COLLEGE a dialogue conducted on 11 November 1990. The most important of these demands was the unconditional acceptance back to work of the striking employees. But these were flatly rejected.

Likewise, on 9 November 1990, respondent SECRETARY denied reconsideration of his return-to-work order and sternly warned the striking employees to comply with its terms. On 12 November 1990, the UNION received the Order.

Thereafter, particularly on 14 and 15 November 1990, the parties held conciliation meetings before the National Conciliation and Mediation Board where the UNION pruned down its demands to three (3), viz.: that striking employees be reinstated under the same terms and conditions before the strike; that no retaliatory or disciplinary action be taken against them; and, that CBA negotiations be continued. However, these efforts proved futile as the COLLEGE remained steadfast in its position that any return-to-work offer should be unconditional.

On 16 November 1990, the COLLEGE manifested to respondent SECRETARY that the UNION continued to defy his return-to-work order of 5 November 1990 so that "appropriate steps under the said circumstances" may be undertaken by him. 1

On 23 November 1990, the COLLEGE mailed individual notices of termination the striking employees, which were received on 26 November 1990, or later. The UNION officers and members then tried to return to work but were no longer accepted by the COLLEGE.

On 5 December 1990, a Complaint for Illegal Strike was filed against the UNION, its officers and several of its members before the National Labor Relations Commission (NLRC), docketed as NLRC Case No. 00-12-06256-90.

The UNION moved for the enforcement of the return-to-work order before respondent SECRETARY, citing "selective acceptance of returning strikers" by the COLLEGE. It also sought dismissal of the complaint. Since then, no further hearings were conducted.

Respondent SECRETARY required the parties to submit their respective position papers. The COLLEGE prayed that respondent SECRETARY uphold the dismissal of the employees who defied his return-to-work order.

On 12 April 1991, respondent SECRETARY issued the assailed Order which, inter alia directed the reinstatement of striking UNION members, premised on his finding that no violent or otherwise illegal act accompanied the conduct of the strike and that a fledgling UNION like private respondent was "naturally expected to exhibit unbridled if inexperienced enthusiasm, in asserting its existence." 2 Nevertheless, the aforesaid Order held UNION officers responsible for the violation of the return-to-work orders

17of 5 and 9 November 1990 and, correspondingly, sustained their termination.

Both parties moved for partial reconsideration of the Order, with petitioner COLLEGE questioning the wisdom of the reinstatement of striking UNION members, and private respondent UNION, the dismissal of its officers.

On 31 May 1991, in a Resolution, respondent SECRETARY denied both motions. Hence, this Petition for Certiorari, with Prayer for the Issuance of a Temporary Restraining Order.

On 26 June 1991, We restrained the SECRETARY from enforcing his assailed Orders insofar as they directed the reinstatement of the striking workers previously terminated.

Petitioner questions the assumption by respondent SECRETARY of jurisdiction to decide on termination disputes, maintaining that such jurisdiction is vested instead in the Labor Arbiter pursuant to Art. 217 of the Labor Code, thus —

"Art. 217.Jurisdiction of Labor Arbiters and the Commission. — (a) Except as otherwise provided under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without extension, the following cases involving all workers, whether agricultural or non-agricultural: . . . 2. Termination disputes . . . 5. Cases arising from any violation of Article 264 of this Code, including questions on the legality of strikes and lock-outs . . ." In support of its position, petitioner invokes Our ruling in PAL v. Secretary of Labor and Employment 3 where We held:

"The Labor Secretary exceeded his jurisdiction when he restrained PAL from taking disciplinary measures against its guilty employees, for, under Art. 263 of the Labor Code, all that the Secretary may enjoin is the holding of the strike but not the company’s right to take action against union officers who participated in the illegal strike and committed illegal acts."cralaw virtua1aw library

Petitioner further contends that following the doctrine laid down in Sarmiento v. Tuico 4 and Union of Filipro Employees v. Nestle’ Philippines, Inc., 5 workers who refused to obey a return-to-work order are not entitled to be paid for work not done, or to reinstatement to the positions they have abandoned by reason of their refusal to return thereto as ordered.

Taking a contrary stand, private respondent UNION pleads for reinstatement of its dismissed officers considering that the act of the UNION in continuing with its picket was never characterized as a "brazen disregard of successive legal orders", which was readily apparent in Union Filipro Employees v. Nestle’ Philippines, Inc., supra, nor was it a willful refusal to return to work, which was the basis of the ruling in Sarmiento v. Tuico, supra. The failure of UNION officers and members to immediately comply with the return-to-work orders was not because they wanted to defy said orders; rather, they held the view that academic institutions were not industries indispensable to the national interest. When respondent SECRETARY denied their motion, for reconsideration, however, the UNION intimated that efforts ware immediately initiated to fashion out a reasonable return-to-work agreement with the COLLEGE, albeit, it failed.

The issue on whether respondent SECRETARY has the power to assume jurisdiction over a labor dispute and its incidental controversies, causing or likely to cause a strike or lockout in an industry indispensable to the national interest, was already settled in International Pharmaceuticals, Inc. Secretary of Labor and Employment. 6 Therein, We ruled that:

". . . [T]he Secretary was explicitly granted by Article 263 (g) of the Labor Code the authority to assume jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, and decide the same accordingly. Necessarily, this authority to assume jurisdictional over the said labor dispute must include and extend to all questions and controversies arising therefrom, including cases over which the Labor Arbiter has exclusive jurisdiction." And rightly so, for, as found in the aforesaid case, Article 217 of the Labor Code did contemplate of exceptions thereto where the SECRETARY is authorized to assume jurisdiction over a labor dispute otherwise belonging exclusively to the Labor Arbiter. This is readily evident from its opening proviso reading" (e)xcept as otherwise provided under this Code . . ."

Previously, We held that Article 263 (g) of the Labor Code was broad enough to give the Secretary of Labor and Employment the power to take jurisdiction over an issue involving unfair labor practice. 7

At first glance, the rulings above stated seem to run counter to that of PAL v. Secretary or Labor and Employment, supra, which was, cited by petitioner. But the conflict is only apparent, not real.

To recall, We ruled in the latter case that the jurisdiction of the Secretary of Labor and Employment in assumption and/or certification cases is limited to the issues that are involved in the disputes or to those that are submitted to him for resolution. The seeming difference is, however, reconcilable. Since the matter on the legality or illegality of the strike was never submitted to him for resolution, he was thus found to have exceeded his jurisdiction when he restrained the employer from taking disciplinary action against employees who staged an illegal strike.

Before the Secretary of Labor and Employment may take cognizance of an issue which is merely incidental to the labor dispute, therefore, the same must be involved in the labor dispute itself, or otherwise submitted to him for resolution. If it was not, as was the case in PAL v. Secretary of Labor and Employment, supra, and he nevertheless acted on it, that assumption of jurisdiction is tantamount to a grave abuse of discretion. Otherwise, the ruling in International Pharmaceuticals, Inc. v. Secretary of Labor and Employment, supra, will apply.

The submission of an incidental issue of a labor dispute, in assumption and/or certification cases, to the Secretary of Labor and Employment for his resolution is thus one of the instances referred to whereby the latter may exercise concurrent jurisdiction together with the Labor Arbiters.

In the instant petition, the COLLEGE in its Manifestation, dated 16 November 1990, asked the "Secretary of Labor to take the appropriate steps under the said circumstances." It likewise prayed in its position paper that respondent SECRETARY uphold its termination of the striking employees. Upon the other hand, the UNION questioned the termination of its officers and members before respondent SECRETARY by moving for the enforcement of

18the return-to-work orders. There is no dispute then that the issue on the legality of the termination of striking employees was properly submitted to respondent SECRETARY for resolution.

Such an interpretation will be in consonance with the intention of our labor authorities to provide workers immediate access to their rights and benefits without being inconvenienced by the arbitration and litigation process that prove to be not only nerve-wracking, but financially burdensome in the long run. Social justice legislation, to be truly meaningful and rewarding to our workers, must not be hampered in its application by long-winded arbitration and litigation. Rights must be asserted and benefits received with the least inconvenience. For, labor laws are meant to promote, not defeat, social justice (Maternity Children’s Hospital v. Hon. Secretary of Labor). 8 After all, Art. 4 of the Labor Code does state that all doubts in the implementation and interpretation of its provisions, including its implementing rules and regulations, shall be resolved in favor of labor.

We now come to the more pivotal question of whether striking union members, terminated for abandonment of work after failing to comply strictly with a return-to-work order, should be reinstated.

We quote hereunder the pertinent provisions of law which govern the effects of defying a return-to-work order:

1. Article 263 (g) of the Labor Code —

"Art. 263.Strikes, picketing, and lockouts. — . . . (g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory arbitration. Such assumption or certification shall have the effect of automatically enjoining the intended or impending strike or lockout as specified in the assumption or certification order. If one has already taken place at the time of assumption or certification, all striking or locked out employees shall immediately return to work and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lookout. The Secretary of Labor and Employment or the Commission may seek the assistance of law enforcement agencies to ensure compliance with this provision as well as with such orders as he may issue to enforce the same . . ." (as amended by Sec. 27, R.A. 6715; Emphasis supplied).

2. Article 264, same Labor Code —

"Art. 264.Prohibited activities. — (a) No labor organization or employer shall declare a strike or lockout without first having bargained collectively in accordance with Title VII of this Book or without first having filed the notice required in the preceding Article or without the necessary strike or lockout vote first having been obtained and reported to the Ministry.

"No strike or lockout shall be declared after assumption of jurisdiction by the President or the Minister or after certification or submission of the dispute to compulsory or voluntary arbitration or during the pendency of cases involving the same grounds for the strike or lockout . . . (Emphasis supplied).

"Any worker whose employment has been terminated as a consequence of an unlawful lockout shall be entitled to

reinstatement with full back wages. Any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status; Provided, That mere participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his employment, even if a replacement had been hired by the employer during such lawful strike . . ." (Emphasis supplied).

3. Section 6, Rule IX, of the New Rules of Procedure of the NLRC (which took effect on 31 August 1990) —

"Section 6. Effects of Defiance. — Non-compliance with the certification order of the Secretary of Labor and Employment or a return to work order of the Commission shall be considered an illegal act committed in the course of the strike or lookout and shall authorize the Secretary of Labor and Employment or the Commission, as the case may be, to enforce the same under pain or loss of employment status or entitlement to full employment benefits from the locking-out employer or backwages, damages and/or other positive and/or affirmative reliefs, even to criminal prosecution against the liable parties . . ." (Emphasis supplied).

Private respondent UNION maintains that the reason they failed ko immediately comply with the return-to-work order of 5 November 1990 was because they questioned the assumption of jurisdiction of respondent SECRETARY. They were of the impression that being an academic institution, the school could not be considered an industry indispensable to national interest, and that pending resolution of the issue, they were under no obligation to immediately return to work.

This position of the UNION is simply flawed. Article 263 (g) Labor Code provides that if a strike has already taken place at the time of assumption, "all striking . . . employees shall immediately return to work." This means that by its very terms, a return-to-work order is immediately effective and executory notwithstanding the filing of a motion for reconsideration (University of Sto. Tomas v. NLRC). 9 It must be strictly complied with even during the pendency of any petition questioning its validity (Union of Filipro Employees v. Nestle’ Philippines, Inc., supra) After all, the assumption and/or certification order is issued in the exercise of respondent SECRETARY’s compulsive power of arbitration and, until set aside, must therefore be immediately complied with.

The rationale for this rule is explained in University of Sto. Tomas v. NLRC, supra, citing Philippine Air Lines Employees Association v. Philippine Air Lines, Inc., 10 thus —

"To say that its (return-to-work order) effectivity must wait affirmance in a motion for reconsideration is not only to emasculate it but indeed to defeat its import, for by then the deadline fixed for the return to work would, in the ordinary course, have already passed and hence can no longer be affirmed insofar as the time element is concerned."

Moreover, the assumption of jurisdiction by the Secretary of Labor and Employment over labor disputes involving academic institutions was already upheld in Philippine School of Business Administration v. Noriel 11 where We ruled thus:

"There is no doubt that the on-going labor dispute at the school adversely affects the national interest. The school is a duly registered educational institution of higher learning with more or

19less 9,000 students. The on-going work stoppage at the school unduly prejudices the students and will entail great loss in terms of time, effort and money to all concerned. More important, it is not amiss to mention that the school is engaged in the promotion of the physical, intellectual and emotional well-being of the country’s youth."

Respondent UNION’s failure to immediately comply with the return-to-work order of 5 November 1990, therefore, cannot be condoned.

The respective liabilities of striking union officers and members who failed to immediately comply with the return-to-work order is outlined in Art. 264 of the Labor Code which provides that any declaration of a strike or lockout after the Secretary of Labor and Employment has assumed jurisdiction over the labor dispute is considered an illegal act. Any worker or union officer who knowingly participates in a strike defying a return-to-work order may, consequently, "be declared to have lost his employment status." Section 6, Rule IX, of the New Rules of Procedure of the NLRC, which provides the penalties for defying a certification order of the Secretary of Labor or a return-to-work order of the Commission, also reiterates the same penalty. It specifically states that non-compliance with the aforesaid orders, which is considered an illegal act, "shall authorize the Secretary of Labor and Employment or the Commission . . . to enforce the same under pain of loss of employment status." Under the Labor Code, assumption and/or certification orders are similarly treated.

Thus, we held in Sarmiento v. Tuico, supra, that by insisting on staging the restrained strike and defiantly picketing the company premises to prevent the resumption of operations, the strikers have forfeited their right to be readmitted, having abandoned their positions, and so could be validly replaced. We recently reiterated this stance in Federation of Free Workers v. Inciong, 12 wherein we cited Union of Filipro Employees v. Nestle’ Philippines, Inc., supra, thus —

"A strike undertaken despite the issuance by the Secretary of Labor of an assumption or certification order becomes a prohibited activity and thus illegal, pursuant to the second paragraph of Art. 264 of the Labor Code as amended . . . The union officers and members, as a result, are deemed to have lost their employment status for having knowingly participated in an illegal act."

Despite knowledge of the ruling in Sarmiento v. Tuico, supra, records of the case reveal that private respondent UNION opted to defy not only the return-to-work order of 5 November 1990 but also that of 9 November 1990.

While they claim that after receiving copy of the Order of 9 November 1990 initiatives were immediately undertaken to fashion out a return-to-work agreement with management, still, the unrebutted evidence remains that the striking union officers and members tried to return to work only eleven (11) days after the conciliation meetings ended in failure, or twenty (20) days after they received copy of the first return-to-work order on 5 November 1990.

The sympathy of the Court which, as a rule, is on the side of the laboring classes (Reliance Surety & Insurance Co., Inc. v. NLRC), 13 cannot be extended to the striking union officers and members in

the instant petition. There was willful disobedience not only to one but two return-to-work orders. Considering that the UNION consisted mainly of teachers, who are supposed to be well-lettered and well-informed, the Court cannot overlook the plain arrogance and pride displayed by the UNION in this labor dispute. Despite containing threats of disciplinary action against some union officers and members who actively participated in the strike, the letter dated 9 November 1990 sent by the COLLEGE enjoining the union officers and members to return to work on 12 November 1990 presented the workers an opportunity to return to work under the same terms and conditions prior to the strike. Yet, the UNION decided to ignore the same. The COLLEGE, correspondingly, had every right to terminate the services of those who chose to disregard the return-to-work orders issued by respondent SECRETARY in order to protect the interests of its students who form part of the youth of the land.

Lastly, the UNION officers and members also argue that the doctrine laid down in Sarmiento v. Tuico, supra, and Union of Filipro Employees v. Nestle’ Philippines, Inc., supra, cannot be made applicable to them because in the latter two cases, workers defied the return-to-work orders for more than five (5) months. Their defiance of the return-to-work order, it is said, did not last more than a month.

Again, this line of argument must be rejected. It is clear from the provisions above quoted that from the moment a worker defies a return-to-work order, he is deemed to have abandoned his job. It is already in itself knowingly participating in an illegal act. Otherwise, the worker will just simply refuse to return to his work and cause a standstill they refused to discharge or allow the management to fill (Sarmiento v. Tuico, supra). Suffice it to say, in Federation of Free Workers v. Inciong, supra, the workers were terminated from work after defying the return-to-work order for only nine (9) days. It is indeed inconceivable that an employee, despite a return-to-work order, will be allowed in the interim to stand akimbo and wait until five (5) orders shall have been issued for their return before they report back to work. This is absurd.

In fine, respondent SECRETARY gravely abused his discretion when he ordered the reinstatement of striking union members who refused to report back to work after he issued two (2) return-to-work orders, which in itself is knowingly participating in an illegal act. The Order in question is, certainly, contrary to existing law and jurisprudence.

WHEREFORE, the Petition for Certiorari is hereby GRANTED. The Order of 12 April 1991 and the Resolution of 31 May 1991 both issued by respondent Secretary of Labor and Employment are SET ASIDE insofar as they order the reinstatement of striking union members terminated by petitioner, and the temporary restraining order We issued on June 26, 1991, is made permanent.

No costs.

SO ORDERED.

Cruz, Griño-Aquino and Bellosillo, JJ., concur.