Tag: Illegal Strike

When Strikes Cross the Line: Defining Legality and Employee Rights in Labor Disputes

In the Philippines, the right to strike is a constitutionally protected means for workers to voice grievances. However, this right is not absolute and is subject to legal limitations. The Supreme Court’s decision in Bigg’s Inc. v. Boncacas clarifies the boundaries of legal strikes, emphasizing that while employees have the right to protest unfair labor practices, this right must be exercised within the bounds of the law, and any act of violence or obstruction during a strike can render it illegal, impacting the employment status of participating union members and officers.

Bigg’s Bust-Up: Did Employee Protests Justify Terminations?

Bigg’s Inc., a restaurant chain, faced labor unrest when its employees formed a union. Disagreements led to strikes, with the company accusing the union of illegal activities. The employees claimed unfair labor practices, including union interference and dismissals. The legal question became: were the strikes legal, and did Bigg’s have grounds to terminate the employment of union members and officers? This case navigated the complexities of labor law, balancing workers’ rights with the need for lawful conduct during labor disputes.

The Supreme Court carefully examined the events surrounding the strikes. It referenced Article 219 (formerly Article 212) (o) of the Labor Code, which defines a strike as a “any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute.” The Court underscored that not all strikes are protected and that certain procedural and substantive requirements must be met for a strike to be considered legal. These requirements are outlined in Article 278 (formerly Article 263) of the Labor Code.

The Labor Code and its Implementing Rules and Regulations (IRR) specify that strikes are legitimate only when grounded in (1) a bargaining deadlock during collective bargaining or (2) unfair labor practices committed by the employer. Furthermore, strikes can only be declared by a certified or duly recognized bargaining representative in cases of a bargaining deadlock. However, any legitimate labor organization may declare a strike in response to unfair labor practices. Regardless of the reason, the union must conduct a “strike vote,” ensuring that a majority of its members support the action.

In the case of Bigg’s Inc., the Court scrutinized two strikes. The first occurred on February 16, 1996, and was deemed an illegal sit-down strike. The Court found that the union failed to comply with the mandatory prerequisites for a valid strike, failing to file the required Notice of Strike and observe the cooling-off period. The Court noted that the purpose of the cooling-off period is to allow the parties to negotiate and seek a peaceful settlement of their dispute to prevent the actual conduct of the strike.

The second strike, on March 5, 1996, was also declared illegal. Even though the union had complied with procedural requirements, the strike was marred by violence, aggression, and obstruction of access to Bigg’s premises. The Court referenced Article 279 (formerly 264) (e) of the Labor Code, which explicitly prohibits acts of violence, coercion, or intimidation during picketing, as well as obstruction of free ingress to or egress from the employer’s premises.

“No person engaged in picketing shall commit any act of violence, coercion or intimidation or obstruct the free ingress to or egress from the employer’s premises for lawful purposes, or obstruct public thoroughfares.”

The Court distinguished between union officers and ordinary members regarding the consequences of participating in an illegal strike. Citing Article 279 (formerly Article 264) (a) of the Labor Code, the Court emphasized that any union officer who knowingly participates in an illegal strike may be declared to have lost their employment status. However, for ordinary union members, termination is justified only if they knowingly participated in illegal acts during the strike.

“x x x 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.”

Given these principles, the Court upheld the dismissal of union officers, including Boncacas, due to their knowing participation in the illegal strikes. However, it ruled that the dismissal of union members who did not participate in any prohibited act during the strikes was invalid. It also addressed the applicability of a Compromise Agreement executed by some union members, clarifying that the agreement did not waive their rights to pursue the case, as it explicitly stated that it was “without prejudice” to the pending cases.

Ultimately, the Court ordered the reinstatement of specific union members who had not engaged in illegal acts during the strike. However, recognizing the prolonged lapse of time since the dismissals in 1996, and considering the strained relationship between the parties, the Court deemed separation pay more appropriate than reinstatement. The separation pay was set at one month’s salary for each year of service from the time of dismissal until the finality of the decision. Furthermore, the monetary award was subject to legal interest, calculated from the date of termination until full satisfaction of the award.

FAQs

What was the key issue in this case?	The central issue was whether the strikes staged by the union were legal, and whether Bigg’s Inc. validly dismissed union members and officers for participating in those strikes. The Court examined the procedural and substantive requirements for a legal strike under the Labor Code.
What makes a strike illegal in the Philippines?	A strike can be deemed illegal if it does not comply with procedural requirements like notice and cooling-off periods, or if it involves prohibited acts such as violence, coercion, or obstruction of access to the employer’s premises. The grounds for the strike must also be valid, such as a bargaining deadlock or unfair labor practices.
What is the difference in liability between union officers and members during an illegal strike?	Union officers who knowingly participate in an illegal strike can lose their employment status, regardless of whether they committed specific illegal acts. Ordinary union members can only be terminated if they knowingly participated in illegal acts during the strike, with substantial evidence proving their participation.
What is a “cooling-off period” in the context of a strike?	A “cooling-off period” is a mandatory waiting period, typically 15 to 30 days, after filing a notice of strike. It allows the parties to negotiate and seek a peaceful resolution to the dispute, preventing the actual strike.
Why did the Court order separation pay instead of reinstatement in this case?	The Court ordered separation pay due to the long period that had passed since the employees’ dismissal (over two decades) and the strained relationship between the employer and the employees. This made reinstatement impractical and not in the best interests of either party.
What is the significance of a “Compromise Agreement” in labor disputes?	A Compromise Agreement is a settlement between parties in a dispute. However, its terms must be clear and unambiguous. If the agreement explicitly reserves the right to pursue the case, it does not prevent the employee from continuing legal action.
What evidence is required to prove that a union member participated in illegal acts during a strike?	There must be substantial evidence to prove that the union member knowingly participated in the commission of prohibited and illegal acts during the strike. This means that the evidence must be relevant and sufficient for a reasonable mind to accept as adequate to justify the conclusion.
What is the legal interest rate applicable to monetary awards in labor cases?	The legal interest rate is 12% per annum from the date of termination until June 30, 2013, and 6% per annum from July 1, 2013, until full satisfaction of the award, following the Supreme Court’s ruling in Nacar v. Gallery Frames.

The Bigg’s Inc. v. Boncacas case serves as a crucial reminder that the right to strike, while fundamental, is not without limitations. It reinforces the importance of adhering to legal procedures and refraining from violence or obstruction during labor disputes. The decision also underscores the differing liabilities of union officers and ordinary members, emphasizing the greater responsibility placed on union leadership to ensure compliance with the law.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: BIGG’S INC. VS. JAY BONCACAS, ET AL., G.R. No. 200636, March 6, 2019

March 6, 2019

Defiance and Dismissal: Understanding the Consequences of Illegal Strikes and Return-to-Work Orders in the Philippines

In Almagro v. Philippine Airlines, the Supreme Court reiterated that employees participating in an illegal strike and defying a return-to-work order lose their employment status. The Court emphasized the importance of adhering to final and executory judgments and the principle of stare decisis, preventing the relitigation of issues already decided in previous cases involving similar facts and parties. This ruling underscores the serious consequences of disobeying lawful orders in labor disputes and reaffirms the finality of court decisions.

When Pilots Ground Themselves: Illegal Strikes and the Price of Defiance

This case involves former senior pilots of Philippine Airlines, Inc. (PAL) who were dismissed after participating in an illegal strike. The pilots, members of the Airline Pilots Association of the Philippines (ALPAP), joined a strike that defied a return-to-work order issued by the Secretary of Labor and Employment. When they attempted to return to work after the deadline, PAL refused to reinstate them, leading to a series of legal battles. The central legal question is whether these pilots, by participating in the illegal strike and defying the return-to-work order, forfeited their employment status, especially considering prior Supreme Court rulings on the same labor dispute.

The Supreme Court anchored its decision on two key legal principles: conclusiveness of judgment (res judicata) and stare decisis. Conclusiveness of judgment, as embodied in Section 47, Rule 39 of the Rules of Civil Procedure, prevents the relitigation of issues already decided in a previous case between the same parties or their privies. The Court noted that the issue of who participated in the illegal strike and defied the return-to-work order had already been conclusively settled in Airline Pilots Association of the Philippines v. Philippine Airlines, Inc. (Airline Pilots). The pilots’ signatures in PAL’s logbook, indicating their attempt to return to work after the deadline, served as evidence of their participation in the strike and defiance of the order.

A review of the records reveals that in [the strike case], the DOLE Secretary declared the ALPAP officers and members to have lost their employment status based on either of two grounds, viz.: their participation in the illegal strike on June 5, 1998 or their defiance of the return-to-work order of the DOLE Secretary. The records of the case unveil the names of each of these returning pilots. The logbook with the heading “Return to Work Compliance/Returnees” bears their individual signature signifying their conformity that they were among those workers who returned to work only on June 26, 1998 or after the deadline imposed by DOLE.

The Court found that even though the pilots argued they were on official leave during the strike, this defense was raised too late and had already been addressed in previous cases. Thus, the principle of res judicata applied, barring them from relitigating the issue. Further, the Court invoked the principle of stare decisis et non quieta movere, which means “to adhere to precedents, and not to unsettle things which are established.” This principle mandates that courts should follow precedents in similar cases to ensure certainty and stability in judicial decisions.

Time and again, the Court has held that it is a very desirable and necessary judicial practice that when a court has laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle and apply it to all future cases in which the facts are substantially the same. Stare decisis et non quieta movere. Stand by the decisions and disturb not what is settled.

The Court highlighted that the factual circumstances and arguments raised by the pilots were substantially similar to those in previous cases, including Rodriguez v. Philippine Airlines, Inc. and Ahmee, et al. v. PAL. Therefore, the principle of stare decisis required the Court to adhere to its prior rulings. The pilots’ attempt to distinguish their case based on the evidence presented was unsuccessful, as the Court found the PAL security logbook to be a crucial and consistent piece of evidence establishing their participation in the strike and defiance of the return-to-work order.

The Supreme Court emphasized that participation in an illegal strike and defiance of a return-to-work order are valid grounds for termination. The Labor Code of the Philippines recognizes the right of employees to strike, but this right is not absolute. Strikes must be conducted in accordance with the law, and employees must comply with lawful orders issued by the Department of Labor and Employment. Failure to do so can result in the loss of employment status. This ruling serves as a stern reminder to employees and labor unions to adhere to legal processes and respect lawful orders in labor disputes. It underscores the importance of seeking redress through proper channels and complying with return-to-work orders to avoid the severe consequence of termination.

The Court’s decision in Almagro v. Philippine Airlines reaffirms the finality of judgments and the binding nature of precedents. It clarifies that issues already decided in previous cases cannot be relitigated, and courts must adhere to established principles of law. This promotes stability and predictability in the legal system, ensuring that similar cases are treated consistently. For employers, this ruling provides assurance that they can rely on established legal principles and prior court decisions in managing labor disputes. It reinforces their right to terminate employees who participate in illegal strikes and defy return-to-work orders. However, it also emphasizes the importance of following due process and ensuring that terminations are based on substantial evidence. For employees, this ruling serves as a cautionary tale. It highlights the serious consequences of participating in illegal strikes and defying lawful orders. It underscores the importance of seeking legal advice and complying with legal processes to protect their rights. Employees should also be aware of the binding nature of prior court decisions and avoid relitigating issues that have already been decided. This ensures that their employment rights are protected while promoting a stable labor environment.

FAQs

What was the key issue in this case?	The key issue was whether the pilots’ participation in an illegal strike and defiance of a return-to-work order justified their dismissal, given prior Supreme Court rulings on the same labor dispute.
What is the significance of the PAL security logbook?	The PAL security logbook, containing the signatures of pilots attempting to return to work after the deadline, served as crucial evidence of their participation in the strike and defiance of the return-to-work order.
*What is res judicata* and how did it apply in this case?**	Res judicata, or conclusiveness of judgment, prevents the relitigation of issues already decided in a previous case between the same parties or their privies. The Court ruled that the issue of the legality of the strike had already been settled.
*What is stare decisis* and why is it important?**	Stare decisis is the principle of adhering to precedents, ensuring consistency and stability in judicial decisions. It was important here as the court had already ruled on similar facts.
Can employees on official leave participate in a strike?	Even if employees are on official leave, participating in an illegal strike and defying a return-to-work order can lead to termination, especially if the strike has been declared illegal and a return-to-work order has been issued.
What is a return-to-work order?	A return-to-work order is an order issued by the Department of Labor and Employment (DOLE) requiring striking employees to return to their jobs. Defiance can result in loss of employment status.
*Who are considered parties or privies for res judicata?*	Parties or privies include those with a substantial identity of interest, such as a union representing its members. This allows res judicata to apply even if all individuals were not named in the first case.
What should employees do if they disagree with a return-to-work order?	Employees who disagree with a return-to-work order should seek legal advice and comply with the order while pursuing legal remedies through proper channels. Defiance can result in severe penalties.

The Supreme Court’s decision in Almagro v. Philippine Airlines reinforces the importance of adhering to legal processes and respecting lawful orders in labor disputes. It serves as a reminder that the right to strike is not absolute and must be exercised within the bounds of the law. By upholding the principles of res judicata and stare decisis, the Court promotes stability and predictability in the legal system, ensuring that similar cases are treated consistently.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

September 12, 2018

Jurisdictional Boundaries in Labor Disputes: When Can Courts Hear Damage Claims?

In a labor dispute involving an illegal strike, Philippine Airlines (PAL) sought damages from the Airline Pilots Association of the Philippines (ALPAP). The Supreme Court clarified that labor tribunals, not regular courts, have jurisdiction over damage claims arising from strikes due to the inherent connection to employer-employee relations. However, because PAL failed to raise its damage claims during the initial labor dispute resolution, the Court ultimately ruled that PAL could not pursue these claims separately, reinforcing the principle against splitting jurisdiction. This decision underscores the importance of raising all related issues within the primary labor dispute proceedings to avoid losing the right to claim damages.

Turbulence in the Skies: Did an Illegal Strike Ground PAL’s Right to Damages?

The case revolves around a strike staged by ALPAP against PAL in 1998, which the Secretary of Labor and Employment (SOLE) declared illegal. Following this declaration, PAL filed a complaint for damages against ALPAP, its officers, and members, alleging significant financial losses due to the strike, including stranded passengers and cancelled flights. The central legal question is whether labor tribunals or regular courts have jurisdiction over PAL’s claims for damages stemming from actions during the illegal strike. The Labor Arbiter (LA) and the National Labor Relations Commission (NLRC) initially dismissed PAL’s complaint, citing a lack of jurisdiction and prescription, while the Court of Appeals (CA) partially granted PAL’s petition, stating that regular courts have exclusive jurisdiction over the claim for damages.

The Supreme Court, in resolving this issue, turned to Article 217 of the Labor Code, now Article 224, which defines the jurisdiction of Labor Arbiters and the Commission. This article specifies that labor tribunals have the authority to resolve cases involving claims for damages arising from employer-employee relationships. However, the Court acknowledged that not every claim between an employer and employee falls under the labor arbiter’s jurisdiction. Intrinsically civil disputes, even those involving employers and employees, are typically handled by regular courts. To determine jurisdiction, the Court applied the “reasonable connection rule,” stating that a claim for damages must have a reasonable causal connection with any of the claims provided for in Article 217 to be properly cognizable by the labor arbiter.

Building on this principle, the Supreme Court disagreed with the Court of Appeals, asserting that PAL’s claim for damages did indeed have a reasonable connection to its employer-employee relationship with ALPAP. The Court emphasized that the claimed damages arose from the illegal strike and actions committed during it, which were closely related to ALPAP’s allegations of unfair labor practices against PAL. The Court referenced its previous decisions, such as Goodrich Employees Association v. Hon. Flores, which affirmed that cases involving unfair labor practices fall within the jurisdiction of labor tribunals, and that these tribunals have jurisdiction over all incidental matters connected to the main issue.

This approach contrasts with cases where the employer-employee relationship is merely incidental to the claim. The Court reinforced the exclusive jurisdiction of labor tribunals over actions for damages arising from labor controversies, citing Holganza v. Hon. Apostol and Philippine Long Distance Telephone Company v. Free Telephone Workers Union, which held that regular courts lack jurisdiction over claims for damages arising from a labor strike. This rule applies even if the strike is deemed illegal, as highlighted in Antipolo Highway Lines Employees Union v. Hon. Aquino, where the Court determined that complaints for damages and injunction related to an illegal strike are incidents of the labor dispute and fall under the labor court’s jurisdiction.

The Court underscored that splitting jurisdiction is not favored under the Labor Code, aligning with the principle established in earlier cases under the Industrial Peace Act. This perspective was illustrated in National Federation of Labor v. Hon. Eisma, where the Court nullified proceedings in a regular court because the complaint for damages was deeply rooted in a labor dispute. Jurisprudence dictates that if a cause of action for damages arises out of or is intertwined with an alleged unfair labor practice, the labor tribunal has exclusive jurisdiction. The Supreme Court clarified that the regular courts lacked jurisdiction over PAL’s claim for damages because it was intertwined with the labor dispute over which the SOLE had assumed jurisdiction.

However, the Court ultimately determined that PAL could not recover the alleged damages because the SOLE had already assumed jurisdiction over the labor dispute, including all related questions and controversies. When the SOLE assumed jurisdiction on December 23, 1997, it encompassed all issues arising from the strike. Therefore, when the SOLE declared the strike illegal in its June 1, 1999 resolution, and when the Supreme Court finalized the case on April 10, 2002, the issue of damages was also deemed resolved, even if it was not explicitly addressed. Allowing PAL to recover damages through a separate complaint would sanction a relitigation of the issue, violating the proscription against split jurisdiction.

Moreover, the Court found that PAL’s claim for damages was barred under the doctrine of immutability of final judgment, which prevents the modification of a final decision. The recovery of damages would depend on evidence from the illegal strike case, which had long attained finality. The Court stated that PAL should have asserted its claim for damages before the SOLE and, if necessary, appealed to the CA. Instead, PAL waited until after the main case had concluded, which was a grave error. The Court reinstated the LA’s decision, dismissing PAL’s complaint for lack of jurisdiction, as the SOLE had exclusive jurisdiction over the matter.

FAQs

What was the key issue in this case?	The key issue was whether labor tribunals or regular courts have jurisdiction over claims for damages arising from an illegal strike. The Supreme Court determined that labor tribunals have jurisdiction due to the reasonable connection between the strike and the employer-employee relationship.
What is the “reasonable connection rule”?	The “reasonable connection rule” states that for a labor arbiter to have jurisdiction over a claim for damages, there must be a reasonable causal connection between the claim and the employer-employee relationship. This means the damages must arise from the employment context.
Why was PAL’s claim for damages ultimately denied?	PAL’s claim was denied because the SOLE had already assumed jurisdiction over the labor dispute, including all related issues. By failing to raise the damage claim during those proceedings, PAL was barred from pursuing it separately.
What is the doctrine of immutability of final judgment?	The doctrine of immutability of final judgment means that a decision that has become final cannot be altered or modified, even to correct errors of fact or law. This principle ensures stability and finality in legal proceedings.
What is split jurisdiction and why is it disfavored?	Split jurisdiction refers to dividing related issues in a single case between different courts or tribunals. It is disfavored because it can lead to inconsistent rulings, inefficiency, and potential injustice.
What should PAL have done differently in this case?	PAL should have asserted its claim for damages during the proceedings before the SOLE, when the SOLE assumed jurisdiction over the labor dispute. Failing to do so resulted in the claim being deemed waived.
Does the legality of the strike affect the jurisdiction of labor tribunals?	No, the legality of the strike does not change the jurisdiction of labor tribunals over claims for damages arising from it. Whether the strike is legal or illegal, the labor tribunal retains jurisdiction over the related damage claims.
What is the role of the Secretary of Labor and Employment (SOLE) in labor disputes?	The SOLE has the authority to assume jurisdiction over labor disputes that affect national interest, which includes the power to resolve all questions and controversies arising from those disputes. This authority ensures a comprehensive resolution of the issues.

The Supreme Court’s decision in this case underscores the importance of raising all related issues, including claims for damages, within the primary labor dispute proceedings. Failure to do so may result in the loss of the right to pursue these claims separately, reinforcing the principles against splitting jurisdiction and the immutability of final judgments.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: PHILIPPINE AIRLINES, INC. vs. AIRLINE PILOTS ASSOCIATION OF THE PHILIPPINES, G.R. No. 200088, February 26, 2018

February 26, 2018

Defiance and Dismissal: Loss of Retirement Benefits for Striking Employees

The Supreme Court ruled that an employee who participates in an illegal strike and defies a return-to-work order loses their employment status and, consequently, the right to retirement benefits. This decision underscores the importance of adhering to labor laws and lawful orders, as defiance can result in the forfeiture of benefits that would otherwise accrue to an employee. The case clarifies that retirement benefits are intended as a reward for loyal service, not as an entitlement for those who engage in unlawful labor practices. The Court emphasized that retirement requires a voluntary agreement, which is absent when an employee is terminated for just cause.

Striking Out: Can Illegal Actions Erase Years of Service?

The case of Armando M. Tolentino (deceased), herein represented by his surviving spouse Merla F. Tolentino and children vs. Philippine Airlines, Inc., stemmed from a labor dispute involving Philippine Airlines (PAL) and its pilots. Armando M. Tolentino, a long-time pilot for PAL and a member of the Airline Pilots Association of the Philippines (ALPAP), participated in a strike that was later declared illegal by the Secretary of Labor. The central legal question was whether Tolentino, despite his years of service, was entitled to retirement benefits and other compensation from PAL, considering his participation in the illegal strike and subsequent failure to comply with a return-to-work order. The Supreme Court’s decision hinged on whether Tolentino’s actions constituted a just cause for termination, thereby forfeiting his right to claim retirement benefits.

Tolentino’s journey with PAL began on October 22, 1971, and by July 16, 1999, he had achieved the rank of A340/A330 Captain. However, his career took a turn when ALPAP members initiated a strike on June 5, 1998. The Secretary of Labor intervened, issuing an Order on June 7, 1998, mandating all striking ALPAP members to return to work within 24 hours, with PAL management required to accept them under the same terms and conditions as before the strike. Despite this Order, Tolentino, along with some other pilots, continued to participate in the strike. This act of defiance proved consequential.

When Tolentino and other striking pilots eventually sought to return to work on June 26, 1998, PAL refused to readmit them, leading to a complaint for illegal lockout filed by the pilots. Subsequently, on July 20, 1998, Tolentino reapplied for employment with PAL as a newly hired pilot, voluntarily undergoing a six-month probationary period. Less than a year later, on July 16, 1999, he resigned. In the interim, on June 1, 1999, the Secretary of Labor officially declared the strike illegal due to procedural infirmities and defiance of the return-to-work order. This declaration had far-reaching implications for the striking ALPAP members, including Tolentino, as the resolution stated that those who participated in defiance of the return-to-work order had lost their employment status. This resolution was later affirmed by the Supreme Court on April 10, 2002.

Upon returning to the Philippines after working for a foreign airline, Tolentino sought to collect his separation and/or retirement benefits under the collective bargaining agreement (CBA) with PAL. However, PAL refused to grant him these benefits, leading Tolentino to file a complaint for non-payment of holiday pay, rest day pay, separation pay, and retirement benefits, along with a claim for damages and attorney’s fees. The Labor Arbiter dismissed Tolentino’s complaint, finding that his participation in the illegal strike and defiance of the return-to-work order constituted a valid dismissal, thereby disqualifying him from separation pay and other benefits. The Labor Arbiter also denied his claim for retirement benefits, as Tolentino had resigned less than a year after being rehired by PAL. The National Labor Relations Commission (NLRC) affirmed the Labor Arbiter’s decision, further cementing the denial of Tolentino’s claims.

The case eventually reached the Court of Appeals (CA), which affirmed the NLRC’s decision with a modification, ordering PAL to pay Tolentino his accrued vacation leave. The CA reasoned that the CBA justified the claim for vacation pay upon separation from the company, regardless of the validity of the termination. However, the Supreme Court ultimately reversed this decision, denying Tolentino’s claims for retirement benefits and other compensation. The Court emphasized that Tolentino’s participation in the illegal strike and his failure to comply with the return-to-work order constituted a just cause for dismissal under Article 282 of the Labor Code. The Court cited PAL, Inc. v. Acting Secretary of Labor, which stated that striking employees who defy a return-to-work order are deemed to have lost their employment status.

Furthermore, the Supreme Court clarified that Tolentino’s reemployment with PAL as a new hire did not restore his previous employment status for the purpose of retirement benefits. The Court stated that reemployment on the condition that the employee be treated as a new employee is a valid exercise of the employer’s prerogative, provided it is not motivated by anti-union sentiments. Since Tolentino resigned less than a year after being rehired, he did not meet the minimum service requirement for retirement benefits under the PAL-ALPAP Retirement Plan. The Court also rejected the argument that Tolentino was entitled to the equity in the retirement fund under the PAL Pilots’ Retirement Benefit Plan. It was clarified that the retirement fund was raised exclusively from PAL’s contributions, and only pilots who retired were entitled to receive the full amount of the contribution.

In essence, the Supreme Court’s decision reinforced the principle that employees who engage in illegal strikes and defy return-to-work orders face the risk of losing their employment status and the benefits associated with it. The ruling serves as a cautionary tale, highlighting the importance of adhering to labor laws and lawful orders in the workplace. The implications of this ruling are significant, particularly for union members and employees involved in labor disputes. It underscores the need to carefully consider the consequences of participating in strikes or defying lawful orders, as such actions can have long-term repercussions on their employment and retirement prospects.

FAQs

What was the key issue in this case?	The key issue was whether an employee, who participated in an illegal strike and defied a return-to-work order, was entitled to retirement benefits despite being terminated for just cause. The Supreme Court ruled against the employee, stating that such actions result in the loss of employment status and forfeiture of retirement benefits.
What is a return-to-work order?	A return-to-work order is a directive issued by the Secretary of Labor during a labor dispute, requiring striking employees to resume their duties under the same terms and conditions of employment that existed before the strike. It is intended to maintain essential services and prevent economic disruption.
What happens if an employee defies a return-to-work order?	If an employee defies a return-to-work order, they are deemed to have committed an illegal act, which is a just cause for dismissal under Article 282 of the Labor Code. This can lead to the loss of employment status and the forfeiture of certain benefits, such as retirement pay.
Can an employee be rehired after participating in an illegal strike?	Yes, an employee can be rehired after participating in an illegal strike, but the employer has the prerogative to treat the reemployment as a new hire. This means the employee’s previous employment status and seniority may not be recognized for the purpose of benefits, such as retirement.
What are the requirements for retirement benefits under the PAL-ALPAP Retirement Plan?	Under the PAL-ALPAP Retirement Plan, a member-pilot must complete at least five years of continuous service with PAL to be entitled to the resignation benefit. To be eligible for normal retirement, a pilot must have either 20 years of service or 20,000 flight hours with PAL.
What is the PAL Pilots’ Retirement Benefit Plan?	The PAL Pilots’ Retirement Benefit Plan is a retirement fund raised exclusively from contributions made by Philippine Airlines (PAL). Upon retirement, each pilot is entitled to receive the full amount of the contribution, which is separate from the benefits under the PAL-ALPAP Retirement Plan.
Can an employee claim retirement benefits if terminated for just cause?	No, an employee who is terminated for just cause is generally not entitled to retirement benefits. Retirement benefits are considered a reward for loyal service, and it would be contrary to the purpose of these benefits to grant them to an employee who was terminated for misconduct or violation of company policies.
What does the Personnel Policies and Procedures Manual say about benefits after dismissal?	The PAL Personnel Policies and Procedures Manual states that generally, a dismissed employee forfeits all entitlements to company benefits and privileges. This policy is applicable to employees who are terminated for just cause, such as participating in an illegal strike.

This case serves as a crucial reminder for both employers and employees regarding the consequences of labor disputes and the importance of adhering to legal and contractual obligations. The Supreme Court’s decision underscores that retirement benefits are not an automatic entitlement but rather a reward for fulfilling the duties and responsibilities of employment in accordance with the law.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Armando M. Tolentino (Deceased) vs. Philippine Airlines, Inc., G.R. No. 218984, January 24, 2018

January 24, 2018

When Union Disaffiliation Leads to Dismissal: Understanding Security Clauses and Strike Illegality

In Ergonomic Systems Philippines, Inc. v. Enaje, the Supreme Court addressed the legality of dismissing employees based on a union security clause and the validity of a strike. The Court ruled that a mother federation cannot invoke a union security clause to demand the dismissal of local union members and officers, and it deemed the strike illegal due to the union’s failure to comply with procedural requirements, specifically the strike vote. This decision clarifies the distinct roles of local unions and their federations and underscores the importance of adhering to labor laws during strikes.

Can a Mother Union Terminate Employees? Disaffiliation, Dismissal, and the Rights of Workers

The case of Ergonomic Systems Philippines, Inc. v. Emerito C. Enaje, et al., decided by the Supreme Court, revolves around a labor dispute stemming from the disaffiliation of a local union from its mother federation, Workers Alliance Trade Unions-Trade Union Congress of the Philippines (Federation). Following the disaffiliation and internal charges against union officers, the Federation demanded that Ergonomic Systems Philippines, Inc. (ESPI) terminate certain union officers and members based on a union security clause in their Collective Bargaining Agreement (CBA). ESPI complied, leading to a strike by the local union and subsequent dismissal of participating members. The central legal question is whether the Federation could invoke the union security clause to demand the dismissal of the employees and whether the strike was conducted legally.

The Supreme Court began its analysis by clarifying the scope of the union security clause. It emphasized that only the local union, Ergonomic Systems Employees Union, could invoke the union security clause in the CBA. The court stated that the CBA was explicit that the union was the sole and exclusive bargaining agent. Therefore, the Federation’s demand for dismissal was deemed invalid, as it overstepped its role as merely an agent of the local union. The Court underscored the autonomy of local unions in their relationships with federations.

“A local union does not owe its existence to the federation with which it is affiliated. It is a separate and distinct voluntary association owing its creation to the will of its members. Mere affiliation does not divest the local union of its own personality, neither does it give the mother federation the license to act independently of the local union. It only gives rise to a contract of agency, where the former acts in representation of the latter. Hence, local unions are considered principals while the federation is deemed to be merely their agent.”

Building on this principle, the Court affirmed the right of local unions to disaffiliate from their mother federations, citing Philippine Skylanders, Inc. v. NLRC: “The right of a local union to disaffiliate from its mother federation is not a novel thesis unillumined by case law.” This established that the Federation’s action was an overreach, and it lacked the authority to demand dismissals. Even if the local union chose to disaffiliate, the Federation would still not be able to demand the dismissal from employment of the union officers and members.

The Court then turned to the legality of the strike staged by the local union. It outlined the procedural requirements for a valid strike under Article 278 of the Labor Code, which includes filing a notice of strike with the National Conciliation and Mediation Board (NCMB), obtaining a strike vote approved by a majority of the total union membership through secret ballot, and giving notice to the NCMB of the voting results at least seven days before the intended strike. These requirements are mandatory.

In this case, the union failed to comply with these mandatory requirements. While the union filed a notice of strike, it commenced the strike before securing a strike vote and submitting the report to the NCMB. The strike vote was taken and reported to the NCMB *after* the strike had already begun. The Court explicitly stated that the union’s non-compliance rendered the strike illegal. Because of this, there were different liabilities for union officers and members.

Concerning the liabilities of the union officers and members, the Court made a distinction based on Article 279(a) of the Labor Code. This section holds that any union officer who knowingly participates in an illegal strike may be declared to have lost their employment status, while ordinary union members can only be dismissed if they committed illegal acts during the strike. In this particular case, the Court found the union officers to be liable since they had knowledge that the requirements for a valid strike were not met.

However, for the union members, the Court determined that there was a lack of sufficient evidence to prove they committed illegal acts during the strike, such as obstruction or violence. Therefore, their dismissal could not be justified on these grounds. The ruling recognized the need to protect the rank-and-file members who participated in the strike without necessarily being aware of its illegality.

The Court also addressed the issue of back wages. Citing G & S Transport Corporation v. Infante, the Court held that the dismissed workers were entitled only to reinstatement without back wages, as they did not render work for the employer during the strike. Because the strike was illegal, the “fair day’s wage for a fair day’s labor” principle applied, meaning there could be no wage for no work performed. The court reasoned that fairness and justice dictated that back wages be denied to employees who participated in illegal concerted activities to the detriment of the employer.

Despite denying back wages, the Court recognized the prolonged period since the strike and the resulting strain in relations between the employer and employees. As a compromise, the Court deemed separation pay appropriate in lieu of reinstatement. The separation pay was set at one month’s salary for each year of service, balancing the union members’ years of service with the employer’s losses due to the illegal strike.

FAQs

What was the key issue in this case?	The key issue was whether a mother federation could demand the dismissal of employees based on a union security clause in a CBA between a company and a local union, and whether the strike conducted by the union was legal.
Can a mother federation invoke a union security clause?	No, the Supreme Court ruled that only the local union that is a party to the CBA can invoke the union security clause, not the mother federation. The federation only serves as the agent of the local union.
What are the requirements for a legal strike?	The requirements include filing a notice of strike with the NCMB, obtaining a strike vote approved by a majority of the union membership, and notifying the NCMB of the voting results at least seven days before the strike.
What happens if a union fails to meet the strike requirements?	If a union fails to comply with these requirements, the strike is considered illegal, which can have consequences for both union officers and members.
What are the liabilities for union officers in an illegal strike?	Union officers who knowingly participate in an illegal strike may be declared to have lost their employment status, meaning they can be dismissed.
What are the liabilities for union members in an illegal strike?	Union members can only be dismissed if they committed illegal acts during the strike, and there must be sufficient evidence to prove these acts.
Are dismissed workers entitled to back wages if the strike was illegal?	No, the Supreme Court ruled that workers are not entitled to back wages for the period they did not work during an illegal strike, based on the principle of “a fair day’s wage for a fair day’s labor.”
Why was separation pay awarded in this case?	Separation pay was awarded in lieu of reinstatement due to the prolonged period since the strike and the strained relations between the employer and employees.

The Supreme Court’s decision in Ergonomic Systems Philippines, Inc. v. Enaje clarifies the responsibilities and limitations of labor federations and unions. It also reinforces the necessity of adhering to legal procedures during strikes to protect the rights and welfare of both employers and employees.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Ergonomic Systems Philippines, Inc. v. Enaje, G.R. No. 195163, December 13, 2017

December 13, 2017

Strikes and Slowdowns: The Limits of Union Power in Philippine Labor Law

The Supreme Court affirmed that employees participating in an illegal strike or slowdown can be terminated. This decision underscores the importance of lawful conduct during labor disputes and clarifies the boundaries of permissible actions for union members and officers. The ruling serves as a reminder that while workers have the right to organize and engage in collective bargaining, these rights are not absolute and must be exercised within the bounds of the law. Union officers, in particular, have a responsibility to guide their members in respecting legal boundaries; failure to do so can result in severe consequences, including dismissal.

When a ‘Slowdown’ Becomes an Illegal Strike: The Case of Polyson Industries

In Errol Ramirez, Julito Apas, Ricky Roselo and Esteban Mission, Jr. vs. Polyson Industries, Inc. and Wilson S. Yu, the central issue revolved around the legality of the petitioners’ dismissal from Polyson Industries. The company accused the petitioners, who were union officers, of instigating a slowdown by inducing employees to refuse overtime work. This slowdown allegedly resulted in significant financial losses for Polyson, leading to the termination of the union officers. The legal question before the Supreme Court was whether the actions of the union officers constituted an illegal strike and whether their dismissal was justified under the Labor Code.

The court’s analysis hinged on two critical aspects of due process in labor cases: substantive and procedural. Substantive due process requires that the dismissal be based on a just or authorized cause, as defined by the Labor Code. Procedural due process, on the other hand, mandates that the employer follow the correct procedure in effecting the dismissal, including providing the employee with notice and an opportunity to be heard. The employer bears the burden of proving the validity of the dismissal with clear and convincing evidence.

In this case, the NLRC found that the petitioners had indeed instigated an illegal activity by inducing and/or threatening workers not to render overtime work. The NLRC considered this a calculated effort amounting to an “overtime boycott” or “work slowdown,” which caused Polyson significant financial losses. The Supreme Court upheld these findings, emphasizing that it is not duty-bound to delve into the accuracy of the NLRC’s factual findings unless there is a clear showing of arbitrariness. The court reiterated the principle that union officers must guide their members to respect the law, and failure to do so warrants a just penalty.

The evidence presented by Polyson played a crucial role in the court’s decision. The company presented the Cutting Section Overtime Sheet, where employees indicated that they were prevented from working overtime. Visca and Tuting identified the petitioners as those who pressured them not to work overtime during the administrative hearing and in their written statements. The court gave weight to these affirmative assertions, noting the absence of any apparent motive for Visca and Tuting to fabricate their claims.

The court also cited an Incident Report where one of the petitioners stated, “[DI BA] SABI NINYO EIGHT (8) HOURS LANG KAMI. EH DI EIGHT (8) NA LANG. KUNG MAG[-]OOVERTIME KAMI DAPAT LAHAT MAY OVERTIME. AYAW KO MAGKAWATAK WATAK ANG MGA TAO KO.” This statement indicated that the petitioners were fully aware of and responsible for the events during the scheduled overtime. Thus, the court agreed with the NLRC and the CA that the petitioners were guilty of instigating a slowdown, which is considered an illegal activity.

The Supreme Court clarified the definition of a slowdown.

x x x a “strike on the installment plan;” as a willful reduction in the rate of work by concerted action of workers for the purpose of restricting the output of the employer, in relation to a labor dispute; as an activity by which workers, without a complete stoppage of work, retard production or their performance of duties and functions to compel management to grant their demands. The Court also agrees that such a slowdown is generally condemned as inherently illicit and unjustifiable, because while the employees “continue to work and remain at their positions and accept the wages paid to them,” they at the same time “select what part of their allotted tasks they care to perform of their own volition or refuse openly or secretly, to the employer’s damage, to do other work;” in other words, they “work on their own terms.

The court emphasized that the law does not require a slowdown to be carefully planned or participated in by a large number of workers. The essence of a slowdown is that workers reduce their rate of work to restrict output or delay production. Even if only a few employees participate, it can still constitute an illegal strike if the purpose is to disrupt the employer’s operations. The petitioners engaged in a slowdown when they induced their co-workers to quit their scheduled overtime work, resulting in a delay in Polyson’s output.

Procedural due process was also satisfied in this case. The employer furnished the employees with two written notices before the termination of their employment: the first informing them of the acts for which their dismissal was sought, and the second informing them of the employer’s decision to dismiss them. The court clarified that the requirement of a hearing is complied with as long as there was an opportunity to be heard, and not necessarily that an actual hearing was conducted. Polyson established that these requirements were sufficiently complied with.

Article 264(a) of the Labor Code provides the legal basis for the dismissal of union officers who participate in illegal strikes:

x x x x

x x x 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.

The court underscored the importance of maintaining a stable relationship between labor and management, as well as the welfare of the entire workforce. Illegal strikes and unlawful acts during strikes can destabilize the social order and disrupt the economic well-being of the State. The law imposes the penalty of dismissal on union officers who irresponsibly participate in illegal strikes and union members who commit unlawful acts during a strike.

FAQs

What was the central issue in this case?	The central issue was whether the dismissal of union officers who instigated a slowdown by inducing employees to refuse overtime work was valid under the Labor Code. The court examined whether their actions constituted an illegal strike.
What is a slowdown?	A slowdown is defined as a “strike on the installment plan,” where workers reduce their rate of work to restrict the employer’s output or delay production. It is generally considered an illegal activity.
What are the two aspects of due process in labor cases?	The two aspects of due process are substantive and procedural. Substantive due process requires a just or authorized cause for dismissal, while procedural due process requires that the employer provide notice and an opportunity to be heard.
What evidence did Polyson Industries present to support its case?	Polyson presented the Cutting Section Overtime Sheet, the testimonies of Visca and Tuting, and an Incident Report. These pieces of evidence supported the claim that the petitioners induced and pressured employees not to work overtime.
What is the role of union officers in strikes?	Union officers have a responsibility to guide their members to respect the law. If they urge members to violate the law or defy authorities, their dismissal from service is a just penalty.
What does Article 264(a) of the Labor Code say about illegal strikes?	Article 264(a) of the Labor Code states that any union officer who knowingly participates in an illegal strike or commits illegal acts during a strike may lose their employment status. This provision emphasizes the severe consequences of unlawful actions during labor disputes.
Is it necessary for a large number of workers to participate in a slowdown for it to be considered illegal?	No, it is not necessary for a large number of workers to participate. The essence of a slowdown is the reduction of the rate of work to restrict output or delay production, regardless of the number of participants.
What are the notice requirements for procedural due process in termination proceedings?	The employer must furnish the employee with two written notices: the first informing them of the acts for which their dismissal is sought, and the second informing them of the employer’s decision to dismiss them. This ensures that employees are aware of the charges against them and have an opportunity to respond.

This case serves as a significant reminder of the boundaries within which unions and their officers must operate. Engaging in illegal activities, such as instigating slowdowns, can have severe consequences, including dismissal from employment. It is crucial for union leaders to guide their members in respecting the law to maintain a stable and productive relationship between labor and management.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Errol Ramirez, et al. vs. Polyson Industries, Inc., G.R. No. 207898, October 19, 2016

October 19, 2016

Strikes and Dismissals: Balancing Labor Rights with Legal Requirements in the Philippines

In the Philippines, the right to strike is constitutionally protected, but it is not absolute. This case clarifies the boundaries of legal strikes and the repercussions for participating in illegal ones. Specifically, the Supreme Court delineates that while union officers may face termination for knowingly participating in an illegal strike, ordinary employees can only be dismissed if they commit illegal acts during the strike. Furthermore, employers must adhere to due process requirements, regardless of the strike’s legality, ensuring that employees have the opportunity to be heard before termination. This balance seeks to protect workers’ rights while maintaining order and adherence to the law in labor disputes.

When Passionate Protests Meet Procedural Pitfalls: Did HSBC’s Employee Strike Cross the Line?

The Hongkong & Shanghai Banking Corporation Employees Union staged a strike in December 1993, protesting the implementation of a job evaluation program (JEP) they deemed an unfair labor practice (ULP). The bank, however, argued that the strike was illegal due to the union’s failure to comply with mandatory procedural requirements under the Labor Code. The central legal question revolves around whether the union’s actions, though driven by concerns over labor practices, were conducted within the permissible boundaries of the law, and what consequences should follow for the participating employees.

The Supreme Court emphasized that the right to strike is a powerful tool for workers, aimed at improving their terms and conditions of employment. However, this right is not without limitations. Article 263 of the Labor Code lays out specific requirements that must be met for a strike to be considered legal. These include filing a notice of strike with the Department of Labor and Employment (DOLE), observing a cooling-off period, securing a strike vote approved by the majority of the union membership through secret ballot, and submitting the results of the strike vote to the National Conciliation and Mediation Board (NCMB).

In this case, the union failed to meet these requirements. According to the Court, the union did not file a notice of strike with the DOLE, nor did it observe the cooling-off period. Furthermore, the strike vote was conducted via open balloting, violating the requirement for a secret ballot.

Article 264 of the Labor Code explicitly states that “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 [Department].”

This failure to comply with the mandatory procedures outlined in Article 263 rendered the strike illegal.

Beyond the procedural lapses, the Court also found that the union members had committed unlawful acts during the strike. Witnesses and evidence presented by HSBC showed that the strikers obstructed the ingress into and egress from the bank’s offices, engaging in acts of violence and intimidation.

As Labor Arbiter Pati observed, the picket was a non-moving, stationary one – nothing less but a barricade…the respondents, at least on that day, have demonstrated an abnormally high degree of hatred and anger at the Bank and its officers.

These actions further contributed to the illegality of the strike.

Despite the illegality of the strike, the Supreme Court clarified that this did not automatically justify the dismissal of all participating employees. The Court distinguished between union officers and ordinary members. According to Article 264(a) of the Labor Code,

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.

This provision emphasizes that the responsibility for an illegal strike is individual, not collective.

To terminate a union officer, the employer must prove that the officer knowingly participated in the illegal strike. For ordinary striking employees, termination is only warranted if the employer can demonstrate that the employee committed illegal acts during the strike. In this case, the Court found that HSBC had not provided sufficient evidence to prove that all the dismissed employees had knowingly participated in the illegal strike or had committed illegal acts. As a result, the Court ruled that the dismissal of several employees was unlawful.

Moreover, the Supreme Court underscored the importance of due process in termination cases, regardless of the strike’s legality. Employers must provide employees with a written notice stating the causes for termination and afford them an opportunity to be heard. HSBC’s failure to strictly observe the twin-notice requirement resulted in the illegal dismissal of several employees. However, the extent of HSBC’s liability varied depending on the circumstances of each employee.

The Court ultimately ruled that HSBC was liable for two types of illegal dismissal. The first type involved dismissals made without both substantive and procedural due process. The second type was based on a valid cause but lacked compliance with procedural due process. Those dismissed without substantive and procedural due process were entitled to reinstatement with full backwages. Those dismissed based on a valid cause but without procedural due process were entitled to nominal damages of P30,000.00 each. This ruling reinforced the need for employers to respect employees’ rights even in the context of illegal strikes.

FAQs

What was the key issue in this case?	The central issue was whether the strike conducted by the union was legal, and whether the subsequent dismissal of the striking employees was justified. The court examined the union’s compliance with procedural requirements for strikes and the individual actions of the employees during the strike.
What are the requirements for a legal strike in the Philippines?	A legal strike requires filing a notice with the DOLE, observing a cooling-off period, conducting a secret ballot strike vote, and submitting the results to the NCMB. Failure to comply with these requirements renders the strike illegal.
Can an employer automatically dismiss employees who participate in an illegal strike?	No, the employer cannot automatically dismiss all employees. Union officers can be dismissed if they knowingly participated in the illegal strike, while ordinary members can only be dismissed if they committed illegal acts during the strike.
What is the twin-notice requirement?	The twin-notice requirement mandates that employers provide employees with a written notice stating the grounds for termination and an opportunity to be heard. A second notice must then be issued informing the employee of the final decision to terminate.
What is the difference between substantive and procedural due process in this context?	Substantive due process refers to having a valid cause for termination under the Labor Code. Procedural due process refers to complying with the twin-notice requirement and providing the employee an opportunity to be heard.
What remedies are available to employees who are illegally dismissed?	Employees illegally dismissed without both substantive and procedural due process are entitled to reinstatement with full backwages and benefits. Those dismissed based on a valid cause but without procedural due process are entitled to nominal damages.
How did the court differentiate between union officers and ordinary members in this case?	The court held that union officers have a greater responsibility to ensure that their members comply with the law. They can be dismissed for merely knowingly participating in an illegal strike, whereas ordinary members must have committed illegal acts during the strike to warrant dismissal.
What constituted illegal acts during the strike in this case?	Illegal acts during the strike included obstructing the ingress into and egress from the bank’s offices, engaging in acts of violence, and intimidating bank officers and employees. These acts went beyond peaceful picketing and violated the Labor Code.

This case underscores the delicate balance between protecting workers’ rights to organize and strike and ensuring that these actions are conducted within the bounds of the law. Employers must respect due process, and unions must adhere to procedural requirements to avoid the consequences of an illegal strike. The Supreme Court’s decision serves as a reminder that both employers and employees have responsibilities in maintaining a fair and orderly labor environment.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: THE HONGKONG & SHANGHAI BANKING CORPORATION EMPLOYEES UNION vs. NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 156635, January 11, 2016

January 11, 2016

When Return-to-Work Orders Clash with Employee Rights: Analyzing Illegal Dismissal in Philippine Airlines

In the case of Rodriguez vs. Philippine Airlines, the Supreme Court addressed the complexities surrounding an illegal strike by the Airline Pilots Association of the Philippines (ALPAP) and its consequences for individual pilots. The Court ruled that pilots who participated in an illegal strike in 1998 and defied a return-to-work order were deemed to have lost their employment status. However, the Court also clarified that those pilots who did not participate in the strike or had valid reasons for not complying with the return-to-work order could not be legally dismissed. The decision underscores the importance of due process and the need for employers to distinguish between actual strikers and those who were legitimately absent from work.

Strikes and Stranded Pilots: Who Pays the Price for Labor Disputes?

The Airline Pilots Association of the Philippines (ALPAP) filed a notice of strike against Philippine Airlines, Inc. (PAL) in December 1997, citing unfair labor practices. This led to a series of events, including the Secretary of Labor assuming jurisdiction over the dispute and issuing orders prohibiting strikes. Despite these orders, ALPAP staged a strike in June 1998, prompting the Secretary of Labor to issue a return-to-work order. When the pilots reported back to work, PAL refused to accept them, leading to complaints of illegal lockout and illegal dismissal. This case highlights the tension between an employer’s right to maintain operations and employees’ rights to engage in concerted activities.

The core issue revolved around the legality of the dismissal of numerous pilots following the strike. PAL argued that all pilots who participated in the strike or defied the return-to-work order lost their employment status. Conversely, the pilots claimed that many of them were not participants in the strike, citing reasons such as being on leave, off-duty, or stranded abroad. These pilots asserted that PAL’s mass dismissal was an attempt to downsize its workforce under the guise of addressing an illegal strike. The Labor Arbiter initially sided with the pilots, finding that PAL had illegally dismissed those who were not actively participating in the strike or had valid reasons for non-compliance.

However, the National Labor Relations Commission (NLRC) reversed the Labor Arbiter’s decision, except for one pilot who was on maternity leave. The NLRC emphasized the importance of the return-to-work order and the fact that many pilots had only reported back to work after the deadline. The Court of Appeals then reversed the NLRC’s decision, reinstating the Labor Arbiter’s finding of illegal dismissal but modifying the remedy to separation pay in lieu of reinstatement. This decision acknowledged that while the pilots had been illegally dismissed, reinstatement might not be viable due to the animosity between the parties and the changing circumstances within PAL.

Building on this principle, the Supreme Court had to reconcile conflicting findings and address the complex web of labor disputes. It had to decide whether the pilots’ complaint for illegal dismissal was barred by previous decisions related to the strike. In doing so, the Court weighed the evidence presented by both sides, including the pilots’ individual circumstances and PAL’s evidence of participation in the strike. The airline company presented a logbook showing that numerous pilots only reported back to work after the deadline, and photographs of some pilots participating in the strike.

In its legal reasoning, the Supreme Court heavily relied on the doctrine of res judicata, specifically conclusiveness of judgment. The Court stated that previous decisions regarding the strike and the return-to-work order were binding on the issue of who participated in the illegal strike.

The elements for res judicata in the second concept, i.e., conclusiveness of judgment, are extant in these cases.

The Court found that the issues in the present case were substantially the same as those already decided in earlier cases involving ALPAP and PAL. This meant that the Court had to adhere to its previous findings regarding the legality of the strike and the validity of the return-to-work order. By extension, the logbook with the heading “Return-To-Work Compliance/Returnees” was a crucial piece of evidence showing the pilots’ late compliance and bound them to the DOLE Secretary’s resolution.

However, the Supreme Court did not adopt a blanket approach. It recognized that some pilots had valid reasons for not complying with the return-to-work order. For instance, one pilot was on maternity leave and could not have reasonably been expected to report back to work within the given timeframe. In such cases, the Court found that the pilots had been illegally dismissed and were entitled to appropriate remedies. Specifically, the court referenced the case of Jadie who was on maternity leave. Her termination was considered illegal and thus was entitled to a compensation. The court also distinguished the situation of Baquiran who did not report to work and was considered to have abandoned his job.

The Court ruled that the pilots who participated in the illegal strike and defied the return-to-work order lost their employment status. However, one pilot, Jadie, who was on maternity leave, was deemed to have been illegally dismissed and was entitled to separation pay and backwages. The Court also denied a motion to reinstate other pilots who had not joined the original petition, finding that the previous NLRC decision had become final and executory as to them. This decision underscores the importance of employers carefully assessing individual circumstances when dealing with the consequences of a strike.

FAQs

What was the key issue in this case?	The key issue was whether the dismissal of several pilots by Philippine Airlines following an illegal strike was lawful, considering that some pilots claimed they did not participate in the strike or had valid reasons for not complying with a return-to-work order.
What is a return-to-work order?	A return-to-work order is an official directive issued by the Department of Labor and Employment (DOLE) during a labor dispute, typically ordering striking employees to resume their duties under the same terms and conditions of employment that existed before the strike.
What is “res judicata” and how did it apply to this case?	Res judicata, specifically conclusiveness of judgment, means that a fact or question already decided in a previous case cannot be re-litigated in a later case involving the same parties or their privies. The Supreme Court used this doctrine to uphold prior rulings on the illegality of the strike.
How did the Court determine who participated in the illegal strike?	The Court relied on a logbook with signatures of pilots who complied with the return-to-work order after the specified deadline, along with photographs showing some pilots participating in the strike. These were regarded as crucial evidence to determine who was actively involved.
What happened to pilots who were on leave or off-duty during the strike?	The Court held that if pilots were legitimately on leave or off-duty during the strike and had no obligation to report for work, they could not be penalized for the strike. However, this was dependent on whether they attempted to comply with the return to work order after their leave.
Why was Gladys Jadie treated differently in the ruling?	Gladys Jadie was on maternity leave during the strike, and the Court found that she could not have reasonably been expected to comply with the return-to-work order. Therefore, her dismissal was deemed illegal and the courts determined her to be entitled to compensation.
What is separation pay, and why was it awarded in this case?	Separation pay is a monetary benefit given to an employee whose employment is terminated due to causes beyond their control. In this case, it was awarded in lieu of reinstatement because the Court found that reinstatement might not be practical or viable.
What is the significance of this ruling for employers and employees?	This ruling clarifies that employers must exercise caution and due process when dealing with the consequences of strikes, distinguishing between actual participants and those with legitimate reasons for absence. It reinforces employees’ rights to due process and fair treatment, even during labor disputes.

This case provides valuable guidance on the legal ramifications of participating in illegal strikes and the importance of adhering to return-to-work orders. While the Court upheld the employer’s right to terminate those who defied the return-to-work order, it also emphasized the need to protect the rights of employees who were not actively involved in the strike or had valid reasons for non-compliance. This ruling underscores the complexities of labor disputes and the need for careful consideration of individual circumstances.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: NILO S. RODRIGUEZ, ET. al. VS. PHILIPPINE AIRLINES, INC., ET. al., G.R. NO. 178501, January 11, 2016

January 11, 2016

The Finality of Judgments: When Second Motions for Reconsideration Don’t Halt Execution

The Supreme Court’s ruling in Club Filipino, Inc. v. Bautista clarifies that filing a second motion for reconsideration does not prevent a court’s decision from becoming final and executory. Once the initial 15-day period for reconsideration has passed following the denial of the first motion, the judgment becomes final, regardless of any subsequent motions. This ensures that litigation concludes in a timely manner, preventing endless delays through repeated appeals.

From Strike to Separation: Can a Retrenchment Program Overturn an Illegal Strike Ruling?

This case arose from a labor dispute between Club Filipino, Inc. and its employees’ union, CLUFEA. After failed negotiations for a new collective bargaining agreement, CLUFEA staged a strike that Club Filipino, Inc. deemed illegal. Consequently, the company filed a petition to declare the strike illegal, leading to the dismissal of union officers. Simultaneously, Club Filipino, Inc. implemented a retrenchment program due to financial losses, which also affected the striking employees. The dismissed union officers then questioned the legality of their dismissal, leading to a complex legal battle involving questions of procedure, due process, and the application of res judicata. The central legal question became whether a prior decision on the validity of a retrenchment program could prevent the dismissed union officers from receiving separation pay and backwages related to the illegal strike.

The Supreme Court tackled the issue of whether the filing of a Supplemental Motion for Reconsideration prevented its earlier Resolution from becoming final and executory. The court reiterated the general rule against second motions for reconsideration, referencing Rule 52, Section 2 of the Rules of Court:

Section 2. Second motion for reconsideration. — No second motion for reconsideration of a judgment or final resolution by the same party shall be entertained.

This prohibition aims to prevent the indefinite stalling of judgments. While the Court had granted Club Filipino, Inc. leave to file the supplemental motion, this did not automatically suspend the finality of the original resolution. A decision becomes final 15 days after a party receives a copy of the decision or resolution, and granting leave to file a second motion does not change this timeline. The entry of judgment can only be lifted if the second motion is ultimately granted.

Building on this principle, the Supreme Court cited Aliviado v. Procter and Gamble Philippines, Inc., emphasizing that the issuance of an entry of judgment is reckoned from the denial of the first motion for reconsideration. Allowing subsequent pleadings to delay finality would create an absurd situation, potentially leading to endless delays by crafty litigants. Thus, the Court affirmed that its Resolution became final and executory on October 26, 2009, following the denial of the first Motion for Reconsideration. Consequently, the National Labor Relations Commission (NLRC) was correct in executing the Court of Appeals’ Decision in the illegal strike case, as no restraining order was in place.

The Court then addressed Club Filipino, Inc.’s argument that the NLRC’s decision on the illegal dismissal case should have been res judicata on the illegal strike case. Res judicata, meaning a matter already judged, prevents the relitigation of issues already decided by a competent court. The Court outlined the elements of res judicata: (1) a final judgment, (2) rendered by a court with jurisdiction, (3) a judgment on the merits, and (4) identity of parties, subject matter, and causes of action. While the first three elements were present, the fourth element—identity of causes of action—was missing. The Court emphasized that a cause of action in an illegal strike case is based on a union’s failure to comply with statutory requirements for conducting a strike, while a cause of action in an illegal dismissal case is premised on an employer’s dismissal of an employee without just cause. The Court further explained this difference by defining a cause of action, quoting the case Heirs of Abadilla v. Galarosa:

A cause of action is “the act or omission by which a party violates the rights of another.” Its elements are:

a right in favor of the plaintiff by whatever means and under whatever law it arises or is created;

an obligation on the part of the named defendant to respect or not to violate such right; and

act or omission on the part of such defendant in violation of the right of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff for which the latter may maintain an action for recovery of damages or other appropriate relief.

Though res judicata did not apply, the Supreme Court acknowledged that both cases shared the same subject matter: the dismissal of the respondents. In the illegal dismissal case, the NLRC found the retrenchment program valid and ordered separation pay based on the collective bargaining agreement. Conversely, the Labor Arbiter initially ruled in the illegal strike case that the respondents’ participation in an illegal strike warranted dismissal. However, the Court of Appeals reversed this decision, awarding some respondents backwages, benefits, and separation pay. The Supreme Court aimed to prevent double compensation by ensuring that any benefits received under the retrenchment program were deducted from the separation pay awarded in the illegal strike case.

This approach contrasts with a scenario where an employee might receive full benefits under both rulings, resulting in unjust enrichment. To illustrate, consider a hypothetical case where an employee receives P100,000 as separation pay from a valid retrenchment program. Later, a court finds the employee was also illegally dismissed due to an illegal strike and awards an additional P150,000 as separation pay. Without the Supreme Court’s guidance, the employee would receive a total of P250,000. However, following the Court’s directive, the P100,000 received from the retrenchment program would be deducted from the P150,000 awarded in the illegal strike case, resulting in a net payment of P50,000. This ensures fairness and prevents the employee from receiving duplicate compensation for the same period of employment.

Ultimately, the Court emphasized the importance of preventing double compensation and clarified the distinct causes of action in illegal strike and illegal dismissal cases. The decision affirms that the NLRC properly executed the Court of Appeals’ Decision in the illegal strike case, considering the need to deduct any benefits already received under the retrenchment program. This balances the rights of employees and employers while adhering to the principles of fairness and preventing unjust enrichment. The Supreme Court carefully considered the implications of both cases to ensure that the respondents were justly compensated without receiving double benefits. By doing so, the court upheld the integrity of the legal process and reinforced the principles of labor law.

FAQs

What was the key issue in this case?	The key issue was whether a decision on the validity of a retrenchment program barred employees from receiving separation pay related to an illegal strike, and whether the filing of a second motion for reconsideration stayed the finality of a court decision.
Did the second motion for reconsideration prevent the judgment from becoming final?	No, the Supreme Court clarified that filing a second motion for reconsideration does not prevent a court’s decision from becoming final and executory. The judgment becomes final 15 days after the denial of the first motion.
*What is res judicata* and how did it apply (or not apply) in this case?**	Res judicata is a legal principle that prevents the relitigation of issues already decided by a competent court. It did not apply because the causes of action in the illegal strike and illegal dismissal cases were different.
What is the difference between the causes of action in an illegal strike and illegal dismissal case?	An illegal strike case focuses on a union’s failure to comply with legal requirements for conducting a strike. An illegal dismissal case centers on an employer’s termination of an employee without just cause.
How did the Court address the issue of potential double compensation?	The Court ruled that any benefits received under the retrenchment program (illegal dismissal case) should be deducted from the separation pay awarded in the illegal strike case. This prevents employees from receiving duplicate compensation.
Were all the employees entitled to full backwages and separation pay?	No, the Court made distinctions based on whether employees had already received separation benefits under the retrenchment program and executed quitclaims. Those who had validly executed quitclaims were not entitled to additional benefits.
What was the significance of the Court of Appeals’ decision in this case?	The Court of Appeals reversed the Labor Arbiter’s decision, which had declared the strike illegal and dismissed the union officers. The CA awarded backwages, benefits, and separation pay to some of the respondents.
Who bears the responsibility for ensuring compliance with labor laws in strike situations?	Both the employer and the labor union bear responsibility for complying with labor laws. The union must follow the legal requirements for conducting a strike, and the employer must ensure that any disciplinary actions are in accordance with the law.

In conclusion, the Supreme Court’s decision in Club Filipino, Inc. v. Bautista reinforces the importance of adhering to procedural rules and preventing unjust enrichment in labor disputes. The ruling provides clear guidelines on the finality of judgments, the application of res judicata, and the calculation of benefits to avoid double compensation, protecting the rights of both employers and employees.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Club Filipino, Inc. v. Bautista, G.R. No. 168406, January 14, 2015

January 14, 2015

When Illegal Strike Actions Override Reinstatement Orders: A Matter of Supervening Events

The Supreme Court’s decision in Libongcogon v. PHIMCO Industries clarifies that a final and executory judgment ordering reinstatement can be rendered unenforceable by subsequent events, specifically when employees are found to have committed illegal acts during a strike. This ruling underscores that participation in illegal strike activities can negate prior orders of reinstatement, reinforcing the principle that labor rights are not absolute and must be exercised within legal bounds. The case highlights the importance of considering all related legal proceedings to ensure equitable outcomes in labor disputes.

Strikes and Consequences: Can Past Misdeeds Nullify Reinstatement Rights?

This case revolves around a labor dispute between Phimco Industries, Inc. (PHIMCO) and several of its employees, Florencio Libongcogon, Felipe Villareal, and Alfonso Claudio, who were members of the Phimco Labor Association (PILA). The central legal question is whether a prior Court of Appeals (CA) decision ordering the reinstatement of these employees, based on an earlier finding of illegal dismissal, can be superseded by subsequent Supreme Court rulings that determined the employees engaged in illegal strike activities. This involves a complex interplay between the doctrine of immutability of final judgments and the principle of supervening events that render the enforcement of a judgment unjust.

The dispute originated from a strike staged by PILA against PHIMCO in April 1995. During the strike, the employees allegedly committed illegal acts, leading to their dismissal. Initially, the CA ruled in favor of the employees, ordering their reinstatement with backwages, finding that PHIMCO had not sufficiently proven that they committed illegal acts. This decision became final and executory. However, in a separate but related case, the Supreme Court later ruled that the strike was illegal due to the unlawful actions of the union members, including blocking access to the company premises. This created a conflict between the final reinstatement order and the subsequent finding of illegal strike participation.

PHIMCO argued that the Supreme Court’s ruling in the illegal strike case constituted a supervening event that rendered the enforcement of the reinstatement order unjust. The company emphasized that the employees’ participation in illegal strike activities provided a valid ground for their dismissal, negating any prior entitlement to reinstatement. The CA, in its amended decision, agreed with PHIMCO, citing the doctrine established in David v. CA, which acknowledges that a final judgment can be rendered unenforceable by supervening events.

The “supervening cause” CA had in mind referred principally to this Court’s (3^rd Division) ruling in the illegal strike case (G.R. No. 170830) promulgated on August 11, 2010 that PILA’s members were validly dismissed as they committed unlawful acts during the strike.

The employees, on the other hand, contended that the doctrine of immutability of final judgments should prevail. They argued that the reinstatement order had already become final and executory, and therefore, could not be altered or modified, even by a subsequent Supreme Court ruling. They cited Silliman University v. Fontelo-Paalan, to support their position that final judgments should be respected and upheld.

However, the Supreme Court sided with PHIMCO, holding that the existence of a supervening cause warranted the modification of the final judgment. The Court emphasized that the doctrine of immutability of final judgments is not absolute and admits of exceptions, particularly when enforcing the judgment would lead to injustice or inequity. The Court found that the employees’ participation in illegal strike activities, as established in the separate Supreme Court ruling, constituted such a supervening cause.

The Court reasoned that allowing the reinstatement of employees who had engaged in illegal strike activities would be unfair to both the company and other employees who had been lawfully dismissed for similar conduct. The decision underscores the principle that labor rights, including the right to strike, are not absolute and must be exercised within the bounds of the law. Illegal acts committed during a strike can have significant consequences, including the loss of employment and the nullification of reinstatement orders.

The Supreme Court’s decision provides clarity on the interplay between the doctrines of immutability of final judgments and supervening events in labor law. It establishes that while final judgments are generally binding and unalterable, they can be modified or rendered unenforceable when subsequent events demonstrate that enforcing the judgment would lead to an unjust or inequitable outcome. In this case, the supervening event was the Supreme Court’s determination that the employees had engaged in illegal strike activities, which justified their dismissal and negated their entitlement to reinstatement.

This ruling has significant implications for labor disputes involving strikes. It serves as a reminder to unions and employees that they must adhere to legal standards during strike actions. Illegal acts, such as blocking access to company premises or engaging in violence, can have serious consequences, including the loss of employment and the nullification of any prior orders of reinstatement. The decision also underscores the importance of considering all related legal proceedings to ensure that equitable outcomes are achieved in labor disputes.

The Court also highlighted that a strike is a concerted action for collective bargaining or workers’ mutual benefit, but its legitimacy hinges on compliance with legal conditions, including avoiding illegal acts. The petitioners’ actions, in concert with other union members, violated these conditions, leading to the denial of their reinstatement.

The Supreme Court’s final point emphasized that even a final decision can be modified if its execution becomes impossible or unjust due to supervening facts. This ensures that justice prevails in light of altered circumstances not present when the original decision was issued. The Court underscored that the petitioners were in the same position as other union members found to have committed illegal acts, and it would be unjust to allow them to escape liability by invoking the doctrine of immutability of final judgments.

FAQs

What was the key issue in this case?	The key issue was whether a final reinstatement order could be superseded by a subsequent finding that the employees had engaged in illegal strike activities.
What is the doctrine of immutability of final judgments?	This doctrine states that a final judgment can no longer be altered or modified, even if the modifications are meant to correct errors of fact or law.
What is a supervening event in legal terms?	A supervening event is a fact or circumstance that arises after a judgment has been issued, which makes the enforcement of that judgment unjust or inequitable.
What constitutes illegal strike activity?	Illegal strike activities can include blocking access to company premises, acts of violence, or any other actions that violate labor laws and regulations.
Why did the Supreme Court side with PHIMCO in this case?	The Supreme Court sided with PHIMCO because the employees were found to have engaged in illegal strike activities, which constituted a supervening event that made their reinstatement unjust.
*What is the significance of the David v. CA* case in this ruling?**	The David v. CA case established the principle that a final judgment can be rendered unenforceable by supervening events, which the Court applied in this case.
Are labor rights absolute, according to this decision?	No, this decision clarifies that labor rights are not absolute and must be exercised within the bounds of the law. Illegal acts committed during a strike can have consequences.
What is the practical implication of this ruling for unions?	Unions must ensure that their members adhere to legal standards during strike actions to avoid the loss of employment and the nullification of reinstatement orders.
Can a final judgment ever be modified?	Yes, even with the finality of judgment, when its execution becomes impossible or unjust due to supervening facts, it may be modified or altered.

In conclusion, the Supreme Court’s decision in Libongcogon v. PHIMCO Industries serves as a critical reminder that labor rights and responsibilities are intertwined, and that unlawful actions during a strike can negate prior favorable judgments. This ruling underscores the importance of lawful conduct in labor disputes and reaffirms the court’s commitment to ensuring equitable outcomes based on the totality of circumstances.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Florencio Libongcogon, et al. vs. Phimco Industries, Inc., G.R. No. 203332, June 18, 2014

June 18, 2014