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PART II- ON STRIKES AND LOCK OUTSUPREME COURT EN BANC

LIBERAL LABOR UNION, Petitioner,

-versus- G.R. No. L-4834

March 28, 1952

PHILIPPINE CAN COMPANY,

Respondent.x---------------------------------------------------x

D E C I S I O N

BAUTISTA ANGELO, J.:

This is a Petition for Review of a Resolution of the Court of Industrial

Relations dated March 14, 1951, declaring illegal the strike staged by

the members of petitioning labor union on March 14, 1949, and giving

authority to respondent not to hire those responsible for the strike on

the ground that petitioner violated the terms of the collective

bargaining agreement it concluded with respondent when it failed to

submit its grievance, first, to a committee of top officials of both the

union and the company and, later, to the Court of Industrial Relations

before declaring the strike.

It appears that because of a labor dispute that had arisen between

petitioner and respondent a case was filed in the Court of Industrial

Relations, which was docketed as case No. 229-V, and, by way of compromise, a collective bargaining agreement was entered into

between them on February 26, 1949. One of the provisions agreed

upon therein concerns the procedure that should be followed in the

settlement of a labor dispute which in substance consists as follows: If

a worker has a complaint the same shall first be submitted to a

grievance committee, which shall be composed of six members, three

representing the union, and three the company. If the complaint is

not satisfactorily settled, it shall next be taken up by the top officials

of both the union and the company. And if still no settlement is

reached, the matter shall be submitted to the Court of Industrial

Relations, which shall determine it in accordance with law. It likewise appears that on the very day the collective bargaining

agreement was concluded, respondent reduced the wages of seven of

the laborers of petitioner by P.50. Two days thereafter, petitioner

protested this reduction to the assistant manager of respondent, and

when the latter intimated that he had nothing to do with it, petitioner

reiterated its protest to the general manager who on March 5, 1949,

told the protestee to come back because the management would meet

to discuss the matter. When the representatives of the union returned

days later they were told that the reductions could not be returned

because they do not appear in the pay-roll, and that in case the matter

would reach the court, the management would deny it. Because of this

refusal, and the fact that the matter could not be brought to the

grievance committee by reason of the failure of respondent to name

its representatives to said committee, after the union had designated

the names of those who should compose it in its behalf, the union

struck on March 14, 1949. As a consequence, the union filed the

petition that initiated these proceedings praying that the strike be

declared legal and that respondent be ordered to restore the former

rate of wages that the laborers affected were receiving and to refund

to them all the reductions that were made in their salaries.

After several days of trial, the case was decided by Hon. Jose S.

Bautista, concurred in by Judge Modesto Castillo, who held that the

strike was legal and justified because of the failure of respondent to

designate its representatives in the grievance committee as provided

for in the bargaining agreement; but on motion for reconsideration,

said holding was reversed in a resolution issued on March 15, 1951,

penned by Presiding Judge Arsenio S. Roldan, and concurred in by Judges Juan L. Lanting and Vicente Jimenez Yanzon, wherein it was

held that the strike was illegal and that the respondent was justified

in not continuing in its service those responsible for the strike. Hence

this petition for review.

The only issue involved in this appeal refers to the legality of the

strike staged by the members of the petitioning union on March 14,

1949. Petitioner contends that the majority opinion of the Court of

Industrial Relations erred in declaring that petitioner had violated the

collective bargaining agreement of February 26, 1949, when it

declared a strike on March 14, 1949, without first submitting its

dispute with respondent to the Court of Industrial Relations, because

while it is true that in said agreement a grievance committee was

provided for to which any dispute should first be submitted,

petitioner could not make use of the procedure agreed upon in view of

the failure of respondent to designate its representatives in said

committees, as it was done by the labor union, and that because of

this failure of the respondent which amounted to an outright violation

of the agreement, the union became relieved of its duty to follow the

grievance procedure and, therefore, its failure to go to the Court of

Industrial Relations before declaring the strike did not amount to a

violation of the agreement.

The pertinent provisions of the collective bargaining agreement of

February 26, 1949, read as follows:

There is hereby created a grievance committee composed of six

(6) members, three as representatives of management and three

as representatives of the union, all of whom are workers in the

company. The matter of discipline, promotion, and other

managerial affairs lies in the hands of management, subject to

the grievance procedure. Any worker who feels aggrieved on the

action taken by the management shall submit his grievance,

orally or in writing, to the grievance committee within three

days from such action, which committee shall pass upon the

grievance within three days upon the submission thereof.

Should the grievance be not satisfactorily settled at this stage, it

shall be taken up in conference between top management officials and top union officials. Should no agreement be

reached at this stage, either party shall submit the matter to the

Court of Industrial Relations for disposition in accordance with

law. It is understood that the members of the grievance

committee shall work in companys time, which shall not exceed

one hour a day, which altogether shall not exceed seven hours a

week. The determination of the time to meet shall be

undertaken by the management.

As may be noted, the parties have expressly agreed on a procedure to

be followed in the settlement of labor disputes. Under this procedure,

the first step to be taken is the creation of a grievance committee

composed of six representatives, three from the union and three from

the company, to which the grievance must first be submitted. The

second step is the submission of the grievance to a conference of top

officials of both management and labor, and if the grievance still is

not settled, the third step is for either party to submit the grievance to

the Court of Industrial Relations for its determination in accordance

with law. The parties undoubtedly have adopted this graduated

procedure in the settlement of their labor disputes because of their

desire to maintain harmonious relations and prevent as much as

possible the declaration of a strike which in its last analysis works

adversely both to capital and labor.

Having in mind this fundamental point of view, the next question to

be determined is, is the strike staged by the members of the

petitioning labor union on March 14, 1949, legal and justified? In this

respect, we find that the majority opinion of the Court of Industrial

Relations has interpreted correctly the import and effect of the

procedure for settlement of labor disputes agreed upon by the parties.

On this point, the majority opinion said: Admitting therefore that

the respondent company has not yet nominated its three

representatives to said grievance body . . . it cannot be denied, too,

that the petitioner union, by its strike on March 14, 1949, has acted

beyond its bound in the collective bargaining agreement when it

failed to submit the workers grievance to a conference of top

management officials and top union officials and on top of all, to the

Court of Industrial Relations which has jurisdiction on the subject

matter of the dispute. We find this appraisal of the situation correct.

As we have already stated, the main purpose of the parties in adopting a procedure in the settlement of their disputes is to prevent

a strike. This procedure must be followed in its entirety if it is to

achieve its objective. This procedure provides for three steps which

should be resorted to before any other step may be taken for the

redress of a particular grievance. It is true that the management has

failed to do its duty in connection with the formation of a grievance

committee, but this failure does not give to labor the right to declare a

strike outright, for its duty is to exhaust all available means within its

reach before resorting to force. There is no use providing for these

steps if they can be ignored. This is a compulsory arbitration which

received the sanction of the court. And if labor chooses not to deal

with the management, either because of distrust or prejudice, the

other way left to achieve a peaceful settlement of its grievance is to

resort to the Court of Industrial Relations. This the union failed to do.

The authorities are numerous which hold that strikes held in violation

of the terms contained in a collective bargaining agreement are

illegal, especially when they provide for conclusive arbitration clauses.

These agreements must be strictly adhered to and respected if their

ends have to be achieved (Shop N. Save vs. Retail Food Clerks Union

(1940) Cal. Super. Ct. CCT. Tab. Case 91-18675; 2 A. L. R. Ann., 2nd

Series, pp. 1278-1282). chanroblespublishingcompany

But in the present case there is more than a mere violation of a

collective bargaining agreement. Here we find that the majority

opinion predicated the illegality of the strike not merely on the

infringement of said agreement by the union but on the proven fact

that, in carrying out the strike, coercion, force, intimidation, violation

with physical injuries, sabotage and the use of unnecessary and

obscene language or epithets were committed by the top officials and

members of the union in an attempt to prevent the other willing

laborers to go to work. We hold that a strike held under these

circumstances cannot be justified in a regime of law for that would

encourage abuses and terrorism and would subvert the very purpose

of the law which provides for arbitration and peaceful settlement of

labor disputes. As aptly said in one case: A labor philosophy based

upon the theory that might is right, in disregard of law and order, is

an unfortunate philosophy of regression whose sole consequences can

be disorder, class hatred and intolerance (Greater City Masters

Plumbers Association vs. Kahme, [1937] 6 N.Y.S. [2nd] 589). In view of the foregoing, we are of the opinion, and so hold, that the

resolution appealed from is in accordance with law, and should,

therefore, be affirmed.

WHEREFORE, the Petition is DENIED with costs against petitioner.G.R. Nos. L-7594 and L-7596 September 8, 1954INSUREFCO PAPER PULP AND PROJECT WORKERS' UNION,petitioner,vs.INSULAR SUGAR REFINING CORPORATION, respondent.INSULAR SUGAR REFINING CORPORATION,petitioner,vs.HONORABLE COURT OF INDUSTRIAL RELATIONS, and INSUREFCO AND PAPER PULP PROJECT WORKERS' UNION,respondents.Cid, Villaluz and Associates for petitioner Insurefco Paper Pulp and Project Workers' Union.Jose P. Bengzon, Guido Advincular and Potenciano Villegas, Jr., for respondent Insular Sugar Refining Corporation.BAUTISTA ANGELO,J.:These two cases concern two petitions for review of the decision rendered by the Court of Industrial Relations on December 8, 1953 declaring the strike staged by the members of the Insurefco Papers Pulp and Project Workers' Union hereinafter referred to as Union, on June 14, 1952 unreasonable and illegal and leaving to the discretion of the management of the Insular Sugar Refining Corporation, hereinafter referred to as Company, the dismissal of those responsible therefor as listed in Exhibit "T" appearing on page 554-558 of the record of Case No. 283-V of said court.

The Union interposed the present petition upon the plea that the court committed serious errors in declaring the strike illegal and in authorizing the management of the Company to dismiss the alleged leaders of the Union at its discretion, whereas the Company has likewise appealed because the authority did not include other persons who allegedly had had a direct part in the strike or are deemed also leaders of the movement.

On June 12, 1952, petitioning Union through its leaders submitted to the Company two sets of economic demands, one for increase in wages, elimination of the rotation system, and enforcement of check-off, and the other containing proposals with respect to profit-sharing, union representation in the management of the Company, and an option to purchase the refinery. In the morning of June 14, 1952, a third demand was submitted by the Union in which it requested for the immediate cessation of the threats, intimidation, and violence being committed by certain thugs, goods, and gangsters inside the refinery and asking at the same time that gratuities be granted to the laborers incident to the purchase of the refinery.

When said demands were submitted to the Chief of the Finance and Legal Division of the Company, the union delegation was advised that the Acting General Manager of the Company was then absent from Manila and for that reason no action could be taken on these demands until after his return.

On June 14, 1952, at about 11:30 p.m., the members of the Union, without notice or warning, struck causing the stoppage and paralization of the operations of the refinery, said members going even to the extent of picketing the approaches of its compound. Because of this walkout, the Company filed on June 18, 1952 an urgent petition in the Court of Industrial Relations praying that the strike thus staged be declared unjustified and illegal and that the Company be authorized to dismiss those responsible for the strike, which petition was docketed as Case No. 707-V.

The Union having failed to file its answer as required by the regulation, the trial of the case proceeded and the Company was allowed to present its evidence in support of the petition. When the time of the Union came to present its rebuttal evidence, its counsel asked that it be allowed to set up and prove certain special defenses, which requested was granted. These defenses are: (1) the maulings and acts of violence committed on members of the Union inside the refinery; (2) the threats, intimidation and violence committed on members of the Union by persons supported, encouraged, and abetted by company officials; and (3) the existence of a company union in the refinery.

After due trial, and the parties had submitted their memoranda, the Court of Industrial Relations rendered decision declaring the strike unjustified and illegal and giving discretion to the management of the Company to dismiss from the service the leaders responsible therefor whose names are listed in Exhibit "T" appearing on pages 554-558 of the record of Case No. 283-V. Both parties, being dissatisfied with the decision, interposed the present petition for review.

Inasmuch as the cases before us concern two petitions for review of a decision of the Court of Industrial Relations, which, by their very nature, merely involve questions of law, the facts of this case as found in the decision are deemed undisputed and, for the purposes of the issues herein raised, resort to said facts is sufficient. We would, therefore, quote hereunder the pertinent portion of the decision wherein said facts are outlined:1wphl.ntIt is clear that Mr. Andres B. Callanta and several others presented exhibits "B" and "C", the alleged set of demands, to Mr. Manuel B. Villano, the secretary and treasurer and chief of the Finance and Legal Department of the PHILSUGIN between 3:00 and 4:00 in the afternoon of June 12, 1952 at the office of the PHILSUGIN at 306 Samanillo Building. Mr. Callanta after asking him when the Acting General Manager of the PHILSUGIN could be contacted was told that said Acting General Manager together with the chairman of the Board, (the Board being composed of five members) and two others, were at the time in Bacolod, Negros Occidental, attending a convention of sugar men Mr. Callanta was advised that the Acting General Manager was expected to arrive before June 17 because the usual meetings of the board was every Wednesday and the following Wednesday would be June 18. Mr. Callanta was advised that Exhibits "B" and "C", would be submitted to Mr. Oliveros, the Acting General Manager, the moment he arrived from Bacolod. Mr. Villano noticed upon receipt of exhibits "B" and "C" that the same were dated March 31, 1952. On Monday morning June 15, 1952, Mr. Villano received from Mr. Santiago, the cashier of the PHILSUGIN, another paper signed by one Mr. Lampino and marked as exhibits "S" or exhibit "5" and was submitted to Mr. Santiago about 11:00 or 12:00 o'clock, Saturday morning, June 14, 1952. This exhibit prayed for the stopping of the alleged mauling, requested the payment of gratuities to the workers and the information about petty thefts committed by "extras". It can readily be seen that there was no possibility for the General Manager nor the board of directors to consider the so-called demands between the time they were presented and the declaration of the strike the strike having been declared about 11:30 p.m. on June 14, 1952. The first official knowledge of the would be strike on that day was when Messrs. Lampino, Robles, Carrera and De Jesus, officers of the union went to the house of one of the key officials of the company, Mr. Dominador Salvador, about 10:30 p.m. urging the latter not to report during his shift that night because there was going to be a strike.

Exhibit "S" of petitioner or "5" for respondent which was received as mentioned by the cashier of the company between 11:00 or 12:00 o'clock Saturday on the morning of June 14, 1952, the day that the strike was declared and which respondent considered the same as an ultimatum, mentioned no time or warning of the declaration of strike. The strike was particularly the act of the heads of the barangays whose names appear in exhibit "T" in Case No. 283-V.

There was no time to consider the alleged demands because the General Manager, the chairman of the Board, and two others were in Bacolod, and even when the manager was advised by the Superintendent of the corporation at 5:03 a.m. thru a telegram on June 15 of the declaration of the strike, efforts to locate the General Manager in Bacolod proved futile, perhaps it was because it was Sunday, (Exhibit "U"). Mr. Callanta, the virtual head of the union, being the president of the U.I.O. mother union of the respondent union, and the person who advised the emissary of the union to serve an ultimatum, knew very well that when he for the very first time on June 12, 1952, presented demands contained in exhibits "B" and "C" the company officials were not in Manila but elsewhere and would be in Manila on June 17, and that the board would meet on June 18. There was, therefore, not time for the company thru its duly constituted authority to consider the alleged demands whether to grant or not the contents of the three sets of demands presented. Mr. Callanta the man who presented exhibits "B" and "C", a very intelligent young man, know that petitioner is a corporation and its activities are supervised and/or controlled by its board. And while it is true that during the progress of the hearing in court propositions and counter propositions were presented to settle the case amicably in and out of court, and while it is equally true that the corporation eventually turned down every effort of amicable settlement, the same could not be taken as the yard stick to conclude, as respondent claimed, that even if the demands presented were studied and scrutinized by the management within a reasonable time still the same would be rejected, as in fact they were. Certainly, it is different when a strike in declared before the demands are studied and presented to the authority that has the final say on the matter, from a strike called after the demands have been denied upon their consideration. As in this case, the strike has already been declared, and the case presented in court. The corporation has every right to stand by on its prayer that the strike be declared illegal. For these reasons, the court considers the strike unreasonable.

The question now to be determined is: Has the Court of Industrial Relations gravely abused its discretion, as claimed, in declaring the strike staged by the members of the Union unreasonable, unjustified, and illegal?

It appears that the Union, through its leaders and officials submitted to the management of the Company a set of demands urging immediate action. These demands were handed over to the Secretary-Treasurer and Chief of the Finance and Legal Division of the Company on June 12, 1952. At that time the Acting General Manager, together with the Chairman and two members of the Board of Directors, were absent, having gone to Bacolod City, Negros Occidental, to attend a conference of sugar men. The leaders of the Union were advised of this fact and were informed that they would probably be back on June 17, because the usual meeting of the Board was held every Wednesday and the following Wednesday would be June 18. And in the morning of June 14, 1952, the Union, also through its leaders, submitted another demand regarding certain maulings and acts of violence being committed inside the refinery and requesting that they be stopped. And as no immediate action was taken thereon, but despite the advice given to them that their demands would be submitted to the Acting General Manager immediately upon his arrival from Bacolod City, the leaders of the Union caused its members to declare a strike at about midnight of June 14, 1952 thereby causing the stoppage and paralization of the operations of the refinery.

It can readily be seen that the walkout was premature as it was declared without giving to the General Manager, or the Board of Directors of the Company, reasonable time within which to consider and act on the demands submitted by the Union. The nature of the demands was such that no possible action could be taken thereon by the officials to whom they were submitted. They could have only been acted upon by the General Manager, or by the Board of Directors. The former was then in Bacolod, and the latter could not be convened because the chairman and two of its members were also absent. And this fact was well known to the leaders of the Union. In the circumstances, the only conclusion that can be drawn is that, as found by the lower court, the strike staged by the Union was unfortunate, as it is ill-considered, considering the great damage caused to the business of the refinery resulting from the complete paralization of its operations. The Court of Industrial Relations, therefore, acted rightly in declaring said strike unjustified and illegal.

One circumstance that should be noted is the fact that a portion of the demands herein involved is but a reaffirmation of the demands that had been submitted by the Union and which were the subject of a previous case between the same parties (Case No. 283-V). This case also gave rise to a similar strike which was resolved by a partial agreement concluded by the parties and wherein, among other things, they included a form of settlement of their labor disputes of the following tenor:1wphl.ntVI. That all labor-management disputes shall be taken up in a Grievance Committee consisting of 6 members, 3 from the Insurefco and Paper Pulp Project Workers' Union and 3 from the management. This committee shall take charge of investigating any dispute arising between labor and management, after which it shall make its recommendation to the management which shall have the final say on the matter under consideration. Any matter submitted to the Grievance Committee shall be decided within four days and the management to take action within three days from the receipt of the recommendation of the Grievance Committee except when the matter necessitates the action of the Board, in which case the management should decide the matter within one week from the receipt of the recommendation of the Grievance Committee. (Exhibits "D", "D-1", and "E").

Note that the above form of settlement covers all disputes that might arise between labor and management and was adopted precisely to pave the way for their amicable solution and avert a possible strike on the part of the Union. This agreement received the sanction of the court. But, far from abiding by this form of arbitration, the Union declared the instant strike as already pointed out. This infringement constitutes a further jurisdiction for the decision reached by the courta quo. As this court has aptly said: "Strikes held in violation of the terms contained in a collective bargaining agreement are illegal especially when they provide for conclusive arbitration clauses. These agreements must be strictly adhered to and respected if their ends have to be achieved." (Liberal Labor Unionvs. Philippine Can Company, 92 Phil., 72.)

It is true that the Union submitted a third demand complaining about certain mauling, threats, or intimidation being committed by certain malefactors inside the refinery, and apparently action on this matter would be taken without awaiting the return of the General Manager or the convening to a session of the Board of Directors, but it should be noted that said demand was submitted at noon of June 14, 1952 and at about midnight of the same day of the Union struck. Even granting that such mauling or intimidation really existed, still we believe that the action taken by the Union was unjustified it appearing that it has been so sudden that it did not give time to the management to make an investigation of the complaint. But the truth is, as found by the Court of Industrial Relations, "there is not proof that the company had any hand in any of the treats, intimidations or mauling incidents as pictured before this court.... They ensued out of petty jealousies existing between the two unions in the company jealousies which were aimed solely at one objective, control by one union." These incidents even reached the local courts and at the time the claim was being considered, they were still pending determination. The court found that this claim is without merit.

The same thing may be said with regard to the claim that the declaration of the strike as become moot in view of the order of the Court of Industrial Relations issued on March 27, 1953 authorizing the partial resumption of the operation of the refinery readmitting to the service all those who took part in the strike, for the simple reason that said order was issued to enable merely the refinery to carry out its commitment to refine a huge quantity of centrifugal sugar. It appears that the order was issued subject to one express condition, that is, that the question of whether the strikers should be allowed to return permanently to work or not should be made subject to the outcome of that case. It is obvious that that order of March 27, 1953 cannot have the effect of declaring moot the question of the legality of the strike which took place on June 14, 1952.

As regards the contention of the Company that the Court of Industrial Relations has failed to include among the leaders whose dismissal was left to the discretion of the management other persons who, as contended, likewise had a direct part in the declaration of the strike, we don't believe necessary to pass upon it appearing that it involves a question of fact which cannot be taken up in a petition for review. It is a well-settled rule in this jurisdiction that "as long as there is some evidence to support a decision of the Court of Industrial Relations, this court should not interfere, nor modify or reverse it, just because it is not based on overwhelming or preponderant evidence. Its only province is to resolve or pass upon questions of law. [Philippine Newspaper Guildvs. Evening News, Inc. G. R. No. L-2604, April 29, 1950, 47 Off. Gaz., 86 Phil. 303 Bardwill Bros.vs. Philippine Labor Union and Court of Industrial Relations (1940), 70 Phil., 672; Antamok Goldfields Miningvs. Court of Industrial Relations and National Labor Union, Inc. (1940) 70 Phil., 340.]

The petitions are dismissed, without pronouncement as to costs.

__________________________G.R. No. 166879 August 14, 2009A. SORIANO AVIATION,Petitioner,vs.EMPLOYEES ASSOCIATION OF A. SORIANO AVIATION, JULIUS S. VARGAS IN HIS CAPACITY AS UNION PRESIDENT, REYNALDO ESPERO, JOSEFINO ESPINO, GALMIER BALISBIS, GERARDO BUNGABONG, LAURENTE BAYLON, JEFFREY NERI, ARTURO INES, REYNALDO BERRY, RODOLFO RAMOS, OSWALD ESPION, ALBERT AGUILA, RAYMOND BARCO, REYNANTE AMIMITA, SONNY BAWASANTA, MAR NIMUAN AND RAMIR LICUANAN,Respondents.D E C I S I O N

CARPIO MORALES,J.:On May 22, 1997, A. Soriano Aviation (petitioner or the company) which is engaged in providing transportation of guests to and from Amanpulo and El Nido resorts in Palawan, and respondent Employees Association of A. Soriano Aviation (the Union), the duly-certified exclusive bargaining agent of the rank and file employees of petitioner, entered into a Collective Bargaining Agreement (CBA) effective January 1, 1997 up to December 31, 1999. The CBA included a "No-Strike, No-Lock-out" clause.

On May 1 & 12, and June 12, 1997, which were legal holidays and peak season for the company, eight mechanics-members of respondent Union, its herein co-respondents Albert Aguila (Aguila), Reynante Amimita (Amimita), Galmier Balisbis (Balisbis), Raymond Barco (Barco), Gerardo Bungabong (Bungabong), Josefino Espino (Espino), Jeffrey Neri (Neri) and Rodolfo Ramos, Jr. (Ramos), refused to render overtime work.

Petitioner treated the refusal to work as a concerted action which is a violation of the "No-Strike, No-Lockout" clause in the CBA. It thus meted the workers a 30-day suspension. It also filed on July 31, 1997 a complaint for illegal strike against them, docketed as NLRC Case No. 07-05409-97, which was later dismissed at its instance in order to give way to settlement, without prejudice to its re-filing should settlement be unavailing.

The attempted settlement between the parties having been futile, the Union filed a Notice of Strike with the National Conciliation and Mediation Board (NCMB) on October 3, 1997, attributing to petitioner the following acts: (1) union busting, (2) illegal dismissal of union officer, (3) illegal suspension of eight mechanics, (4) violation of memorandum of agreement, (5) coercion of employees and interrogation of newly-hired mechanics with regard to union affiliation, (6) discrimination against the aircraft mechanics, (7) harassment through systematic fault-finding, (8) contractual labor, and (9) constructive dismissal of the Union President, Julius Vargas (Vargas).

As despite conciliation no amicable settlement of the dispute was arrived at, the Union went on strike on October 22, 1997.

Meanwhile, pursuant to its reservation in NLRC Case No. 07-05409-97, petitioner filed a Motion to Re-Open the Case which was granted by Labor Arbiter Manuel P. Asuncion by Order of October 21, 1997.

By Decision1dated September 28, 1998 rendered in petitioners complaint in NLRC Case No. 07-05409-97, the Labor Arbiter declared that the newly implemented work-shift schedule was a valid exercise of management prerogative and the refusal of herein individual respondents to work on three consecutive holidays was a form of protest by the Union, hence, deemed a concerted action. Noting that the Union failed to comply with the formal requirements prescribed by the Labor Code in the holding of strike, the strike was declared illegal.

The Union appealed to the NLRC which dismissed it in a per curiam Decision2dated September 14, 1999, and the subsequent motion for reconsideration was denied by Resolution dated November 11, 1999.

In the interim or on June 16, 1998, eight months into the "second strike," petitioner filed a complaint against respondents before the Labor Arbiter, praying for the declaration as illegal of the strike on account of their alleged pervasive and widespread use of force and violence and for the loss of their employment, citing the following acts committed by them: publicly shouting of foul and vulgar words to company officers and non-striking employees; threatening of officers and non-striking employees with bodily harm and dousing them with water while passing by the strike area; destruction of or inflicting of damage to company property, as well as private property of company officers; and putting up of placards and streamers containing vulgar and insulting epithets including imputing crime on the company.

By Decision3of June 15, 2000, Labor Arbiter Ramon Valentin C. Reyes declared the "second strike" illegal. Taking judicial notice of the September 28, 1998 Decision of Labor Arbiter Asuncion, he noted that as the Union went on the "first strike" on a non-strikeable issue the questioned change of work schedule, it violated the "No-Strike, No-Lockout" clause in the CBA and, in any event, the Union failed to comply with the requirements for a valid strike.

The Labor Arbiter went on to hold that the Union deliberately resorted to the use of violent and unlawful acts in the course of the "second strike," hence, the individual respondents were deemed to have lost their employment.

On appeal, the National Labor Relations Commission (NLRC) affirmed in toto the Labor Arbiters decision, by Resolution4dated October 31, 2001. It held that even if the strike were legal at the onset, the commission of violent and unlawful acts by individual respondents in the course thereof rendered it illegal.

Its motion for reconsideration having been denied by Resolution5dated December 14, 2001, the Union appealed to the Court of Appeals.

By the assailed Decision of April 16, 2004,6the appellate court reversed and set aside the NLRC ruling, holding that the acts of violence committed by the Union members in the course of the strike were not, as compared to the acts complained of in Shell Oil Workers Union v. Shell Company of the Philippines,7First City Interlink Transportation Co., Inc., v. Roldan-Confesor8and Maria Cristina Fertilizer Plant Employees Association v. Tandaya,9(this case was applied by the Labor Arbiter in his Decision of September 28, 2008) where the acts of violence resulted in loss of employment, concluded that the acts in the present case were not as serious or pervasive as in these immediately-cited cases to call for loss of employment of the striking employees.

Specifically, the appellate court noted that at the time petitioner filed its complaint in June 1998, almost eight months had already elapsed from the commencement of the strike and, in the interim, the alleged acts of violence were committed only during nine non-consecutive days, viz: one day in October, two days in November, four days in December, all in 1997, and two days in January 1998. To the appellate court, these incidents did not warrant the conversion of an otherwise legal strike into an illegal one, and neither would it result in the loss of employment of the strikers. For, so the appellate court held, the incidents consisted merely of name-calling and using of banners imputing negligence and criminal acts to the company and its officers, which do not indicate a degree of violence that could be categorized as grave or serious to warrant the loss of employment of the individual strikers found to be responsible.

By Resolution of January 25, 2005, the appellate court denied petitioners motion for reconsideration, hence, the present petition.

Petitioner insists that, contrary to the appellate courts finding, the questioned acts of the strikers were of a serious character, widespread and pervasive; and that the Unions imputation of crime and negligence on its part, and the prolonged strike resulted in its loss of goodwill and business, particularly the termination of its lease and air-service contract with Amanpulo, the loss of its after-sales repair service agreement with Bell Helicopters, the loss of its accreditation as the Beechcraft service facility, and the decision of El Nido to put up its own aviation company.

Apart from the acts of violence committed by the strikers, petitioner bases its plea that the strike should be declared illegal on the violation of the "No-Strike-No-Lockout" clause in the CBA, the strike having arisen from non-strikeable issues. Petitioner proffers that what actually prompted the holding of the strike was the implementation of the new shift schedule, a valid exercise of management prerogative.

In issue then is whether the strike staged by respondents is illegal due to the alleged commission of illegal acts and violation of the "No Strike-No Lockout" clause of the CBA and, if in the affirmative, whether individual respondents are deemed to have lost their employment status on account thereof.

The Court rules in the affirmative.

The Court notes that, as found by the Labor Arbiter in NLRC Case No. 07-05409-97, the first strike or the mechanics refusal to work on 3 consecutive holidays was prompted by their disagreement with the management-imposed new work schedule. Having been grounded on a non-strikeable issue and without complying with the procedural requirements, then the same is a violation of the "No Strike-No Lockout Policy" in the existing CBA. Respecting the second strike, where the Union complied with procedural requirements, the same was not a violation of the "No Strike- No Lockout" provisions, as a "No Strike-No Lockout" provision in the Collective Bargaining Agreement (CBA) is a valid stipulation but may be invoked only by employer when the strike is economic in nature or one which is conducted to force wage or other concessions from the employer that are not mandated to be granted by the law. It would be inapplicable to prevent a strike which is grounded on unfair labor practice.10In the present case, the Union believed in good faith that petitioner committed unfair labor practice when it went on strike on account of the 30-day suspension meted to the striking mechanics, dismissal of a union officer and perceived union-busting, among others. As held in Malayang Samahan ng mga Manggaggawa sa M. Greenfield v. Ramos:11On the submission that the strike was illegal for being grounded on a non-strikeable issue, that is, the intra-union conflict between the federation and the local union, it bears reiterating that when respondent company dismissed the union officers, the issue was transformed into a termination dispute and brought respondent company into the picture. Petitioners believed in good faith that in dismissing them upon request by the federation, respondent company was guilty of unfair labor practice in that it violated the petitioners right to self-organization. The strike was staged to protest respondent companys act of dismissing the union officers. Even if the allegations of unfair labor practice are subsequently found out to be untrue, the presumption of legality of the strike prevails. (Emphasis supplied)

Be that as it may, the Court holds that the second strike became invalid due to the commission of illegal action in its course.

It is hornbook principle that the exercise of the right of private sector employees to strike is not absolute. Thus Section 3 of Article XIII of the Constitution provides:

SECTION 3. x x x

It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations and peaceful concerted activities, including theright to strike inaccordancewithlaw.They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law. (Emphasis and underscoring supplied)

Indeed, even if the purpose of a strike is valid, the strike may still be held illegal where the means employed are illegal. Thus, the employment of violence, intimidation, restraint or coercion in carrying out concerted activities which are injurious to the right to property renders a strike illegal. And so is picketing or the obstruction to the free use of property or the comfortable enjoyment of life or property, when accompanied by intimidation, threats, violence, and coercion as to constitute nuisance.12Apropos is the following ruling in Sukhothai Cuisine v. Court of Appeals:13Well-settled is the rule that even if the strike were to be declared valid because its objective or purpose is lawful, the strike may still be declared invalid where the means employed are illegal. Among such limits are the prohibited activities under Article 264 of the Labor Code, particularly paragraph (e), which states that no person engaged in picketing shall:

a) commit any act of violence, coercion, or intimidation or

b) obstruct the free ingress to or egress from the employer's premises for lawful purposes, or

c) obstruct public thoroughfares.

The following acts have been held to be prohibited activities: where the strikers shouted slanderous and scurrilous words against the owners of the vessels; where the strikers used unnecessary and obscene language or epithets to prevent other laborers to go to work, and circulated libelous statements against the employer which show actual malice; where the protestors used abusive and threatening language towards the patrons of a place of business or against co-employees, going beyond the mere attempt to persuade customers to withdraw their patronage; where the strikers formed a human cordon and blocked all the ways and approaches to the launches and vessels of the vicinity of the workplace and perpetrated acts of violence and coercion to prevent work from being performed; and where the strikers shook their fists and threatened non-striking employees with bodily harm if they persisted to proceed to the workplace. Permissible activities of the picketing workers do not include obstruction of access of customers. (emphasis supplied)

The appellate court found in the present case, as in fact it is not disputed, that the acts complained of were the following:141. On 29 October 1997, while Robertus M. Cohen, personnel manager of the Company, was eating at the canteen, petitioner Rodolfo Ramos shouted "insults and other abusive, vulgar and foul-mouthed word" with the use of a megaphone, such as, "sige, ubusin mo yung pagkain," "kapal ng mukha mo;" that when he left the canteen to go back to his office he was splashed with water from behind so that his whole back was drenched; that when he confronted that strikers at the picket line accompanied by three (3) security guards, to find out who was responsible, he was told by petitioner Oswald Espion who was then holding a thick piece of wood approximately two (2) feet long to leave.

2. On the same day, 29 October 1997, petitioners Julius Vargas, Jeffrey Neri, and Rodolfo Ramos, together with Jose Brin, shouted to Capt. Ben Hur Gomez, the chief operating officer of the Company, in this wise, "Matanda ka na, balatuba ka pa rin. Mangungurakot ka sa kompanya!"

3. In the morning of 11 November 1997, petitioner Ramos was reported to have shouted to Mr. Maximo Cruz, the Mechanical and Engineering Manager of the Company, "Max, mag-resign ka na, ang baho ng bunganga mo!"

4. In the afternoon of the same day, 11 November 1997, petitioner Jeffrey Neri was said to have shouted these words "Max, mag-resign ka na, ang baho ng bunganga mo!" to Mr. Maximo Cruz;

5. On 12 November 1997. petitioners Julius Vargas, Jeffrey Neri, Oswald Espion, Raymond Barco, together with Jose Brin, were reported to have shouted to Capt. Gomez and Mr. Maximo Cruz, "Matanda ka na, balatuba ka pa rin! Max, ang baho ng bunganga mo, kasing baho ng ugali mo!"

6. On the same day, 12 November 1997, petitioner Oswald Espion was said to have shouted to the non-striking employees and officers of the Company, "putang-ina ninyo!"

7. Also, on 12 November 1997, petitioner Oswald Espion was reported to have thrown gravel and sand to the car owned by Celso Villamor Gomez, lead man of the Company, as the said car was traveling along company premises near the picket line; (apart from the marks of mud, gravel and sand found on the entire body of the car, no heavy damages, however, appears to have been sustained by the car)."

8. On 08 December 1997, petitioners Julius Vargas, Rey Espero, Rey Barry, Galmier Balisbis, Rodolfo Ramos, Sonny Bawasanta and Arturo Ines, together with Jose Brin, shouted, "Max, ang sama mo talaga, lumabas ka dito at pipitpitin ko ang mukha mo!" "Cohen, inutil ka talaga. Nagpahaba ka pa ng balbas para kang tsonggo!" Cohen, lumabas ka dito at hahalikan kita."

9. On 10 December 1997, petitioners Vargas and Espion were reported to have shouted to Mr. Maximino Cruz, "Hoy, Max Cruz, wala kang alam dyan, huwag kang poporma-porma dyan!" and then flashed the "dirty finger" at him;

10. On 15 December 1997, petitioner Neri was said to have shouted to non-striking employees at the canteen, "Hoy, mga iskerol, kain lang ng kain, mga putangina ninyo!"

11. Also on 15 December 1997, petitioners Vargas, Neri, Espion, Mar Nimuan, Ramir Licuanan, Albert Aguila and Sonny Bawasanta, together with Jose Brin, splashed water over Edmund C. Manibog, Jr., security guard of the Company;

12. On 20 December 1997, the strikers admittedly lit and threw firecrackers purportedly outside the Company premises, as part of a noise barrage, while the Company was having its Christmas party inside the Company premises;

13. On 14 January 1998, when Chris A. Oballas, collector of the Company, boarded a public utility jeepney where Jose Brin, a striker, was also passenger, Jose Brin was said to have shouted to the other passengers and driver of the jeepney, "Mga pasahero, driver, itong tao ito sherol, ang kapal ng mukha. Iyong pinagtrabahuhan namin kinakain nito, ibenebent[a] kami nito, hudas ito! Mga pasahero, tingnan niyo, hindi makatingin-tingin sa akin, hindi makapagsalita. Hoy, tingin ka sa akin, napahiya ka sa mga ginagawa mo ano?" and, that when Chris Oballas was alighting from the jeepney, he was kicked on his leg by Jose Brin; and,

14. On 15 January 1998, while Julio Tomas, Avionics Technician of the Company, and his girlfriend, Elizabeth Gali, also an employee of the Company, were waiting for their ride, several union members shouted to Elizabeth Gali, Beth iwanan mo na yang taong yan, walang kwentang tao yan!" "Beth, paano na yung pinagsamahan natin?" irked, Julio Tomas upon boarding the passenger jeepney with his girlfriend threw a P2.00 coin in the direction of the picketers, the coin hit the windshield of a privately-owned jeepney belonging to petitioner Espion which was parked alongside the premises of the strike area; The act of Tomas, provoked the petitioners Espion and Amimita to follow Tomas, who when left alone inside the tricycle after his girlfriend took a separate tricycle to her home, was approached by petitioners Espion and Amimita; petitioner Espion then threw aP2.00 coin at him, and while pointing a baseball bat to his face shouted, "Huwag mong uulitin yung ginawa mo kundi tatamaan ka sa akin!" (Emphasis and italics in the original)

The Court notes that the placards and banners put up by the striking workers in the company premises read: "ANDRES SORIANO AVIATION, INC. CAUGHT IN THE ACT, ATTEMPTING TO BRIBE GOVERNMENT OFFICIALS BEWARE, NOW A NAME YOU CAN TRASH," "ASAI DETERIORATING SAFETY RECORD KILLS 2 DEAD + VARIOUS (IN PLANE CRASH) FLIGHT MISHAPS BEWARE," "FLY AT YOUR OWN RISK," "ANDRES SORIANO AVIATION, INC. DETERIORATING SAFETY RECORD KILLS INNOCENT PEOPLE IN PLANE CRASH, THE CAUSE: UNTRAINED MECHANICS DOING AIRCRAFT RELEASE, THE RESULT: SLIPSHOD MAINTENANCE AND SLOPPY PLANE INSPECTION," "WANNA FLY BLIND?," "BENHUR GOMEZ DRAGS COMPANY TO DEBT AND SHAMEFUL EXPERIENCE (MAHIYA KA NAMAN, OY!)," "A. SORIANO AVIATION, INC., DEAD PEOPLE IN PLANE CRASH," "ELY BONIFACIO (MASAKIT ANG TOTOO) MAGNANAKAW NG PIYESA, PALITAN NA RIN! TINGNAN NYO KUNG NAGNANAKAW," "MEKANIKO DE EROPLANO Y HUELGA UN VIAJE DE PELIGRO, AIRCRAFT MANAGEMENT BULOK; "A. SORIANO AVIATION KILLS PEOPLE FOR LAX OVERSIGHT OF SAFETY PROC." "(ELY BONIFACIO-PATALSIKIN NA RIN," "MANDARAMBONG" "MUKHANG KWARTA," "SAAN MO DINALA ANG DORNIER SPECIAL TOOLS? IKAW HA!)," "ELY BONIFACIO KAWATAN BANTAY SALAKAY," "AMANPULO AND EL NIDO GUESTS, BEWARE OF ASAI FLIGHTS, AIRCRAFT MECHANICS STILL ON STRIKE," "GOING TO BORACAY AND EL NIDO IS GOOD BUT FLYING WITH A. SORIANO AVIATION? THINK TWICE!" "ACHTUNG: A SORIANO AVIATION DEAD PEOPLE IN PLANE CRASH INSURANCE ENTITLEMENTS DENIED DUE TO CAR VIOLATIONS," "UNDRESS SORIANO AVIATION, INC. UNRELIABLE FIXED BASED OPERATOR KILLS PEOPLE FOR LAX OVERSIGHT OF SAFETY PROCEDURES."

It cannot be gainsaid that by the above-enumerated undisputed acts, the Union committed illegal acts during the strike. The Union members repeated name-calling, harassment and threats of bodily harm directed against company officers and non-striking employees and, more significantly, the putting up of placards, banners and streamers with vulgar statements imputing criminal negligence to the company, which put to doubt reliability of its operations, come within the purview of illegal acts under Art. 264 and jurisprudence.

That the alleged acts of violence were committed in nine non-consecutive days during the almost eight months that the strike was on-going does not render the violence less pervasive or widespread to be excusable. Nowhere in Art. 264 does it require that violence must be continuous or that it should be for the entire duration of the strike.1avvphilThe appellate court took against petitioner its filing of its complaint to have the strike declared illegal almost eight months from the time it commenced. Art. 264 does not, however, state for purposes of having a strike declared as illegal that the employer should immediately report the same. It only lists what acts are prohibited. It is thus absurd to expect an employer to file a complaint at the first instance that an act of violence is alleged to be committed, especially, as in the present case, whenan earlier complaintto have the refusal of the individual respondents to work overtime declared as an illegal strike was still pending an issue resolved in its favor only on September 25, 1998.

The records show that the Union went on strike on October 22, 1997, and the first reported harassment incident occurred on October 29, 1997, while the last occurred in January, 1998. Those instances may have been sporadic, but as found by the Labor Arbiter and the NLRC, the display of placards, streamers and banners even up to the time the appeal was being resolved by the NLRC works against the Unions favor.

The acts complained of including the display of placards and banners imputing criminal negligence on the part of the company and its officers, apparently with the end in view of intimidating the companys clientele, are, given the nature of its business, that serious as to make the "second strike" illegal. Specifically with respect to the putting up of those banners and placards, coupled with the name-calling and harassment, the same indicates that it was resorted to to coerce the resolution of the dispute the very evil which Art. 264 seeks to prevent.

While the strike is the most preeminent economic weapon of workers to force management to agree to an equitable sharing of the joint product of labor and capital, it exerts some disquieting effects not only on the relationship between labor and management, but also on the general peace and progress of society and economic well-being of the State.15If such weapon has to be used at all, it must be used sparingly and within the bounds of law in the interest of industrial peace and public welfare.

As to the issue of loss of employment of those who participated in the illegal strike, Sukhothai16instructs:

In the determination of the liabilities of the individual respondents, the applicable provision is Article 264(a) of the Labor Code:

Art. 264.Prohibited Activities (a) x x x

x 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 an illegal 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.

x x x x

InSamahang Manggagawa sa Sulpicio Lines, Inc.-NAFLU v. Sulpicio Lines, Inc.,this Court explained that the effects of such illegal strikes, outlined in Article 264, make a distinction between workers and union officers who participate therein: an ordinary striking worker cannot be terminated for mere participation in an illegal. There must be proof that he or she committed illegal acts during a strike. A union officer, on the other hand, may be terminated from work when he knowingly participates in an illegal strike, and like other workers, when he commits an illegal act during an illegal strike. In all cases, the striker must be identified. But proof beyond reasonable doubt is not required. Substantial evidence available under the attendant circumstances, which may justify the imposition of the penalty of dismissal, may suffice.17(Emphasis supplied)

The liability for prohibited acts has thus to be determined on an individual basis.1awph!1.e+A perusal of the Labor Arbiters Decision, which was affirmed in toto by the NLRC, shows that on account of the staging of the illegal strike, individual respondents were all deemed to have lost their employment, without distinction as to their respective participation.

Of the participants in the illegal strike, whether theyknowingly participated in the illegal strikein the case of union officers orknowingly participated in the commission of violent acts during the illegal strikein the case of union members, the records do not indicate. While respondent Julius Vargas was identified to be a union officer, there is no indication if he knowingly participated in the illegal strike. The Court not being a trier of facts, the remand of the case to the NLRC is in order only for the purpose of determining the status in the Union of individual respondents and their respective liability, if any.

WHEREFORE, the petition is GRANTED. The Court of Appeals Decision and Resolution dated April 16, 2004 and January 25, 2005, respectively, are REVERSED and SET ASIDE. The Resolutions dated October 31, 2001 and December 14, 2001 of the National Labor Relations Commission affirming the Decision of the Labor Arbiter in NLRC-NCR Case No. 00-06-04890-98 are AFFIRMED with the MODIFICATION in light of the foregoing discussions.

The case is accordingly REMANDED to the National Labor Relations Commission for the purpose of determining the Union status and respective liabilities, if any, of the individual respondents.

SO ORDERED.__________________

G.R. No. L-24711 April 30, 1968BENGUET CONSOLIDATED, INC.,plaintiff-appellant,vs.BCI EMPLOYEES and WORKERS UNION-PAFLU, PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS, CIPRIANO CID and JUANITO GARCIA,defendants-appellees.Ross, Selph, Del Rosario, Bito and Misa for plaintiff-appellant.Cipriano Cid and Associates for defendants-appellees.BENGZON, J.P.,J.:The contending parties in this case Benguet Consolidated, Inc., ("BENGUET") on the one hand, and on the other, BCI Employees & Workers Union ("UNION") and the Philippine Association of Free Labor Unions ("PAFLU") do not dispute the following factual settings established by the lower court.

On June 23, 1959, the Benguet-Balatoc Workers Union ("BBWU"), for and in behalf of all BENGUET employees in its mines and milling establishment located at Balatoc, Antamok and Acupan, Municipality of Itogon, Mt. Province, entered into a Collective Bargaining Contract, Exh. "Z" ("CONTRACT") with BENGUET. Pursuant to its very terms, said CONTRACT became effective for a period of four and a half (4-) years, or from June 23, 1959 to December 23, 1963. It likewise embodied a No-Strike, No-Lockout clause.1About three years later, or on April 6, 1962, a certification election was conducted by the Department of Labor among all the rank and file employees of BENGUET in the same collective bargaining units. UNION obtained more than 50% of the total number of votes, defeating BBWU, and accordingly, the Court of Industrial Relations, on August 18, 1962, certified UNION as the sole and exclusive collective bargaining agent of all BENGUET employees as regards rates of pay, wages, hours of work and such other terms and conditions of employment allowed them by law or contract.

Subsequently, separate meetings were conducted on November 22, 23 and 24, 1962 at Antamok, Balatoc and Acupan Mines respectively by UNION. The result thereof was the approval by UNION members of a resolution2directing its president to file a notice of strike against BENGUET for:

1. [Refusal] to grant any amount as monthly living allowance for the workers;

2. Violation of Agreements reached in conciliation meetings among which is the taking down of investigation [sic] and statements of employees without the presence of union representative;

3. Refusal to dismiss erring executive after affidavits had been presented, thereby company showing [sic] bias and partiality to company personnel;

4. Discrimination against union members in the enforcement of disciplinary actions.

The Notice of Strike3was filed on December 28, 1962. Three months later, in the evening of March 2, 1963, UNION members who were BENGUET employees in the mining camps at Acupan, Antamok and Balatoc, went on strike. Regarding the conduct of the strike, the trial court reports:4... Picket lines were formed at strategic points within the premises of the plaintiff. The picketers, by means of threats and intimidation, and in some instances by the use of force and violence, prevented passage thru the picket lines by personnel of the plaintiff who were reporting for work. Human blocks were formed on points of entrance to working areas so that even vehicles could not pass thru, while the officers of the plaintiff were not allowed for sometime to leave the "staff" area.

The strikers forming picket lines bore placards with the letters BBWU-PAFLU written thereon. As a general rule, the picketers were unruly, aggressive and uttered threatening remarks to staff members and non-strikers who desire to pass thru the picket lines. On some occasions, the picketers resorted to violence by pushing back the car wherein staff officers were riding who would like to enter the mine working area. The picketers lifted one side of the vehicle and were in the act of overturning it when they were prevented from doing so by the timely intervention of PC soldiers, who threw tear gas bombs to make the crowd disperse. Many of the picketers were apprehended by the PC soldiers and criminal charges for grave coercion were filed against them before the Court of First Instance of Baguio. Two of the strike leaders and twenty-two picketers, however, were found guilty of light coercion while nineteen other accused were acquitted.

There was a complete stoppage of work during the strike in all the mines. After two weeks elapsed, repair and maintenance of the water pump was allowed by the strikers and some of the staff members were permitted to enter the mines, who inspected the premises in the company of PC soldiers to ascertain the extent of the damage to the equipment and losses of company property.

x x x x x x x x x

On May 2, 1963, the parties agreed to end the raging dispute. Accordingly, BENGUET and UNION executed the AGREEMENT, Exh. 1. PAFLU placed its conformity thereto and said agreement was attested to by the Director of the Bureau of Labor Relations. About a year later or on January 29, 1964, a collective bargaining contract was finally executed between UNION-PAFLU and BENGUET.5Meanwhile, as a result, allegedly, of the strike staged by UNION and its members, BENGUET had to incur expenses for the rehabilitation of mine openings, repair of mechanical equipment, cost of pumping water out of the mines, value of explosives, tools and supplies lost and/or destroyed, and other miscellaneous expenses, all amounting to P1,911,363.83. So, BENGUET sued UNION, PAFLU and their respective Presidents to recover said amount in the Court of First Instance of Manila,on the sole premise that said defendants breached their undertaking in the existing CONTRACT not to strike during the effectivity thereof.

In answer to BENGUET's complaint, defendants unions and their respective presidents put up the following defenses: (1) they were not bound by the CONTRACT which BBWU, the defeated union, had executed with BENGUET; (2) the strike was due,inter alia, to unfair labor practices of BENGUET; and (3) the strike was lawful and in the exercise of the legitimate rights of UNION-PAFLU under Republic Act 875.

Issues having been joined, trial commenced. On February 23, 1965, the trial court rendered judgment dismissing the complaint on the ground that the CONTRACT, particularly the No-Strike clause, did not bind defendants. The latters' counterclaim was likewise denied. Failing to get a reconsideration of said decision, BENGUET interposed the present appeal.

The several errors assigned by BENGUET basically ask three questions:

(1) Did the Collective Bargaining Contract executed between BENGUET and BBWU on June 23, 1959 and effective until December 23, 1963automatically bindUNION-PAFLU upon its certification, on August 18, 1962, as sole bargaining representative of all BENGUET employees?

(2) Are defendants labor unions and their respective presidents liable for the illegal acts committed during the course of the strike and picketing by some union members?

(3) Are defendants liable to pay the damages claimed by BENGUET?

In support of an affirmative answer to the first question, BENGUET first invokes the so-called "Doctrine of Substitution" referred to inGeneral Maritime Stevedores' Union v. South Sea Shipping Lines, L-14689, July 26, 1960. There it was remarked:

x x x x x x x x x

We also hold that where the bargaining contract is to run for more than two years, the principle of substitution may well be adopted and enforced by the CIR to the effect that after two years of the life of a bargaining agreement, a certification election may be allowed by the CIR;that if a bargaining agent other than the union or organization that executed the contract, is elected, said new agent would have to respect said contract, but that it may bargain with the management for the shortening of the life of the contract if it considers it too long, or refuse to renew the contract pursuant to an automatic renewal clause. (Emphasis supplied)

x x x x x x x x x

The submission utterly fails to persuade Us. The above-quoted pronouncement wasobiter dictum. The only issue in theGeneral Maritime Stevedores' Unioncase was whether a collective bargaining agreement which had practically run for 5 years constituted a bar to certification proceedings. We held it did not and accordingly directed the courta quoto order certification elections. With that, nothing more was necessary for the disposition of the case. Moreover, the pronouncement adverted to was rather premature. The possible certification of a union different from that which signed the bargaining contract was a mere contingency then since the elections were still to be held. Clearly, the Court was not called upon to rule on possible effects of such proceedings on the bargaining agreement.6But worse, BENGUET's reliance upon the Principle of Substitution is totally misplaced. This principle, formulated by the NLRB7as its initial compromise solution to the problem facing it when there occurs a shift in employees' union allegiance after the execution of a bargaining contract with their employer, merely states that even during the effectivity of a collective bargaining agreement executed between employer and employees thru their agent, the employees can change said agentbut the contract continues to bind them up to its expiration date. They may bargain however for the shortening of said expiration date.8In formulating the "substitutionary" doctrine, the only consideration involved was the employees' interest in the existing bargaining agreement. The agent's interest never entered the picture. In fact, the justification9for said doctrine was:

...that the majority of the employees, as an entity under the statute,is the true party in interest to the contract, holding rights through the agency of the union representative. Thus, any exclusive interest claimed by the agent is defeasible at the will of the principal.... (Emphasis supplied)

Stated otherwise, the "substitutionary" doctrine only provides that the employees cannot revoke the validly executed collective bargaining contract with their employer by the simple expedient of changing their bargaining agent. And it is in the light of this that the phrase "said new agent would have to respect said contract" must be understood. It only means that the employees, thru their new bargaining agent, cannot renege on their collective bargaining contract, except of course to negotiate with management for the shortening thereof.

The "substitutionary" doctrine, therefore, cannot be invoked to support the contention that a newly certified collective bargaining agent automatically assumes all the personal undertakings like the no-strike stipulation here in the collective bargaining agreement made by the deposed union. When BBWU bound itself and its officers not to strike, it could not have validly bound also all the other rival unions existing in the bargaining units in question. BBWU was the agent of the employees, not of the other unions which possess distinct personalities. To consider UNION contractually bound to the no-strike stipulation would therefore violate the legal maxim thatres inter alios nec prodest nec nocet.10Of course, UNION, as the newly certified bargaining agent, could always voluntarily assume all the personal undertakings made by the displaced agent. But as the lower court found, there was no showing at all that, prior to the strike,11UNION formally adopted the existing CONTRACT as its own and assumed all the liability ties imposed by the same upon BBWU.

BENGUET also alleges that UNION is now in estoppel to claim that it is not contractually bound by the CONTRACT for having filed on September 28, 1962, in Civil Case No. 1150 of the Court of First Instance of Baguio, entitled "Bobok Lumber Jack Ass'n. vs. Benguet Consolidated, Inc. and BCI Employees Workers Union-PAFLU"12a motion praying for the dissolution of the ex parte writ of preliminary injunction issued therein, wherein the following appears:

In that case,the CIR transfered the contactual rights of the BBWU to the defendant union. One of such rights transferred was the right to the modified union-shop checked off union dues arrangement now under injunction.

The collective bargaining contract mentioned in the plaintiff's complaint did not expire by the mere fact that the defendant union was certified as bargaining agent in place of the BBWU. The Court of Industrial Relations in the case above mentioned made it clear that the collective bargaining contract would be respected unless and until the parties act otherwise.In effect, the defendant union by act of subrogation took the place of the BBWU as the UNION referred to in the contract. (Emphasis supplied)

There is no estoppel. UNION did not assert the above statement against BENGUET to force it to rely upon the same to effect the union check-off in its favor. UNION and BENGUET were together as co-defendants in said Civil Case No. 1150. Rather, the statement was directed against Bobok Lumber Jack Ass'n., plaintiff therein, to weaken its cause of action. Moreover, BENGUET did not rely upon said statement. What prompted Bobok Lumber Jack Ass'n. to file the complaint for declaratory relief was the fact that "... the defendants [UNION and BENGUET]are planning to agree to the continuationof a modified union shop in the three camps mentioned above without giving the employees concerned the opportunity to express their wishes on the matter ..." BENGUET even went further in its answer filed on October 18, 1962, by asserting that "... defendants havealready agreed to the continuationof the modified union shop provision in the collective bargaining agreement...."13Neither can we accept BENGUET's contention that the inclusion of said aforequoted motion in the record on appeal filed in said Civil Case No. 1150, now on appeal before Us docketed as case No. L-24729, refutes UNION's allegation that it has subsequently abandoned its stand against Bobok Lumber Jack Ass'n., in said case. The mere appearance of such motion in the record on appeal is but a compliance with the procedural requirement of Rule 41, Sec. 6, of the Rules of Court, that all matters necessary for a proper understanding of the issues involved be included in the record on appeal. This therefore cannot be taken as a rebuttal of the UNION's explanation.

There is nothing then, in law as well as in fact, to support plaintiff BENGUET's contention that defendants are contractually bound by the CONTRACT. And the stand taken by the trial court all the more becomes unassailable in the light of Art. 1704 of the Civil Code providing that:

In the collective bargaining,the labor union or members of the board or committee signing the contractshall be liable for non-fulfillment thereof. (Emphasis supplied)

There is no question, defendants were not signatories nor participants in the CONTRACT.

Lastly, BENGUET contends, citing Clause II in connection with Clause XVIII of the CONTRACT, that since all the employees, as principals, continue being bound by the no-strike stipulation until the CONTRACT's expiration, UNION, as their agent, must necessarily be bound also pursuant to the Law on Agency. This is untenable. The way We understand it, everything binding on a duly authorized agent,acting as such, is binding on the principal; notvice-versa, unless there is a mutual agency, or unless the agent expressly binds himself to the party with whom he contracts. As the Civil Code decrees it:14The agent who acts as such is not personally liable to the party with whom he contracts, unless he expressly binds himselfor exceeds the limits of his authority without giving such party sufficient notice of his powers. (Emphasis supplied)1wph1.tHere, it was the previous agent who expressly bound itself to the other party, BENGUET. UNION, the new agent, did not assume this undertaking of BBWU.

In view of all the foregoing, We see no further necessity of delving further into the other less important points raised by BENGUET in connection with the first question.

On the second question, it suffices to consider, in answer thereto, that the rule of vicarious liability has, since the passage of Republic Act 875, been expressly legislated out.15The standing rule now is that for a labor union and/or its officials and members to be liable, there must beclear proofof actual participation in, or authorization or ratification of the illegal acts.16While the lower court found that some strikers and picketers resorted to intimidation and actual violence, it also found that defendants presented uncontradicted evidence that before and during the strike, the strike leaders had time and again warned the strikers not to resort to violence but to conduct peaceful picketing only.17Assuming that the strikers did not heed these admonitions coming from their leaders, the failure of the union officials to go against the erring union members pursuant to the UNION and PAFLU constitutions and by-laws exposes, at the most, only a flaw or weakness in the defense which, however, cannot be the basis for plaintiff BENGUET to recover.

Lastly, paragraph VI of the Answer18sufficiently traverses the material allegations in paragraph VI of the Complaint,19thus precluding a fatal admission on defendants' part. The purpose behind the rule requiring specific denial is obtained: defendants have set forth the matters relied upon in support of their denial. Paragraph VI of the Answer may not be a model pleading, but it suffices for purposes of the rule. Pleadings should, after all, be liberally construed.20Since defendants were not contractually bound by the no-strike clause in the CONTRACT, for the simple reason that they were not parties thereto, they could not be liable for breach of contract to plaintiff. The lower court therefore correctly absolved them from liability.

WHEREFORE, the judgment of the lower court appealed from is hereby affirmed. No costs. So ordered._____________________

Malayang Samahan ng mga Manggagawa sa M. Greenfield, G.R. No. 113907 , February 28, 2000At bar is a Petition for Certiorari under Rule 65 of the Revised Rules

of Court to annul the decision of the National Labor Relations

Commission in an unfair labor practice case instituted by a local union against its employer company and the officers of its national

federation. chanroblespublishingcompany

The petitioner, Malayang Samahan ng mga Manggagawa sa M.

Greenfield, Inc., (B) (MSMG), hereinafter referred to as the local

union, is an affiliate of the private respondent, United Lumber and

General Workers of the Philippines (ULGWP), referred to as the

federation. The collective bargaining agreement MSMG and M

Greenfield, Inc. names the parties as follows:

This agreement made and entered into by and between:

M. GREENFIELD, INC. (B) a corporation duly organized

in accordance with the laws of the Republic of the

Philippines with office address at Km. 14, Merville Road,

Paraaque, Metro Manila, represented in this act by its

General Manager, Mr. Carlos T. Javelosa, hereinafter

referred to as the company;

-and-

MALAYANG SAMAHAN NG MGA MANGGAGAWA SA

M. GREENFIELD (B) (MSMG)/UNITED LUMBER AND

GENERAL WORKERS OF THE PHILIPPINES (ULGWP),

a legitimate labor organization with address at Suite 404,

Trinity Building, T.M. Kalaw Street, Manila, represented

in this act by a Negotiating Committee headed by its

National President, Mr. Godofredo Paceno, Sr. referred to

in this Agreement as the UNION.

The CBA includes, among others, the following pertinent provisions:

Article II-Union Security

SECTION 1. Coverage and Scope. All employees who are

covered by this Agreement and presently members of the

UNION shall remain members of the UNION for the duration

of this Agreement as a condition precedent to continued

employment with the COMPANY. x x x x x x x x x

SECTION 4. Dismissal. Any such employee mentioned in

Section 2 hereof, who fails to maintain his membership in the

UNION for non-payment of UNION dues, for resignation and

for violation of Unions Constitution and By-Laws and any new

employee as defined in Section 2 of this Article shall upon

written notice of such failure to join or to maintain membership

in the UNION and upon written recommendation to the

COMPANY by the UNION, be dismissed from the employment

by the COMPANY; provided, however, that the UNION shall

hold the COMPANY free and blameless from any and all

liabilities that may arise should the dismissed employee

question, in any manner, his dismissal; provided, further that

the matter of the employees dismissal under this Article may be

submitted as a grievance under Article XIII and, provided,

finally, that no such written recommendation shall be made

upon the COMPANY nor shall COMPANY be compelled to act

upon any such recommendation within the period of sixty (60)

days prior to the expiry date of this Agreement conformably to

law.

Article IX

SECTION 4. Program Fund. The Company shall provide the

amount of P10, 000.00 a month for a continuing labor

education program which shall be remitted to the

Federation.

[2]

On September 12, 1986, a local union election was held under the

auspices of the ULGWP wherein the herein petitioner, Beda

Magdalena Villanueva, and the other union officers were proclaimed

as winners. Minutes of said election were duly filed with the Bureau

of Labor Relations on September 29, 1986. chanroblespublishingcompany

On March 21, 1987, a Petition for Impeachment was filed with the

national federation ULGWP by the defeated candidates in the

aforementioned election. On June 16, 1987, the federation conducted an audit of the local

union-funds. The investigation. did not yield any unfavorable result

and the local union. officers were cleared of the charges of anomaly in

the custody, handling and disposition of the union funds.

The 14 defeated candidates filed a Petition for

Impeachment/Expulsion of the local union officers with the DOLE

NCR on November 5, 1987, docketed as NCR-OD-M-11-780-87.

However, the same was dismissed on March 2, 1988, by Med-Arbiter

Renato Parungo for failure to substantiate the charges and to present

evidence in support of the allegations.

On April 17, 1988, the local union held a general membership meeting

at the Caruncho Complex in Pasig. Several union members failed to

attend the meeting, prompting the Executive Board to create a

committee tasked to investigate the non-attendance of several union

members in the said assembly, pursuant to Sections 4 and 5, Article V

of the Constitution and By-Laws of the union, which read:

SEKSYON 4. Ang mga kinukusang hindi pagdalo o hindi

paglahok sa lahat ng hakbangin ng unyon ng sinumang kasapi o

pinuno ay maaaring maging sanhi ng pagtitiwalag o

pagpapataw ng multa ng hindi hihigit sa P50.00 sa bawat araw

na nagkulang.

SEKSYON 5. Ang sinumang dadalo na aalis ng hindi pa

natatapos ang pulong ay ituturing na pagliban at maparusahan

ito ng alinsunod sa Article V, Seksyong 4 ng Saligang Batas na

ito. Sino mang kasapi o opisyales na mahuli ang dating sa

takdang oras ng di lalampas sa isang oras ay magmumulta ng

P25.00 at babawasin sa sahod sa pamamagitan ng salary

deduction at higit sa isang oras ng pagdating ng huli ay

ituturing na pagliban.

[3]

On June 27, 1988, the local union wrote respondent a letter

requesting it to deduct the union fines from the wages/salaries of

those union members who failed to attend the general membership

meeting. A portion of the said letter:

x x x x x x x x x In connection with Section 4 Article II of our existing Collective

Bargaining Agreement, please deduct the amount of P50.00

from each of the union members named in said annexes on the

payroll of July 2-8, 1988 as fine for their failure to attend said

general membership meeting.

[4]

In a Memorandum dated July 3, 1988, the Secretary General of the

national federation, Godofredo Paceo, Jr. disapproved the

resolution of the local union imposing the P50.00 fine. The union

officers protested such action by the Federation in a Reply dated July

4, 1988.

On July 11, 1988, the federation wrote respondent company a letter

advising the latter not to deduct the fifty-peso fine from the salaries of

the union members requesting that:

any and all future representations by MSMG affecting a

number of members be first cleared from the federation before

corresponding action by the Company.

The following day, respondent company sent a reply to petitioner

unions request in a letter, stating that it cannot deduct fines from the

employees salary without going against certain laws. The company

suggested that the union refer the matter to the proper government

office for resolution in order to avoid placing the company in the

middle of the issue.

The imposition of P50.00 fine became the subject of bitter

disagreement between the Federation and the local union

culminating in the latters declaration of general autonomy from the

former through Resolution No. 10 passed by the local executive board

and ratified by the general membership on July 16, 1988.

In retaliation, the national federation asked respondent company to

stop the remittance of the local unions share in the education funds

effective August 1988. This was objected to by the local union which

demanded that the education fund be remitted to it in full. The company was thus constrained to file a Complaint for

Interpleader with a Petition for Declaratory Relief with the MedArbitration Branch of the Department of Labor and Employment,

docketed as Case No. OD-M-8-435-88. This was resolved on October

28, 1988, by Med-Arbiter Anastacio Bactin in an Order, disposing

thus:

WHEREFORE, premises considered, it is hereby ordered:

1. That the United Lumber and General Workers of

the Philippines (ULGWP) through its local union officers

shall administer the collective bargaining agreement

(CBA).

2. That petitioner company shall remit the P10,000.00

monthly labor education program fund to the ULGWP

subject to the condition that it shall use the said amount

for its intended purpose.

3. That the Treasurer of the MSMG shall be authorized

to collect from the 356 union members the amount of

P50.00 as penalty for their failure to attend the general

membership assembly on April 17, 1988.

However, if the MSMG Officers could present the

individual written authorizations of the 356 union

members, then the company is obliged to deduct from the

salaries of the 356 union members the P50.00 fine.

[6]

On appeal, Director Pura-Ferrer Calleja issued a Resolution dated

February 7, 1989, which modified in part the earlier disposition, to

wit:

WHEREFORE, premises considered, the appealed portion is

hereby modified to the extent that the company should remit

the amount of five thousand pesos (P5,000.00) of the

P10,000.00 monthly labor education program fund to ULGWP

and the other P5,000.00 to MSMG, both unions to use the same

for its intended purpose.

[7]

Meanwhile, on September 2, 1988, several local unions (Top Form,

M. Greenfield, Grosby, Triumph International, General Milling, and

Vander Hons chapters) filed a Petition for Audit and Examination of

the federation and education funds of ULGWP which was granted by

Med-Arbiter Rasidali Abdullah on December 25, 1988 in an Order

which directed the audit and examination of the books of account of

ULGWP.

On September 30, 1988, the officials of ULGWP called a Special

National Executive Board Meeting at Nasipit, Agusan del Norte where

a Resolution was passed placing the MSMG under trusteeship and

appointing respondent Cesar Clarete as administrator.

On October 27, 1988, the said administrator wrote the respondent

company informing the latter of. its designation of a certain Alfredo

Kalingking as local union president and disauthorizing the

incumbent union officers from representing the employees. This

action by the national federation was protested by the petitioners in a

letter to respondent company dated November 11, 1988.

On November 13, 1988, the petitioner union officers received

identical letters from the administrator requiring them to explain

within 72 hours why they should not be removed from their office and

expelled from union membership.

On November 26, 1988, petitioners replied:

(a) Questioning the validity of the alleged National Executive

Board Resolution placing their union under trusteeship;

(b) Justifying the action of their union in declaring a general

autonomy from ULGWP due to the latters inability to give

proper educational, organizational and legal services to its

affiliates and the pendency of the audit of the federation

funds;

(c) Advising that their union did not commit any act of

disloyalty as it has remained an affiliate of ULGWP; (d) Giving ULGWP a period of five (5) days to cease and desist

from further committing acts of coercion, intimidation and

harassment.

However, as early as November 21, 1988, the officers were expelled

from the ULGWP. The termination letter read:

Effective today, November 21, 1988, you are hereby expelled

from UNITED LUMBER AND GENERAL WORKERS OF THE

PHILIPPINES (ULGWP) for committing acts of disloyalty

and/or acts inimical to the interest and violative to the

Constitution and by-laws of your federation.

You failed and/or refused to offer an explanation inspite of the

time granted to you.

Since you are no longer a member of good standing, ULGWP is

constrained to recommend for your termination from your

employment, and provided in Article II Section 4, known as

UNION SECURITY, in the Collective Bargaining agreement.

On the same day, the federation advised respondent company of the

expulsion of the 30 union officers and demanded their separation

from employment pursuant to the Union Security Clause in their

collective bargaining agreement. This demand was reiterated twice,

through letters dated February 21 and March 4, 1989, respectively, to

respondent company.

Thereafter, the Federation filed a Notice of Strike with the National

Conciliation and Mediation Board to compel the company to effect

the immediate termination of the expelled union officers.

On March 7, 1989, under the pressure of a threatened strike,

respondent company terminated the 30 union officers from

employment, serving them identical copies of the termination letter

reproduced below:

We received a demand letter dated 21 November 1988 from the

United Lumber and General Workers of the Philippines

(ULGWP) demanding for your dismissal from employment pursuant to the provisions of Article II, Section 4 of the existing

Collective Bargaining Agreement (CBA). In the said demand

letter, ULGWP informed us that as of November 21, 1988, you

were expelled from the said federation for committing acts of

disloyalty and/or inimical to the interest of ULGWP and

violative to its Constitution and By-laws particularly Article V,

Section 6, 9, and 12, Article XIII, Sectio