Strikes Important.docx

THIRD DIVISION G.R. No. 155679

December 19, 2006

BIFLEX PHILS. INC. LABOR UNION (NAFLU), PATRICIA VILLANUEVA, EMILIA BANDOLA, RAQUEL CRUZ, DELIA RELATO, REGINA CASTILLO, LOLITA DELOS ANGELES, MARISSA VILLORIA, MARITA ANTONIO, LOLITA LINDIO, ELIZA CARAULLIA, LIZA SUA, and FILFLEX INDUSTRIAL AND MANUFACTURING LABOR UNION (NAFLU), MYRNA DELA TORRE, AVELINA AÑONUEVO, BERNICE BORCELO, NARLIE YAGIN, EVELYN SANTILLAN, LEONY SERDONCILO, TRINIDAD CUYA, ANDREA LUMIBAO, GYNIE ARNEO, ELIZABETH CAPELLAN, JOSEPHINE DETOSIL, ZENAIDA FRANCISCO, and FLORENCIA ANAGO, petitioners, vs. FILFLEX INDUSTRIAL AND MANUFACTURING CORPORATION and BIFLEX (PHILS.), INC., respondents. DECISION CARPIO MORALES, J.: Assailed via Petition for Review on Certiorari is the Court of Appeals Decision1 of May 28, 2002 setting aside the National Labor Relations Commission (NLRC) Resolution2 of August 14, 1995 which reversed the December 15, 1992 Decision3 of the Labor Arbiter. Petitioners Patricia Villanueva, Emilia Bandola, Raquel Cruz, Delia Relato, Regina Castillo, Lolita delos Angeles, Marissa Villoria, Marita Antonio, Lolita Lindio, Eliza Caraulia, and Liza Sua were officers of Biflex (Phils.) Inc. Labor Union. Petitioners Myrna dela Torre, Avelina Añonuevo, Bernice Borcelo, Narlie Yagin, Evelyn Santillan, Leony Serdoncilo, Trinidad Cuya, Andrea Lumibao, Gynie Arneo, Elizabeth Capellan, Josephine Detosil, Zenaida Francisco, and Florencia Anago were officers of Filflex Industrial and Manufacturing Labor Union. 1

The two petitioner-unions, which are affiliated with National Federation of Labor Unions (NAFLU), are the respective collective bargaining agents of the employees of corporations. Respondents Biflex (Phils.) Inc. and Filflex Industrial and Manufacturing Corporation (respondents) are sister companies engaged in the garment business. Situated in one big compound along with another sister company, General Garments Corporation (GGC), they have a common entrance. On October 24, 1990, the labor sector staged a welga ng bayan to protest the accelerating prices of oil. On even date, petitioner-unions, led by their officers, herein petitioners, staged a work stoppage which lasted for several days, prompting respondents to file on October 31, 1990 a petition to declare the work stoppage illegal for failure to comply with procedural requirements.4 On November 13, 1990, respondents resumed their operations.5 Petitioners, claiming that they were illegally locked out by respondents, assert that aside from the fact that the welga ng bayan rendered it difficult to get a ride and the apprehension that violence would erupt between those participating in the welga and the authorities, respondents’ workers were prevented from reporting for work. Petitioners further assert that respondents were "slighted" by the workers’ no-show, and as a punishment, the workers as well as petitioners were barred from entering the company premises. On their putting up of tents, tables and chairs in front of the main gate of respondents’ premises, petitioners, who claim that they filed a notice of strike on October 31, 1990,6 explain that those were for the convenience of union members who reported every morning to check if the management would allow them to report for work. Respondents, on the other hand, maintain that the work stoppage was illegal since the following requirements for the staging of a valid strike were not complied with: (1) filing of notice of strike; (2) securing a strike vote, and

(3) submission of a report of the strike vote to the Department of Labor and Employment.7

Board Member

The Labor Arbiter, by Decision of December 15, 1992, finding for respondents, held that the strike was illegal.8 The decretal text of its decision reads:

8. Marissa Villoria

WHEREFORE, judgment is hereby rendered declaring the respondents guilty of an illegal strike. Consequently, their following officers are declared to have lost their employment status:

9. Marita Antonio

BIFLEX LABOR UNION (NAFLU)

10. Lolita Lindio

1. Reynaldo Santos

Board Member

President

11. Eliza Caranlia

2. Patricia Villanueva

Board Member

Vice President

12. Liza Sua

3. Emilia Bandola

Board Member

Secretary 4. Raquel Cruz Treasurer 5. Delia Relato Auditor 6. Regina Castillo Board Member 7. Lolita delos Angeles 2

Board Member

Board Member

FIFLEX INDUSTRIAL AND MANUFACTURING LABOR UNION (NAFLU) 1. Myrna dela Torre President 2. Avelina Anonuevo Vice President 3. Barnice Borcelo Secretary

4. Nerlie Yagin

Director

Treasurer 5. Evelyn Santillan Auditor 6. Leony Serdoncilo Director 7. Trinidad Cuga Director 8. Andrea Lumibao Director 9. Gynie Arneo Director 10. Elizabeth Capellar Director 11. Josephine Detosil Director 12. Zenaida Francisco Director 13. Florencia Anago 3

SO ORDERED.9 Respondents thereupon terminated the employment of petitioners. On appeal, the National Labor Relations Commission (NLRC) reversed the ruling of the Labor Arbiter, it holding that there was no strike to speak of as no labor or industrial dispute existed between the parties.10 It accordingly ordered respondents to reinstate petitioners to their former positions, without loss of seniority rights, and with full backwages from the date of their termination. 11 On respondents’ petition for certiorari, the Court of Appeals, by Decision of May 28, 2002, reversed that of the NLRC and reinstated that of the Labor Arbiter. In finding for respondents, the appellate court discredited petitioners’ claim of having been illegally locked out, given their failure to even file a letter of protest or complaint with the management,12 and their failure to comply with the legal requirements of a valid strike.13 The appellate court further noted that while petitioners claimed that they filed a notice of strike on October 31, 1990, no copy thereof was ever produced before the Labor Arbiter.14 Hence, the instant petition which faults the appellate court to have: I . . . ERRED IN INTERPRETING ART. 264 (A) OF THE LABOR CODE TO BE MANDATORY AND CALLING FOR THE AUTOMATIC DISMISSAL OF THE PETITIONERS FOR HAVING ENGAGED IN AN ILLEGAL STRIKE. II

. . . ERR[ED] IN NOT RULING THAT RESPONDENTS ERRED IN IMMEDIATELY IMPLEMENTING THE DECISION OF THE LABOR ARBITER . . . DISMISSING PETITIONERS FROM WORK DESPITE THE FACT THAT THE SAID DECISION HAS NOT YET BECOME FINAL AND EXECUTORY. III . . . ERRED IN DECLARING THAT PETITIONERS WERE GUILTY OF HOLDING AN ILLEGAL STRIKE WHEN CIRCUMSTANCES SHOWED THAT RESPONDENTS WERE THE ONES WHO WERE GUILTY OF AN ILLEGAL LOCKOUT. The petition fails. That petitioners staged a work stoppage on October 24, 1990 in conjunction with the welga ng bayan organized by the labor sector to protest the accelerating prices of oil, it is not disputed. Stoppage of work due to welga ng bayan is in the nature of a general strike, an extended sympathy strike. It affects numerous employers including those who do not have a dispute with their employees regarding their terms and conditions of employment.15 Employees who have no labor dispute with their employer but who, on a day they are scheduled to work, refuse to work and instead join a welga ng bayan commit an illegal work stoppage.16 Even if petitioners’ joining the welga ng bayan were considered merely as an exercise of their freedom of expression, freedom of assembly or freedom to petition the government for redress of grievances, the exercise of such rights is not absolute.17 For the protection of other significant state interests such as the "right of enterprises to reasonable returns on investments, and to expansion and growth"18 enshrined in the 1987 Constitution must also be considered, otherwise, oppression or self-destruction of capital in order to promote the interests of labor would be sanctioned. And it would give imprimatur to workers’ joining demonstrations/rallies even before affording the employer an opportunity to make the necessary arrangements to counteract the implications of the work stoppage on the business, and ignore the novel "principle of shared responsibility between workers and employers"19 aimed at fostering industrial peace. 4

There being no showing that petitioners notified respondents of their intention, or that they were allowed by respondents, to join the welga ng bayan on October 24, 1990, their work stoppage is beyond legal protection. Petitioners, nonetheless, assert that when they returned to work the day following the welga ng bayan on October 24, 1990, they were refused entry by the management, allegedly as punishment for their joining the welga. Hence, they claim that they were illegally locked out by respondents. If there was illegal lockout, why, indeed, did not petitioners file a protest with the management or a complaint therefor against respondents? As the Labor Arbiter observed, "[t]he inaction of [petitioners] betrays the weakness of their contention for normally a locked-out union will immediately bring management before the bar of justice."20 Even assuming arguendo that in staging the strike, petitioners had complied with legal formalities, the strike would just the same be illegal, for by blocking the free ingress to and egress from the company premises, they violated Article 264(e) of the Labor Code which provides that "[n]o person engaged in picketing shall … obstruct the free ingress to or egress from the employer’s premises for lawful purposes, or obstruct public thoroughfares." Even the NLRC, which ordered their reinstatement, took note of petitioners’ act of "physically blocking and preventing the entry of complainant’s customers, supplies and even other employees who were not on strike."21 In fine, the legality of a strike is determined not only by compliance with its legal formalities but also by the means by which it is carried out. Petitioners, being union officers, should thus bear the consequences of their acts of knowingly participating in an illegal strike, conformably with the third paragraph of Article 264 (a) of the Labor Code which provides: . . . Any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status: Provided, That mere participation of a worker in a lawful strike shall

not constitute sufficient ground for termination of his employment, even if a replacement had been hired by the employer during such lawful strike. (Emphasis and underscoring supplied) In Gold City Integrated Port Service, Inc. v. National Labor Relations Commission,22 this Court, passing on the use of the word "may" in the immediately quoted provision, held that "[t]he law . . . grants the employer the option of declaring a union officer who participated in an illegal strike as having lost his employment." Reinstatement of a striker or retention of his employment, despite his participation in an illegal strike, is a management prerogative which this Court may not supplant. Costs against petitioners. WHEREFORE, the petition is DENIED. SO ORDERED. FIRST DIVISION [G.R. No. 142824. December 19, 2001] INTERPHIL LABORATORIES EMPLOYEES UNION-FFW, ENRICO GONZALES and MA. THERESA MONTEJO, petitioners, vs. INTERPHIL LABORATORIES, INC., AND HONORABLE LEONARDO A. QUISUMBING, SECRETARY OF LABOR AND EMPLOYMENT, respondents. DECISION KAPUNAN, J.: Assailed in this petition for review on certiorari are the decision, promulgated on 29 December 1999, and the resolution, promulgated on 05 April 2000, of the Court of Appeals in CA-G.R. SP No. 50978. Culled from the questioned decision, the facts of the case are as follows: Interphil Laboratories Employees Union-FFW is the sole and exclusive bargaining agent of the rank-and-file employees of Interphil Laboratories, Inc., a company engaged in the business of manufacturing and packaging 5

pharmaceutical products. They had a Collective Bargaining Agreement (CBA) effective from 01 August 1990 to 31 July 1993. Prior to the expiration of the CBA or sometime in February 1993, Allesandro G. Salazar,[1] Vice-President-Human Resources Department of respondent company, was approached by Nestor Ocampo, the union president, and Hernando Clemente, a union director. The two union officers inquired about the stand of the company regarding the duration of the CBA which was set to expire in a few months. Salazar told the union officers that the matter could be best discussed during the formal negotiations which would start soon. In March 1993, Ocampo and Clemente again approached Salazar. They inquired once more about the CBA status and received the same reply from Salazar. In April 1993, Ocampo requested for a meeting to discuss the duration and effectivity of the CBA. Salazar acceded and a meeting was held on 15 April 1993 where the union officers asked whether Salazar would be amenable to make the new CBA effective for two (2) years, starting 01 August 1993. Salazar, however, declared that it would still be premature to discuss the matter and that the company could not make a decision at the moment. The very next day, or on 16 April 1993, all the rank-and-file employees of the company refused to follow their regular two-shift work schedule of from 6:00 a.m. to 6:00 p.m., and from 6:00 p.m. to 6:00 a.m. At 2:00 p.m. and 2:00 a.m., respectively, the employees stopped working and left their workplace without sealing the containers and securing the raw materials they were working on. When Salazar inquired about the reason for their refusal to follow their normal work schedule, the employees told him to "ask the union officers." To minimize the damage the overtime boycott was causing the company, Salazar immediately asked for a meeting with the union officers. In the meeting, Enrico Gonzales, a union director, told Salazar that the employees would only return to their normal work schedule if the company would agree to their demands as to the effectivity and duration of the new CBA. Salazar again told the union officers that the matter could be better discussed during the formal renegotiations of the CBA. Since the union was apparently unsatisfied with the answer of the company, the overtime boycott continued. In addition, the employees started to engage in a work slowdown campaign during the time they were working, thus substantially delaying the production of the company.[2]

On 14 May 1993, petitioner union submitted with respondent company its CBA proposal, and the latter filed its counter-proposal. On 03 September 1993, respondent company filed with the National Labor Relations Commission (NLRC) a petition to declare illegal petitioner unions overtime boycott and work slowdown which, according to respondent company, amounted to illegal strike. The case, docketed NLRC-NCR Case No. 00-09-05529-93, was assigned to Labor Arbiter Manuel R. Caday. On 22 October 1993, respondent company filed with the National Conciliation and Mediation Board (NCMB) an urgent request for preventive mediation aimed to help the parties in their CBA negotiations.[3] The parties, however, failed to arrive at an agreement and on 15 November 1993, respondent company filed with Office of the Secretary of Labor and Employment a petition for assumption of jurisdiction.

Caday held in abeyance the proceedings before him. However, on 06 June 1994, Acting Labor Secretary Jose S. Brillantes, after finding that the issues raised would require a formal hearing and the presentation of evidentiary matters, directed the Labor Arbiters Caday and M. Sol del Rosario to proceed with the hearing of the cases before them and to thereafter submit their report and recommendation to his office. On 05 September 1995, Labor Arbiter Caday submitted his recommendation to the then Secretary of Labor Leonardo A. Quisumbing.[8] Then Secretary Quisumbing approved and adopted the report in his Order, dated 13 August 1997, hence: WHEREFORE, finding the said Report of Labor Arbiter Manuel R. Caday to be supported by substantial evidence, this Office hereby RESOLVES to APPROVE and ADOPT the same as the decision in this case, and judgment is hereby rendered:

On 24 January 1994, petitioner union filed with the NCMB a Notice of Strike citing unfair labor practice allegedly committed by respondent company. On 12 February 1994, the union staged a strike.

(1) Declaring the overtime boycott and work slowdown as illegal strike;

On 14 February 1994, Secretary of Labor Nieves Confesor issued an assumption order[4] over the labor dispute. On 02 March 1994, Secretary Confesor issued an order directing respondent company to immediately accept all striking workers, including the fifty-three (53) terminated union officers, shop stewards and union members back to work under the same terms and conditions prevailing prior to the strike, and to pay all the unpaid accrued year end benefits of its employees in 1993.[5] On the other hand, petitioner union was directed to strictly and immediately comply with the return to work orders issued by (the) Office x x x.[6] The same order pronounced that (a)ll pending cases which are direct offshoots of the instant labor dispute are hereby subsumed herewith.[7]

Nestor Ocampo - President

In the interim, the case before Labor Arbiter Caday continued. On 16 March 1994, petitioner union filed an Urgent Manifestation and Motion to Consolidate the Instant Case and to Suspend Proceedings seeking the consolidation of the case with the labor dispute pending before the Secretary of Labor. Despite objection by respondent company, Labor Arbiter 6

Hernando Clemente - Director

(2) Declaring the respondent union officers namely:

Carmelo Santos - Vice-President Marites Montejo - Treasurer/Board Member Rico Gonzales - Auditor Rod Abuan - Director Segundino Flores - Director

who spearheaded and led the overtime boycott and work slowdown, to have lost their employment status; and

(3) Finding the respondents guilty of unfair labor practice for violating the then existing CBA which prohibits the union or any employee during the existence of the CBA from staging a strike or engaging in slowdown or interruption of work and ordering them to cease and desist from further committing the aforesaid illegal acts. Petitioner union moved for the reconsideration of the order but its motion was denied. The union went to the Court of Appeals via a petition for certiorari. In the now questioned decision promulgated on 29 December 1999, the appellate court dismissed the petition. The unions motion for reconsideration was likewise denied. Hence, the present recourse where petitioner alleged: THE HONORABLE FIFTH DIVISION OF THE COURT OF APPEALS, LIKE THE HONORABLE PUBLIC RESPONDENT IN THE PROCEEDINGS BELOW, COMMITTED GRAVE ABUSE OF DISCRETION, AMOUNTING TO LACK AND/OR EXCESS OF JURISDICTION WHEN IT COMPLETELY DISREGARDED PAROL EVIDENCE RULE IN THE EVALUATION AND APPRECIATION OF EVIDENCE PROFERRED BY THE PARTIES. THE HONORABLE FIFTH DIVISION OF THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION, AMOUNTING TO LACK AND/OR EXCESS OF JURISDICTION, WHEN IT DID NOT DECLARE PRIVATE RESPONDENTS ACT OF EXTENDING SUBSTANTIAL SEPARATION PACKAGE TO ALMOST ALL INVOLVED OFFICERS OF PETITIONER UNION, DURING THE PENDENCY OF THE CASE, AS TANTAMOUNT TO CONDONATION, IF INDEED, THERE WAS ANY MISDEED COMMITTED. THE HONORABLE FIFTH DIVISION OF THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION, AMOUNTING TO LACK AND/OR EXCESS OF JURISDICTION WHEN IT HELD THAT THE SECRETARY OF LABOR AND EMPLOYMENT HAS JURISDICTION OVER A CASE (A PETITION TO DECLARE STRIKE ILLEGAL) WHICH HAD LONG BEEN FILED AND PENDING BEFORE THE LABOR ARBITER.[9] We sustain the questioned decision. 7

On the matter of the authority and jurisdiction of the Secretary of Labor and Employment to rule on the illegal strike committed by petitioner union, it is undisputed that the petition to declare the strike illegal before Labor Arbiter Caday was filed long before the Secretary of Labor and Employment issued the assumption order on 14 February 1994. However, it cannot be denied that the issues of overtime boycott and work slowdown amounting to illegal strike before Labor Arbiter Caday are intertwined with the labor dispute before the Labor Secretary. In fact, on 16 March 1994, petitioner union even asked Labor Arbiter Caday to suspend the proceedings before him and consolidate the same with the case before the Secretary of Labor. When Acting Labor Secretary Brillantes ordered Labor Arbiter Caday to continue with the hearing of the illegal strike case, the parties acceded and participated in the proceedings, knowing fully well that there was also a directive for Labor Arbiter Caday to thereafter submit his report and recommendation to the Secretary. As the appellate court pointed out, the subsequent participation of petitioner union in the continuation of the hearing was in effect an affirmation of the jurisdiction of the Secretary of Labor. The appellate court also correctly held that the question of the Secretary of Labor and Employments jurisdiction over labor-related disputes was already settled in International Pharmaceutical, Inc. vs. Hon. Secretary of Labor and Associated Labor Union (ALU)[10] where the Court declared: In the present case, the Secretary was explicitly granted by Article 263(g) of the Labor Code the authority to assume jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, and decide the same accordingly. Necessarily, this authority to assume jurisdiction over the said labor dispute must include and extend to all questions and controversies arising therefrom, including cases over which the labor arbiter has exclusive jurisdiction. Moreover, Article 217 of the Labor Code is not without, but contemplates, exceptions thereto. This is evident from the opening proviso therein reading (e)xcept as otherwise provided under this Code x x x. Plainly, Article 263(g) of the Labor Code was meant to make both the Secretary (or the various regional directors) and the labor arbiters share jurisdiction, subject to certain conditions. Otherwise, the Secretary would not be able to effectively

and efficiently dispose of the primary dispute. To hold the contrary may even lead to the absurd and undesirable result wherein the Secretary and the labor arbiter concerned may have diametrically opposed rulings. As we have said, (i)t is fundamental that a statute is to be read in a manner that would breathe life into it, rather than defeat it. In fine, the issuance of the assailed orders is within the province of the Secretary as authorized by Article 263(g) of the Labor Code and Article 217(a) and (5) of the same Code, taken conjointly and rationally construed to subserve the objective of the jurisdiction vested in the Secretary.[11] Anent the alleged misappreciation of the evidence proffered by the parties, it is axiomatic that the factual findings of the Labor Arbiter, when sufficiently supported by the evidence on record, must be accorded due respect by the Supreme Court.[12] Here, the report and recommendation of Labor Arbiter Caday was not only adopted by then Secretary of Labor Quisumbing but it was likewise affirmed by the Court of Appeals. We see no reason to depart from their findings. Petitioner union maintained that the Labor Arbiter and the appellate court disregarded the parol evidence rule[13] when they upheld the allegation of respondent company that the work schedule of its employees was from 6:00 a.m. to 6:00 p.m. and from 6:00 p.m. to 6:00 a.m. According to petitioner union, the provisions of their CBA on working hours clearly stated that the normal working hours were from 7:30 a.m. to 4:30 p.m.[14] Petitioner union underscored that the regular work hours for the company was only eight (8) hours. It further contended that the Labor Arbiter as well as the Court of Appeal should not have admitted any other evidence contrary to what was stated in the CBA. The reliance on the parol evidence rule is misplaced. In labor cases pending before the Commission or the Labor Arbiter, the rules of evidence prevailing in courts of law or equity are not controlling.[15] Rules of procedure and evidence are not applied in a very rigid and technical sense in labor cases. [16] Hence, the Labor Arbiter is not precluded from accepting and evaluating evidence other than, and even contrary to, what is stated in, the CBA. In any event, the parties stipulated: 8

Section 1. Regular Working Hours - A normal workday shall consist of not more than eight (8) hours. The regular working hours for the Company shall be from 7:30 A.M. to 4:30 P.M. The schedule of shift work shall be maintained; however the company may change the prevailing work time at its discretion, should such change be necessary in the operations of the Company. All employees shall observe such rules as have been laid down by the company for the purpose of effecting control over working hours.[17] It is evident from the foregoing provision that the working hours may be changed, at the discretion of the company, should such change be necessary for its operations, and that the employees shall observe such rules as have been laid down by the company. In the case before us, Labor Arbiter Caday found that respondent company had to adopt a continuous 24-hour work daily schedule by reason of the nature of its business and the demands of its clients. It was established that the employees adhered to the said work schedule since 1988. The employees are deemed to have waived the eighthour schedule since they followed, without any question or complaint, the two-shift schedule while their CBA was still in force and even prior thereto. The two-shift schedule effectively changed the working hours stipulated in the CBA. As the employees assented by practice to this arrangement, they cannot now be heard to claim that the overtime boycott is justified because they were not obliged to work beyond eight hours. As Labor Arbiter Caday elucidated in his report: Respondents' attempt to deny the existence of such regular overtime schedule is belied by their own awareness of the existence of the regular overtime schedule of 6:00 A.M. to 6:00 P.M. and 6:00 P.M. to 6:00 A.M. of the following day that has been going on since 1988. Proof of this is the case undisputedly filed by the union for and in behalf of its members, wherein it is claimed that the company has not been computing correctly the night premium and overtime pay for work rendered between 2:00 A.M. and 6:00 A.M. of the 6:00 P.M. to 6:00 A.M. shift. (tsn pp. 9-10, testimony of Alessandro G. Salazar during hearing on August 9, 1994). In fact, the union Vice-President Carmelo C. Santos, demanded that the company make a recomputation of the overtime records of the employees from 1987 (Exh. "P"). Even their own witness, union Director Enrico C. Gonzales, testified

that when in 1992 he was still a Quality Control Inspector at the Sucat Plant of the company, his schedule was sometime at 6:00 A.M. to 6:00 P.M., sometime at 6:00 A.M. to 2:00 P.M., at 2:00 P.M. to 10:00 P.M. and sometime at 6:00 P.M. to 6:00 A.M., and when on the 6 to 6 shifts, he received the commensurate pay (t.s.n. pp. 7-9, hearing of January 10, 1994). Likewise, while in the overtime permits, dated March 1, 6, 8, 9 to 12, 1993, which were passed around daily for the employees to sign, his name appeared but without his signatures, he however had rendered overtime during those dates and was paid because unlike in other departments, it has become a habit to them to sign the overtime schedule weekly (t.s.n. pp. 2631, hearing of January 10, 1994). The awareness of the respondent union, its officers and members about the existence of the regular overtime schedule of 6:00 A.M. to 6:00 P.M. and 6:00 P.M. to 6:00 A.M. of the following day will be further shown in the discussion of the second issue.[18] As to the second issue of whether or not the respondents have engaged in "overtime boycott" and "work slowdown" from April 16, 1993 up to March 7, 1994, both amounting to illegal strike, the evidence presented is equally crystal clear that the "overtime boycott" and "work slowdown" committed by the respondents amounted to illegal strike. As undisputably testified to by Mr. Alessandro G. Salazar, the company's Vice-President-Human Resources Department, sometime in February, 1993, he was approached by the union President Nestor Ocampo and Union Director Hernando Clemente who asked him as to what was the stand of the company regarding the duration of the CBA between the company and which was set to expire on July 31, 1993. He answered that the matter could be best discussed during the formal renegotiations which anyway was to start soon. This query was followed up sometime in March, 1993, and his answer was the same. In early April, 1993, the union president requested for a meeting to discuss the duration and effectivity of the CBA. Acceding to the request, a meeting was held on April 15, 1993 wherein the union officers asked him if he would agree to make the new CBA effective on August 1, 1993 and the term thereof to be valid for only two (2) years. When he answered that it was still premature to discuss the matter, the very next day, April 16, 1993, all the rank and file employees of the company refused to follow their regular two-shift work schedule of 6:00 A.M. to 6:00 P.M. and 6:00 P.M. to 6:00 A.M., when after the 8-hours work, they abruptly stopped 9

working at 2:00 P.M. and 2:00 A.M., respectively, leaving their place of work without sealing the containers and securing the raw materials they were working on. When he saw the workers leaving before the end of their shift, he asked them why and their reply was "asked (sic) the union officers." Alarmed by the overtime boycott and the damage it was causing the company, he requested for a meeting with the union officers. In the meeting, he asked them why the regular work schedule was not being followed by the employees, and union Director Enrico Gonzales, with the support of the other union officers, told him that if management would agree to a two-year duration for the new CBA and an effectivity date of August 1, 1993, all employees will return to the normal work schedule of two 12-hour shifts. When answered that the management could not decide on the matter at the moment and to have it discussed and agreed upon during the formal renegotiations, the overtime boycott continued and the employees at the same time employed a work slowdown campaign during working hours, causing considerable delay in the production and complaints from the clients/customers (Exh. "O", Affidavit of Alessandro G. Salazar which formed part of his direct testimony). This testimonial narrations of Salazar was, as earlier said, undisputed because the respondents' counsel waived his cross examination (t.s.n. p. 15, hearing on August 9, 1994). Aside from the foregoing undisputed testimonies of Salazar, the testimonies of other Department Managers pointing to the union officers as the instigators of the overtime boycott and work slowdown, the testimony of Epifanio Salumbides (Exh. "Y") a union member at the time the concerted activities of the respondents took place, is quoted hereunder: 2. Noon Pebrero 1993, ipinatawag ng Presidente ng Unyon na si Nestor Ocampo ang lahat ng taga-maintenance ng bawat departamento upang dumalo sa isang miting. Sa miting na iyon, sinabi ni Rod Abuan, na isang Direktor ng Unyon, na mayroon ilalabas na memo ang Unyon na nag-uutos sa mga empleyado ng Kompanya na mag-imbento ng sari-saring dahilan para lang hindi sila makapagtrabaho ng "overtime". Sinabihan rin ako ni Tessie Montejo na siya namang Treasurer ng Unyon na 'Manny, huwag ka na lang pumasok sa Biyernes para hindi ka masabihan ng magtrabaho ng Sabado at Linggo' na siya namang araw ng "overtime" ko. x x x

3. Nakalipas ang dalawaang buwan at noong unang bahagi ng Abril 1993, miniting kami ng Shop Stewards namin na sina Ariel Abenoja, Dany Tansiongco at Vicky Baron. Sinabihan kami na huwag ng mag-ovetime pag nagbigay ng senyas ang Unyon ng "showtime." 4. Noong umaga ng ika-15 ng Abril 1993, nagsabi na si Danny Tansiongco ng "showtime". Dahil dito wala ng empleyadong nag-overtime at sabay-sabay silang umalis, maliban sa akin. Ako ay pumasok rin noong Abril 17 at 18, 1993 na Sabado at Linggo. 5. Noong ika-19 ng Abril 1993, ako ay ipinatawag ni Ariel Abenoja Shop Steward, sa opisina ng Unyon. Nadatnan ko doon ang halos lahat ng opisyales ng Unyon na sina: Nestor Ocampo ----- Presidente Carmelo Santos ----- Bise-Presidente Nanding Clemente -- Director Tess Montejo------- Chief Steward Segundo Flores ------ Director Enrico Gonzales ----- Auditor Boy Alcantara ------- Shop Steward Rod Abuan ----------- Director at marami pang iba na hindi ko na maala-ala. Pagpasok ko, ako'y pinaligiran ng mga opisyales ng Unyon. Tinanong ako ni Rod Aguan kung bakit ako "nagovetime" gayong "Binigyan ka na namin ng instruction na huwag pumasok, pinilit mo pa ring pumasok." "Management ka ba o Unyonista." Sinagot ko na ako ay Unyonista. Tinanong niya muli kung bakit ako pumasok. Sinabi ko na wala akong maibigay na dahilan para lang hindi pumasok at "magovertime." Pagkatapos nito, ako ay pinagmumura ng mga opisyales ng Unyon kaya't ako ay madaliang umalis. 10

x x x" Likewise, the respondents' denial of having a hand in the work slowdown since there was no change in the performance and work efficiency for the year 1993 as compared to the previous year was even rebuffed by their witness M. Theresa Montejo, a Quality Control Analyst. For on crossexamination, she (Montejo) admitted that she could not answer how she was able to prepare the productivity reports from May 1993 to February 1994 because from April 1993 up to April 1994, she was on union leave. As such, the productivity reports she had earlier shown was not prepared by her since she had no personal knowledge of the reports (t.s.n. pp. 32-35, hearing of February 27, 1995). Aside from this admission, the comparison made by the respondents was of no moment, because the higher production for the years previous to 1993 was reached when the employees regularly rendered overtime work. But undeniably, overtime boycott and work slowdown from April 16, 1993 up to March 7, 1994 had resulted not only in financial losses to the company but also damaged its business reputation. Evidently, from all the foregoing, respondents' unjustified unilateral alteration of the 24-hour work schedule thru their concerted activities of "overtime boycott" and "work slowdown" from April 16, 1993 up to March 7, 1994, to force the petitioner company to accede to their unreasonable demands, can be classified as a strike on an installment basis, as correctly called by petitioner company. xxx[19] It is thus undisputed that members of the union by their own volition decided not to render overtime services in April 1993.[20] Petitioner union even admitted this in its Memorandum, dated 12 April 1999, filed with the Court of Appeals, as well as in the petition before this Court, which both stated that "(s)sometime in April 1993, members of herein petitioner, on their own volition and in keeping with the regular working hours in the Company x x x decided not to render overtime".[21] Such admission confirmed the allegation of respondent company that petitioner engaged in overtime boycott and work slowdown which, to use the words of Labor Arbiter Caday, was taken as a means to coerce respondent company to yield to its unreasonable demands.

More importantly, the overtime boycott or work slowdown by the employees constituted a violation of their CBA, which prohibits the union or employee, during the existence of the CBA, to stage a strike or engage in slowdown or interruption of work.[22] In Ilaw at Buklod ng Manggagawa vs. NLRC,[23] this Court ruled: x x x (T)he concerted activity in question would still be illicit because contrary to the workers explicit contractual commitment that there shall be no strikes, walkouts, stoppage or slowdown of work, boycotts, secondary boycotts, refusal to handle any merchandise, picketing, sit-down strikes of any kind, sympathetic or general strikes, or any other interference with any of the operations of the COMPANY during the term of xxx (their collective bargaining) agreement. What has just been said makes unnecessary resolution of SMCs argument that the workers concerted refusal to adhere to the work schedule in force for the last several years, is a slowdown, an inherently illegal activity essentially illegal even in the absence of a no-strike clause in a collective bargaining contract, or statute or rule. The Court is in substantial agreement with the petitioners concept of a slowdown as 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 employers damage, to do other work; in other words, they work on their own terms. x x x.[24] Finally, the Court cannot agree with the proposition that respondent company, in extending substantial separation package to some officers of petitioner union during the pendency of this case, in effect, condoned the illegal acts they committed. 11

Respondent company correctly postured that at the time these union officers obtained their separation benefits, they were still considered employees of the company. Hence, the company was merely complying with its legal obligations.[25] Respondent company could have withheld these benefits pending the final resolution of this case. Yet, considering perhaps the financial hardships experienced by its employees and the economic situation prevailing, respondent company chose to let its employees avail of their separation benefits. The Court views the gesture of respondent company as an act of generosity for which it should not be punished. WHEREFORE, the petition is DENIED DUE COURSE and the 29 December 1999 decision of the Court of Appeals is AFFIRMED. SO ORDERED G.R. Nos. L-24267-8. May 31, 1966.] PERFECTO FERRER, OSCAR FLORES, JULIAN AGUSTIN, FELICISIMO LICHUGA, PIO SUMAGIT and INHELDER LABORATORIES, INC. & SISTER COMPANIES EMPLOYEES UNION, Petitioners, v. COURT OF INDUSTRIAL RELATIONS, INHELDER LABORATORIES INC., SAN ROQUE TRADING CORPORATION AND/OR HANS INHELDER, PRESIDENT AND GENERAL MANAGER, Respondents. J. C. Espinas & Associates, for Petitioners. Alberto Q, Ubay and Associates and Jose C. Vitug for Respondents. SYLLABUS 1. EMPLOYER AND EMPLOYEE; STRIKE CALLED TO OFF-SET UNFAIR LABOR PRACTICES BEFORE EXPIRATION OF 30-DAY PERIOD; CASE AT BAR. — Petitioners filed a 30-day notice of strike upon the ground that respondents had been "bargaining in bad faith." The management, in turn, filed unfair labor practice charges against the Union, for alleged refusal to bargain. Meanwhile, the Management suspended, transferred and/or demoted

union members. Before the expiration of the 30-day period, petitioner declared a strike. Held: Although the Management may have had the strict legal right to take disciplinary and other administrative measures against the union members, however, the time chosen by the Management therefor justified the belief of the Union that the real or main purpose of the Management was to discourage membership in the Union and to discredit the officers thereof. The strike having been called to off-set what petitioners were warranted in believing in good faith to be unfair labor practices on the part of the management, the petitioners were not bound to wait for the expiration of thirty (30) days from notice of strike before staging the same. The strike was not, accordingly, illegal and the strikes had not thereby lost their status as employees of respondents. Considering, however, that the latter have been absolved from the charge of unfair labor practice, the reinstatement of the strikers must be without backpay. DECISION CONCEPCION, J.: These are two (2) unfair labor practice cases commenced in the Court of Industrial Relations. One (L-24268) was filed by the Management of Inhelder Laboratories, Inc. and its sister companies (Inhelder Inc. and San Roque Trading Corporation) against the Labor Union of employees thereof and some officers and members of the Union, and the other (L-24267) by the latter against the former. Being interrelated, the two cases were jointly heard. In due course, the trial Judge, Hon. Ansberto P. Paredes, rendered a decision dismissing the complaints in both cases. On motion for reconsideration filed by the Management, the Court of Industrial Relations en banc, in a resolution penned by Judge Emiliano C. Tabigne, and concurred "in the result" by Presiding Judge Arsenio I. Martinez and Associate Judge Amando C. Bugayong, and with, in effect, the dissent of Judge Paredes, reconsidered the latter’s decision , insofar as it dismissed the complaint of the Management, and decreed that the officers and members of the Union who had participated in a peaceful strike staged by the latter from July 1 to July 15, 1963, "be considered to have lost their status as employees of the companies" aforementioned. Hence, this appeal by certiorari taken by the Union and its members adversely affected by the said resolution. 12

The main issue in this appeal is whether said strike was illegal or not. Respondents herein maintain that it was, because of petitioners’ failure to give a 30-day notice of their intention to strike and because the strike had allegedly been called in bad faith. Upon the other hand, petitioners contend that it was not, for the reason that the strike was provoked by alleged unfair labor practices on the part of the respondents and because said petitioners had acted in good faith in staging said strike. The records show that, immediately after an election held on March 27, 1963, in which Inhelder Laboratories, Inc. and Sister Companies Employees Union obtained the requisite majority, the Union submitted to the Management of said corporations a set of demands for a collective bargaining agreement (Exhibits A, A-1 and 3). This led to negotiations, held, sometimes, with the intervention of the Conciliation Division of the Bureau of Labor, and, sometimes, directly, between the representatives of the parties, without said intervention, and lasting for several weeks. As an agreement was reached on some points, the same were incorporated into a draft of agreement, which, in turn, became the basis for, or was followed by, further negotiations. As additional points of agreement were reached, another draft of agreement was prepared. In a meeting held before said Conciliation Division, in the morning of May 29, 1963, another such draft (Exhibit C-1) was drawn, to which the Management refers as "final draft." However, petitioners’ representatives pressed for the inclusion, in the agreement, of a union clause, an accumulated sick leave clause, and an accumulated vacation leave clause, apart from the increase of the high cost of living monthly allowance from P20.00 to P30.00, the creation of a grievance committee and a general salary increase. The negotiations continued in the afternoon of May 29, 1963, and were resumed in the morning of May 30 or 31, 1963, in the course of which, respondents contend, the Management agreed to increase the high cost of living allowance to P25.00, provided that the other demands were withdrawn, to which petitioners allegedly gave their conformity. Another draft of agreement (Exhibit D) — which the representative of Management, again, characterizes as "final" — was, accordingly, prepared, and the representatives of both parties initialed it, with the understanding, according to respondents, that the agreement would be signed on June 1,

1963. In the afternoon of May 31, 1963, petitioners’ representative called, however, that of Management and asked for the inclusion in the agreement a union shop or union security clause. This request not having been granted, the Union later refused to sign to agreement. The Court of Industrial Relations en banc was of the opinion that, inasmuch as the document last mentioned (Exhibit D) was a "final draft" of the agreement between the parties, and petitioners’ representatives had initialed said draft, "the refusal . . . of the Union to sign the final or clean form of the contract on June 1, 1963, its refusal to honor Exhibit D as a perfected contract and its insistence in negotiating the contract so recently after its perfection are constitutive of bad faith" ; that the strike staged by the Union from July 1 to July 15, 1963, was illegal and those who took part in it are deemed separated from the service. Upon the other hand, His Honor, the trial Judge, held otherwise, upon the ground that the surrounding circumstances were such that petitioners were reasonably justified in believing that the respondents’ acts constituted unfair labor practices and that petitioners had to strike forthwith in order to arrest the evil effects of said practices upon the Union and its members. Upon a review of the record, we are inclined to agree with the latter view. That of the lower court en banc is mainly anchored on the fact that the draft of agreement made and amended in the morning of May 30 or 31, 1963 (Exhibit D), had been initialed by representatives of both parties and that the Management refers thereto as a "final draft." We note, however, that the draft Exhibit C-1, prepared in the morning of May 29, 1963, is, likewise, called by the Management as a "final" draft. Yet, admittedly, negotiations between the parties continued after the preparation of said "final" draft, thus indicating, not only, that the alleged finality thereof reflected, at best, the unilateral opinion of the Management, but, also, that even the latter did not consider it as expressive of a complete, definite and perfected agreement with the petitioners, for, otherwise, the Management would not have participated in the negotiations that took place or continued after the preparation of said Exhibit C-1. These observations apply equally to the "draft" of agreement Exhibit D, prepared and amended in the afternoon of May 29 and the morning of May 13

30 or 31, 1963. Moreover, the fact that both parties affixed their initials to this "draft" Exhibit D does not necessarily prove that the same was more "final" than the "final draft" (Exhibit C-1) made in the morning of May 29, 1963. Indeed, if the parties had reached, said afternoon and in the morning of May 30 or 31, 1963. a complete agreement on the terms and conditions of their proposed collective bargaining agreement, they could have and would have signed Exhibit D that same morning, instead of agreeing that the document be formally signed on June 1, 1963. In fact, the agreement to this effect suggests that the parties understood that a contract had not, as yet, been perfected. As His Honor, the trial Judge, had aptly put it, Exhibit D was no more than a draft of contract, not a contract in itself. At this juncture, it is well to remember that, on March 29, 1963, the petitioners had written to the management the letter Exhibit A (also marked as Exhibit 3) enclosing therewith a draft of the collective bargaining agreement (Exhibit A-1) they would wish to have the management, as the basis for negotiations between both parties; that such negotiations lasted from late in March to early in July, 1963; that, as they threshed out their points of difference, those that had been settled were incorporated into another draft or agreement prepared by the management; that the latter was followed by further negotiations on other points; that, when an agreement was reached thereon, another draft incorporating said additional points was made; that when Exhibit D was prepared, several still pending settlement; that among these points were the matter of inclusion in the agreement of a union shop or union security clause, a vacation leave clause, and a sick leave clause, in addition to the increase of the high cost of living monthly allowance from P20.00 to P30.00, and the organization of a grievance committee; that, although in the afternoon of May 29, and the following morning or that of May 31, 1963, the management had agreed on the establishment of said committee and the increase of the high cost of living monthly allowance to P25.00, this did not imply that petitioners had given up their demand for a union shop or union security clause; and that, in the return-to- work agreement signed by both parties on July 15, 1963 (Exhibits 1 and 2), said clause was, in fact, included. In other words, contrary to what is intimated in the resolution appealed from, it is not true that petitioner had made new demands, either on May 29 or on May 30 or 31, 1963. Indeed, the demand for a union shop or union

security clause, which was the main bone of contention, had been included in the draft of agreement Exhibit A-1 enclosed with petitioners’ letter of March 29, 1963. What happened, merely, was that the demands incorporated in said draft were discussed by both parties, one after the other; that an agreement on the former did not connote an abandonment of the latter; and that, after the settlement of one issue, it was understood that the others would be taken up thereafter. It would appear, also, that, after the meeting with the representative of Management, in the morning of May 30, or 31, 1963, petitioners’ representatives reported to the Union the contents of Exhibit D, and that, when the Union members learned that said document did not include the union shop or union security clause, they withdrew from their representatives the authority to sign, on their behalf, the collective bargaining agreement with the Management. Under these circumstances, said representatives could not validly sign said agreement, and their refusal to do so is not and cannot be an act of bad faith. Neither may the Union members be held to have acted in bad faith in so withdrawing said authority from their representatives, unless the clause aforementioned were included in the agreement. That clause was part of their original demands, as set forth in their draft of agreement Exhibit A-1, and their representatives could not waive it without their consent. As a matter of fact, there is reason to believe that when petitioners’ representatives did not sign on June 1, 1963 and subsequently thereto the draft of agreement Exhibit D, as amended and initialed on May 30 or 31, upon the ground that they had no authority to do so without the union shop or union, the Management suspected that this was a mere excuse put up by said representatives of petitioners herein. Hence, on June 7, 1963, the Management sent a memorandum (Exhibits 13 and I) to all of its employees, purporting to inform them of the status of the negotiations with their representative, and stating that the latter had refused to sign the draft of agreement Exhibit D — copies of which were made available to all employees — and instead "came out with a new 1 demand — ‘Union Shop’" — upon the ground that such was the desire of the Union members, who had allegedly disauthorized the officers of the Union. 14

Soon thereafter — or from June 10 to June 15, 1963 — several members of the Union resigned therefrom irrevocably, effective on June 15, 1963, "in view of the apparent failure of our Union officers to enter into a working agreement with our employer for the purpose of improving our lot even in a small way." 2 Considering that this is false, for the Management had already yielded to the demand for an increase in the high cost of living allowance and the creation of a grievance committee; that these resignations took place immediately after the Management had dealt with the Union members directly, through the aforementioned memorandum; and that said resignations were conveyed in identically worded communications (Exhibits 6, 7, 8, 9, and 10), some of which were mimeographed, it was only natural for the petitioners to believe that said resignations had been inspired, if not exacted, by the Management, and that the latter had resorted thereto in order to exert pressured upon the Union and compel the same to sign the draft of agreement (Exhibit D) without the union shop or union security clause. Hence, on June 13, 1963, petitioners filed a 30-day notice of strike (Exhibits 5 and E), upon the ground that respondents had been "bargaining in bad faith." However, the Management, in turn, filed unfair labor practice charges against the Union, for alleged refusal to bargain. Meanwhile, and thereafter — or from June 10 to June 22, 1963 — the Management had transferred two (2) members of the Union, suspended a third one and assigned still another to a work less dignified than that which he did before. 3 So, on June 24, 1963, petitioners filed an unfair labor practice charge against the Management, for the suspension or demotion of union members due allegedly to union activities. On June 25, 1963, the Union gave another notice of strike upon the ground that the Management was engaged in unfair labor practices, by suspending, demoting, intimidating and coercing union members, on account of their union activities. Thereafter and in accordance with a strike from June 26, 1963, the Union staged a strike from July 1 to July 15, 1963, on which latter date the strike was called off in conformity with return-to-work agreements Exhibits 1 and 2, then signed by both parties. Although the Management may have had the strict legal right to take against union members the disciplinary and other administrative measures above referred to, there is no denying the fact that the time chosen by the Management therefor, when considered in relation with the attending

circumstances, reasonably justified the belief of the Union that the real or main purpose of the Management was to discourage membership in the Union, to discredit the officers thereof, to weaken the Union and to induce or compel the same to sign the draft of agreement Exhibit D as amended, on May 29 and 30 or 31, 1963. As stated in the decision of His Honor, the trial Judge, said belief was confirmed by the fact that prosecutors of the Court of Industrial Relations found sufficient grounds to file and did file, against the Management, a complaint for unfair labor practices. In other words, both parties had performed acts which understandably induced each to believe that the other was guilty of such practices — although, as we now analyze the whole situation, without the excitement, the heat and the passion of the direct participants in the labor dispute, at the peak thereof, such belief may not turn out to be borne out by the objective realities — and both were reasonably justified in taking the counter measures adopted by them. As a consequence, we hold that the strike in question had been called to off-set what petitioners were warranted in believing in good faith to be unfair labor practices on the part of Management, that petitioners were not bound, therefore, to wait for the expiration of thirty (30) days from notice of strike before staging the same, that said strike was not, accordingly, illegal and that the strikes had not thereby lost their status as employees of respondents herein. Upon the other hand, considering that the latter have been absolved from the charge of unfair labor practice, the reinstatement of the strikers must be without backpay. Wherefore, the resolution appealed from should be, as it is hereby modified accordingly, without special pronouncement as to costs. It is so ordered. Bengzon, C.J., J.B.L. Reyes, Barrera, Dizon, Regala, Zaldivar and Sanchez, JJ., concur. Makalintal and J.P. Bengzon, JJ., took no part.

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