Facts:

C. Alcantara & Sons, Inc. (the Company), a domestic corporation engaged in the manufacture and processing of plywood, is the petitioner in this case. The Nagkahiusang Mamumuo sa Alsons-SPFL (the Union) serves as the exclusive bargaining representative for the Company's rank-and-file employees. A critical component of the employment relationship was a Collective Bargaining Agreement (CBA) which included a "no strike, no lockout" clause. As negotiations for economic provisions in the CBA deadlocked, the Union conducted a strike vote, subsequently reporting to the Department of Labor and Employment (DOLE) and engaging in a strike after the mandatory cooling-off period elapsed.

During the strike, the Company petitioned the National Labor Relations Commission (NLRC) for a preliminary injunction to prevent strikers from obstructing non-striking employees' access to the workplace. Initially, the NLRC issued a temporary restraining order and later a preliminary inj

...

Facts:

Parties and Underlying Relationship

• The Company, C. Alcantara & Sons, Inc., is a domestic corporation engaged in the manufacture and processing of plywood.
• Nagkahiusang Mamumuo sa Alsons-SPFL (the Union) is the exclusive bargaining agent representing the Company’s rank and file employees.
• A Collective Bargaining Agreement (CBA) exists between the Company and the Union containing a “no strike, no lockout” clause, which prohibits either party from resorting to industrial actions such as strikes or lockouts during the agreement’s term.

Negotiations and the Initiation of the Strike

• The parties initiated negotiations on the economic provisions of their CBA, but these discussions ended in a deadlock.
• Following the deadlock, the Union held a strike vote in which an overwhelming majority of its members favored striking.
• After filing a notice of strike with the Department of Labor and Employment (DOLE) and observing the mandatory cooling-off period, the Union went on strike despite the contractual prohibition.

Petition for Injunctive Relief and Subsequent Proceedings

• During the strike, the Company filed a petition for a writ of preliminary injunction and a temporary restraining order (TRO) ex parte with the National Labor Relations Commission (NLRC) to stop the strikers from hindering the entry of non-striking employees.
• The NLRC initially issued a 20-day TRO and later a writ of preliminary injunction against the Union, its officers, and members, although enforcement required intervention by law enforcement agencies.
• The Union challenged the issuance of the injunction by filing a petition with the Court of Appeals (CA), which later dismissed the petition without appeal by the Union.

Adjudication on the Legality of the Strike and Termination of Union Members

• The Company filed a petition with the Regional Arbitration Board seeking to declare the strike illegal based on the CBA’s no-strike provision and subsequently included individual Union members in its amended petition alleging participation in illegal acts.
• The Union, including its officers and striking members, counterclaimed for unfair labor practices, illegal dismissal, and damages, and also questioned the service of summons on individual members.
• On June 29, 1999, the Labor Arbiter declared the strike illegal:
• The Union officers were deemed to have forfeited their employment and were ordered to pay damages amounting to P3,825,000.00 plus interest and attorney’s fees.
• The rank and file Union members, for whom no evidence of committing illegal acts was found during the strike, were ordered to be reinstated without backwages.
• A motion for immediate reinstatement pending appeal was filed by the terminated Union members but was not acted upon by the Labor Arbiter, and the Company ultimately did not reinstate them.

Appeals and Further Developments

• Both parties appealed the Labor Arbiter’s decision to the NLRC:
• The Company challenged the reinstatement order while the Union contested the declaration of strike illegality and the termination of its officers.
• On November 8, 1999, the NLRC upheld the declaration of the strike as illegal, sanctioned the termination of Union officers, and extended termination to the rank and file members based on evidence of their alleged illegal acts.
• The CA later annulled the NLRC decision on June 29, 1999, reinstating the Labor Arbiter’s decision regarding the reinstatement of terminated members.
• Separate petitions were subsequently filed in the Supreme Court:
• G.R. No. 155109 by the Company.
• G.R. Nos. 155135 and 179220 by the Union and its members.

Motion for Reinstatement Pending Appeal and Resolution on Backwages/Separation Pay

• During the pendency of the appeals, the affected Union members filed a motion for reinstatement pending final resolution and for the computation of their backwages.
• The Labor Arbiter eventually ruled (November 21, 2002) that reinstatement was no longer practicable due to severely strained relations, ordering instead that the Company pay separation pay computed on the basis of one‐half month’s salary for every year of service.
• The NLRC initially ordered the payment of accrued wages and 13th month pay in lieu of reinstatement but later modified its ruling to delete these benefits on reconsideration.
• The CA ultimately dismissed the petition for reinstatement pending appeal, holding that the provisions for immediate reinstatement applied only to illegal dismissal cases under Article 223 of the Labor Code, not to terminations under Article 264.

Issue:

Jurisdictional Issue

• Whether the NLRC properly acquired jurisdiction over the individual Union members, despite their refusal to accept or acknowledge service of summons.

Legality of the Strike

• Whether the strike, although observed in compliance with the procedural requirements prescribed by Article 263 of the Labor Code, was invalid due to its conflict with the CBA’s “no strike, no lockout” provision.

Termination of Union Members

• Whether the illegal strike justified the termination of:
• Union officers, who held positions of leadership and were bound by the contractual obligations.
• Rank and file Union members, who should only be terminated if there is clear evidence of committing illegal acts during the strike.

Entitlement to Backwages

• Whether the terminated Union members are entitled to the payment of backwages for the period during which the Company refused to reinstate them pending appeal.

Entitlement to Separation Pay and Other Benefits

• Whether the terminated Union members are entitled to accrued wages and separation pay, considering the circumstances surrounding their dismissal and the principles of equitable and compassionate justice.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Acquisition of Jurisdiction

• The Court reasoned that proper service of summons and voluntary appearance by the Union members satisfied jurisdictional requirements, rendering any technical refusals immaterial.

Strike Invalidity Despite Procedural Compliance

• Although the Union complied with the formal requirements under Article 263, the strike was held invalid because it contravened a contractual no-strike provision binding both parties.
• The mutual waiver of economic action rights in favor of voluntary arbitration, as explicitly agreed to in the CBA, overshadows the procedural compliance.

Differential Treatment of Union Officers and Rank and File

• Union officers, by virtue of their leadership roles and the responsibilities entrusted to them, are held to a stricter standard and can be terminated for engaging in an illegal strike.
• Rank and file members, however, require clear and convincing evidence of having committed illegal acts during the strike to justify termination.

Reinstatement Pending Appeal and Backwages Liability

• The decision underscores that the duty to reinstate under Article 223 of the Labor Code applies to all termination cases, irrespective of the grounds, and the failure to do so obligates the employer to pay backwages.
• The period of non-reinstatement, even if later reversed by the NLRC, creates a liability for the employer to make whole the affected employees.

Equitable Award of Separation Pay

• Given the long service records of the terminated Union members and the absence of any prior misconduct, the Court found it equitable and reasonable to award separation pay as a form of financial assistance.
• This measure reflects the law’s policy of compassionate justice, balancing the disciplinary action with the recognition of past s

...continue reading