G.R. No. 139940 - Arellano University Employees and Workers Union vs. Court of Appeals

Case Summary (G.R. No. 139940)

Procedural Posture and Petitioners’ Challenge

The Supreme Court described that the present petition for certiorari targeted two Court of Appeals rulings dismissing petitioners’ certiorari petition as time-barred under the amended Rule 65 period. Petitioners urged the application of substantial justice notwithstanding procedural lapse, and they sought a liberal construction of the Rules to secure a just disposition. The record showed that the Court of Appeals’ September 3, 1999 resolution denying petitioners’ motion for reconsideration was received by them on September 13, 1999. On September 27, 1999, petitioners filed a motion for a thirty-day extension of time to file the petition, which the Court of Appeals granted. Thereafter, on October 28, 1999, petitioners filed the petition for certiorari.

The Supreme Court explained that petitioners could not have availed of a certiorari petition as a mere substitute for a lost appeal. Accordingly, it treated the filing as a matter for review under Rule 45 in line with its established approach.

Rule 65 Time Period, Retroactivity, and the Court’s Decision to Reach the Merits

The Court then focused on the governing procedural rule. It noted that Section 4 of Rule 65 had been amended by the Supreme Court En Banc on July 21, 1998, adding the rule that the period is interrupted if a motion for reconsideration or new trial is timely filed, and if the motion is denied the petition must be filed within the remaining period, which cannot be less than five (5) days. It also observed that no extension of time to file the petition could be granted except for most compelling reason, and in no case beyond fifteen (15) days.

The Court further explained that Section 4 of Rule 65 was subsequently amended by A.M. No. 00-2-03-SC, which took effect on September 1, 2000, and which provided for a sixty (60) day period to file a Rule 65 petition from notice of denial of a motion for reconsideration or new trial. It held that remedial procedural changes do not create new rights or take away vested rights, and therefore may be applied retroactively to cases pending and undetermined at the time of their passage. Thus, even though the Court of Appeals’ assailed resolutions were issued in 1999, the Court held there was no reason not to apply the 2000 amendment retroactively to petitioners’ petition.

Although the Court generally remands cases to the appellate court for further proceedings, it chose to decide the matter on the merits to avoid further delay.

Origin of the Labor Dispute: Notices of Strike and Audit Petition

On December 12, 1997, the Arellano University Employees and Workers Union—claiming to be the exclusive bargaining representative of about three hundred eighty (380) rank-and-file employees—filed with the NCMB a Notice of Strike charging the University with ULP. The notice alleged, among others: interference in union activities; union busting in violation of CBA Article IV, Section 2; union busting based on the alleged disregard of the union’s request to deduct penalties from its members who were absent without justifiable reasons during union meetings; and contracting workout involving the management’s alleged contracting out of services and functions performed by union members.

Subsequently, on December 17, 1997, a majority of the union members filed a petition for audit of union funds before the DOLE against union officers. On March 11, 1998, the DOLE-NCR Regional Director directed the union officers to call a general membership meeting to render an accounting of union funds remitted per a check-off statement, amounting to P481,117.28. On the same date, the then DOLE Secretary Cresenciano B. Trajano certified the Notice of Strike for compulsory arbitration to the NLRC, assigned to Labor Arbiter Cristeta D. Tamayo, and hearings were set on July 3, 1998, July 17, 1998, and August 11, 1998 without settlement.

Consolidation Motions and a Second Notice of Strike

On July 28, 1998, the University moved for consolidation with the earlier ULP charge and filed interpleader and other related claims. It sought consolidation with: an interpleader docketed as NLRC NCR Case No. 00-02-02036-98, pending before Labor Arbiter Felipe T. Garduque II, and a complaint docketed as NLRC NCR Case No. 00-02-01422-98, pending before Labor Arbiter Ramon Valentin T. Reyes, both involving the same parties.

Before the NLRC could act on the consolidation motion, the DOLE Secretary Bienvenido E. Laguesma, by an order dated August 5, 1998, certified for compulsory arbitration a second Notice of Strike filed by the union on July 16, 1998, docketed as NCMB-NCR-NS-07-277-98, charging additional CBA violations, including withholding of union and death benefits, non-granting of a ten percent salary increase, illegal or unauthorized payroll deductions, union interference through circulating letters against the union, and non-implementation of the retirement plan.

A strike was then staged on August 5, 1998. The DOLE Secretary directed the strikers to return to work within twenty-four (24) hours. The order was served upon the union on August 6, 1998, and the union lifted the strike on August 7, 1998 at about 3:00 p.m. Prompted by this strike episode, the University filed on August 24, 1998 a petition to declare the strike illegal, docketed as NLRC-NCR Case No. 00-08-06897-98, which was consolidated with the other cases.

NLRC Rulings on the Consolidated Cases

In resolving the consolidated cases, the NLRC issued a Decision of October 12, 1998, declaring that the union’s two notices of strike were without merit as to the issues resolved, and accordingly absolving the University from the ULP charges. It also disposed of employment-status consequences in the case involving the illegal strike petition, and it addressed computation of daily wage and benefits under a separate issue.

The NLRC found that the events leading to the strike were driven by the union’s suspicion that the audit petition of union funds was initiated by the University. Citing a DOLE Regional Director order of March 11, 1998, the NLRC concluded that the petition for audit was initiated out of the union’s own volition, leaving no basis for a finding of interference in union activities.

On the alleged union busting, the NLRC held that the University’s refusal to deduct penalties from the salaries of union members who failed to attend union meetings was grounded on the CBA provisions—particularly that deductions required submission of individual check-off authorizations—which the NLRC found were not met by the union. The NLRC also emphasized the requirement that unions must not impose fines that are arbitrary, excessive, or oppressive.

On the “contracting out” allegation, the NLRC found it was not raised during conciliation at the NCMB level.

Regarding the second notice of strike, the NLRC found that only certain charges remained after the union dropped other issues following NCMB hearings. It found no ULP in the withholding of union dues and death aid benefits, crediting the University’s explanation that such withholding was pursuant to written requests by certain union members deposited with the DOLE for settlement. It further found the retirement plan non-implementation allegation baseless and noted it had not been ventilated before the NCMB.

In the interpleader-related case (NLRC NCR Case No. 00-02-02036-98), the NLRC held the University could not be held guilty of ULP for refusing to heed the union’s demand that salaries be deducted for failure to attend union meetings. It grounded this on the union’s failure to satisfy CBA requirements for deductions and the filing of an interpleader to litigate the parties’ claims before the NLRC. It also found that the resolution calling for the deductions was not valid because it was not signed by the majority of union officers and was not shown to have been circulated to members.

In the illegal strike case (NLRC NCR Case No. 00-08-06897-98), the NLRC granted the University’s petition and declared the loss of employment status of the individual strikers for knowingly defying the DOLE Secretary’s return-to-work order. It reasoned that the return-to-work order was served on the union on August 6, 1998, but the strike was lifted only on August 7, 1998 at about 3:00 p.m.

In the wage computation case (NLRC NCR Case No. 00-02-01422-98), the NLRC upheld the University’s use of 314 days rather than 365 days in computing the “equivalent daily rate” of pay of daily-paid employees.

Petitioners filed a motion for reconsideration of the NLRC decision. The NLRC denied it through a Resolution of January 20, 1999. Petitioners then elevated the dispute to the Court of Appeals via a petition for certiorari, which the Court of Appeals dismissed as earlier described.

Petitioners’ Main Submissions Before the Supreme Court and the University’s Counter-Position

Before the Supreme Court, petitioners insisted that the University violated the CBA by withholding union dues and death benefits. The University countered that it did withhold such dues and benefits at the request of union members who had expressed grievances against the union and its officers. The University maintained that the affected amounts were deposited with the DOLE, where the issues could be settled.

Supreme Court’s Evaluation of ULP: Check-Off, “Gross Violation,” and Good Faith

The Supreme Court turned to the standards for ULP and CBA violations. It addressed the right of a union to collect dues and check-off, noting that under the then prevailing Rules Implementing the Labor Code, Book V—as amended—the right of the incumbent bargaining representative to check off and to collect dues resulting therefrom was not affected by the pendency of a representation case or an intra-union dispute. The Court then explained that to constitute ULP, violations of the CBA must be gross. Under the cited Labor Code standard, “gross violation” meant flagrant and/or malicious refusal to compl

Case Syllabus (G.R. No. 139940)

The petition for certiorari assailed the Court of Appeals Resolutions of April 13, 1999 and September 3, 1999 dismissing petitioners’ certiorari for being filed six days beyond the reglementary period under Rule 65 of the 1997 Rules of Civil Procedure.
The Supreme Court treated the petition as a review under Rule 45 because the relief sought was, in substance, a substitute for a lost or unavailing appeal.
The Court set aside the Court of Appeals resolutions and affirmed the NLRC rulings with modifications concerning reinstatement and backwages.

Parties and Procedural Posture

Petitioners were Arellano University Employees and Workers Union and named union members, who challenged adverse NLRC decisions through certiorari dismissed by the Court of Appeals.
The respondents were the Court of Appeals, the National Labor Relations Commission, and Arellano University, Inc. (the University).
The Court of Appeals dismissed the petition for being filed late under the amended Section 4, Rule 65 applicable at the time, without reaching the merits.
Petitioners invoked substantial justice and requested a liberal construction of the rules to secure a just disposition.

Timeline of Filings and Notices

The Court of Appeals Resolution of September 3, 1999 denying petitioners’ motion for reconsideration was received by petitioners on September 13, 1999.
Petitioners filed on September 27, 1999 a motion for a 30-day extension of time to file petition, which the Court granted.
Petitioners filed the present petition for certiorari on October 28, 1999.
The Court described the timing as previously treated as beyond the reglementary period, yet resolved the timeliness issue by applying the later rule amendment retroactively.

Nature of Underlying Labor Disputes

The labor controversies originated from multiple union actions and management responses, all involving the University and the Union.
The disputes included unfair labor practice (ULP) charges, consolidation motions, and a petition to declare a strike illegal.
The controversies also involved wage computation, including the divisor used for computing daily pay.
The NLRC decisions resolved consolidated matters arising from the Union’s notices of strike and the University’s related filings.

Union’s Notices of Strike

On December 12, 1997, the Union filed with the NCMB a Notice of Strike charging the University with ULP based on: interference in union activities, “union busting” for violating CBA Article IV, Section 2, refusal to deduct penalties from union members absent and without justifiable reasons during union meetings, and contracting workout for allegedly contracting out functions performed by union members.
The Notice of Strike was docketed as NCMB-NCR-NS-12-520-97.
On December 17, 1997, a majority of Union members filed a petition for audit of union funds before the DOLE.
On March 11, 1998, the DOLE Regional Director directed the Union officers to call a general membership meeting to render an accounting of union funds of P481,117.28 remitted per the check-off statement.
On March 11, 1998, then DOLE Secretary Cresenciano B. Trajano certified the Notice of Strike for compulsory arbitration to the NLRC, assigned to Labor Arbiter Cristeta D. Tamayo, with hearings scheduled on July 3, 1998, July 17, 1998, and August 11, 1998.
On August 5, 1998, the DOLE Secretary certified a second Notice of Strike for compulsory arbitration, docketed as NCMB-NCR-NS-07-277-98, charging CBA violations and other acts including withholding of union and death benefits, non-granting of salary increase, illegal deductions in the payroll, union interference through letters against the Union, and non-implementation of an approved retirement plan.

Events During the Second Strike

A strike was staged on August 5, 1998.
On the same date, the DOLE Secretary ordered the strikers to return to work within 24 hours, and the order was served on the Union on August 6, 1998.
The Union lifted the strike on August 7, 1998 at about 3:00 p.m.
The staged strike prompted the University to file on August 24, 1998 a petition to declare the strike illegal, docketed as NLRC-NCR Case No. 00-08-06897-98, and consolidated with other cases.

Consolidation and NLRC Proceedings

On July 28, 1998, the University moved to consolidate the ULP charge with an interpleader it filed and a complaint the Union filed for underpayment due to changes in salary computation and non-payment of Sunday pay.
Before the NLRC acted on consolidation, the DOLE Secretary certified the second notice of strike to the NLRC, resulting in additional matters for resolution.
The NLRC proceeded to resolve the consolidated cases through a Decision of October 12, 1998, followed by Resolution of January 20, 1999 on reconsideration.

NLRC Disposition and Findings

The NLRC declared that the Union’s two notices of strike, to the extent resolved, were without merit and absolved the University from ULP charges contained in those notices.
The NLRC declared the loss of employment status of all individual respondents in NLRC-NCR Case No. 00-08-06897-98.
The NLRC found no diminution of workers’ benefits in NLRC-NCR Case No. 00-02-01422-98 because the University used 314 days as the divisor in computing daily wage for daily-paid employees.
The NLRC found that the strike was triggered by the Union’s suspicion that the union-fund audit petition was initiated by the University.
The NLRC held that because the DOLE Regional Director’s order showed the audit petition was initiated by the petitioners themselves, there was no factual basis to hold the University guilty of interference.

Union Busting and CBA Check-Off Issues

On “union busting,” the NLRC held that refusal to deduct penalties from salaries of Union members who failed