G.R. No. 168406 - Club Filipino, Inc. vs. Bautista

Case Summary (G.R. No. 168406)

Factual Background: Collective Bargaining Deadlock and the Strike

CLUFEA and Club Filipino, Inc. had entered into successive collective bargaining agreements, the last of which expired on May 31, 2000. Before the expiry and during the sixty-day freedom period, CLUFEA made demands to negotiate a new agreement. Club Filipino, Inc. replied that its Board of Directors could not muster a quorum to negotiate. CLUFEA thereafter formally submitted its proposals in June 2000. Club Filipino, Inc. failed to negotiate, citing the illness of the chairperson of its negotiating panel. CLUFEA then sought preventive mediation before the National Conciliation and Mediation Board (NCMB) to compel negotiations. The panels met on April 5, 2001 but declared a deadlock. On April 6, 2001, CLUFEA filed a Notice of Strike with the NCMB grounded on the bargaining deadlock.

The record reflected that Club Filipino, Inc. submitted the first part of its counterproposal on April 22, 2001, while CLUFEA conducted a strike vote on May 4, 2001 under the supervision of the Department of Labor and Employment, with a majority of CLUFEA’s total membership voting to strike. On May 11, 2001, Club Filipino, Inc. submitted the second part of its counterproposal, which CLUFEA countered with an improved offer. Club Filipino, Inc. refused the improved offer. On May 26, 2001, CLUFEA staged the strike on the basis of the bargaining deadlock.

Club Filipino, Inc.’s Petition to Declare the Strike Illegal

On May 31, 2001, Club Filipino, Inc. filed before the National Capital Regional Arbitration Branch of the NLRC a Petition to Declare [CLUFEA’s] Strike Illegal. Club Filipino, Inc. alleged that CLUFEA failed to comply with the legal requirements for staging a strike, specifically by allegedly failing to file the required Notice of Strike and by allegedly failing to conduct the required strike vote. It further claimed that members of CLUFEA committed illegal acts during the strike, including disrupting employees’ entry and exit from the premises and cutting off the company’s electricity and water supply on the first day of the strike. Club Filipino, Inc. prayed that the union officers who participated be declared to have lost their employment status pursuant to Art. 264(a) of the Labor Code.

CLUFEA answered through officers who verified the Answer: Benjamin Bautista (President), Danilo Caluag (Vice President), Ronie Sualog (Secretary), and Joel Calida (Treasurer).

Proceedings Before the Labor Arbiter and the Procedural Defect Found

Labor Arbiter Manuel P. Asuncion resolved the petition and declared the strike procedurally infirm. He held that CLUFEA’s Notice of Strike did not contain CLUFEA’s written proposals and Club Filipino, Inc.’s counterproposals, in violation of then Rule XXII, Section 4 of the Omnibus Rules Implementing the Labor Code. The rule required that, in bargaining deadlocks, the Notice of Strike should state unresolved issues, and that it should be accompanied by the written proposals of the union and the counterproposals of the employer, and proof of a request for conference, as far as practicable. The Labor Arbiter ruled that nonconforming notices were deemed as not having been filed.

In a Decision dated November 28, 2001, the Labor Arbiter declared the strike illegal on that procedural ground and considered all the union officers involved as terminated from service. Due to Club Filipino, Inc.’s retrenchment program launched allegedly before the issuance of the Decision, the Labor Arbiter ordered the dismissed union officers to receive separation pay equivalent in terms to that offered to retrenched employees.

Appeal to the NLRC: Lack of Standing and Failure of Authority

On December 20, 2001, CLUFEA appealed the Labor Arbiter’s Decision to the NLRC, with Bautista, Caluag, Sualog, and Calida verifying the Memorandum of Appeal on CLUFEA’s behalf. The NLRC dismissed the appeal for lack of standing. It found that Bautista had allegedly resigned from Club Filipino, Inc. on September 30, 2001 and had received separation benefits under the club’s Employees Retirement Plan. It also found that Caluag, Sualog, and Calida misrepresented themselves as union officers when they appealed. According to the NLRC, CLUFEA had already elected new officers on September 28, 2001, and thus they were no longer officers at the time of the appeal.

The NLRC additionally found that as of November 23, 2001, CLUFEA had terminated the services of its legal counsel, yet the former counsel filed and signed the Memorandum of Appeal, allegedly without authority. In a Decision dated September 30, 2002, the NLRC denied the appeal for lack of merit. Subsequent motions for reconsideration were denied by the NLRC in a Resolution dated July 15, 2003.

Petition for Certiorari Before the Court of Appeals

On September 22, 2003, Bautista, Sualog, Calida, Arinto, de Guzman, and Fegalquin filed a Petition for Certiorari before the Court of Appeals. Caluag did not join; instead, Carlito Presentacion, a CLUFEA member, joined in filing the petition.

The Court of Appeals first resolved whether Bautista and others had legal personality to appeal before the NLRC. It held that a worker ordered dismissed had the right to question the dismissal, particularly if not properly impleaded and if not properly addressed in the decision that decreed dismissal. It found that, as union officers, Bautista and the others had the right to appeal the loss of their employment with the NLRC. For Arinto, de Guzman, and Fegalquin, the Court of Appeals further ruled that they had not been granted the full hearing required by constitutional due process, as they participated only at the motion for reconsideration stage. Thus, the Labor Arbiter’s Decision did not bind them.

On the merits, the Court of Appeals ruled that the Labor Arbiter committed grave abuse of discretion in declaring the strike illegal. It reasoned that the Rule XXII, Section 4 requirements were not absolute. It held that the rule required that the union proposals and employer counterproposals be attached to the Notice of Strike as far as practicable. Since Club Filipino, Inc. submitted its counterproposals only after CLUFEA filed its Notice of Strike, it was not practicable for CLUFEA to attach Club Filipino, Inc.’s counterproposals at the time it filed the Notice.

The Court of Appeals also held that the Labor Arbiter disregarded the law on the status of officers participating in an illegal strike. It recognized that union officers may be dismissed for participating in an illegal strike only if they knowingly participated. It faulted the Labor Arbiter for ordering the dismissal of all officers without naming them and without specifying their acts that rendered the strike illegal. The Court of Appeals, however, noted that Bautista and Fegalquin had resigned during the case and received separation benefits, and thus they no longer had legal interest. It also dismissed the petition as to Presentacion for lack of officer status and lack of dismissal under the labor tribunals’ decisions.

Court of Appeals Disposition

In a Decision dated May 31, 2005, the Court of Appeals granted the Petition for Certiorari as to Sualog, Calida, Arinto, and de Guzman. It set aside the Labor Arbiter’s Decision for being null and void and ordered full backwages and benefits from dismissal to finality of the Court of Appeals Decision. In lieu of reinstatement, it ordered Club Filipino, Inc. to pay separation pay computed at one (1) month salary per year of service from hiring to finality, less amounts already received pursuant to the Labor Arbiter’s Decision. The petition was dismissed as to Bautista, Fegalquin, and Presentacion.

Supreme Court Proceedings and Prior Ruling on the Petition for Review

Club Filipino, Inc. filed a Petition for Review on Certiorari with the Supreme Court on June 23, 2005. After memoranda were filed, the case was considered submitted for decision. The Supreme Court agreed with the Court of Appeals and sustained its findings. It ruled that CLUFEA could not have attached Club Filipino, Inc.’s counterproposals in the Notice of Strike because Club Filipino, Inc. had submitted them only after CLUFEA filed the Notice. Accordingly, CLUFEA did not violate Rule XXII, Section 4. The Court further held that the Labor Arbiter gravely abused discretion by ordering wholesale dismissal of the union officers, since the law required knowledge as a condition sine qua non before a union officer could be dismissed for participation in an illegal strike, and the Labor Arbiter’s ruling did not identify how each respondent knowingly participated in the alleged illegality.

In its Resolution dated July 13, 2009, the Supreme Court denied Club Filipino, Inc.’s Petition for Review on Certiorari. Club Filipino, Inc.’s first motion for reconsideration was denied with finality by Resolution dated September 9, 2009, and the Court declared it would not entertain any further pleadings or motions. Entry of judgment was later issued on October 26, 2010, declaring finality as of October 26, 2009.

The Supplemental Motion for Reconsideration: Events After Finality and Motions Relating to Execution

After the September 9, 2009 denial, Club Filipino, Inc. filed a Supplemental Motion for Reconsideration. The Court later granted leave to file and admit the Supplemental Motion in a Resolution dated January 11, 2010. Club Filipino, Inc. then argued that execution was prematurely pursued despite the pending Supplemental Motion. It also filed urgent motions seeking resolution and clarification. Club Filipino, Inc. asserted that NLRC granted respondents’ motion for execution, which allegedly would cause double payment because respondents would be paid separation benefits under the retrenchment program and also under the illegal strike case.

The Court ultimately addressed these issues through a Supplemental Motion for Reconsideration, the subject of the present Resolution dated January 14, 2015.

Reso

Case Syllabus (G.R. No. 168406)

This case resolved Club Filipino, Inc. and Atty. Roberto F. De Leon’s Supplemental Motion for Reconsideration of the Court’s Resolution dated July 13, 2009.
Club Filipino Employees Association (CLUFEA) was a labor union representing the employees of Club Filipino, Inc.
CLUFEA and Club Filipino, Inc. had collective bargaining agreements, the last of which expired on May 31, 2000.
After the agreement expired, CLUFEA demanded negotiations within the sixty-day freedom period, but Club Filipino, Inc. claimed its Board could not muster a quorum to negotiate.
CLUFEA submitted its proposals to the negotiating panel in June 2000, but negotiations stalled because Club Filipino, Inc. cited illness of the panel chairperson.

Negotiations and Deadlock Events

The negotiating panels ultimately met on April 5, 2001, and each panel declared a deadlock.
On April 6, 2001, CLUFEA filed with the National Conciliation and Mediation Board (NCMB) a Notice of Strike grounded on bargaining deadlock.
Club Filipino, Inc. submitted the first part of its counterproposal on April 22, 2001.
On May 4, 2001, CLUFEA conducted a strike vote under Department of Labor and Employment supervision, with a majority voting to strike.
On May 11, 2001, Club Filipino, Inc. submitted the second part of its counterproposal, which CLUFEA countered with an improved offer, but Club Filipino, Inc. refused.
On May 26, 2001, CLUFEA staged the strike based on the deadlock.

Employer’s Petition and Allegations

On May 31, 2001, Club Filipino, Inc. filed with the National Capital Regional Arbitration Branch of the NLRC a Petition to Declare CLUFEA’s Strike Illegal.
Club Filipino, Inc. argued that CLUFEA failed to file a Notice of Strike and failed to conduct a proper strike vote, thus violating statutory strike requirements.
Club Filipino, Inc. also alleged that CLUFEA members committed illegal acts during the strike, including preventing ingress and egress and cutting off the club’s electricity and water on the first day of the strike.
Club Filipino, Inc. prayed for the declaration that all union officers who participated in the strike had lost their employment status pursuant to Article 264(a) of the Labor Code.

Union Officers and Their Participation

CLUFEA answered the petition by having its officers verify the answer, namely Benjamin Bautista, Danilo Caluag, Ronie Sualog, Joel Calida, and later-relevant officers Johnny Arinto, Roberto de Guzman, and Laureno Fegalquin.
The labor disputes proceeded through the Labor Arbiter, then the NLRC, then judicial review before the Court of Appeals, and eventually before the Supreme Court.
The case involved not only the strike legality issues but also multiple questions on officer status, due process, and authority to appeal.

Labor Arbiter’s Findings

Labor Arbiter Manuel P. Asuncion decided the petition to declare the strike illegal.
The Labor Arbiter found that CLUFEA’s Notice of Strike failed to contain CLUFEA’s written proposals and Club Filipino, Inc.’s counterproposals, in violation of then Rule XXII, Section 4 of the Omnibus Rules Implementing the Labor Code.
The Labor Arbiter held that the statutory notice requirement for bargaining deadlocks required, as far as practicable, the unresolved issues and the union proposals, employer counterproposals, and proof of request for conference.
Applying the rule’s consequence, the Labor Arbiter treated noncompliant notice as not having been filed and considered the strike procedurally infirm.
In a Decision dated November 28, 2001, the Labor Arbiter declared the strike illegal and terminated all union officers involved in the proceedings.
The Labor Arbiter ordered that because of the club’s alleged retrenchment program launched before the decision, the dismissed union officers were to receive separation pay similar to that offered to affected employees.

NLRC Dismissal of Appeal

On December 20, 2001, CLUFEA appealed to the NLRC, with its officers verifying the Memorandum of Appeal.
The NLRC ruled that the appeal was filed by persons lacking legal standing to question the Labor Arbiter’s decision.
The NLRC treated Bautista as having resigned on September 30, 2001, after receiving separation benefits pursuant to Club Filipino, Inc.’s Employees Retirement Plan.
The NLRC found Caluag, Sualog, and Calida to have misrepresented themselves as CLUFEA officers at the time of appeal because CLUFEA had allegedly elected a new set of officers on September 28, 2001.
The NLRC also noted a letter allegedly issued by the new officers showing opposition to an appeal and stating that continued appeal might endanger remaining members.
The NLRC further found that as of November 23, 2001, CLUFEA had terminated its legal counsel, and the former counsel still filed and signed the Memorandum of Appeal without authority.
In a Decision dated September 30, 2002, the NLRC denied the December 20, 2001 appeal for lack of merit.
The NLRC denied motions for reconsideration in a Resolution dated July 15, 2003.

Petition for Certiorari Before the Court of Appeals

On September 22, 2003, Bautista, Sualog, Calida, Arinto, de Guzman, and Fegalquin filed a Petition for Certiorari with the Court of Appeals, while Caluag no longer joined.
The petition was filed with Presentacion as a CLUFEA member joining in the filing after Caluag withdrew.

Court of Appeals—Standing and Due Process

The Court of Appeals first resolved whether Bautista, Sualog, Calida, Arinto, de Guzman, and Fegalquin had legal personality to appeal to the NLRC.
The Court of Appeals ruled that a worker ordered dismissed under a tribunal decision had the right to question the dismissal, especially where the worker was not properly impleaded and not properly bound by the decision decreeing dismissal.
The Court of Appeals held that as officers of CLUFEA, Bautista et al. had a right to appeal the loss of employment status.
The Court of Appeals found Arinto, de Guzman, and Fegalquin were not granted the full hearing required by due process.
The Court of Appeals noted that these officers participated only during the Motion for Reconsideration stage with the NLRC, so the Labor Arbiter’s decision did not bind them.

Court of Appeals—Strike Legality Merits

On the merits, the Court of Appeals found that the Labor Arbiter gravely abused discretion in declaring the strike illegal.
The Court of Appeals held that the requirements in Rule XXII, Section 4 did not appear absolute.
The Court of Appeals reasoned that Rule XXII, Section 4 only required that the proposals and counterproposals be attached to the Notice of Strike as far as practicable.
The Court of Appeals held that since the union filed a Notice of Strike before the employer submitted counterproposals, it was not practicable for the union to attach the employer’s counterproposals at the time of filing.
The Court of Appeals also held that the Labor Arbiter disregarded the rule on the status of employees participating in an illegal strike.
The Court of Appeals ruled that union officers may be dismissed for participation in an illegal strike only if they knowingly participated.
The Court of Appeals concluded that even assuming illegality of the strike, the Labor Arbiter