Case Summary (G.R. No. L-40367-69)
Key Dates
– Collective Bargaining Agreement (CBA) expiry: December 31, 1990
– Notice of strike filed by the Union: August 23, 1991
– Assumption order by Labor Secretary Torres: September 20, 1991
– Resolution fixing CBA terms: December 27, 1991
– Layoff of 94 rank-and-file employees: January 27, 1992
– Acting Secretary Confesor’s resolution declaring the first layoff illegal: April 14, 1992
– Layoff of 73 employees: October 2, 1992
– Omnibus Resolution on both layoffs: January 25, 1993
– Petition for certiorari filed: 1993
– Supreme Court decision: February 28, 1996
Applicable Law
– 1987 Philippine Constitution, Article XIII, Section 3 (right to self-organization)
– Labor Code of the Philippines:
• Article 263(g) (assumption of jurisdiction in vital industries)
• Article 283 (30-day notice requirement for permanent layoff)
• Article 245 (ineligibility of managerial employees to join rank-and-file unions)
– Revised Rules of Court, Rule 65 (certiorari).
Factual Background
The CBA between MII and the Union expired on December 31, 1990. Negotiations for a successor CBA reached deadlock and the Union filed a strike notice on August 23, 1991. Despite conciliation, the dispute escalated, prompting Labor Secretary Torres to assume jurisdiction under Article 263(g) of the Labor Code on September 20, 1991, enjoining any strike, lockout, or acts that might exacerbate the dispute. On December 27, 1991, Torres resolved outstanding CBA items and directed the execution of a new agreement.
While the Union’s motion for reconsideration was pending, MII unilaterally laid off 94 rank-and-file employees on January 27, 1992, citing business exigencies and automation. The Union moved to enjoin the layoff as violative of the injunction against exacerbating the dispute and the 30-day notice requirement. Acting Labor Secretary Confesor granted relief on April 14, 1992, deeming the layoff illegal, ordering reinstatement with full backwages, and reiterating all prior directives.
After partial recalls, MII sought reconsideration. A new CBA was executed on June 29, 1992, without prejudice to pending motions. On October 2, 1992, MII laid off 73 employees for redundancy; Confesor enjoined the layoff on October 15, 1992. MII’s motion for reconsideration was denied in an Omnibus Resolution dated January 25, 1993, which upheld the illegality of the first layoff, referred the second layoff’s legality to the NLRC, and lifted all injunctions. MII filed a Rule 65 petition alleging grave abuse of discretion.
Issue 1: Legality of the Layoffs and Assumption Order Authority
Whether the Acting Secretary of Labor gravely abused her discretion and exceeded jurisdiction in declaring the January 1992 and October 1992 layoffs illegal and ordering reinstatement with backwages on the ground that they exacerbated the labor dispute.
Ruling on Issue 1
The Court affirmed the Secretary’s authority under Article 263(g) of the Labor Code to assume jurisdiction in disputes affecting industries indispensable to the national interest and to enjoin any acts likely to aggravate such disputes. It held that management prerogatives—while generally respected—are subject to statutory limitations, including injunctions issued under Article 263(g). The pharmaceutical industry’s national importance justified strict enforcement of the assumption order.
MII’s argument that the layoffs did not exacerbate the dispute because no violent reaction occurred was rejected. The Court applied the established principle that any unilateral act during a deadlocked negotiation that tends to heighten tensions constitutes exacerbation, regardless of immediate disruptions. It further found that the layoff notice’s language demonstrated no intention to temporary layoff but a permanent severance, contravening the 30-day notice requirement of Article 283. Factual findings by the Secretary, supported by substantial evidence, were accorded deference.
Issue 2: Scope of the Bargaining Unit and Exclusion of Executive Secretaries
Whether the Secretary abused discretion by including executive secretaries among rank-and-file bargaining‐unit members subject to the closed-shop provision.
Ruling on Issue 2
The Court recognized that Article 245 of the
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Facts of the Case
- Metrolab Industries, Inc. (MII) and Metro Drug Corporation Employees Association–Federation of Free Workers (the Union) were parties to a Collective Bargaining Agreement (CBA) that expired on December 31, 1990.
- Negotiations for a new CBA reached an impasse; the Union filed a notice of strike on August 23, 1991.
- Under Article 263(g) of the Labor Code, Secretary Ruben D. Torres assumed jurisdiction by order dated September 20, 1991, enjoining any strike or lockout and directing submission of position papers.
- On December 27, 1991, Torres resolved the deadlocked issues, ordering execution of a new CBA; the Union filed a motion for reconsideration.
- On January 27, 1992, during the pendency of that motion, MII laid off 94 rank-and-file employees; the Union moved for a cease-and-desist order, alleging violation of the injunction and the 30-day notice requirement.
- MII defended that the layoff was temporary, invoked management prerogative, and cited revenue losses and automation as business reasons.
- On April 14, 1992, Acting Labor Secretary Nieves Roldan Confesor declared the layoff illegal, ordered reinstatement with full backwages, and reaffirmed prior orders.
- MII filed a partial motion for reconsideration and a motion for clarification; parties signed a new CBA on June 29, 1992, without prejudice to pending motions.
- On October 2, 1992, MII laid off another 73 employees for redundancy; the Union opposed and Confesor issued another cease-and-desist order.
- On January 25, 1993, Confesor promulgated an Omnibus Resolution denying MII’s motions for reconsideration, referring the second layoff’s legality to the NLRC, and lifting all prior injunctions.
- MII sought certiorari relief under Rule 65, assailing both the April 14, 1992 Resolution and the January 25, 1993 Omnibus Resolution for grave abuse of discretion and excess of jurisdiction.
Procedural Posture
- Petition for certiorari under Rule 65 to annul the Secretary’s two resolutions.
- Temporary Restraining Order issued on March 4, 1993, enjoining enforcement of the assailed resolutions.
- Supreme Court’s First Division took cognizance under G.R. No. 108855.
Issues Presented
- Whether the Labor Secretary gravely abused her discretion and exceeded jurisdiction by declaring the temporary layoff of 94 employees illegal, ordering reinstate