Case Summary (G.R. No. 87014-16)
Petitioner
NFSW asserted it was the certified bargaining agent for CAC rank‑and‑file employees (about 1,200) and sought enforcement of entitlement to 13th month pay under PD 851 in addition to contractual bonuses. NFSW staged strikes in November 1981 and January 1982 to compel payment and filed petitions seeking to enjoin enforcement of an adverse labor arbiter’s decision.
Respondents
CAC maintained that its contractual bonuses (Christmas, milling, amelioration) were in substance the equivalent of PD 851’s 13th month pay and therefore exempted it from additional payment. Labor Arbiter Ovejera declared the January 28, 1982 strike illegal; respondents sought implementation of that decision and assistance of law enforcement.
Key Dates and Procedural Posture
Relevant events: CBA effective February 16, 1981–February 15, 1984; strike of November 28, 1981 and settlement/compromise agreement of November 30, 1981 (paragraph 4 providing submission to a final Supreme Court decision “if it is clearly held” that the employer is liable for a distinct 13th month pay); Supreme Court Marcopper decision initially promulgated June 11, 1981 (motion for reconsideration denied December 15, 1981; entry of judgment December 18, 1981); NFSW notice to strike filed January 22, 1982; strike commenced January 28, 1982; labor arbiter decision declaring strike illegal dated February 20, 1982; petition for prohibition filed with the Supreme Court February 26, 1982; Supreme Court rendered judgment dismissing the petition (May 31, 1982).
Applicable Law and Instruments
Primary statutory and regulatory framework relied upon by the Court: Article 264 and Article 265 of the Labor Code (provisions on strike notices, cooling‑off periods, strike‑vote requirements, and prohibited activities), Presidential Decree No. 851 (13th Month Pay Law), and the Rules Implementing PD 851 (Section 3(e) defining “its equivalent” to include certain bonuses). Constitutional principles discussed include the social justice and protection to labor mandates of the Constitution in force at the time.
Facts — Collective Bargaining and Bonuses
CAC and NFSW had a CBA (Feb 16, 1981–Feb 15, 1984) containing Art. VII, Sec. 5: “Bonuses — The parties also agree to maintain the present practice on the grant of Christmas bonus, milling bonus, and amelioration bonus to the extent as the latter is required by law.” The Christmas and milling bonuses together amounted to 1½ months’ salary. CAC had been paying these bonuses and treated them as covering PD 851’s requirement.
Facts — Strike, Compromise Agreement and Renewal
NFSW struck November 28, 1981 demanding the 13th month pay under PD 851 in addition to existing bonuses; parties executed a compromise agreement November 30, 1981, that deferred to any “final decision of the Supreme Court” that clearly held an obligation for a separate 13th month pay. After the Marcopper decision became final, NFSW renewed its demand; CAC refused. NFSW filed a notice to strike January 22, 1982, then struck January 28, 1982; strike‑vote report was filed with MOLE on January 29, 1982 (after the strike began).
Procedural History Below
CAC filed a petition with the Regional Arbitration Branch (R.A.B. Case No. 0110‑82) February 8, 1982, to declare the strike illegal based principally on violation of Batas Pambansa Blg. 130 and noncompliance with Article 264 cooling‑off and Article 264(f) seven‑day strike‑vote reporting requirement. Labor Arbiter Ovejera, after hearings, rendered a February 20, 1982 decision declaring the strike illegal and ordering resumption of operations, reinstatement of employees, payment of salaries for those placed on preventive suspension, and requesting law‑enforcement assistance. NFSW filed a petition for prohibition before the Supreme Court seeking to annul and enjoin implementation of that decision.
Issues Presented
The Supreme Court reduced the controversy to two fundamental issues: (1) whether the NFSW strike was illegal, hinging mainly on whether the statutory cooling‑off period and the seven‑day post‑vote prohibition in Article 264 are mandatory or directory; and (2) whether, under PD 851, CAC was obliged to pay a 13th month salary in addition to the Christmas, milling and amelioration bonuses already being paid.
Legal Framework on Strikes — Articles 264 and 265 (as applied)
Article 264(c), (e) and (f) set out distinct notice periods (30 days for bargaining deadlocks; 15 days for alleged unfair labor practices), impose a cooling‑off duty on the Ministry to exert mediation/conciliation during the period, and require a two‑thirds strike/lockout vote with reporting to the Ministry at least seven days before intended strike subject to the cooling‑off period. Article 265 renders unlawful a strike declared without compliance with collective bargaining procedures, required notice, or reporting of the strike vote, and strikes after assumption of jurisdiction by the President/Minister or submission to arbitration or during the pendency of cases involving the same grounds.
Court’s Analysis — Mandatory Character of the Cooling‑Off Period and 7‑Day Ban
The Court concluded the cooling‑off period and the seven‑day strike‑vote reporting requirement are mandatory. It reasoned that statutory language (“the labor union may strike … should the dispute remain unsettled until the lapse of the requisite number of days from the mandatory filing of the notice,” and the requirement to furnish the Ministry the results “at least seven (7) days before the intended strike, subject to the cooling‑off period”) plainly contemplates waiting periods as preconditions to lawful striking. The Court held that to treat these waiting periods as merely directory would defeat the purposes for which notice and vote requirements were prescribed.
Court’s Analysis — Purposes of Notice and Vote Requirements
The Court emphasized the legislative intent: notice and the cooling‑off period furnish the Ministry an opportunity to mediate and conciliate to avoid strikes and their attendant public and economic harms; the seven‑day pre‑strike reporting provides assurance that a valid strike vote was taken and affords members a chance to seek remedy if misreported or improperly invoked. The Court found these statutory objectives would be undermined if the waiting periods were not mandatory.
Court’s Analysis — Regulation of the Right to Strike and Police Power
Citing the need to reconcile the right to strike with broader public interest, the Court treated the cooling‑off and seven‑day restrictions as reasonable regulations and a valid exercise of the State’s police power. It observed that the right to strike is subject to more regulation than the right to organize due to its impact on public interest, quoting an authority to that effect.
Court’s Analysis — Amicable Settlement and Alleged Criminality of Nonpayment
NFSW argued that nonpayment under PD 851 constituted an unfair labor practice (and an offense against the State) exempting the dispute from cooling‑off limitations. The Court found it unclear that CAC’s refusal was criminal as the implementing rules treated nonpayment as money claims to be processed under labor rules. The Court further held that mediation could aim at permissible provisional or temporary measures—e.g., provisional payments or postponement of intended strike to avert harm—rather than an improper compromise of criminal liability. It also noted that amicable settlement of criminal liability is not categorically forbidden where the law permits settlement; in any event Art. 264(e) makes MOLE’s mediation duty applicable to labor disputes.
Court’s Conclusion on Illegality of the Strike
Because NFSW struck six days after filing a strike notice (before expiration of the mandatory cooling‑off period) and failed to file the strike‑vote report at least seven days prior to the intended strike (the report in fact was filed after the strike began), the Court concluded the strike did not conform to statutory requirements and therefore was illegal. The Court found it unnecessary to rule on whether pendency of an arbitration case would independently render the strike illegal under Article 265.
Court’s Analysis — Scope and Purpose of PD 851 (13th Month Pay)
Turning to the second issue, the Court examined PD 851’s text and purpose: PD 851 required employers to pay a 13th month pay to employees earning not more than P1,000 monthly, but exempted “Employers already paying their employees a 13th month pay or its equivalent.” The Court emphasized the evident legislative intent to benefit only those employees not already receiving an equivalent; the Decree was not intended to impose a double burden on employers already paying an equivalent in some form under voluntary practice or CBA.
Court’s Rationale — Definition of “Equivalent” and Administrative Rules
The Court accorded significant weight to the Rules Implementing PD 851, specifically Section 3(e), which defined “its equivalent” to include Christmas bonus, mid‑year bonus, profit‑sharing payments and other cash bonuses amounting to not less than one‑twelfth of basic salary, while excluding certain allowances and non‑monetary benefits. The Court treated the implementing rule as a conte
Case Syllabus (G.R. No. 87014-16)
Nature of the Case and Relief Sought
- Petition for prohibition filed by petitioner National Federation of Sugar Workers (NFSW) seeking annulment of the Labor Arbiter Ethelwoldo R. Ovejera decision dated February 20, 1982 (Regional Arbitration Branch No. VI-A, Bacolod City) that declared NFSW’s ongoing strike at Central Azucarera de la Carlota (CAC) illegal, and to restrain enforcement or implementation of that decision.
- Petitioner also sought preliminary injunction relief to restrain respondents from implementing or enforcing the February 20, 1982 decision, to enjoin threatened acts violative of rights of strikers and peaceful picketers, and to require maintenance of the status quo as of February 20, 1982 pending resolution.
- On the main petition, petitioner prayed: (1) declaration that the February 20, 1982 decision is null and void; (2) that the preliminary injunction be made permanent; and (3) for such other relief as may be just.
Procedural History Below
- NFSW, bargaining agent of CAC rank-and-file employees, concluded a collective bargaining agreement (CBA) with CAC effective February 16, 1981–February 15, 1984; Art. VII, Sec. 5 of CBA provided for maintenance of present practice on the grant of Christmas, milling and amelioration bonuses.
- On November 28, 1981, NFSW struck allegedly to compel payment of 13th month pay under Presidential Decree No. 851 in addition to bonuses.
- November 30, 1981: CAC and NFSW entered a compromise agreement; paragraph 4 provided that the parties "agree to abide by the final decision of the Supreme Court in any case involving the 13th Month Pay Law if it is clearly held that the employer is liable to pay a 13th month pay separate and distinct from the bonuses already given."
- After the Marcopper decision (G.R. No. 51254) became final and executory in mid-December 1981, NFSW renewed demand for 13th month pay; CAC refused.
- January 22, 1982: NFSW filed a notice to strike with Ministry of Labor and Employment (MOLE) Regional Office in Bacolod City; strike commenced six days later.
- January 29, 1982: NFSW filed a report of strike-vote with MOLE one day after strike commencement.
- February 8, 1982: CAC filed petition with Regional Arbitration Branch VI-A seeking declaration that strike was illegal principally for violation of Batas Pambansa Blg. 130 — specifically for striking before the expiration of the 15‑day cooling‑off period applicable to ULP strikes and before lapse of seven days from submission of strike‑vote results.
- February 20, 1982: Labor Arbiter Ovejera rendered decision declaring the strike illegal and ordering immediate resumption of operations, reinstatement of employees (with exceptions noted), pay for those on preventive suspension, and a directive that NFSW and affiliates desist from acts impairing milling operations; requested law enforcement assistance for enforcement.
- February 26, 1982: NFSW filed the instant petition for prohibition in the Supreme Court, bypassing the NLRC, alleging threatened immediate enforcement of the February 20 decision and violation of fundamental rights.
- Hearing was held and memoranda submitted; no temporary restraining order was issued by the Supreme Court during pendency.
Facts — Parties, Agreements, and Chronology
- NFSW was the bargaining agent representing about 1,200 of over 2,000 CAC rank-and-file employees.
- CBA (Feb. 16, 1981–Feb. 15, 1984) contained Art. VII, Sec. 5: parties agreed to "maintain the present practice on the grant of Christmas bonus, milling bonus, and amelioration bonus to the extent as the latter is required by law."
- Christmas and milling bonuses, under the CBA/practice, amounted to 1½ months’ salary.
- November 28, 1981: strike commenced to press for 13th month pay under PD 851 in addition to existing bonuses.
- November 30, 1981: compromise agreement between CAC and NFSW containing paragraph 4 regarding reliance on any "final decision of the Supreme Court" holding employers liable to pay 13th month pay separate and distinct from bonuses.
- Marcopper case (G.R. No. 51254) was pending as of November 30, 1981; original Marcopper decision promulgated June 11, 1981 (dismissal on vote of seven Justices); motion for reconsideration denied December 15, 1981 (five‑Justice vote for denial; three dissented; two reserved; four did not take part); entry of judgment December 18, 1981, rendering Marcopper decision final and executory.
- NFSW renewed demand for 13th month pay after Marcopper finality; CAC refused.
- NFSW filed strike notice Jan. 22, 1982; strike began Jan. 28, 1982; strike‑vote report filed Jan. 29, 1982.
- CAC filed petition to declare strike illegal Feb. 8, 1982 before R.A.B. VI-A; Labor Arbiter declared strike illegal Feb. 20, 1982.
Issues Framed by the Court
- The Court reduced the contested matters to two fundamental issues for disposition:
- Whether the strike declared by NFSW is illegal, which principally depends on whether the cooling‑off period (Art. 264(c)) and the seven‑day ban after reporting strike‑vote (Art. 264(f)) are mandatory or merely directory.
- Whether, under Presidential Decree No. 851 (13th Month Pay Law), CAC is obliged to pay its workers a 13th month salary in addition to Christmas, milling and amelioration bonuses already paid under the CBA — i.e., whether CAC’s existing bonuses constitute an "equivalent" of the 13th month pay and thus exempt CAC from PD 851’s requirement.
Relevant Statutory Provisions Quoted by the Court
- Article 264, Labor Code (pertinent excerpts quoted):
- Section (c): Filing notice of strike: 30 days for bargaining deadlocks, 15 days for unfair labor practices; during the cooling‑off period MOLE to exert all efforts at mediation and conciliation; should the dispute remain unsettled until lapse of requisite days, union may strike.
- Section (e): MOLE duty to exert all efforts at mediation/conciliation during cooling‑off period; strike/lockout may occur after lapse.
- Section (f): Strike decision must be approved by at least two‑thirds of total union membership; results must be furnished to MOLE at least seven days before intended strike, subject to cooling‑off period.
- Article 265, Labor Code (quoted):
- It is unlawful for labor organization or employer to declare a strike or lockout without first having bargained collectively, or without filing the notice required, or without the necessary strike/lockout vote reported to MOLE.
- It is likewise unlawful to declare a strike or lockout after assumption of jurisdiction by the President or Minister or after certification/submission to arbitration or during pendency of cases involving same grounds for the strike or lockout.
Court’s Holding — Legality of Strike
- The strike staged by NFSW was declared illegal.
- Principal bases for the holding:
- The cooling‑off period in Art. 264(c) and the seven‑day strike ban after the strike‑vote report in Art. 264(f) are mandatory, not merely directory.
- The statutory language ("the labor union may strike" after lapse of requisite days; "in every case" furnish MOLE results at least seven days before intended strike) and policy underlying them show the waiting periods must be complied with.
- The two requirements (cooling‑off period and seven‑day report ban) must both be observed; a strike declared before lapse of required periods frustrates the purposes of mediation/conciliation and the assurance of a true union decision to strike.
- NFSW declared strike six days after filing a strike notice — before the mandatory cooling‑off period had lapsed — and failed to file with MOLE, prior to launching the strike, a strike‑vote report at least seven days before the intended strike; instead, the strike‑vote report was filed after the strike had commenced.
- Because of these violations, the Court concluded the strike was not in conformity with law and therefore illegal.
- The Court expressly stated that, given this conclusion, it was unnecessary to decide whether the pendency of the arbitration case (R.A.B. No. 512-81) rendered the strike illegal under Art. 265 (prohibition on strikes during pendency of cases involving same grounds).
Court’s Reasoning — Meaning, Purpose and Constitutionality of the Waiting Periods
- Language of the Law:
- The Court interp