Title
Nissan Motors Phils., Inc. vs. Secretary of Labor and Employment
Case
G.R. No. 158190-91
Decision Date
Jun 21, 2006
A labor dispute between Nissan and its union led to a work slowdown despite DOLE orders. Union officers were dismissed, members suspended. SC upheld penalties, modified economic benefits, and sustained contempt citation against union counsel.
labor dispute
labor union
disciplinary measures

Case Summary (G.R. No. 158190-91)

Factual Background

The labor dispute began as a collective bargaining deadlock between Nissan Motor and the Union, prompting the filing of four (4) notices of strike with the NCMB. The first notice of strike was filed on December 4, 2000 (NCMB-RBIV-LAG-NS-12-045-00), premised on alleged unfair labor practice following the suspension of about 140 employees after a disruptive protest action on November 15, 2000 tied to the employees’ demand for payment of the second half of their thirteenth month pay.

The second notice of strike was filed on July 24, 2001 (NCMB-RBIV-LAG-NS-07-027-01), on the ground of deadlock in collective bargaining involving a combination of economic and non-economic issues. On August 22, 2001, DOLE, upon Nissan Motor’s petition, issued an order assuming jurisdiction over the dispute and expressly enjoining any strike or lockout, directing the parties to cease and desist from acts that would exacerbate the situation, and requiring the Union to refrain from any slowdown or similar activities that might disrupt operations or reduce production below normal levels.

Development of the DOLE Proceedings and the Assumption Order’s Enforcement

After the assumption of jurisdiction order, the Union and the Company continued to file pleadings and notices. The DOLE Secretary later summarized that on August 27, 2001, the Union filed a third notice of strike based on alleged illegal lockout and illegal suspension and related allegations. On September 12, 2001, DOLE directed consolidation of the third notice with the first two, reiterated the injunction against strike or lockout, and directed the parties to refrain from slowdown. On September 18, 2001, the Union filed an urgent petition to suspend the effects of termination of Union officers, then numbering forty-three.

On September 18, 2001, the Union filed a fourth notice of strike alleging illegal dismissal of eighteen Union officials, illegal lockout tied to forced leave, coercion and intimidation, union busting, and non-payment of salaries. On September 28, 2001, Acting DOLE Secretary Arturo D. Brion issued an order consolidating the fourth notice with the first three and again reiterated the injunction contained in the assumption order and related DOLE orders.

Despite the reiterated injunctions, Nissan Motor alleged that the Union violated the assumption order and staged an actual strike on October 1, 2001, picketing and blocking company offices and plant premises and obstructing ingress and egress. Nissan Motor sought the deputization of the Philippine National Police (PNP) to secure free access. The DOLE Secretary then issued an order deputizing the PNP on October 13, 2001, and the parties later presented their positions on the underlying labor issues and on whether the Union’s conduct amounted to a prohibited slowdown or illegal strike.

Parties’ Positions Before DOLE

Nissan Motor disputed the Union’s claims and argued that (i) the Union’s strike-related actions were illegal because they contravened the assumption of jurisdiction order and cooling-off requirements; (ii) certain suspensions and later terminations were valid disciplinary measures preceded by due process; and (iii) economic demands sought by the Union were unsupportable given the Company’s financial distress. Nissan Motor maintained that its losses over recent years, attributed to broader economic conditions and reduced market share, militated against awarding generous economic benefits and that labor costs were unsustainable at the level proposed by the Union.

The Union, on the other hand, denied engaging in concerted work slowdown, argued that no overt acts established concerted slowdown, and insisted that production disruptions were attributable to other causes such as training and lack of parts. The Union also assailed the Company’s discipline and dismissals as unlawful and asserted that Nissan Motor violated procedural due process. The Union further raised legal defenses including the pari delicto doctrine, and challenged the dismissal of Union officers and the Company’s alleged authority to dismiss them after the Union brought illegal strike allegations before DOLE.

DOLE Decision and Modification

On December 5, 2001, DOLE Secretary Patricia A. Sto. Tomas issued a decision that affirmed the suspension of the 140 employees involved in the first notice of strike; sustained the dismissal of Union officers; but recalled the dismissal of Union members, ordering their reinstatement to former positions without back wages, and imposing a one-month suspension deemed already served. DOLE also ordered the parties to conclude a collective bargaining agreement (CBA) embodying the dispositions made and other agreements reached during negotiation and conciliation, with prospective effect.

Both Nissan Motor and the Union sought partial reconsideration, but their motions were denied in a modificatory resolution issued on January 22, 2002. The modification deleted from the list of dismissed Union officers the names of three employees that had been previously identified as officers but were not shown as officers in the official records of the Bureau of Labor Relations.

Proceedings Before the Court of Appeals

Nissan Motor and the Union each filed separate petitions for certiorari under Rule 65 before the CA, in CA-G.R. SP No. 69107 (Nissan Motor) and CA-G.R. SP No. 69799 (the Union), which were later consolidated. On February 7, 2003, the CA, through its Special Division of Five, denied both petitions and affirmed DOLE’s decision and modificatory resolution. The parties’ motions for reconsideration were denied by CA on May 15, 2003.

Before the CA ruled on the merits, the CA’s Fourth Division issued a resolution on November 8, 2002 citing the Union’s counsel Atty. Banzuela, Jr. for indirect contempt under Rule 71, ordering him to pay a fine of P15,000.00. The narrative of antecedents showed that the Union had filed motions and pleadings alleging improper handling of the case among divisions, including content later deemed by the CA to be baseless and malicious; the CA later found the explanation insufficient to justify the challenged utterances.

Issues on Review by the Supreme Court

In the petitions under Rule 45, Nissan Motor sought review of the CA ruling insofar as it affirmed (a) DOLE’s award of economic benefits to the rank-and-file workers and (b) the recall of the dismissal of 140 Union members. The Union, in its own petitions, assailed DOLE’s and the CA’s finding that the Union engaged in concerted work slowdown despite the assumption order. It also challenged the contempt resolution involving its counsel.

Supreme Court’s Treatment of Fact-Finding and the Concerted Slowdown Finding

The Supreme Court recognized the controlling standards for judicial review of quasi-judicial fact-finding by administrative and specialized agencies, emphasizing that factual determinations supported by substantial evidence generally receive respect and even conclusiveness when upheld by the CA. Applying this, the Court declined to disturb the factual conclusion confirmed by DOLE and the CA that the Union and its members engaged in work slowdown that, under the circumstances and in defiance of the assumption order, amounted to an illegal strike.

The Court examined the evidentiary basis for the claimed slowdown. It noted that production outcomes across several lines reflected a significant reduction during the period tied to the CBA deadlock and the filing of the second strike notice. The Court rejected the Union’s explanations that production setbacks were due to training or lack of parts, observing instead that record evidence pointed to slowdown effects, including delays attributable to the slowdown in particular lines and the connection between absenteeism and forced leave. The Court also treated the Union’s failure to credibly show cessation of prohibited activity as undermining the Union’s defense.

Legality of Dismissal, Penalty Distinctions, and Due Process

The Court held that, because the Union engaged in work slowdown that constituted an illegal strike, Nissan Motor was correct in dismissing the Union officers under Article 264(a) for participating in the illegal strike in defiance of the assumption order. However, the Court agreed with the legal distinction in the Labor Code’s framework between union officers and union members/workers. The Court reiterated that while the employer is authorized to declare union officers who knowingly participated in illegal strikes as having lost employment status, the law’s structure and jurisprudence distinguish ordinary striking workers or union members: termination generally requires proof that they committed illegal acts during the strike.

On this point, the Court affirmed DOLE’s and the CA’s choice to temper the consequence for rank-and-file members. It endorsed DOLE’s decision to impose a one-month suspension (deemed already served) rather than loss of employment status, guided by circumstances that the members reported for work and did not abandon their posts, acted pursuant to leader orders, and that the evidence did not establish their participation in illegal acts during the strike in the same manner as the officers.

The Court also addressed the Union’s claim of lack of due process. It found that the record showed the Company asked the erring Union officers/members to explain and warned them of possible consequences before declaring loss of employment status. It further held that the Union’s due process allegations were essentially issues of fact, which were not reviewable in a petition for review on certiorari where the appellate court’s factual findings generally bind the Supreme Court. Consequently, the Court did not need to dwell on the entitlement to full back wages, because back wages normally follow only when dismissal or suspension is declared unlawful.

Consideration of Alleged Exacerbation by the Company

The Court did not portray Nissan Motor as entirel

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