Title
Philippine Diamond Hotel and Resort, Inc. vs. Manila Diamond Hotel Employees Union
Case
G.R. No. 158075
Decision Date
Jun 30, 2006
A union staged an illegal strike after failing to secure certification as the exclusive bargaining agent; officers lost employment status, while non-participating members were reinstated without backwages.
labor union
certification election
collective bargaining rights
A

Case Summary (G.R. No. 158075)

Petitioner

The Hotel (Philippine Diamond Hotel and Resort, Inc.) challenged the union’s actions, sought injunctive relief, petitioned to declare the strike illegal, and contested various claims for reinstatement and backwages.

Respondent

The Manila Diamond Hotel Employees Union (registered August 19, 1996) and its officers and members pursued certification, demanded bargaining (for their members), staged a strike beginning November 29, 1997, and filed ULP complaints and related cases.

Key Dates

  • Union registration: August 19, 1996.
  • Petition for certification election: November 11, 1996 (denied by DOLE-NCR).
  • Cash remittance incident and related disciplinary action: end of May 1997 and June–July 1997.
  • Notice to bargain and Notice of Strike: September 1997 (Notice to Bargain), Notice of Strike filed September 29, 1997; strike began November 29, 1997.
  • DOLE order certifying dispute to NLRC (assumption of jurisdiction): April 15, 1998; modified April 30, 1998.
  • NLRC Resolution declaring strike illegal and deeming union officers/members as having lost employment: November 19, 1999.
  • Court of Appeals decision affirming illegality but ordering reinstatement with backwages for members: November 21, 2002.
  • Final appellate disposition (Supreme Court decision basis): decision reviewed under the 1987 Constitution.

Applicable Law and Constitutional Basis

  • 1987 Constitution, Article XIII, Section 3 (workers’ rights to self-organization, collective bargaining, and the right to strike in accordance with law).
  • Labor Code provisions: Article 255 (exclusive bargaining representation), Article 242 (rights of legitimate labor organizations), Article 264 and subprovisions (prohibitions on strikes involving ULP during pendency of cases, and acts during picketing such as obstruction), and paragraph 3 of Article 264(a) (loss of employment status of union officers who knowingly participate in illegal strikes and of workers who commit illegal acts during strikes). Jurisprudential principles on backwages and the “fair day’s wage for a fair day’s labor” rule as articulated in cited precedent were applied.

Procedural History

The union sought certification and, after denial by DOLE-NCR, proceeded to seek bargaining (for members) and ultimately declared and staged a strike. The Hotel filed for injunction and later a petition to declare the strike illegal. The NCMB conducted conciliation conferences; the union filed ULP complaints. DOLE intervened by certifying the dispute to the NLRC for compulsory arbitration and ordering return-to-work directives; Acting Secretary Español modified the order to require reinstatement to the payroll and consolidation of pending cases. The NLRC declared the strike illegal, deemed union officers and members to have lost employment, and dismissed several complaints. The Court of Appeals affirmed illegality and officers’ loss of employment but reversed the NLRC to require reinstatement with backwages for union members. The Supreme Court reviewed the CA ruling.

Facts Relevant to Illegality Determination

  • The union was not the exclusive bargaining representative of the majority in an employer-wide appropriate unit; DOLE-NCR denied certification on fragmentation grounds.
  • The union demanded bargaining “for its members only,” which the Hotel refused on the ground that the union was not certified as exclusive bargaining agent.
  • The union announced and commenced a strike on November 29, 1997 while conciliation remained pending and while some proceedings were unresolved.
  • Evidence (photographs, NLRC ocular inspection report, police reports) indicated concerted actions by strikers that included blockade of employee passage/driveway, setting up a tent, use of ropes and placards to obstruct ingress and egress, noise barrage, threats to guests, and explosions of firecrackers that caused guest panic. Some hotel supervisors were observed participating in or supporting the strike.

Legal Issues on Appeal

  1. Whether the union’s strike was a lawful exercise of the right to strike under the Constitution and Labor Code.
  2. Whether the Hotel’s refusal to bargain constituted an unfair labor practice (ULP) that would justify the strike.
  3. Whether union officers and/or union members who participated in the strike lost employment status and whether they should be reinstated with backwages.
  4. Whether the Court of Appeals properly ordered reinstatement of union members with backwages.

Supreme Court’s Conclusions on Bargaining and ULP

  • Article 255 of the Labor Code mandates that only a labor organization designated or selected by the majority in an appropriate bargaining unit is the exclusive representative for collective bargaining. Because the union was not the certified exclusive representative, it had no legal standing to demand employer-wide collective bargaining on behalf of a broader unit and could not lawfully insist on bargaining for nonmembers.
  • The union’s attempt to bargain “for its members only” was held to risk fragmentation of bargaining units, undermining the statutory and policy objective favoring a single employer-wide unit to enhance collective bargaining power and avoid fragmentation. The Hotel’s refusal to bargain under those circumstances did not constitute a ULP that would justify a strike.
  • The union’s allegation that the Hotel prevented or intimidated workers from joining the union was not substantiated by substantial evidence; the burden rested on the union to prove ULP allegations, and available conciliation opportunities remained for the union to present evidence.

Supreme Court’s Findings on Strike Conduct and Illegality

  • The strike was declared illegal because: (a) it was staged during the pendency of cases involving the same grounds (violating Article 264’s proscription against striking on ULP grounds while cases are pending); and (b) the means employed included obstructing the free ingress and egress to the employer’s premises and acts of intimidation and coercion (violating Article 264(e)). Photographs, police reports, and the NLRC ocular inspection supported these findings.
  • The exercise of the constitutional right to strike is not absolute; use of violence, intimidation, obstruction, or coercion that injures property rights or constitutes nuisance renders a strike illegal.

Distinction Between Union Officers and Rank-and-File Members; Evidentiary Requirements

  • Under paragraph 3 of Article 264(a), any union officer who knowingly participates in an illegal strike may be declared to have lost employment status. Thus, officers may be dismissed by mere knowing participation in an illegal strike (or commission of illegal acts during the strike).
  • Rank-and-file members, however, cannot be dismissed for mere participation in an illegal strike; there must be proof they committed illegal acts during the strike to justify termination.
  • The NLRC’s blanket declaration that union officers and members lost employment status without identifying specific members who committed illegal acts was problematic. The photographic evidence and lists filed by the Hotel named many strikers but did not specifically identify which individuals committed particular illegal acts. The Supreme Court therefore directed a remand to identify who among the listed strikers actually committed illegal acts.

Backwages Rule and Exceptions

  • The general rule is that striking employees are not entitled to backwages for strike days under the principle “a fair day’s wage for a fair day’s labor.” This rule applies even when the strike protests alleged ULPs.
  • Exceptions to the “no backwages” rule exist in limited circumstances: illegal lockout compelling a strike, the employer’s commission of the grossest form of ULP, discriminatory rehiring practices in bad faith, or instances where strikers made an unconditional offer to return to work and were refused reinstatemen

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