G.R. No. 153799 - Solidbank Union vs. Metropolitan Bank and Trust Co.

Case Summary (G.R. No. 153799)

Factual Background: The April 3, 2000 Mass Action and the Secretary of Labor’s Orders

The Solidbank Union was a legitimate labor organization and the duly certified sole bargaining representative of all rank-and-file employees of Solidbank. Negotiations for a new economic package under the remaining term of the 1997–2001 Collective Bargaining Agreement (CBA) reached an impasse. On January 18, 2000, then Secretary of Labor Bienvenido E. Laguesma (Secretary Laguesma) assumed jurisdiction over the labor dispute and enjoined the parties from holding any strike or lockout or engaging in any activity likely to exacerbate the situation. Thereafter, on March 24, 2000, Secretary Laguesma issued an order directing, among others, Solidbank and the Union to conclude their CBA for 2000 and 2001, dismissing an unfair labor practice charge against Solidbank, and ordering a check-off from employees’ lump sum payment equivalent to seven percent (7%) of economic benefits for the first year, inclusive of signing bonuses, subject to check-off requirements. The order also directed Solidbank to recall show-cause memos issued to employees who participated in mass actions, if such memos had been issued.

Despite the assumption order, about seven hundred twelve (712) union members and officers skipped work on April 3, 2000 and trooped to Secretary Laguesma’s office in Intramuros, Manila, to accompany their lawyer in filing a Motion for Reconsideration and to stage a brief public demonstration. Other employees in provincial branches likewise absented themselves. Solidbank regarded the mass action as an illegal strike—an abandonment of work intended to paralyze its operations—and issued memoranda informing participants that they had put their jobs at risk. It also offered to take back those who would report for work on April 6, 2000. About five hundred thirteen (513) employees complied. For the one hundred ninety-nine (199) employees who did not comply, Solidbank required them to explain within twenty-four (24) hours why they should not be dismissed and, pending explanations, placed them under preventive suspension. On April 17, 2000, Solidbank dismissed the one hundred ninety-nine (199) employees, but later re-admitted seventy (70), leaving one hundred twenty-nine (129) dismissed employees. Separately, some employees executed Release, Waiver, and Quitclaim documents in favor of Solidbank.

Further corporate events intervened. The Union and Solidbank both sought reconsideration of Secretary Laguesma’s ruling. On May 8, 2000, Secretary Laguesma denied motions for reconsideration separately filed by Solidbank and the Union. Subsequently, Solidbank and First Metro entered into a merger agreement, with Solidbank as the surviving entity, but renamed as First Metro Investment Corporation. Later, Metrobank bought all banking-related assets and liabilities of Solidbank (renamed First Metro), which ceased operations on August 31, 2000.

Proceedings Before the Labor Arbiter: Complaint, Defenses, and Labor Arbiter Flores’s Decision

On July 21, 2000, the Union, along with its dismissed members (collectively referred to as complainants), filed an illegal dismissal complaint before the Labor Arbiter against Solidbank, its officers, and First Metro, and later amended it by dropping thirty-two (32) individual complainants and some respondents while impleading Metrobank and its Human Resources officer. Complainants argued that the April 3, 2000 mass demonstration was not a strike but a lawful exercise of constitutional rights to freedom of expression, peaceful assembly, and to petition the government for redress.

Respondents countered that Solidbank validly terminated the employment of those who participated in an illegal strike, and that the Unions’ unfair labor practice theory lacked merit. They also argued that because Solidbank ceased operations on August 31, 2000, all employees were terminated pursuant to Article 283 of the Labor Code, which governs closure or cessation of operations.

On March 16, 2001, Labor Arbiter Luis D. Flores (Labor Arbiter Flores) ruled that the April 3, 2000 incident was not a strike but merely an expression of displeasure over Secretary’s ruling. The Labor Arbiter further held that the twenty-four-hour deadline to submit written explanations was insufficient to afford reasonable opportunity to refute the charges. He also found that Solidbank committed unfair labor practice by using union membership as a basis for recalling or terminating employment. Consequently, the Labor Arbiter declared the dismissal illegal and unjustified and ordered reinstatement and the payment of full backwages, attorneys’ fees, and moral and exemplary damages, with computation stated in the dispositive portion.

The NLRC’s Divergent Rulings and Subsequent Court of Appeals Proceedings

Both Solidbank and Metrobank appealed. On July 23, 2001, the NLRC Second Division reversed and vacated the Labor Arbiter’s decision, holding that the mass action was a strike within the meaning of Article 212(o) of the Labor Code and in violation of Secretary Laguesma’s January 18, 2000 assumption order. Nevertheless, it awarded separation benefits on equitable grounds and ruled that Solidbank did not interfere with the employees’ right to self-organization, thus no unfair labor practice existed. It also dismissed the complaint regarding a complainant for forum shopping and dismissed claims of employees who executed quitclaims.

Complainants and banks moved for reconsideration, but the NLRC denied the same in a resolution dated September 28, 2001. Meanwhile, other similarly situated employees filed separate cases, which were assigned to different labor arbiters. Labor Arbiter Canizares dismissed those complaints on November 14, 2000, but the NLRC Third Division reversed on January 31, 2002, holding Solidbank liable for illegal dismissal and ordering reinstatement and full backwages (subject to provisions of the subsisting CBA if reinstatement was not feasible), though it dismissed other claims for lack of merit.

The conflicting NLRC decisions spawned multiple petitions for certiorari in the Court of Appeals (CA). In one set, the CA Twelfth Division denied petitions and upheld the illegality of the dismissal. In another set, involving CA-G.R. SP No. 68054, the CA Second Division held that the April 3, 2000 mass demonstration was a valid exercise of the employees’ right to petition for redress and reinstated Labor Arbiter Flores’s decision, with reductions in moral and exemplary damages. In CA-G.R. SP No. 68998, the CA Special Third Division ruled that Metrobank could not be held solidarily liable with Solidbank because the banks had separate and distinct legal personalities and held that the mass demonstration was an illegal strike, further stating that complainants were not entitled to separation pay due to violation of the assumption order.

The Supreme Court’s Earlier November 15, 2010 Decision as Controlling Res Judicata

The core doctrinal and factual determinations had already been resolved by the Supreme Court in its November 15, 2010 Decision in Solidbank Corporation v. Gamier (G.R. Nos. 159460 and 159461). The present consolidated petitions came to be dismissed because that decision constituted res judicata.

In that earlier decision, the Supreme Court addressed whether the concerted mass action and related work abandonment/ boycott were a lawful protest under freedom of expression and related rights or an unlawful labor strike; whether dismissals were valid; and whether separation pay or financial assistance was warranted. The Court held that the protest rally and concerted abandonment were actually a strike, not a legitimate exercise of constitutional rights, and that the employees violated Secretary Laguesma’s January 18, 2000 assumption order. It also upheld the dismissal of union officers and determined that petitioners failed to present proof that the union members participated in the commission of an illegal act during the strike. The Supreme Court then specified individual rights and liabilities, including those who had executed Release, Waiver, and Quitclaim documents, those dropped from the original complaint, and those who were included in the appeal though not impleaded as parties in the first complaint. It further ruled that reinstatement was no longer feasible due to the considerable lapse of time and the closure of Solidbank, and awarded separation pay equivalent to one (1) month salary for every year of service. For those who executed quitclaims, it ordered that separation pay should be net of sums already received. Regarding Metrobank, it held that Metrobank could not be held solidarily liable with Solidbank because it was not the successor-in-interest. It also refused to hold Vistan and Mendoza solidarily liable absent a showing of malice, ill-will, or bad faith. The dispositive portion ordered payment of separation pay to entitled individual respondents, and directed the NLRC to determine who were union members entitled to the award and who were union officers excluded for valid dismissal.

The Court noted that the earlier November 15, 2010 decision became final and executory on May 20, 2011, invoking the immutability of judgment.

Issues Framed in the Present Petitions

In G.R. No. 153799, complainants argued that the Labor Arbiter’s reinstatement aspect was immediately executory under Article 223 of the Labor Code, and thus they claimed entitlement to backwages from Labor Arbiter’s promulgation until reversal by the NLRC. Metrobank countered that the petition was improper because it sought review of interlocutory CA resolutions granting injunctive relief under Rule 45, and further argued mootness and that Article 223 was no longer applicable because the controversy had already reached the CA and the Labor Arbiter decision was no longer on appeal. Metrobank also renewed jurisdictional and liability arguments.

In G.R. No. 157506, complainants insisted

Case Syllabus (G.R. No. 153799)

Consolidation and Case Identity

These petitions were consolidated because they all arose from the same April 3, 2000 mass action by Solidbank employees and from the related and conflicting decisions of the Court of Appeals (CA) and the National Labor Relations Commission (NLRC).
The Court noted that the core issues were already resolved in Solidbank Corporation v. Gamier decided on November 15, 2010, and that the November 15, 2010 Decision constituted res judicata in the consolidated petitions.
The Court dismissed the consolidated petitions for lack of merit, on the ground that the final ruling in G.R. Nos. 159460 and 159461 became binding and immutable.

Parties and Procedural Posture

Solidbank Union and its members were petitioners in one set of consolidated petitions (G.R. No. 153799 and related petitions involving the same labor dispute).
Metropolitan Bank and Trust Company (Metrobank) was respondent in G.R. No. 153799 and petitioner in G.R. No. 157169, assailing portions of the CA rulings affecting separation benefits and the injunction issued in the course of CA proceedings.
Solidbank Corporation (Solidbank) and its successor entity First Metro Investment Corporation (First Metro) were involved in the labor proceedings and in the subsequent petitions, including those where corporate successor and liability issues were raised.
The Court dealt with interrelated CA certiorari petitions arising from opposite NLRC rulings, and then with Supreme Court petitions attacking those CA decisions.

Key Factual Allegations

Solidbank Union (Union) was the duly certified sole bargaining representative of Solidbank’s rank-and-file employees.
The Union and Solidbank negotiated a new economic package for the remaining two years of the 1997–2001 collective bargaining agreement (CBA), but the parties reached an impasse.
On January 18, 2000, Secretary of Labor Bienvenido E. Laguesma (Secretary Laguesma) assumed jurisdiction over the dispute and enjoined the parties from holding any strike or lockout or any activity that might exacerbate the situation.
On March 24, 2000, Secretary Laguesma issued an order directing the parties to conclude the CBA for 2000 and 2001, dismissing an unfair labor practice charge against Solidbank, requiring check-off of seven percent (7%) of certain economic benefits, and directing Solidbank to recall show-cause memos if such memos had in fact been issued.
On April 3, 2000, approximately seven hundred twelve (712) Union members and officers skipped work and went to the Secretary’s office in Intramuros, Manila, to accompany their lawyer in filing a motion for reconsideration and to stage a brief public demonstration.
Other rank-and-file employees in provincial branches also absented themselves from work on April 3, 2000.
Solidbank treated the mass demonstration and work stoppage as an illegal strike that would paralyze operations, issued memoranda warning employees that their jobs were at risk, offered re-admission to those who would report to work on April 6, 2000, and required non-compliant employees to explain within 24 hours why they should not be dismissed.
Solidbank placed the non-compliant employees under preventive suspension and dismissed 199 employees on April 17, 2000, later re-admitting 70 employees, leaving 129 dismissed employees.
Some employees executed Release, Waiver, and Quitclaim in favor of Solidbank on varying dates.
The Secretary denied both the Union’s and Solidbank’s motions for reconsideration on May 8, 2000.
Solidbank merged with First Metro, with Solidbank as the surviving entity renamed First Metro Investment Corporation, and later Metrobank bought the banking-related assets and liabilities, after which Solidbank (renamed First Metro) ceased banking operations on August 31, 2000.

Labor Arbiter Proceedings

On July 21, 2000, the Union, through complainants including dismissed employees, filed an illegal dismissal complaint with the labor arbiter against Solidbank and its officers and other impleaded entities.
Complainants asserted that the April 3, 2000 mass demonstration was not a strike but a legitimate exercise of their constitutional rights to freedom of expression, peaceful assembly, and petition the government for redress of grievances.
Respondents argued that Solidbank’s termination was valid because the action was an illegal strike and that the dismissal was based on justifiable cause.
Respondents also emphasized closure of Solidbank’s banking operations on August 31, 2000, invoking Article 283 of the Labor Code in relation to cessation of operations.
On March 16, 2001, Labor Arbiter Luis D. Flores held that the April 3, 2000 incident was not a strike but was instead an expression of displeasure over the Secretary’s ruling.
The labor arbiter found the 24-hour period for explanation unreasonably short to afford due process.
The labor arbiter also found unfair labor practice by Solidbank for using Union membership as a basis to recall or terminate employment.
The labor arbiter ordered reinstatement and payment of full backwages and employment benefits, attorneys’ fees, moral damages, and exemplary damages, with the computation stated in the dispositive portion.

NLRC Rulings and Conflicts

Solidbank and Metrobank appealed the labor arbiter’s decisio