Title
University of San Agustin Employees' Union-FFW vs. Court of Appeals
Case
G.R. No. 169632
Decision Date
Mar 28, 2006
A union's strike was declared illegal after defying a labor order, resulting in officers losing employment; economic disputes were referred to arbitration per CBA.
tuition incremental proceeds
collective bargaining agreement
illegal strike

Case Summary (G.R. No. 169632)

Factual Background

The University is a non-stock, non-profit educational institution offering both basic and higher education. The Union was the duly recognized collective bargaining unit for both teaching and non-teaching rank-and-file personnel. The parties later entered negotiations for the economic provisions for the remaining years SY 2003-2004 and SY 2004-2005, focusing on the manner of computing the percentage of net TIP to be allotted for salary and other benefits, specifically seventy percent (70%) of the net TIP.

The negotiations reached an impasse on the computation of TIP. As the parties could not agree, the Union declared a bargaining deadlock, filed a Notice of Strike before the National Conciliation and Mediation Board (NCMB), and the University opposed by moving to strike out the Notice of Strike and refer the dispute to voluntary arbitration, anchored on the CBA’s “no strike, no lockout” clause. The NCMB failed to resolve the University’s motion.

Faced with the dispute and the impasse, the parties made a joint request for the SOLE to assume jurisdiction. The labor dispute was docketed as OS-AJ-0032-2003, and on September 18, 2003, the SOLE issued an Assumption of Jurisdiction Order (AJO) directing the parties to cease and desist from acts that would exacerbate the situation and strictly enjoining any strike or lockout. The order also required position papers and evidence to be submitted within specific periods.

On September 19, 2003, the Union staged a strike. At 6:45 a.m. that day, sheriffs Francisco L. Reyes and Rocky M. Francisco arrived at the University to serve the AJO. At the main entrance, the sheriffs met Merlyn Jara, whom they attempted to serve with the AJO. Ms. Jara read the AJO and refused to receive it, citing Union Board Resolution No. 3 that named the union president as the only authorized person to receive the order. The sheriffs informed her that even if she refused to acknowledge receipt, the AJO would still be considered served.

The sheriffs then proceeded to post copies of the AJO at approximately 8:45 a.m. at designated locations, including the main gate and entrances of buildings and the Union’s office within the campus. At 9:20 a.m., the sheriffs served the AJO on the University. Later, at around 5:25 p.m., the Union president arrived and received the AJO. The University thereafter filed, on September 24, 2003, a petition to declare the strike illegal and loss of employment status before the NLRC Sub-regional Arbitration Branch No. VI in Iloilo City, docketed as NLRC SRAB Case No. 06-09-50370-03, and it requested consolidation with the SOLE proceedings; consolidation was granted by the Labor Arbiter on November 7, 2003.

Proceedings Before the SOLE

On April 6, 2004, the SOLE rendered a Decision resolving the economic issues over which the parties had deadlocked, including the issue of legality or illegality of the September 19, 2003 strike. It also ruled on the labor consequences of the strike. Dispositively, the SOLE dismissed the petition to declare the strike illegal for lack of legal and factual basis, and consequently held that there was no basis to declare loss of employment status on the part of any striking union members. The University’s motion for reconsideration was denied on May 24, 2004.

Court of Appeals’ Treatment of the Strike and the Economic Issues

The University elevated the matter to the Court of Appeals through a petition for certiorari docketed as CA-G.R. SP No. 85317. On March 4, 2005, the Court of Appeals partially granted the petition. The Court of Appeals affirmed the SOLE’s rulings on the economic issues, particularly the formula for computing the employees’ share in the tuition fee increase for Academic Year 2003-2004. However, it reversed the SOLE’s disposition on the legality of the September 19, 2003 strike, declaring the strike illegal and deeming the union officers to have lost their employment status. It further affirmed the SOLE’s dispositions on the economic issues at that time.

After motions for reconsideration from both parties, the Court of Appeals, acting on the Partially Amended Decision dated August 23, 2005, granted the University’s motion for partial reconsideration regarding the economic issues. It ruled that the SOLE had abused its discretion in resolving the economic issues because those matters were properly subject to the grievance machinery as embodied in the CBA. It therefore directed the parties to refer the economic issues to voluntary arbitration, particularly as to the computation and determination of the TIP share in the manner stated in the decision. The Court of Appeals maintained, however, its prior ruling that the strike was illegal and that the union officers were deemed to have lost employment status.

Issues Raised on Petition for Review

The Union and the union officers filed the instant petition on September 20, 2005, raising as principal issues: first, whether the Court of Appeals committed grave abuse of discretion in declaring illegal the September 19, 2003 strike and in deeming the union officers to have lost employment status, given petitioners’ asserted compliance with the effect of the AJO and their alleged absence of bad faith or recalcitrance; and second, whether the Court of Appeals committed grave abuse of discretion in directing that the economic issues be referred to voluntary arbitration.

Petitioners emphasized that the AJO was deemed served upon them as of 8:45 a.m. on September 19, 2003, and they argued that, in situations where a strike has already commenced, the SOLE gives striking workers a period of twenty-four hours to return to work, which they asserted they were not shown to have violated. They also argued that the SOLE’s authority to assume jurisdiction necessarily covered all questions and controversies arising from the dispute, including those involving issues allegedly under the labor arbiter’s exclusive jurisdiction.

Supreme Court’s Treatment of the Strike Issue

The Supreme Court reiterated that under Rule 45, only questions of law may be raised, and factual findings of the lower tribunal are generally respected. Nonetheless, it proceeded to assess the evidence on the strike issue because the Court of Appeals’ conclusions differed from the SOLE’s conclusions regarding legality.

The Court found the Court of Appeals’ conclusions well supported, particularly by the sheriff’s report, which the Court treated as an official statement of the sheriffs’ acts under the SOLE’s writs and processes. It applied the presumption that a sheriff regularly performed official duty, absent contrary evidence supported by clear and convincing proof.

The sheriff’s report unequivocally stated that union officers refused to receive the AJO when the AJO was served on them on the morning of September 19, 2003. The Court held that Union Board Resolution No. 3, which authorized only the union president to receive the AJO, could not circumvent the established standard procedure under the Office of the Undersecretary for Labor Relations that considers AJOs as duly served upon posting of copies on designated places. The Court emphasized that such procedure was adopted precisely to prevent thwarting of AJOs by the simple expedient of refusal to receive them.

The Court also found unpersuasive petitioners’ attempt to excuse refusal by claimed procedural expectations, including the assertion of a supposedly well settled practice that the SOLE gives twenty-four hours to return to work. It held that such practice had no basis in law and jurisprudence. It then anchored its ruling on the plain text of Article 263(g) of the Labor Code, which provides that if a strike has already taken place at the time of assumption or certification, all striking or locked out employees shall immediately return to work, and the employer shall resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout. The Court rejected an interpretation of “immediately return to work” as meaning “within twenty-four (24) hours,” noting that its previous rulings indicated an almost instantaneous or automatic compliance upon due service of an AJO.

Applying these principles to the record, the Court sustained the Court of Appeals’ finding that the Union deliberately disregarded the AJO. It treated as decisive the factual circumstance that the AJO was served at 8:45 a.m., but the strikers persisted with the strike and refused to receive it, waiting instead for the union president’s arrival at 5:25 p.m. The Court likewise relied on narration in the sheriff’s report describing counsel’s refusal and the assertion that the Union would recognize the SOLE’s assumption only when the union president received the order.

Accordingly, the Supreme Court held that there was no reversible error in declaring the September 19, 2003 strike illegal. It further held that the union officers were deemed to have lost their employment status for having knowingly participated in the illegal act, pursuant to the legal consequence linked to defiance of the AJO.

Supreme Court’s Ruling on the Economic Issues and Voluntary Arbitration

On the second issue, the Supreme Court agreed with the Court of Appeals’ direction to refer the economic issues arising from the CBA to voluntary arbitration. It treated the economic controversy, including the formula for computing the share of employees in the tuition increase and the TIP computation under the CBA, as arising from the interpretation or implementation of the CBA.

It noted that the CBA’s grievance machinery contemplated that disputes or complaints arising from the interpretation or implementation of the CBA and disputes concerning the interpretation or enforcement of company personnel policies were to be resolved through grievance procedures, and if unresolved, submitted to a Voluntary Arbitrator for final resolution. The Court reasoned that through no fault of the University, those gr

...continue reading

Analyze Cases Smarter, Faster
Jur helps you analyze cases smarter to comprehend faster, building context before diving into full texts. AI-powered analysis, always verify critical details.

About Privacy Terms