FIRST DIVISION

January 11, 2016

G.R. No. 178501

NILO S. RODRIGUEZ, FRANCISCO T. ALISANGCO, BENJAMIN T. ANG, VICENTE P. ANG, SILVESTRE D. ARROYO, RUDERICO
C. BAQUIRAN, WILFREDO S. CRUZ, EDMUNDO M. DELOS REYES, JR., VIRGILIO V. ECARMA, ISMAEL F. GALISIM, TITO F.
GARCIA, IBERATO D. GUTIZA, GLADYS L. JADIE, LUISITO M. JOSE, PATERNO C. LABUGA, JR. NOEL Y. LASTIMOSO,
DANILO C. MATIAS, BEN T. MATURAN, VIRGILIO N. OCHARAN, GABRIEL P. PIAMONTE, JR., ARTURO A. SABADO, MANUEL
P. SANCHEZ, MARGOT A. CORPUS as the surviving spouse of the deceased ARNOLD S. CORPUS, and ESTHER VICTORIA A.
ALCANESES as the surviving spouse of the deceased EFREN S. ALCANESES, Petitioners,
vs.
PHILIPPINE AIRLINES, INC., AND NATIONAL LABOR RELATIONS COMMISSION, Respondents.

x-----------------------x

G.R. No. 178510

PHILIPPINE AIRLINES, INC., Petitioner,

vs.
NILO S. RODRIGUEZ, FRANCISCO T. ALISANGCO, BENJAMIN T. ANG, VICENTE P. ANG, SILVESTRE D. ARROYO, RUDERICO
C. BAQUIRAN, ARNOLD* S. CORPUS, WILFREDO S. CRUZ, EDMUNDO M. DELOS REYES, JR., VIRGILIO V. ECARMA, ISMAEL
F. GALISIM, TITO F. GARCIA, LIBERATO D. GUTIZA, GLADYS L. JADIE, LUISITO M. JOSE, PATERNO C. LABUGA, JR., NOEL
Y. LASTIMOSO, DANILO C. MATIAS, BEN T. MATURAN, VIRGILIO N. OCHARAN, GABRIEL M. PIAMONTE, JR., RODOLFO O.
POE, JR., ARTURO A. SABADO, MANUEL P. SANCHEZ, and ESTHER VICTORIA A. ALCAÑESES, as the Sole Heir of the
Deceased EFREN S. ALCAÑESES, Respondents.

DECISION

LEONARDO-DE CASTRO, J.:

Before the Court are two consolidated Petitions for Review on Certiorari under Rule 45 of the Revised Rules of Court assailing the
Decision1 dated November 30, 2006 and Resolution dated June 8, 2007 of the Court of Appeals in CA-G.R. SP No. 71190.

The petitioners in G.R. No. 178501 are 24 former pilots of Philippine Airlines, Inc. (PAL), namely, Nilo S. Rodriguez (Rodriguez),
Francisco T. Alisangco (Alisangco ), Benjamin T. Ang, Vicente P. Ang, Silvestre D. Arroyo (Arroyo), Ruderico C. Baquiran (Baquiran),
Wilfredo S. Cruz, Edmundo M. Delos Reyes, Jr. (Delos Reyes), Virgilio V. Ecarma (Ecanna), Ismael F. Galisim (Galisim), Tito F. Garcia
(Garcia), Liberato D. Gutiza (Gutiza), Gladys L. Jadie (Jadie), Luisito M. Jose (Jose), Paterno C. Labuga, Jr. (Labuga), Noel Y.
Lastimoso (Lastimoso), Danilo C. Matias (Matias), Ben T. Maturan (Maturan), Virgilio N. Ocharan (Ocharan), Gabriel M. Piamonte, Jr.
(Piamonte), Arturo A. Sabado (Sabado), Manuel P. Sanchez (Sanchez), Margot A. Corpus as the surviving spouse of the deceased
Arnold S. Corpus (Corpus), and Esther Victoria A. Alcafieses as the surviving spouse of the deceased Efren S. Alcafieses (Alcafieses ),
hereinafter collectively referred to as Rodriguez, et al., deemed by PAL to have lost their employment status for taking part in the illegal
strike in June 1998.

The petitioner in G.R. No. 178510 is PAL, a domestic corporation organized and existing under the laws of the Republic of the
Philippines, operating as a common carrier transporting passengers and cargo through aircraft. PAL named Rodriguez, et al. and
Rodolfo O. Poe (Poe) as respondents in its Petition.

In its assailed Decision, the Court of Appeals: (1) reversed the Decision dated November 6, 2001 of the National · Labor Relations
Commission (NLRC) in NLRC NCR CA No. 027348-01 which declared the loss of employment of Rodriguez, et al. (except for Jadie) to
be in accordance with law; and (2) reinstated the Decision dated December 11, 2000 of the Labor Arbiter in NLRC NCR Case No. 00-
06-06290-99 which held PAL liable for the illegal dismissal of Rodriguez, et al. but with the modifications directing PAL to pay the pilots
their separation pay in lieu of reinstatement and deleting the awards for moral and exemplary damages and attorney's fees.

Rodriguez, et al., pray that the Court partially reverse the judgment of the Court of Appeals by ordering their reinstatement with
backwages and restoring the awards for moral and exemplary damages and attorney's fees; while PAL petitions that the same
judgment be completely annulled and set aside.

The relevant facts of the case are as follows:

On December 9, 1997, the Airline Pilots Association of the Philippines (ALP AP) filed with the National Conciliation and Mediation
Board (NCMB) a Notice of Strike, docketed as NCMB NCR NS 12-514-97 (Strike Case), on the grounds of unfair labor practice and
union-busting by PAL.2

By virtue of the authority vested upon him under Article 263(g) 3 of the Labor Code of the Philippines (Labor Code), the Secretary4 of the
Department of Labor and Employment (DOLE) assumed jurisdiction over the Strike Case, and issued an Order 5 on December 23, 1997
prohibiting all actual and impending strikes and lockouts. On May 25, 1998, the DOLE Secretary issued another Order 6 reiterating the
prohibition against strikes and lockouts.

Despite the abovementioned Orders of the DOLE Secretary, ALPAP filed a second Notice of Strike on June 5, 1998 and staged a strike
on the same day at around 5:30 in the afternoon. The DOLE Secretary immediately called PAL and ALP AP for conciliation conferences
on June 6 and 7, 1998 to amicably settle the dispute between them. 7 After his efforts failed, the DOLE Secretary issued an Order8 on
June 7, 1998 (Return-to-Work Order) with the following directive:

WHEREFORE, FOEGOING PREMISES CONSIDERED, all striking officers and members of ALP AP are hereby ordered to return to
work within twenty-four (24) hours from receipt of this Order and for PAL management to accept them under the same terms and
conditions of employment prior to the strike.

Our directive to both parties to cease and desist from committing any and all acts that will exacerbate the situation is hereby reiterated.9

On June 26, 1998, the members of ALP AP reported for work but PAL did not accept them on the ground that the 24-hour period for the
strikers to return set by the DOLE Secretary in his Return-to-Work Order had already lapsed, resulting in the forfeiture of their
employment.

Consequently, ALPAP filed with the NLRC on June 29, 1998 a Complaint 10 for illegal lockout against PAL, docketed as NLRC NCR
Case No. 00-06-05253-98 (Illegal Lockout Case). ALP AP averred that after its counsel received the Return-to-Work Order on June 25,
1998, its members reported back to work on June 26, 1998 in compliance with the 24-hour period set in the said Order. ALP AP prayed
that PAL be ordered to unconditionally accept its members back to work and pay the salaries and other benefits due them. On August
21, 1998, the Acting Executive Labor Arbiter ordered the consolidation of the Illegal Lockout Case with the Strike Case pending before
the DOLE Secretary.11

The DOLE Secretary12 issued a Resolution13 on June 1, 1999 in the consolidated Strike and Illegal Lockout Cases, with a dispositive
portion that reads:

WHEREFORE, PREMISES CONSIDERED, this Office hereby:

xxxx

b. DECLARES the strike conducted by ALPAP on June 5, 1998 and thereafter illegal for being procedurally infirm and in open defiance
of the return-to-work order of June 7, 1998 and consequently, the strikers are deemed to have lost their employment status; and

c. DISMISSES the complaint for illegal lockout for lack of merit. 14

ALP AP filed a Motion for Reconsideration but it was denied by the DOLE Secretary in a Resolution dated July 23, 1999. 15

ALP AP assailed the foregoing Resolutions dated June 1, 1999 and July 23, 1999 of the DOLE Secretary in the consolidated Strike and
Illegal Lockout Cases in a Petition for Certiorari under Rule 65 of the Revised Rules of Court filed before the Court of Appeals and
docketed as CA-G.R. SP No. 54880. The appellate court dismissed said Petition in a Decision16 dated August 22, 2001. ALP AP
elevated the case to this Court by filing a Petition for Certiorari, bearing the title "Airline Pilots Association of the Philippines v. Philippine
Airlines, Inc." docketed as G.R. No. 152306 (1st ALP AP case). The Court dismissed the Petition of ALP AP in a minute
Resolution17 dated April 10, 2002 for failure of ALPAP to show grave abuse of discretion on the part of the appellate court. Said
Resolution dismissing the Ft ALPAP case became final and executory on August 29, 2002.18

Meanwhile, 32 ALP AP members, consisting of Rodriguez, et al., Poe, Nino B. Dela Cruz (Dela Cruz), Baltazar B. Musong (Musong),
Elmer F. Pefia (Pefia), Cesar G. Cruz, Antonio 0. Noble, Jr. (Noble), Nicomen H. Versoza, Jr. (Versoza), and Ryan Jose C. Hinayon
(Hinayon), hereinafter collectively referred to as complainants - with varying ranks of captain, first officer, and second officer 19 - filed
with the NLRC on June 7, 1999 a Complaint20 for illegal dismissal against PAL, docketed as NLRC-NCR Case No. 00-06-06290-99
(Illegal Dismissal Case). The Complaint stated three causes of action, to wit:

CAUSES OF ACTION
A. ILLEGAL DISMISSAL in that [PAL] terminated the employment of the above-named complainants on 7 June 1998 (except for
complainant Liberato D. Gutiza, who was dismissed on 6 June 1998) for their alleged participation in a strike staged by ALP AP at the
Philippine Airlines, Inc. commencing on 5 June 1998 when in truth and in fact:

(i) Complainants EFREN S. ALCAÑESES, VICENTE P. ANG, BENJAMIN T. ANG, SILVESTRE D. ARROYO, LIBERA TO D. GUTIZA,
LUISITO M. JOSE, DANILO C. MATIAS, GABRIEL M. PIAMONTE, JR., MANUEL P. SANCHEZ, and NICOMEN H. VERSOZA,
JR. actually reported for work and duly discharged all their duties and responsibilities as pilots by flying their assigned
equipment and completing their respective flights to their specified destinations, as scheduled;

(ii) Complainants GLADYS L. JADIE and BEN T. MATURAN, having been on duly approved and scheduled medical leaves, were
authorized and permitted to absent themselves from work on 5 June 1998 up to the termination of their employment on 7 June 1998,
complainant JADIE being then on maternity leave and grounded as she was already in her ninth month of pregnancy, while
complainant MATURAN was recuperating from a laparotomy and similarly medically grounded until 15 June 1998;

(iii) Complainants EDMUNDO M. DELOS REYES, JR., BALTAZAR B. MUSONG, ANTONIO O. NOBLE, JR., ELMER F. PENA, and
ARTURO A. SABADO were not required to work and were legally excused from work on 5 June 1998 up to the termination of their
employment on 7 June 1998 as they were on their annual vacation leaves as approved and pre-scheduled by [PAL] as early as
December 1997 conformably with Company policy and practice on vacation leave scheduling;

(iv) Complainants NILO S. RODRIGUEZ, RUDERICO C. BAQUIRAN, ARNOLD S. CORPUS, CESAR G. CRUZ, WILFREDO S. CRUZ,
NINO B. DELA CRUZ, VIRGILIO V. ECARMA, ISMAEL F. GALISIM, TITO F. GARCIA, RYAN JOSE C. HINA YON, PATERNO C.
LABUGA, JR., NOEL Y. LASTIMOSO, RODOLFO 0. POE and VIRGILIO N. OCHARAN were likewise not required to work and were
legally excused from work on 5 June 1998 up to the termination of their employment on 7 June 1998 as they were off duty and did not
have any scheduled flights based on the June 1998 monthly flights schedules issued to them by [PAL] in May 1998; and

(v) Complainant FRANCISCO T. ALISANGCO was serving a seven-day suspension and, thus, not required to work from 4 June
1998 to 10 June 1998 under Memorandum of Suspension, dated 5 May 1998.

negating that there was any stoppage of work or refusal to return to work on the part of the above-named complainants, as was made
the basis of the termination of their employment by [PAL] on 7 June 1998 (6 June 1998 for complainant Gutiza), due solely to their
union affiliation and membership.

FURTHER, [PAL] denied the above-named complainants due process in the termination of their employment in that it failed to notify
them in writing of the charges against them, did not give them any opportunity to be heard and to explain their side at an administrative
investigation, and to date, has not served them with any formal notice of the termination of their employment and the cause or causes
therefor.

THUS, [PAL] summarily effected the dismissal of the abovenamed complainants without just or lawful cause.

B. NON-PAYMENT OF SALARIES AND OTHER BENEFITS

1. Basic or guaranteed pay

2. Productivity pay

3. Transportation allowance

4. Rice subsidy

5. Retirement Fund

6. Pilots Occupational Disability Fund

7. Vacation leave

8. Sick leave

9. Unutilized days off

10. Trip leave

11. Trip passes

C. DAMAGES

1. Actual Damages

2. Moral Damages

3. Exemplary Damages

4. Attorney's Fees

5. Cost of Suit.21

Complainants alleged that they were not participants of the June 5, 1998 strike of ALP AP and that they had no obligation to comply
with the Return-to-Work Order of the DOLE Secretary. The respective allegations of the complainants are summed up below:

COMPLAINANT ALLEGATION/S

Alcañeses He was the scheduled instructor of the simulator sessions on June 5, 8 & 9, 1998. However,
the sessions were canceled due to the breakdown of the 737 simulator. He was assigned on
home reserve duty on June 6, 1998 and had a day-off on June 7, 1998.

Alisangco He was serving a seven-day suspension from June 4 to 10, 1998.

Benjamin T. He flew Flight No. PR-722 from Manila to London and was supposed to embark on a return
Ang trip from London to Manila on June 7, 1998. However, no aircraft arrived due to the strike.
He arrived in Manila on June 13, 1998.

Vicente P. Ang He was the First Officer in Flight No. PR-105 from San Francisco, which arrived in Manila on
June 6, 1998. He immediately went to his hometown in Cebu City for his scheduled days-off
until June 11, 1998, and thereafter on annual vacation leave until July 2, 1998.

Arroyo He left Manila and flew to Europe, arriving there on June 5, 1998. He was stranded in Paris
since no PAL aircraft arrived. He flew back to Manila on June 13, 1998.

Baquiran He arrived in Manila from Los Angeles on June 4, 1998, and was off-duty until June 7, 1998.
His next flight assignment was on June 8, 1998. He called PAL Dispatch Office on June 7,
1998 to confirm his flight but was advised that his flight was canceled and that he was
already dismissed.

Corpus He arrived in Manila from Vancouver on May 30, 1998, and was off-duty until June 10, 1998.
His next assignment was on June 11, 1998.

Cesar G. Cruz He arrived in Manila from Riyadh on June 5, 1998, and was off-duty until June 9, 1998. His
next flight assignment was on June 10, 1998.

Wilfredo S. Cruz He arrived from Honolulu on June 4, 1998, and was off-duty until June 8, 1998. He reported
for his next assignment on June 9, 1998 but was unable to enter as Gate I of PAL
compound was locked.

Dela Cruz He arrived in Manila from Los Angeles on June 5, 1998, and was off-duty until June 12,
1998. His next assignment was on June 13, 1998.

Delos Reyes He was on leave from May 26, 1998 to June 26, 1998.
Ecarma After attending ground school at PAL Training Center on June 4, 1998, he was on scheduled
off-duty until June 17, 1998. His passport was in the custody of PAL as it was scheduled for
processing from June 6, 1998 to June 13, 1998. His next flight assignment was on June 18,
1998.

Galisim He underwent training in Toulouse, France from April 1998 to May 22, 1998. He was waiting
for his schedule from PAL.

Garcia He was on leave from May 25, 1998 to June 10, 1998.

Gutiza He was the Flight Officer of Flight No. PR-100 bound for Honolulu. Upon arriving back in
Manila on June 7, 1998, he was told that he was already terminated.

Hinayon He arrived in Manila from Bangkok on June 5, 1998, and was off-duty until June 10, 1998.
His next flight assignment was on June 11, 1998.

Jadie She was on maternity leave from June 5, 1998. She gave birth on June 24, 1998.

Jose He flew from Honolulu and arrived in Manila on June 7, 1998. He was on scheduled day-off
on June 8, 1998, and was on home reserve duty from June 9 to 12, 1998.

Labuga He arrived in Manila on June 4, 1998 on Flight No. PR-298, and was off-duty until June 9,
1998. His next flight assignment was on June 10, 1998.

Matias He commanded the flight from Manila to San Francisco, which arrived on June 4, 1998. He
left San Francisco the following day or on June 5, 1998 and arrived in Manila on June 6,
1998. He was on scheduled days-off from June 7 to 11, 1998. His next flight assignment
was on June 12, 1998.

Maturan He was on sick leave from June 5-15, 1998 to undergo a medical operation called
laparotomy.

Musong He was on leave from May 22, 1998 to June 11, 1998.

Noble He was on leave from May 22, 1998 to June 11, 1998.

Ocharan He arrived in Manila from Honolulu in May 1998, and was off-duty until June 11, 1998. His
next flight assignment was on June 12, 1998.

Piamonte He arrived from Honolulu on June 6, 1998 and was on scheduled days-off until next flight on
June 10, 1998. He reported on June 9, 1998 for said flight but could not enter the PAL
compound.

Peña He was on leave from June 5, 1998 to June 28, 1998.

Poe He completed a ground course for the Airbus-320 captaincy in May 1998, and was waiting
for his schedule from PAL.

Rodriguez He arrived in Manila from San Francisco on June 2, 1998. He was on scheduled days-off
and/or off-duty until June 12, 1998. His next flight assignment was on June 13, 1998.
 Sabado He was on leave from May 21, 1998 to June 11, 1998.

Sanchez He arrived from Los Angeles in Manila on June 6, 1998, and was directed to leave the
airport premises immediately. He was prevented from retrieving his car inside the
employees' parking area. He had no scheduled flights until June 15, 1998.

Versoza He was on duty on June 5, 1998 as he flew from Paris to Bangkok arriving there on June 6,
1998. He flew back to Manila on June 7, 1998 and had no scheduled flights until June 10,
1998.

PAL terminated complainants from employment together with the strikers who disobeyed the Return-to-Work Order, even though
complainants had valid reasons for not reporting for work.

Complainants, except for Gutiza,22 further asserted that PAL did not observe the twin requirements of notice and hearing in effecting
their termination; that PAL refused to admit them when they reported for work on June 26, 1998; and that PAL, which long planned to
reduce its fleet and manpower, took advantage of the strike by dismissing its pilots en masse. Complainants thus prayed for
reinstatement to their former positions without loss of seniority rights; backwages and other monetary claims; and moral and exemplary
damages, and attorney's fees.

In its Motion to Dismiss and/or Position Paper for Respondent, 23 PAL averred that the Complaint for illegal dismissal is an offshoot of
the Strike and Illegal Lockout Cases wherein the DOLE Secretary already adjudged with finality that the striking pilots lost their
employment for participating in an illegal strike and/or disobeying the Return-to-Work Order. Hence, PAL argued that the Complaint
was already barred by res judicata.

In addition, PAL presented the following evidence to refute complainants' allegation that they were not strikers: (a) the logbook showing
that complainants belatedly complied with the Return-to-Work Order on June 26, 1998; and (b) the photographs showing that some of
complainants were at the strike area or picket line, particularly: Maturan, who was supposed to be on sick leave from June 1 to 15,
1998 but was seen picketing on June 9, 1998; Delos Reyes, Musong, Noble, Sabado, and Peña, who were supposed to be on vacation
leave but were seen in the strike area24and who did not report back for work after their respective vacation leaves ended; Rodriguez,
Baquiran, Corpus, Cesar G. Cruz, Wilfredo S. Cruz, De La Cruz, Ecarma, Galisim, Garcia, Hinayon, Labuga, Lastimosa, Poe, and
Ocharan, who were off-duty but participated in the strike against PAL; and Alcañeses, Benjamin T. Ang, Vicente P. Ang, Arroyo, Gutiza,
Jose, Matias, Piamonte, Sanchez, and Versoza who, after returning from abroad and completing their respective flights, joined the
strike instead of offering their services to PAL who was in dire need of pilots at that time. As regards Jadie, PAL contended that she
forfeited her employment by failing to report for work at the end of her maternity leave.

Labor Arbiter Francisco A. Robles (Robles) rendered a Decision25 on December 11, 2000. According to Labor Arbiter Robles, the Illegal
Dismissal Case may proceed independently from the Strike and Illegal Lockout Cases:

On the threshold issue of jurisdiction, it is unfortunately a lost cause for [PAL] to argue that the instant case involves a dispute already
assumed and decided by the Secretary of Labor in NCMB-NCR-NS-12-514-97 and its related cases. The strike case resolved by the
Labor Secretary is not more and no less than that - a strike case wherein the validity of ALPAP's declared mass action on June 5, 1998
is at issue. In contrast, going by the allegations of the complaint in the instant case, the cause of action pleaded by complainants
against [PAL] are for illegal dismissal, non-payment of salaries and benefits, and damages, based precisely on the pivotal fact alleged
by complainants that they are not "strikers" in the eyes of the law and yet had been inexplicably slapped with termination of their
employment along with the strikers. Not one of the consolidated cases NCMB-NCR-NS-12-514-97, NCMB-NCR-NS-06-236-98 NLRC-
NCR-No. 00-06-05235-98 shall resolve or has already resolved the instant termination dispute.

We note that this case has not been ordered consolidated with the strike case, nor has [PAL] at anytime asked for such consolidation.
The June 1, 1999 Resolution of the Secretary of Labor in NCMB-NCR-NS-12-514-97, cited by [PAL] as having a binding effect on
complainants do not mention the[ m] at all, or purport to treat of their peculiar case of being non-strikers dismissed as strikers. We
cannot therefore subscribe to the view advanced by [PAL] that this is a dispute already assumed by the Secretary of Labor and decided
by him with the affirmance of the strikers' loss of employment in his June 1, 1999 Resolution in NCMB-NCR-NS-12-514-97.
Complainants should be given their day in court with respect to their claims herein as there is simply no basis for assuming that the
same have already been resolved in the strike case.

It is well-settled that as an element of res judicata, there must be between the first and second action identity of parties, identity of
subject matter and identity of causes of action. (Linzag vs. Court of Appeals, 291 SCRA 304; Nabus vs. Court of Appeals, G.R. No.
91670, February 7, 1991, 193 SCRA 732; VDA Fish Broker, et al. vs. NLRC, et al., G.R. Nos. 76142-43, December 27, 1993). The
parties, subject matter and causes of action involved in this case are so vastly different from those in NCMB-NCR-NS-12-514-97 etc.
that it is difficult if not virtually impossible to conceive how the resolution of such strike case can constitute res judicata in the case of
complainants herein. This Office therefore cannot but exercise the jurisdiction duly invoked by complainants over this termination
dispute with the filing of their complaint.26

Labor Arbiter Robles then proceeded to resolve the merits of the case in complainants' favor:

Turning now to the merits of the case, [PAL] has not rebutted and even admits that complainants' status and individual circumstances
at or about the time of the strike declared on June 5, 1998 are essentially as stated by them in their complaint (i.e., that complainants
were working or were on leave of absence, day-off, etc.) and related in further detail in their submitted individual sworn statements in
the case. Since complainants were concededly working or otherwise excused from work at the time of the strike, their employment with
[PAL] should not have been prejudiced or affected in any way at all by its occurrence. Yet [PAL] implemented the mass dismissal of
close to 600 pilots, including complainants, without distinction as to their guilt or innocence of "striking".

A strike, by definition, is a temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute
(Art. 212 (o) of the Labor Code). It is incongruous to accuse an employee who was actually working or was excused from work of
"stoppage" of the work he was precisely carrying out or was not required to perform. [PAL] should have made these distinctions
between the pilots who staged the strike and those peculiarly situated as complainants (working or excused from work) before taking
action against its employees for the June 5, 1998 strike, instead of dismissing them in a sweepingly reckless, arbitrary, and oppressive
manner.

Indeed, on the basis of [PAL]'s Return-to-Work Notice and the DOLE Return-to-Work Order, loss of employment in connection with the
strike was a consequence to be faced only by "PAL pilots who joined the strike" and "all striking officers and members and officers (sic)
of ALP AP", to whom the warning notices had expressly been issued. It should not have been made to apply to complainants, who were
working or were not at all supposed to be working at the time of the strike, and therefore had every reason to believe that the issuances
addressed to "strikers" do not refer to them. For the same reason, it does not make any sense to consider complainants as having
"defied" the return-to-work mandate in failing to beat the deadline prescribed for the strikers. Precisely, complainants were notstrikers.

[PAL] asserts that it "called" on its reserve pilots including complainants to man its flights when the strike was declared and in any case
complainants should have "offered" their services at that time because it was in dire need of pilots. However, not a single piece of
evidence was ever presented by [PAL] to prove that it sent out any rush dispatch messages to complainants, or even made a telephone
call, to upgrade them to active duty or recall them from their leave of absences/days-off/suspension on the ground that their services
were urgently needed. It being the responsibility of (PAL] under the CBA to draw up the pilots' monthly schedule and deploy them on
flight assignments, it did not have to wait for complainants to volunteer manning PAL flights. [PAL] had the prerogative to change
complainants' flight schedules in accordance with the CBA. It did not exercise this prerogative. It cannot now blame complainants for
the consequences of its own inaction.

As for [PAL]' s contention that the photographs taken of complainants at the picket line proves their being "strikers", the pictures do not
show that those who admittedly were working at the time of the strike were in fact among the picketers at the Company premises and
not on the PAL flights that they claim to have crewed for. In any case, [PAL] does not take issue with the working status of the
complainants who had flights on or about June 5, 1998; only that complainants did not report for work thereafter. On the other. hand,
the rest of the complainants were excused from work. Their "free time" would be meaningless if they were not at liberty to man the
picket line while off-duty without fear of adverse consequences from their lawful exercise of their guaranteed rights. It is to be stressed
that complainants have sufficiently shown by their uncontradicted evidence that they were working or were excused from work during
the material period of the strike until their dismissal. Without more, the unexplained pictures of the complainants at the picket line (most
of which were taken long after June 9, 1998) cannot be said to constitute a proven case of "striking."

We further find pertinent the cited cases of Bangalisan vs. Court of Appeals (276 SCRA 619) and Dela Cruz vs. Court of Appeals (305
SCRA 303) to the effect that an alleged "striker" who was excused from work during a strike staged by his co-workers cannot be
penalized with the loss of his employment as a striker in the absence of his actual participation in the strike since those who avail of
their free time "to dramatize their grievances and to dialogue with the proper authorities within the bounds of the law" cannot be held
liable for their participation in the mass action against their employer, this being a valid exercise of their constitutionally guaranteed
rights. Picketers are not necessarily strikers. If complainants had manned the picket lines at some time during their off-duty, it was their
right to do so. They cannot be accused of stoppage of work if they do.

As correctly pointed out by complainants, [PAL] certainly had the records to verify if complainants were in fact striking, working, or off-
duty as of June 5, 1998. Despite this, it precipitately ousted complainants from their employment in a mass purging of about 600 pilots
as strikers. Significantly, [PAL] had made no attempt to rebut complainants' evidence (consisting of sworn statements of witnesses and
documentary exhibits) tending to show that:

1. Management's declared intention since 1997 was to retrench/retire about 200 pilots and drastically downscale operations because of
alleged business losses, but its restructuring program gained no ground despite the passage of several months because ALP AP was
staunchly opposed to it and in the meantime, [PAL] continued "bleeding';
2. A PAL management pilot, Capt. Emmanuel Generoso, disclosed to several ALP AP pilots that a strike by ALPAP would be a
welcome development as it would make management's job of ridding the company pilots easier;

3. The instant ALP AP declared the strike, complainants ceased receiving their salaries, allowances, and benefits which fell due, as
though [PAL] had merely been waiting for the strike to happen and, this done, it considered the pilots' termination as effected ipso facto.
Complainants were not furnished any written notice requiring them to show cause why they should not be dismissed from employment
for any offense; nor were they given written notices of termination (except for complainant Liberato Gutiza who received a termination
letter with the effectivity date of June 6, 1998 after being made to crew Flight No. PR-100 which arrived in Manila from Honolulu on
June 7, 1998);

4. Confirming the veracity of several press statements made by [PAL] on its mass dismissal of about 600 pilots by June 7, 1998, when
some of the complainants thereafter called PAL Flight Deck Crew Scheduling to check on their next scheduled flights, they were
informed that they were terminated employees and no longer had any flight assignments, and would furthermore be barred from
entering the Gate to [PAL] offices;

5. Complainants were given employment application forms to accomplish and submit if they were to resume their work as PAL pilots;
and

6. [PAL] considered its dismissal of almost 600 pilots, including complainants, as "reaffirmed" under the DOLE Return-to-Work Order as
of June 9, 1998 or upon the lapse of the 24-hour deadline fixed therein. It immediately downscaled its flight operations on the basis of a
44-man pilot complement, shutting down several stations in the process.

The foregoing facts, which stand in the record unrebutted by countervailing evidence from [PAL], all too clearly reveal management's
prior decision and firm resolve to dismiss its pilots at the first opportunity, which it found in the June 5, 1998 strike. Of course,
complainants' case presented an unexpected complication since they cannot be lumped together with the strikers given their
circumstances at the time of the strike. [PAL] however took its chances, it dismissed them anyway and is now straining in vain to
rationalize complainants' termination as "strikers". The facts present a classical case of dismissal in bad faith. Complainants never had
a chance to hold on to their employment since [PAL] was hell-bent from the start on the mass dismissal of its pilots regardless of the
existence of actual and valid grounds to terminate their employment. It should be made to face the consequences thereof. 27

Ultimately, Labor Arbiter Robles adjudicated:

IN VIEW OF THE FOREGOING, judgment is hereby rendered:

(a) Finding the dismissal of complainants to be illegal;

(b) Ordering [PAL] to reinstate complainants to their former positions without loss of seniority rights, privileges and benefits;

(c) Ordering [PAL] to pay complainants their full backwages from June 9, 1998 up to date ofreinstatement, xx x.

xxxx

and in addition, (i) longevity pay at P500.00/month for every year of service based on seniority date falling after June 9, 1998; (ii)
Christmas bonus for 1998 and 1999 per the CBA; (iii) complainants' proportionate share in the P5 million contribution of [PAL] to the
Retirement Fund, and (iv) cash equivalent of vacation leave and sick leave which complainants earned from June 9, 1998 until
reinstatement based on the CBA scheduled (sic).

(d) Ordering [PAL] to pay moral damages to complainants in the amount of P300,000.00 each;

(e) Ordering [PAL] to pay exemplary damages to complainants in the amount of P200,000.00 each;

(f) Ordering [PAL] to pay complainants on their money claims for unpaid salaries for the period June 1-8, 1998, and productivity
allowance, transportation allowance, and rice subsidy for May 1998 and June 1-8, 1998; and

28
(g) Ordering [PAL] to pay complainants attorney's fees in an amount equivalent to ten percent (10%) of the total monetary award.

PAL appealed before the NLRC, docketed as NLRC NCR CA No. 027348-01. In its Decision dated November 6, 2001, the NLRC
reversed Labor Arbiter Robles' Decision.

On the jurisdictional and procedural matters, the NLRC found that: (a) The on-going receivership proceedings before the Securities and
Exchange Commission (SEC) involving PAL had no effect on the jurisdiction of the Labor Arbiter or the NLRC over the Illegal Dismissal
Case; (b) The Illegal Dismissal Case was not barred by res judicata despite the prior ruling of the DOLE Secretary in the Strike Case
because the latter did not resolve the particular cause of action asserted by the complainants in the former; and (c) The issue on forum
shopping was rendered moot by the finding of the NLRC on the absence of res judicata.

The NLRC next addressed the substantive issue of whether or not complainants were illegally dismissed. The NLRC ruled in the
negative for all the complainants except Jadie. According to the NLRC, the strike was not a one-day affair. It started on June 5, 1998
and lasted until the later part of June 1998. Complainants' assertion that they were not strikers was controverted by the photographs
submitted as evidence by PAL showing that several complainants were at the strike area on June 9, 1998, some even holding a
streamer saying: "WE ARE ON STRIKE." The NLRC gave weight to the finding of the DOLE Secretary, affirmed by the Court of
Appeals in CA-G.R. SP No. 54880, that ALPAP was served a copy of the Return-to-Work Order on June 8, 1998, thus, the ALPAP
strikers had 24 hours, or until June 9, 1998, to comply with said Order. However, based on the logbook, the complainants only reported
back to work on June 26, 1998. As a result of their defiance of the DOLE Secretary's Return-to-Work Order, complainants lost their
employment status as of June 9, 1998. Even if complainants were supposedly on official leave or off-duty during the strike, records
revealed that their official leave or off-duty status had expired at least two weeks before June 26, 1998. The logbook establishing that
complainants reported for work only on June 26, 1998 must prevail over the complainants' unsupported allegations that they called PAL
offices upon the expiration of their respective leaves or days off to verify the status of their flights. The NLRC additionally pointed out
that complainants, while claiming they were not strikers, reported back for work in compliance with the DOLE Secretary's Return-to-
Work Order, their signatures appearing in the logbook pages under the captions: "RETURN-TO-WORK RETURNEES," "RETURN-TO-
WORK COMPLIANCE," and "RETURN-TO-WORK DOLE COMPLIANCE."

In the case of Gutiza, the NLRC held that he was dismissed for being a union officer who knowingly participated in the illegal
strike.29 The NLRC also particularly noted that while other complainants belatedly reported for work on June 26, 1998 together with the
other ALP AP pilots, Baquiran did not ever attempt to comply with the Return-to-Work Order, and was declared to have simply
abandoned his job.30 The NLRC only spared Jadie, there being no evidence that she participated in the illegal strike. Jadie was on
leave being in her ninth month of pregnancy at the time of the strike, actually giving birth on June 24, 1998. The NLRC opined that
given her circumstances, it was impossible for Jadie to comply with the Return-to-Work Order, hence, she was illegally dismissed on
June 9, 1998.31However, Jadie could no longer be reinstated. Jadie's former position as Captain of the F-50 aircraft no longer existed
as said aircraft was returned to the lessors in accordance with the Amended and Restated Rehabilitation Plan of PAL. Also, per the
certification of the Air Transportation Office (ATO), Jadie's license already expired in 1998. Consequently, the NLRC directed PAL to
pay Jadie backwages and separation pay, instead of reinstatement.

The dispositive portion of the NLRC Decision dated November 6, 2001 reads:

WHEREFORE, premises considered, we hold that the following complainants lost their employment status with respondent PAL for
cause and in accordance with law: Arnold S. Corpus, Cesar G. Cruz, Liberato D. Gutiza, Luisito M. Jose, Paterno C. Labuga, Jr.,
Baltazar B. Musong, Arturo A. Sabado, Jr., Nilo S. Rodriguez, Edmundo delos Reyes, Jr., Tito F. Garcia, Virgilio V. Ecarma, Noel Y.
Lastimoso, Virgilio N. Ocharan, Rodolfo 0. Poe, Efren S. Alcañeses, Benjamin T. Ang, Vicente T. Ang, Silvestre D. Arroyo, Manuel P.
Sanchez, Nicomen H. Versoza, Jr., Danilo C. Matias, Francisco T. Alisangco, Antonio 0. Noble, Jr., Ben T. Maturan, Wilfredo S. Cruz,
Ismael F. Galisim, Gabriel M. Piamonte,' Jr., Elmer F. Peña, Nino B. dela Cruz, Ruderico C. Baquiran and Ryan Jose C. Hinayon.

The Labor Arbiter's decision declaring that the aforementioned complainants were illegally dismissed, and all the monetary awards
granted to them, are hereby reversed and set aside for lack of merit. The Labor Arbiter's order for the reinstatement of the complainants
is likewise declared to be devoid of merit, and any claim based on said order of reinstatement, such as, but not limited to, backwages
pending appeal, is declared to be without any legal basis.

Respondent PAL is hereby directed to pay complainant Gladys L. Jadie, the monetary award granted in the assailed decision which is
P2,024,865.00 and (I) longevity pay at P500.00/month of every year of service based on seniority date falling after June 9, 1998; (II)
Christmas bonus for 1998 and 1999 per the CBA; (III) [Jadie's] proportionate share in the P5 million contribution of [PAL] to the
Retirement Fund, and (IV) cash equivalent of vacation leave and sick leave which [Jadie] earned from June 9, 1998 until September 11,
2000.

[PAL] is also ordered to pay [ Jadie] her unpaid salaries for the period June 1-8, 1998 and productivity allowance, transportation
allowance, and rice subsidy for May 1998 and June 1-8, 1998.

In addition, [PAL] is ordered to pay [ Jadie] separation pay equivalent to one half (1/2) month for every year of service as a PAL
employee.

[PAL] is ordered to pay [ Jadie] attorney's fees in an amount equivalent to ten percent (10%) of the total monetary award. 32

Aggrieved, Rodriguez, et al., Dela Cruz, and Poe filed a Petition for Certiorari with the Court of Appeals, docketed as CA-G.R. SP No.
71190, assailing the NLRC judgment for having been rendered with grave abuse of discretion. Dela Cruz subsequently withdrew his
Petition on June 25, 2003.
The Court of Appeals promulgated its Decision on November 30, 2006 favoring Rodriguez, et al., and Poe. The appellate court
adjudged that: (a) PAL indiscriminately dismissed on June 7, 1998 its more than 600 pilots, including Rodriguez, et al. and Poe, who did
not comply with its Return-to-Work Notice published in the Philippine Daily Inquirer; (b) PAL simply took advantage of the strike on June
5, 1998 to dismiss ALPAP members en masse, regardless of whether the members participated in the strike or not, so as to reduce its
pilots complement to an acceptable level and to erase seniority; (c) since they were already terminated on June 7, 1998, any activity
undertaken by Rodriguez, et al. and Poe on and after June 9, 1998 was already immaterial; (d) the NLRC gave undue weight to the
photographs and logbook presented by PAL; (e) the photographs were not properly identified nor the circumstances under which they
had been taken satisfactorily established; (f) the logbook and its entries are self-serving because the logbook was supplied by PAL itself
and there was a dearth of explanation as to the implications of the pilots' signatures appearing therein and the significance of the
annotations "RETURN-TO-WORK RETURNEES " "RETURN-TO-WORK COMPLIANCE " and "RETURN-TO-WORK DOLE
COMPLIANCE;" and (g) as for Jadie, PAL did not satisfactorily prove that her reinstatement was an impossibility as there was no
showing that her services were obsolete or could no longer be utilized.

Although the Court of Appeals essentially agreed with the findings and conclusion of Labor Arbiter Robles that Rodriguez, et al. and
Poe were illegally dismissed, it modified Labor Arbiter Robles' Decision as follows:

All told, We find that [NLRC] gravely abused its discretion in setting aside the Decision of the Labor Arbiter which found that [Rodriguez,
et al. and Poe] had indeed been illegally dismissed. We are mindful, however, that the relief of reinstatement of [Rodriguez, et al. and
Poe] may no longer be viable or practicable in view of several factors, i.e., the animosity between the parties ([Rodriguez, et al. and
Poe] occupy positions of confidence) herein as engendered by this protracted and heated litigation, the fact that [Rodriguez, et al. and
Poe) may have already secured equivalent or other employments after the significant lapse of time since the institution of their suit and,
finally, the nature of [PAL' s] business which require the continuous operations of its planes, and because of which, new pilots have
already been hired.

We, therefore, modify the Decision of the Labor Arbiter by affirming the grant of backwages to [Rodriguez, et al. and Poe] but, instead,
order the payment of separation pay in lieu of reinstatement.

Moreover, We delete the awards of moral and exemplary damages as well as attorney's fees. Moral and exemplary damages cannot be
justified solely upon the premise that an employer dismissed his employee without cause or due process. The termination must be
attended with bad faith, or fraud or in a manner oppressive to labor, which were not convincingly established herein. Where a party is
not entitled to actual or moral damages, an award of exemplary damages is likewise without basis (San Miguel Corporation vs. Del
Rosario, 477 SCRA 619; Tanay Recreation Center and Development Corp. vs. Fausto, 455 SCRA 457). Likewise, the policy of the law
is to put no premium on the right to litigate. Hence, the award of attorney's fees should also be deleted. 33

The Court of Appeals decreed in the end:

WHEREFORE, premises considered, the petition for certiorari is hereby GRANTED. The Decisions of the public respondent NLRC,
dated November 6, 2001 and March 25, 2002 are hereby SET ASIDEand the Decision of Labor Arbiter Francisco Robles, dated
December 11, 2000, is REINSTATEDsubject to the MODIFICATIONS that in lieu of reinstatement, [PAL] is ordered to pay
[Rodriguez, et al. and Poe] separation pay and that the awards of moral and exemplary damages and attorney's fees are hereby
deleted.

The Court NOTES the withdrawal of the petition insofar as petitioner Nino de la Cruz is concerned. 34

Rodriguez, et al., and Poe filed a Motion for Partial Reconsideration, while PAL filed a Motion for Reconsideration of the foregoing
Decision, but the appellate court denied both motions in a Resolution 35 dated June 8, 2007.

Hence, Rodriguez, et al., and PAL assail before this Court the Decision dated November 30, 2006 and Resolution dated June 8, 2007
of the Court of Appeals by way of separate Petitions for Review on Certiorari, docketed as G.R. No. 178501 and G.R. No. 178510,
respectively.

In G.R. No. 178501, Rodriguez, et al., assigned four errors on the part of the Court of Appeals, viz.:

I. THE COURT OF APPEALS ERRED IN ORDERING THE PAYMENT OF SEPARATION PAY TO [RODRIGUEZ, ET AL.] IN LIEU OF
REINSTATEMENT, ON THE GROUNDS THAT [RODRIGUEZ, ET AL.] "MAY HA VE ALREADY SECURED" OTHER EMPLOYMENT
AND THAT "NEW PILOTS HA VE ALREADY BEEN HIRED", CONTRARY TO THE EXPRESS PROVISIONS OF THE LABOR CODE,
THE IMPLEMENTING RULES AND REGULATIONS THEREOF, AS WELL AS EXISTING JURISPRUDENTIAL POLICY, ALL
MANDATING THAT ILLEGALLY DISMISSED EMPLOYEES SHALL BE ENTITLED TO THE TWIN REMEDIES OF REINSTATEMENT
AND PAYMENT OF BACKWAGES.
II. THE COURT OF APPEALS ERRED WHEN IT DENIED THE AW ARD OF REINSTATEMENT ON THE SUPPOSITION THAT SAID
RELIEF, WHICH IS A RIGHT AUTHORIZED UNDER THE LAW AND EXISTING JURISPRUDENCE, "MAY NO LONGER BE VIABLE
OR PRACTICABLE" IN THE PRESENT CASE DUE TO ALLEGED STRAINED RELATIONS BETWEEN THE PARTIES.

III. THE COURT OF APPEALS ERRED IN DENYING THE AWARD OF MORAL AND EXEMPLARY DAMAGES, DESPITE ITS OWN
FINDING THAT PRIVATE RESPONDENT HAD ENGAGED IN AN "INDISCRIMINATE DISMISSAL" AND HAD SIMPLY TAKEN
ADVANTAGE OF THE 5 JUNE 1998 STRIKE TO DISMISS [RODRIGUEZ, ET AL.] EN MASSE, IN VIOLATION OF LAW AND
JURISPRUDENTIAL PRECEDENTS.

IV. THE COURT OF APPEALS ERRED IN DENYING THE AWARD OF ATTORNEY'S FEES, DESPITE FINDING THAT PRIVATE
RESPONDENT HAD ARBITRARILY AND CAPRICIOUSLY TERMINATED [RODRIGUEZ, ET AL. 'S]

EMPLOYMENT, THUS FORCING THEM TO LITIGATE AND CONSEQUENTLY INCUR EXPENSES TO PROTECT THEIR RIGHTS
AND INTERESTS, CONTRARY TO SETTLED LAW AND JURISPRUDENCE.36

Whereas PAL based its Petition in G.R. No. 178510 on the following assignment of errors:

I. [RODRIGUEZ, ET AL. AND POE'S] COMPLAINT FOR ILLEGAL DISMISSAL IS BARRED BY THE FINAL AND EXECUTORY
DECISION IN THE COMPLAINT FOR ILLEGAL LOCKOUT FILED BY ALPAP IN BEHALF OF ALL ITS MEMBERS, INCLUDING
[RODRIGUEZ, ET AL. AND POE].

II. THE DECISION OF THIS HONORABLE COURT IN G.R. NO. 170069 FILED BY ONE OF [RODRIGUEZ, ET AL. AND POE'S]
ORIGINAL CO-COMPLAINANTS (CESAR CRUZ) IS APPLICABLE AND BINDING ON [RODRIGUEZ, ET AL. AND POE], BEING
BASED ON THE SAME FACTS AND EVIDENCE.

III. THE COURT OF APPEALS SERIOUSLY ERRED WHEN IT REVIEWED AND REASSESSED THE FACTUAL FINDINGS OF THE
NLRC AND SUPPLANTED THE SAME WITH ITS OWN FACTUAL FINDINGS AND CONCLUSIONS IN A PETITION FOR
CERTIORARI WHERE THE ONLY ISSUE WAS WHETHER THE NLRC ACTED WITHOUT JURISDICTION OR WITH GRAVE ABUSE
OF DISCRETION.

IV. THE SIXTH DIVISION OF THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT PAL MERELY TOOK ADV ANT
AGE OF THE ALP AP STRIKE TO DISMISS ITS PILOTS EN MASSE, CONTRARY TO THE FACTUAL FINDINGS OF THE
SECRETARY OF LABOR, THE NLRC, THE COURT OF APPEALS AND THIS HONORABLE COURT IN EARLIER CASES INVOL
YING THE SAME FACTS AND EVIDENCE.37

In the meantime, during the pendency of the instant Petitions, the Court decided on June 6, 2011 Airline Pilots Association ·of the
Philippines v. Philippine Airlines, Inc,.38 docketed as G.R. No. 168382 (2nd ALPAP case). The 2nd ALP AP case arose from events that
took place following the finality on August 29, 2002 of the Resolution dated April 10, 2002 which dismissed the Ft ALP AP case. Below
is the factual background for the 2nd ALP AP case as summarized by the Court in said Decision:

On January 13, 2003, ALPAP filed before the Office of the DOLE Secretary a Motion in [the Strike Case], requesting the said office to
conduct an appropriate legal proceeding to determine who among its officers and members should be reinstated or deemed to have
lost their employment with PAL for their actual participation in the strike conducted in June 1998. ALPAP contended that there is a
need to conduct a proceeding in order to determine who actually participated in the illegal strike since not only the striking
workers were dismissed by PAL but all of ALPAP's officers and members, even though some were on official leave or abroad
at the time of the strike.It also alleged that there were some who joined the strike and returned to work but were asked to sign new
contracts of employment, which abrogated their earned seniority. Also, there were those who initially defied the return-to-work order but
immediately complied with the same after proper receipt thereof by ALP AP's counsel. However, PAL still refused to allow them to enter
its premises. According to ALPAP, such measure, as to meet the requirements of due process, is essential because it must be
first established that a union officer or member has participated in the strike or has committed illegal acts before they could
be dismissed from employment. In other words, a fair determination of who must suffer the consequences of the illegal strike is
indispensable since a significant number of ALP AP members did not at all participate in the strike. The motion also made reference to
the favorable recommendation rendered by the Freedom of Association Committee of the International Labour Organization (ILO) in
ILO Case No. 2195 which requested the Philippine Government "to initiate discussions in order to consider the possible reinstatement
in their previous employment of all ALPAP's workers who were dismissed following the strike staged in June 1998." A Supplemental
Motion was afterwards filed by ALP AP on January 28, 2003, this time asking the DOLE Secretary to resolve all issues relating to the
entitlement to employment benefits by the officers and members of ALP AP, whether terminated or not.

In its Comment to ALP AP's motions, PAL argued that the motions cannot legally prosper since the DOLE Secretary has no authority to
reopen or review a final judgment of the Supreme Court relative to [the Strike Case]; that the requested proceeding is no longer
necessary as the CA or this Court did not order the remand of the case to the DOLE Secretary for such determination; that the NLRC
rather than the DOLE Secretary has jurisdiction over the motions as said motions partake of a complaint for illegal dismissal with
monetary claims; and that all money claims are deemed suspended in view of the fact that PAL is under receivership.

On January 24, 2003, the DOLE called the parties to a hearing to discuss and clarify the issues raised in ALP AP's motions. In a letter
dated July 4, 2003 addressed to ALPAP President, Capt. Ismael C. Lapus, Jr., then Acting DOLE Secretary, Imson, resolved ALP AP's
motions in the following manner:

xxxx

After a careful consideration of the factual antecedents, applicable legal principles and the arguments of the parties, this Office
concludes that [the Strike Case] has indeed been resolved with finality by the highest tribunal of the land, the Supreme Court. Being
final and executory, this Office is bereft of authority to reopen an issue that has been passed upon by the Supreme Court.

It is important to note that in pages 18 to 19 of ALP AP's Memorandum, it admitted that individual complaints for illegal dismissal have
been filed by the affected pilots before the NLRC. It is therefore an implied recognition on the part of the pilots that the remedy to their
present dilemma could be found in the NLRC.

xxxx

Thus, to avoid multiplicity of suits, splitting causes of action and forum-shopping which are all obnoxious to an orderly administration of
justice, it is but proper to respect the final and executory order of the Supreme Court in this case as well as the jurisdiction of the NLRC
over the illegal dismissal cases. Since ALP AP and the pilots have opted to seek relief from the NLRC, this Office should respect the
authority of that Commission to resolve the dispute in the normal course of law. This Office will no longer entertain any further initiatives
to split the jurisdiction or to shop for a forum that shall only foment multiplicity of labor disputes. Parties should not jump from one forum
to another. This Office will make sure of that.

By reason of the final ruling of the Honorable Supreme Court, the erring pilots have lost their

employment status and second, because these pilots have filed cases to contest such loss before another forum, the Motion and
Supplemental Motion of ALP AP as well as the arguments raised therein are merely NOTED by this Office."

ALP AP filed its motion for reconsideration arguing that the issues raised in its motions have remained unresolved hence, it is the duty
of DOLE to resolve the same it having assumed jurisdiction over the labor dispute. ALP AP also denied having engaged in forum
shopping as the individual complainants who filed the cases before the NLRC are separate and distinct from ALP AP and that the
causes of action therein are different. According to ALP AP, there was clear abdication of duty when then Acting Secretary Imson
refused to properly act on the motions. In a letter dated July 30, 2003, Secretary Sto. Tomas likewise merely noted ALP AP's motion for
reconsideration, reiterating the DOLE's stand to abide by the final and executory judgment of the Supreme Court.

Proceedings before the Court of Appeals

ALP AP filed a petition for certiorari with the CA, insisting that the assailed letters dated July 4, 2003 and July 30, 2003, which merely
noted its motions, were issued in grave abuse of discretion.

xxxx

The CA, in its Decision dated December 22, 2004, dismissed the petition. It found no grave abuse of discretion on the part of Sto.
Tomas and Imson in refusing to conduct the necessary proceedings to determine issues relating to ALP AP members' employment
status and entitlement to employment benefits. The CA held that both these issues were among the issues taken up and resolved in the
June 1, 1999 DOLE Resolution which was affirmed by the CA in CA-G.R. SP No. 54880 and subsequently determined with finality by
this Court in [the 1st ALP AP case]. Therefore, said issues could no longer be reviewed. The CA added that Sto. Tomas and Imson
merely acted in deference to the NLRC's jurisdiction over the illegal dismissal cases filed by individual ALP AP members.

ALP AP moved for reconsideration which was denied for lack of merit in CA Resolution dated May 30, 2005. 39(Emphases supplied.)

ALP AP once more sought remedy from this Court through a Petition for Review on Certiorari in the 2nd ALPAP case. The Court
therein denied the Petition of ALP AP for lack of merit, based on the ratiocination extensively quoted below:

We deny the petition.

There was no grave abuse of

discretion on the part of Sto. Tomas
and Imson in merely noting ALPAP's
twin motions in due deference to a
final and immutable judgment
rendered by the Supreme Court.

From the June 1, 1999 DOLE Resolution, which declared the strike of June 5, 1998 as illegal and pronounced all ALP AP officers and
members who participated therein to have lost their employment status, an appeal was taken by ALP AP. This was dismissed by the
CA in CA-G .R. SP No. 54880, which ruling was affirmed by this Court and which became final and executory on August 29, 2002.

In the instant case, ALP AP seeks for a conduct of a proceeding to determine who among its members and officers actually participated
in the illegal strike because, it insists, the June 1, 1999 DOLE Resolution did not make such determination. However, as correctly ruled
by Sto. Tomas and Imson and affirmed by the CA, such proceeding would entail a reopening of a final judgment which could not be
permitted by this Court. Settled in law is that once a decision has acquired finality, it becomes immutable and unalterable, thus can no
longer be modified in any respect. Subject to certain recognized exceptions, the principle of immutability leaves the judgment
undisturbed as "nothing further can be done except to execute it."

True, the dispositive portion of the DOLE Resolution does not specifically enumerate the names of those who actually participated in
the strike but only mentions that those strikers who failed to heed the return-to-work order are deemed to have lost their employment.
This omission, however, cannot prevent an effective execution of the decision. As was held in Reinsurance Company of the Orient, Inc.
v. Court of Appeals, any ambiguity may be clarified by reference primarily to the body of the decision or supplementary to the pleadings
previously filed in the case. In any case, especially when there is an ambiguity, "a judgment shall be read in connection with the entire
record and construed accordingly."

There is no necessity to conduct a

proceeding to determine the
participants in the illegal strike or
those who refused to heed the return
to work order because the ambiguity
can be cured by reference to the
body of the decision and the
pleadings filed.

A review of the records reveals that in [the Strike Case], the DOLE Secretary declared the ALP AP officers and members to
have lost their employment status based on either of two grounds, viz.: their participation in the illegal strike on June 5, 1998
or their defiance of the return-to-work order of the DOLE Secretary. The records of the case unveil the names of each of these
returning pilots. The logbook with the heading "Return to Work Compliance/Returnees" bears their individual signature
signifying their conformity that they were among those workers who returned to work only on June 26, 1998 or after the
deadline imposed by DOLE. From this crucial and vital piece of evidence, it is apparent that each of these pilots is bound by
the judgment. Besides, the complaint for illegal lockout was filed on behalf of all these returnees. Thus, a finding that there
was no illegal lockout would be enforceable against them. In fine, only those returning pilots, irrespective of whether they
comprise the entire membership of ALPAP, are bound by the June 1, 1999 DOLE Resolution.

ALPAP harps on the inequity of PAL's termination of its officers and members considering that some of them were on leave
or were abroad at the time of the strike. Some were even merely barred from returning to their work which excused them for
not complying immediately with the return-to-work order. Again, a scrutiny of the records of the case discloses that these
allegations were raised at a very late stage, that is, after the judgment has finally decreed that the returning pilots' termination was
legal. Interestingly, these defenses were not raised and discussed when the case was still pending before the DOLE Secretary, the CA
or even before this Court. We agree with the position taken by Sto. Tomas and Imson that from the time the return-to-work order was
issued until this Court rendered its April 10, 2002 resolution dismissing ALP AP's petition, no ALP AP member has claimed that he was
unable to comply with the return-to-work directive because he was either on leave, abroad or unable to report for some reason. These
defenses were raised in ALPAP's twin motions only after the Resolution in G.R. No. 152306 reached finality in its last ditch
effort to obtain a favorable ruling. It has been held that a proceeding may not be reopened upon grounds already available to
the parties during the pendency of such proceedings; otherwise, it may give way to vicious and vexatious proceedings. ALP
AP was given all the opportunities to present its evidence and arguments. It cannot now complain that it was denied due
process.

Relevant to mention at this point is that when NCMB NCR NS 12-514-97 (strike/illegal lockout case) was still pending, several
complaints for illegal dismissal were filed before the Labor Arbiters of the NLRC by individual members of ALPAP,
questioning their termination following the strike staged in June 1998. PAL likewise manifests that there is a pending case
involving a complaint for the recovery of accrued and earned benefits belonging to ALPAP members. Nonetheless, the
pendency of the foregoing cases should not and could not affect the character of our disposition over the instant case.
Rather, these cases should be resolved in a manner consistent and in accord with our present disposition for effective
enforcement and execution of a final judgment.40 (Emphases supplied.)
The Decision dated June 6, 2011 of the Court in the 2nd ALPAP case became final and executory on September 9, 2011.

Bearing in mind the final and executory judgments in the 1st and 2nd ALPAP cases, the Court denies the Petition of Rodriguez, et al., in
G.R. No. 178501 and partly grants that of PAL in G.R. No. 178510.

The Court, in the 2nd ALPAP case, acknowledged the illegal dismissal cases instituted by the individual ALPAP members before the
NLRC following their termination for the strike in June 1998 (which were apart from the Strike and Illegal Lockout Cases of ALPAP
before the DOLE Secretary) and affirmed the jurisdiction of the NLRC over said illegal dismissal cases. The Court, though, also
expressly pronounced in the 2nd ALPAP case that "the pendency of the foregoing cases should not and could not affect the character of
our disposition over the instant case. Rather, these cases should be resolved in a manner consistent and in accord with our present
disposition for effective enforcement and execution of a final judgment."

The Petitions at bar began with the Illegal Dismissal Case of Rodriguez, et al. and eight other former pilots of PAL before the NLRC.
Among the Decisions rendered by Labor Arbiter Robles, the NLRC, and the Court of Appeals herein, it is the one by the NLRC which is
consistent and in accord with the disposition for effective enforcement and execution of the final judgments in the 1st and 2nd ALPAP
cases.

The 1st and 2nd ALPAP cases which became final and executory on August 29, 2002 and September 9, 2011, respectively,
constitute res judicata on the issue of who participated in the illegal strike in June 1998 and whose services were validly terminated.

The Court expounded on the doctrine of res judicata in Spouses Layos v. Fil-Estate Golf and Development, Inc.41:

Res judicata literally means "a matter adjudged; a thing judicially acted upon or decided; a thing or matter settled by judgment." Res
judicata lays the rule that an existing final judgment or decree rendered on the merits, and without fraud or collusion, by a court of
competent jurisdiction, upon any matter within its jurisdiction, is conclusive of the rights of the parties or their privies, in all other actions
or suits in the same or any other judicial tribunal of concurrent jurisdiction on the points and matters in issue in the first suit.

It is espoused in the Rules of Court, under paragraphs (b) and (c) of Section 47, Rule 39, which provide:

SEC. 47. Effect of judgments or final orders. - The effect of a judgment or final order rendered by a court of the Philippines, having
jurisdiction to pronounce the judgment or final order, may be as follows:

xxxx

(b) In other cases, the judgment or final order is, with respect to the matter directly adjudged or as to any other matter that could have
been raised in relation thereto, conclusive between the parties and their successors in interest by title subsequent to the
commencement of the action or special proceeding, litigating the same thing and under the same title and in the same capacity; and

(c) In any other litigation between the same parties or their successors in interest, that only is deemed to have been adjudged in a
former judgment or final order which appears upon its face to have been so adjudged, or which was actually and necessarily included
therein or necessary thereto.

The doctrine of res judicata lays down two main rules which may be stated as follows: (1) The judgment or decree of a court of
competent jurisdiction on the merits concludes the litigation between the parties and their privies and constitutes a bar to a new action
or suit involving the same cause of action either before the same or any other tribunal; and (2) any right, fact, or matter in issue directly
adjudicated or necessarily involved in the determination of an action before a competent court in which a judgment or decree is
rendered on the merits is conclusively settled by the judgment therein and cannot again be litigated between the parties and their
privies whether or not the claims or demands, purposes, or subject matters of the two suits are the same. These two main rules mark
the distinction between the principles governing the two typical cases in which a judgment may operate as evidence. In speaking of
these cases, the first general rule above stated, and which corresponds to the afore-quoted paragraph (b) of Section 4 7, Rule 3 9 of
the Rules of Court, is referred to as "bar by former judgment"; while the second general rule, which is embodied in paragraph (c) of the
same section and rule, is known as "conclusiveness of judgment".

The Resolution of this Court in Calalang v. Register of Deeds of Quezon City, provides the following enlightening discourse on
conclusiveness of judgment:

The doctrine res judicata actually embraces two different concepts: (1) bar by former judgment and (b) conclusiveness of judgment.

The second concept - conclusiveness of judgment - states that a fact or question which was in issue in a former suit and was there
judicially passed upon and determined by a court of competent jurisdiction, is conclusively settled by the judgment therein as far as the
parties to that action and persons in privity with them are concerned and cannot be again litigated in any future action between such
parties or their privies, in the same court or any other court of concurrent jurisdiction on either the same or different cause of action,
while the judgment remains unreversed by proper authority. It has been held that in order that a judgment in one action can be
conclusive as to a particular matter in another action between the same parties or their privies, it is essential that the issue be identical.
If a particular point or question is in issue in the second action, and the judgment will depend on the determination of that particular
point or question, a former judgment between the same parties or their privies will be final and conclusive in the second if that same
point or question was in issue and adjudicated in the first suit (Nabus vs. Court of Appeals, 193 SCRA 732 [1991]). Identity of cause of
action is not required but merely identity of issue.

Justice Feliciano, in Smith Bell & Company (Phils.), Inc. vs. Court of Appeals (197 SCRA 201, 210 [1991]), reiterated Lopez vs.
Reyes (76 SCRA 179 [1977]) in regard to the distinction between bar by former judgment which bars the prosecution of a second action
upon the same claim, demand, or cause of action, and conclusiveness of judgment which bars the relitigation of particular facts or
issues in another litigation between the same parties on a different claim or cause of action.

The general rule precluding the relitigation of material facts or questions which were in issue and adjudicated in former action are
commonly applied to all matters essentially connected with the subject matter of the litigation. Thus, it extends to questions necessarily
implied in the final judgment, although no specific finding may have been made in reference thereto and although such matters were
directly referred to in the pleadings and were not actually or formally presented. Under this rule, if the record of the former trial shows
that the judgment could not have been rendered without deciding the particular matter, it will be considered as having settled that
matter as to all future actions between the parties and if a judgment necessarily presupposes certain premises, they are as conclusive
as the judgment itself.

Another case, Oropeza Marketing Corporation v. Allied Banking Corporation, further differentiated between the two rules of res
judicata, as follows:

There is "bar by prior judgment" when, as between the first case where the judgment was rendered and the second case that is
sought to be barred, there is identity of parties, subject matter, and causes of action. In this instance, the judgment in the first case
constitutes an absolute bar to the second action. Otherwise put, the judgment or decree of the court of competent jurisdiction on the
merits concludes the litigation between the parties, as well as their privies, and constitutes a bar to a new action or suit involving the
same cause of action before the same or other tribunal.

But where there is identity of parties in the first and second cases, but no identity of causes of action, the first judgment is
conclusive only as to those matters actually and directly controverted and determined and not as to matters merely involved therein.
This is the concept of res judicata known as "conclusiveness of judgment". Stated differently, any right, fact, or matter in issue
directly adjudicated or necessarily involved in the determination of an action before a competent court in which judgment is rendered on
the merits is conclusively settled by the judgment therein and cannot again be litigated between the parties and their privies whether or
not the claim, demand, purpose, or subject matter of the two actions is the same.

In sum, conclusiveness of judgment bars the re-litigation in a second case of a fact or question already settled in a previous case. The
second case, however, may still proceed provided that it will no longer touch on the same fact or question adjudged in the first case.
Conclusiveness of judgment requires only the identity of issues and parties, but not of causes of action. (Emphases ours.)

The elements for res judicata in the second concept, i.e., conclusiveness of judgment, are extant in these cases.

There is identity of parties in the 1st and 2nd ALPAP cases, on one hand, and the Petitions at bar. While the 1st and 2nd ALPAP cases
concerned ALP AP and the present Petitions involved several individual members of ALPAP, the union acted in the 1st and 2nd ALPAP
cases in representation of its members. In fact, in the 2nd ALPAP case, the Court explicitly recognized that the complaint for illegal
lockout was filed by ALP AP on behalf of all its members who were returning to work. 42 Also in the said case, ALPAP raised, albeit
belatedly, exactly _the same arguments as Rodriguez, et al. herein. Granting that there is no absolute identity of parties, what is
required, however, for the application of the principle of res judicata is not absolute, but only substantial identity of parties. ALP AP and
Rodriguez, et al. share an identity of interest from which flowed an identity of relief sought, namely, the reinstatement of the terminated
ALP AP members to their former positions. Such identity of interest is sufficient to make them privy-in-law, one to the other, and meets
the requisite of substantial identity of parties.43

There is likewise an identity of issues between the 1st and 2nd ALPAP cases and these cases. Rodriguez, et al., insist that they did
not participate in the June 1998 strike, being on official leave or scheduled off-duty. Nonetheless, on the matter of determining the
identities of the ALPAP members who lost their employment status because of their participation in the illegal strike in June 1998, the
Court is now conclusively bound by its factual and legal findings in the 1st and 2nd ALPAP cases.

In the 1st ALPAP case, the Court upheld the DOLE Secretary's Resolution dated June 1, 1999 declaring that the strike of June 5, 1998
was illegal and all ALP AP officers and members who participated therein had lost their employment status. The Court in the 2nd ALP
AP case ruled that even though the dispositive portion of the DOLE Secretary's Resolution did not specifically enumerate the names of
those who actually participated in the illegal strike, such omission cannot prevent the effective execution of the decision in the 1st
ALPAP case. The Court referred to the records of the Strike and Illegal Lockout Cases, particularly, the logbook, which it unequivocally
pronounced as a "crucial and vital piece of evidence." In the words of the Court in the 2nd ALPAP case, "[t]he logbook with the heading
'Return-To-Work Compliance/Returnees' bears their individual signature signifying their conformity that they were among those workers
who returned to work only on June 26, 1998 or after the deadline imposed by DOLE.xx x In fine, only those returning pilots, irrespective
of whether they comprise the entire membership of ALPAP, are bound by the June 1, 1999 DOLE Resolution."

The logbook was similarly submitted as evidence by PAL against the complainants in the Illegal Dismissal Case now on appeal.
Rodriguez, et al., except for Jadie and Baquiran, were signatories in the logbook as returnees, 44 bound by the Resolution dated June 1,
1999 of the DOLE Secretary. The significance and weight accorded by the NLRC to the logbook can no longer be gainsaid considering
the declarations of the Court in the 2nd ALPAP case. Moreover, the logbook entries were corroborated by photographs showing
Rodriguez, et al., excluding Baquiran, Galisim, Jadie, Wilfredo S. Cruz, and Piamonte, actually participating in the strike. The objection
that the photographs were not properly authenticated deserves scant consideration as rules of evidence are not strictly observed in
proceedings before administrative bodies like the NLRC, where decisions may be reached on the basis of position papers only. 45 It is
also worth noting that those caught on photographs did not categorically deny being at the strike area on the time/s and date/s the
photographs were taken, but assert that they were there in lawful exercise of their right while on official leave or scheduled off-duty, or
in the alternative, that they were already dismissed from service as early as June 7, 1998 and their presence at the strike area
thereafter was already irrelevant. The Court further concurs in the observation of the NLRC that the official leave or scheduled off-duty
of Rodriguez, et al. expired at least two weeks prior to June 26, 1998, yet they did not make any effort to return to work before said
date. Rodriguez, et al. instead heeded the advice of their lawyer to report en masse with the other ALP AP members, only proving that
they were complying not with the Return-to-Work Order of the DOLE Secretary but the orders of their union and its counsel.

There is no compelling reason for the Court to disturb the findings of the NLRC as to Baquiran and Jadie, the two pilots who did not
sign the logbook.

To stress, the Return-to-Work Order was served on ALPAP on June 8, 1998, and its members had 24 hours or until June 9, 1998 to
report back for work. There is no evidence that Baquiran complied, or at least, attempted to comply with said Order. Neither did
Baquiran report back for work with the other ALPAP members on June 26, 1998. Baquiran, who made no attempt to report for work at
all, cannot be in a better position than the other ALPAP members who belatedly reported for work on June 26, 1998 and were still
deemed to have lost their employment. As the NLRC declared, Baquiran "simply abandoned his job."

Only Jadie among Rodriguez, et al., was illegally dismissed by PAL. During the strike, Jadie was already on maternity leave. Jadie did
not join the strike and could not be reasonably expected to report back for work by June 9, 1998 in compliance with the Return-to-Work
Order. Indeed, Jadie gave birth on June 24, 1998. However, as both the NLRC and the Court of Appeals had held, Jadie can no longer
be reinstated for the following reasons: (1) Jadie's former position as Captain of the E-50 aircraft no longer existed as said aircraft was
already returned to its lessors in accordance with the Amended and Restated Rehabilitation Plan of PAL; (2) Per ATO certification,
Jadie's license expired in 1998; (3) the animosity between the parties as engendered by the protracted and heated litigation; (4) the
possibility that Jadie had already secured equivalent or other employment after the significant lapse of time since the institution of the
Illegal Dismissal Case; and (5) the nature of the business of PAL which requires the continuous operations of its planes and, thus, the
hiring of new pilots. In lieu of reinstatement, Jadie is entitled to separation pay.

Following latest jurisprudence,46 Jadie is entitled to the following reliefs/awards for her illegal dismissal: (1) separation pay equivalent to
one month salary for every year of service in lieu of reinstatement; (2) backwages from June 9, 1998; (3) longevity pay at
PS00.00/month for every year of service based on seniority date falling after June 9, 1998; (4) Christmas bonuses; (5) Jadie's
proportionate share in the P5 Million contribution of PAL to the Retjrement Fund; and (5) cash equivalent of vacation leaves and sick
leaves which Jadie earned after June 9, 1998. All of the aforementioned awards shall be computed until finality of this Decision.

Jadie is further entitled to receive benefits due her even prior to her illegal dismissal on June 9, 1998, namely: (1) unpaid salaries for
June 1 to 8, 1998; and (2) productivity allowance, transportation allowance, and rice subsidy for May 1998 and June 1 to 8, 1998.

All monetary awards due Jadie shall earn legal interest of 6% per annum from date of finality of this Decision until fully paid.

Finally, the Court acts upon the Motion for Leave to Reinstate Elmer F. Peña, Antonio P. Noble, Baltazar B. Musong, Nicomen H.
Versoza and Ryan Jose C. Hinayon as Petitioners in G.R. No. 178501. Peña, Noble, Musong, Versoza, and Hinayon, hereinafter
referred to collectively as Peña, et al., were among the original complainants in the Illegal Dismissal Case before the Labor Arbiter.
However, Peña, et al. were unable to join as petitioners in the Petition for Certiorari before the Court of Appeals in CAG. R. SP No.
71190, as well as the present Petition in G.R. No. 178501, because at the time said Petitions were filed, they were already employed
outside the country. The Court denies the Motion. When Peña, et al. failed to join the Petition in CA-G.R. SP No. 71190, the Decision
dated November 6, 2001 of the NLRC in NLRC NCR CA No. 027348-01 had become final and executory as to them. Peña, et
al. cannot simply be "reinstated" as petitioners in G.R. No. 178501 since they are not parties to and had no legal interest in the
appealed Decision dated November 30, 2006 of the Court of Appeals in CA-G.R. SP No. 71190.

WHEREFORE, premises considered, judgment is hereby rendered:

(1) DISMISSING the Petition of Rodriguez, et al., in G.R. No. 178501 and PARTLY GRANTING the Petition of PAL in G.R. No. 178510;
(2) REVERSING and SETTING ASIDE the Decision dated November 30, 2006 of the Court of Appeals in CA-G.R. SP No. 71190;

(3) DECLARING that Jadie was illegally dismissed and ORDERING PAL to pay her the following:

(a) As consequences of her illegal dismissal: (i) separation pay equivalent to one (1) month salary for every year of service in lieu of
reinstatement; (ii) backwages from June 9, 1998; (iii) longevity pay at P500.00/month for every year of service based on seniority date
falling after June 9, 1998; (iv) Christmas bonuses from 1998; (v) Jadie's proportionate share in the PS Million contribution of PAL to the
Retirement Fund; and (vi) cash equivalent of vacation leaves and sick leaves which Jadie earned after June 9, 1998, all of which shall
be computed until finality of this Decision;

(b) Benefits due her prior to her illegal dismissal on June 9, 1998: (i) unpaid salaries for June 1 to 8, 1998; and (ii) productivity
allowance, transportation allowance, and rice subsidy for May 1998 and June 1 to 8, 1998; and

(c) Legal interest of 6% per annum on all monetary awards due her from the date of finality of this Decision until full payment thereof;

(4) DISMISSING for lack of merit the Complaint for Illegal Dismissal of Rodriguez, Alisangco, Benjamin T. Ang, Vicente P. Ang, Arroyo,
Baquiran, Wilfredo S. Cruz, Delos Reyes, Ecarma, Galisim, Garcia, Gutiza, Jose, Labuga, Lastimoso, Matias, Maturan, Ocharan,
Piamonte, Sabado, Sanchez, Corpus, and Alcañeses; and

(5) DENYING the Motion for Leave to Reinstate Elmer F. Peña, Antonio P. Noble, Baltazar B. Musong, Nicomen H. Versoza and Ryan
Jose C. Hinayon as Petitioners in G.R. No. 178501.

SO ORDERED.

SECOND DIVISION

OCTOBER 4, 2017

G.R. No. 200499

SAN FERNANDO COCA-COLA RANK-AND-FILE UNION (SACORU), represented by its President, ALFREDO R.
MARAÑON, Petitioner
vs.
COCA-COLA BOTTLERS PHILIPPINES, INC. (CCBPI), Respondent

DECISION

CAGUIOA, J.:

Petitioner San Fernando Coca-Cola Rank and File Union (SACORU) filed a petition for review1 on certiorari under Rule 45 of the Rules
of Court assailing the Decision2 dated July 21, 2011 and Resolution3 dated February 2, 2012 of the Court of Appeals (CA) in CA-G.R.
SP No. 115985. The CA affirmed the Resolution4 dated March 16, 2010 of the National Labor Relations Commission· (NLRC), Second
Division, which dismissed SACORU's complaint against respondent Coca-Cola Bottlers Philippines, Inc. (CCBPI) for unfair labor
practice and declared the dismissal of 27 members of SACORU for redundancy as valid.

Facts

The facts, as found by the CA, are:

On May 29, 2009, the private respondent company, Coca-Cola Bottlers Philippines., Inc. ("CCBPI")issued notices of termination to
twenty seven (27) rank-and-file, regular employees and members of the San Fernando Rank-and-File Union ("SACORU'), collectively
referred to as "union members", on the ground of redundancy due to the ceding out of two selling and distribution systems,
the Conventional Route System ("CRS') and Mini Bodega System ("MB") to the Market Execution Partners ("MEPS''), better known
as "Dealership System". The termination of employment was made effective on June 30, 2009, but the union members were no longer
required to report for work as they were put on leave of absence with pay until the effectivity date of their termination. The union
members were also granted individual separation packages, which twenty-two (22) of them accepted, but under protest.

To SACORU, the new, reorganized selling and distribution systems adopted and implemented by CCBPI would result in the diminution
of the union membership amounting to union busting and to a violation of the Collective Bargaining Agreement (CBA) provision against
contracting out of services or outsourcing of regular positions; hence, they filed a Notice of Strike with the National Conciliation and
Mediation Board (NCMB) on June 3, 2009 on the ground of unfair labor practice, among others. On June 11, 2009, SACORU
conducted a strike vote where a majority decided on conducting a strike.

On June 23, 2009, the then Secretary of the Department of Labor and Employment (DOLE), Marianito D. Roque, assumed jurisdiction
over the labor dispute by certifying for compulsory arbitration the issues raised in the notice of strike. He ordered,

"WHEREFORE, premises considered, and pursuant to Article 263 (g) of the Labor Code of the Philippines, as amended, this Office
hereby CERTIFIES the labor dispute at COCA-COLA BOTTLERS PHILIPPINES, INC. to the National Labor Relations Commission for
compulsory arbitration.

Accordingly, any intended strike or lockout or any concerted action is automatically enjoined. If one has already taken place, all striking
and locked out employees shall, within twenty-four (24) hours from receipt of this Order, immediately return to work and the employer
shall immediately resume operations and re-admit all workers under the same terms and conditions prevailing before the strike. The
parties are likewise enjoined from committing any act that may further exacerbate the situation."

Meanwhile, pending hearing of the certified case, SACORU filed a motion for execution of the dispositive portion of the certification
order praying that the dismissal of the union members not be pushed through because it would violate the order of the DOLE Secretary
not to commit any act that would exacerbate the situation.

On August 26, 2009, however, the resolution of the motion for execution was ordered deferred and suspended; instead, the issue was
treated as an item to be resolved jointly with the main labor dispute.

CCBPI, for its part, argued that the new business scheme is basically a management prerogative designed to improve the system of
selling and distributing products in order to reach more consumers at a lesser cost with fewer manpower complement, but resulting in
greater returns to investment. CCBPI also contended that there was a need to improve its distribution system if it wanted to remain
viable and competitive in the business; that after a careful review and study of the existing system of selling and distributing its
products, it decided that the existing CRS and MB systems be ceded out to the MEPs or better known as "Dealership System" because
the enhanced MEPs is a cost-effective and simplified scheme of distribution and selling company products; that CCBPI, through the
simplied system, would derive benefits such as: (a) lower cost to serve; (b) fewer assets to manage; (c) zero capital infusion.

SACORU maintained that the termination of the 27 union members is a circumvention of the CBA against the contracting out of regular
job positions, and that the theory of redundancy as a ground for termination is belied by the fact that the job positions are contracted out
to a "third party provider"; that the termination will seriously affect the union membership because out of 250 members, only 120
members will be left upon plan implementation that there is no redundancy because the sales department still exists except that job
positions will be contracted out to a sales contractor using company equipment for the purpose of minimizing labor costs because
contractual employees do not enjoy CBA benefits; that the contractualization program of the company is illegal because it will render
the union inutile in protecting the rights of its members as there will be more contractual employees than regular employees; and that
the redundancy program will result in the displacement of regular employees which is a clear case of union busting.

Further, CCBPI argued that in the new scheme of selling and distributing products through MEPs or "Dealership [System]", which is a
contract of sale arrangement, the ownership of the products is transferred to the MEPs upon consummation of the sale and payment of
the products; thus, the jobs of the terminated union members will become redundant and they will have to be terminated as a
consequence; that the termination on the ground of redundancy was made in good faith, and fair and reasonable criteria were
determined to ascertain what positions were to be phased out being an inherent management prerogative; that the terminated union
members were in fact paid their separation pay benefits when they were terminated; that they executed quitclaims and release; and that
the quitclaims and release being voluntarily signed by the terminated union members should be declared valid and binding against
them.5

The NLRC dismissed the complaint for unfair labor practice and declared as valid the dismissal of the employees due to redundancy.
The dispositive portion of the NLRC Resolution states:

WHEREFORE, in view of the foregoing, a Decision is hereby rendered ordering the dismissal of the labor dispute between the Union
and Coca-Cola Bottlers Company, Inc.
Accordingly, the charge of Unfair Labor Practice against the company is DISMISSED for lack of merit and the dismissal of the twenty
seven (27)

complainants due to redundancy is hereby declared valid. Likewise, the Union's Motion for Writ of Execution is Denied for lack of merit.

SO ORDERED.6

With the NLRC's denial of its motion for reconsideration, SACO RU filed a petition for certiorari under Rule 65 of the Rules of Court
before the CA. The CA, however, dismissed the petition and found that the NLRC did not commit grave abuse of discretion. The
dispositive portion of the CA Decision states:

WHEREFORE, the instant petition is DISMISSED.

IT IS SO ORDERED.7

SACORU moved for reconsideration of the CA Decision but this was denied. Hence, this petition.

Issues

a. Whether CCBPI validly implemented its redundancy program;

b. Whether CCBPI's implementation of the redundancy program was an unfair labor practice; and

c. Whether CCBPI should have enjoined the effectivity of the termination of the employment of the 27 affected union members when
the DOLE Secretary assumed jurisdiction over their labor dispute.

The Court's Ruling

The petition is partly granted.

Although SACORU claims that its petition raises only questions of law, a careful examination of the issues on the validity of the
redundancy program and whether it constituted an unfair labor practice shows that in resolving the issue, the Court would have to
reexamine the NLRC and CA's evaluation of the evidence that the parties presented, thus raising questions of fact. 8 This cannot be
done following Montoya v. Trans med Manila Corp. 9 that only questions of law may be raised against the CA decision and that the CA
decision will be examined only using the prism of whether it correctly determined the existence of grave abuse of discretion, thus:

Furthermore, Rule 45 limits us to the review of questions of law raised against the assailed CA decision. In ruling for legal correctness,
we have to view the CA decision in the same context that the petition for certiorari it ruled upon was presented to it; we have to examine
the CA decision from the prism of whether it correctly determined the presence or absence of grave abuse of discretion in the NLRC
decision before it, not on the basis of whether the NLRC decision on the merits of the case was correct.xxx 10

"[G]rave abuse of discretion may arise when a lower court or tribunal violates or contravenes the Constitution, the law or existing
jurisprudence."11 The Court further held in Banal III v. Panganiban that:

By grave abuse of discretion is meant, such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction. The
abuse of discretion must be grave as where the power is exercised in an arbitrary or despotic manner by reason of passion or personal
hostility and must be so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined
by or to act at all in contemplation of law.12

The reason for this limited review is anchored on the fact that the petition before the CA was a certiorari petition under Rule 65; thus,
even the CA did not have to assess and weigh the sufficiency of evidence on which the NLRC based its decision. The CA only had to
determine the existence of grave abuse of discretion. As the Court held in Soriano, Jr. v. National Labor Relations Commission: 13

As a general rule, in certiorari proceedings under Rule 65 of the Rules of Court, the appellate court does not assess and weigh the
sufficiency of evidence upon which the Labor Arbiter and the NLRC based their conclusion. The query in this proceeding is limited to
the determination of whether or not the NLRC acted without or in excess of its jurisdiction or with grave abuse of discretion in rendering
its decision. However, as an exception, the appellate court may examine and measure the factual findings of the NLRC if the same are
not supported by substantial evidence.14

Here, the Court finds that the CA was correct in its determination that the NLRC did not commit grave abuse of discretion.

CCBPI's redundancy program is valid.

For there to be a valid implementation of a redundancy program, the following should be present:

(1) written notice served on both the employees and the Department of Labor and Employment at least one month prior to the intended
date of retrenchment; (2) payment of separation pay equivalent to at least one month pay or at least one month pay for every year of
service, whichever is higher; (3) good faith in abolishing the redundant positions; and (4) fair and reasonable criteria in ascertaining
what positions are to be declared redundant and accordingly abolished. 15

The NLRC found the presence of all the foregoing when it ruled that the termination was due to a scheme that CCBPI adopted and
implemented which was an exercise of management prerogative, 16 and that there was no proof that it was exercised in a malicious or
arbitrary manner.17 Thus:

It appears that the termination was due to the scheme adopted and implemented by respondent company in distributing and selling its
products, to reach consumers at greater length with greater profits, through MEPs or dealership system is basically an exercise of
management prerogative. The adoption of the scheme is basically a management prerogative and even if it cause the termination of
some twenty seven regular employees, it was not in violation of their right to self-organization much more in violation of their right to
security of tenure because the essential freedom to manage business remains with management. x x x

Prior to the termination of the herein individual complainants, respondent company has made a careful study of how to be more cost
effective in operations and competitive in the business recognizing in the process that its multi-layered distribution system has to be
simplified. Thus, it was determined that compared to other distribution schemes, the company incurs the lowest cost-to-serve through
Market Execution Partners (ME[P]s) or Dealership system. The CRS and Mini-Bodega systems posted the highest in terms of cost-to-
serve. Thus, the phasing out of the CRS and MB is necessary which, however, resulted in the termination of the complainants as their
positions have become redundant. Be that as it may, respondent company complied with granting them benefits that is more than what
the law prescribes. They were duly notified of their termination from employment thirty days prior to actual termination. x x x18

On the issue of CCBPI's violation of the CBA because of its engagement of an independent contractor, the NLRC ruled that the
implementation of a redundancy program is not destroyed by the employer availing itself of the services of an independent contractor,
thus:

In resolving this issue, We find the ruling in Asian Alcohol vs. NLRC, 305 SCRA 416, in parallel application, where it was held that an
employer's good faith in implementing a redundancy program is not necessarily destroyed by availment of services of an independent
contractor to replace the services of the terminated employees. We have held previously that the reduction of the number of workers in
a company made necessary by the introduction of the services of an independent contractor is justified when the latter is undertaken in
order to effectuate more economic and efficient methods of production. Likewise, in Maya Farms Employees Organization vs. NLRC,
239 SCRA 508, it was held that labor laws discourage interference with employer's judgment in the conduct of his business. Even as
the law is solicitous of the welfare of the employees, it must also protect the right of an employer to exercise what are clearly
management prerogatives. As long as the company's exercise of the same is in good faith to advance its interest and not for the
purpose of circumventing the rights of employees under the law or valid agreements, such exercise will be upheld. For while this right is
not absolute, the employees right to security of tenure does not give him the vested right in his position as would deprive an employer
of its prerogative to exercise his right to maximize profits. (Abbot Laboratories, Phils. Inc. vs. NLRC, 154 SCRA 713). 19

For its part, the CA ruled that the NLRC did not commit grave abuse of discretion, even as it still reviewed the factual findings of the
NLRC and arrived at the same conclusion as the NLRC. On whether redundancy existed and the validity of CCBPI's implementation,
the CA ruled that CCBPI had valid grounds for implementing the redundancy program:

In the case at hand, CCBPI was able to prove its case that from the study it conducted, the previous CRS and MB selling and
distribution schemes generated the lowest volume contribution which thus called for the redesigning and enhancement of the existing
selling and distribution strategy; that such study called for maximizing the use of the MEPs if the company is to retain its market
competitiveness and viability; that furthermore, based on the study, the company determined that the MEPs will enable the CCBPI
to "reach more" with fewer manpower and assets to manage; that it is but a consequence of the new scheme that CCBPI had to
implement a redundancy program structured to downsize its manpower complement. 20

The CA also agreed with the NLRC that CCBPI complied with the notice requirements for the dismissal of the employees. 21

Given the limited review in this petition, the Court cannot now reexamine the foregoing factual findings of both the NLRC and CA that
the redundancy program was valid.

As the CA found, the NLRC's factual findings were supported by substantial evidence and are in fact in compliance with the law and
jurisprudence. The CA therefore correctly determined that there was no grave abuse of discretion on the part of the NLRC.
As stated earlier, the CA, even if it had no duty to re-examine the factual findings of the NLRC, still reviewed them and, in doing so,
arrived at the very same conclusion. These factual findings are accorded not only great respect but also finality, 22 and are therefore
binding on the Court.

CCBPI did not commit an unfair labor practice.

The same principle of according finality to the factual findings of the NLRC and CA applies to the determination of whether CCBPI
committed an unfair labor practice. Again, the CA also correctly ruled that the NLRC, with its findings supported by law and
jurisprudence, did not commit grave abuse of discretion.

In Zambrano v. Philippine Carpet Manufacturing Corp.,23 the Court stated:

Unfair labor practice refers to acts that violate the workers' right to organize. There should be no dispute that all the prohibited acts
constituting unfair labor practice in essence relate to the workers' right to self-organization. Thus, an employer may only be held liable
for unfair labor practice if it can be shown that his acts affect in whatever manner the right of his employees to self-organize.24

To prove the existence of unfair labor practice, substantial evidence has to be presented. 25

Here, the NLRC found that SACORU failed to provide the required substantial evidence, thus:

The union's charge of ULP against respondent company cannot be upheld. The union's mere allegation of ULP is not evidence, it must
be supported by substantial evidence.

Thus, the consequent dismissal of twenty seven (27) regular members of the complainant's union due to redundancy is not per se an
act of unfair labor practice amounting to union busting. For while, the number of union membership was diminished due to the
termination of herein union members, it cannot safely be said that respondent company acted in bad faith in terminating their services
because the termination was not without a valid reason. 26

The CA ruled similarly and found that SACORU failed to support its allegation that CCBPI committed an unfair labor practice:

SACORU failed to proffer any proof that CCBPI acted in a malicious or arbitrarily manner in implementing the redundancy program
which· resulted in the dismissal of the 27 employees, and that CCBPI engaged instead the services of independent contractors. As no
credible, countervailing evidence had been put forth by SACORU with which to challenge the validity of the redundancy program
implemented by CCBPI, the alleged unfair labor practice acts allegedly perpetrated against union members may not be simply
swallowed. SACORU was unable to prove its charge of unfair labor practice and support its allegations that the termination of the union
members was done with the end-in-view of weakening union leadership and representation. There was no showing that the redundancy
program was motivated by ill will, bad faith or malice, or that it was conceived for the purpose of interfering with the employees' right to
self-organize.27

The Court accordingly affirms these findings of the NLRC and the CA that SACORU failed to present any evidence to prove that the
redundancy program interfered with their right to self-organize.

CCBPI violated the return-to-work order.

SACORU claims that CCBPI violated the doctrine in Metrolab Industries, Inc. v. Roldan-Confesor, 28 when it dismissed the employees
after the DOLE Secretary assumed jurisdiction over the dispute. SACO RU argues that CCBPI should have enjoined the termination of
the employees which took effect on July 1, 2009 because the DOLE Secretary enjoined further acts that could exacerbate the
situation.29 On the other hand, CCBPI argued that the termination of the employment was a certainty, from the time the notices of
termination were issued,30 and the status quo prior to the issuance of the assumption order included the impending termination of the
employment of the 27 employees.31

Both the NLRC32 and CA33 ruled that Metrolab did not apply to the dispute because the employees received the notice of dismissal prior
to the assumption order of the DOLE Secretary, thus CCBPI did not commit an act that exacerbated the dispute.

To the Court, the issue really is this: whether the status quo to be maintained after the DOLE Secretary assumed jurisdiction means
that the effectivity of the termination of employment of the 27 employees should have been enjoined. The Court rules in favor of SACO
RU.

Pertinent to the resolution of this issue is Article 263 (g) 34 of the Labor Code, which provides the conditions for, and the effects of, the
DOLE Secretary's assumption of jurisdiction over a dispute:

ARTICLE 263. Strikes, picketing, and lockouts. x x x

xxxx

(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the
national interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify the same to
the Commission for compulsory arbitration. Such assumption or certification shall have the effect of automatically enjoining the intended
or impending strike or lockout as specified in the assumption or certification order. If one 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 immediately
resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout. The Secretary
of Labor and Employment or the Commission may seek the assistance of law enforcement agencies to ensure compliance with this
provision as well as with such orders as he may issue to enforce the same. (Emphasis and underscoring supplied.)

The powers given to the DOLE Secretary under Article 263 (g) is an exercise of police power with the aim of promoting public good.35 In
fact, the scope of the powers is limited to an industry indispensable to the national interest as determined by the DOLE
Secretary.36 Industries that are indispensable to the national interest are those essential industries such as the generation or distribution
of energy, or those undertaken by banks, hospitals, and export-oriented industries.37 And following Article 263 (g), the effects of the
assumption of jurisdiction are the following:

(a) the enjoining of an impending strike or lockout or its lifting, and

(b) an order for the workers to return to work immediately and for the employer to readmit all workers under the same terms and
conditions prevailing before the strike or lockout,38 or the return-to-work order.

As the Court ruled in Trans-Asia Shipping Lines, Inc.-Unlicensed Crews Employees Union-Associated Labor Union (TASLI-ALU) v.
Court of Appeals39 :

When the Secretary exercises these powers, he is granted "great breadth of discretion" in order to find a solution to a labor
dispute.1âwphi1 The most obvious of these powers is the automatic enjoining of an impending strike or lockout or the lifting thereof if
one has already taken place. Assumption of jurisdiction over a labor dispute, or as in this case the certification of the same to the NLRC
for compulsory arbitration, always co-exists with an order for workers to return to work immediately and for employers to readmit all
workers under the same terms and conditions prevailing before the strike or lockout. 40

Of important consideration in this case is the return-to-work order, which the Court characterized in Manggagawa ng Komunikasyon sa
Pilipinas v. Philippine Long Distance Telephone Co., Inc., 41 as "interlocutory in nature, and is merely meant to maintain status quo
while the main issue is being threshed out in the proper forum." 42 The status quo is simply the status of the employment of the
employees the day before the occurrence of the strike or lockout. 43

Based on the foregoing, from the date the DOLE Secretary assumes jurisdiction over a dispute until its resolution, the parties have the
obligation to maintain the status quo while the main issue is being threshed out in the proper forum - which could be with the DOLE
Secretary or with the NLRC. This is to avoid any disruption to the economy and to the industry of the employer - as this is the potential
effect of a strike or lockout in an industry indispensable to the national interest - while the DOLE Secretary or the NLRC is resolving the
dispute.

Since the union voted for the conduct of a strike on June 11, 2009, when the DOLE Secretary issued the return-to-work order dated
June 23, 2009,44 this means that the status quo was the employment status of the employees on June 10, 2009. This status quo should
have been maintained until the NLRC resolved the dispute in its Resolution dated March 16, 2010, where the NLRC ruled that CCBPI
did not commit unfair labor practice and that the redundancy program was valid. This Resolution then took the place of the return-to-
work order of the DOLE Secretary and CCBPI no longer had the duty to maintain the status quo after March 16, 2010.

Given this, the 27 employees are therefore entitled to backwages and other benefits from July 1, 2009 until March 16, 2010, and CCBPI
should re-compute the separation pay that the 27 employees are entitled taking into consideration that the termination of their
employment shall be effective beginning March 16, 2010.

WHEREFORE, premises considered, the petition for review is hereby PARTLY GRANTED. The Decision of the Court of Appeals dated
July 21, 2011 and Resolution dated February 2, 2012 are hereby AFFIRMED as to the finding that respondent did not commit unfair
labor practice and that the redundancy program is valid. Respondent, however, is directed to pay the 27 employees backwages from
July 1, 2009 until March 16, 2010, and to re-compute their separation pay taking into consideration that the termination of their
employment is effective March 16, 2010.

SO ORDERED.
Republic of the Philippines
SUPREME COURT
Baguio City

G.R. No. 170007 April 7, 2014

TABANGAO SHELL REFINERY EMPLOYEES ASSOCIATION, Petitioner,

vs.
PILIPINAS SHELL PETROLEUM CORPORATION, Respondent.

DECISION

LEONARDO-DE CASTRO, J.:

This an appeal from the Decision1 dated August 8, 2005 of the Court of Appeals in CA-G.R. SP No. 88178 dismissing the petition for
certiorari of the petitioner Tabangao Shell Refinery Employees Association.

The origins of the controversy

In anticipation of the expiration on April 30, 2004 of the 2001-2004 Collective Bargaining Agreement (CBA) between the petitioner and
the respondent Pilipinas Shell Petroleum Corporation, the parties started negotiations for a new CBA. After several meetings on the
ground rules that would govern the negotiations and on political items, the parties started their discussion on the economic items on
July 27, 2004, their 31st meeting. The union proposed a 20o/o annual across-the-board basic salary increase for the next three years
that would be covered by the new CBA. In lieu of the annual salary increases, the company made a counter-proposal to grant all
covered employees a lump sum amount of ₱80,000.00 yearly for the three-year period of the new CBA.2

The union requested the company to present its counter-proposal in full detail, similar to the presentation by the union of its economic
proposal. The company explained that the lump sum amount was based on its affordability for the corporation, the then current salary
levels of the members of the union relative to the industry, and the then current total pay and benefits package of the employees. Not
satisfied with the company’s explanation, the union asked for further justification of the lump sum amount offered by the company.
When the company refused to acknowledge any obligation to give further justification, the union rejected the company’s counter-
proposal and maintained its proposal for a 20% annual increase in basic pay for the next three years. 3

On the 39th meeting of the parties on August 24, 2004, the union lowered its proposal to 12% annual across-the-board increase for the
next three years. For its part, the company increased its counter-proposal to a yearly lump sum payment of ₱88,000.00 for the next
three years. The union requested financial data for the manufacturing class of business in the Philippines. It also requested justification
for the company’s counter-offer. In response, the company stated that financial measures for Tabangao were available in the refinery
scorecard regularly cascaded by the management to the employees. The company reiterated that its counter-offer is based on its
affordability for the company, comparison with the then existing wage levels of allied industry, and the then existing total pay and
benefits package of the employees. The company subsequently provided the union with a copy of the company’s audited financial
statements.4

However, the union remained unconvinced and asked for additional documents to justify the company’s counter-offer. The company
invited the attention of the union to the fact that additional data, such as the refinery performance scorecard, were available from the
refinery’s website and shared network drives. The company also declared that the bases of its counter-offer were already presented to
the union and contained in the minutes of previous meetings. The union thereafter requested for a copy of the comparison of the
salaries of its members and those from allied industries. The company denied the request on the ground that the requested information
was entrusted to the company under a confidential agreement. Alleging failure on the part of the company to justify its offer, the union
manifested that the company was bargaining in bad faith.5 The company, in turn, expressed its disagreement with the union’s
manifestation.6

On the parties’ 41st meeting held on September 2, 2004, the company proposed the declaration of a deadlock and recommended that
the help of a third party be sought. The union replied that they would formally answer the proposal of the company a day after the
signing of the official minutes of the meeting. On that same day, however, the union filed a Notice of Strike in the National Conciliation
and Mediation Board (NCMB), alleging bad faith bargaining on the part of the company. The NCMB immediately summoned the parties
for the mandatory conciliation-mediation proceedings but the parties failed to reach an amicable settlement. 7

Assumption of Jurisdiction by the Secretary of Labor and Employment

On September 16, 2004, during the cooling off period, the union conducted the necessary strike vote. The members of the union, who
participated in the voting, unanimously voted for the holding of a strike. Upon being aware of this development, the company filed a
Petition for Assumption of Jurisdiction with the Secretary of Labor and Employment. 8 The petition was filed pursuant to the first
paragraph of Article 263(g) of the Labor Code which provides:

ART. 263. Strikes, picketing, and lockouts. – x x x

xxxx

(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the
national interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify the same to
the Commission for compulsory arbitration. Such assumption or certification shall have the effect of automatically enjoining the intended
or impending strike or lockout as specified in the assumption or certification order. If one 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 immediately
resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout. The Secretary
of Labor and Employment or the Commission may seek the assistance of law enforcement agencies to ensure the compliance with this
provision as well as with such orders as he may issue to enforce the same.

The company’s petition for assumption of jurisdiction was docketed as OSEC-AJ-0033-04/NCMB-RBIV-LAG-NS-09-048-04.

In an Order9 dated September 20, 2004, the then Secretary of Labor and Employment, Patricia Sto. Tomas, granted the petition of the
company. The Secretary of Labor and Employment took notice of the Notice of Strike filed by the union in the NCMB which charged the
company with unfair labor practice consisting of bad faith in bargaining negotiations. The Secretary of Labor and Employment also
found that the intended strike would likely affect the company’s capacity to provide petroleum products to the company’s various
clientele, including the transportation sector, the energy sector, and the manufacturing and industrial sectors. The Secretary of Labor
and Employment further observed that a strike by the union would certainly have a negative impact on the price of commodities.
Convinced that such a strike would have adverse consequences on the national economy, the Secretary of Labor and Employment
ruled that the labor dispute between the parties would cause or likely to cause a strike in an industry indispensable to the national
interest. Thus, the Secretary of Labor and Employment assumed jurisdiction over the dispute of the parties. The dispositive portion of
the Order dated September 20, 2004 reads:

WHEREFORE, considering the foregoing premises, this Office hereby assumes jurisdiction over the labor dispute between the
TABANGAO SHELL REFINERY EMPLOYEES ASSOCIATION and the PILIPINAS SHELL PETROLEUM CORPORATION, pursuant to
Article 263 (g) of the Labor Code, as amended.

Accordingly, any form of concerted action, whether actual or intended, is hereby enjoined. Parties are directed to maintain the status
quo existing at the time of service of this Order. They are also ordered not to commit any act that may exacerbate the situation.

However, if at the time of service of this Order a strike has already commenced, the employees are directed to immediately return to
work within twenty-four (24) hours from receipt thereof. In such case[,] the employer shall, without unnecessary delay, resume
operations and readmit all workers under the same terms and conditions prevailing before the strike.

To expedite the resolution of this dispute, the parties are directed to submit in three [3] copies, their respective Position Paper on the
economic issues and those raised in the Notice of Strike, docketed as NCMB-RBIV-LAG-NS-09-048-04. It must be submitted
personally to this Office within seven [7] calendar days from receipt of this Order. Another three [3] calendar days from receipt of the
other party’s position paper shall be allowed for the personal filing or submission of their respective Comment and Reply thereon.
Service of position papers together with annexes, affidavits and other papers accompanying the same should be done personally. If
service by registered mail cannot be avoided, it should follow the mandate of Article 263 of the Labor Code and shall be deemed
complete upon the expiration of five (5) calendar days from mailing. After said period[,] the allowed time for filing of Reply shall start,
after which, the case shall be deemed submitted for resolution.

The Company is ordered to attach the following documents to its position paper, to assist this Office in the prompt resolution of this
case:

a] Complete Audited Financial Statements for the past five [5] years certified as to its completeness by the Chief Financial Comptroller
or Accountant, as the case may be[;]

SEC stamped COMPLETE audited Financial Statements shall include the following:

1. Independent Auditor’s opinion

2. Comparative Balance Sheet

3. Comparative Income Statement

4. Comparative Cash Flows

5. Notes to the Financial Statements as required by SEC

b] Projected Financial Statements of the Company FOR THE NEXT THREE [3] YEARS (Balance Sheets, Income Statements, Cash
Flow, and Appropriate notes to such projected [F]inancial Statements);

c] CBA history as to all the economic issues;

d] Cost estimates of its final offer on the specific CBA issues;

e] A separate itemized summary of the Management Offer and the Union demands with [the] following format:

[[reference = http://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2014/april2014/170007.pdf]]

Description of Demands Existing CBA Union Demands Management Offer

1.

2.

The Union is directed to provide a copy of their last CBA, an itemized summary of its CBA demands, as well as a computation of their
cost[s] that require resolution in triplicate copies using the same format stated above.

No petition, pleading or any opposition thereto shall be acted upon by this Office, without proof of its service to the adverse
party/parties.

In the interest of speedy labor justice, this Office will entertain no motion for extension or postponement.

The urgency of the need to rule on this case is only in faithful adherence to the following provision of Article 263 paragraph (i) of the
Labor Code, as follows:

"The Secretary of Labor and Employment, the Commission or the voluntary arbitrator shall decide or resolve the dispute within thirty
(30) calendar days from the date of the assumption of jurisdiction or the certification or submission of the dispute, as the case may be. x
x x"

The appropriate police authority is hereby deputized to enforce this Order if it turns out that within twenty-four (24) hours from service
hereof, there appears a refusal by either or both parties to comply herewith.10

The Secretary of Labor and Employment denied the motion for reconsideration of the union in a Resolution dated October 6, 2004. The
union’s second motion for reconsideration was denied in a Resolution dated December 13, 2004. 11

Petition for certiorari in the Court of Appeals

The union thereafter filed a petition for certiorari, 12 docketed as CA-G.R. SP No. 88178, in the Court of Appeals on January 13, 2005.
The union alleged in its petition that the Secretary of Labor and Employment acted with grave abuse of discretion in grossly
misappreciating the facts and issue of the case. It contended that the issue is the unfair labor practice of the company in the form of bad
faith bargaining and not the CBA deadlock. Anchoring its position on item 8 of what the parties agreed upon as the ground rules that
would govern the negotiations, the union argued that, at the time the Order dated September 20, 2004 was issued, there was no CBA
deadlock on account of the union’s non-conformity with the declaration of a deadlock, as item 8 of the said ground rules provided that a
"deadlock can only be declared upon mutual consent of both parties." Thus, the Secretary of Labor and Employment committed grave
abuse of discretion when she assumed jurisdiction and directed the parties to submit position papers even on the economic issues.13

The Court of Appeals found the position of the union untenable. It cited this Court’s ruling in St. Scholastica’s College v. Torres14 that
the authority of the Secretary of Labor and Employment under Article 263(g) of the Labor Code to assume jurisdiction over a labor
dispute causing or likely to cause a strike or lockout in an industry indispensable to national interest includes questions and
controversies arising from the said dispute, including cases over which the Labor Arbiter has exclusive jurisdiction. Applying St.
Scholastica’s College, the Court of Appeals found that the 2004 CBA Official Minutes of the Meetings show that the union and the
company were already discussing the economic issues when the union accused the company of bargaining in bad faith. As such, the
Secretary of Labor and Employment had the authority to take cognizance of the economic issues, which issues were the necessary
consequence of the alleged bad faith bargaining. 15

Moreover, according to the Court of Appeals, Article 263(g) of the Labor Code vests in the Secretary of Labor and Employment not only
the discretion to determine what industries are indispensable to national interest but also the power to assume jurisdiction over such
industries’ labor disputes, including all questions and controversies arising from the said disputes. Thus, as the Secretary of Labor and
Employment found the company’s business to be one that is indispensable to national interest, she had authority to assume jurisdiction
over all of the company’s labor disputes, including the economic issues. 16

Finally, the Court of Appeals noted that the union’s contention that the Secretary of Labor and Employment cannot resolve the
economic issues because the union had not given its consent to the declaration of a deadlock was already moot. The Court of Appeals
observed that the union filed on February 7, 2005 another Notice of Strike citing CBA deadlock as a ground and, in an Order dated
March 1, 2005, the then Acting Secretary of Labor and Employment, Manuel Imson, granted the company’s Manifestation with Motion
to Consider the Second Notice of Strike as Subsumed to the First Notice of Strike. 17

Given the above reasons, the Court of Appeals dismissed the petition for certiorari of the union. The dispositive portion of the Decision
dated August 8, 2005 reads as follows:

UPON THE VIEW WE TAKE OF THIS CASE, THUS, the petition must be, as it hereby is DISMISSED, for lack of merit. Costs against
petitioner.18

A detour: from the National Labor Relations Commission to the Secretary of Labor and Employment

In the meantime, on February 2, 2005, the union filed a complaint for unfair labor practice against the corporation in the National Labor
Relations Commission. The union alleged that the company refused, or violated its duty, to bargain. 19

The company moved for the dismissal of the complaint, believing that all the elements of forum shopping and/or litis pendentia were
present.20

In an Order21 dated May 9, 2005, the Labor Arbiter found that the case arose from the very same CBA negotiations which culminated
into a labor dispute when the union filed a notice of strike for bad faith bargaining and CBA deadlock. According to the Labor Arbiter,
the issue raised by the union, refusal to bargain, was a proper incident of the labor dispute over which the Secretary of Labor and
Employment assumed jurisdiction. Thus, the case was forwarded for consolidation with the labor dispute case of the parties in the
Office of the Secretary of Labor and Employment.

Decision of the Secretary of Labor and Employment

During the pendency of the union’s petition for certiorari in the Court of Appeals, the Secretary of Labor and Employment rendered a
Decision22 dated June 8, 2005 in OSEC-AJ-0033-04/NCMB-RBIV-LAG-NS-09-048-04/NCMB-RBIV-LAG-NS-02-004-05.

In her Decision, the Secretary of Labor and Employment held that there was already deadlock although the ground for the first Notice of
Strike was unfair labor practice for bargaining in bad faith. Citing Capitol Medical Center Alliance of Concerned Employees-Unified
Filipino Service Workers v. Laguesma23 where it has been held that there may be a deadlock not only in the strict legal sense of an
impasse despite reasonable effort at good faith bargaining but also where one of the parties unduly refuses to comply with its duty to
bargain, the Secretary of Labor and Employment ruled that the circumstances – 41 CBA meetings showing "reasonable efforts at good
faith bargaining" without arriving at a CBA – show that there was effectively a bargaining deadlock between the parties.24

Moreover, the Secretary of Labor and Employment also passed upon the issue of whether the company was guilty of bargaining in bad
faith:

Now, is the Company guilty of bargaining in bad faith? This Office rules in the negative.

The duty to bargain does not compel any party to accept a proposal, or make any concession, as recognized by Article 252 of the Labor
Code, as amended. The purpose of collective bargaining is the reaching of an agreement resulting in a contract binding on the parties;
however, the failure to reach an agreement after negotiations continued for a reasonable period does not establish a lack of good faith.
The laws invite and contemplate a collective bargaining contract, but they do not compel one. The duty to bargain does not include the
obligation to reach an agreement. Thus, the Company’s insistence on a bargaining position to the point of stalemate does not establish
bad faith. The Company’s offer[,] a lump sum of Php88,000 per year, for each covered employee in lieu of a wage increase cannot, by
itself, be taken as an act of bargaining in bad faith. The minutes of the meetings of the parties, show that they both exerted their best
efforts, to try to resolve the issues at hand. Many of the proposed improvements or changes, were either resolved, or deferred for
further discussion. It is only on the matter of the wage increase, that serious debates were registered. However, the totality of conduct
of the Company as far as their bargaining stance with the Union is concerned, does not show that it was bargaining in bad faith.25
The Secretary of Labor and Employment then proceeded to decide on the matter of the wage increase and other economic issues of
the new CBA. For failure of the union to substantiate its demand for wage increase as it did not file its position paper, the Secretary of
Labor and Employment looked at the financial situation of the company, as shown by its audited financial statements, and found it just
and equitable to give a lump sum package of ₱95,000.00 per year, per covered employee, for the new CBA covering the period May 1,
2004 until April 30, 2007. The Secretary of Labor and Employment further retained the other benefits covered by the 2001-2004 CBA as
she found the said benefits to be sufficient and reasonable. 26

Neither the union nor the company appealed the Decision dated June 8, 2005 of the Secretary of Labor and Employment. 27 Thus, the
said Decision attained finality.

The present petition

The union now comes to this Court to press its contentions. It insists that the corporation is guilty of unfair labor practice through bad
faith bargaining. According to the union, bad faith bargaining and a CBA deadlock cannot legally co-exist because an impasse in
negotiations can only exist on the premise that both parties are bargaining in good faith. Besides, there could have been no deadlock
between the parties as the union had not given its consent to it, pursuant to item 8 of the ground rules governing the parties’
negotiations which required mutual consent for a declaration of deadlock. The union also posits that its filing of a CBA deadlock case
against the company was a separate and distinct case and not an offshoot of the company’s unfair labor practice through bargaining in
bad faith. According to the union, as there was no deadlock yet when the union filed the unfair labor practice of bargaining in bad faith,
the subsequent deadlock case could neither be an offshoot of, nor an incidental issue in, the unfair labor practice case. Because there
was no deadlock yet at the time of the filing of the unfair labor practice case, the union claims that deadlock was not an incidental issue
but a non-issue. As deadlock was a non-issue with respect to the unfair labor practice case, the Court of Appeals misapplied St.
Scholastica’s College and the Secretary of Labor and Employment committed grave abuse of discretion when it presumed deadlock in
its Order dated September 20, 2004 assuming jurisdiction over the labor dispute between the union and the company. 28

For its part, the company argues that the Court of Appeals correctly affirmed the Order dated September 20, 2004 of the Secretary of
Labor and Employment assuming jurisdiction over the labor dispute between the parties. The company claims that it is engaged in an
industry that is vital to the national interest, and that the evidence on record established that there was already a full-blown labor
dispute between the company and the union arising from the deadlock in CBA negotiations. The company insists that the alleged bad
faith on its part, which the union claimed to have prevented any CBA deadlock, has no basis. The company invokes the final Decision
dated June 8, 2005 of the Secretary of Labor and Employment which ruled that the company was not guilty of bargaining in bad faith.
For the company, even if the union’s first Notice of Strike was based on unfair labor practice and not deadlock in bargaining, the
Secretary of Labor and Employment’s assumption of jurisdiction over the labor dispute between the parties extended to all questions
and controversies arising from the labor dispute, that is, including the economic issues. 29

The Court’s ruling

The petition fails. There are at least four reasons to support the denial of the petition and each reason is sufficient to defeat the union’s
claims.

First, the petition is barred by res judicata in the concept of conclusiveness of judgment.

The concept of conclusiveness of judgment is explained in Nabus v. Court of Appeals 30 as follows:

The doctrine states that a fact or question which was in issue in a former suit, and was there judicially passed on and determined by a
court of competent jurisdiction, is conclusively settled by the judgment therein, as far as concerns the parties to that action and persons
in privity with them, and cannot be again litigated in any future action between such parties or their privies, in the same court or any
other court of concurrent jurisdiction on either the same or a different cause of action, while the judgment remains unreversed or
unvacated by proper authority. The only identities thus required for the operation of the judgment as an estoppel x x x are identity of
parties and identity of issues.

It has been held that in order that a judgment in one action can be conclusive as to a particular matter in another action between the
same parties or their privies, it is essential that the issues be identical. If a particular point or question is in issue in the second action,
and the judgment will depend on the determination of that particular point or question, a former judgment between the same parties [or
their privies] will be final and conclusive in the second if that same point or question was in issue and adjudicated in the first suit[.] x x x.
(Citations omitted.)

The Decision dated June 8, 2005 of the Secretary of Labor and Employment in the labor dispute over which he assumed jurisdiction,
OSEC-AJ-0033-04/NCMB-RBIV-LAG-NS-09-048-04/NCMB-RBIV-LAG-NS-02-004-05, has long attained finality. The union never
denied this.

In this connection, Article 263(i) of the Labor Code is clear:

ART. 263. Strikes, picketing, and lockouts. – x x x

xxxx

(i) The Secretary of Labor and Employment, the Commission or the voluntary arbitrator shall decide or resolve the dispute within thirty
(30) calendar days from the date of the assumption of jurisdiction or the certification or submission of the dispute, as the case may be.
The decision of the President, the Secretary of Labor and Employment, the Commission or the voluntary arbitrator shall be final and
executory ten (10) calendar days after receipt thereof by the parties. (Emphases supplied.)

Pursuant to Article 263(i) of the Labor Code, therefore, the Decision dated June 8, 2005 of the Secretary of Labor and Employment
became final and executory after the lapse of the period provided under the said provision. Moreover, neither party further questioned
the Decision dated June 8, 2005 of the Secretary of Labor and Employment.

The Decision dated June 8, 2005 of the Secretary of Labor and Employment already considered and ruled upon the issues being raised
by the union in this petition. In particular, the said Decision already passed upon the issue of whether there was already an existing
deadlock between the union and the company when the Secretary of Labor and Employment assumed jurisdiction over their labor
dispute. The said Decision also answered the issue of whether the company was guilty of bargaining in bad faith. As the Decision dated
June 8, 2005 of the Secretary of Labor and Employment already settled the said issues with finality, the union cannot once again raise
those issues in this Court through this petition without violating the principle of res judicata, particularly in the concept of conclusiveness
of judgment.

Second, a significant consequence of the finality of the Decision dated June 8, 2005 of the Secretary of Labor and Employment is that it
rendered the controversy between the union and the company moot.

In particular, with the finality of the Decision dated June 8, 2005, the labor dispute, covering both the alleged bargaining in bad faith and
the deadlock, between the union and the company was settled with finality. As the said Decision settled essentially the same questions
being raised by the union in this case, the finality of the said Decision rendered this case moot. The union cannot be allowed to use this
case to once again unsettle the issues that have been already settled with finality by the final and executory Decision dated June 8,
2005 of the Secretary of Labor and Employment.

Moreover, the issues of alleged bargaining in bad faith on the part of the company and the deadlock in the negotiations were both
incident to the framing of a new CBA that would govern the parties for the period 2004 to 2007. Not only had the said period long
lapsed, the final Decision dated June 8, 2005 of the Secretary of Labor and Employment also facilitated the framing of the new CBA,
particularly on the disputed provision on annual lump sum payment in lieu of wage increase. The dispositive portion of the said Decision
is clear and categorical:

WHEREFORE, this Office hereby orders:

1. The award of Php95,000 lump sum, per covered employee per year, for the duration of their CBA, effective 01 May 2004 to 30 April
2007;

2. The retention of benefits on vacation leave, sick leave, and special leave as provided in the 2001-2004 CBA;

3. All improvements that [the] parties may have agreed upon during the negotiations, are adopted as part of the CBA. All other
demands, not passed upon herein, are deemed DENIED.

The parties are hereby directed, to submit a copy of the CBA incorporating the awards granted herein, within ten (10) days from receipt
of this Decision.31

As the above directive of the Secretary of Labor and Employment in the decretal portion of the Decision dated June 8, 2005 has long
been final and executory, the dispute on the matter of the provision on annual wage increase contra yearly lump sum payment is
already moot.

Third, the petition is improper as it presents questions of fact. A question of fact cannot properly be raised in a petition for review under
Rule 45 of the Rules of Court.32 This petition of the union now before this Court is a petition for review under Rule 45 of the Rules of
Court.

The existence of bad faith is a question of fact and is evidentiary. 33 The crucial question of whether or not a party has met his statutory
duty to bargain in good faith typically turns on the facts of the individual case, and good faith or bad faith is an inference to be drawn
from the facts.34 Thus, the issue of whether or not there was bad faith on the part of the company when it was bargaining with the union
is a question of fact. It requires that the reviewing court look into the evidence to find if indeed there is proof that is substantial enough
to show such bad faith.
The issue of whether there was already deadlock between the union and the company is likewise a question of fact. It requires the
determination of evidence to find whether there is a "counteraction" of forces between the union and the company and whether each of
the parties exerted "reasonable effort at good faith bargaining." 35 This is so because a deadlock is defined as follows:

A ‘deadlock’ is x x x the counteraction of things producing entire stoppage; x x x There is a deadlock when there is a complete blocking
or stoppage resulting from the action of equal and opposed forces x x x. The word is synonymous with the word impasse, which x x x
‘presupposes reasonable effort at good faith bargaining which, despite noble intentions, does not conclude in agreement between the
parties.’36

Considering that the issues presented by the union are factual issues, the union’s petition is improper. As a rule, this Court cannot
properly inquire into factual matters in the exercise of its judicial power under Rule 45 of the Rules of Court. While there are exceptions
to this rule, none of the exceptions apply in this case.

Fourth, and finally, assuming that this Court may disregard the conclusiveness of judgment and review the factual matters raised by the
union, the merits are still not in the union’s favor.

The findings of fact of the Secretary of Labor and Employment in the Decision dated June 8, 2005 that there already existed a
bargaining deadlock when she assumed jurisdiction over the labor dispute between the union and the company, and that there was no
bad faith on the part of the company when it was bargaining with the union are both supported by substantial evidence. This Court sees
no reason to reverse or overturn the said findings.

The final and executory Decision dated June 8, 2005 of the Secretary of Labor and Employment squarely addressed the contention of
the union that the company was guilty of bargaining in bad faith. The said Decision correctly characterized the nature of the duty to
bargain, that is, it does not compel any party to accept a proposal or to make any concession. 37 While the purpose of collective
bargaining is the reaching of an agreement between the employer and the employee’s union resulting in a binding contract between the
parties, the failure to reach an agreement after negotiations continued for a reasonable period does not mean lack of good faith. The
laws invite and contemplate a collective bargaining contract but do not compel one. 38 For after all, a CBA, like any contract is a product
of mutual consent and not of compulsion. As such, the duty to bargain does not include the obligation to reach an agreement. 39 In this
light, the corporation’s unswerving position on the matter of annual lump sum payment in lieu of wage increase did not, by itself,
constitute bad faith even if such position caused a stalemate in the negotiations, as correctly ruled by the Secretary of Labor and
Employment in the decision dated June 8, 2005.

As there was no bad faith on the part of the company in its bargaining with the union, deadlock was possible and did occur. The union’s
reliance on item 8 of the ground rules governing the parties’ negotiations which required mutual consent for a declaration of deadlock
was reduced to irrelevance by the actual facts. Contra factum non valet argumentum. There is no argument against facts. And the fact
is that the negotiations between the union and the company were stalled by the opposing offers of yearly wage increase by the union,
on the one hand, and annual lump sum payment by the company, on the other hand. Each party found the other’s offer unacceptable
and neither party was willing to yield. The company suggested seeking the assistance of a third party to settle the issue but the union
preferred the remedy of filing a notice of strike. Each party was adamant in its position. Thus, because of the unresolved issue on wage
increase, there was actually a complete stoppage of the ongoing negotiations between the parties and the union filed a Notice of Strike.
A mutual declaration would neither add to nor subtract from the reality of the deadlock then existing between the parties. Thus, the
absence of the parties’ mutual declaration of deadlock does not mean that there was no deadlock. At most, it would have been simply a
recognition of the prevailing status quo between the parties.

More importantly, the union only caused confusion in the proceedings before the Secretary of Labor and Employment when it
questioned the latter’s assumption of jurisdiction over the labor dispute between the union and the company on the ground that the
"Secretary erred in assuming jurisdiction over the ‘CBA’ case when it [was] not the subject matter of the notice of strike" because the
case was "all about ‘ULP’ in the form of bad faith bargaining." For the union, the Secretary of Labor and Employment should not have
touched the issue of the CBA as there was no CBA deadlock at that time, and should have limited the assumption of jurisdiction to the
charge of unfair labor practice for bargaining in bad faith. 40

The union is wrong.

As discussed above, there was already an actual existing deadlock between the parties. What was lacking was the formal recognition
of the existence of such a deadlock because the union refused a declaration of deadlock. Thus, the union’s view that, at the time the
Secretary of Labor and Employment exercised her power of assumption of jurisdiction, the issue of deadlock was neither an incidental
issue to the matter of unfair labor practice nor an existing issue is incorrect.

More importantly, however, the union’s mistaken theory that the deadlock issue was neither incidental nor existing is based on its
premise that the case is all about the company’s alleged unfair labor practice of bargaining in bad faith, which is the ground stated in its
first Notice of Strike. In particular, the union asserts:
The evidentiary value of the Notice of Strike for ULP of BAD FAITH BARGAINING (Annex "M" of the petition) cannot be taken for
granted. It is the very important documentary evidence that shows what is the existing "labor dispute" between the parties. 41

While the first Notice of Strike is indeed significant in the determination of the existing labor dispute between the parties, it is not the
sole criterion. As this Court explained in Union of Filipro Employees-Drug, Food and Allied Industries Unions-Kilusang Mayo Uno v.
Nestle Philippines, Inc.42:

The Secretary of the DOLE has been explicitly granted by Article 263(g) of the Labor Code the authority to assume jurisdiction over a
labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, and decide the same
accordingly.1âwphi1 And, as a matter of necessity, it includes questions incidental to the labor dispute; that is, issues that are
necessarily involved in the dispute itself, and not just to that ascribed in the Notice of Strike or otherwise submitted to him for resolution.
x x x (Emphasis supplied.)

The totality of the company’s Petition for Assumption of Jurisdiction, including every allegation therein, also guided the Secretary of
Labor and Employment in the proper determination of the labor dispute over which he or she was being asked to assume jurisdiction.

A "labor dispute" is defined under Article 212(l) of the Labor Code as follows:

ART. 212. Definitions. – x x x

xxxx

(l) "Labor dispute" includes any controversy or matter concerning terms or conditions of employment or the association or
representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment, regardless
of whether the disputants stand in the proximate relation of employer and employee.

In this case, there was a dispute, an unresolved issue on several matters, between the union and the company in the course of the
negotiations for a new CBA. Among the unsettled issues was the matter of compensation. In particular, paragraphs 1 to 6 of the
statement of Antecedent Facts in the company’s Petition for Assumption of Jurisdiction 43 read:

1. The Collective Bargaining Agreement (CBA) of the Company and the Union expired on 30 April 2004.

2. Thus, as early as 13 April 2004, the Company and the Union already met to discuss the ground rules that would govern their
upcoming negotiations. Then, on 15 April 2004, the Union submitted its proposals for the renewal of their CBA.

3. While a total of 41 meetings were held between the parties, several items, including the matter of compensation, remained
unresolved.

Copies of the Minutes of the 41 meetings are attached hereto and made integral part hereof as Annexes "A" to "A-40".

4. On 2 September 2004, the Union filed a Notice of Strike with the NCMB, Region IV based in Calamba, Laguna anchored on a
perceived unfair labor practice consisting of alleged bad faith bargaining on the part of the Company.

Although there is no basis to the charge of unfair labor practice as to give a semblance of validity to the notice of strike, the Company
willingly and actually participated in the conciliation and mediation conferences called by the NCMB to settle the dispute.

A copy of the Notice of Strike is attached hereto and made integral part hereof as Annex "B".

5. Although conciliation meetings have been conducted by the National Conciliation and Mediation Board (NCMB) through Conciliator
Leodegario Teodoro on 09 and 13 September 2004, no settlement of the dispute has yet been agreed upon.

6. Based on the attendant circumstances, as well as on the actuations of the Union officers and members, it is likely that the Union has
already conducted, or is set to conduct soon, a strike vote. 44

Thus, the labor dispute between the union and the company concerned the unresolved matters between the parties in relation to their
negotiations for a new CBA. The power of the Secretary of Labor and Employment to assume jurisdiction over this dispute includes and
extends to all questions and controversies arising from the said dispute, such as, but not limited to the union’s allegation of bad faith
bargaining. It also includes and extends to the various unresolved provisions of the new CBA such as compensation, particularly the
matter of annual wage increase or yearly lump sum payment in lieu of such wage increase, whether or not there was deadlock in the
negotiations. Indeed, nowhere does the Order dated September 20, 2004 of the Secretary of Labor and Employment mention a CBA
deadlock. What the union viewed as constituting the inclusion of a CBA deadlock in the assumption of jurisdiction was the inclusion of
the economic issues, particularly the company’s stance of yearly lump sum payment in lieu of annual wage increase, in the directive for
the parties to submit their respective position papers.45 The union’s Motion for Reconsideration (With Urgent Prayer to Compel the
Company to Justify Offer of Wage [Increase] Moratorium) and Second Motion for Reconsideration questioning the Order dated
September 20, 2004 of the Secretary of Labor and Employment actually confirm that the labor dispute between the parties essentially
and necessarily includes the conflicting positions of the union, which advocates annual wage increase, and of the company, which
offers yearly lump sum payment in lieu of wage increase. In fact, that is the reason behind the union’s prayer that the company be
ordered to justify its offer of wage increase moratorium. 46 As there is already an existing controversy on the matter of wage increase,
the Secretary of Labor and Employment need not wait for a deadlock in the negotiations to take cognizance of the matter. That is the
significance of the power of the Secretary of Labor and Employment under Article 263(g) of the Labor Code to assume jurisdiction over
a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest. As this Court elucidated
in Bagong Pagkakaisa ng Manggagawa ng Triumph International v. Secretary of the Department of Labor and Employment 47:

Article 263(g) is both an extraordinary and a preemptive power to address an extraordinary situation - a strike or lockout in an industry
indispensable to the national interest. This grant is not limited to the grounds cited in the notice of strike or lockout that may have
preceded the strike or lockout; nor is it limited to the incidents of the strike or lockout that in the meanwhile may have taken place. As
the term "assume jurisdiction" connotes, the intent of the law is to give the Labor Secretary full authority to resolve all matters within the
dispute that gave rise to or which arose out of the strike or lockout; it includes and extends to all questions and controversies arising
from or related to the dispute, including cases over which the labor arbiter has exclusive jurisdiction. (Citation omitted.)

Everything considered, therefore, the Secretary of Labor and Employment committed no abuse of discretion when she assumed
jurisdiction over the labor dispute of the union and the company.

WHEREFORE, the petition is hereby DENIED.

SO ORDERED.

THIRD DIVISION

SOLIDBANK CORPORATION (now known as G.R. No. 159460

FIRST METRO INVESTMENT CORPORATION),

Petitioner,

- versus -

ERNESTO U. GAMIER, ELENA R.

CONDEVILLAMAR, JANICE L. ARRIOLA and
OPHELIA C. DE GUZMAN,

Respondents.

x- - - - - - - - - - - - - - - - - - - - - - - - - -x

SOLIDBANK CORPORATION and/or its G.R. No. 159461

successor-in-interest, FIRST METRO
INVESTMENT CORPORATION, DEOGRACIAS

N. VISTAN AND EDGARDO MENDOZA, JR., Present:

Petitioners,

CARPIO MORALES, J.,

Chairperson,

- versus - BRION,

BERSAMIN,

VILLARAMA, JR., and

SOLIDBANK UNION AND ITS DISMISSED SERENO, JJ.

OFFICERS AND MEMBERS, namely:
EVANGELINE J. GABRIEL, TERESITA C.
LUALHATI, ISAGANI P. MAKISIG, REY S.
PASCUA, EVELYN A. SIA, MA. VICTORIA M.
VIDALLON, AUREY A. ALJIBE, REY ANTHONY
M. AMPARADO, JOSE A. ANTENOR, AUGUSTO
Promulgated:
D. ARANDIA, JR., JANICE L. ARRIOLA, RUTH
SHEILA MA. BAGADIONG, STEVE D. BERING,
ALAN ROY I. BUYCO, MANALO T. CABRERA,
RACHE M. CASTILLO, VICTOR O. CHUA,
VIRGILIO Y. CO, JR., LEOPOLDO S. DABAY,
ARMAND V. DAYANG-HIRANG, HUBERT V. November 15, 2010
DIMAGIBA, MA. LOURDES CECILIA B.
EMPARADOR, FELIX D. ESTACIO, JR., JULIETA
T. ESTRADA, MARICEL G. EVALLA, JOSE G.
GUISADIO, JOSE RAINARIO C. LAOANG,
ALEXANDER A. MARTINEZ, JUAN ALEX C.
NAMBONG, JOSEPHINE M. ONG, ARMANDO B.
OROZCO, ARLENE R. RODRIGUEZ, NICOMEDES
P. RUIZO, JR., DON A. SANTANA, ERNESTO R.
SANTOS, JR., EDNA M. SARONG, GREGORIO S.
SECRETARIO, ELLEN M. SORIANO, ROSIE C.
UY, ARVIN D.VALENCIA, FERMIN JOSSEPH B.
VENTURA, JR., EMMANUEL C. YAPTANCO,
ERNESTO C. ZUNIGA, ARIEL S. ABENDAN,
EMMA R. ABENDAN, PAULA AGNES A.
ANGELES, JACQUILINE B. BAQUIRAN,
JENNIFER S. BARCENAS, ALVIN E.
BARICANOSA, GEORGE MAXIMO P. BARQUEZ,
MA. ELENA G. BELLO, RODERICK M. BELLO,
MICHAEL MATTHEW B. BILLENA, LEOPE L.
CABENIAN, NEPTALI A. CADDARAO,
FERDINAND MEL S. CAPULING, MARGARETTE
B. CORDOVA, MA. EDNA V. DATOR, RANIEL C.
DAYAO, RAGCY L. DE GUZMAN, LUIS
E. DELOS SANTOS, CARMINA

M. DEGALA, EPHRAIM RALPH A. DELFIN,

KAREN M. DEOCERA, CAROLINA C. DIZON,
MARCHEL S. ESQUEJJO, JOCELYN I.ESTROBO,
MINERVA S. FALLARME, HERNANE
C.FERMOCIL, RACHEL B.

FETIZANAN, SAMUEL A. FLORENTINO,

MENCHIE R.FRANCISCO, ERNESTO U. GAMIER,
MACARIO RODOLFO N. GARCIA, JOEL S.
GARMINO, LESTER MARK Z. GATCHALIAN, MA.
JINKY P. GELERA, MA. TERESA G. GONZALES,
GONZALO G. GUINIT, EMILY H. GUINO-O,
FERDINAND S. HABIJAN, JUN G.
HERNANDEZ, LOURDES D. IBEAS, MA. ANGELA
L. JALANDONI, JULIE T. JORNACION, MANUEL
C. LIM, MA. LOURDES A. LIM, EMERSON V.
LUNA, NOLASCO

B. MACATANGAY, NORMAN C. MANACO,

CHERRY LOU B.

MANGROBANG, MARASIGAN G. EDMUNDO,

ALLEN M. MARTINEZ, EMELITA C.MONTANO,
ARLENE P. NOBLE, SHIRLEY A. ONG, LOTIZ E.
ORTIZ LUIS, PABLITO M. PALO, MARY JAINE D.
PATINO, GEOFFREY T. PRADO, OMEGA
MELANIE M. QUINTANO, ANES A. RAMIREZ,
RICARDO D. RAMIREZ, DANIEL O. RAQUEL,
RAMON B. REYES, SALVACION N. ROGADO,
ELMOR R. ROMANA, JR., LOURDES U.
SALVADOR,ELMER S. SAYLON, BENHARD E.
SIMBULAN, MA. TERESA S. SOLIS,
MA. LOURDES ROCEL E. SOLIVEN, EMILY C.
SUY AT, EDGAR ALLAN P. TACSUAN,
RAYMOND N. TANAY, JOCELYN Y. TAN,
CANDIDO G. TISON, MA. THERESA O. TISON,
EVELYN T. UYLANGCO, CION E. YAP, MA.
OPHELIA C. DE GUZMAN, MA. HIDELISA P. IRA,
RAYMUND MARTIN A. ANGELES, MERVIN S.
BAUTISTA, ELENA R. CONDEVILLAMAR,
CHERRY T. CO, LEOPOLDO V. DE LA ROSA,
DOROTEO S. FROILAN, EMMANUEL B. GLORIA,
JULIETEL JUBAC AND ROSEMARIE L. TANG,

Respondents.

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

DECISION

VILLARAMA, JR., J.:

The consolidated petitions before us seek to reverse and set aside the Decision [1] dated March 10, 2003 of the Court of Appeals (CA) in
CA-G.R. SP Nos. 67730 and 70820 which denied the petitions for certiorari filed by Solidbank Corporation (Solidbank) and ordered the
reinstatement of the above-named individual respondents to their former positions.

The Antecedents

Sometime in October 1999, petitioner Solidbank and respondent Solidbank Employees Union (Union) were set to renegotiate the
economic provisions of their 1997-2001 Collective Bargaining Agreement (CBA) to cover the remaining two years thereof. Negotiations
commenced on November 17, 1999 but seeing that an agreement was unlikely, the Union declared a deadlock on December 22,
1999 and filed a Notice of Strike on December 29, 1999.[2] During the collective bargaining negotiations, some Union members staged
a series of mass actions. In view of the impending actual strike, then Secretary of Labor and Employment Bienvenido E. Laguesma
assumed jurisdiction over the labor dispute, pursuant to Article 263 (g) of the Labor Code, as amended. The assumption order
dated January 18, 2000 directed the parties to cease and desist from committing any and all acts that might exacerbate the situation. [3]

In his Order[4] dated March 24, 2000, Secretary Laguesma resolved all economic and non-economic issues submitted by the parties, as
follows:

WHEREFORE, premises considered, judgment is hereby issued:

a. Directing Solidbank Corporation and Solidbank Union to conclude their Collective Bargaining Agreement for the years 2000 and
2001, incorporating the dispositions above set forth;

b. Dismissing the unfair labor practice charge against Solidbank Corporation;

c. Directing Solidbank to deduct or check-off from the employees lump sum payment an amount equivalent to seven percent (7%) of
their economic benefits for the first (1st) year, inclusive of signing bonuses, and to remit or turn over the said sum to the Unions
authorized representative, subject to the requirements of check-off;

d. Directing Solidbank to recall the show-cause memos issued to employees who participated in the mass actions if such memos were
in fact issued.

SO ORDERED.[5]

Dissatisfied with the Secretarys ruling, the Union officers and members decided to protest the same by holding a rally infront of the
Office of the Secretary of Labor and Employment in Intramuros, Manila, simultaneous with the filing of their motion for reconsideration
of the March 24, 2000 Order. Thus, on April 3, 2000, an overwhelming majority of employees, including the individual respondents,
joined the mass leave and protest action at the Department of Labor and Employment (DOLE) office while the banks provincial
branches in Cebu, Iloilo, Bacolod and Naga followed suit and boycotted regular work.[6] The union members also picketed the banks
Head Office in Binondo on April 6, 2000, and Paseo de Roxas branch on April 7, 2000.

As a result of the employees concerted actions, Solidbanks business operations were paralyzed. On the same day, then President of
Solidbank, Deogracias N. Vistan, issued a memorandum[7] addressed to all employees calling their absence from work and
demonstration infront of the DOLE office as an illegal act, and reminding them that they have put their jobs at risk as they will be asked
to show cause why they should not be terminated for participating in the union-instigated concerted action. The employees work
abandonment/boycott lasted for three days, from April 3 to 5, 2000.

On the third day of the concerted work boycott (April 5, 2000), Vistan issued another memorandum, [8] this time declaring that the bank
is prepared to take back employees who will report for work starting April 6, 2000 provided these employees were/are not part of those
who led or instigated or coerced their co-employees into participating in this illegal act. Out of the 712 employees who took part in the
three-day work boycott, a total of 513 returned to work and were accepted by the bank. The remaining 199 employees insisted on
defying Vistans directive, which included herein respondents Ernesto U. Gamier, Elena R. Condevillamar, Janice L. Arriola and Ophelia
C. De Guzman. For their failure to return to work, the said 199 employees were each issued a show-cause memo directing them to
submit a written explanation within twenty-four (24) hours why they should not be dismissed for the illegal strike x x x in defiance of x x
x the Assumption Order of the Secretary of Labor x x x resulting [to] grave and irreparable damage to the Bank, and placing them under
preventive suspension.[9]

The herein 129 individual respondents were among the 199 employees who were terminated for their participation in the three-day work
boycott and protest action. On various dates in June 2000, twenty-one (21) of the individual respondents executed Release, Waiver and
Quitclaim in favor of Solidbank.[10]

On May 8, 2000, Secretary Laguesma denied the motions for reconsideration filed by Solidbank and the Union.[11]
The Union filed on May 11, 2000 a Motion for Clarification of certain portions of the Order dated March 24, 2000, and on May 19,
2000 it filed a Motion to Resolve the Supervening Issue of Termination of 129 Striking Employees. On May 26, 2000, Secretary
Laguesma granted the first motion by clarifying that the contract-signing bonus awarded in the new CBA should likewise be based on
the adjusted pay. However, the Unions second motion was denied,[12] as follows:

This Office cannot give due course to the Unions second motion. The labor dispute arising from the termination of the Bank employees
is an issue that ought to be entertained in a separate case. The assumption order of January 18, 2000 covered only the bargaining
deadlock between the parties and the alleged violation of the CBA provision on regularization. We have already resolved both the
deadlock and the CBA violation issues. The only motion pending before us is the motion for clarification, which we have earlier
disposed of in this Order. Thus, the only option left is for the Union to file a separate case on the matter.[13]

In the meantime, the Monetary Board on July 28, 2000 approved the request of Metropolitan Bank and Trust Company (Metrobank) to
acquire the existing non-real estate assets of Solidbank in consideration of assumption by Metrobank of the liabilities of Solidbank, and
to integrate the banking operations of Solidbank with Metrobank.Subsequently, Solidbank was merged with First Metro Investment
Corporation, and Solidbank, the surviving corporation, was renamed the First Metro Investment Corporation (FMIC). [14] By August 31,
2000, Solidbank ceased banking operations after surrendering its expanded banking license to the Bangko Sentral ng
Pilipinas. Petitioners duly filed a Termination Report with the DOLE and granted separation benefits to the banks employees.[15]

Respondents Gamier, Condevillamar, Arriola and De Guzman filed separate complaints for illegal dismissal, moral and exemplary
damages and attorneys fees on April 28, May 15 and May 29, 2000, respectively (NLRC NCR Case Nos. [S]30-04-01891-00, 30-05-
03002-00 and 30-05-02253-00). The cases were consolidated before Labor Arbiter Potenciano S. Caizares,
Jr. Respondent Union joined by the 129 dismissed employees filed a separate suit against petitioners for illegal dismissal, unfair labor
practice and damages (NLRC NCR Case No. 30-07-02920-00 assigned to Labor Arbiter Luis D. Flores).

Labor Arbiters Rulings

In his Decision dated November 14, 2000, Labor Arbiter Potenciano S. Caizares, Jr. dismissed the complaints of Gamier,
Condevillamar, Arriola and De Guzman. It was held that their participation in the illegal strike violated the Secretary of Labors return to
work order upon the latters assumption of the labor dispute and after directing the parties to execute their new CBA. [16]

On March 16, 2001, Labor Arbiter Luis D. Flores rendered a decision[17] in favor of respondents Union and employees, the dispositive
portion of which reads:

WHEREFORE, premises considered, judgment is hereby rendered declaring complainants dismissal as illegal and unjustified and
ordering the respondents Solidbank Corporation and/or its successor-in-interest First Metro Investment Corporation and/or Metropolitan
Bank and Trust Company and/or Deogracias Vistan and/or Edgardo Mendoza to reinstate complainants to their former
positions. Concomitantly, said respondents are hereby ordered to jointly and severally pay the complainants their full backwages and
other employees benefits from the time of their dismissal up to the date of their actual reinstatement; payment of ten (10%) percent
attorneys fees; payment of ONE HUNDRED FIFTY THOUSAND PESOS (P150,000.00) each as moral damages and ONE HUNDRED
THOUSAND PESOS (P100,000.00) each as exemplary damages which are computed, at the date of this decision in the amount of
THIRTY THREE MILLION SEVEN HUNDRED NINETY FOUR THOUSAND TWO HUNDRED TWENTY TWO PESOS and 80/100
(P33,794,222.80), by the Computation and Examination Unit of this branch and becomes an integral part of this Decision.

SO ORDERED. [18]

Respondents Gamier, Condevillamar, Arriola and De Guzman appealed the decision of Labor Arbiter Caizares, Jr. to the National
Labor Relations Commission (NLRC NCR CA No 027342-01). Petitioners likewise appealed from the decision of Labor Arbiter Flores
(NLRC NCR CA No. 028510-01).

Rulings of the NLRC

On July 23, 2001, the NLRCs Second Division rendered a Decision[19] reversing the decision of Labor Arbiter Flores, as follows:

WHEREFORE, premises considered, the decision of the Labor Arbiter is hereby VACATED and SET ASIDE and a new one entered
dismissing the complaint for illegal dismissal and unfair labor practice for lack of merit. As equitable relief, respondents are hereby
ordered to pay complainants separation benefits as provided under the CBA at least one (1) month pay for every year of service
whichever is higher.

SO ORDERED.[20]

The Second Division ruled that the mass action held by the bank employees on April 3, 2000 infront of the Office of the Secretary of
Labor was not a legitimate exercise of the employees freedom of speech and assembly. Such was a strike as defined under Article 212
(o) of the Labor Code, as amended, which does not distinguish as to whom the action of the employees is directed against, nor the
place/location where the concerted action of the employees took place. Complainants Gamier, Condevillamar, Arriola and De Guzman
did not report for work and picketed the DOLE premises on April 3, 2000; they continuously refused to report back to work until April 7,
2000 when they were issued a Notice of Termination. It was stressed that the mass action of the bank employees was an incident of a
labor dispute, and hence the concerted work abandonment was a prohibited activity contemplated under Article 264 (a) of the Labor
Code, as amended, upon assumption of jurisdiction by the Secretary of Labor. Citing this Courts ruling in the case of Telefunken
Semiconductors Employees Union-FFW v. Court of Appeals,[21] the Second Division found there was just and valid cause for the
dismissal of complainants.[22]

On the charge of forum shopping with respect to twenty-one (21) individual complainants who have voluntarily settled their claims
against Solidbank, the said cases not having been dismissed by the Labor Arbiter despite proper motion, [23] the Second Division found
that complainants admitted in their Answer that the said employees preferred to pursue their own independent action against the bank
and their names were stricken out from the original complaint; hence, the Labor Arbiter erred in granting relief to said employees.
Nevertheless, it held that the complaint will not be dismissed on this ground as the issue of forum shopping should have been raised in
the proceedings before the Labor Arbiter.[24]

Respondents filed a motion for reconsideration while the petitioners filed a partial motion for reconsideration. Both motions were denied
under Resolution[25] dated September 28, 2001.

As to respondents appeal, the NLRCs Third Division by Decision[26] dated January 31, 2002, reversed the decision of Labor Arbiter
Caizares, Jr., as follows:

WHEREFORE, the decision appealed from is hereby SET ASIDE and a new one entered finding the respondent Solidbank Corporation
liable for the illegal dismissal of complainants Ernesto U. Gamier, Elena P. Condevillamar, Janice L. Arriola and Maria Ophelia C. de
Guzman, and ordering the respondent bank to reinstate the complainants to their former positions without loss of seniority rights and to
pay full backwages reckoned from the time of their illegal dismissal up to the time of their actual/payroll reinstatement. Should
reinstatement not be feasible, respondent bank is further ordered to pay complainants their separation pay in accordance with the
provisions of the subsisting Collective Bargaining Agreement.

All other claims are DISMISSED for lack of merit.

SO ORDERED.[27]

The Third Division held that the protest action staged by the banks employees before the DOLE did not amount to a strike but rather an
exercise of their right to express frustration and dissatisfaction over the decision rendered by the Secretary of Labor. Hence, it cannot
be concluded that the activity is per se illegal or violative of the assumption order considering that at the time, both parties had pending
motions for reconsideration of the Secretarys decision. Moreover, it was found that Gamier, Condevillamar, Arriola and De Guzman
were not fully investigated on the charge that they had instigated or actively participated in an illegal activity; neither was it shown that
the explanations submitted by them were considered by the management. Since said employees had presented evidence of plausible
and acceptable reasons for their absence at the workplace at the time of the protest action, their termination based on such alleged
participation in the protest action was unjustified.[28]

Respondents filed a partial motion while the petitioners filed a motion for reconsideration of the Decision dated January 31, 2002. Both
motions were denied under Resolution[29] dated March 8, 2002.

On November 20, 2001, petitioners filed a petition for certiorari before the CA assailing the July 23, 2001 Decision and Resolution dated
September 28, 2001 of the NLRCs Second Division insofar as it ordered the payment of separation benefits to the 129 terminated
employees of Solidbank who participated in the mass action/strike (CA-G.R. SP No. 67730).[30]

On May 23, 2002, petitioners filed a separate petition in the CA (CA-G.R. SP No. 70820) seeking the reversal of the January 31, 2002
Decision and Resolution dated March 8, 2002 of the NLRCs Third Division and praying for the following reliefs: (1) immediate issuance
of a TRO and writ of preliminary injunction to restrain/enjoin the NLRC from issuing a writ of execution in NLRC CA No. 027342-01; (2)
the petition be consolidated with CA-G.R. SP No. 67730 before the Thirteenth Division and CA-G.R. SP No. 68054 before the Third
Division, or if consolidation is no longer possible, that the petition be resolved independently of the aforesaid cases; and (3) granting the
petition by annulling and setting aside the January 31, 2002 Decision of the NLRC, and reinstating the November 14, 2000 Decision of
Labor Arbiter Caizares, Jr.[31]

On August 9, 2002, petitioners filed a Manifestation before the Fifteenth Division (CA-G.R. SP No. 67730) attaching thereto a copy of
the Decision[32] (dated July 26, 2002) rendered by the CAs Special Third Division in CA-G.R. SP No. 68998, a petition for certiorari
separately filed by Metrobank which also sought to annul and set aside the July 23, 2001 Decision of the NLRCs Second Division
insofar as it ordered the payment of separation benefits to the dismissed employees of Solidbank. In the said decision, the CAs
Fourteenth Division gave due course to the petition of Metrobank and affirmed the July 23, 2001 decision of the NLRC but reversed and
set aside the portion of the decision ordering the payment of separation benefits. [33]

On September 11, 2002, respondents filed an Omnibus Motion and Counter-Manifestation arguing that petitioners Manifestation
constitutes a judicial admission that Metrobank engaged in forum shopping; it was thus prayed that CA-G.R. SP No. 68998 be
consolidated with CA-G.R. SP No. 67730, the latter having a lower case number.Further, respondents attached a copy of the
Decision[34] dated August 29, 2002 rendered by the CAs Second Division in CA-G.R. SP No. 68054, the petition separately filed by the
Union and the 129 terminated employees of Solidbank from the July 23, 2001 Decision of the NLRCs Second Division. The CAs
Second Division granted the petition in CA-G.R. SP No. 68054 and reinstated the March 16, 2001 Decision of Labor Arbiter Flores.

CA-G.R. SP Nos. 67730 and 70820 were consolidated before the Twelfth Division.

Court of Appeals Ruling

On March 10, 2003, the CA rendered its Decision[35] the dispositive portion of which reads:

WHEREFORE, the twin petitions are hereby DENIED. The dismissal of private respondents are hereby declared to be
illegal. Consequently, petitioner is ordered to reinstate private respondents to their former position, consonant with the Decision of this
Court in CA-G.R. SP No. 68054.

SO ORDERED.[36]

First, on the issue of forum shopping, the CA found that while there were indeed two cases filed respecting the same matter of illegality
of the dismissal of certain employees of Solidbank, it appears that the individual complainants have no hand in initiating the case before
the Labor Arbiter for which the Union filed the complaint in behalf of its members. Hence, the individual complainants cannot be said to
have deliberately or consciously sought two different fora for the same issues and causes of action. Petitioners, moreover, failed to call
the attention of the Labor Arbiter as to the fact of filing of similar complaints by four employees.

As to the nature of the mass action resorted to by the employees of Solidbank, the CA ruled that it was a legitimate exercise of their
right to free expression, and not a strike proscribed when the Secretary of Labor assumed jurisdiction over the impass between
Solidbank and the Union in the collective bargaining negotiations. The CA thus reasoned:

while conceding that the aggregated acts of the private respondents may have resulted in a stoppage of work, such was the necessary
result of the exercise of a Constitutional right. It is beyond cavil that the mass action was done, not to exert any undue pressure on
the petitioner with regard to wages or other economic demands, but to express dissatisfaction over the decision of the Labor
Secretary subsequent to his assumption of jurisdiction. Surely, this is one course of action that is not enjoined even when a
labor dispute is placed under the assumption of the said Labor Secretary. To allow an act of the Labor Secretary one man in the
Executive Department to whittle down a freedom guaranteed by the Bill of Rights would be to place upon that freedom a limitation never
intended by the several framers of our Constitution. In effect, it would make a right enshrined in the Fundamental Law that was ratified
by the Sovereign People, subordinate to a prerogative granted by the Labor Code, a statutory enactment made by mere
representatives of the People. This anomaly We cannot allow.

xxxx

Was private respondents act of massing in front of the DOLE Building calculated by them to cause work stoppage, or were they merely
airing their grievance over the ruling of the Labor Secretary in exercise of their civil liberties? Who can divine the motives of their
hearts? But when two different interpretations are possible, the courts must lean towards that which gives meaning and vitality to the
Bill of Rights. x x x[37] (Emphasis supplied.)

On April 2, 2003, petitioners filed a motion for reconsideration but this was denied by the CA in its Resolution[38] dated August 7, 2003.

The Petitions

G.R. No. 159460

Petitioners argued that the CA erred in holding that the mass action of April 3, 2000 infront of the Office of the Secretary of Labor was
not a strike considering that it had all the elements of a strike and the respondents judicially admitted that it was a strike. The CA
deemed the mass action as an exercise of the respondents freedom of expression but such constitutional right is not absolute and
subject to certain well-defined exceptions. Moreover, a mass action of this nature is considered a strike and not an exercise of ones
freedom of expression, considering further that the Secretarys Order dated January 18, 2000 is a valid exercise of police power.

Petitioners assail the CA in not considering the damage and prejudice caused to the bank and its clients by respondents illegal
acts. Respondents mass actions crippled banking operations. Over-the-counter transactions were greatly undermined. Checks for
clearing were significantly delayed. On-line transactions were greatly hampered, causing inestimable damage to the nationwide network
of automated teller machines. Respondent Unions actions clearly belie its allegation that its mass action was merely intended to protest
and express their dissatisfaction with the Secretarys Order dated March 24, 2000.

In view of the illegal strike conducted in violation of the Secretarys assumption order, petitioners maintain that the dismissal of
respondents was not illegal, as consistently ruled by this Court in many cases. Even granting arguendo that their termination was
illegal, the CA erred in ordering the reinstatement of respondents and holding that Solidbank, FMIC and Metrobank are solidarily liable
to the respondents. Lastly, the CA erred in not finding that respondents were guilty of forum shopping as respondents claim that they
did not know the Union had filed a complaint was unbelievable under the circumstances. [39]

G.R. No. 159461

Petitioners contend that the CA erred in ruling that the dismissal of respondents Gamier, Condevillamar, Arriola and De Guzman was
illegal, considering that this was not an issue raised in the petition for certiorari before the appellate court. What was raised by
petitioners was only the propriety of the award of separation pay by the NLRC which in fact declared their dismissal to be valid and
legal.

Petitioners maintain that respondents are not entitled to separation pay even if the dismissal was valid because they committed serious
misconduct and/or illegal act in defying the Secretarys assumption order. Moreover, the CA also erred in disregarding the Release,
Waiver and Quitclaim executed by twenty-one (21) individual respondents who entered into a compromise agreement with
Solidbank.[40]

Issues

The fundamental issues to be resolved in this controversy are: (1) whether the protest rally and concerted work abandonment/boycott
staged by the respondents violated the Order dated January 18, 2000 of the Secretary of Labor; (2) whether the respondents were
validly terminated; and (3) whether the respondents are entitled to separation pay or financial assistance.

Our Ruling

Article 212 of the Labor Code, as amended, defines strike as any temporary stoppage of work by the concerted action of employees as
a result of an industrial or labor dispute. A labor dispute includes any controversy or matter concerning terms and conditions of
employment or the association or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and
conditions of employment, regardless of whether or not the disputants stand in the proximate relation of employers and
employees.[41] The term strike shall comprise not only concerted work stoppages, but also slowdowns, mass leaves, sitdowns, attempts
to damage, destroy or sabotage plant equipment and facilities and similar activities. [42] Thus, the fact that the conventional term strike
was not used by the striking employees to describe their common course of action is inconsequential, since the substance of the
situation, and not its appearance, will be deemed to be controlling. [43]

After a thorough review of the records, we hold that the CA patently erred in concluding that the concerted mass actions staged by
respondents cannot be considered a strike but a legitimate exercise of the respondents right to express their dissatisfaction with the
Secretarys resolution of the economic issues in the deadlocked CBA negotiations with petitioners. It must be stressed that the
concerted action of the respondents was not limited to the protest rally infront of the DOLE Office on April 3,
2000. Respondent Unionhad also picketed the Head Office and Paseo de Roxas Branch. About 712 employees, including those in the
provincial branches, boycotted and absented themselves from work in a concerted fashion for three continuous days that virtually
paralyzed the employers banking operations. Considering that these mass actions stemmed from a bargaining deadlock and an order
of assumption of jurisdiction had already been issued by the Secretary of Labor to avert an impending strike, there is no doubt that the
concerted work abandonment/boycott was the result of a labor dispute.

In Toyota Motor Phils. Corp. Workers Association (TMPCWA) v. National Labor Relations Commission, [44] petitioners union and
members held similar protest rallies infront of the offices of BLR and DOLE Secretary and at the company plants. We declared that said
mass actions constituted illegal strikes:

Petitioner Union contends that the protests or rallies conducted on February 21 and 23, 2001 are not within the ambit of strikes as
defined in the Labor Code, since they were legitimate exercises of their right to peaceably assemble and petition the government for
redress of grievances. Mainly relying on the doctrine laid down in the case of Philippine Blooming Mills Employees Organization v.
Philippine Blooming Mills Co., Inc., it argues that the protest was not directed at Toyota but towards the Government (DOLE and
BLR). It explains that the protest is not a strike as contemplated in the Labor Code. The Union points out that in Philippine Blooming
Mills Employees Organization, the mass action staged in Malacaang to petition the Chief Executive against the abusive behavior of
some police officers was a proper exercise of the employees right to speak out and to peaceably gather and ask government for
redress of their grievances.
The Unions position fails to convince us.

While the facts in Philippine Blooming Mills Employees Organization are similar in some respects to that of the present case,
the Union fails to realize one major difference: there was no labor dispute in Philippine Blooming Mills Employees Organization. In the
present case, there was an on-going labor dispute arising from Toyotas refusal to recognize and negotiate with the Union,
which was the subject of the notice of strike filed by the Union on January 16, 2001. Thus, the Unions reliance on Philippine
Blooming Mills Employees Organization is misplaced, as it cannot be considered a precedent to the case at bar.

xxxx

Applying pertinent legal provisions and jurisprudence, we rule that the protest actions undertaken by the Union officials and members
on February 21 to 23, 2001 are not valid and proper exercises of their right to assemble and ask government for redress of their
complaints, but are illegal strikes in breach of the Labor Code. The Unions position is weakened by the lack of permit from the City
of Manila to hold rallies. Shrouded as demonstrations, they were in reality temporary stoppages of work perpetrated through
the concerted action of the employees who deliberately failed to report for work on the convenient excuse that they will hold a
rally at the BLR and DOLE offices in Intramuros, Manila, on February 21 to 23, 2001. x x x (Emphasis supplied.)

Moreover, it is explicit from the directive of the Secretary in his January 18, 2000 Order that the Union and its members shall refrain
from committing any and all acts that might exacerbate the situation,[45] which certainly includes concerted actions. For all intents and
purposes, therefore, the respondents staged a strike ultimately aimed at realizing their economic demands. Whether such pressure was
directed against the petitioners or the Secretary of Labor, or both, is of no moment. All the elements of strike are evident in the Union-
instigated mass actions.

The right to strike, while constitutionally recognized, is not without legal constrictions.[46] Article 264 (a) of the Labor Code, as amended,
provides:

Art. 264. Prohibited activities. (a) x x x

No strike or lockout shall be declared after assumption of jurisdiction by the President or the Secretary or after certification or
submission of the dispute to compulsory or voluntary arbitration or during the pendency of cases involving the same grounds for
the strike or lockout.

x x x x (Emphasis supplied.)

The Court has consistently ruled that once the Secretary of Labor assumes jurisdiction over a labor dispute, such jurisdiction should not
be interfered with by the application of the coercive processes of a strike or lockout.[47] A strike that is undertaken despite the issuance
by the Secretary of Labor of an assumption order and/or certification is a prohibited activity and thus illegal. [48]

Article 264 (a) of the Labor Code, as amended, also considers it a prohibited activity to declare a strike during the pendency of cases
involving the same grounds for the same strike. [49] There is no dispute that when respondents conducted their mass actions on April 3
to 6, 2000, the proceedings before the Secretary of Labor were still pending as both parties filed motions for reconsideration of the
March 24, 2000 Order. Clearly, respondents knowingly violated the aforesaid provision by holding a strike in the guise of mass
demonstration simultaneous with concerted work abandonment/boycott.

Notwithstanding the illegality of the strike, we cannot sanction petitioners act of indiscriminately terminating the services of individual
respondents who admitted joining the mass actions and who have refused to comply with the offer of the management to report back to
work on April 6, 2000. The liabilities of individual respondents must be determined under Article 264 (a) of the Labor Code, as
amended:

Art. 264. Prohibited activities. x x x

xxxx

Any worker whose employment has been terminated as a consequence of an unlawful lockout shall be entitled to reinstatement with full
back wages. Any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly
participates in the commission of illegal acts during a strike may be declared to have lost his employment status: Provided,
That mere participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his employment,
even if a replacement had been hired by the employer during such lawful strike.

xxxx

The foregoing shows that the law makes a distinction between union officers and members. For knowingly participating in an illegal
strike or participating in the commission of illegal acts during a strike, the law provides that a union officer may be terminated from
employment. The law grants the employer the option of declaring a union officer who participated in an illegal strike as having lost his
employment. It possesses the right and prerogative to terminate the union officers from service. [50]

However, a worker merely participating in an illegal strike may not be terminated from employment. It is only when he commits illegal
acts during a strike that he may be declared to have lost employment
status.[51] We have held that the responsibility of union officers, as main players in an illegal strike, is greater than that of the members
and, therefore, limiting the penalty of dismissal only for the former for participation in an illegal strike is in order.[52] Hence, with respect
to respondents who are union officers, the validity of their termination by petitioners cannot be questioned. Being fully aware that the
proceedings before the Secretary of Labor were still pending as in fact they filed a motion for reconsideration of the March 24, 2000
Order, they cannot invoke good faith as a defense.[53]

For the rest of the individual respondents who are union members, the rule is that an ordinary striking worker cannot be terminated for
mere participation in an illegal strike.There must be proof that he or she committed illegal acts during a strike. In all cases, the striker
must be identified. But proof beyond reasonable doubt is not required. Substantial evidence available under the attendant
circumstances, which may justify the imposition of the penalty of dismissal, may suffice. Liability for prohibited acts is to be determined
on an individual basis.[54]

Petitioners have not adduced evidence on such illegal acts committed by each of the individual respondents who are union
members. Instead, petitioners simply point to their admitted participation in the mass actions which they knew to be illegal, being in
violation of the Secretarys assumption order. However, the acts which were held to be prohibited activities are the following:

where the strikers shouted slanderous and scurrilous words against the owners of the vessels; where the strikers used unnecessary
and obscene language or epithets to prevent other laborers to go to work, and circulated libelous statements against the employer
which show actual malice; where the protestors used abusive and threatening language towards the patrons of a place of business or
against co-employees, going beyond the mere attempt to persuade customers to withdraw their patronage; where the strikers formed a
human cordon and blocked all the ways and approaches to the launches and vessels of the vicinity of the workplace and perpetrated
acts of violence and coercion to prevent work from being performed; and where the strikers shook their fists and threatened non-striking
employees with bodily harm if they persisted to proceed to the workplace. x x x[55]

The dismissal of herein respondent-union members are therefore unjustified in the absence of a clear showing that they committed
specific illegal acts during the mass actions and concerted work boycott.

Are these dismissed employees entitled to backwages and separation pay?

The award of backwages is a legal consequence of a finding of illegal dismissal. Assuming that respondent-union members have
indeed reported back to work at the end of the concerted mass actions, but were soon terminated by petitioners who found their
explanation unsatisfactory, they are not entitled to backwages in view of the illegality of the said strike. Thus, we held in G & S
Transport Corporation v. Infante[56]--

It can now therefore be concluded that the acts of respondents do not merit their dismissal from employment because it has not been
substantially proven that they committed any illegalact while participating in the illegal strike. x x x

xxxx

With respect to backwages, the principle of a fair days wage for a fair days labor remains as the basic factor in determining the award
thereof. If there is no work performed by the employee there can be no wage or pay unless, of course, the laborer was able,
willing and ready to work but was illegally locked out, suspended or dismissed or otherwise illegally prevented from working. While
it was found that respondents expressed their intention to report back to work, the latter exception cannot apply in this
case. In Philippine Marine Officers Guild v. Compaia Maritima, as affirmed in Philippine Diamond Hotel and Resort v. Manila Diamond
Hotel Employees Union, the Court stressed that for this exception to apply, it is required that the strike be legal, a situation that
does not obtain in the case at bar. (Emphasis supplied.)

Under the circumstances, respondents reinstatement without backwages suffices for the appropriate relief. But since reinstatement is
no longer possible, given the lapse of considerable time from the occurrence of the strike, not to mention the fact that Solidbank had
long ceased its banking operations, the award of separation pay of one (1) month salary for each year of service, in lieu of
reinstatement, is in order.[57] For the twenty-one (21) individual respondents who executed quitclaims in favor of the petitioners,
whatever amount they have already received from the employer shall be deducted from their respective separation pay.

Petitioners contended that in view of the blatant violation of the Secretarys assumption order by the striking employees, the award of
separation pay is unjust and unwarranted.That respondent-members themselves knowingly participated in the illegal mass actions
constitutes serious misconduct which is a just cause under Article 282 for terminating an employee.
We are not persuaded.

As we stated earlier, the Labor Code protects an ordinary, rank-and-file union member who participated in such a strike from losing his
job, provided that he did not commit an illegal act during the strike.[58] Article 264 (e) of the Labor Code, as amended, provides for such
acts which are generally prohibited during concerted actions such as picketing:

No person engaged in picketing shall commit any act of violence, coercion or intimidation or obstruct the free ingress to or
egress from the employers premises for lawful purposes, or obstruct public thoroughfares. (Emphasis supplied.)

Petitioners have not adduced substantial proof that respondent-union members perpetrated any act of violence, intimidation, coercion
or obstruction of company premises and public thoroughfares. It did not submit in evidence photographs, police reports, affidavits and
other available evidence.

As to the issue of solidary liability, we hold that Metrobank cannot be held solidarily liable with Solidbank for the claims of the latters
dismissed employees. There is no showing that Metrobank is the successor-in-interest of Solidbank. Based on petitioners documentary
evidence, Solidbank was merged with FMIC, with Solidbank as the surviving corporation, and was later renamed as FMIC. While
indeed Solidbanks banking operations had been integrated with Metrobank, there is no showing that FMIC has ceased business
operations. FMIC as successor-in-interest of Solidbank remains solely liable for the sums herein adjudged against Solidbank.

Neither should individual petitioners Vistan and Mendoza be held solidarily liable for the claims adjudged against petitioner
Solidbank. Article 212 (e)[59] does not state that corporate officers are personally liable for the unpaid salaries or separation pay of
employees of the corporation. The liability of corporate officers for corporate debts remains governed by Section 31 [60] of
the Corporation Code.

It is basic that a corporation is invested by law with a personality separate and distinct from those of the persons composing it as well
as from that of any other legal entity to which it may be related. Mere ownership by a single stockholder or by another corporation of all
or nearly all of the capital stock of a corporation is not of itself sufficient ground for disregarding the separate corporate personality.[61] In
labor cases, in particular, the Court has held corporate directors and officers solidarily liable with the corporation for the termination of
employment of corporate employees done with malice or in bad faith. [62] Bad faith is never presumed.[63] Bad faith does not simply
connote bad judgment or negligence -- it imports a dishonest purpose or some moral obliquity and conscious doing of wrong. It means
a breach of a known duty through some motive or interest or ill-will that partakes of the nature of fraud.[64]

Respondents have not satisfactorily proven that Vistan and Mendoza acted with malice, ill-will or bad faith. Hence, said individual
petitioners are not liable for the separation pay of herein respondents-union members.

WHEREFORE, the petitions are PARTLY GRANTED. The Decision dated March 10, 2003 of the Court of Appeals in CA-G.R. SP Nos.
67730 and 70820 is hereby SET ASIDE. Petitioner Solidbank Corporation (now FMIC) is hereby ORDERED to pay each of the above-
named individual respondents, except union officers who are hereby declared validly dismissed, separation pay equivalent to one (1)
month salary for every year of service. Whatever sums already received from petitioners under any release, waiver or quitclaim shall be
deducted from the total separation pay due to each of them.

The NLRC is hereby directed to determine who among the individual respondents are union members entitled to the separation pay
herein awarded, and those union officers who were validly dismissed and hence excluded from the said award.

No costs.

SO ORDERED.