SECOND DIVISION

[G.R. NOS. 158190-91 : June 21, 2006]

NISSAN MOTORS PHILIPPINES, INC., Petitioner, v. SECRETARY OF LABOR AND EMPLOYMENT and BAGONG
NAGKAKAISANG LAKAS SA NISSAN MOTOR PHILIPPINES, INC. (BANAL-NMPI-OLALIA-KMU), Respondents.

[G.R. NOS. 158276 and 158283 : June 21, 2006]

BAGONG NAGKAKAISANG LAKAS SA NISSAN MOTORS PHILIPPINES, INC. (BANAL-NMPI-OLALIA-

KMU), Petitioner, v. COURT OF APPEALS (SPECIAL DIVISION OF FIVE), SECRETARY OF LABOR and EMPLOYMENT
and NISSAN MOTORS PHILIPPINES, INC., Respondents.

DECISION

GARCIA, J.:

Assailed and sought to be set aside in these petitions for review under Rule 45 of the Rules of Court are the Decision of the
Court of Appeals (CA) dated February 7, 20031 and its Resolution of May 15, 2003,2in CA-G.R. SP No. 69107 and CA G.R. SP
No. 69799, denying the petitions for certiorari separately interposed by Nissan Motor Philippines, Inc. ("Nissan Motor" or
"Company") and Bagong Nagkakaisang Lakas sa Nissan Motor Philippines, Inc. (BANAL-NMPI-OLALIA-KMU).

Docketed as G.R. NOS. 158190-91, Nissan Motor's petition excepts from the assailed ruling of the appellate court insofar as
it affirmed (a) the award by the respondent Secretary of Labor and Employment of certain economic benefits to the
company's rank-and-file workers and (b) the recall of the dismissal of 140 Union members. On the other hand, the petition of
BANAL-NMPI-OLALIA-KMU ("Union" hereafter), docketed as G.R. NOS. 158276 and 158283, assails the respondent
Secretary's holding that the Union and its members engaged in a concerted work slowdown despite the issuance of the
assumption of jurisdiction order dated August 22, 2001,3 infra, and subsequent orders of similar import. The same petition
raises too the issue respecting the correctness of the CA's resolution citing the Union's counsel for contempt.

In gist, the case turns on the labor dispute triggered by a collective bargaining deadlock between Nissan Motor and the Union
resulting in the filing of four (4) notices of strike with the National Conciliation and Mediation Board (NCMB). Filed on
December 4, 2000, the first Notice of Strike (NCMB-RBIV-LAG-NS-12-045-00), on the ground of alleged unfair labor practice,
stemmed from the suspension of about 140 company employees, following the November 15, 2000 disruptive protest action
arising from the employees' demand for payment of the 2nd half of their 13th month pay. The Union filed the second strike
notice (NCMB-RBIV-LAG-NS-07-027-01) on July 24, 2001 on the ground of deadlock in collective bargaining involving a mix
of economic and non-economic issues.

On August 22, 2001, the Department of Labor and Employment (DOLE), upon Nissan Motor's petition, issued an order
assuming jurisdiction over the dispute at Nissan Motor. In it, the DOLE Secretary expressly enjoined any strike or lockout and
directed the parties to cease and desist from committing any act that might exacerbate the situation, and for the Union to
refrain from any slowdown and other similar activities that may disrupt company operations or bring its production to
belowits normal and usual levels.

What happened next is summarized in the Decision of the respondent DOLE Secretary dated December 5, 2001,4 viz:

On 27 August 2001, the Union filed a 3rd Notice of Strike - on the ground of illegal lockout, illegal suspension, union busting
'.

xxx

On 12 September 2001, [the DOLE] issued an Order directing that the 3rd Notice of Strike be consolidated with the first two
notices '; reiterating the injunction against strike or lockout, and directing the parties to cease and desist from committing
acts which may aggravate the situation and to refrain from any slowdown.

On 18 September 2001, the Union filed a [reiterative] Urgent Petition to Suspend the Effects of Termination of union officers
and members, now numbering 43 '.

On 24 September 2001, the Company filed its Position Paper.

On 18 September 2001, the Union filed a 4th Notice of Strike - on grounds of alleged illegal dismissal of eighteen (18) union
officials, illegal lockout on account of the forced leave, coercion/intimidation, union busting and non-payment of salaries for
the period August 15-30, 2001.

On 28 September 2001, Acting [DOLE] Secretary Arturo D. Brion issued an Order consolidating the 4th notice of strike with
the first three (3) notices - and reiterating the injunction contained in the assumption of jurisdiction order of 22 August 2001
and the Order of 12 September 2001.
1
 xxx

On 05 October 2001, the Company filed a Motion to Deputize PNP Laguna to Secure, Maintain and Preserve Free Ingress and
Egress of NMPI, alleging - that despite the injunctions - against any slowdown and strike, the Union went on actual strike on
01 October 2001, picketed and blocked the company offices, and plant premises; unlawfully blocked and obstructed all
entrances and exits points.

On 08 October 2001, the Union filed a 'Mosyon Laban sa Deputasyon [ng PNP],' '.

xxx

On 13 October 2001, the Secretary of Labor issued an Order deputizing the [PNP] '.

On 22 October 2001, the Union filed a Supplemental Position Paper with Reply alleging that the bargaining unit at NMPI - is
composed of 360 highly skilled employees; that the workers are always on forced leave; work is only for 4 or 5 days. The
average daily salary of employees is P400.00 which is allegedly below the poverty line '. The average monthly salary of
employees is P10,000.00 for rank and file P20,000.00 for supervisory (sic).

The Union states further that the Company realized P3.2 Billion in gross sale for the year 2000; that it is very flexible with
the pricing of its products which price ranges from P750,000.00 to P1.3 Million; that the estimated direct labor cost is only
P68.180 Million.

On the political issues, the Union alleges that 140 union officers and members were placed under suspension from 3-6 days
without observing procedural due process. xxx. The Union alleges too that the Company abused its prerogative in imposing
discipline '.

The Union accuses the Company of violating the assumption of jurisdiction order by falsely accusing the Union of committing
slowdown and placing them on forced leave, as on (sic) June 18, 30, July 7, 14, & 21. While all these were taking place and
up until 23 July, the Union claims, the CKD parts have not arrived thus, the low production.

The Union claims that after the filing of the 2nd notice of strike, the Company charged the Union with engaging in work
slowdown. Despite explanation that the low production was due to many reasons none of which is attributable to a
slowdown; '. The Union requested for grievance but the Company ignored it.

The Union claims that the charge against the employees of violation of the assumption of jurisdiction order is just a [union
busting] ploy '. It claims likewise that the Company also violated the assumption order, therefore the principle of pari delicto
applies to both parties.

The Union explained also its position on the CBA deadlock '.

On 26 October 2001, the Company filed its Reply to the Union's Position Paper [later followed by] a Rejoinder to the Union's
Reply [therein alleging] ... that the first notice of strike is totally without merit as the Union's charge of [UPL] is not
supported by the events xxx. crvll

The charge of illegal suspension of more or less 140 union members ranging from 3 to 6 days is without merit as the action
was in the exercise of management's prerogative to instill discipline among its employees. The Company asserts that the
suspension was a sanction for the employees' misconduct committed on 15 November 2000, by refusing to go back to their
assigned workstations, and instead demanding payment of the 2nd half of their 13th month pay. The suspension from work
was imposed as a disciplinary measure under the Company Rules - and after observance of due process, the Company
alleges. The Company notes that the subject employees failed to submit satisfactory explanation within the 48-hour period
granted to them. The incident was recorded in the Company's Exhibits '. A copy of the Notice of Charge, marked as Exhibit
"J," a copy of the Notice of Suspension, marked as Exhibit "K," and the Affidavit of Mr. Artemio del Rosario, marked as
Exhibit "M" were submitted to further support the claim of validity of the suspension.

Anent the said 13th month-pay related issue, - the Company states that the statutory deadline for payment of the 13th
month-pay is December 24th of the applicable year, thus the demand for early payment is not in order. The 13th month pay
was released as promised on 29 November 2000.

On the 2nd Notice of Strike, the Company states that it is incapable of meeting the [capricious] economic demands of the
Union - [which are] being made despite the continued losses suffered by NMPI over the last four (4) years of its operations
amounting to about P1.490 Billion. Notwithstanding the reduction of the Union's total package, it would still cost
P212,081,987.00 or 309.5% increase over the previous CBA; whereas the Company's last offer before withdrawing the same
was a package amounting to P35, 386,458.00 which represents a 52.5% increase over the previous CBA. This package
consists in:

A. Annual Salary increase - P900.00 + P160.00 merit increase

b. Signing bonus - P3,000.00

c. Maternity assistance - Normal - P 6, 500.00

Caesarian - P13,000.00

2
Miscarriage - P 3, 900.00

xxx xxx xxx

p. Overtime pay premium Increase for ordinary day,

special holiday, rest day and regular day

xxx

The Company maintains that the losses [in] - its last four (4) years of operations, from 1997 to 2000, resulted in net losses
amounting to P1.490 Billion, owing to such factors as the 1997 Asian economic meltdown, ', and the Company's limited
motor vehicle market share '. Copies of its audited financial statements were submitted as Annexes "B", "C", "D", and "E" of
the Affidavit of Mr. Valentino de Leon, Exhibit "L" of the Company's Position Paper.

The Company contends that overall, NMPI's total market share in the year 2000 was lower than the previous year - and
among the lowest in the industry '. These factors militate against drastic award of economic benefits - as such could
adversely affect the Company's survival.

The Company states too, that the slowdown carried out by the Union after the filing of the 2nd strike notice, was in violation
of the cooling off period prescribed by law, therefore illegal.

Moreover, the slowdown violates - the CBA. The Company submitted a sworn affidavit of Mr. Manolito E. Burgos, Exhibit "O"
of the Position Paper, to prove the fact that a slowdown was in fact carried out which adversely affected NMPI's normal
production '.

On the matter of the dismissal of 19 Union officers and 25 members - after the issuance of the Assumption of Jurisdiction
Order ', the Company asserts that the subject employees defied the - Order by continuing to carry on the slowdown '. The
Union's refusal to formally acknowledge receipt of the Order of 22 August 2001, cannot thwart the efficacy of the said Order
'. Citing several [SC] decisions on the matter, the Company maintains that this blatant defiance of the DOLE orders left it
with no choice but to declare the concerned employees to have forfeited or lost their jobs.

The Company averred that the dismissal was preceded by observance of due process. To prove this, it submitted Exhibit "M"
(Affidavit of Mr. Artemio A. del Rosario) and its Annexes ', consisting in the notices to explain and the notices of dismissal.

xxx

In its Reply to the Union's Position Paper, the Company contends that the unofficial figures given to Administrator Olalia
should not be used as NMPI's last position since these were never directly presented by the Company to the Union as they
are confidential information.

The Company alleges that the Union's computation of the incremental direct cost over the three (3) year period is totally
incorrect and misleading as annual increases are cumulative. Moreover, there is not basis for comparing total labor cost
against total sales revenues. While labor cost may be just a small percentage of total sales revenue, NMPI is incurring
tremendous losses because of big overhead cost '.

xxx

The Company - confirmed that it unofficially offered P3,000.00 only, however, the basis for signing bonus no longer exist
because the parties did not reach any agreement on the CBA. The signing bonus is premised on goodwill which no longer
existed '. (Underlining and words in bracket added; emphasis in the original.)

On December 5, 2001, public respondent DOLE Secretary Patricia A. Sto. Tomas issued her assailed Decision, the fallo of
which reads:

WHEREFORE, in the light of the foregoing discussions, this Office orders the following:

1. The suspension of the 140 employees which is the subject of the first notice of strike is hereby affirmed;

2. The dismissal of the Union officers is hereby sustained. However, the dismissal of the Union members is recalled, hence,
they are reinstated to their former positions without back wages. They are imposed a suspension of one month which is
deemed already served;

3. Bagong Nagkakaisang Lakas sa Nissan Motor Philippines, Inc. (BANAL-NMPI-OLALIA-KMU) and Nissan Motor Philippines,
Inc. are hereby ordered to conclude a Collective Bargaining Agreement embodying the dispositions made above and all other
agreements which were reached by the parties during negotiation and conciliation. Such agreement shall have prospective
effect.

SO ORDERED.

In due time, the Company and the Union each sought partial reconsideration, but their corresponding motions were denied
by the public respondent Secretary in a modificatory resolution dated January 22, 2002.5 The modification consisted in the

3
deletion from the list of dismissed Union officers the names of three (3) employees previously identified as officers but are
not listed as such in the official records of the Bureau of Labor Relations.

Therefrom, both the Company and the Union went to the CA via separate petitions for certiorari under Rule 65 of the Rules of
Court. The Company's recourse, docketed as CA-G.R. SP No. 69107, and that of the Union, as CA-G.R. SP No. 69799, were
later ordered consolidated.

On February 7, 2003, the CA, thru its Special Division of Five, rendered its assailed Decision6 which denied the private
parties' separate petitions and affirmed the public respondent Secretary's Decision dated December 5, 2001 and Resolution
of January 22, 2002. The Company's and the Union's respective motions for reconsideration were denied by the CA in a
Resolution dated May 15, 2003.

Before the CA, however, issued its February 7, 2003 decision on the merits, its Fourth Division to which the case, as
consolidated, originally pertained, issued a Resolution dated November 8, 20027 citing Atty. Napoleon Banzuela, Jr., counsel
for the Union, for indirect contempt under Rule 71 of the Rules of Court and required to pay a fine of P15,000.00. In brief,
the citation is set against the following antecedents:

1. On February 28, 2002, in CA-G.R. SP No. 69107, the CA, per a Resolution8 penned by Associate Justice Eloy R. Bello, then
of the CA 5th Division, temporarily enjoined the implementation of the DOLE underlying decision of December 5, 2001.
Barely a month after, the Union filed its own petition for certiorari, 9 docketed as CA-G.R. SP No. 69799 of the court's 11th
Division - with prayer for its consolidation with CA-G.R. SP No. 69107 which was then pending with the CA's 5th Division;

2. Subsequently, both petitions were consolidated and raffled to Justice Bello, formerly of the 5th Division, but who was at
this time with the 4th Division of the CA. Justice Bello accepted the consolidation, being, per Resolution of October 11,
200210, in accordance with CA internal rules.

3. On May 20, 2002, the Union moved for the inhibition of Justice Bello and/or the transfer of the case to the 11th Division11,
to which motion Nissan Motor interposed an opposition with prayer to expunge from the records the Union's motion.

4. On August 14, 2002 the CA issued a Resolution denying the motion for inhibition of Justice Bello.12 On September 23,
2002, the Union, thru Atty. Banzuela, Jr. filed a Motion to Refer Back to the Fourth (4th) Division to which the Case was
Originally Consolidated and there alleging the following:

Lately, upon follow-up on the case by the workers, they learned that a reorganization as regards the compositions of the
Divisions of the entire [CA] transpired wherein JUSTICE ELOY BELLO was transferred to the SECOND DIVISION, but
surprisingly, he brought with him the above entitled case in the Second Division which was originally docketed with the
Fourth Division, despite the fact that the workers filed a motion to inhibit, which was denied and expunged from the records.
However, bringing with him the above-entitled case in the SECOND (2nd) DIVISION lend credence to the
allegation/accusation of the workers that JUSTICE ELOY BELLO, has undue interest over the instant case.

6. The CA found the foregoing imputation to be baseless and malicious and likewise found Atty. Banzuela's proffered
explanation insufficient to justify the utterances he made in his September 23, 2002 motion.

We now come to the instant petitions, which the Court, per its Resolution of September 17, 2003,13 as reiterated in another
Resolution dated March 22, 2004,14 ordered consolidated.

In its recourse, Nissan Motor contends that the CA erred:

1. In not considering and applying hereto pertinent law and jurisprudence which provide that regardless of rank in the union,
workers who defy and contravene the [DOLE's] assumption of jurisdiction and/or return-to-work orders are deemed to have
committed an illegal act and, as consequence thereof, have lost their employment status.

2. In affirming public respondent Secretary of Labor and Employment's award of economic benefits to private respondent
Union and the rank-and-file workers considering its own confirmatory finding of petitioner's financial distress.

On the other hand, the Union, apart from the matter of contempt of court, raises in its own petition the issue of whether or
not:

1. Mass dismissal and collective liability are sanctioned by law and existing jurisprudence;

2. Union officers and members accused of work slowdown in defiance of assumption of jurisdiction are entitled to due process
to determine their individual participation;

3. The Pari Delicto (sic) doctrine is applicable in the instant case;

4. Respondent company can dismiss union officers and members after it brought the issue of illegal strike before the [DOLE]
Secretary; and cralawlibra ry

5. The 160 Union officers and members [total] illegally dismissed are entitled to reinstatement and full backwages.

Nissan Motor faults the CA for effectively ordering, like the public respondent Secretary, the reinstatement of the 140 rank-
and-file Union members who waged a work slowdown notwithstanding the assumption of jurisdiction order dated August 22,
2001 and what amounts to a reiterated return-to-work orders (RTWO) dated September 12 and 28, 2001. The public

4
respondent Secretary, Nissan Motors notes, had found the dismissal of the Union officers to be justified. Accordingly, and
consistent with extant jurisprudence, the dismissal of the 140 rank-and-file Union members should have also been upheld,
given the Secretary's categorical factual determination about the Union having engaged in work slowdown which, under the
circumstances it was undertaken, she viewed as constituting an illegal strike.15

Nissan Motor next sets its sight on the DOLE's disposition on the economic aspect of the case. In relation thereto, it
expresses dismay over the bountiful basket of economic benefits, inclusive of what amounts to a signing bonus, that the CA,
following the lead of the DOLE Secretary, extended to the Union members and rank-and-file workers in general, given the
backdrop against which the award was made, viz: a) the benefits were based on confidential "unofficial proposals" the
company made before the NCMB at the start of the Collective Bargaining Agreement (CBA) negotiations; b) these proposals
were made before the Union's work slowdown; and c) the Company is in dire financial strait, a situation attributable to the
1997 Asian currency crisis but which the Union's work slowdown aggravated.

For its part, the Union claims that the appellate court erred in sustaining the finding respecting the concerted work
slowdown. As argued, no overt act has been shown to prove the fact of concerted work slowdown, let alone the participation
of each of its members thereon. Far from establishing such deplorable practice, the Union maintains that the facts would tend
to show that it was Nissan Motor which is guilty of unfair labor practices acts against the Union and its members, pointing to
their dismissal which was allegedly effected without due process of law.

And while not determinative of the final outcome of the substantive merits of this case, the CA's resolution of November 8,
200216 embodying the contempt citation is also assailed. According to the Union's counsel Atty. Banzuela, what the CA
considers as contemptuous utterances against Justice Eloy Bello, Jr. were actually remarks he made without malice, unaware
as he was of the CA rules respecting distribution, assignment and disposition of cases.

Subject to well-defined exceptions, the doctrinal rule is that factual determinations of administrative and quasi-judicial
agencies, such as the National Labor Relations Commission or the DOLE, are generally accorded not only respect but even
conclusiveness if supported by substantial evidence, in recognition of their expertise on specific matters under their
consideration and jurisdiction.17 This doctrine applies with greater force when the appellate court passes upon and upholds
such findings of facts.18

The conclusion of the public respondent Secretary of Labor and Employment, as confirmed by the CA, is that the Union and
its members indeed "engaged in work slowdown which under the circumstances in which they were undertaken constitute
illegal strike." The defiance came in the form of the continuation of the slowdown enjoined in the underlying assumption
order, by the strike actually staged by the Union, its officers and members on October 1, 2001, the closure of the company's
offices and plant premises and the barricading of main gates. In fact, the DOLE Secretary had to ask the intervention of the
Laguna Philippine National Police (PNP) to assist the Company in opening what appeared to be padlocked and welded gates
leading to company premises. But side by side with this determination is the CA's categorical finding that the Company's
hands were not entirely clean, having contributed to the ensuing deteriorating impasse between labor and management.

Verily, the DOLE's repeated admonitions against any act that might exacerbate the labor dispute cut both ways. Accordingly,
the Court is not disposed, as Nissan Motor and the Union respectively urge, to disturb, one way or the other, the factual
determination on what eventually led the parties to engage in a labor-management locking of horns. To be sure, the
Company's act - after the DOLE Secretary had issued her assumption order - of suspending a very substantial number of
Union officers/members with threat of eventual dismissal and perceived illegal lockout and union busting went against the
injunction against the commission of any act that would add fire to what was already a volatile situation. This is not to say
that the Company is guilty of unfair labor practice, or union busting, to be precise. It cannot be heard, however, to say that
the CA - taking stock of the third and fourth notices of strike filed and the grounds therefor - erred in saying that the
Company "was not entirely without fault for the defiant and adversarial level into which the tense situation between the
parties eventually degenerated."19 In the same token, the Union cannot plausibly say, as it does at every turn, that its
officers and members desisted from engaging in what turned out to be a crippling work slowdown. The evidence on record
and the ensuing discerning and detailed observations of the public respondent Secretary belie the Union's posture:

A perusal of the Production Plan and Results, for the months of June [to] - September 2001 - provide[s] a vivid picture of the
extent of the reduction in production of the Company's JIG Lines 1 and 2, Metal Line and Trim/Chassis Line No. 1 during the
period covered by the labor dispute, and tend[s] to validate the Company's contention that a slowdown was carried out by
the Union starting 24 July 2001.

As the Union itself alleges, there was normal, even high production [95% - 100% of production plan in all lines] in the month
of June 2001. '. In the month of July 2001, production at JIG Line 2 was 100% of plan from July 2 to 23 (covering only 5
working days), and at Metal Line, production was from 88% to 142% of plan, for the first 3 weeks of July. But production fell
by at least 50% in the 4th week (Annexes A-1, B-1, C-1 and D-1 of Company's Exhibit "O"), the time when the CBA deadlock
occurred and the 2nd strike notice was filed.

xxx

Union claims that production setback was due to - workers [training] on the new product line launched in June. This claim is
- belied by evidence. xxx. crvll

Union claims that the low production was due also to lack of parts. Company's Annexes to Exhibit "O" - show that during the
period in question, there were no parts delay in JIG Line 1 experienced on August 3. In Trim/Chassis Line 1, there was in fact
work-in-progress delay from JIG 1 and JIG 2 owing clearly to the slowdown in the latter lines xxx. crvll

Neither is the Union's claim that the forced leaves and suspension of workers were responsible for the disruption of
production true. On the contrary, it was the lack of work-in progress due to slowdown and absenteeism which are responsible
for the declaration of forced leave. Annex "B-2" of Company's Exh. "O" in fact shows that operations at JIG Line 2 were
cancelled and transferred to Line 1 starting on August 22 due to high incidents of absenteeism. xxx. crvll

5
Thus, the Union's excuses do not hold sway on this Office. To be sure, the Union engaged in work slowdown which under the
circumstances in which they were undertaken constitutes illegal strike. The Company is therefore right in dismissing the
subject Union officers in accordance with Article 264 (a) of the Labor Code, for participating in illegal strike in defiance of the
assumption of jurisdiction order by the Labor Secretary.20 (Underscoring and letters in bracket added)

Given the above perspective, the benign consideration which the public respondent Secretary accorded the rank-and-file
Union members who joined in the work slowdown in defiance of the assumption order and the complementing RTWO
commends itself for concurrence. As may be recalled, the public respondent Secretary imposed on the erring Union members
a one (1) month suspension to replace the penalty of loss of employment status heretofore meted on them by the Company.
Article 263(g) in relation to Article 264 of the Labor Code governs the effects of a strike or similar prohibited acts in
assumption cases, thus:

Art. 263. Strikes, picketing and lockouts. xxx (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 '. Such assumption - shall have the effect of automatically enjoining the intended
or impending strike or lockoutas specified '. If one has already taken place at the time of assumption ', all striking or locked
out employees shall 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 or lockout. xxx. (Underscoring supplied.)

Article 264. Prohibited Activities.

(a) xxx

No strike or lockout shall be declared after the assumption of jurisdiction by - the Secretary or - during the pendency of
cases involving the same grounds for the strike or lockout.

xxx. Any union officer who knowingly participates in 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: '.

While the employer is authorized to declare a union officer who participated in an illegal strike as having lost his
employment,21 his/its option is not as wide with respect to union members or workers for the law itself draws a line and
makes a distinction between union officers and members/ordinary workers. An ordinary striking worker or union member
cannot, as a rule, be terminated for mere participation in an illegal strike; there must be proof that he committed illegal acts
during the strike.22 And lest it be forgotten, the law invests the Secretary of Labor and Employment the prerogative of
tempering the consequence of the defiance to the assumption order. The Secretary may thus merely suspend rather than
dismiss the employee involved.23 This is as it should be. For as then Associate, now Chief, Justice Artemio V. Panganiban
prefaced his ponencia in Solvic Industrial Corporation v. NLRC24 - "Except for the most serious causes affecting the business
of the employer, our labor laws frown upon dismissal. Where a penalty less punitive would suffice, an employee should not
be sanctioned with a consequence so severe."

With the view we take of this case, the public respondent Secretary of Labor and Employment - and necessarily the CA -
acted within the bounds of the law - and certainly rendered a judicious solution to the dispute - when she spared the striking
workers or union members from the penalty of dismissal. This disposition takes stock of the following circumstances
justifying a less drastic penalty for ordinary striking workers: a) the employees who engaged in slowdown actually reported
for work and continued to occupy their respective posts, or, in fine, did not abandon their jobs; b) they were only following
orders of their leaders; and c) no evidence has been presented to prove their participation in the commission of illegal
activities during the strike. Not to be overlooked is a factor which the CA, perhaps having in mind PAL v.
Brillantes,25 regarded as justifying the leniency assumed by the public respondent Secretary towards the members of the
Union. We refer to the fact that Nissan Motor appeared to have also exacerbated, as earlier indicated, the emerging volatile
atmosphere despite the Secretary's order veritably enjoining the parties to respect the status quo prevailing when she
assumed jurisdiction over the dispute. Foremost of these exacerbating acts is the en masse termination of most of the Union
members, albeit it may be conceded that the employer has the prerogative of imposing disciplinary sanctions against
assumption-order-defying employees.

The Court has considered the cases cited by the Company to support its brief on the issue of dismissal, notably Union of
Filipro Employees v. Nestle Philippines, Inc.,26 St. Scholastica's College v. Torres,[27]and Telefunken Semiconductors
Employees Union-FFW v. Court of Appeals.28 There, we held that any worker who participates in a strike or otherwise
engages in any prohibited act in defiance of the assumption order may be meted the penalty of loss of employment status.
But as correctly pointed out by the public respondent Secretary, however, the law itself authorizes the graduation of
penalties, Article 264 of the Labor Code making, as it were, a distinction between union officers and its members or any
other workers, the main differing line contextually being that the latter do not necessarily lose their job by mere participation
in an illegal strike absent proof that they committed illegal acts. Thus in Association of Independent Union in the Philippines
v. NLRC,29 we 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.
Of the same tenor, albeit formulated a bit differently is our holding in Gold City Integrated Port Service, Inc. v. NLRC.30

Certainly not lost on the Court is the fact that the cited cases are not on all fours applicable, Filipro, St. Scholastica and
Telefunken involving as they do the staging of actual strikes, resulting in work stoppage and complete abandonment of
employment. There lies the difference. In this case, the element of abandonment of work does not obtain, the employees
engaging in work slowdown having reported for work at their usual post. Abandonment means deliberate, unjustified refusal
of the employee to resume employment.31

The Court, just like the public respondent Secretary, however, cannot lend cogency to the Union's unyielding contention that
Nissan Motor imposed disciplinary sanctions against its officers and members without due process of law. As it were, the
records32 tend to show that the Company, before proceeding against those concerned, asked the erring Union
officers/members and workers to explain what amounts to their defiant attitude and duly warned them of their imminent fate
as a consequence of their intransigence, before declaring and then confirming their loss of employment status. The
6
Company's evidence presented during the proceedings before the respondent Secretary, specifically Exhibits "L," "M" and "O"
of Annex "N" of the Company's Petition for Review in G.R. NOS. 158190-91, which the latter gave full faith and credence in
her Decision dated December 5, 2001 and thereafter the CA proved this point.

At any rate, the Union's protestation on non-observance of due process is altogether an issue of fact that has no place in the
instant appellate proceedings. For, the Court's jurisdiction in a Petition for Review is limited to reviewing or revising errors of
law allegedly committed by the appellate court, its findings of fact being generally binding on this Court.33

In view of the legality of the disciplinary measures taken against the union officers and members of the union, the Court
need not delve on the issue of entitlement to full backwages. Backwages is, as a rule, forthcoming only in cases where the
dismissal or suspension, as the case may be, is declared unlawful.

Apropos the contempt citation, we sustain the CA's order penalizing Atty. Napoleon Banzuela, Jr. for indirect contempt for his
uncalled-for and disrespectful remarks directed against Justice Eloy Bello, Jr. Atty. Banzuela cannot plausibly set up his
ignorance of the appellate court's internal rules as a justification for making his contemptuous, malicious and disparaging
statements against the person and integrity of a sitting CA justice. The Court is at loss to understand how his lack of
knowledge of such rules, if that be really the case, can serve as excuse for his unwarranted and unfounded ascription of
interest against a member of a court. A well-intentioned mind could have conveyed its sentiments about such perceived
interest in a civil and respectful language befitting a gentleman and an officer of the court. It behooved Atty. Banzuela, as
such officer, to uphold the dignity and authority of the men and women in the judiciary. The innuendo embodied in the
Union's September 23, 2002 motion, doubtless the product of Atty. Banzuela's mind, is simply reprehensible. The Court
cannot, as urged, let it pass unpunished.

Finally, the disposition made by the public respondent Secretary relating to the economic aspects of the CBA, such as, but
not limited, transportation allowance, 14th month pay, seniority pay, separation pay and the effectivity of the new CBA,
appears to be proper. However, conformably with the evidence on record that shows the Company's precarious financial
position, there is a need to modify the other awards she thus made:

1) The annual salary increases of P900.00 for the 1st year, P1,000.00 and P1,100.00 for the 2nd and 3rd years, respectively,
which, given the proven continued losses of the Company, are hereby modified to minimize and mitigate its operational
losses to: P900.00 annual increase for the initial 3-year term of the CBA, effective upon execution of a new CBA. In this
regard, the Court cannot sanction the award made by the public respondent Secretary based ostensibly on the revelation of
NCMB Administrator Olalia that was sourced from the confidential position given him by the Company. The reason for this is
simple. Article 233 of the Labor Code34 prohibits the use in evidence of confidential information given during conciliation
proceedings. NCMB Administrator Olalia clearly breached this provision of law. Moreover, as correctly pointed out by the
Company, this confidential information given to Administrator Olalia was made prior to the Union's slowdown and defiance of
the Assumption Order of August 22, 2001 causing it additional losses.

2) The award for gratuity bonus of P3,000.00 per employee is vacated for lack of basis. As no less pointed out by the public
respondent Secretary, the Union's demand for a signing bonus is bereft of any factual or legal basis considering that the CBA
was not concluded in the bargaining table. Moreover, the filing by the Union of a notice of strike, not to mention effecting a
slowdown during the mandatory cooling-off period prescribed under Article 263 (c)35 of the Code ate up whatever goodwill -
the motivating basis for signing bonus - there was between labor and management. By parity of reasoning, there can
likewise be no basis for the award or conversion of the Union's demand for a signing bonus into gratuity pay inasmuch as the
latter benefit was, in the first place, never an issue between the parties nor part of the Union's demand. It is not amiss to
state, therefore, that the public respondent Secretary abused her discretion when she extended to the Union an award not
asked for, let alone negotiated.

Parenthetically, the Company's lament about the public respondent Secretary being in error when she proceeded to extend to
members of the rank-and-file of the bargaining unit the privilege of obtaining half a month's pay/salary by way of a salary
loan for the employee's benefit or that of the immediate members of his family every start of the semestral school year is
unacceptable. According to the Company, such arrangement, as opposed to the present practice wherein the Company
accords a P5,000.00 educational loan semestrally for its employees or that of the immediate members of the employee's
family, while seemingly innocuous, would in reality weigh heavily on its finances. Far from being burdensome and
confiscatory, as argued by the Company, this particular award appears to the Court, as it did to the CA and the DOLE, to be
reasonable and modest increase in benefits, being in the form of a loan. A loan suggests repayment. At the end of the day,
therefore, the Company will get its money back and will be doing its share to promote industrial peace.

WHEREFORE, the assailed Decision and Resolution of the Court of Appeals dated February 7, 2003 and May 15, 2003,
respectively, in CA-G.R. SP 69107 and CA G.R. SP No. 69799 are hereby AFFIRMED, with the following modifications:

1. The award of annual salary increases shall be at P900.00 effective during the initial three-year term of the CBA; and cralawlib rary

2. The award of gratuity bonus of P3,000.00 per covered employee is deleted.

ACCORDINGLY, except insofar as they delved on the awards immediately referred to above, the petition of Nissan Motor
Philippines, Inc. in G.R. NOS. 158190-91, and the petition of Bagong Nagkakaisang Lakas Sa Nissan Motor Philippines, Inc. in
G.R. NOS. 158276 and 158283 are both DENIED.

No Costs.

SO ORDERED.

Endnotes:

7
1
Penned by Associate Justice Rebecca De-Guia-Salvador, concurred in by Associate Justice Remedios Salazar-Fernando and
Associate Justice Edgardo F. Sundiam, with Associate Justice Eloy R. Bello, Jr. (ret.) and Associate Justice Danilo B Pine (ret.)
dissenting; Rollo (G.R. NOS. 158276 & 158283), pp. 53 et seq.

2
Id. at 66 et seq.

3
Rollo (G.R. NOS. 158190-91), pp. 122-125.

4
Rollo (G.R. NOS. 158276 & 158283), pp. 199-232.

5
Id. at 44 et seq.

6
See Note #1, supra.

7
Penned by Associate Justice Eloy R. Bello (ret.) and concurred in by Associate Justices Godardo A. Jacinto and Rebecca De
Guia-Salvador; Rollo (G.R. NOS. 158276 & 158283) pp. 72-73.

8
CA Rollo, p. 1048.

9
Id. at 2 et seq.

10
Id. at 2030 et seq.

11
Id. at 1078 et seq.

12
Id. at 2017 et seq.

13
Rollo (G.R. NOS. 158276 & 158283), p. 706.

14
Id. at 916 et seq.

15
Page 15 of the Secretary of Labor's decision; Id. at 24.

16
See Note #7, supra.

17
Baybay Water District v. COA, G.R. NOS. 147248-49, Jan. 23, 2002, 374 SCRA 482; Brahm Industries, Inc. v. NLRC, G.R.
No. 118853, Oct. 16, 1997, 280 SCRA 82 and other cases.

18
San Juan De Dios Educational Foundation Employees Union-Alliance of Filipino Workers v. San Juan De Dios Educational
Foundation, Inc., G.R. No. 143341, May 28, 2004, 430 SCRA 193, citing Shoppes Manila v. NLRC, G.R. No. 147125, Jan. 14,
2004, 419 SCRA 354 and other cases.

19
CA Decision, p. 3.

20
At pp. 13-15.

21
Gold City Integrated Port Service, Inc. v. NLRC, G.R. No. 103560, July 6, 1995, 245 SCRA 627.

22
Ibid.

23
PAL v. Brilliantes, G.R. No. 119360, Oct. 10, 1997, 280 SCRA 515.

24
G.R. No. 125548, Sept. 25, 1998, 296 SCRA 432.

25
See Note # 23, supra.

26
G.R. NOS. 88710-12, Dec. 19, 1990, 192 SCRA 396.

27
G.R. No. 100158, June 29, 1992, 210 SCRA 565, 575-576.

28
G.R. NOS. 143013-14, December 18, 2000, 348 SCRA 565.

29
G.R. No. 1120505, March 25, 1999, 305 SCRA 219.

30
See Note # 22, supra.

8
31
C.A. Azucena, The Labor Code With Comments and Cases, Vol. II, Revised 1999 ed., p. 458, citing NEECO v. Minister of
Labor, G.R. No. 61965, 184 SCRA 25.

32
Rollo (G.R. Nos.158190-91), pp. 1538-1622.

33
R. Transport Corporation v. Ejandra, G.R. No. 148508, May 20, 2004, 428 SCRA 725, citing cases.

34
Article 233. Privileged Communications. - Information and statements made at conciliation proceedings shall be treated as
privileged communication and shall not be used as evidence in the Commission. xxx. crvll

35
Art. 263. STRIKES, PICKETING, AND LOCKOUTS xxx (c) In cases of bargaining deadlocks, the duly certified or recognized
bargaining agent may file a notice of strike or the employers may file a notice of lockout with the Ministry at least 30 days
before the intended date thereof. In cases of unfair labor practice, the period of notice shall be 15 days '.

9
 THIRD DIVISION
[ G.R. No. 193789, September 19, 2012 ]
ALEX Q. NARANJO, DONNALYN DE GUZMAN, RONALD V. CRUZ, ROSEMARIE P. PIMENTEL,
AND ROWENA B. BARDAJE, PETITIONERS, VS. BIOMEDICA HEALTH CARE, INC. AND
CARINA “KAREN” J. MOTOL, RESPONDENTS.

DECISION
VELASCO JR., J.:
The Case

This Petition for Review on Certiorari under Rule 45 seeks to annul the June 25, 2010 [1] Decision and September 20, 2010[2] Resolution
of the Court of Appeals (CA) in CA-G.R. SP No. 108205, finding that petitioners were validly dismissed. The CA Decision overturned
the Decision dated November 21, 2008[3] of the National Labor Relations Commission (NLRC) and reinstated the Decision dated March
31, 2008[4] of Labor Arbiter Ligerio V. Ancheta.

The Facts

Respondent Biomedica Health Care, Inc. (Biomedica) was, during the material period, engaged in the distribution of medical
equipment. Respondent Carina “Karen” J. Motol (Motol) was then its President.

Petitioners were former employees of Biomedica holding the following positions:

Alex Q. Naranjo (Naranjo)
Ronald Allan V. Cruz (Cruz)
Rowena B. Bardaje (Bardaje)
Donnalyn De Guzman (De Guzman) -
Rosemarie P. Pimentel (Pimentel)
- Liaison Officer
- Service Engineer
- Administration Clerk
Sales Representative
- Accounting Clerk[5]

On November 7, 2006, which happened to be Motol’s birthday, petitioners––with two (2) other employees, Alberto Angeles (Angeles)
and Rodolfo Casimiro (Casimiro)––were all absent for various personal reasons. De Guzman was allegedly absent due to loose bowel
movement,[6] Pimentel for an ophthalmology check-up,[7] Bardaje due to migraine,[8] Cruz for not feeling well,[9] and Naranjo because he
had to attend a meeting at his child’s school.[10]Notably, these are the same employees who filed a letter-complaint dated October 31,
2006[11] addressed to Director Lourdes M. Transmonte, National Director, National Capital Region-Department of Labor and
Employment (DOLE) against Biomedica for lack of salary increases, failure to remit Social Security System and Pag-IBIG contributions,
and violation of the minimum wage law, among other grievances. Per available records, the complaint has not been acted upon.

Later that day, petitioners reported for work after receiving text messages for them to proceed to Biomedica. They were, however,
refused entry and told to start looking for another workplace. [12]

The next day, November 8, 2006, petitioners allegedly came in for work but were not allowed to enter the premises.[13] Motol
purportedly informed petitioners, using foul language, to just find other employment.

Correspondingly, on November 9, 2006, Biomedica issued a notice of preventive suspension and notices to explain within 24 hours
(Notices)[14] to petitioners. In the Notices, Biomedica accused the petitioners of having conducted an illegal strike and were accordingly
directed to explain why they should not be held guilty of and dismissed for violating the company policy against illegal strikes under
Article XI, Category Four, Sections 6, 8, 12, 18 and 25 of the Company Policy. The individual notice reads:

Subject: Notice of Preventive Suspension

& Notice to explain within 24 hours

Effective upon receipt hereof, you are placed under preventive suspension for willfully organizing and/or engaging in illegal strike on
November 7, 2006. Your said illegal act-in conspiracy with your other co-employees, paralyzed the company operation on that day and
resulted to undue damage and prejudice to the company and is direct violation of Article XI, Category Four Section 6, 8, 12, 18 & 25 of
our Company Policy, which if found guilty, you will be meted a penalty of dismissal.

Please explain in writing within 24 hours from receipt hereof why you should not be held guilty of violating the company policy
considering further that you committed and timed such act during the birthday of our Company president.

On November 15, 2006, petitioners were required to proceed to the Biomedica office where they were each served their
Notices.[15] Only Angeles and Casimiro submitted their written explanation for their absence wherein they alleged that petitioners forced
them to go on a “mass leave” while asking Biomedica for forgiveness for their actions.

On November 20, 2006, petitioners filed a Complaint with the NLRC for constructive dismissal and nonpayment of salaries, overtime
pay, 13th month pay as well as non-remittance of SSS, Pag-IBIG and Philhealth contributions as well as loan payments. The case was
docketed as Case No. 00-09597-06.

Thereafter, Biomedica served Notices of Termination on petitioners. All dated November 29, 2006, [16] the notices uniformly stated:

We regret to inform you that since you did not submit the written letter of explanation as requested in your preventive suspension notice
dated November 9, 2006, under Article XI, Category Four, Section 6, 8, 12, 18 and 25 you are hereby dismissed from service effective
immediately.

On March 31, 2008, the Labor Arbiter issued a Decision, [17] the dispositive portion of which reads:

WHEREFORE, the foregoing premises considered, judgment is hereby rendered dismissing for lack of merit the instant complaint for
illegal dismissal.

However, the respondents are hereby ORDERED, jointly and severally, to pay the complainants the following:
10
Unpaid salary for the period 08-15 November 2006;

Pro-rated 13th month pay for 2006; and

Service Incentive Leave for 2006 (except for complainant Bardaje).

From the monetary award given to complainant Naranjo, the amount of PhP4,750.00 shall be deducted.

From the monetary award given to complainant Pimentel, the amount of PhP4,500.00 shall be deducted.

A detailed computation of the monetary awards, as of the date of this Decision, is embodied in Annex “A” which is hereby made an
integral part hereof.

SO ORDERED.[18]

The Labor Arbiter found that, indeed, petitioners engaged in a mass leave akin to a strike. He added that, assuming that petitioners
were not aware of the company policies on illegal strikes, such mass leave can sufficiently be deemed as serious misconduct under Art.
282 of the Labor Code. Thus, the Labor Arbiter concluded that petitioners were validly dismissed.

Petitioners appealed the Labor Arbiter’s Decision to the NLRC which rendered a modificatory Decision dated November 21,
2008.[19] Unlike the Labor Arbiter, the NLRC found and so declared petitioners to have been illegally dismissed and disposed as follows:

WHEREFORE, in view of the foregoing, judgment is hereby rendered modifying the assailed Decision dated April 11, 2008 [sic]; [20]
(a) DECLARING the Complainants to have been illegally dismissed for lack of just cause;
(b) ORDERING Respondents to pay separation pay in lieu of reinstatement and payment of backwages
computed on the basis of one (1) month pay for every year of service up to the date of complainants illegal
dismissal;
(c) ORDERING the respondents to pay complainant De Guzman and Cruz their unpaid commission on the
basis of their sale for year 2005-2006;
(d) Sustaining the monetary award as stated in the Decision dated April 11, 2008;
(e) ORDERING the respondents to pay attorney’s fees in the amount of 10% of the total award of monetary
claims.
All other claims and counterclaims are dismissed for lack of factual and legal basis.

SO ORDERED.[21]
Thereafter, Biomedica moved but was denied reconsideration per the NLRC’s Resolution dated January 30, 2009. [22]

From the Decision and Resolution of the NLRC, Biomedica appealed the case to the CA which rendered the assailed Decision dated
June 25, 2010, the dispositive portion of which reads:

WHEREFORE, premises considered, the assailed Decision and Resolution of public respondent National Labor Relations Commission
(NLRC) dated November 21, 2008 and January 30, 2009 respectively in NLRC NCR CN 00-11-09597-06 are hereby ANNULLED and
SET ASIDE. Decision of the labor arbiter is hereby REINSTATED.

SO ORDERED.[23]

In its assailed Resolution dated September 20, 2010, the CA denied petitioners’ Motion for Reconsideration. The CA ruled that, indeed,
petitioners staged a mass leave in violation of company policy. This fact, coupled with their refusal to explain their actions, constituted
serious misconduct that would justify their dismissal.

Hence, the instant appeal.

The Issues

I.
The Court of Appeals, with all due respect, gravely erred in concluding facts in the case which were neither rebutted nor proved as to its
truthfulness.

II.
The Court of Appeals, with all due respect, gravely erred in ruling that grave abuse of discretion was committed by the NLRC and by
reason of the same, it upheld the Decision of the Labor Arbiter stating that petitioners were not illegally dismissed.

III.
The Court of Appeals, with all due respect, gravely erred in ruling that grave abuse of discretion was committed by the NLRC and by
reason of the same, it upheld the Decision of the Labor Arbiter in relation to petitioners[’] money claims. [24]

The Court’s Ruling

This petition is meritorious.

Petitioners were illegally dismissed

The fundamental law of the land guarantees security of tenure, thus:

11
Sec. 3. The State shall afford full protection to labor x x x.

x x x They shall be entitled to security of tenure, humane conditions of work and a living wage. [25] x x x

On the other hand, the Labor Code promotes the right of the worker to security of tenure protecting them against illegal dismissal:

ARTICLE 279. Security of Tenure. - In cases of regular employment, the employer shall not terminate the services of an employee
except for a just cause or when authorized by this Title. An Employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other
benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual
reinstatement.

It bears pointing out that in the dismissal of an employee, the law requires that due process be observed. Such due process
requirement is two-fold, procedural and substantive, that is, “the termination of employment must be based on a just or authorized
cause of dismissal and the dismissal must be effected after due notice and hearing.” [26] In the instant case, petitioners were not afforded
both procedural and substantive due process.

Petitioners were not afforded

procedural due process

Art. 277(b) of the Labor Code contains the procedural due process requirements in the dismissal of an employee:

Art. 277. Miscellaneous Provisions. – x x x

(b) Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just
and authorized cause without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the
worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall
afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in
accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment.
Any decision taken by the employer shall be without prejudice to the right of the worker to contest the validity or legality of his dismissal
by filing a complaint with the regional branch of the National Labor Relations Commission. The burden of proving that the termination
was for a valid or authorized cause shall rest on the employer.

On the other hand, Rule XIII, Book V, Sec. 2 I (a) of the Implementing Rules and Regulations of the Labor Code states:

SEC. 2. Standards of due process; requirements of notice.––In all cases of termination of employment, the following standards of due
process shall be substantially observed:

I. For termination of employment based on just causes as defined in Article 282 of the Code:
(a) A written notice served on the employee specifying the ground or grounds for termination, and giving said
employee reasonable opportunity within which to explain his side.

(b) A hearing or conference during which the employee concerned, with the assistance of counsel if he so desires is given opportunity
to respond to the charge, present his evidence, or rebut the evidence presented against him.

(c) A written notice of termination served on the employee, indicating that upon due consideration of all the circumstances, grounds
have been established to justify his termination. (Emphasis supplied.)

Thus, the Court elaborated in King of Kings Transport, Inc. v. Mamac [27] that a mere general description of the charges against an
employee by the employer is insufficient to comply with the above provisions of the law:

x x x Moreover, in order to enable the employees to intelligently prepare their explanation and defenses, the notice should contain a
detailed narration of the facts and circumstances that will serve as basis for the charge against the employees. A general
description of the charge will not suffice. Lastly, the notice should specifically mention which company rules, if any, are violated
and/or which among the grounds under Art. 282 is being charged against the employees.

xxxx

x x x We observe from the irregularity reports against respondent for his other offenses that such contained merely a general
description of the charges against him. The reports did not even state a company rule or policy that the employee had allegedly
violated. Likewise, there is no mention of any of the grounds for termination of employment under Art. 282 of the Labor Code. Thus,
KKTI’s “standard” charge sheet is not sufficient notice to the employee. (Emphasis supplied.)

In the instant case, the notice specifying the grounds for termination dated November 9, 2006 states:

Effective upon receipt hereof, you are placed under preventive suspension for willfully organizing and/or engaging in illegal strike on
November 7, 2006. Your said illegal act-in conspiracy with your other co-employees, paralyzed the company operation on that day
and resulted to undue damage and prejudice to the company and is direct violation of Article XI, Category Four Section 6, 8,
12, 18 & 25 of our Company Policy, which if found guilty, you will be meted a penalty of dismissal.

Please explain in writing within 24 hours from receipt hereof why you should not be held guilty of violating the company policy
considering further that you committed and timed such act during the birthday of our Company president.[28]

Clearly, petitioners were charged with conducting an illegal strike, not a mass leave, without specifying the exact acts that the company
considers as constituting an illegal strike or violative of company policies. Such allegation falls short of the requirement in King of Kings
Transport, Inc. of “a detailed narration of the facts and circumstances that will serve as basis for the charge against the employees.” A
bare mention of an “illegal strike” will not suffice.

Further, while Biomedica cites the provisions of the company policy which petitioners purportedly violated, it failed to quote said

12
provisions in the notice so petitioners can be adequately informed of the nature of the charges against them and intelligently file their
explanation and defenses to said accusations. The notice is bare of such description of the company policies. Moreover, it is incumbent
upon respondent company to show that petitioners were duly informed of said company policies at the time of their employment and
were given copies of these policies. No such proof was presented by respondents. There was even no mention at all that such
requirement was met. Worse, respondent Biomedica did not even quote or reproduce the company policies referred to in the notice as
pointed out by the CA stating:

It must be noted that the company policy which the petitioner was referring to was not quoted or reproduced in the petition, a copy of
which is not also appended in the petition, as such we cannot determine the veracity of the existence of said policy. [29]

Without a copy of the company policy being presented in the CA or the contents of the pertinent policies being quoted in the pleadings,
there is no way by which one can determine whether or not there was, indeed, a violation of said company policies.

Moreover, the period of 24 hours allotted to petitioners to answer the notice was severely insufficient and in violation of the
implementing rules of the Labor Code. Under the implementing rule of Art. 277, an employee should be given “reasonable opportunity”
to file a response to the notice. King of Kings Transport, Inc. elucidates in this wise:

To clarify, the following should be considered in terminating the services of employees:

(1) The first written notice to be served on the employees should contain the specific causes or grounds for termination against them,
and a directive that the employees are given the opportunity to submit their written explanation within a reasonable period. “Reasonable
opportunity” under the Omnibus Rules means every kind of assistance that management must accord to the employees to enable them
to prepare adequately for their defense. This should be construed as a period of at least five (5) calendar days from receipt of the
notice to give the employees an opportunity to study the accusation against them, consult a union official or lawyer, gather
data and evidence, and decide on the defenses they will raise against the complaint.[30] (Emphasis supplied.)

Following King of Kings Transport, Inc., the notice sent out by Biomedica in an attempt to comply with the first notice of the due process
requirements of the law was severely deficient.

In addition, Biomedica did not set the charges against petitioners for hearing or conference in accordance with Sec. 2, Book V, Rule XIII
of the Implementing Rules and Regulations of the Labor Code and in line with ruling in King of Kings Transport, Inc., where the Court
explained:

(2) After serving the first notice, the employers should schedule and conduct a hearing or conference wherein the employees will be
given the opportunity to: (1) explain and clarify their defenses to the charge against them; (2) present evidence in support of their
defenses; and (3) rebut the evidence presented against them by the management. During the hearing or conference, the employees
are given the chance to defend themselves personally, with the assistance of a representative or counsel of their choice. Moreover, this
conference or hearing could be used by the parties as an opportunity to come to an amicable settlement. [31]

While petitioners did not submit any written explanation to the charges, it is incumbent for Biomedica to set the matter for hearing or
conference to hear the defenses and receive evidence of the employees. More importantly, Biomedica is duty-bound to exert efforts,
during said hearing or conference, to hammer out a settlement of its differences with petitioners. These prescriptions Biomedica failed
to satisfy.

Lastly, Biomedica again deviated from the dictated contents of a written notice of termination as laid down in Sec. 2, Book V, Rule XIII
of the Implementing Rules that it should embody the facts and circumstances to support the grounds justifying the termination. As
amplified in King of Kings Transport, Inc.:

(3) After determining that termination of employment is justified, the employers shall serve the employees a written notice of
termination indicating that: (1) all circumstances involving the charge against the employees have been considered; and (2) grounds
have been established to justify the severance of their employment. [32]

The November 26, 2006 Notice of Termination issued by Biomedica miserably failed to satisfy the requisite contents of a valid notice of
termination, as it simply mentioned the failure of petitioners to submit their respective written explanations without discussing the facts
and circumstances to support the alleged violations of Secs. 6, 8, 12, 18 and 25 of Category Four, Art. XI of the alleged company rules.

All told, Biomedica made mincemeat of the due process requirements under the Implementing Rules and the King of Kings Transport,
Inc. ruling by simply not following any of their dictates, to the extreme prejudice of petitioners.

Petitioners were denied substantive due process

In any event, petitioners were also not afforded substantive due process, that is, they were illegally dismissed.

The just causes for the dismissal of an employee are exclusively found in Art. 282(a) of the Labor Code, which states:

ARTICLE 282. Termination by employer. – An employer may terminate an employment for any of the following causes:

(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection
with his work.

It was on this ground that the CA upheld the dismissal of petitioners from their employment. Serious misconduct, as a justifying ground
for the dismissal of an employee, has been explained in Aliviado v. Procter & Gamble, Phils., Inc.:[33]

Misconduct has been defined as improper or wrong conduct; the transgression of some established and definite rule of action,
a forbidden act, a dereliction of duty, unlawful in character implying wrongful intent and not mere error of judgment. The
misconduct to be serious must be of such grave and aggravated character and not merely trivial and unimportant. To be a just cause
for dismissal, such misconduct (a) must be serious; (b) must relate to the performance of the employee’s duties; and (c) must show that
the employee has become unfit to continue working for the employer.

13
Clearly, to justify the dismissal of an employee on the ground of serious misconduct, the employer must first establish that the
employee is guilty of improper conduct, that the employee violated an existing and valid company rule or regulation, or that the
employee is guilty of a wrongdoing. In the instant case, Biomedica failed to even establish that petitioners indeed violated company
rules, failing to even present a copy of the rules and to prove that petitioners were made aware of such regulations. In fact, from the
records of the case, Biomedica has failed to prove that petitioners are guilty of a wrongdoing that is punishable with termination from
employment. Art. 277(b) of the Labor Code states, “The burden of proving that the termination was for a valid or authorized cause shall
rest on the employer.” In the instant case, Biomedica failed to overcome such burden. As will be shown, petitioners’ absence on
November 7, 2006 cannot be considered a mass leave, much less a strike and, thus, cannot justify their dismissal from employment.

Petitioners did not stage a mass leave

The accusation is for engaging in a mass leave tantamount to an illegal strike.

The term “Mass Leave” has been left undefined by the Labor Code. Plainly, the legislature intended that the term’s ordinary sense be
used. “Mass” is defined as “participated in, attended by, or affecting a large number of individuals; having a large-scale
character.”[34] While the term “Leave” is defined as “an authorized absence or vacation from duty or employment usually with pay.” [35]

Thus, the phrase “mass leave” may refer to a simultaneous availment of authorized leave benefits by a large number of employees in a
company.

It is undeniable that going on leave or absenting one’s self from work for personal reasons when they have leave benefits available is
an employee’s right. In Davao Integrated Port Stevedoring Services v. Abarquez, [36] the Court acknowledged sick leave benefits as a
legitimate economic benefit of an employee, carrying a purpose that is at once legal as it is practical:

Sick leave benefits, like other economic benefits stipulated in the CBA such as maternity leave and vacation leave benefits, among
others, are by their nature, intended to be replacements for regular income which otherwise would not be earned because an employee
is not working during the period of said leaves. They are non-contributory in nature, in the sense that the employees contribute nothing
to the operation of the benefits. By their nature, upon agreement of the parties, they are intended to alleviate the economic condition of
the workers.

In addition to sick leave, the company, as a policy or practice or as agreed to in a CBA, grants vacation leave to employees. Lastly,
even the Labor Code grants a service incentive leave of 5 days to employees. Moreover, the company or the CBA lays down the
procedure in the availment of the vacation leave, sick leave or service incentive leave.

In the factual milieu at bar, Biomedica did not submit a copy of the CBA or a company memorandum or circular showing the authorized
sick or vacation leaves which petitioners can avail of. Neither is there any document to show the procedure by which such leaves can
be enjoyed. Absent such pertinent documentary evidence, the Court can only conclude that the availment of petitioners of their
respective leaves on November 7, 2006 was authorized, valid and in accordance with the company or CBA rules on entitlement to and
availment of such leaves. The contention of Biomedica that the enjoyment of said leaves is in reality an illegal strike does not hold
water in the absence of strong controverting proof to overturn the presumption that “a person is innocent of x x x wrong.”[37] Thus, the
individual leaves of absence taken by the petitioners are not such absences that can be regarded as an illegal mass action.

Moreover, a mass leave involves a large number of people or in this case, workers.

Here, the five (5) petitioners were absent on November 7, 2006. The records are bereft of any evidence to establish how many workers
are employed in Biomedica. There is no evidence on record that 5 employees constitute a substantial number of employees of
Biomedica. And, as earlier stated, it is incumbent upon Biomedica to prove that petitioners were dismissed for just causes, this includes
the duty to prove that the leave was large-scale in character and unauthorized. This, Biomedica failed to prove.

Having failed to show that there was a mass leave, the Court concludes that there were only individual availment of their leaves by
petitioners and they cannot be held guilty of any wrongdoing, much less anything to justify their dismissal from employment. On this
ground alone, the petition must be granted.

Petitioners did not go on strike

Granting for the sake of argument that the absence of the 5 petitioners on November 7, 2006 is considered a mass leave, still, their
actions cannot be considered a strike.

Art. 212(o) of the Labor Code defines a strike as “any temporary stoppage of work by the concerted action of employees as a result
of any industrial or labor dispute.”

“Concerted” is defined as “mutually contrived or planned” or “performed in unison.” [38] In the case at bar, the 5 petitioners went on leave
for various reasons. Petitioners were in different places on November 7, 2006 to attend to their personal needs or affairs. They did not
go to the company premises to petition Biomedica for their grievance. To demonstrate their good faith in availing their leaves, petitions
reported for work and were at the company premises in the afternoon after they received text messages asking them to do so. This
shows that there was NO intent to go on strike. Unfortunately, they were barred from entering the premises and were told to look for
new jobs. Surely the absence of petitioners in the morning of November 7, 2006 cannot in any way be construed as a concerted action,
as their absences are presumed to be for valid causes, in good faith, and in the exercise of their right to avail themselves of CBA or
company benefits. Moreover, Biomedica did not prove that the individual absences can be considered as “temporary stoppage of
work.” Biomedica’s allegation that the mass leave “paralyzed the company operation on that day” has remained unproved. It is
erroneous, therefore, to liken the alleged mass leave to an illegal strike much less to terminate petitioners’ services for it.

Notably, the CA still ruled that petitioners went on strike as evidenced by the explanation letters of Angeles and Casimiro sent by
Biomedica. They stated in the letters that they, along with petitioners, agreed to go on leave on the birthday on Motol to stress their
demands against the company.

These statements do not deserve much weight and credit.

Sec. 11(c) of the 2011 NLRC Rules of Procedure relevantly provides:

14
SECTION 11. SUBMISSION OF POSITION PAPER AND REPLY. – x x x

xxxx

c) The position papers of the parties shall cover only those claims and causes of action stated in the complaint or amended complaint,
accompanied by all supporting documents, including the affidavits of witnesses, which shall take the place of their direct
testimony, excluding those that may have been amicably settled. (Emphasis supplied.)

In the instant case, the CA accepted as evidence the explanation letters issued by Angeles and Casimiro when these are not notarized.
While notarization may seem to be an inconsequential requirement considering that the Labor Arbiter and the NLRC are not strictly
bound by technical rules of evidence, however, mere explanation letters submitted to the company that the authors issued even before
the case was filed before the NLRC cannot be accepted as direct testimony of the authors. The requirement that the direct testimony
can be contained in an affidavit is to ensure that the affiant swore under oath before an administering officer that the statements in the
affidavit are true. The affiant knows that he or she can be charged criminally for perjury under solemn affirmation or at least he or she
is bound to his or her oath. Thus, the affidavits or sworn statements of these employees should have been presented. At the very least,
the workers should have been summoned to testify on such letters. Ergo, these letters cannot be the sole basis for the finding that
petitioners conducted a strike against Biomedica and for the termination of their employment. Lastly, the explanation letters cannot
overcome the clear and categorical statements made by the petitioners in their verified positions papers. As between the verified
statements of petitioners and the unsworn letters of Angeles and Casimiro, clearly, the former must prevail and are entitled to great
weight and value.

Finally, it cannot be overemphasized that in case of doubt, a case should be resolved in favor of labor. As aptly stated in Century
Canning Corporation v. Ramil:[39]

x x x Unsubstantiated suspicions, accusations, and conclusions of employers do not provide for legal justification for dismissing
employees. In case of doubt, such cases should be resolved in favor of labor, pursuant to the social justice policy of labor laws and the
Constitution.

Biomedica has failed to adduce substantial evidence to prove that petitioners’ dismissal from their employment was for a just or
authorized cause. The conclusion is inescapable that petitioners were illegally dismissed.

Dismissal is not the proper penalty

But setting aside from the nonce the facts established above, the most pivotal argument against the dismissal of petitioners is that the
penalty of dismissal from employment cannot be imposed even if we assume that petitioners went on an illegal strike. It has not been
shown that petitioners are officers of the Union. On this issue, the NLRC correctly cited Gold City Integrated Port Service, Inc. v.
NLRC,[40] wherein We ruled that: “An ordinary striking worker cannot be terminated for mere participation in an illegal strike. There must
be proof that he committed illegal acts during a strike.”

In the instant case, Biomedica has not alleged, let alone, proved the commission by petitioners of any illegal act during the alleged
mass leave. There being none, the mere fact that petitioners conducted an illegal strike cannot be a legal basis for their dismissal.

Petitioners are entitled to separation pay in lieu of

reinstatement, backwages and nominal damages

Given the illegality of their dismissal, petitioners are entitled to reinstatement and backwages as provided in Art. 279 of the Labor Code,
which states:

An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges
and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his
compensation was withheld from him up to the time of his actual reinstatement.

Thus, the Court ruled in Golden Ace Builders v. Talde,[41] citing Macasero v. Southern Industrial Gases Philippines:[42]

Thus, an illegally dismissed employee is entitled to two reliefs: backwages and reinstatement. The two reliefs provided are separate
and distinct. In instances where reinstatement is no longer feasible because of strained relations between the employee and the
employer, separation pay is granted. In effect, an illegally dismissed employee is entitled to either reinstatement, if viable, or separation
pay if reinstatement is no longer viable, and backwages.

The normal consequences of respondents’ illegal dismissal, then, are reinstatement without loss of seniority rights, and
payment of backwages computed from the time compensation was withheld up to the date of actual reinstatement. Where
reinstatement is no longer viable as an option, separation pay equivalent to one (1) month salary for every year of service
should be awarded as an alternative. The payment of separation pay is in addition to payment of backwages. (Emphasis
supplied.)

Petitioners were absent from work on Motol’s birthday. Respondent Motol, in the course of denying entry to them on November 8,
2006, uttered harsh, degrading and bad words. Petitioners were terminated in swift fashion and in gross violation of their right to due
process revealing that they are no longer wanted in the company. The convergence of these facts coupled with the filing by petitioners
of their complaint with the DOLE shows a relationship governed by antipathy and antagonism as to justify the award of separation pay
in lieu of reinstatement. Thus, in addition to backwages, owing to the strained relations between the parties, separation pay in lieu of
reinstatement would be proper. In Golden Ace Builders, We explained why:

Under the doctrine of strained relations, the payment of separation pay is considered an acceptable alternative to reinstatement when
the latter option is no longer desirable or viable. On one hand, such payment liberates the employee from what could be a highly
oppressive work environment. On the other hand, it releases the employer from the grossly unpalatable obligation of maintaining in its
employ a worker it could no longer trust.

Strained relations must be demonstrated as a fact, however, to be adequately supported by evidence — substantial evidence to show
that the relationship between the employer and the employee is indeed strained as a necessary consequence of the judicial
controversy.[43]
15
And in line with prevailing jurisprudence,[44] petitioners are entitled to nominal damages in the amount of PhP 30,000 each for
Biomedica’s violation of procedural due process.

WHEREFORE, the Decision dated June 25, 2010 and the Resolution dated September 20, 2010 of the CA in CA-G.R. SP No. 108205
are hereby REVERSED and SET ASIDE. The Decision dated November 21, 2008 of the NLRC in NLRC LAC No. 08-002836-08 is
hereby REINSTATED with MODIFICATION. As modified, the November 21, 2008 NLRC Decision shall read, as follows:

WHEREFORE, in view of the foregoing, judgment is hereby rendered modifying the assailed Decision [of the Labor Arbiter] dated
[March 31, 2008];

(a) DECLARING the Complainants to have been illegally dismissed for lack of just cause;

(b) ORDERING Respondents jointly and solidarily to pay Complainants separation pay in lieu of reinstatement computed on the basis
of one (1) month pay for every year of service from date of employment up to November 29, 2006 (the date of complainants illegal
dismissal);

(c) ORDERING Respondents jointly and solidarily to pay Complainants backwages from November 29, 2006 up to the finality of this
Decision;

(d) ORDERING the Respondents jointly and solidarily to pay Complainants the following:
1. Unpaid salary for the period 08-15 November 2006;
2. Pro-rated 13th month pay for 2006;
3. Service Incentive Leave for 2006 (except for complainant Bardaje);
4. Unpaid commissions based on their sales for the years 2005 and 2006; and
5. Nominal damages in the amount of PhP 30,000 each.
(e) ORDERING the Respondents jointly and solidarily to pay Complainants attorney’s fees in the amount of 10% of the total award of
monetary claims.

All other claims and counterclaims are dismissed for lack of factual and legal basis.

The NLRC is ordered to recompute the monetary awards due to petitioners based on the aforelisted dispositions deducting from the
awards to Naranjo and Pimentel their cash advances of PhP4,750.00 and PhP4,500.00, respectively.

SO ORDERED.

No costs.

SO ORDERED.

Velasco, Jr., (Chairperson), Peralta, Abad, Perez,* and Mendoza, JJ., concur.

* Additional member per Special Order No. 1299 dated August 28, 2012.
[1]
Rollo, pp. 55-63. Penned by Associate Justice Florito S. Macalino and concurred in by Associate Justices Juan Q. Enriquez and
Ramon M. Bato, Jr.
[2] Id. at 64.
[3]
Id. at 314-329. Penned by Commissioner Gregorio O. Bilog, III and concurred in by Commissioners Lourdes C. Javier and Pablo C.
Espiritu.
[4] Id. at 265-282.
[5] Id. at 266-267.
[6] Id. at 113.
[7] Id. at 118.
[8] Id. at 110.
[9] Id. at 107.
[10] Id. at 103.
[11] Id. at 174.
[12] Id. at 315.
[13] Id. at 316.
[14] Id. at 142.
[15] Id. at 104, 107, 111, 114 & 119.
[16]
Id. at 143, 145, 147 & 149.

16
[17] Id. at 264-284.
[18] Id. at 282.
[19] Id. at 314-329.
[20]This should be March 31, 2008. April 11, 2008 refers to the date of the Notice of Judgment/Decision for the March 31, 2008 Decision
of the Labor Arbiter.
[21] Rollo, pp. 328-329.
[22] Id. at 344-345.
[23] Id. at 63.
[24] Id. at 24-25.
[25] Constitution, Art. XIII, Sec. 3.
[26] Mansion Printing Center v. Bitara, Jr., G.R. No. 168120, January 25, 2012.
[27] G.R. No. 166208, June 29, 2007, 526 SCRA 116, 123-127.
[28]
Rollo, p. 142.
[29] Id. at 60.
[30] Supra note 27, at 125.
[31] Id. at 125-126.
[32] Id. at 126.
[33] G.R. No. 160506, March 9, 2010,614 SCRA 563, 583-584.
[34] Webster’s Third New International Dictionary (1981).
[35] Id. at 1287.
[36] G.R. No. 102132, March 19, 1993, 220 SCRA 197, 207.
[37] Rules of Court, Rule 131(a).
[38] Webster’s Third New International Dictionary 470 (1981).
[39] G.R. No. 171630, August 8, 2010, 627 SCRA 192, 202.
[40] G.R. No. 103560, July 6, 1995, 245 SCRA 627, 637.
[41] G.R. No. 187200, May 5, 2010, 620 SCRA 283, 289.
[42] G.R. No. 178524, January 30, 2009, 577 SCRA 500, 507.
[43] Supra note 41.
[44] Aliling v. Feliciano, G.R. No. 185829, April 25, 2012.

17
18