COMPLEX ELECTRONICS EMPLOYEES ASSOCIATION v NLRC The Union anchors its position on the fact that Lawrence Qua
n the fact that Lawrence Qua is both
G.R. No. 121315-6; July 19, 1999
Doctrine:
1. A "runaway shop" is defined as an industrial plant moved by its
owners from one location to another to escape union labor regulations
or state laws, but the term is also used to describe a plant removed to
a new location in order to discriminate against employees at the old
plant because of their union activities.
2. The purpose of the notice requirement is to enable the proper
authorities to determine after hearing whether such closure is being
done in good faith, i.e., for bona fide business reasons, or whether, to
the contrary, the closure is being resorted to as a means of evading
compliance with the just obligations of the employer to the employees
affected.
Facts:
Due to losses on production of the petitioner, it was constrained to
cease operations. In the evening of April 6, 1992, the machinery,
equipment and materials being used for production at Complex were
pulled-out from the company premises and transferred to the premises
of Ionics Circuit, Inc. (Ionics) at Cabuyao, Laguna. The following day,
a total closure of company operation was effected at Complex.
A complaint was, thereafter, filed with the Labor Arbitration Branch of
the NLRC for unfair labor practice, illegal closure/illegal lockout, money
claims for vacation leave, sick leave, unpaid wages, 13th month pay,
damages and attorney’s fees. The Union alleged that the pull-out of
the machinery, equipment and materials from the company premises,
which resulted to the sudden closure of the company was in violation
of Section 3 and 8, Rule XIII, Book V of the Labor Code of the
Philippines and the existing CBA. Ionics was impleaded as a party
defendant because the officers and management personnel of Complex
were also holding office at Ionics with Lawrence Qua as the President
of both companies.
1|Page
the president of Complex and Ionics and that both companies have the
same set of Board of Directors. It claims that business has not ceased
at Complex but was merely transferred to Ionics, a runaway shop. To
prove that Ionics was just a runaway shop, petitioner asserts that out
of the 80,000 shares comprising the increased capital stock of Ionics,
it was Complex that owns majority of said shares with P1,200,000.00
as its capital subscription and P448,000.00 as its paid up investment,
compared to P800,000.00 subscription andP324,560.00 paid-up owing
to the other stockholders, combined. Thus, according to the Union,
there is a clear ground to pierce the veil of corporate fiction.
Issue:
1. Whether or not Ionics is merely a runaway shop
2. Whether or not there was ULP
Ruling:
1. The Union’s contentions are untenable.
A "runaway shop" is defined as an industrial plant moved by its owners
from one location to another to escape union labor regulations or state
laws, but the term is also used to describe a plant removed to a new
location in order to discriminate against employees at the old plant
because of their union activities. It is one wherein the employer moves
its business to another location or it temporarily closes its business for
anti-union purposes. A "runaway shop" in this sense, is a relocation
motivated by anti-union animus rather than for business reasons. In
this case, however, Ionics was not set up merely for the purpose of
transferring the business of Complex. At the time the labor dispute
arose at Complex, Ionics was already existing as an independent
company. As earlier mentioned, it has been in existence since July 5,
1984. It cannot, therefore, be said that the temporary closure in
Complex and its subsequent transfer of business to Ionics was for anti-
union purposes. The Union failed to show that the primary reason for
the closure of the establishment was due to the union activities of the
employees.
The mere fact that one or more corporations are owned or controlled
by the same or single stockholder is not a sufficient ground for
disregarding separate corporate personalities. 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.

2. The purpose of the notice requirement is to enable the proper

authorities to determine after hearing whether such closure is being
done in good faith, i.e., for bona fide business reasons, or whether, to
the contrary, the closure is being resorted to as a means of evading
compliance with the just obligations of the employer to the employees
affected. 28

While the law acknowledges the management prerogative of closing

the business, it does not, however, allow the business establishment to
disregard the requirements of the law. The case of Magnolia Dairy
Products v. NLRC is quite emphatic about this.

The law authorizes an employer, like the herein petitioners, to

terminate the employment of any employee due to the installation of
labor saving devices. The installation of these devices is a management
prerogative, and the courts will not interfere with its exercise in the
absence of abuse of discretion, arbitrariness, or maliciousness on the
part of management, as in this case. Nonetheless, this did not excuse
petitioner from complying with the required written notice to the
employee and to the Department of Labor and Employment (DOLE) at
least one month before the intended date of termination. This
procedure enables an employee to contest the reality or good faith
character of the asserted ground for the termination of his services
before the DOLE.

The failure of petitioner to serve the written notice to private

respondent and to the DOLE, however, does not ipso facto make
private respondent’s termination from service illegal so as to entitle her
to reinstatement and payment of backwages. If at all, her termination
from service is merely defective because it was not tainted with bad
faith or arbitrariness and was due to a valid cause.

2|Page
ASSOCIATED LABOR UNION v JUDGE JOSE C. BORROMEO
G.R. No. L-26461 November 27, 1968
Doctrine:
The courts of law have no jurisdiction to act on labor cases or various
incidents arising therefrom. That is basic and elementary. Jurisdiction
to try and adjudicate such cases pertains exclusively to the proper
labor officials of the Department of Labor
Jurisdiction is vested bylaw and not by the demands of emergency.
Facts:
It appears that on June 24, 1986, as a consequence of a controversy
arising from charges of unfair labor practices against the respondent,
BELYCA Corporation, the petitioner filed a notice of strike with the then
Ministry of Labor and Employment.
On the same date, the private respondent commenced suit for
injunction with the respondent RTC. It alleged that the petitioner had
obstructed free ingress to the firm's premises, "preventing workers of
Belyca farms from entering the business establishments ... preventing
said workers from giving feeds and/or food to the hogs and fowls which
would kill all of said hogs and fowls if not attended to this very day
..." (The private respondent maintains "about 7,500 hogs and with
8,000 fowls with a total value of about P10,000.00." ) On the same day,
the respondent judge issued a temporary restraining order (TRO)
"commanding herein defendants [the striking workers], their agents
and/or representatives to allow plaintiff [the private-respondent) or
workers or authorized representatives free passage to and from Belyca
Farms, located at Kalasungay Malaybalay, Bukidnon to feed plaintiffs
seven thousand five hundred (7,500) hogs and eight thousand (8,000)
fowls."
On August 4, 1986, the petitioner filed a motion for reconsideration (to
lift TRO as well as for the dismissal of the case on the ground of lack
of jurisdiction. On August 14, 1986, the respondent judge denied the
motion.
3|Page
Issue:
Whether or not the RTC has Jurisdiction over Labor Cases?
Ruling:
No. The courts of law have no jurisdiction to act on labor cases or
various incidents arising therefrom. That is basic and elementary.
Jurisdiction to try and adjudicate such cases pertains exclusively to the
proper labor officials of the Department of Labor.
The respondent judge cannot enjoin acts carried out as a consequence
of the strike without unavoidably ruling on the legality of the strike
itself. (“The strike can continue. It does not mean that this Court has
ruled on the legality or illegality of the said strike.”) To say indeed that
the workers had obstructed free passage to the strike-bound firm, is by
necessity, to say that the strike was illegal, notwithstanding the judge’s
own words of caution (that he was not ruling on the legality or illegality
of the strike.
The fact that the poultry and piggery maintained by the private
respondent required close care and attention does not warrant the
respondent judge’s assumption of jurisdiction. It did not confer on him
the competence he did not have. Jurisdiction is vested by law and not
by the demands of emergency.
Judge committed a grave abuse of discretion.—This is not, of course,
to say that the strike in question was, ergo, legal. As we said, concerted
acts of labor are the domain of the labor officials, not the judiciary.
Assuming, then, that the private respondent had cause for complaint—
and that the strike was illegal or had become illegal as a result of the
strikers’ resort to illegal acts—the courts are not the proper forum for
it. The gross haste, furthermore, with which the challenged TRO was
issued (it was issued on the same day the complaint was filed)—and
based on the bare word alone of Belyca (that the strikers had behaved
unlawfully in the course of the strike)—has not eluded this Court. This
is a grave abuse of discretion. Plainly, it denied the workers due process
of law.
Panay Electric Company Inc. vs. NLRC
G.R. No. 102672 October 4, 1995
Doctrine:
The State guarantees the right of all workers to self-organization,
collective bargaining and negotiations, as well as peaceful concerted
activities, including the right to strike, in accordance with law.7 The
right to strike, however, is not absolute. It has heretofore been held
that a "no strike, no lock-out" provision in the Collective Bargaining
Agreement ("CBA") is a valid stipulation although the clause may be
invoked by an employer only when the strike is economic in nature or
one which is conducted to force wage or other concessions from the
employer that are not mandated to be granted by the law itself.
Facts:
On 30 October 1990, petitioner Panay Electric Company, Inc., posted
in its premises a notice announcing the need for a "Report Clerk" who
could assume the responsibility of gathering accounting and computer
data at its power plant. When nobody applied for the position, the
EDP/Personnel Manager recommended Enrique Huyan who was at the
time an Administrative Personnel Assistant at the head office. Huyan
was then also a Vice President of respondent union. The
recommendation was approved by the company's President and
General Manager.
In a letter, dated 09 November 1990, Enrique Huyan informed
petitioner that he was not interested in accepting the new position for
he sees it as a demotion on his part. Eventually, on 03 December 1990,
Huyan was given a "notice of dismissal" for gross insubordination.
Respondent union, on 20 December 1990, filed a notice of strike.
On 02 January 1990, a strike vote was taken where 113 out of 149
union members voted; the result showed 108 "yes" votes, 1 "no" vote,
and 4 abstentions. On 22 January 1991, the union went on strike.
Forthwith, the company filed a petition to declare the strike illegal. On
25 January 1991, upon receipt of an order from the Secretary of Labor
and Employment certifying the dispute to the NLRC, the union lifted its
strike and, on the day following, the striking employees, including
Huyan, reported for work.
4|Page
In its position paper and memorandum before the NLRC, the union
averred that the real reason for ordering the transfer of Huyan was to
penalize him for his union activities, particularly for being the suspected
"Mao," author of the column "Red Corner," in the Union's New Digest
which featured an item on alleged wrongdoings by top company
officials at the power plant.
Petitioner company, in turn, maintained hat in declaring a strike, the
Union, including its officers and members, committed a serious breach
of the "no strike, no lock out clause," of the Collective Bargaining
Agreement ("CBA"); and that during the strike, illegal acts were
committed by the union officers and members.
Issue:
Whether or not the strike conducted by the Union from January 22 to
25, 1991 to be illegal as the same was staged in violation of the no
strike, no lock-out clause in the Collective Bargaining Agreement.
Held:
The State guarantees the right of all workers to self-organization,
collective bargaining and negotiations, as well as peaceful concerted
activities, including the right to strike, in accordance with law. The right
to strike, however, is not absolute.
It has heretofore been held that a "no strike, no lock-out" provision in
the Collective Bargaining Agreement ("CBA") is a valid stipulation
although the clause may be invoked by an employer only when the
strike is economic in nature or one which is conducted to force wage
or other concessions from the employer that are not mandated to be
granted by the law itself.
It would be inapplicable to prevent a strike which is grounded on unfair
labor practice. In this situation, it is not essential that the unfair labor
practice act has, in fact, been committed; it suffices that the striking
workers are shown to have acted honestly on an impression that the
company has committed such unfair labor practice and the surrounding
circumstances could warrant such a belief in good faith.
-

5|Page
6|Page