G.R.

NO. 140992 - March 25, 2004

SAMAHANG MANGGAGAWA SA SULPICIO LINES, INC.NAFLU, RODOLFO ALINDATO, ROQUE TAN, JESSIE LIM, SUSAN TOPACIO, LYDDA PASCUAL,
BERNARDO ALCANTARA, GELACIO DESQUITADO, RODRIGO AVELINO, LEONARDO ANDRADE, DANILO CHUA, AMANDO EUGENIO, CALVIN LOPEZ,
ANDRES BASCO, JR., and CIRILO ALON, Petitioners, v. SULPICIO LINES, INC., Respondents.

D E C I S I O N

SANDOVAL-GUTIERREZ, J.:

A strike is a powerful weapon of the working class. But like a sensitive explosive, it must be handled carefully, lest it blows up in the workers own
hands.1 Thus, the right to strike has to be pursued within the bounds of law.

For our resolution is the instant Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, assailing the
Decision2 dated May 28, 1999 and the Resolution3 dated November 25, 1999 rendered by the Court of Appeals in CA-G.R. SP No. 51322, entitled
"Samahang Manggagawa sa Sulpicio Lines, Inc. NAFLU v. National Labor Relations Commission and Sulpicio Lines, Inc."

The factual antecedents as gleaned from the records are:

On February 5, 1991, Sulpicio Lines, Inc. (herein respondent) and the Samahang Manggagawa sa Sulpicio Lines Inc. NAFLU (herein petitioner)
executed a collective bargaining agreement (CBA) with a term of five (5) years (from October 17, 1990 to October 16, 1995).

After three (3) years or on December 15, 1993, petitioner union and respondent company started their negotiation on the CBAs economic
provisions.4 But this negotiation remained at stalemate.

On March 1, 1994, petitioner filed with the National Conciliation and Mediation Board (NCMB), National Capital Region, a notice of strike due to
collective bargaining deadlock, docketed as NCMB-NCR-NS-03-118-94.

For its part, respondent, on March 21, 1994, filed with the Office of the Secretary, Department of Labor and Employment a petition praying that
the Labor Secretary assume jurisdiction over the controversy.

On March 23, 1994, former Labor Secretary Nieves R. Confesor issued an Order assuming jurisdiction over the labor dispute pursuant to Article 263
(g) of the Labor Code, as amended, thus:

"WHEREFORE PREMISES CONSIDERED, this Office assumes jurisdiction over the labor dispute at Sulpicio Lines, Inc. pursuant to Article 263 (g) of the
Labor Code, as amended.

"Accordingly, any strike or lockout whether actual or intended is hereby enjoined.

"Further, the parties are directed to cease and desist from committing any and all acts that might exacerbate the situation.

"SO ORDERED."

Meanwhile, on May 20, 1994, petitioner filed with the NCMB a second notice of strike alleging that respondent company committed acts5
constituting unfair labor practice amounting to union busting, docketed as NCMB NCR-05-261-94.

Provoked by respondents alleged unfair labor practice/s, petitioner union immediately conducted a strike vote. Thus, on May 20, 1994, about 9:30
oclock in the morning, 167 rank-and-file employees, officers and members of petitioner, did not report for work and instead gathered in front of
Pier 12, North Harbor at Manila.

As a remedial measure, former Labor Secretary Confesor issued an Order dated May 20, 1994 directing the striking employees to return to work;
and certifying the labor dispute to the National Labor Relations Commission (NLRC) for compulsory arbitration. This certified labor dispute was
docketed as NLRC Case No. CC-0083-94.

Meanwhile, respondent company filed with the NLRC a complaint for "illegal strike/clearance for termination," docketed as NLRC NCR Case No. 00-
05-04705-94.

On September 29, 1995, the NLRC issued a Resolution6 declaring the strike of petitioners officers and members illegal, with notice to respondent of
the option to terminate their (petitioners officers) employment. In the same Resolution, the NLRC dismissed petitioners complaint against
respondent, thus:

"WHEREFORE, premises considered, after a careful and judicious consideration of the facts, arguments and evidence thus adduced, it is the
considered opinion of thie Commission that the union (Samahang Manggagawa sa Sulpicio Lines, Inc.) had clearly engaged in an illegal strike on
May 20, 1994, when its officers and members actively participated in a well concerted refusal, stoppage and cessation to render work at Sulpicio
1
Lines, Inc.. In clear violation not only of the procedural requirements of a valid strike, but worse, in clear and blatant contravention of the
assumption order of the Secretary of Labor and Employment. Consequently, the following union officers named in the complaint, to wit:

1) Allan F. Aguhar
9) Rodrigo Avelino
2) Rodolfo Alindato
10) Leonardo Andrade
3) Roque Tan
11) Danilo Chua
4) Jessie Lim
12) Amando Eugenio
5)Susan Topacio
13) Calvin Lopez
6) Lydda Pascual
14) Andres Rasco, Jr.
7) Bernardo Alcantara
15) Cirilo Alon
8) Gelacio Dequitado

are declared to have lost their employment status with the company, and the latter may now, if it so desires, terminate their employment with it.
The unions complaint against the company is hereby DISMISSED for lack of merit.

"SO ORDERED."

Petitioner filed a motion for reconsideration but was denied by the NLRC in a Resolution7 dated January 15, 1996.

On March 19, 1996, petitioner filed with this Court a petition for certiorari assailing the NLRC Resolutions. Pursuant to our ruling in St. Martins
Funeral Home v. NLRC,8 we referred the petition to the Court of Appeals for its appropriate action and disposition.

On May 28, 1999, the Court of Appeals rendered a Decision affirming the NLRC Resolutions. The Appellate Court held (1) that the NLRC has
jurisdiction to resolve the issue of legality of the strike; (2) that the May 20, 1994 temporary work stoppage by the officers and members of
petitioner amounted to an illegal strike; (3) that even assuming that respondent committed unfair labor practice/s, still, the strike is illegal because
it failed to comply with the mandatory procedural requirements of a valid strike under Article 263 (c) and (f) of the Labor Code, as amended; and
(4) that the dismissal of petitioners officers who knowingly participated in an illegal strike is in accordance with Article 264 (a) of the Labor Code, as
amended.

On October 20, 1995, petitioner filed a motion for reconsideration but was denied by the Court of Appeals in a Resolution dated November 25,
1999.

Hence, this Petition for Review on Certiorari . Petitioner alleged that the Court of Appeals seriously erred (1) in holding that the one-day work
stoppage of petitioners officers and members is an illegal strike; (2) in sustaining the dismissal from the service of its officers; and (3) in ruling that
the NLRC has jurisdiction over a petition to declare the strike illegal.

The basic issue for our determination is whether the strike staged by petitioners officers and members is illegal. Articles 263 and 264 of the Labor
Code, as amended, provide:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

"ART. 263. STRIKES, PICKETING AND LOCKOUTS.

x x x

(c) In cases of bargaining deadlocks, the duly certified or recognized bargaining agent may file a notice of strike x x x with the Ministry (now
Department) at least 30 days before the intended date thereof. In cases of unfair labor practice, the period of notice shall be 15 days and in the
absence of a duly certified or recognized bargaining agent, the notice of strike may be filed by any legitimate labor organization in behalf of its
members. However, in case of dismissal from employment of union officers duly elected in accordance with the union constitution and by-laws,
which may constitute union busting where the existence of the union is threatened, the 15-day cooling-off period shall not apply and the union
may take action immediately.

x x x

(f) A decision to declare a strike must be approved by a majority of the total union membership in the bargaining unit concerned, obtained by
secret ballot in meetings or referenda called for that purpose. x x x. The decision shall be valid for the duration of the dispute based on substantially
the same grounds considered when the strike or lockout vote was taken. The Ministry (now Department) may at its own initiative or upon the
request of any affected party, supervise the conduct of the secret balloting. In every case, the union x x x shall furnish the Ministry (now
Department) the results of the voting at least seven days before the intended strike or lockout, subject to the cooling-off period herein provided.
2

x x x.

ART. 264. PROHIBITED ACTIVITIES.

(a) No labor organization or employer shall declare a strike or lockout without first having bargained collectively in accordance with Title VII of this
Book or without first having filed the notice required in the preceding article or without the necessary strike or lockout vote first having been
obtained and reported to the Ministry (now Department).

x x x."

Following are the Implementing Guidelines of the above provisions issued by the Department of Labor and Employment:

1. A strike shall be filed with the Department of Labor and Employment at least 15 days if the issues raised are unfair labor practice or at least 30
days if the issue involved bargaining deadlock. However, in case of dismissal from employment of union officers duly elected in accordance with
the union constitution and by-laws, which may constitute union busting where the existence of the union is threatened, the 15-day cooling-off
period shall not apply and the union may take action immediately;chanroblesvirtuallawlibrary

2. The strike shall be supported by a majority vote of the members of the union obtained by secret ballot in a meeting called for the purpose;
andcralawlibrary

3. A strike vote shall be reported to the Department of Labor and Employment at least seven (7) days before the intended strike.

There is no showing that the petitioner union observed the 7-day strike ban; and that the results of the strike vote were submitted by petitioners to
the Department of Labor and Employment at least seven (7) days before the strike.
We thus hold that for failing to comply with the mandatory requirements of Article 263 (c) and (f) of the Labor Code, the strike mounted by
petitioner union on May 20, 1994 is illegal.

In Gold City Integrated Port Service, Inc. v. NLRC,9 we stressed that "the language of the law leaves no room for doubt that the cooling-off period
and the seven-day strike ban after the strike-vote report were intended to be mandatory."

But petitioner insists that the strike can still be declared legal for it was done in good faith, being in response to what its officers and members
honestly perceived as unfair labor practice or union busting committed by respondent.

Petitioners accusation of union busting is bereft of any proof. We scanned the records very carefully and failed to discern any evidence to sustain
such charge.

In Tiu v. NLRC,10 we held:

"x x x. It is the union, therefore, who had the burden of proof to present substantial evidence to support its allegations (of unfair labor practices
committed by management) .

"x x x.

"x x x, but in the case at bar the facts and the evidence did not establish even at least a rational basis why the union would wield a strike based on
alleged unfair labor practices it did not even bother to substantiate during the conciliation proceedings. It is not enough that the union believed
that the employer committed acts of unfair labor practice when the circumstances clearly negate even a prima facie showing to warrant such a
belief."

We explained in National Federation of Labor v. NLRC11 that "with the enactment of Republic Act No. 6715 which took effect on March 21, 1989,
the rule now is that such requirements as the filing of a notice of strike, strike vote, and notice given to the Department of Labor are mandatory in
nature. Thus, even if the union acted in good faith in the belief that the company was committing an unfair labor practice, if no notice of strike and
a strike vote were conducted, the said strike is illegal."

In a desperate attempt to justify its position, petitioner insists that what transpired on May 20, 1994 was not a strike but merely a "one-day work
absence"12 or a "simple act of absenteeism".13 ςrνll

We are not convinced. A strike, as defined in Article 212 (o) of the Labor Code, as amended, means "any temporary stoppage of work by the
concerted action of employees as a result of an industrial or labor dispute." The term "strike" shall comprise not only concerted work stoppages,
but also slowdowns, mass leaves, sitdowns, attempts to damage, destroy or sabotage plant equipment and facilities, and similar activities.14 ςrνll

The basic elements of a strike are present in the case at bar. First, petitioners officers and members numbering 167, in a concerted manner, did not
report for work on May 20, 1994; second, they gathered in front of respondents office at Pier 12, North Harbor at Manila to participate in a strike
voting conducted by petitioner; and third, such union activity was an aftermath of petitioners second notice of strike by reason of respondents
3
unfair labor practice/s. Clearly, what transpired then was a strike because the cessation of work by petitioners concerted action resulted from a
labor dispute.

Invoking compassion, petitioner pleads that its officers who participated in the one-day strike should not be dismissed from the service, considering
that respondents business activities were not interrupted, much less paralyzed. While we sympathize with their plight, however, we must take care
that in the contest between labor and capital, the results achieved are fair and in conformity with the law.15 ςrνll

Pertinent is Article 264 (a) of the same Code, thus:

"ART. 264. PROHIBITED ACTIVITIES.

"x x x. Any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the
commission of illegal acts during a strike may be declared to have lost his employment status: Provided, That mere participation of a worker in a
lawful strike shall not constitute sufficient ground for termination of his employment, even if a replacement had been hired by the employer during
such lawful strike.

x x x."

It is worth reiterating that the strike is illegal for failure of petitioner to submit the strike vote to the Department of Labor and Employment at least
seven (7) days prior thereto. Also, petitioner failed to prove that respondent company committed any unfair labor practice. Amid this background,
the participation of the union officers in an illegal strike forfeits their employment status.

In Telefunken Semiconductors Employees Union-FFW v. Secretary of Labor and Employment,16 we explained

"The effects of such illegal strikes, outlined in Article 265 (now Article 264) of the Labor Code, make a distinction between workers and union
officers who participate therein.

"A union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the commission of
illegal acts during a strike may be declared to have lost their employment status. 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. A union officer, on the other hand, may be
terminated from work when he knowingly participates in an illegal strike, and like other workers, when he commits an illegal act during a strike."

Moreover, petitioner maintains that the Labor Arbiter, not the NLRC, should have taken cognizance of the case at bar. We do not agree.

In International Pharmaceuticals, Inc. v. Secretary of Labor and Employment,17 we held:

x x x [T]he Secretary was explicitly granted by Article 263 (g) of the Labor Code the authority to assume jurisdiction over a labor dispute causing or
likely to cause a strike or lockout in an industry indispensable to the national interest, and decide the same accordingly. Necessarily, this authority
to assume jurisdiction over the said labor dispute must include and extend to all questions and controversies arising therefrom, including cases
over which the Labor Arbiter has exclusive jurisdiction (underscoring supplied).

"In the same manner, when the Secretary of Labor and Employment certifies the labor dispute to the NLRC for compulsory arbitration the latter is
concomitantly empowered to resolve all questions and controversies arising therefrom including cases otherwise belonging originally and
exclusively to the Labor Arbiter."

WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court of Appeals dated May 28, 1999 and November 25, 1999 are hereby
AFFIRMED.

SO ORDERED.

Corona, and Carpio-Morales, JJ., concur.
Vitug, (Chairman), J., on official leave.



G.R. NO. 147566 : December 6, 2006
SAN MIGUEL CORPORATION, Petitioner, v. NATIONAL LABOR RELATIONS COMMISSION and RAFAEL MALIKSI, Respondents.

D E C I S I O N

GARCIA, J.:

In this Petition for Review under Rule 45 of the Rules of Court, petitioner San Miguel Corporation (SMC) seeks the reversal and setting aside of the
Decision1 dated September 30, 1999 of the Court of Appeals (CA) in CA-G.R. SP No. 50321, as reiterated in its Resolution2 of March 20, 2001,
4
affirming in toto an earlier decision of the National Labor Relations Commission (NLRC) in NLRC NCR CA No. 005478-93, entitled "Rafael C. Maliksi v.
San Miguel Corporation and/or Philippine Software Services & Education Center." The affirmed NLRC decision overturned that of the Labor Arbiter
and declared the herein private respondent Rafael Maliksi (Maliksi) a regular employee of the petitioner and ordered the latter to reinstate him
with benefits.

As found by the NLRC and subsequently adopted by the CA, the facts are as follows:

On 16 October 1990, Rafael M. Maliksi filed a complaint against the San Miguel Corporation-Magnolia Division, herein referred to as SMC and
Philippine Software Services and Education Center herein referred to as PHILSSEC to compel the said respondents to recognize him as a regular
employee. He amended the complaint on 12 November 1990 to include the charge of illegal dismissal because his services were terminated on 31
October 1990.

The complainant's employment record indicates that he rendered service with Lipercon Services from 1 April 1981 to February 1982 as budget
head assigned to SMC-Beer Division, then from July 1983 to April 1985 with Skillpower, Inc., as accounting clerk assigned to SMC-Magnolia Division,
then from October 1988 to 1989 also with Skillpower, Inc. as acting clerk assigned to SMC-Magnolia Finance, and from October 1989 to 31 October
1990 with PHILSSEC assigned to Magnolia Finance as accounting clerk. The complainant considered himself as an employee of SMC-Magnolia.
Lipercon Services, Skillpower, Inc. and PHILSSEC are labor-only contractors and any one of which had never been his employer. His dismissal,
according to him, was in retaliation for his filing of the complaint for regularization in service. His dismissal was illegal there being no just cause for
the action. He was not accorded due process neither was his dismissal reported to the Department of Labor and Employment.

PHILSSEC disclaimed liability. As an entity catering (sic) computer systems and program for business enterprises, it has contracted with SMC-
Magnolia to computerize the latter's manual accounting reporting systems of its provincial sales. PHILSSEC then conducted a three phase analysis
of SMC Magnolia set up: first the computer needs of the firm was (sic) determined; then, the development of computer systems or program
suitable; and, finally, set up the systems and train the employees to operate the same. In all these phases, PHILSSEC uses its computer system and
technology and provided the necessary manpower to compliment the transfer of the technology to SMC-Magnolia. Complainant Maliksi was one of
those employed by PHILSSEC whose principal function was the manual control of data needed during the computerization. Like all assigned to the
project, the complainant's work was controlled by PHILSSEC supervisors, his salary paid by the agency and he reported directly to PHILSSEC. The
computerization project was completed on 31 October 1990, and so, the complainant was terminated on the said date.

SMC, on the other hand, submitted its position. In the contract SMC entered with PHILSSEC, the latter undertook to set up the computerization of
the provincial sales reporting system of Magnolia Division. To carry out the task, PHILSSEC utilized 3 computer programmers and the rest were data
encoders. The complainant being one of the compliments (sic) performed the following functions:

xxx xxx xxx

SMC likewise contends that PHILSSEC exercised exclusive managerial prerogative over the complainant as to hiring, payment of salary, dismissal
and most importantly, the control over his work. SMC was interested only in the result of the work specified in the contract but not as to the means
and methods of accomplishing the same. Moreover, PHILSSEC has substantial capital of its own. It has an IBM system, 3 computers, 17 IBM or IBM-
compatible computers; it has a building where the computer training center and main office are located. What it markets to clients are computer
programs and training systems on computer technology and not the usual labor or manpower supply to establishment concerns. Moreover, what
PHILSSEC set up employing the complainant, among others, has no relation to the principal business of SMC, which is food and beverage. It was a
single relationship between the people utilized by PHILSSEC and SMC' '3

The Labor Arbiter declared Maliksi a regular employee of PHILSSEC and absolved SMC from liability. Dispositively, the Labor Arbiter's decision
reads:

WHEREFORE, the complainant, Rafael Maliksi, is recognized as a regular employee of Philippine Software Services and Education Center which
respondent is ordered to reinstate him to a job of the same level as his previous position in any of the projects where there is a vacancy and
without loss of seniority rights. A five months backwages is awarded because the prolonged suspension from his work was brought about by his
refusal to take any job offered by PHILSSEC earlier in the proceedings of this case. The respondent, SMC-Magnolia Division, is exempted from any
liability as the complaint against the said corporation is dismissed for lack of merit.

SO ORDERED.

Maliksi appealed to the NLRC. In turn, in a decision dated January 26, 1998, the NLRC reversed that of the Labor Arbiter by declaring Maliksi

a regular employee of the petitioner and ordering the latter to reinstate him without loss of seniority rights and with full benefits, to wit:

WHEREFORE, as recommended, the decision below is hereby SET ASIDE. Accordingly, judgment is hereby rendered directing respondent SMC-
Magnolia Division to reinstate complainant as a regular employee without loss of seniority rights and other privileges and to pay complainant full
backwages, inclusive of allowances and other benefits or their monetary equivalent, computed from the time his compensation was withheld from
him up to time of his actual reinstatement, plus 10% of the total money award for and attorney's fees.

SO ORDERED.5
5

From the aforementioned decision of the NLRC, SMC went on certiorari to the CA in CA-G.R. SP No. 50321.

As stated at the outset, the CA, in the herein assailed Decision6 dated September 30, 1999, affirmed in toto that of the NLRC. In so doing, the CA
found SMC to have utilized PHILSSEC, Lipercon Services, Inc. (Lipercon) and Skillpower, Inc. (Skillpower) as conduits to circumvent Article 280 of the
Labor Code, employing Maliksi as contractual or project employee through these entities, thereby undermining his right to gain regular
employment status under the law. The appellate court echoed the NLRC's assessment that Maliksi's work was necessary or desirable in the
business of SMC in its Magnolia Division, for more than the required one-year period. It affirmed the NLRC's finding that the three (3) conduit
entities adverted to, Lipercon and Skillpower, are labor-only contractors such that Maliksi's previous employment contracts with SMC, through
these two entities, are deemed to have been entered into in violation of labor laws. Consequently, Maliksi's employment with SMC became
permanent and regular after the statutory period of one year of service through these entities. The CA concluded that on account of his past
employment contracts with SMC under Lipercon and Skillpower, Maliksi was already a regular employee of SMC when he entered into SMC's
computerization project as part of the PHILSSEC project complement.

With its motion for reconsideration having been denied by the CA in its Resolution of March 20, 2001, SMC is now with this Court via the present
recourse on the following assigned errors:

I

The Court of Appeals gravely erred in declaring private respondent a regular employee of petitioner SMC despite its findings that PHILSSEC, the
contractor that employed private respondent, is an independent job contractor.

Corollarily, the declaration of the Honorable Court of Appeals that private respondent is a regular employee of petitioner SMC proceeds from the
erroneous premise that private respondent was already a regular employee of SMC when he was hired by the independent contractor PHILSSEC.
Having been placed in petitioner SMC by a supposed labor-only contractor, for just five months and for a different job, three years after his last
assignment therein, private respondent had not thereby become a regular employee of petitioner SMC.

II

The Court of Appeals gravely erred in ultimately resolving the case upon the principle that "all doubts must be resolved in favor of labor"; certainly,
protection to labor does not imply sanctioning a plain injustice to the employer, particularly where private respondent was shown to have stated
falsehoods and committed malicious intercalations and misrepresentations.

III

The Court of Appeals gravely erred in declaring that private respondent was not part of the of the personnel group in the computerization program
of petitioner SMC under PHILSSEC.

We DENY.

SMC concedes that Maliksi, before his employment with PHILSSEC, worked in SMC from November 1988 to April 1990, but as employee of
Skillpower7 and that he was previously assigned to SMC between 1981 up to February 1985, "for periods spread apart."8 The Labor Arbiter found,
as earlier stated, that Maliksi rendered service with Lipercon from 1 April 1981 to February 1982 as budget head assigned to SMC-Beer Division;
from July 1983 to April 1985 with Skillpower as accounting clerk assigned to SMC-Magnolia Division, then from October 1988 to 19899 also with
Skillpower as acting clerk assigned to SMC-Magnolia Finance, and from October 1989 to 31 October 1990 with PHILSSEC assigned to Magnolia
Finance as accounting clerk. In all, it appears that, while under the employ of either Lipercon or Skillpower, Maliksi has undisputedly rendered
service with SMC for at least three years and seven months.10

The Court takes judicial notice of the fact that Lipercon and Skillpower were declared to be labor-only contractors,11 providing as they do
manpower services to the public for a fee. The existence of an employer-employee relationship is factual and we give due deference to the factual
findings of both the NLRC and the CA that an employer-employee relationship existed between SMC (or its subsidiaries) and Maliksi. Indeed, having
served SMC for an aggregate period of more than three (3) years through employment contracts with these two labor contractors, Maliksi should
be considered as SMC's regular employee. The hard fact is that he was hired and re-hired by SMC to perform administrative and clerical work that
was necessary to SMC's business on a daily basis. In Bustamante v. National Labor Relations Commission, 12 we ruled:

In the case at bar, petitioners were employed at various periods from 1985 to 1989 for the same kind of work they were hired to perform in
September 1989. Both the labor arbiter and the respondent NLRC agree that petitioners were employees engaged to perform activities necessary
in the usual business of the employer. As laborers, harvesters or sprayers in an agricultural establishment which produces high grade bananas,
petitioners' tasks are indispensable to the year-round operations of respondent company. This belies the theory of respondent company that the
employment of petitioners was terminated due to the expiration of their probationary period in June 1990. If at all significant, the contract for
probationary employment was utilized by respondent company as a chicanery to deny petitioners their status as regular employees and to evade
paying them the benefits attached to such status. Some of the petitioners were hired as far back as 1985, although the hiring was not continuous.
They were hired and re-hired in a span of from two to four years to do the same type of work which conclusively shows the necessity of petitioners'
service to the respondent company's business. Petitioners have, therefore, become regular employees after performing activities which are
6
necessary in the usual business of their employer. But, even assuming that the activities of petitioners in respondent company's plantation were
not necessary or desirable to its business, we affirm the public respondent's finding that all of the complainants (petitioners) have rendered non-
continuous or broken service for more than one (1) year and are consequently considered regular employees.

We do not sustain public respondent's theory that private respondent should not be made to compensate petitioners for backwages because its
termination of their employment was not made in bad faith. The act of hiring and re-hiring the petitioners over a period of time without
considering them as regular employees evidences bad faith on the part of private respondent. The public respondent made a finding to this effect
when it stated that the subsequent re-hiring of petitioners on a probationary status "clearly appears to be a convenient subterfuge on the part of
management to prevent complainants (petitioners) from becoming regular employees." (Emphasis supplied)cralawlibrary

It is worth noting that, except for the computerization project of PHILSSEC, petitioner did not make any insinuation at all that the services of Maliksi
with SMC was project-related such that an employment contract with Lipercon and Skillpower was necessary.

In Madriaga v. Court of Appeals,13 the Court, confronted with the same issue now being addressed, declared that regularization of employment

in SMC should extend to those whose situation is similar to the complainants in said case. We wrote:

This is the third time that the parties have invoked the power of this Court to decide the labor dispute involved in this case. The generative facts of
the case are as follows:

On 04 March 1988, the NOWM and a number of workers-complainants filed with the Arbitration Branch of the NCR, NLRC, Manila, against San
Miguel Corporation, Philippine Dairy Products Corporation, Magnolia Dairy Products, Skillpower Corporation and Lipercon Services, Inc. for illegal
dismissal.

xxx xxx xxx

The Voluntary Arbitrator rendered a decision on 29 July 1988, the dispositive of which states:

WHEREFORE, it is hereby declared that complainants are regular employees of SMC and PDPC. Accordingly, SMC and PDPC are hereby ordered to
reinstate the dismissed 85 complainants to their former positions as their regular employees effective from the date of the filing of their complaints
with full backwages less the daily financial assistance of P30.00 per day each, extended to them by Lipercon and Skillpower.

Aggrieved by the said decision of the Voluntary Arbitrator, SMC and PDPC filed a petition for certiorari before the Supreme Court.

It was upon the filing of the said petition for certiorari that the Court had the first opportunity to pass upon the controversies involved in this case.
In a Resolution dated 30 August 1989, the Court dismissed G.R. No. 85577 entitled, "Philippine Dairy Products Corporation and San Miguel
Corporation - Magnolia Dairy Products Division v. Voluntary Arbitrator Tito F. Genilo of the Department of Labor and Employment (DOLE) and the
National Organization of Workingmen (NOWM)" for lack of merit. The Court held in full:

Individual private respondents are xxx [SMC, et al.] laborers supplied to petitioners by Skillpower Corporation and Lipercon Services, Inc., on the
basis of contracts of services. Upon expiration of the said contracts, individual private respondents were denied entry to petitioners' premises.
Individual private respondents and respondent union thus filed separate complaints for illegal dismissal against petitioners San Miguel Corp.,
Skillpower Corporation and Lipercon Services, Inc., in the [NLRC, NCR] After consolidation and voluntary arbitration, respondent Labor Arbiter Tito
F. Genilo rendered a decision xxx declaring individual private respondents regular employees of petitioners and ordering the latter to reinstate the
former and to pay them backwages. On motion for execution filed by private respondents, Labor Arbiter Genilo issued on October 20, 1988 an
order directing, among others, the regularization of "all the complainants which include those still working and those already terminated." Hence,
this petition for certiorari with injunction.

Petitioners contend that prior to reinstatement, individual private respondents should first comply with certain requirements, like submission of
NBI and police clearances and submission to physical and medical examinations, since petitioners are deemed to be direct employers and have the
right to ascertain the physical fitness and moral uprightness of its employees by requiring the latter to undergo periodic examinations, and that
petitioners may not be ordered to employ on regular basis the other workers rendering services to petitioners by virtue of a similar contract of
services between petitioners and Skillpower Corporation and Lipercon Services, Inc. because such other workers were not parties to or were not
impleaded in the voluntary arbitration case.

Considering that the clearances and examinations sought by petitioners from private respondents are not 'periodic' in nature but are made
preconditions for reinstatement, as in fact the petition filed alleged that reinstatement shall be effective upon compliance with such requirements,
(pp. 5-6 thereof) which should not be the case because this is not a case of initial hiring, the workers concerned having rendered years of service to
petitioners who are considered direct employers, and that regularization is a labor benefit that should apply to all qualified employees similarly
situated and may not be denied merely because some employees were allegedly not parties to or were not impleaded in the voluntary arbitration
case, even as the finding of Labor Arbiter Genilo is to the contrary, this Court finds no grave abuse of discretion committed by Labor Arbiter Genilo
in issuing the questioned order of October 20, 1988.

ACCORDINGLY, the Court Resolved to Dismiss the petition for lack of merit.
7

In fine, the Court affirmed the ruling of the Voluntary Arbitrator and declared that therein complainants are regular employees of San Miguel
Corporation (SMC) and PDPC. It must be noted that in the abovequoted Resolution, the Court extended the benefit of regularization not only to the
original complainants but also to those workers who are "similarly situated" to therein complainants. Herein petitioners are among those who are
"similarly situated."14 (Emphasis supplied)cralawlibrary

We find respondent Maliksi to be similarly situated with those of the complainants in Madriaga. Indeed, Lipercon and Skillpower have figured in
not just a few of our decisions,15 so much so that we are inclined to believe that these two were involved in labor-only contracting with respect to
Maliksi. We hold that the finding of the NLRC and the CA as to SMC's resorting to labor-only contracting is entitled to consideration in its full
weight.

With respect to PHILSSEC, there was no need for Maliksi to be employed under the former's computerization program to be considered a regular
employee of SMC at the time. Moreover, SMC itself admits that Maliksi's work under the computerization program did "not require the operation
of a computer system, such as the software program being developed by PHILSSEC."16 Given this admission, we are simply at a loss to understand
why Maliksi should be included in the computerization project as a project employee. Not being a computer expert, Maliksi's inclusion in the
project was uncalled for. To our mind, his placement in the project was for the purpose of circumventing labor laws. The evidence shows that
immediately before he entered the PHILSSEC project in October 1989, Maliksi was fresh out of his employment with SMC (through Skillpower) as
acting clerk assigned to SMC-Magnolia Finance (from October 1988 to 1989).

Maliksi's work under the PHILSSEC project was mainly administrative in nature and necessary to the development of SMC's business. These were:

a. posting manually the daily account balances in the workset;
b. fitting the daily totals into the monthly totals;
c. comparing the manual totals with the computer generated totals;
d. locating the differences between the totals; and,
e. adjusting and correcting errors.

Simply put, the data gathered by SMC on a daily basis through Maliksi's work would be submitted for analysis and evaluation, thereby allowing
SMC to make the necessary business decisions that would enable it to market its products better, or monitor its sales and collection with efficiency.
Without the data gatherer or encoder, no analysis could occur. SMC would then, for the most part, be kept in the dark.

As to the petitioner's second assigned error, we hold that there is no need to resolve the present case under the principle that all doubts should be
resolved in favor of the workingman. The perceived doubt does not obtain in the first place.

We understand Maliksi's desperation in making his point clear to SMC, which unduly refuses to acknowledge his status as a regular employee.
Instead, he was juggled from one employment contract to another in a continuous bid to circumvent labor laws. The act of hiring and re-hiring
workers over a period of time without considering them as regular employees evidences bad faith on the part of the employer.17 Where, from the
circumstances, it is apparent that periods have been imposed to preclude the acquisition of tenurial security by the employee, the policy,
agreement or practice should be struck down as contrary to public policy, morals, good customs or public order.18 In point of law, any person who
willfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall be liable for the damage.19

Ways and means contrived by employers to countermand labor laws granting regular employment status to their workers are numerous and long.
For instance, they toss the poor workers from one job contractor to another, make them go through endless applications, lining up, paperwork,
documentation, and physical examinations; make them sign five - or ten-month-only job contracts, yet re-hire them after brief "rest periods," but
not after requiring them to go through the whole application and selection process once again; prepare and have them sign waivers, quitclaims,
and the like; refuse to issue them identification cards, receipts or any other concrete proof of employment or documentary proof of payment of
their salaries; fail to enroll them for entitlement to social security and other benefits; give them positions, titles or designations that connote short-
term employment.

Others are more creative: they set up "distributors" or "dealers" which are, in reality, shell or dummy companies. In this manner, the mother
company avoids the employer-employee relations, and is thus shielded from liability from employee claims in case of illegal dismissal, closure,
unfair labor practices and the like. In those instances, the poor employees, finding the shell or dummy company to be without assets, often end up
confused and without recourse as to whom to run after. They sue the mother company which conveniently sets up the defense of absence of
employer-employee relations. In San Miguel Corporation v. MAERC Integrated Services, Inc.,20 we took note of the practice of hiring employees
through labor contractors that catered exclusively to the employment needs of SMC or its divisions or other specific business interests, such that
after the specific SMC business or division ceases to do business, the labor contractor likewise ceases its operations.

The contrivances may be many and the schemes ingenious and imaginative. But this Court will not hesitate to put pen to a line and defend the
worker's right to be secure in his (or her) proprietary right to regular employment and his right to a secure employment, viz, one that is free from
fear and doubt, that anytime he could be removed, retrenched, his contract not renewed or he might not be re-hired. The ramifications may seem
trivial, but we cannot allow the ordinary Filipino worker's right to tenurial security to be put in jeopardy by recurrent but abhorrent practices that
threaten the very lives of those that depend on him.

8
Considering, however, the supervening event that SMC's Magnolia Division has been acquired by another entity, it appears that private
respondent's reinstatement is no longer feasible. Instead, he should be awarded separation pay as an alternative.21 Likewise, owing to petitioner's
bad faith, it should be held liable to pay damages for causing undue injury and inconvenience to the private respondent in its contractual hiring-
firing-rehiring scheme.

WHEREFORE, the instant petition is DENIED and the assailed CA decision dated September 30, 1999 is AFFIRMED, with the MODIFICATION that if
the reinstatement of private respondent is no longer practicable or feasible, then petitioner SMC is ordered to pay him, in addition to the other
monetary awards, separation pay for the period from October 31, 1990 when he was dismissed until he shall have been actually paid at the rate of
one (1) month salary for every year of his employment, with a fraction of at least six (6) months being considered as one (1) year, or the rate of
separation pay awarded by petitioner to its other regular employees as provided by written agreement, policy or practice, whichever is higher or
most beneficial to private respondent.

In addition, petitioner is hereby suffered to indemnify private respondent the amount of P50,000.00 as nominal damages for its bad faith in
juggling the latter from one labor contractor to another and causing him unnecessary injury and inconvenience, and for denying him his proprietary
right to regular employment.

Let this case be REMANDED to the Labor Arbiter for the computation of private respondent's backwages, proportionate 13th month pay,
separation pay, attorneys' fees and other monetary awards; and for immediate execution.

Costs against the petitioner.

SO ORDERED.



ST. SCHOLASTICA'S COLLEGE, petitioner, vs. HON. RUBEN TORRES, in his capacity as SECRETARY OF LABOR AND EMPLOYMENT, and SAMAHANG
NG MANGGAGAWANG PANG-EDUKASYON SA STA. ESKOLASTIKA-NAFTEU, respondents.
G.R. No. 100158 June 2, 1992


BELLOSILLO, J.:

The principal issue to be resolved in this recourse is whether striking union members terminated for abandonment of work after failing to comply
with return-to-work orders of the Secretary of Labor and Employment (SECRETARY, for brevity) should by law be reinstated.

On 20 July 1990, petitioner St. Scholastica's College (COLLEGE, for brevity) and private respondent Samahan ng Manggagawang Pang-Edukasyon sa
Sta. Eskolastika-NAFTEU (UNION, for brevity) initiated negotiations for a first-ever collective bargaining agreement. A deadlock in the negotiations
prompted the UNION to file on 4 October 1990 a Notice of Strike with the Department of Labor and Employment (DEPARTMENT, for brevity),
docketed as NCMB-NCR-NS-10-826.

On 5 November 1990, the UNION declared a strike which paralyzed the operations of the COLLEGE. Affecting as it did the interest of the students,
public respondent SECRETARY immediately assumed jurisdiction over the labor dispute and issued on the same day, 5 November 1990, a return-to-
work order. The following day, 6 November 1990, instead of returning to work, the UNION filed a motion for reconsideration of the return-to-work
order questioning inter alia the assumption of jurisdiction by the SECRETARY over the labor dispute.

On 9 November 1990, the COLLEGE sent individual letters to the striking employees enjoining them to return to work not later than 8:00 o'clock
A.M. of 12 November 1990 and, at the same time, giving notice to some twenty-three (23) workers that their return would be without prejudice to
the filing of appropriate charges against them. In response, the UNION presented a list of (6) demands to the COLLEGE in a dialogue conducted on
11 November 1990. The most important of these demands was the unconditional acceptance back to work of the striking employees. But these
were flatly rejected.

Likewise, on 9 November 1990, respondent SECRETARY denied reconsideration of his return-to-work order and sternly warned the striking
employees to comply with its terms. On 12 November 1990, the UNION received the Order.

Thereafter, particularly on 14 and 15 November 1990, the parties held conciliation meetings before the National Conciliation and Mediation Board
where the UNION pruned down its demands to three (3), viz.: that striking employees be reinstated under the same terms and conditions before
the strike; that no retaliatory or disciplinary action be taken against them; and, that CBA negotiations be continued. However, these efforts proved
futile as the COLLEGE remained steadfast in its position that any return-to-work offer should be unconditional.

On 16 November 1990, the COLLEGE manifested to respondent SECRETARY that the UNION continued to defy his return-to-work order of 5
November 1990 so that "appropriate steps under the said circumstances" may be undertaken by him. 1

On 23 November 1990, the COLLEGE mailed individual notices of termination to the striking employees, which were received on 26 November
1990, or later. The UNION officers and members then tried to return to work but were no longer accepted by the COLLEGE.
9

On 5 December 1990, a Complaint for Illegal Strike was filed against the UNION, its officers and several of its members before the National Labor
Relations Commission (NLRC), docketed as NLRC Case No. 00-12-06256-90.

The UNION moved for the enforcement of the return-to-work order before respondent SECRETARY, citing "selective acceptance of returning
strikers" by the COLLEGE. It also sought dismissal of the complaint. Since then, no further hearings were conducted.

Respondent SECRETARY required the parties to submit their respective position papers. The COLLEGE prayed that respondent SECRETARY uphold
the dismissal of the employees who defied his return-to-work order.

On 12 April 1991, respondent SECRETARY issued the assailed Order which, inter alia, directed the reinstatement of striking UNION members,
premised on his finding that no violent or otherwise illegal act accompanied the conduct of the strike and that a fledgling UNION like private
respondent was "naturally expected to exhibit unbridled if inexperienced enthusiasm, in asserting its existence". 2 Nevertheless, the aforesaid
Order held UNION officers responsible for the violation of the return-to-work orders of 5 and 9 November 1990 and, correspondingly, sustained
their termination.

Both parties moved for partial reconsideration of the Order, with petitioner COLLEGE questioning the wisdom of the reinstatement of striking
UNION members, and private respondent UNION, the dismissal of its officers.

On 31 May 1991, in a Resolution, respondent SECRETARY denied both motions. Hence, this Petition for Certiorari, with Prayer for the Issuance of a
Temporary Restraining Order.

On 26 June 1991, We restrained the SECRETARY from enforcing his assailed Orders insofar as they directed the reinstatement of the striking
workers previously terminated.

Petitioner questions the assumption by respondent SECRETARY of jurisdiction to decide on termination disputes, maintaining that such jurisdiction
is vested instead in the Labor Arbiter pursuant to Art. 217 of the Labor Code, thus —

Art. 217. Jurisdiction of Labor Arbiters and the Commission. — (a) Except as otherwise provided under this Code, the Labor Arbiters shall have
original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision
without extension, the following cases involving all workers, whether agricultural or non-agricultural: . . . 2. Termination disputes . . . 5. Cases
arising from any violation of Article 264 of this Code, including questions on the legality of strikes and lock-outs . . .

In support of its position, petitioner invokes Our ruling in PAL v. Secretary of Labor and Employment 3 where We held:

The labor Secretary exceeded his jurisdiction when he restrained PAL from taking disciplinary measures against its guilty employees, for, under Art.
263 of the Labor Code, all that the Secretary may enjoin is the holding of the strike but not the company's right to take action against union officers
who participated in the illegal strike and committed illegal acts.

Petitioner further contends that following the doctrine laid down in Sarmiento v. Tuico 4 and Union of Filipro Employees v. Nestle Philippines, Inc.,
5 workers who refuse to obey a return-to-work order are not entitled to be paid for work not done, or to reinstatement to the positions they have
abandoned of their refusal to return thereto as ordered.

Taking a contrary stand, private respondent UNION pleads for reinstatement of its dismissed officers considering that the act of the UNION in
continuing with its picket was never characterized as a "brazen disregard of successive legal orders", which was readily apparent in Union Filipro
Employees v. Nestle Philippines, Inc., supra, nor was it a willful refusal to return to work, which was the basis of the ruling in Sarmiento v. Tuico,
supra. The failure of UNION officers and members to immediately comply with the return-to-work orders was not because they wanted to defy said
orders; rather, they held the view that academic institutions were not industries indispensable to the national interest. When respondent
SECRETARY denied their motion for reconsideration, however, the UNION intimated that efforts were immediately initiated to fashion out a
reasonable return-to-work agreement with the COLLEGE, albeit, if failed.

The issue on whether respondent SECRETARY has the power to assume jurisdiction over a labor dispute and its incidental controversies, causing or
likely to cause a strike or lockout in an industry indispensable to the national interest, was already settled in International Pharmaceuticals, Inc. v.
Secretary of Labor and Employment. 6 Therein, We ruled that:

. . . [T]he Secretary was explicitly granted by Article 263 (g) of the Labor Code the authority to assume jurisdiction over a labor dispute causing or
likely to cause a strike or lockout in an industry indispensable to the national interest, and decide the same accordingly. Necessarily, this authority
to assume jurisdiction over the said labor dispute must include and extend to all questions and include and extend to all questions and
controversies arising therefrom, including cases over which the Labor Arbiter has exclusive jurisdiction.

And rightly so, for, as found in the aforesaid case, Article 217 of the Labor Code did contemplate of exceptions thereto where the SECRETARY is
authorized to assume jurisdiction over a labor dispute otherwise belonging exclusively to the Labor Arbiter. This is readily evident from its opening
proviso reading "(e)xcept as otherwise provided under this Code . . .

10
Previously, We held that Article 263 (g) of the Labor Code was broad enough to give the Secretary of Labor and Employment the power to take
jurisdiction over an issue involving unfair labor practice. 7

At first glance, the rulings above stated seem to run counter to that of PAL v. Secretary of Labor and Employment, supra, which was cited by
petitioner. But the conflict is only apparent, not real.

To recall, We ruled in the latter case that the jurisdiction of the Secretary of Labor and Employment in assumption and/or certification cases is
limited to the issues that are involved in the disputes or to those that are submitted to him for resolution. The seeming difference is, however,
reconcilable. Since the matter on the legality or illegality of the strike was never submitted to him for resolution, he was thus found to have
exceeded his jurisdiction when he restrained the employer from taking disciplinary action against employees who staged an illegal strike.

Before the Secretary of Labor and Employment may take cognizance of an issue which is merely incidental to the labor dispute, therefore, the same
must be involved in the labor disputed itself, or otherwise submitted to him for resolution. If it was not, as was the case in PAL v. Secretary or Labor
and Employment, supra, and he nevertheless acted on it, that assumption of jurisdiction is tantamount to a grave abuse of discretion. Otherwise,
the ruling in International Pharmaceuticals, Inc. v. Secretary of Labor and Employment, supra, will apply.

The submission of an incidental issue of a labor dispute, in assumption and/or certification cases, to the Secretary of Labor and Employment for his
resolution is thus one of the instances referred to whereby the latter may exercise concurrent jurisdiction together with the Labor Arbiters.

In the instant petition, the COLLEGE in its Manifestation, dated 16 November 1990, asked the "Secretary of Labor to take the appropriate steps
under the said circumstances." It likewise prayed in its position paper that respondent SECRETARY uphold its termination of the striking employees.
Upon the other hand, the UNION questioned the termination of its officers and members before respondent SECRETARY by moving for the
enforcement of the return-to-work orders. There is no dispute then that the issue on the legality of the termination of striking employees was
properly submitted to respondent SECRETARY for resolution.

Such an interpretation will be in consonance with the intention of our labor authorities to provide workers immediate access to their rights and
benefits without being inconvenienced by the arbitration and litigation process that prove to be not only nerve-wracking, but financially
burdensome in the long run. Social justice legislation, to be truly meaningful and rewarding to our workers, must not be hampered in its application
by long-winded arbitration and litigation. Rights must be asserted and benefits received with the least inconvenience. For, labor laws are meant to
promote, not defeat, social justice (Maternity Children's Hospital v. Hon. Secretary of Labor ). 8 After all, Art. 4 of the Labor Code does state that all
doubts in the implementation and interpretation of its provisions, including its implementing rules and regulations, shall be resolved in favor of
labor.

We now come to the more pivotal question of whether striking union members, terminated for abandonment of work after failing to comply
strictly with a return-to-work order, should be reinstated.

We quote hereunder the pertinent provisions of law which govern the effects of defying a return-to-work order:

1. Article 263 (g) of the Labor Code —

Art. 263. Strikes, picketing, and lockouts. — . . . (g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in
an industry indispensable to the national interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it
or certify the same to the Commission for compulsory arbitration. Such assumption or certification shall have the effect of automatically enjoining
the intended or impending strike or lockout as specified in the assumption or certification order. If one has already taken place at the time of
assumption or certification, all striking or locked out employees shall immediately return to work and the employer shall immediately resume
operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout. The Secretary of Labor and
Employment or the Commission may seek the assistance of law enforcement agencies to ensure compliance with this provision as well as with such
orders as he may issue to enforce the same . . . (as amended by Sec. 27, R.A. 6715; emphasis supplied).

2. Article 264, same Labor Code —

Art. 264. Prohibited activities. — (a) No labor organization or employer shall declare a strike or lockout without first having bargained collectively
in accordance with Title VII of this Book or without first having filed the notice required in the preceding Article or without the necessary strike or
lockout vote first having been obtained and reported to the Ministry.

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

Any worker whose employment has been terminated as consequence of an unlawful lockout shall be entitled to reinstatement with full back
wages. Any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the
commission of illegal acts during a strike may be declared to have lost his employment status: Provided, That mere participation of a worker in a
lawful strike shall not constitute sufficient ground for termination of his employment, even if a replacement had been hired by the employer during
such lawful strike . . . (emphasis supplied).
11

3. Section 6, Rule IX, of the New Rules of Procedure of the NLRC (which took effect on 31 August 1990) —

Sec. 6. Effects of Defiance. — Non-compliance with the certification order of the Secretary of Labor and Employment or a return to work order
of the Commission shall be considered an illegal act committed in the course of the strike or lockout and shall authorize the Secretary of Labor and
Employment or the Commission, as the case may be, to enforce the same under pain or loss of employment status or entitlement to full
employment benefits from the locking-out employer or backwages, damages and/or other positive and/or affirmative reliefs, even to criminal
prosecution against the liable parties . . . (emphasis supplied).

Private respondent UNION maintains that the reason they failed to immediately comply with the return-to-work order of 5 November 1990 was
because they questioned the assumption of jurisdiction of respondent SECRETARY. They were of the impression that being an academic institution,
the school could not be considered an industry indispensable to national interest, and that pending resolution of the issue, they were under no
obligation to immediately return to work.

This position of the UNION is simply flawed. Article 263 (g) of the Labor Code provides that if a strike has already taken place at the time of
assumption, "all striking . . . employees shall immediately return to work." This means that by its very terms, a return-to-work order is immediately
effective and executory notwithstanding the filing of a motion for reconsideration (University of Sto. Tomas v. NLRC). 9 It must be strictly complied
with even during the pendency of any petition questioning its validity (Union of Filipro Employees v. Nestle Philippines, Inc., supra). After all, the
assumption and/or certification order is issued in the exercise of respondent SECRETARY's compulsive power of arbitration and, until set aside,
must therefore be immediately complied with.

The rationale for this rule is explained in University of Sto. Tomas v. NLRC, supra, citing Philippine Air Lines Employees Association v. Philippine Air
Lines, Inc., 10 thus —

To say that its (return-to-work order) effectivity must wait affirmance in a motion for reconsideration is not only to emasculate it but indeed to
defeat its import, for by then the deadline fixed for the return to work would, in the ordinary course, have already passed and hence can no longer
be affirmed insofar as the time element is concerned.

Moreover, the assumption of jurisdiction by the Secretary of Labor and Employment over labor disputes involving academic institutions was
already upheld in Philippine School of Business Administration v. Noriel 11 where We ruled thus:

There is no doubt that the on-going labor dispute at the school adversely affects the national interest. The school is a duly registered educational
institution of higher learning with more or less 9,000 students. The on-going work stoppage at the school unduly prejudices the students and will
entail great loss in terms of time, effort and money to all concerned. More important, it is not amiss to mention that the school is engaged in the
promotion of the physical, intellectual and emotional well-being of the country's youth.

Respondent UNION's failure to immediately comply with the return-to-work order of 5 November 1990, therefore, cannot be condoned.

The respective liabilities of striking union officers and members who failed to immediately comply with the return-to-work order is outlined in Art.
264 of the Labor Code which provides that any declaration of a strike or lockout after the Secretary of Labor and Employment has assumed
jurisdiction over the labor dispute is considered an illegal. act. Any worker or union officer who knowingly participates in a strike defying a return-
to-work order may, consequently, "be declared to have lost his employment status."

Section 6 Rule IX, of the New Rules of Procedure of the NLRC, which provides the penalties for defying a certification order of the Secretary of
Labor or a return-to-work order of the Commission, also reiterates the same penalty. It specifically states that non-compliance with the aforesaid
orders, which is considered an illegal act, "shall authorize the Secretary of Labor and Employment or the Commission . . . to enforce the same under
pain of loss of employment status." Under the Labor Code, assumption and/or certification orders are similarly treated.

Thus, we held in Sarmiento v. Tuico, supra, that by insisting on staging the restrained strike and defiantly picketing the company premises to
prevent the resumption of operations, the strikers have forfeited their right to be readmitted, having abandoned their positions, and so could be
validly replaced.

We recently reiterated this stance in Federation of Free Workers v. Inciong, 12 wherein we cited Union of Filipro Employees v. Nestle Philippines,
Inc., supra, thus —

A strike undertaken despite the issuance by the Secretary of Labor of an assumption or certification order becomes a prohibited activity and thus
illegal, pursuant to the second paragraph of Art. 264 of the Labor Code as amended . . . The union officers and members, as a result, are deemed to
have lost their employment status for having knowingly participated in an illegal act.

Despite knowledge of the ruling in Sarmiento v. Tuico, supra, records of the case reveal that private respondent UNION opted to defy not only the
return-to-work order of 5 November 1990 but also that of 9 November 1990.

While they claim that after receiving copy of the Order of 9 November 1990 initiatives were immediately undertaken to fashion out a return-to-
work agreement with management, still, the unrebutted evidence remains that the striking union officers and members tried to return to work
12
only eleven (11) days after the conciliation meetings ended in failure, or twenty (20) days after they received copy of the first return-to-work order
on 5 November 1990.

The sympathy of the Court which, as a rule, is on the side of the laboring classes (Reliance Surety & Insurance Co., Inc. v. NLRC), 13 cannot be
extended to the striking union officers and members in the instant petition. There was willful disobedience not only to one but two return-to-work
orders. Considering that the UNION consisted mainly of teachers, who are supposed to be well-lettered and well-informed, the Court cannot
overlook the plain arrogance and pride displayed by the UNION in this labor dispute. Despite containing threats of disciplinary action against some
union officers and members who actively participated in the strike, the letter dated 9 November 1990 sent by the COLLEGE enjoining the union
officers and members to return to work on 12 November 1990 presented the workers an opportunity to return to work under the same terms and
conditions or prior to the strike. Yet, the UNION decided to ignore the same. The COLLEGE, correspondingly, had every right to terminate the
services of those who chose to disregard the return-to-work orders issued by respondent SECRETARY in order to protect the interests of its
students who form part of the youth of the land.

Lastly, the UNION officers and members also argue that the doctrine laid down in Sarmiento v. Tuico, supra, and Union of Filipro Employees v.
Nestle, Philippines, Inc., supra, cannot be made applicable to them because in the latter two cases, workers defied the return-to-work orders for
more than five (5) months. Their defiance of the return-to-work order, it is said, did not last more than a month.

Again, this line of argument must be rejected. It is clear from the provisions above quoted that from the moment a worker defies a return-to-work
order, he is deemed to have abandoned his job. It is already in itself knowingly participating in an illegal act. Otherwise, the worker will just simply
refuse to return to his work and cause a standstill in the company operations while retaining the positions they refuse to discharge or allow the
management to fill (Sarmiento v. Tuico, supra). Suffice it to say, in Federation of Free Workers v. Inciong, supra, the workers were terminated from
work after defying the return-to-work order for only nine (9) days. It is indeed inconceivable that an employee, despite a return-to-work order, will
be allowed in the interim to stand akimbo and wait until five (5) orders shall have been issued for their return before they report back to work. This
is absurd.

In fine, respondent SECRETARY gravely abused his discretion when he ordered the reinstatement of striking union members who refused to report
back to work after he issued two (2) return-to-work orders, which in itself is knowingly participating in an illegal act. The Order in question is,
certainly, contrary to existing law and jurisprudence.

WHEREFORE, the Petition for Certiorari is hereby GRANTED. The Order of 12 April 1991 and the Resolution 31 May 1991 both issued by respondent
Secretary of Labor and Employment are SET ASIDE insofar as they order the reinstatement of striking union members terminated by petitioner, and
the temporary restraining order We issued on June 26, 1991, is made permanent.

No costs.

SO ORDERED.


G.R. No. 120751. March 17, 1999.
PHIMCO INDUSTRIES, INC., Petitioner, v. HONORABLE ACTING SECRETARY OF LABOR JOSE BRILLANTES and PHIMCO INDUSTRIES LABOR
ASSOCIATION, Respondents.


D E C I S I O N

PURISIMA, J.:

At bar is a Petition for Certiorari under Rule 65 of the Revised Rules of Court, seeking to set aside the July 7, 1995 Order 1 of the then Acting
Secretary Jose Brillantes of the Department of Labor and Employment, in NCMB-NCR-NS-03-122-95, on the around of grave abuse of discretion
amounting to lack or excess of jurisdiction.

The antecedent facts are, as follows:

On March 9, 1995, the private respondent, Phimco Industries Labor Association (PILA), duly certified collective bargaining representative of the
daily paid workers of the petitioner, Phimco Industries Inc. (PHIMCO), filed a notice of strike with the National Conciliation and Mediation Board,
NCR, against PHIMCO, a corporation engaged in the production of matches, after a deadlock in the collective bargaining and negotiation. On April
21, 1995, when the several conciliation conferences called by the contending parties failed to resolve their differences PILA, composed of 352 2
members, staged a strike.

On June 7, 1995, PILA presented a petition for the intervention of the Secretary of Labor in the resolution of the labor dispute, to which petition
PHIMCO opposed. Pending resolution of the said petition or on June 26, 1995, to be precise, PHIMCO sent notice of termination to some 47 3
workers including several union officers.chanrobles.com : virtual law library

On July 7, 1995, the then Acting Secretary of Labor Jose Brillantes assumed jurisdiction over the labor dispute and issued his Order; ruling, thus:jgc
13

"WHEREFORE, ABOVE PREMISES CONSIDERED, and Article 263 (g) of the Labor Code, as amended, this office hereby assumes jurisdiction over the
dispute at Phimco Industries, Inc.

Accordingly, all the striking workers, except those who have been handed down termination papers on June 26, 1995, are hereby directed to return
to work within twenty-four (24) hours from receipt of this Order and for the Company to accept them back under the same terms and conditions
prevailing prior to the strike.

The parties are further ordered to cease and desist from committing any act that will aggravate the situation.

To expedite the resolution of this dispute, the parties are directed to submit their position papers and evidence within ten (10) days from receipt of
this Order.

SO ORDERED."

On July 12, 1995, petitioner brought the present petition; theorizing, that:
I
THE HONORABLE ACTING SECRETARY JOSE BRILLANTES ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION IN ISSUING THE ASSAILED ORDER.

II
THE HONORABLE ACTING SECRETARY JOSE BRILLANTES ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION WHEN HE WENT BEYOND THE BASIS FOR ASSUMPTION OF JURISDICTION UNDER ART. 263 OF THE LABOR CODE."
On July 31, 1995, two weeks after the filing of the Petition, the public respondent issued another Order 6 temporarily holding in abeyance the
implementation of the questioned Order dated July 7, 1995 for a period of thirty (30) day; directing, as follows:jgc:chanrobles.com.ph

"WHEREFORE, PREMISES CONSIDERED, the implementation of our Order dated 7 July 1995 is hereby temporarily held in abeyance for a period of
thirty (30) days effective from receipt thereof pending the private negotiations of the parties for the settlement of their labor dispute. Thereafter,
both the Union and the Company are directed to submit to this Office the result of their negotiations for our evaluation and appropriate action.

SO ORDERED."

The pivotal issue here is: whether or not the public respondent acted with grave abuse of discretion amounting to lack or excess of jurisdiction in
assuming jurisdiction over subject labor dispute.

The petition is impressed with merit

Article 263, paragraph (g) of the Labor Code, provides:jgc:

"(g) When, in his opinion, there exist a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national
interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify the same to the Commission for
compulsory arbitration . . ."
"The Labor Code vests in the Secretary of Labor the discretion to determine what industries are indispensable to the national interest. Accordingly,
upon the determination by the Secretary of Labor that such industry is indispensable to the national interest, he will assume jurisdiction over the
labor dispute in the said industry." 8 This power, however, is not without any limitation. In upholding the constitutionality of B.P. 130 insofar as it
amends Article 264 (g) 9 of the Labor Code, it stressed in the case of Free telephone Workers Union v. Honorable Minister of Labor and
Employment, Et Al., 10 the limitation set by the legislature on the power of the Secretary of Labor to assume jurisdiction over a labor dispute,
thus:jgc

"Batas Pambansa Blg. 130 cannot be any clearer, the coverage being limited to "strikes or lockouts adversely affecting the national interest." 11

In this case at bar, however, the very admission by the public respondent draws the labor dispute in question out of the ambit of the Secretary’s
prerogative, to wit:jgc:

"While the case at bar appears on its face not to fall within the strict categorization of cases imbued with "national interest", this office believes
that the obtaining circumstances warrant the exercise of the powers under Article 263 (g) of the Labor Code, as amended." 12

The private respondent did not even make any effort to touch on the indispensability of the match factory to the national interest. It must have
been aware that a match factory, though of value, can scarcely be considered as an industry "indispensable to the national interest" as it cannot be
in the same category as "generation and distribution of energy, or those undertaken by banks, hospitals, and export-oriented industries." 13 Yet,
the public respondent assumed jurisdiction thereover, ratiocinating as follows:

"For one, the prolonged work disruption has adversely affected not only the protagonists, i.e, workers and the Company, but also those directly
and indirectly dependent upon the unhampered and continued operations of the Company for their means of livelihood and existence. In addition,
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the entire community where the plant is situated has also been placed in jeopardy. If the dispute at the Company remains unabated, possible loss
of employment, not to mention consequent social problems, might result thereby compounding the unemployment problem of the country."

Thus we cannot be unmindful of the possible dire consequences that might ensue if the present dispute is allowed to remain unresolved,
particularly when an alternative dispute resolution mechanism obtains to dispose of the differences between the parties herein. 14

It is thus evident from the foregoing that the Secretary’s assumption of jurisdiction grounded on the alleged "obtaining circumstances" and not on
a determination that the industry involved in the labor dispute is one indispensable to the "national interest", the standard set by the legislature,
constitutes grave abuse of discretion amounting to lack of or excess of jurisdiction. To uphold the action of the public respondent under the
premises would be stretching too far the power of the Secretary of Labor as every case of a strike or lockout where there are inconveniences in the
community, or work disruptions in an industry though not indispensable to the national interest, would then come within the Secretary’s power. It
would be practically allowing the Secretary of Labor to intervene in any Labor dispute at his pleasure. This is precisely why the law sets and defines
the standard: even in the exercise of his power of compulsory arbitration under Article 263 (g) of the Labor Code, the Secretary must follow the
law. For "when an overzealous official by-passes the law on the pretext of retaining a laudable objective, the intendment or purpose of the law will
lose its meaning as the law itself is disregarded." 15

In light of the foregoing, we hold that the public respondent gravely abused his discretion in assuming jurisdiction over the labor dispute sued upon
in the case.

WHEREFORE, the petition is hereby GRANTED; and the assailed Order, dated July 7, 1995, of the Acting Secretary of Labor SET ASIDE. No
pronouncement as to costs.

SO ORDERED.

Romero, Vitug and Gonzaga-Reyes, JJ., concur.

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