Allied Banking Corporation vs. National Labor Relations Commission

Employees who knowingly defy a return-to-work order issued by the Secretary of Labor under Article 263(g) of the Labor Code, after the Secretary has assumed jurisdiction over a labor dispute, may be validly dismissed and declared to have lost their employment status under Article 264(a); such defiance is distinct from mere participation in an illegal strike, and any provisional reinstatement ordered pending determination of the strike's legality is terminated once the strike is declared illegal, precluding an award of back wages.

The case arose from a collective bargaining agreement (CBA) renewal dispute between Allied Banking Corporation and its employees' union, Allied Banking Employees Union—NUBE. When negotiations reached a deadlock over wage increases, the union filed a notice of strike. The Secretary of Labor assumed jurisdiction over the dispute, automatically enjoining any strike. Despite this, union members staged strikes in January and February 1985. The Bank issued return-to-work notices, which the employees defied, leading to their termination for abandonment. This triggered over a decade of administrative and judicial proceedings regarding the legality of the strikes and the validity of the dismissals, involving multiple petitions to the Supreme Court and orders for provisional reinstatement.

• The collective bargaining agreement between Allied Banking Corporation and Allied Banking Employees Union—NUBE was set to expire on June 30, 1984, and the parties failed to reach an amicable settlement on wage increases during renewal negotiations.
• The union filed a notice of strike with the Bureau of Labor Relations due to the bargaining deadlock.
• On December 16, 1984, then Minister of Labor Blas Ople assumed jurisdiction over the dispute pursuant to Article 263(g) of the Labor Code, automatically enjoining any intended or impending strike and requiring all striking employees to immediately return to work if a strike had already taken place.
• On January 4, 1985, the Bank filed a Manifestation and Urgent Motion praying for a return-to-work order, which Minister Ople granted on January 6, 1985, including a P1,000.00 grant per employee chargeable to future CBA benefits.
• On January 18, 1985, Minister Ople directed the parties to continue negotiations until January 31, 1985, threatening to personally resolve the deadlock if no compromise was reached.
• On February 11, 1985, certain union members resumed the strike, and acts of violence were committed on February 12, 1985, resulting in criminal charges against some strikers.
• The Bank published notices in major newspapers (Bulletin Today, Times Journal, and Daily Express) on February 12, 1985, directing striking employees to return to work not later than 1:00 p.m. of February 13, 1985.
• The respondents failed to report for work by the deadline, explaining that they believed Minister Ople's January 31, 1985 decision was unjust and that they were merely exercising self-defense against unfair labor practices.
• The Bank issued notices of termination to the respondents for abandonment of work due to their failure to obey the assumption and return-to-work orders.
• On March 7, 1985, Minister Ople issued a Resolution modifying his January 31, 1985 Order, prompting the union to lift its picket lines on March 11, 1985, and notify the Bank of their return to work.
• The Bank refused to accept the employees back, claiming they had already been dismissed for abandonment when they failed to obey the assumption order.
• On June 5, 1985, Minister Ople issued an Order directing the Bank to reinstate provisionally all striking workers except those who accepted separation pay, union officers, and those with pending criminal charges.
• On August 29, 1986, Minister Augusto Sanchez modified the June 5, 1985 Order to reinstate all striking employees except those who had already accepted separation pay.
• The Supreme Court issued a Resolution on May 4, 1988, remanding the case to the Department of Labor to resolve factual issues including the legality of the strike and the roles played by individual respondents, noting that the reinstatement ordered by Minister Sanchez was provisional pending the final outcome of the petition to declare the strike illegal.
• The Labor Arbiter ruled on September 4, 1992, that the strikes were illegal and union officers lost their employment status, but held that the 41 individual respondents who did not commit illegal acts were illegally dismissed and ordered their reinstatement with back wages.
• The NLRC ruled on May 20, 1994, that the 41 respondents were validly dismissed for defying the return-to-work order, but remanded the issue of whether they were entitled to back wages from 1986 to the Labor Arbiter.

• Allied Banking Corporation argued that the NLRC committed grave abuse of discretion in remanding the issue of back wages to the Labor Arbiter because such a disposition was inconsistent with the NLRC's finding that the employees were validly dismissed.
• The Bank contended that the May 4, 1988 Supreme Court Resolution remanding the case to the Department of Labor became moot and academic after the strike was declared illegal and the dismissals upheld.
• The Bank asserted that an award of back wages is incompatible with a finding of valid dismissal for abandonment of work and defiance of a return-to-work order.

• The Bank maintained that the provisional reinstatement ordered by the Minister of Labor in 1986 was subject to the outcome of the petition to declare the strike illegal, and thus was terminated when the strike was declared illegal.

• In the consolidated petition (G.R. No. 116461), the employees argued that the NLRC gravely abused its discretion in affirming the validity of their dismissal by the Bank.

• The employees contended that mere participation of union members in an illegal strike should not automatically result in termination from employment.
• They asserted that there was no proof they knowingly participated in an illegal strike, claiming they acted on the strength of representations by union officers that the strike was legal and in the honest belief that they were defending their rights.
• They argued that a strike is not synonymous with abandonment of work, citing precedents that mere failure to report for work after notice to return does not constitute abandonment nor bar reinstatement.
• They urged the Court to adopt a liberal approach favoring labor and to view with compassion the plight of the workers.

• In G.R. No. 116128, the employees (respondents) countered that the NLRC erred in affirming their dismissal, reiterating that mere participation in an illegal strike does not automatically result in loss of employment status.
• They argued that they did not knowingly participate in an illegal strike, as they believed the Minister's orders were unjust and that they were acting in self-defense against unfair labor practices.

• They maintained that their failure to comply with the return-to-work order was justified by their good faith belief in the legality of their actions and the alleged unfair labor practices committed by the Bank.

• In G.R. No. 116461, the National Labor Relations Commission and Allied Banking Corporation (respondents) argued that the employees were validly dismissed for defying the return-to-work order issued under Article 263(g) of the Labor Code.

• They contended that defiance of a return-to-work order constitutes abandonment of work under the law on strikes, distinct from abandonment under Article 282(b) of the Labor Code.
• They maintained that the provisional reinstatement ordered in 1986 did not entitle the employees to back wages once the strike was declared illegal, as the reinstatement was expressly conditioned on the final outcome of the legality of the strike.

• Procedural:
  • Whether the NLRC committed grave abuse of discretion in remanding to the Labor Arbiter the issue of whether the 41 respondents are entitled to back wages corresponding to the period they should have been reinstated since 1986, despite finding that the respondents were validly dismissed.
• Substantive Issues:
  • Whether the respondents were validly dismissed for defying the return-to-work order issued by the Secretary of Labor under Article 263(g) of the Labor Code.
  • Whether the respondents' failure to comply with the return-to-work order constitutes abandonment of work under Article 263(g) and Article 264(a) of the Labor Code, or whether it falls under the ordinary concept of abandonment under Article 282(b).
  • Whether the provisional reinstatement ordered by the Minister of Labor in 1986 entitles the respondents to back wages from September 1986 up to the date of the NLRC decision, despite the subsequent declaration that the strike was illegal.

• Procedural:
  • The Supreme Court annulled and set aside the portion of the NLRC Decision dated May 20, 1994, and its Order dated July 8, 1994, which remanded to the Labor Arbiter the issue of reinstatement and computation of back wages for the 41 respondents.
  • The Court held that such remand was inconsistent with the NLRC's finding of valid dismissal and was issued with grave abuse of discretion.
  • The Court explained that the May 4, 1988 Resolution remanding the case to the Department of Labor was issued when the petition to declare the strike illegal had not yet been resolved; now that the strike has been declared illegal and the dismissal upheld, the factual matters mentioned in that Resolution have become moot and academic.
  • The Court ruled that an award of back wages is incompatible with the findings of the NLRC upholding the dismissal of the respondents.
• Substantive:
  • The Supreme Court affirmed the NLRC's finding that the respondents were validly dismissed.
  • The Court held that defiance of a return-to-work order issued under Article 263(g) of the Labor Code is a valid ground for dismissal under Article 264(a), which declares that any strike undertaken despite an assumption or certification order is a prohibited activity and thus illegal.
  • The Court distinguished between mere participation in an illegal strike (which does not automatically result in termination) and defiance of a return-to-work order (which results in loss of employment status), emphasizing that the return-to-work order imposes a duty that must be discharged even against the worker's will.
  • The Court ruled that assumption and certification orders are executory in character and must be strictly complied with by the parties even during the pendency of any petition questioning their validity.
  • The Court held that the provisional reinstatement ordered by the Minister of Labor in his August 29, 1986 Order was expressly subject to the final outcome of the petition to declare the strike illegal; therefore, once the strike was declared illegal and the dismissal upheld, the provisional reinstatement was terminated, and the respondents could not claim back wages for the period from 1986 to the date of the NLRC decision.

• Assumption of Jurisdiction and Automatic Injunction — Under Article 263(g) of the Labor Code, when the Secretary of Labor assumes jurisdiction over a labor dispute causing or likely to cause a strike in an industry indispensable to the national interest, such assumption automatically enjoins any intended or impending strike, and if one has already taken place, all striking employees must immediately return to work and the employer must immediately resume operations.
• Executory Character of Assumption Orders — Assumption and certification orders are executory in character and must be strictly complied with by the parties even during the pendency of any petition questioning their validity; striking workers must cease and desist from any acts that undermine the authority of the Secretary of Labor once such an order is issued.
• Defiance of Return-to-Work Order as Ground for Dismissal — Under Article 264(a) of the Labor Code, any worker or union officer who knowingly participates in a strike defying a return-to-work order may be declared to have lost his employment status; this is distinct from mere participation in a lawful or illegal strike where no assumption order has been issued.
• Return-to-Work as Duty, Not Right — A return-to-work order imposes a duty rather than confers a right, and while as a right it may be waived, it must be discharged as a duty even against the worker's will; returning to work is not a matter of option but of obligation to maintain the status quo while the legality of the strike is determined.
• Provisional Reinstatement — Reinstatement ordered pending the final outcome of a petition to declare a strike illegal is provisional only; a permanent reinstatement depends on the legality of the strike, and once the strike is declared illegal, the provisional reinstatement is terminated and back wages cannot be awarded.

• "Assumption and certification orders are executory in character and are to be strictly complied with by the parties even during the pendency of any petition questioning their validity."
• "Regardless therefore of their motives, or the validity of their claims, the striking workers must cease and/or desist from any and all acts that tend to, or undermine this authority of the Secretary of Labor, once an assumption and/or certification order is issued."
• "It is not correct to say that it may be enforced only if the strike is legal and may be disregarded if the strike is illegal, for the purpose precisely is to maintain the status quo while the determination is being made."
• "The return-to-work order not so much confers a right as it imposes a duty; and while as a right it may be waived, it must be discharged as a duty even against the worker's will."
• "Abandonment of work as a ground to dismiss under Article 282 (b) of the Labor Code should not be confused with abandonment of work under the law on strike, particularly those as provided in Article 263 (g) and Article 264 (a) of the Labor Code."
• "While social justice has an inclination to give protection to the working class, the cause of the labor sector is not upheld at all times as the employer has also a right entitled to respect in the interest of simple fair play."

• Union of Filipro Employees v. Nestle Philippines, Inc., 192 SCRA 396 (1990) — Cited for the principle that a strike undertaken despite the issuance by the Secretary of Labor of an assumption or certification order becomes a prohibited activity and thus illegal, and that assumption/certification orders are executory in character and must be strictly complied with.
• Sarmiento v. Tuico, 162 SCRA 676 (1988) — Cited for the rationale that a return-to-work order imposes a duty that must be discharged even against the worker's will.
• Asian Transmission Corporation v. National Labor Relations Commission, 179 SCRA 582 (1989) — Cited for the same rationale regarding the obligatory nature of return-to-work orders.
• St. Scholastica's College v. Torres, 210 SCRA 565 (1992) — Cited for the principle that union officers and members who knowingly participate in an illegal strike are deemed to have lost their employment status, and that the Court's sympathy cannot be extended to those who willfully disobey return-to-work orders.
• Federation of Free Workers v. Inciong, 208 SCRA 157 (1992) — Cited in St. Scholastica's College for the rule that a strike despite an assumption order is illegal.
• Jackbilt Concrete Block Company, Inc. v. Norton and Harrison Company, 71 SCRA 44 (1976) — Cited for the principle that strikers who fail without justification to report for work despite reinstatement orders are deemed to have forfeited their right to reinstatement.
• Insular Life Assurance Co. Ltd., Employees Association-NATU v. The Insular Life Assurance Co. Ltd., 37 SCRA 244 (1971) — Cited by respondents but distinguished; held that mere failure to report does not constitute abandonment in certain contexts, but not applicable to defiance of return-to-work orders under Article 263(g).
• RCPI v. Philippine Communications Electronics & Electricity Worker's Federation, 58 SCRA 763 (1974) — Cited by respondents but distinguished similarly.

• Article 263(g) of the Labor Code — Provides for the assumption of jurisdiction by the Secretary of Labor over labor disputes causing or likely to cause strikes in industries indispensable to the national interest, and the automatic effect of enjoining strikes and requiring immediate return to work.
• Article 264(a) of the Labor Code — Prohibits strikes or lockouts after assumption of jurisdiction by the President or the Secretary of Labor; provides that 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 employment status.
• Article 282(b) of the Labor Code — Provides for abandonment of work as a ground for dismissal by the employer, distinguished from abandonment under the law on strike (Articles 263(g) and 264(a)).