Allied Banking Corporation vs. National Labor Relations Commission

Defiance of a return-to-work order issued pursuant to the Secretary of Labor's assumption of jurisdiction over a labor dispute constitutes an illegal act that justifies the termination of employment of participating workers, regardless of their motives or the perceived legality of their strike.

A dispute arose between Allied Banking Corporation and its employees' union during the renewal of their Collective Bargaining Agreement. After the union filed a notice of strike, the Secretary of Labor and Employment assumed jurisdiction over the dispute pursuant to Article 263(g) of the Labor Code, enjoining any strike or lockout. Despite this, the union staged strikes on January 3-4, 1985, and again from February 11 to March 11, 1985. The bank terminated the employees who failed to return to work by a specified deadline. The Secretary of Labor later ordered the provisional reinstatement of all striking employees (except those who had accepted separation pay) pending resolution of the strike's legality.

• Nature of the Dispute: The conflict originated from a deadlock in CBA negotiations, particularly on wage increases, leading the union to file a notice of strike.
• Assumption of Jurisdiction: On December 16, 1984, the Secretary of Labor assumed jurisdiction over the dispute, automatically enjoining any intended strike.
• The Strikes: The union staged a strike on January 3-4, 1985, and a second, continuous strike from February 11 to March 11, 1985, despite the assumption order.
• Termination and Reinstatement Orders: The bank terminated employees who failed to return to work. The Secretary of Labor subsequently issued orders for the provisional reinstatement of strikers pending the final determination of the strike's legality.
• Provisional Reinstatement and Non-Compliance: While many employees were reinstated, 41 individual respondents were not. The bank cited its inability to find equivalent positions for them.
• Labor Arbiter's Ruling: The Arbiter found the strikes illegal under Article 263(g) but held that non-officer employees could only be dismissed if they committed illegal acts during the strike. Finding they did not, the Arbiter declared their dismissal illegal and ordered reinstatement with back wages.
• NLRC's Ruling: The NLRC affirmed that the strikes were illegal and that the employees' defiance of the return-to-work order constituted a valid ground for dismissal. However, it remanded the issue of back wages for the 41 non-reinstated employees to the Labor Arbiter, citing a prior Supreme Court resolution.

• Validity of Dismissal (Allied Banking Corporation): The bank argued that the employees' defiance of the Secretary of Labor's assumption and return-to-work orders constituted an illegal act under Article 264(a) of the Labor Code, justifying their termination. The bank contended that the NLRC gravely abused its discretion in remanding the back wages issue, as it was inconsistent with the finding of a valid dismissal.
• Illegality of Strike and Abandonment (Allied Banking Corporation): The bank maintained that the strikes were illegal and that the employees' failure to report for work constituted abandonment, severing the employment relationship.

• No Automatic Termination (Employees): The employees argued that mere participation in an illegal strike should not automatically result in termination. They contended there was no proof they knowingly participated in an illegal act.
• Strike as Suspended Relationship, Not Abandonment: They asserted that a strike suspends but does not terminate the employer-employee relationship, and their actions did not demonstrate an intent to abandon their jobs.
• Entitlement to Back Wages: The employees contended that the NLRC should have adopted a liberal approach favoring labor and that they were entitled to back wages from the period they should have been reinstated.

• Defiance of Assumption Order: Whether the employees' defiance of the return-to-work order issued pursuant to the Secretary of Labor's assumption of jurisdiction constitutes a valid ground for termination.
• Consistency of NLRC Ruling: Whether the NLRC committed grave abuse of discretion in remanding the issue of back wages to the Labor Arbiter after having upheld the validity of the employees' dismissal.

• Defiance of Assumption Order: The defiance of a return-to-work order issued under Article 263(g) of the Labor Code is a prohibited activity and an illegal act. Workers who knowingly participate in such defiance may be deemed to have lost their employment status. The Court emphasized that assumption orders are executory and must be strictly complied with, regardless of the workers' motives or the perceived validity of their claims.
• Consistency of NLRC Ruling: The NLRC's order to remand the back wages issue was annulled. The Court found it illogical and a grave abuse of discretion to inquire into back wages after having correctly ruled that the employees were validly dismissed. An award of back wages is incompatible with a finding of valid termination.

• Executory Nature of Assumption Orders — An assumption or certification order issued by the Secretary of Labor under Article 263(g) of the Labor Code is immediately executory and must be strictly complied with by the parties, even while a petition questioning its validity is pending. Its purpose is to ensure a speedy resolution of disputes in industries indispensable to the national interest without jeopardizing that interest.
• Defiance as Illegal Act — A strike undertaken, or the refusal to return to work, in defiance of an assumption or certification order is a prohibited activity and thus illegal under Article 264(a) of the Labor Code. Union officers who knowingly participate in such an illegal strike, and workers who knowingly participate in the commission of illegal acts during a strike (which includes defying the return-to-work order), may be declared to have lost their employment status.

• "Returning to work in this situation is not a matter of option or voluntariness but of obligation. The worker must return to his job together with his co-workers so the operations of the company can be resumed and it can continue serving the public and promoting its interest."
• "The reinstatement ordered by then Minister Sanchez... was only provisional and subject to the outcome of the petition to declare the strike illegal. A permanent reinstatement will depend on the legality or illegality of the strike."
• "The NLRC's disposition of the case remanding to the Labor Arbiter the issue of reinstating respondents and the computation of their back wages is an illogical consequence of respondents' valid dismissal from their employment."

• Union of Filipro Employees v. Nestle Philippines, Inc., 192 SCRA 396 (1990) — Cited for the principle that a strike despite an assumption order is illegal and that the order must be strictly complied with regardless of the strikers' motives.
• St. Scholastica's College v. Torres, 210 SCRA 565 (1992) — Cited to reiterate that defiance of a return-to-work order is a ground for termination and that social justice does not compel protection for willful disobedience.
• Jackbilt Concrete Block Company, Inc. v. Norton and Harrison Company, 71 SCRA 44 (1976) — Cited for the holding that strikers who fail, without justification, to report for work pursuant to a reinstatement order are deemed to have forfeited their right to reinstatement.

• Article 263(g), Labor Code of the Philippines — Provides that when the Secretary of Labor assumes jurisdiction over a labor dispute in an industry indispensable to the national interest, the intended strike is automatically enjoined, and if one has taken place, all striking employees shall immediately return to work.
• Article 264(a), Labor Code of the Philippines — Provides that no strike shall be declared after the assumption of jurisdiction by the Secretary of Labor. It states that any union officer who knowingly participates in an illegal strike and any worker who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status.

• Justice Padilla
• Justice Bellosillo
• Justice Vitug
• Justice Kapunan