Biflex Phls. Inc. Labor Union (NAFLU) vs. Filflex Industrial and Manufacturing Corporation

Union officers who knowingly participate in an illegal strike — including a work stoppage undertaken in conjunction with a welga ng bayan absent any labor dispute with the employer and without compliance with statutory strike formalities — may be declared to have lost their employment status, the word "may" in Article 264(a) of the Labor Code granting the employer the option to so declare.

Respondents Biflex (Phils.) Inc. and Filflex Industrial and Manufacturing Corporation are sister companies engaged in the garment business, situated in one compound along with another sister company, General Garments Corporation, sharing a common entrance. The two petitioner-unions, both affiliated with the National Federation of Labor Unions (NAFLU), are the respective collective bargaining agents of the employees of these corporations. On October 24, 1990, the labor sector staged a welga ng bayan to protest accelerating oil prices, providing the backdrop against which the union officers' work stoppage and subsequent termination would be evaluated.

Petitioners are officers of two labor unions — the Biflex (Phils.) Inc. Labor Union (NAFLU) and the Filflex Industrial and Manufacturing Labor Union (NAFLU) — which serve as the collective bargaining agents of the employees of respondents Biflex (Phils.) Inc. and Filflex Industrial and Manufacturing Corporation, respectively. The two respondent corporations are sister companies engaged in the garment business, situated in one compound along with another sister company, General Garments Corporation, sharing a common entrance.

On October 24, 1990, the labor sector staged a welga ng bayan to protest accelerating oil prices. On that same date, the petitioner-unions, led by their officers, staged a work stoppage that lasted for several days. Petitioners claimed that the welga ng bayan made it difficult to get a ride and created apprehension that violence would erupt between participants and authorities, effectively preventing workers from reporting for work. They further asserted that respondents were "slighted" by the workers' no-show and, as punishment, barred the workers and petitioners from entering the company premises, constituting an illegal lockout. Petitioners put up tents, tables, and chairs in front of the main gate, explaining that these were for the convenience of union members who reported every morning to check if management would allow them to return to work. Petitioners claimed to have filed a notice of strike on October 31, 1990, though no copy thereof was ever produced before the Labor Arbiter.

Respondents, for their part, maintained that the work stoppage was illegal for failure to comply with the procedural requirements for a valid strike: filing of a notice of strike, securing a strike vote, and submission of a report of the strike vote to the Department of Labor and Employment. On October 31, 1990, respondents filed a petition to declare the work stoppage illegal. Operations resumed on November 13, 1990. Respondents thereafter terminated the employment of the petitioners pursuant to the Labor Arbiter's decision.

The Labor Arbiter, by Decision of December 15, 1992, found for respondents and declared the strike illegal, ordering the termination of the union officers named therein. The NLRC reversed this ruling, holding that there was no strike to speak of since no labor or industrial dispute existed between the parties, and ordered reinstatement with full backwages. The Court of Appeals, on certiorari, reversed the NLRC and reinstated the Labor Arbiter's decision, discrediting petitioners' lockout claim — noting their failure to file any letter of protest or complaint with management — and finding non-compliance with the legal requirements of a valid strike, including the absence of any produced copy of the alleged notice of strike.

• Automatic Dismissal for Illegal Strike: Petitioners faulted the appellate court for interpreting Article 264(a) of the Labor Code as mandatory and calling for the automatic dismissal of petitioners for having engaged in an illegal strike.
• Premature Implementation of Labor Arbiter's Decision: Petitioners argued that respondents erred in immediately implementing the Labor Arbiter's decision dismissing petitioners from work despite the fact that the decision had not yet become final and executory.
• Illegal Lockout by Respondents: Petitioners contended that the appellate court erred in declaring them guilty of holding an illegal strike when circumstances showed that respondents were the ones guilty of an illegal lockout, having barred workers from entering the company premises as punishment for joining the welga ng bayan.

• Legality of the Work Stoppage: Whether petitioners' work stoppage in conjunction with the welga ng bayan constituted an illegal strike.
• Illegal Lockout Claim: Whether respondents committed an illegal lockout when they refused entry to petitioners after the work stoppage.
• Termination of Union Officers: Whether union officers who knowingly participated in the illegal strike could be declared to have lost their employment status under Article 264(a) of the Labor Code, and whether the word "may" in that provision is mandatory or discretionary.
• Premature Implementation: Whether respondents erred in immediately implementing the Labor Arbiter's decision despite its non-finality.

• Legality of the Work Stoppage: Yes, the work stoppage was illegal. Employees who have no labor dispute with their employer but refuse to work and instead join a welga ng bayan commit an illegal work stoppage, more so where there was no prior notification to or permission from the employer.
• Illegal Lockout Claim: No, the illegal lockout claim was discredited. Petitioners' failure to file any protest or complaint with management belied their contention, as a locked-out union would normally immediately bring management before the bar of justice.
• Termination of Union Officers: Yes, union officers who knowingly participated in the illegal strike could be declared to have lost their employment status. The word "may" in Article 264(a) grants the employer the option to so declare, making reinstatement a management prerogative the Court may not supplant.
• Premature Implementation: N/A, as the text does not separately address this issue with distinct reasoning; the Court's ruling on the illegality of the strike and the discretionary language of Article 264(a) effectively subsumed this question.

• Legality of the Work Stoppage: A work stoppage due to a welga ng bayan is in the nature of a general strike, an extended sympathy strike, affecting numerous employers including those who have no dispute with their employees regarding terms and conditions of employment. Employees who have no labor dispute with their employer but who refuse to work and instead join a welga ng bayan commit an illegal work stoppage. Even if petitioners' participation were considered an exercise of freedom of expression, assembly, or petition, such rights are not absolute; the Constitution also protects the right of enterprises to reasonable returns on investments and growth, and enshrines the principle of shared responsibility between workers and employers aimed at fostering industrial peace. There being no showing that petitioners notified respondents of their intention or were allowed to join the welga ng bayan, their work stoppage was beyond legal protection. Moreover, even assuming arguendo that petitioners had complied with legal formalities, the strike would still be illegal because petitioners blocked the free ingress to and egress from the company premises, violating Article 264(e) of the Labor Code. The NLRC itself took note of petitioners' act of physically blocking and preventing the entry of customers, supplies, and non-striking employees. The legality of a strike is determined not only by compliance with legal formalities but also by the means by which it is carried out.

• Illegal Lockout Claim: Petitioners' claim of illegal lockout was discredited by their own inaction. Had there been an illegal lockout, petitioners would have filed a protest with management or a complaint before the proper forum. As the Labor Arbiter observed, the inaction of petitioners betrays the weakness of their contention, for normally a locked-out union will immediately bring management before the bar of justice. No such protest or complaint was filed.

• Termination of Union Officers: Under the third paragraph of Article 264(a) of the Labor Code, any union officer who knowingly participates in an illegal strike may be declared to have lost his employment status. In Gold City Integrated Port Service, Inc. vs. National Labor Relations Commission, the Court held that the word "may" in this provision grants the employer the option of declaring a union officer who participated in an illegal strike as having lost his employment. Reinstatement or retention of employment, despite participation in an illegal strike, is a management prerogative which the Court may not supplant. Petitioners, being union officers, must bear the consequences of their acts of knowingly participating in the illegal strike.

• Illegality of Welga ng Bayan Work Stoppage — A work stoppage due to a welga ng bayan is in the nature of a general strike, an extended sympathy strike, affecting numerous employers including those who have no dispute with their employees. Employees who have no labor dispute with their employer but who, on a day they are scheduled to work, refuse to work and instead join a welga ng bayan commit an illegal work stoppage. The Court applied this by holding that petitioners' work stoppage was illegal since no labor dispute existed between them and respondents, and petitioners neither notified respondents of their intention to join the welga ng bayan nor were allowed by respondents to do so.

• Legality of Strike Determined by Both Formalities and Means — The legality of a strike is determined not only by compliance with its legal formalities but also by the means by which it is carried out. The Court applied this by finding that even assuming petitioners had complied with legal formalities, the strike would still be illegal because petitioners blocked free ingress to and egress from the company premises in violation of Article 264(e) of the Labor Code.

• Union Officers' Liability in Illegal Strikes (Article 264(a)) — 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. The word "may" grants the employer the option to declare such loss of employment status; reinstatement or retention despite participation in an illegal strike is a management prerogative the Court may not supplant. The Court applied this by affirming the termination of the petitioner union officers.

• "Stoppage of work due to welga ng bayan is in the nature of a general strike, an extended sympathy strike. It affects numerous employers including those who do not have a dispute with their employees regarding their terms and conditions of employment." — This passage defines the legal character of a welga ng bayan work stoppage and establishes the doctrinal basis for holding such stoppages illegal when undertaken by employees without a labor dispute against their own employer.

• "In fine, the legality of a strike is determined not only by compliance with its legal formalities but also by the means by which it is carried out." — This formulation articulates the dual test for strike legality — procedural compliance and lawful conduct — and is the ratio decidendi for sustaining the illegality finding even apart from the formalities issue.

• "The law . . . grants the employer the option of declaring a union officer who participated in an illegal strike as having lost his employment. Reinstatement of a striker or retention of his employment, despite his participation in an illegal strike, is a management prerogative which this Court may not supplant." — Quoted from Gold City Integrated Port Service, Inc. vs. NLRC, this passage defines the discretionary character of Article 264(a)'s "may" and establishes that the decision to terminate or retain is a management prerogative beyond the Court's power to override.

• Gold City Integrated Port Service, Inc. vs. National Labor Relations Commission, G.R. No. 103560, July 6, 1995, 245 SCRA 627 — Controlling precedent on the interpretation of the word "may" in Article 264(a) of the Labor Code. The Court followed this decision in holding that the employer has the option to declare a union officer who participated in an illegal strike as having lost employment status, and that reinstatement is a management prerogative the Court may not supplant.

• Jacinto vs. Court of Appeals, G.R. No. 124540, November 14, 1997, 281 SCRA 657 — Cited for the proposition that the exercise of freedoms of expression, assembly, and petition is not absolute.

• Zaldivar vs. Gonzales, Nos. L-79690-707 and No. L-80578, October 7, 1988, 166 SCRA 316 — Cited alongside Jacinto in support of the principle that constitutional freedoms are not absolute.

• Article 264(a), Labor Code — 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 his employment status. The Court applied this provision to uphold the termination of the petitioner union officers, relying on the discretionary "may" to affirm the employer's option to terminate.

• Article 264(e), Labor Code — Provides that no person engaged in picketing shall obstruct the free ingress to or egress from the employer's premises for lawful purposes, or obstruct public thoroughfares. The Court applied this provision to hold that even assuming compliance with strike formalities, the strike would still be illegal because petitioners blocked free ingress to and egress from the company premises.

• Article XIII, Section 3(3) and 3(4), 1987 Constitution — Section 3(3) enshrines the principle of shared responsibility between workers and employers aimed at fostering industrial peace; Section 3(4) protects the right of enterprises to reasonable returns on investments and to expansion and growth. The Court invoked these provisions to balance petitioners' exercise of constitutional freedoms against the state's interest in protecting enterprises and promoting industrial peace.

Quisumbing, J. (Chairperson), Carpio, J., Tinga, J., and Velasco, Jr., JJ., concurred.