Bigg's Inc. vs. Boncacas

A union officer who knowingly participates in an illegal strike may be validly dismissed from employment, while a union member may be dismissed only if he knowingly participated in the commission of illegal acts during the strike, supported by substantial evidence identifying him as having committed such acts. Employees who participated in an illegal strike but did not commit prohibited acts are entitled to reinstatement but not to backwages, unless an established exception applies; where reinstatement is no longer feasible due to the lapse of a long period of time or strained relations, separation pay of one month's salary per year of service is awarded in lieu of reinstatement.

Bigg's Inc. operates a chain of restaurants with its principal place of business in Naga City, Camarines Sur. Its employees formed a labor union named Bigg's Employees Union, which was issued a Certificate of Registration by the Department of Labor and Employment on January 30, 1996. At the time of the strikes in question, the union had not yet been certified or recognized as the collective bargaining agent of Bigg's employees. The union was represented by its president, Jay Boncacas, while Bigg's was represented by its personnel officer Arlene Acabado and general manager Teresita Arejola. The parties' conflicting accounts of the events of February 1996 — including allegations of union busting by the employees and allegations of an illegal sit-down strike by management — gave rise to cross-complaints before the National Conciliation and Mediation Board for unfair labor practice, illegal dismissal, illegal strike, and damages.

Bigg's Inc. operates a chain of restaurants with its principal place of business in Naga City, Camarines Sur. Its employees formed the Bigg's Employees Union, which was issued a Certificate of Registration by the Department of Labor and Employment on January 30, 1996. At the time of the events in question, the union had not yet been certified or recognized as the collective bargaining agent of Bigg's employees. Jay Boncacas served as union president.

The parties presented sharply conflicting accounts of the events of February 1996. According to Bigg's, on February 16, 1996, approximately 50 union members staged an illegal sit-down strike at the Bigg's restaurant, refusing to perform their assigned tasks during the first shift. The union did not file a Notice of Strike with the National Conciliation and Mediation Board prior to the work stoppage, nor did it obtain a strike vote from its members. The union belatedly filed a Notice of Strike on the same day. Bigg's issued memoranda placing the striking employees under preventive suspension and requiring them to explain within 24 hours. When the employees failed to comply, Bigg's sent termination letters on February 19, 1996. The union members, for their part, accused Bigg's of interfering with union activities, alleging that in February 1996, members were asked to withdraw their union membership under threat of dismissal, and that employees Mariano Aycardo and Marilyn Jana were dismissed purportedly due to their union membership. The union members claimed that on February 16, 1996, Boncacas and other members were prevented from entering Bigg's premises, and that when they attempted to return to work on February 17, 1996, they were informed of their suspension.

Cross-complaints were filed before the NCMB — the union members filed a complaint for unfair labor practice, illegal dismissal, and damages (Sub RAB Case No. 05-03-00037-96), while Bigg's filed a complaint for illegal strike (Sub RAB Case No. 05-03-00034-96). The complaints were consolidated and mediation proceedings were conducted. When mediation reached an impasse, the union conducted a second strike on March 5, 1996. Bigg's alleged that during this strike, union members were disruptive and violent, preventing ingress and egress by forming human barricades, throwing stones at delivery vans causing injury to a driver and damage to vehicles and the guardhouse, placing large rocks along the road, and using megaphones to discourage customers. The strike was stopped when both parties agreed to compulsory arbitration.

After hearings before the Labor Arbiter, several employees manifested that they had entered into settlements with Bigg's and executed Quitclaims and Releases, while others were found to be contractual employees whose contracts had expired prior to the controversy and were removed as parties. The Labor Arbiter found both strikes illegal — the first for noncompliance with procedural requirements and the second for prohibited acts of violence and obstruction — and upheld the dismissal of union officers Boncacas, Liria, San Juan, and Arines, while ordering the reinstatement of 16 union members who were not shown to have committed illegal acts. The NLRC initially reversed this ruling but, on motion for reconsideration, reinstated the LA Decision. The Court of Appeals partially granted the union's appeal, overturning the finding of a sit-down strike on February 16, 1996 for insufficiency of evidence, upholding the illegality of the March 5, 1996 strike, exonerating Boncacas, and ordering the reinstatement of 23 union members with backwages. On motions for reconsideration, the CA amended its decision to remove certain employees who were not parties before it, while upholding the validity of the Compromise Agreement as not constituting a waiver of the employees' rights to pursue the case.

Bigg's Inc. (G.R. No. 200487):

• Scope of Certiorari Review: Bigg's argued that the CA committed reversible error in overturning the NLRC's findings, which had affirmed the LA's findings of fact and law, when in a petition for certiorari under Rule 65, the CA's purview is merely to determine whether the NLRC committed grave abuse of discretion — not to re-review the evidence.
• Misappreciation of Facts: Bigg's contended that the CA misappreciated the evidence in ruling that no strike occurred on February 16, 1996 and in crediting the union members' testimonies that they were barred from entering the premises. Bigg's claimed that it was the employees who refused to perform their jobs during the first shift, forcing management to close the store at 10:00 a.m.
• Prior Settlements: Bigg's maintained that certain union members had already voluntarily accepted separation pay and executed Quitclaims and Releases, and should therefore be excluded from any award.
• No Backwages for Illegal Strike: Bigg's argued that even assuming the union members were entitled to reimbursement, they were not entitled to backwages because the strikes they conducted were illegal.
• Separation Pay in Lieu of Reinstatement: Bigg's prayed that separation pay be awarded instead of reinstatement, given the long period of time that had elapsed since the dismissal.

Union Members (G.R. No. 200636):

• Legality of March 5 Strike: The union members maintained that the strike held on March 5, 1996 was not illegal and that they did not commit violence, coercion, or any prohibited act during the strike.
• Prior Illegal Dismissal: Arguendo that the March 5, 1996 strike was illegal, the union members contended that their dismissal was still illegal because their employment had already been terminated on February 19, 1996, prior to the March 5 strike. Any prohibited acts during the March 5 strike could not justify a dismissal that had already occurred.
• Reinstatement of Union Officers: The union members prayed that union officers Liria, San Juan, and Arines should also be reinstated with backwages.
• Omitted Members: The union members argued that Menandro Ramos, Lina Bartolome, Carmen Tejero, Sheila Raymundo, and Gregorio Come should also be reinstated, as their names were listed in the body of the LA Decision as entitled to reinstatement but were omitted from the dispositive portion without explanation and without any finding of participation in illegal acts.
• Damages and Attorney's Fees: The union members prayed for moral and exemplary damages and attorney's fees.

• Legality of the February 16, 1996 Strike: Whether the strike held on February 16, 1996 was illegal.
• Legality of the March 5, 1996 Strike: Whether the strike held on March 5, 1996 was illegal.
• Validity of Dismissal of Union Officers: Whether the union officers were validly dismissed from employment.
• Validity of Dismissal of Union Members: Whether the union members who did not commit illegal acts during the strikes were validly dismissed.
• Proper Award and Parties: What monetary award is proper and which employees are entitled to the award, including whether backwages should be granted, whether separation pay should be awarded in lieu of reinstatement, and whether omitted union members should be included.

• Legality of the February 16, 1996 Strike: Yes, the strike was illegal. The union failed to file the requisite Notice of Strike and did not observe the mandatory cooling-off period, and the union did not prove unfair labor practice or union busting that would exempt it from these requirements.
• Legality of the March 5, 1996 Strike: Yes, the strike was illegal. Although procedural requirements were complied with, the striking union members committed prohibited acts of violence, aggression, vandalism, and obstruction of free ingress and egress, in violation of Article 279(e) of the Labor Code.
• Validity of Dismissal of Union Officers: Yes, the dismissal was valid. Under Article 279(a) of the Labor Code, a union officer who knowingly participates in an illegal strike may be declared to have lost his employment status; Boncacas not only participated but principally organized both illegal strikes.
• Validity of Dismissal of Union Members: No, the dismissal of union members who did not knowingly commit illegal acts during the strikes was invalid. Mere participation in a lawful strike is not ground for termination, and for union members, dismissal requires knowing participation in the commission of illegal acts during a strike, supported by substantial evidence.
• Proper Award and Parties: Separation pay in lieu of reinstatement at one month's salary per year of service, without backwages. Menandro Ramos and Sheila Raymundo were included in the award. The monetary award earns 12% legal interest per annum from February 19, 1996 to June 30, 2013, and 6% per annum from July 1, 2013 until full satisfaction.

• Legality of the February 16, 1996 Strike: The CA erred in overturning the NLRC and LA findings that a sit-down strike occurred on February 16, 1996. Multiple Bigg's employees — security guard Ireneo Sumpay, Jr., supervisor Evelyn Rectin, operations officer Teresita Arejola, and corporate officer Carmen Manjon — executed consistent and corroborative sworn affidavits and testified that union members refused to work and staged a sit-down strike. This constituted substantial evidence, the quantum of proof required in labor cases. The strike was illegal because the union did not file a Notice of Strike with the NCMB prior to the work stoppage — filing one on the same day cannot substitute for compliance, as the cooling-off period is mandatory and intended to allow genuine efforts at amicable settlement. The union also failed to prove unfair labor practice under Article 259 of the Labor Code or union busting under Article 263, which would have allowed a non-certified bargaining agent to initiate a strike or exempt it from the cooling-off period. The union presented no substantial evidence that members were actually dismissed or threatened with dismissal for their union membership.

• Legality of the March 5, 1996 Strike: The consistent and uniform findings of the CA, NLRC, and LA on the illegality of the March 5, 1996 strike were upheld. Although the union complied with the procedural requirements for a valid strike, the striking members committed acts of violence, aggression, vandalism, and blockage of free passage to and from Bigg's premises. Audio-video footage was presented showing these prohibited acts, and counsel for the union members stated during hearings that he was not contesting the allegation that some members attempted to block the passage of delivery vans. Article 279(e) of the Labor Code prohibits persons engaged in picketing from committing acts of violence, coercion, or intimidation, or obstructing free ingress to or egress from the employer's premises.

• Validity of Dismissal of Union Officers: Article 279(a) of the Labor Code imposes a stricter standard on union officers than on mere members. For union officers, knowingly participating in an illegal strike is sufficient ground for termination; for union members, dismissal requires knowing participation in the commission of illegal acts during the strike, with substantial evidence identifying them as having committed such acts. Boncacas not only knowingly participated but principally organized both illegal strikes. The CA erred in exonerating Boncacas on the ground that he did not personally commit illegal acts during the March 5 strike, as the standard for union officers does not require personal commission of illegal acts — knowing participation in the illegal strike itself suffices. The dismissal of all union officers, including Boncacas, Liria, San Juan, and Arines, was therefore valid.

• Validity of Dismissal of Union Members: Union members who did not knowingly participate in the commission of illegal acts during the strikes were invalidly dismissed. The LA Decision identified only Boncacas, Liria, San Juan, and Arines as participants in the illegal strikes. As to Gregorio Come, the LA listed him as a participant in the March 5 strike but did not state whether he knowingly participated in prohibited acts. As to Menandro Ramos, Lina Bartolome, Carmen Tejero, and Sheila Raymundo, the LA made no finding of participation in any illegal act, yet their names were omitted from the dispositive portion without explanation. Absent any definite finding of knowing participation in illegal acts, these members should have been included in the award of reinstatement.

• Proper Award and Parties: Backwages were deleted because employees dismissed for joining an illegal strike are not entitled to backwages even if reinstated, conformably with the principle of "a fair day's wage for a fair day's labor." None of the recognized exceptions — illegal lockout compelling a strike, grossest form of unfair labor practice, discriminatory rehiring, or refusal to reinstate workers who unconditionally offered to return to work after a legal strike — were present, as both strikes were illegal. Separation pay was awarded in lieu of reinstatement because 23 years had elapsed since the dismissal and Bigg's manifested that it could no longer trust the striking employees, especially given that the company is in the food service industry. The Compromise Agreement executed by certain employees was vague and explicitly reserved the right to pursue the pending cases, and thus did not constitute a waiver of their rights. Bigg's failed to prove that certain employees were contractual, having submitted only a memorandum of termination rather than the employment contracts themselves. However, employees who were not parties before the CA — Maruja De Vera, Willie Oyarde, Marlon Romero, Michael Valenzuela, Egino Palmar, and Joseph Rull — could not claim benefits from the CA's decision. Of the five omitted union members, only Sheila Raymundo and Menandro Ramos joined the instant petition; the Court could not issue judgment as to Lina Bartolome, Carmen Tejero, and Gregorio Come, who were no longer parties. The monetary award earns legal interest at 12% per annum from February 19, 1996 until June 30, 2013, and 6% per annum from July 1, 2013 until full satisfaction, pursuant to Nacar vs. Gallery Frames.

• Distinction Between Union Officers and Union Members in Illegal Strikes — Under Article 279(a) of the Labor Code, a union officer who knowingly participates in an illegal strike may be validly dismissed from employment; the standard is stricter for officers than for members. For union members, dismissal requires knowing participation in the commission of illegal acts during the strike, supported by substantial evidence identifying them as having committed such prohibited acts. Mere participation in a lawful strike is not ground for termination. The Court applied this distinction to uphold the dismissal of all union officers, including Boncacas, who organized both illegal strikes, while ordering separation pay for union members who committed no illegal acts.

• No-Backwages Rule for Illegal Strikes — Employees dismissed for joining an illegal strike are not entitled to backwages for the period of the strike even if they are reinstated, in conformity with the principle of "a fair day's wage for a fair day's labor." Recognized exceptions exist: (a) when employees were illegally locked out to compel them to strike; (b) when the employer is guilty of the grossest form of unfair labor practice; (c) when the employer committed discrimination in rehiring of strikers; or (d) when workers who staged a voluntary unfair labor practice strike offered to return to work unconditionally but the employer refused to reinstate them. The last exception requires that the strike be legal. None of these exceptions was present, as both strikes were illegal.

• Separation Pay in Lieu of Reinstatement — Separation pay may be awarded in lieu of reinstatement under enumerated circumstances: (a) when reinstatement can no longer be effected due to passage of a long period of time or realities of the situation; (b) reinstatement is inimical to the employer's interest; (c) reinstatement is no longer feasible; (d) reinstatement does not serve the best interests of the parties; (e) the employer is prejudiced by the workers' continued employment; (f) facts making execution unjust or inequitable have supervened; or (g) strained relations between employer and employee. The Court awarded separation pay of one month's salary per year of service because 23 years had elapsed and Bigg's manifested it could no longer trust the striking employees.

• Requirements for a Valid Strike — A valid strike requires: (1) filing of a notice of strike with the regional branch of the NCMB, copy furnished the employer; (2) observance of the cooling-off period — 30 days for bargaining deadlocks, 15 days for unfair labor practice, with no cooling-off period in cases of union busting; (3) conduct of a strike vote by secret ballot approved by majority of the total union membership, with 24-hour prior notice to the NCMB; and (4) reporting of the strike vote results to the NCMB at least seven days before the intended strike. In cases of unfair labor practice, a legitimate labor organization may declare a strike even without certification as bargaining agent. In cases of union busting — defined as dismissal of duly elected union officers threatening the existence of the union — the 15-day cooling-off period does not apply.

• Substantial Evidence in Labor Cases — The quantum of proof required in labor cases is substantial evidence, defined as such amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. The consistent and corroborative sworn declarations of multiple witnesses constituted substantial evidence of the sit-down strike on February 16, 1996, reversing the CA's finding that only one witness attested to the strike.

• "For union officers, knowingly participating in an illegal strike is a valid ground for termination of their employment. But for union members who participated in a strike, their employment may be terminated only if they committed prohibited and illegal acts during the strike and there is substantial evidence or proof of their participation, i.e., that they are clearly identified to have committed such prohibited and illegal acts." — This passage, quoting Magdala Multipurpose & Livelihood Cooperative vs. Kilusang Manggagawa ng LGS, articulates the controlling distinction between union officers and members in illegal strikes, which is the central ratio decidendi of the case.

• "Conformably with the long honored principle of a fair day's wage for a fair day's labor, employees dismissed for joining an illegal strike are not entitled to backwages for the period of the strike even if they are reinstated by virtue of their being merely members of the striking union who did not commit any illegal act during the strike." — This passage, quoting Escario vs. NLRC, states the canonical formulation of the no-backwages rule for illegal strikes, which the Court applied to delete the backwages award.

• "The cooling-off period is not merely a period during which the union and the employer must simply wait. The purpose of the cooling-off period is to allow the parties to negotiate and seek a peaceful settlement of their dispute to prevent the actual conduct of the strike. In other words, there must be genuine efforts to amicably resolve the dispute." — This passage defines the substantive purpose of the cooling-off period, explaining why filing a notice of strike on the same day as the work stoppage cannot constitute compliance.

• "Absent any definite finding that said members willingly participated in any illegal act, they should have been included in the award of reinstatement with backwages by the LA." — This passage establishes the principle that omission from a dispositive portion without a corresponding finding of participation in illegal acts cannot deprive employees of their right to reinstatement.

• Magdala Multipurpose & Livelihood Cooperative vs. Kilusang Manggagawa ng LGS, 675 Phil. 861 (2011) — Followed. The Court quoted its summary of Article 264(a) of the Labor Code establishing the distinction between union officers and union members regarding the consequences of participating in an illegal strike.
• Escario vs. NLRC, 645 Phil. 503 (2010) — Followed. The Court relied on its formulation of the no-backwages rule for employees dismissed for joining an illegal strike, and its enumeration of circumstances warranting separation pay in lieu of reinstatement.
• Philippine Diamond Hotel & Resort, Inc. vs. Manila Diamond Hotel Employees Union, 526 Phil. 679 (2006) — Followed. The Court adopted its enumeration of exceptions to the no-backwages rule and its discussion of separation pay in lieu of reinstatement when reinstatement is no longer possible.
• Lapanday Workers Union vs. NLRC, 318 Phil. 114 (1995) — Followed. The Court cited its reasoning that the seven-day waiting period is intended to give the NCMB an opportunity to verify whether the projected strike carries the imprimatur of the majority of union members.
• Nacar vs. Gallery Frames, 716 Phil. 267 (2013) — Followed. Applied to set the legal interest rate at 12% per annum until June 30, 2013, and 6% per annum from July 1, 2013 until full satisfaction.
• Municipality of Orion vs. Pereyra, 50 Phil. 679 (1927) — Followed. Applied to hold that a reversal as to parties appealing does not necessitate a reversal as to parties not appealing, and that the Court cannot issue judgment as to non-parties.
• Valencia vs. Classique Vinyl Products Corporation, 804 Phil. 492 (2017) — Followed. Cited for the definition of substantial evidence as the quantum of proof in labor cases.

• Article 219 (formerly Article 212)(o), Labor Code — Defines "strike" as any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute. Applied to characterize the work stoppages at issue.
• Article 259 (formerly Article 248), Labor Code — Defines unfair labor practices of employers, including interference with the right to self-organization, discrimination, and dismissal for union activities. Applied to evaluate the union's claim of unfair labor practice, which the Court found unsubstantiated.
• Article 278 (formerly Article 263), Labor Code — Sets forth the procedural requirements for a valid strike, including notice of strike, cooling-off period, strike vote by secret ballot, and the seven-day waiting period. Provides that in cases of union busting, the 15-day cooling-off period shall not apply. Applied to determine the illegality of the February 16, 1996 strike for noncompliance.
• Article 279 (formerly Article 264)(a), Labor Code — Provides that 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 employment status; mere participation in a lawful strike is not ground for termination. Applied to uphold the dismissal of union officers and to distinguish the standard for union members.
• Article 279 (formerly Article 264)(e), Labor Code — Prohibits persons engaged in picketing from committing acts of violence, coercion, intimidation, or obstruction of free ingress and egress. Applied to hold the March 5, 1996 strike illegal for prohibited acts.
• Department Order No. 40-03, Amending the Implementing Rules of Book V of the Labor Code — Sections 5, 6, 7, and 10, governing grounds for strike, who may declare a strike, notice of strike, and strike vote requirements. Applied to detail the procedural requisites for a valid strike and the exceptions for unfair labor practice and union busting.

Carpio (Chairperson), J. Reyes, Jr., and Hernando, JJ., concurred. Perlas-Bernabe, J., was on wellness leave.