Gold City Integrated Port Service, Inc. vs. NLRC

Ordinary workers who merely participate in an illegal strike cannot be terminated absent proof of illegal acts, while union officers who knowingly participate in an illegal strike may be terminated; separation pay in lieu of reinstatement may be awarded to the ordinary workers when reinstatement has become impossible, but no backwages are awarded as a penalty for their participation in the illegal strike.

INPORT was engaged in stevedoring and arrastre services at the port of Cagayan de Oro, and its employees were members of the Macajalar Labor Union — Federation of Free Workers (MLU-FFW), with which INPORT had an existing collective bargaining agreement. The CBA contained a union security clause requiring termination of an employee who loses good standing with the union upon proper notice. The dispute required the SC to apply the Labor Code’s strike requirements and the distinct consequences of illegal strike participation for ordinary workers and union officers.

INPORT operated stevedoring and arrastre services at the port of Cagayan de Oro, and its employees belonged to the Macajalar Labor Union — Federation of Free Workers (MLU-FFW), which had an existing collective bargaining agreement with INPORT. Early in the morning of April 30, 1985, the employees stopped working and gathered in a mass action to express grievances over wages, thirteenth month pay, and hazard pay. The strike paralyzed operations at the port. On the same morning, the strikers filed individual notices of strike, titled “Kaugalingon nga Declarasyon sa Pag-Welga,” with the then Ministry of Labor and Employment. Conciliation conferences between INPORT and the strikers failed, and INPORT filed a complaint before the Labor Arbiter for Illegal Strike with a prayer for a restraining order and preliminary injunction. On May 7, 1985, the NLRC issued a temporary restraining order. Thereafter, the majority of the strikers returned to work, leaving the private respondents who continued their protest.

Counsel for the private respondents filed a manifestation stating that INPORT required prior screening by the MLU-FFW before the remaining strikers could be accepted back to work. Counsel for the MLU-FFW also filed a Motion to Drop Most of the Party Respondents from the complaint. The 278 employees on whose behalf the motion was filed claimed that they were duped or tricked into signing the individual notices of strike; after discovering the deception and verifying that the strike was staged by a minority of union officers and members without the approval of or consultation with the majority, they withdrew their notices and returned to work. INPORT interposed no objection, and the Labor Arbiter, in a decision dated July 23, 1985, granted their exclusion as respondents. The complaint was then directed against the 31 respondents who did not return to work and continued the strike; four of them later died, leaving the 27 private respondents in the case.

The Labor Arbiter found that the strike staged on April 30, 1985 was illegal for failure to comply with the formal requirements of Article 264 of the Labor Code. He found no evidence that the workers who participated in the illegal strike committed illegal acts, and after noting that INPORT accepted the other striking employees back to work, he held that the private respondents should similarly be allowed to return without undergoing the screening required by the MLU-FFW. As to the six private respondents who were union officers, the Labor Arbiter ruled that they could not have been duped or tricked into signing the strike notice because they were active participants in the conciliation meetings and were fully aware of what was going on; they should be accepted back to work after seeking reconsideration from INPORT.

The private respondents contended that they were terminated for failure to submit to the screening requirement. INPORT, for its part, pointed out that the screening was allegedly requested by the MLU-FFW upon the belief that a competing union, the National Federation of Labor, had influence over its members in staging the strike, and that INPORT agreed to the screening requirement merely to avoid further friction with the MLU-FFW. INPORT later filed a Manifestation attaching a May 15, 1987 Certification by the President of the MLU-FFW stating that the remaining strikers had ceased to be members of the union. The MLU-FFW had an existing CBA with INPORT containing a union security clause.

The NLRC found that the private respondents were not actually terminated from service but were merely made to submit to a screening committee as a prerequisite for readmission, and that those resistant to the procedure were partly responsible for the delay in their readmission. The Labor Arbiter’s factual findings, as modified by the NLRC, thus centered on the absence of proof that the ordinary workers committed illegal acts during the strike, the union officers’ active and knowing participation in the strike, and the remaining strikers’ refusal to undergo screening and their subsequent cessation of union membership.

• Separation Pay and Backwages Despite Illegal Strike: INPORT alleged that the NLRC committed grave abuse of discretion in awarding private respondents separation pay and backwages despite the declaration that the strike was illegal.
• Finality of the NLRC Resolution: INPORT maintained that the NLRC’s January 14, 1991 Resolution could not be modified upon reconsideration after the lapse of an unreasonable period of time.

• Reduction of Separation Pay and Deletion of Backwages: Private respondents assailed the NLRC’s reduction of separation pay and deletion of backwages as constituting grave abuse of discretion.
• Timeliness of Reconsideration: Private respondents alleged that the January 14, 1991 Resolution could not be reconsidered after the unreasonable length of eleven months.
• Termination Through Screening: Private respondents contended that they were terminated for failure to submit to the screening requirement.

• Legality of the April 30, 1985 Mass Action: Whether the mass action was a strike and illegal for noncompliance with Article 264(c) and (f) of the Labor Code.
• Reliefs for Ordinary Union Members: Whether ordinary workers who participated in the illegal strike but committed no illegal acts are entitled to reinstatement, separation pay, and backwages.
• Reliefs for Union Officers: Whether union officers who knowingly participated in the illegal strike are entitled to reinstatement, separation pay, and backwages.
• Timeliness of NLRC Reconsideration: Whether the NLRC’s January 14, 1991 Resolution could be modified on December 12, 1991 after eleven months.

• Legality of the April 30, 1985 Mass Action: Yes. The mass action was a strike, and it was illegal for failure to comply with Article 264(c) and (f), there being no valid notice, secret-ballot strike vote, cooling-off period, or seven-day reporting.
• Reliefs for Ordinary Union Members: Yes, in part. Ordinary workers may not be terminated for mere participation in an illegal strike absent proof of illegal acts; they are entitled to reinstatement, but the SC awarded one month salary per year of service until 1985 as separation pay in lieu of reinstatement, without backwages.
• Reliefs for Union Officers: No. Union officers who knowingly participated in the illegal strike may be terminated under Article 264 and are not entitled to reinstatement, separation pay, or backwages.
• Timeliness of NLRC Reconsideration: Yes. The eleven-month period did not invalidate the modification; the January 14, 1991 Resolution had not acquired finality because a motion for reconsideration was timely filed.

• Legality of the April 30, 1985 Mass Action: The SC treated the April 30 mass action as a strike because there was a temporary stoppage of work by concerted action resulting from a labor dispute over wages, thirteenth month pay, and hazard pay; Article 212(0) and (1) define strike and labor dispute. The formal requirements in Article 264(c) and (f) are mandatory. The individual notices filed by the workers did not conform because they were represented by MLU-FFW, which had an existing CBA with INPORT; the workers also failed to observe the secret-ballot strike vote, cooling-off period, and reporting requirements. National Federation of Sugar Workers vs. Ovejera held that the cooling-off period and seven-day strike ban after the strike-vote report are mandatory. The strike was therefore illegal.

• Reliefs for Ordinary Union Members: Article 265 (now Article 264) distinguishes workers from union officers. A worker merely participating in an illegal strike may not be terminated; termination requires proof of illegal acts during the strike. No such proof existed. The SC found private respondents were dismissed when INPORT refused to accept them after they refused the screening, even though the Labor Arbiter had ordered their acceptance without screening. As ordinary workers, they were entitled to reinstatement. But a decade had lapsed, and the May 15, 1987 Certification and the CBA union security clause showed they had ceased to be MLU members, so reinstatement was impossible. In lieu of reinstatement, the SC awarded one month salary for every year of service until 1985 as separation pay. No backwages were awarded as a penalty for their continued participation in the illegal strike after most co-workers returned. The NLRC’s “equitable relief” separation pay and P1,000.00 compensation were deleted as incompatible.

• Reliefs for Union Officers: Article 264 provides that a union officer who knowingly participates in an illegal strike may be declared to have lost employment status. The word “may” grants the employer the option to terminate. The union officers were active participants in the conciliation meetings and could not have been duped into signing the strike notice; they knowingly participated. INPORT’s prior acceptance of other union officers and its uncalled-for screening did not erase its right to terminate. The SC held their insistence on unconditional reinstatement or separation pay and backwages unwarranted and unjustified, and denied them any relief.

• Timeliness of NLRC Reconsideration: A resolution does not acquire finality while a timely motion for reconsideration remains pending. The January 14, 1991 Resolution was timely challenged by motion for reconsideration, so it had not become final. The SC held that, under the circumstances, eleven months was not an unreasonable length of time. The December 12, 1991 modified Resolution was therefore valid and in accordance with law.

• Mandatory Strike Requirements — Article 264(c) and (f) of the Labor Code require the union to file a notice of strike at least thirty days before the intended date (fifteen days in unfair labor practice cases), obtain approval of the strike by at least two-thirds of the total union membership in the bargaining unit by secret ballot, furnish the Ministry the results of the voting at least seven days before the intended strike, and observe the cooling-off period. The SC applied these requirements strictly: the individual notices filed by the workers did not conform because they were represented by MLU-FFW, which had an existing CBA with INPORT, and the workers failed to observe the secret-ballot strike vote, cooling-off period, and reporting requirements, making the April 30, 1985 strike illegal.
• Consequences of an Illegal Strike: Ordinary Workers vs. Union Officers — An ordinary worker may not be terminated for mere participation in an illegal strike; termination requires proof that he committed illegal acts during the strike. A union officer who knowingly participates in an illegal strike may be declared to have lost employment status, and any worker or union officer who commits illegal acts during a strike may likewise be terminated. The SC applied the distinction by protecting the ordinary members absent proof of illegal acts and denying relief to the union officers who knowingly participated.
• Reinstatement and Backwages Require Illegal Dismissal; Separation Pay May Substitute — Reinstatement and full backwages are reliefs for an illegally dismissed employee, while separation pay is awarded when reinstatement is not possible or when dismissal is due to valid causes under Articles 283 and 284. The SC found the ordinary members were dismissed when INPORT refused to accept them after the screening, but awarded separation pay in lieu of reinstatement because reinstatement had become impossible; it denied backwages as a penalty for their continued participation in the illegal strike.
• Union Security Clause and Cessation of Union Membership — Under the CBA’s union security clause, an employee who loses good standing with the union may be discharged, dismissed, or terminated upon proper notice. The SC applied the clause to the remaining strikers who had ceased to be MLU-FFW members, holding that they could no longer be reinstated and that separation pay was the proper substitute.
• Finality and Reconsideration — A resolution does not acquire finality while a timely motion for reconsideration is pending. The SC applied this rule in holding that the NLRC’s January 14, 1991 Resolution had not become final and that the December 12, 1991 modification after eleven months was valid, the period not being unreasonable under the circumstances.

• “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.” — The SC uses this statutory distinction to deny relief to union officers while protecting ordinary workers absent proof of illegal acts.
• “Under the law, an employee is entitled to reinstatement and to his full backwages when he is unjustly dismissed.” — The SC states the general rule before distinguishing illegal strike cases and the substitute remedy of separation pay.
• “Since private respondents (union members) are no longer members of the MLU, they cannot be reinstated. In lieu of reinstatement, which was a proper remedy before May 1987 when they were dismissed from the union, we award them separation pay.” — The SC uses the CBA union security clause and the cessation of union membership to award separation pay instead of reinstatement.
• “The Resolution of the public respondent dated January 14, 1991 did not acquire finality in view of the timely filing of a motion for reconsideration.” — The SC rejects the argument that the NLRC could not modify its resolution after eleven months.

• National Federation of Sugar Workers vs. Ovejera, G.R. No. L-59743, May 31, 1982, 114 SCRA 354 — Controlling precedent; followed for the rule that the cooling-off period and seven-day strike ban after the strike-vote report are mandatory.
• Torillo vs. Leogardo, G.R. No. 77205, May 27, 1991, 197 SCRA 471 — Cited for reinstatement and backwages as separate and distinct reliefs for an illegally dismissed employee.
• Indophil Acrylic Mfg. Corp. vs. NLRC, G.R. No. 96488, September 27, 1993, 226 SCRA 723 — Cited with Torillo for the same proposition on reinstatement and backwages.
• PLDT vs. NLRC, G.R. No. L-80609, August 23, 1988, 164 SCRA 671 — Cited for the rule that separation pay is allowed only where the employee is validly dismissed for causes other than serious misconduct or those reflecting on moral character.
• Escareal vs. NLRC, G.R. No. 99359, September 2, 1992, 213 SCRA 472 — Cited for separation pay being oriented toward the immediate future and backwages restoring income lost by reason of unlawful dismissal.
• Prime Security Services, Inc. vs. NLRC, G.R. No. 93476, March 19, 1993, 220 SCRA 142 — Cited for the definition of separation pay as a statutory right and the amount received at the time of severance from service.
• Bisig ng Manggagawa sa Concrete Aggregates, Inc. vs. NLRC, G.R. No. 105090, September 16, 1993, 226 SCRA 499 — Cited for the definition of strike.
• Ilaw at Buklod ng Manggagawa vs. NLRC, G.R. No. 91980, June 27, 1991, 198 SCRA 586 — Cited for the definition of strike.

• Article 212(0), 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; the SC used it to classify the April 30 mass action as a strike.
• Article 212(1), Labor Code — Defines labor dispute as any controversy or matter concerning terms or conditions of employment; the SC found a labor dispute over wages, thirteenth month pay, and hazard pay.
• Article 264(c) and (f), Labor Code (formerly Article 264; now Article 263) — Requires notice of strike, secret-ballot strike vote, reporting of results, and cooling-off period; the SC applied these mandatory requirements to declare the strike illegal.
• Article 265 (now Article 264), Labor Code — Provides the effects of an illegal strike, including that a union officer who knowingly participates may be declared to have lost employment status and that a worker or union officer who commits illegal acts during a strike may be terminated; the SC applied the distinction between ordinary workers and union officers.
• Article 279, Labor Code — Entitles an employee to reinstatement and full backwages when unjustly dismissed; the SC used it as the general rule but denied backwages to ordinary members as a penalty and awarded separation pay because reinstatement had become impossible.
• Articles 283 and 284, Labor Code — Identify the causes for which separation pay may be granted; the SC cited them to distinguish separation pay from the reliefs due to illegal strike participants.
• Article 1, Section 2(b), CBA — Union security clause requiring discharge, dismissal, or termination of an employee who loses good standing with the union upon proper notice; the SC applied it to hold that the remaining strikers who ceased union membership could no longer be reinstated.