Lapanday Workers Union vs. NLRC

A strike held before seven days have elapsed from submission of the strike-vote results is illegal under Article 263(f) of the Labor Code. The Union’s October 12, 1988 strike violated that requirement because it reported the voting results only on October 10, 1988.

Lapanday Agricultural and Development Corporation and CADECO Agro Development Philippines, Inc. were sister companies engaged in banana production, with agricultural establishments in Davao City. Lapanday Workers’ Union, affiliated with KMU-ANGLO, was the certified bargaining agent of their rank-and-file employees, and the individual petitioners were Union members. The Union and the employers had a collective bargaining agreement covering December 5, 1985 to November 30, 1988.

The Union’s conflict with LADECO and CADECO concerned security arrangements and employee seminars introduced shortly before their CBA expired. On August 1, 1988, the employers contracted Philippine Eagle Protectors and Security Agency, Inc. to secure their premises in Lapanday, Bandug and Callawa, Davao City, and Guising, Davao Del Sur, and protect their officers, employees and guests within company premises. The Union accused the guards of intimidating and harassing its members. The employers also conducted Human Development and Industrial Relations seminars for managerial and supervisory personnel and later for rank-and-file employees. The Union objected that the discussion of the Philippine political spectrum associated ANGLO with outlawed organizations and other leftist groups. At a labor-management meeting on August 2, 1988, the employers explained these matters, and the Union, represented by President Arquilao Bacolod and its counsel, agreed to allow its members to attend the seminars.

Despite that agreement, the Union continued its opposition. On August 6, 1988, Bacolod and Rene Arao led a picket at the security agency’s premises, and on August 19 and 20, the Union directed its members not to attend the scheduled seminars. On August 25, it filed a notice of strike with the National Conciliation and Mediation Board, alleging employee coercion, intimidation of Union members and union-busting. A conciliation conference on August 29 produced an agreement that Union and KMU-ANGLO officials, together with the NCMB Executive Director, would attend the September 5 seminar and that a committee would convene on September 10, 1989 to establish guidelines governing the guards. After attending the September 5 seminar, Union officials ceased opposing its continuation but maintained their demand to remove the discussion concerning KMU-ANGLO. The employers then informed the NCMB that the notice of strike no longer had a basis.

On September 8, 1988, Union director Danilo Martinez was shot dead in his home before his wife and children. The gunman was later identified as Eledio Samson, allegedly a member of the employers’ new security forces. Most Union members did not report for work the following day. They returned on September 10 but did not comply with management’s production quota system. According to the employers, the Union had instructed the workers to reduce production to thirty percent, constituting economic sabotage through a slowdown. On September 14, the employers filed their complaints for illegal strike, unfair labor practice and damages.

The workers again stayed away from work on September 17, 1988 to attend Martinez’s burial. On September 23, they proceeded instead to the employers’ Lanang office with placards demanding removal of the security guards, ouster of certain management officials and approval of their mass leave application. That action failed to obtain their demands. City Mayor Rodrigo Duterte subsequently intervened, and dialogues took place at his office on September 27 and 29. These efforts also failed because the employers refused to withdraw their pending cases.

On October 3, 1988, the Union conducted a strike vote, which received overwhelming support from the workers. It submitted the voting result to the NCMB on October 10. Two days later, on October 12, the Union commenced its strike.

The Union and affected workers later filed the December 6, 1988 complaints challenging their suspension and dismissal. In evaluating the earlier absence on September 9, Labor Arbiter Sancho considered the circumstances surrounding Martinez’s killing sufficient to justify the workers’ refusal to report that day. The union leaders admitted knowing the law governing strikes, including its procedural requirements.

• Characterization of Collective Activities: The petitioners argued that the NLRC gravely abused its discretion in treating their activities from September 9 to October 12, 1988 as strike activities.

• Legality of the October 12 Strike: The petitioners maintained that the NLRC gravely abused its discretion in declaring the October 12, 1988 strike illegal.

• Prior Adjudication of Strike Legality: In appealing Sancho’s decision, the employers argued that he improperly passed upon the strike’s legality because the Regional Arbitration Branch had already decided that issue and its ruling remained pending on appeal before the NLRC.

• Earlier Work Stoppages: Whether the NLRC gravely abused its discretion in treating the September 9 and 23, 1988 activities as strike activities.

• Seven-Day Waiting Period: Whether the October 12, 1988 strike was illegal because it began before the mandatory waiting period following submission of the strike-vote results had elapsed.

• Dismissal of Union Leaders: Whether the union leaders who knowingly participated in the illegal strike could be declared to have lost their employment status.

• Rank-and-File Reinstatement and Backwages: Whether ordinary Union members merely induced to participate should be reinstated and receive backwages.

• Earlier Work Stoppages: No. The SC sustained the NLRC’s finding as supported by substantial evidence, while finding it unnecessary to rule exhaustively on the September 9 and 23 work stoppages after determining that the October 12 strike was illegal.

• Seven-Day Waiting Period: Yes. Article 263(f) required submission of the strike-vote results at least seven days before the intended strike, but the Union reported the results on October 10 and struck on October 12.

• Dismissal of Union Leaders: Yes. Article 264 permits loss of employment status for union officers who knowingly participate in an illegal strike, and the leaders admitted knowing the applicable strike procedures.

• Rank-and-File Reinstatement and Backwages: Reinstatement without backwages was proper. The SC distinguished members merely induced to join from their leaders, but denied compensation for services not rendered during the illegal strike.

• Earlier Work Stoppages: Article 212(1) defines a strike as a temporary work stoppage resulting from employees’ concerted action over an industrial or labor dispute. The SC found substantial evidence supporting the NLRC’s treatment of the earlier activities. However, the independently established illegality of the October 12 strike made an exhaustive determination of the September 9 and 23 stoppages unnecessary.

• Seven-Day Waiting Period: Article 263 requires filing a strike notice, obtaining the required strike vote and reporting the voting results to the labor authorities. In National Federation of Sugar Workers (NFSW) vs. Overseas, et al., the SC had established that both the procedural steps and their prescribed waiting periods are mandatory. The seven-day interval allows the Department of Labor and Employment to verify whether the proposed strike genuinely has majority support; reporting also permits members to challenge a false report before the strike begins. Majority approval protects against an impulsive decision and gives the Union the support needed for collective action. Batangas Laguna Tayabas Bus Company vs. NLRC likewise recognized that the constitutional right to strike remains subject to reasonable regulation and that violating legal requirements renders a strike illegal. Although the Union obtained an overwhelmingly favorable vote on October 3, it reported the result only on October 10 and struck on October 12. This haste deprived the DOLE of the statutory verification period and defeated the policy underlying Article 263(f).

• Dismissal of Union Leaders: Article 264 distinguishes union officers who knowingly participate in an illegal strike from ordinary workers merely participating in it. The officers were major participants in the illegal strike and admitted knowing the law and its procedural requirements. Their admitted knowledge defeated a claim of good faith. The SC therefore sustained the NLRC’s decision limiting dismissal to the leaders of the illegal strike, particularly the Union officers who played major roles.

• Rank-and-File Reinstatement and Backwages: The SC applied its policy of reinstating rank-and-file workers who were merely misled into supporting an illegal strike. Their participation warranted treatment different from that of the knowledgeable leaders who instigated the action. Reinstatement nevertheless did not entitle them to backwages because they should not receive compensation for services they had not rendered during the illegal strike.

• Mandatory strike procedures and waiting periods — Filing the strike notice, obtaining the required strike vote, reporting its results and observing the prescribed waiting periods are mandatory. The October 12 strike was illegal because the Union failed to observe the seven-day interval after reporting its strike-vote result.

• Majority approval by secret ballot — Under Article 263(f), a strike decision requires approval by a majority of the total Union membership in the bargaining unit, obtained through secret ballot at meetings or referenda called for that purpose. Actual favorable voting does not dispense with timely reporting and the statutory waiting period.

• Verification of strike authorization — The seven-day reporting interval gives the DOLE an opportunity to verify majority approval and allows members to seek a remedy against a false voting report before the strike occurs. Commencing the strike two days after reporting frustrated this purpose.

• Knowing participation by union officers — Article 264 permits loss of employment status for a union officer who knowingly participates in an illegal strike. The leaders’ admitted knowledge of strike procedures supported their dismissal and defeated their reliance on good faith.

• Different treatment of ordinary participants — Rank-and-file workers merely misled into joining an illegal strike may be reinstated even when the knowledgeable leaders lose their employment. In this case, reinstatement carried no backwages because the workers had not rendered services during the illegal strike.

• “The seven (7) day waiting period is intended to give the Department of Labor and Employment an opportunity to verify whether the projected strike really carries the imprimatur of the majority of the union members.” — This explains the statutory purpose defeated when the Union struck two days after reporting its voting result.

• “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: Provided that mere participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his employment, even if a replacement had been hired by the employer during such lawful strike.” — This passage from Article 264 supplies the statutory basis for terminating officers who knowingly participate in an illegal strike and distinguishes that ground from participation in illegal acts during a strike.

• National Federation of Sugar Workers (NFSW) vs. Overseas, et al., G.R. No. 59743, May 31, 1982, 114 SCRA 354, 365 — Followed for the mandatory character of strike procedures and their prescribed waiting periods, including the strike-vote reporting interval.

• Batangas Laguna Tayabas Bus Company vs. NLRC, G.R. No. 101858, August 21, 1992, 212 SCRA 792, 802 — Followed for the rule that the constitutional right to strike must comply with reasonable regulation and that violation of statutory requirements renders the strike illegal.

• Article 212(1), Labor Code, as amended — Defines a strike as a temporary work stoppage through employees’ concerted action resulting from an industrial or labor dispute.

• Article 263(c), Labor Code, as amended by E.O. No. 111 — Prescribes notice periods of thirty days for bargaining deadlocks and fifteen days for unfair labor practices. It also provides an exception to the fifteen-day cooling-off period for dismissal of duly elected union officers constituting union-busting that threatens the Union’s existence; the provision formed part of the statutory framework governing the strike.

• Article 263(f), Labor Code, as amended by E.O. No. 111 — Requires majority approval of a strike through secret ballot and submission of the voting results at least seven days before the intended strike, subject to the applicable cooling-off period. The Union violated the reporting interval by striking on October 12 after submitting its results on October 10.

• Article 264(a), Labor Code — The quoted portions prohibit declaring a strike without the prescribed prior collective bargaining, notice, and obtained and reported strike vote, and authorize loss of employment status for officers who knowingly participate in an illegal strike. The SC applied the latter rule to the knowledgeable Union leaders.

• E.O. No. 111, dated December 24, 1986; R.A. No. 6715 — The SC applied Articles 263 and 264 as amended by E.O. No. 111 because the complaint preceded the March 21, 1989 effectivity of R.A. No. 6715.