Manila Hotel Employees Association vs. Manila Hotel Corporation

A strike conducted in defiance of the Secretary of Labor's assumption order and the NLRC's return-to-work order is illegal, and all employees — whether union officers or ordinary members — who participate in such strike and fail to comply with the return-to-work order lose their employment status. The assumption order and return-to-work order are immediately executory notwithstanding the filing of a motion for reconsideration, and compliance is mandatory regardless of the workers' motives or the validity of their claims.

Manila Hotel Corporation operated a de luxe hotel in Metro Manila catering to foreign tourists and businessmen, employing more than 700 employees and serving as a venue for local and international conventions. The Manila Hotel Employees Association (MHEA) was the recognized labor union of the hotel's rank-and-file employees. The hotel's operations were deemed indispensable to the national interest, providing substantial foreign exchange earnings and tax revenues, which justified the Secretary of Labor's exercise of assumption jurisdiction over labor disputes affecting the hotel under Article 263(g) of the Labor Code.

On 11 November 1999, the Manila Hotel Employees Association (MHEA), represented by its Chairman Ferdinand Barles, filed a Notice of Strike with the National Conciliation and Mediation Board (NCMB) against Manila Hotel, alleging unfair labor practices. Upon petition of Manila Hotel, the Secretary of Labor and Employment (SOLE) issued an Order on 24 November 1999 certifying the labor dispute to the NLRC for compulsory arbitration pursuant to Article 263(g) of the Labor Code. The Order enjoined any strike or lockout and directed the parties to cease and desist from committing acts that would exacerbate the situation. Copies were served on the parties and their counsels. MHEA filed a Motion for Reconsideration on 29 November 1999, questioning the validity of the Order.

A mandatory conference was set before Presiding Commissioner Rogelio I. Rayala on 8 February 2000, during which the parties were advised of the certification order prohibiting any action that would exacerbate the situation. At the instance of MHEA officers, the hearing was reset to 29 February 2000 due to the absence of MHEA's counsel. Two days later, on 10 February 2000, MHEA conducted a strike despite the clear terms of the SOLE's Order and the reminders given during the conference. On the same day, Commissioner Rayala called for another mandatory conference. Thereafter, several conferences were conducted, during which both parties were warned against aggravating the volatile situation. On 8 March 2000, the NLRC sought to have both parties identify the issues and stipulate facts, and allowed them sufficient time to file position papers, with which both parties failed to comply.

Manila Hotel filed a complaint with prayer for injunction on 11 February 2000, alleging that MHEA's strike was illegal, that strikers blocked all ingress and egress of the hotel premises, and that they harassed and intimidated company officers, non-striking employees, customers, and suppliers. The NLRC issued an Order on 11 February 2000 directing the striking workers to return to work immediately and the hotel to accept them back under the same terms and conditions, with a twenty-four-hour compliance deadline. The parties received the Order before 4:00 p.m. that day. MHEA admitted in its Urgent Manifestation and Motion to Set Aside Order dated 14 February 2000 that a copy was served on the picket lines at 5:00 p.m. Manila Hotel manifested that only six striking employees complied with the return-to-work order and were reinstated; the rest openly defied it. MHEA filed an Urgent Manifestation and Motion to Set Aside Order on 14 February 2000, alleging that its Motion for Reconsideration of the SOLE's Order was still pending and therefore the NLRC had not acquired jurisdiction. The NLRC denied this motion on 17 February 2000.

The NLRC promulgated its Decision on 5 April 2000, declaring the strike illegal for defiance of the return-to-work order. It ruled that only the union officers forfeited their employment status, finding no evidence that the ordinary members had been notified of the return-to-work order. In view of the antagonism on both sides, the NLRC awarded severance pay equivalent to one month's salary per year of service to the returning union members instead of ordering reinstatement. Both parties moved for reconsideration — Manila Hotel seeking deletion of the severance pay award, and MHEA seeking reversal on grounds of lack of jurisdiction and deprivation of due process. The NLRC denied both motions on 17 May 2000. Manila Hotel then filed a Petition for Certiorari before the Court of Appeals, which granted the petition on 31 October 2001, modifying the NLRC decision to declare that both union officers and members lost their employment status and deleting the severance compensation award. MHEA's motion for reconsideration was denied on 1 August 2002. MHEA thereafter filed the present petition before the Supreme Court, signed by Ferdinand Barles.

• Reinstatement of Ordinary Members: Petitioner maintained that the individual petitioners, as mere ordinary members of the union, were entitled to reinstatement without loss of seniority or other employee rights and benefits, with full backwages from date of dismissal until actual reinstatement.
• Strained Relationship Doctrine: Petitioner argued that the Court of Appeals and the NLRC committed reversible error in applying the doctrine of strained relationship to the case.
• Jurisdiction of the NLRC: Petitioner alleged that the NLRC had not acquired jurisdiction over the labor dispute because the Motion for Reconsideration of the SOLE's certification order was still pending, preventing the order from becoming final and executory.
• Due Process: Petitioner claimed it was deprived of due process, assailing the NLRC decision for having been determined without conducting preliminary hearings or requiring the submission of position papers.
• Non-Service of Orders: Petitioner alleged that the union members were not served copies of the assumption order issued by the SOLE and implied that they were not served the return-to-work order.
• In Pari Delicto: Petitioner propounded the theory that both parties had acted in pari delicto and that the dismissal of its members who participated in the illegal strike was therefore unwarranted.
• Honest Belief: Petitioner alleged that the strikers relied on their honest belief that the filing of a Motion for Reconsideration of the SOLE's order entitled them to participate in a strike.
• Mitigating Circumstance: Petitioner claimed that the Court should consider as a mitigating circumstance the fact that the strike was held three months after filing the notice of strike.

• Lack of Authority to File: Respondent argued that Ferdinand Barles was not authorized to file the present petition, as he was no longer the Chairman of MHEA at the time of filing, and sought the petition's dismissal on this ground.
• SPAs Pertained to a Different Case: Respondent alleged that the special powers of attorney submitted by MHEA authorized Barles to represent union members in a different case (CA-G.R. S.P No. 59601), not the present petition.
• Illegality of the Strike: Respondent maintained that the strike was illegal, having been conducted in defiance of the SOLE's assumption order and the NLRC's return-to-work order, and that the striking employees consequently lost their employment status.

• Authority to Sign Verification: Whether Ferdinand Barles was duly authorized to sign the verification and certification of non-forum shopping in the present petition.
• Legality of the Strike: Whether the strike conducted by MHEA on 10 February 2000 was illegal for having been staged in defiance of the SOLE's assumption order and the NLRC's return-to-work order.
• Loss of Employment Status: Whether both union officers and ordinary members who participated in the illegal strike lost their employment status.
• Immediate Executory Nature of Return-to-Work Orders: Whether a return-to-work order is immediately executory notwithstanding the filing of a motion for reconsideration.
• In Pari Delicto: Whether the doctrine of in pari delicto applies to warrant the reinstatement of the striking employees.
• Strained Relationship Doctrine: Whether the doctrine of strained relationship was properly applied in the case.

• Authority to Sign Verification: No. Ferdinand Barles was no longer the Chairman of MHEA at the time the petition was filed and had not been specifically authorized by the union members to sign the verification and certification of non-forum shopping for this case, rendering the petition procedurally defective.
• Legality of the Strike: Yes, the strike was illegal. It was conducted in open defiance of the SOLE's assumption order dated 24 November 1999, which enjoined any strike or lockout, and in defiance of the NLRC's return-to-work order dated 11 February 2000.
• Loss of Employment Status: Yes. Both union officers and ordinary members who participated in the illegal strike and failed to comply with the return-to-work order lost their employment status, the Court having consistently ruled that defiance of an assumption or return-to-work order is a valid ground for loss of employment.
• Immediate Executory Nature of Return-to-Work Orders: Yes. A return-to-work order is immediately executory notwithstanding the filing of a motion for reconsideration and must be strictly complied with even during the pendency of any petition questioning its validity.
• In Pari Delicto: No. The doctrine of in pari delicto does not apply because there was no evidence that Manila Hotel committed an illegal lockout; it readmitted the six employees who complied with the return-to-work order.
• Strained Relationship Doctrine: The Court did not separately rule on this issue, having already found the strike illegal and the loss of employment status warranted on other grounds.

• Authority to Sign Verification: The Court found that Ferdinand Barles was appointed Chairman of MHEA on 23 December 1998 but was no longer chairman at the time the petition was filed on 26 September 2002. A certification from the union Secretary General established that Antonio Dumpit held the chairmanship from 5 July 2000 to 19 December 2002 and was succeeded by Eduardo Saplan. The SPAs submitted by MHEA authorized Barles to represent 138 union members in a different case (CA-G.R. S.P No. 59601, elevated to the Supreme Court under G.R. No. 144879), not the present petition. MHEA's assertion that the two cases involved the same parties and issues was self-defeating, as it would violate the rule against forum shopping. Pursuant to Supreme Court Circular Nos. 28-91 and 04-94, and the ruling in Teoville Homeowner's Association vs. Ferreira, the person signing the verification and certification of non-forum shopping must be specifically authorized to do so. Since Barles was no longer an officer of the union, he was no longer privy to cases filed by MHEA, and absent specific authorization from the members he sought to represent, any statement he made could not bind MHEA.

• Legality of the Strike: The SOLE's assumption order was issued on 24 November 1999, certifying the dispute to the NLRC for compulsory arbitration pursuant to Article 263(g) of the Labor Code. The order enjoined any strike or lockout. The hotel was engaged in an industry indispensable to the national interest, employing over 700 employees, catering to foreign tourists, and contributing substantial foreign exchange earnings and tax revenues. The assumption of jurisdiction was in the nature of a police power measure. Despite clear knowledge of the order — confirmed by their attendance at the 8 February 2000 mandatory conference where they were advised not to exacerbate the situation — MHEA staged the strike on 10 February 2000. Article 264(a) of the Labor Code explicitly prohibits any strike after assumption of jurisdiction by the SOLE or after certification of the dispute to compulsory arbitration. The Court has consistently held that once the SOLE assumes jurisdiction, such jurisdiction should not be interfered with by the coercive processes of a strike or lockout.

• Loss of Employment Status: The Court has consistently ruled across several decades that defiance of an assumption order or a return-to-work order by a striking employee — whether a union officer or a member — is an illegal act and a valid ground for loss of employment status. The NLRC's return-to-work order was issued on 11 February 2000 and served on the picket lines and on MHEA's counsel. Only six employees complied; the rest openly defied it. The strike and picketing were still being conducted on 28 February 2000, well after the twenty-four-hour deadline. The NLRC initially ruled that only union officers lost employment because there was no evidence of which members were notified, but the Court of Appeals correctly modified this ruling, and the Supreme Court affirmed, as the records showed that copies of the orders were served on the picket lines and on counsel.

• Immediate Executory Nature of Return-to-Work Orders: Citing St. Scholastica's College vs. Torres and Philippine Airlines Employees' Association vs. Philippine Airlines, Inc., the Court reiterated that a return-to-work order is immediately executory notwithstanding the filing of a motion for reconsideration. The certification attests to the urgency of the matter, affecting an industry indispensable to the national interest. The order is issued in the exercise of compulsory power of arbitration and must be obeyed until set aside. To require that its effectivity await affirmance on motion for reconsideration would emasculate it, as the deadline for return to work would have already passed. Returning to work in this situation is not a matter of option but of obligation. The strikers' alleged honest belief that the pending Motion for Reconsideration entitled them to strike could not be sustained.

• In Pari Delicto: MHEA cited Philippine Airlines, Inc. vs. Brillantes and Philippines Interfashion Inc. vs. National Labor Relations Commission, where the Court ordered reinstatement of employees who participated in illegal strikes. In Philippine Airlines, Inc. vs. Brillantes, the exception was made because the employer had itself violated the SOLE's order by terminating 183 union officers and members — an illegal lockout. In Philippines Interfashion Inc. vs. NLRC, the return-to-work order was not issued pursuant to an assumption or certification order, and the employees had complied with it, yet the employer refused to reinstate 114 of them, constituting an illegal lockout. In the present case, there was no evidence that Manila Hotel committed an illegal lockout. It readmitted the six employees who complied. MHEA made only a vague reference to employees who complied but were refused readmittance, without identifying them or filing any case for illegal lockout. Applying the in pari delicto doctrine was therefore improper and without basis.

• Strained Relationship Doctrine: The Court did not separately address this issue in its reasoning, having already disposed of the petition on the procedural ground of lack of authority and the substantive grounds of illegal strike and loss of employment status. The Court of Appeals had applied the doctrine in modifying the NLRC's award of severance pay, and the Supreme Court affirmed the CA's decision in full.

• Immediate Executory Nature of Return-to-Work Orders — A return-to-work order issued pursuant to an assumption or certification order by the SOLE is immediately executory notwithstanding the filing of a motion for reconsideration. It must be strictly complied with even during the pendency of any petition questioning its validity. The rationale is that the certification attests to the urgency of the matter affecting an industry indispensable to the national interest, and the order is issued in the exercise of compulsory power of arbitration. To await affirmance on motion for reconsideration would emasculate the order, as the deadline for return to work would have already passed. In this case, MHEA's strike was conducted in defiance of both the assumption order and the return-to-work order, and its argument that the pending Motion for Reconsideration entitled it to strike was rejected.

• Loss of Employment Status for Defiance of Assumption/Return-to-Work Orders — Defiance of an assumption order or a return-to-work order by a striking employee, whether a union officer or a member, is an illegal act and a valid ground for loss of employment status. The Court has consistently ruled that once the SOLE assumes jurisdiction over a labor dispute, such jurisdiction should not be interfered with by the coercive processes of a strike or lockout. In this case, both union officers and ordinary members who participated in the illegal strike and failed to comply with the return-to-work order lost their employment status.

• Authority to Sign Verification and Certification of Non-Forum Shopping — The person signing the verification and certification of non-forum shopping must be specifically authorized to do so by the party on whose behalf the pleading is filed. It is the party-pleader, not counsel, who must execute the certificate, as counsel may be unaware of similar actions pending in other courts. In this case, Ferdinand Barles was no longer chairman of MHEA at the time the petition was filed and had not been specifically authorized for this case, rendering the petition procedurally defective.

• Assumption of Jurisdiction as Police Power Measure — The Secretary of Labor's assumption of jurisdiction over labor disputes causing or likely to cause a strike or lockout in an industry indispensable to the national interest is in the nature of a police power measure, aimed at arriving at a peaceful and speedy solution to labor disputes without jeopardizing national interests. The SOLE has the discretion to determine what industries are indispensable to the national interest.

• "Defiance of the assumption order or a return-to work order by a striking employee, whether a union officer or a member, is an illegal act and, therefore, a valid ground for loss of employment status." — This passage states the controlling rule on the consequences of defying assumption and return-to-work orders, applicable to both union officers and ordinary members.

• "The very nature of a return-to-work order issued in a certified case lends itself to no other construction. The certification attests to the urgency of the matter, affecting as it does an industry indispensable to the national interest. The order is issued in the exercise of the court's compulsory power of arbitration, and therefore must be obeyed until set aside." — This passage, quoted from Philippine Airlines Employees' Association vs. Philippine Airlines, Inc., articulates the rationale for the immediate executory nature of return-to-work orders and is frequently cited in subsequent jurisprudence on illegal strikes.

• "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." — This passage defines the nature of the worker's duty to comply with return-to-work orders, emphasizing that compliance is mandatory regardless of the worker's motives or the validity of their claims.

• "Regardless therefore of their motives, or the validity of their claims, the striking workers must cease and/or desist from any and all acts that tend to, or undermine this authority of the Secretary of Labor, once an assumption and/or certification order is issued." — This passage establishes the absolute character of the SOLE's authority once an assumption or certification order is issued, precluding strikers from ignoring return-to-work orders by citing unfair labor practices.

• Teoville Homeowner's Association vs. Ferreira, G.R. No. 140086, 8 June 2005 — Followed. Established the requirement that the person signing the verification and certification of non-forum shopping must be specifically authorized to do so, which Barles failed to satisfy.

• St. Scholastica's College vs. Torres, G.R. No. 100158, 29 June 1992 — Followed. Reiterated the rule that a return-to-work order is immediately executory notwithstanding the filing of a motion for reconsideration.

• Philippine Airlines Employees' Association vs. Philippine Airlines, Inc., G.R. No. L-32740, 31 March 1971 — Followed. Provided the rationale for the immediate executory nature of return-to-work orders in certified cases, quoted at length in the decision.

• Grand Boulevard Hotel vs. Genuine Labor Organization of Workers in Hotel, Restaurant and Allied Industries (GLOWHRAIN), G.R. No. 153664, 18 July 2003 — Followed. Cited for the rule that defiance of an assumption or return-to-work order results in loss of employment status, and for the caution against the unreasonable and indiscriminate exercise of the right to strike.

• Philippine Airlines, Inc. vs. Brillantes, G.R. No. 119360, 10 October 1997 — Distinguished. The Court made an exception ordering reinstatement because the employer had itself violated the SOLE's order by terminating employees — an illegal lockout not present in the present case.

• Philippines Interfashion Inc. vs. National Labor Relations Commission, G.R. No. L-59847, 18 October 1982 — Distinguished. Reinstatement was ordered because the return-to-work order was not issued pursuant to an assumption or certification order, and the employees had complied with it, yet the employer refused to reinstate them, constituting an illegal lockout.

• PNOC Dockyard and Engineering Corporation vs. National Labor Relations Commission, G.R. No. 118223, 26 June 1998 — Distinguished. The strike was considered legal because the certification order was invalidly served on the guard on duty instead of the union president. In the present case, copies were served on the picket lines and on counsel.

• Reliance Surety & Insurance Co., Inc. vs. National Labor Relations Commission, G.R. Nos. 86917-18, 25 January 1991 — Cited. Reiterated the principle that while the Court's sympathy is on the side of labor, the results achieved must be fair and in conformity with the rules.

• Article 263(g), Labor Code — Empowers the Secretary of Labor to assume jurisdiction over labor disputes causing or likely to cause a strike or lockout in an industry indispensable to the national interest, or to certify the same to the Commission for compulsory arbitration. Such assumption or certification automatically enjoins the intended or impending strike or lockout. If a strike has already taken place, all striking employees must immediately return to work and the employer must resume operations and readmit all workers under the same terms and conditions prevailing before the strike. Applied to justify the SOLE's certification of the MHEA dispute to the NLRC and the automatic injunction against the strike.

• Article 264(a), Labor Code — Prohibits any strike or lockout after assumption of jurisdiction by the Secretary of Labor or after certification or submission of the dispute to compulsory or voluntary arbitration, or during the pendency of cases involving the same grounds for the strike or lockout. Applied to declare the 10 February 2000 strike illegal, having been conducted after the SOLE's certification order.

• Supreme Court Circular Nos. 28-91 and 04-94 — Require a Certification of Non-Forum Shopping in any initiatory pleading filed before the Supreme Court and the Court of Appeals. Applied to find the petition procedurally defective, as Barles was not specifically authorized to sign the certification for the present case.

Consuelo Ynares-Santiago (Chairperson), Ma. Alicia Austria-Martinez, Romeo J. Callejo, Sr., and Antonio Eduardo B. Nachura concurred with the decision.