Pilipino Telephone Corporation vs. Pilipino Telephone Employees Association (PILTEA)

A union officer who knowingly participates in an illegal strike may be declared to have lost his employment status, and the employer's option to impose dismissal is mandatory where the strike was conducted in defiance of a Secretary of Labor's assumption order and in violation of the procedural requirements under Article 263 of the Labor Code. The Court of Appeals cannot reduce this penalty absent a finding of grave abuse of discretion on the part of the NLRC, and the judicial prerogative to temper the penalty applies only where the employer itself exacerbated the situation.

Pilipino Telephone Corporation (the Company) and Pilipino Telephone Employees Association (PILTEA, the Union) were parties to a Collective Bargaining Agreement (CBA) expiring on December 31, 1997. When renegotiation of the non-representation aspects of the CBA reached a standstill, the parties submitted their dispute to the National Conciliation and Mediation Board (NCMB) for preventive mediation. The Secretary of Labor assumed jurisdiction over the entire labor dispute on August 14, 1998, enjoining any strike or lockout and directing the parties to cease and desist from acts that might exacerbate the situation.

Pilipino Telephone Corporation and Pilipino Telephone Employees Association were parties to a Collective Bargaining Agreement set to expire on December 31, 1997. On October 30, 1997, the Union submitted its proposals for renegotiation of the non-representation aspects of the CBA. When a standstill developed on several issues, the parties submitted their dispute to the NCMB for preventive mediation, but conciliation proceedings failed.

On July 13, 1998, the Union filed its first Notice of Strike with the NCMB, alleging unfair labor practice by the Company's Revenue Assurance Department Manager Rosales and Call Center Department Manager Alegado, including requiring employees to execute undated resignation letters prior to regularization, preventing display of Union flags and CBA slogans, prohibiting Union activities, requiring forced overtime to prevent attendance at Union meetings, using insulting language, threatening employees who joined concerted activities, and utilizing security guards to harass Union participants. The Company responded by filing a petition for Consolidated Assumption of Jurisdiction with the Office of the Secretary of Labor. On August 14, 1998, Secretary Bienvenido E. Laguesma issued an Order assuming jurisdiction over the entire labor dispute pursuant to Article 263(g) of the Labor Code, enjoining any strike or lockout, and directing the parties to cease and desist from committing acts that might exacerbate the situation.

On September 4, 1998, the Union filed a second Notice of Strike with the NCMB on the grounds of union busting — for the Company's alleged refusal to turn over union funds — and the mass promotion of Union members during CBA negotiations, allegedly aimed at excluding them from the bargaining unit. On the same day, the Union went on strike. On September 9, 1998, Secretary Laguesma directed the striking Union officers and members to return to work within twenty-four hours and for the Company to accept all strikers under the same terms and conditions prior to the strike. The Union and its members complied.

On December 7, 1998, the Company filed a petition with the NLRC to declare the September 4, 1998 strike illegal. Labor Arbiter Aliman D. Mangandog found the strike illegal for having been conducted in defiance of Secretary Laguesma's August 14, 1998 assumption order and for non-compliance with the procedural requirements under the Labor Code and its implementing rules. The Labor Arbiter noted that the grounds in the second notice of strike were substantially the same as those in the first, that the Company's refusal to turn over checked-off union dues was not a strikeable issue as it was not a gross and blatant violation of the economic provisions of the CBA, and that the mass promotion of Union members was not tantamount to dismissal and thus did not constitute union busting. The strike also suffered from fatal procedural defects: the notice was filed on the same day as the strike, the fifteen-day cooling-off period was not observed, no strike vote was conducted within the prescribed time, and the result of the strike vote was not furnished to the NCMB at least seven days prior to the intended strike. Various illegal acts were also found to have been committed during the strike, including blocking entrances, using company vehicles to obstruct driveways, deflating vehicle tires, preventing delivery of food to non-striking employees, tying entrance doors shut, and discouraging clients from transacting with the Company. The Labor Arbiter declared the union officers to have lost their employment status and suspended the erring union members for six months without pay, finding that the members were merely acting at the order of their leaders. The NLRC affirmed this decision in toto.

The Union and its officers and members filed a Petition for Certiorari under Rule 65 with the Court of Appeals, attributing grave abuse of discretion to the NLRC. The Court of Appeals modified the NLRC ruling by reducing the penalty on union officers Briones, De Leon, Fidel, and Torres from dismissal to six-month suspension, finding the supreme penalty of dismissal "so harsh" and noting that the Company did not have "clean hands" for having committed unfair labor practice by refusing to turn over union dues. Both parties filed partial motions for reconsideration, which were denied, leading to the instant consolidated petitions.

• Company's Position on Penalty (G.R. No. 160058): The Company argued that the CA decision and resolution reducing the penalty of the union officers from dismissal to suspension were contrary to law and jurisprudence, and prayed that the NLRC decision be reinstated in toto.
• Union's Position on Strike Legality (G.R. No. 160094): The Union and its officers Briones, De Leon, and Torres maintained that the September 4, 1998 strike was legal, contending that the Company was guilty of union busting in promoting a substantial number of Union members and officers to positions outside the bargaining unit during CBA negotiations while they maintained the same jobs and duties.
• Unfair Labor Practice as Justification: The Union capitalized on the CA's finding that the Company was guilty of unfair labor practice in refusing to turn over deducted contingency fees of union members, arguing that this finding precluded the ruling that the strike was illegal and that the Union acted in bad faith.
• Reliance on Precedent: The Union cited Bacus vs. Ople, Panay Electric Company vs. NLRC, and PNOC Dockyard and Engineering Corporation vs. NLRC in support of its position that a strike inspired by good faith does not automatically render the same illegal.

• Legality of the Strike: Whether the Union's September 4, 1998 strike was legal under the Labor Code and its implementing rules.
• Penalty on Union Officers: Whether the Court of Appeals committed reversible error in reducing the penalty imposed on the union officers from dismissal to six-month suspension.

• Legality of the Strike: No. The strike was illegal for having been conducted in defiance of the Secretary of Labor's August 14, 1998 assumption order and for non-compliance with the mandatory procedural requirements under Article 263 of the Labor Code, including the cooling-off period and the seven-day strike ban.
• Penalty on Union Officers: Yes, the CA committed reversible error. The NLRC did not act with grave abuse of discretion in imposing dismissal, and no basis existed to invoke the judicial prerogative to temper the penalty, the Company not having exacerbated the situation in the manner contemplated by PAL vs. Brillantes.

• Legality of the Strike: Article 263 of the Labor Code, as amended by Republic Act No. 6715, and Rule XXII, Book V of the Omnibus Rules outline mandatory procedural requirements for a valid strike: filing a notice of strike with the NCMB, observing a cooling-off period (fifteen days for unfair labor practice, thirty days for bargaining deadlock), conducting a strike vote by secret ballot with majority approval, and reporting the strike vote result to the NCMB at least seven days before the intended strike. These requirements are mandatory in nature, and failure to comply renders the strike illegal. The Union staged the strike on the same day it filed its second notice of strike, violating the seven-day strike ban and the cooling-off period. The Union's claim of union busting — which would have excused non-observance of the cooling-off period — was unavailing, because the mass promotion of Union members was not tantamount to dismissal and thus did not constitute union busting under Article 263, which requires dismissal of union officers duly elected in accordance with the union constitution and by-laws and a threat to the union's existence by such dismissal. The Union's reliance on Bacus vs. Ople was misplaced, as that case was decided before the effectivity of R.A. No. 6715 on March 21, 1989, after which the procedural requirements became mandatory. Panay Electric Company and PNOC Dockyard were likewise inapplicable, as the striking unions in those cases complied with the procedural requirements. Furthermore, the strike defied the Secretary of Labor's assumption order, as the grounds in the second notice of strike — the mass promotion and the non-remittance of deducted contingency fees — were already existing when the Secretary assumed jurisdiction over the entire labor dispute on August 14, 1998. Article 264 of the Labor Code prohibits any strike after assumption of jurisdiction by the Secretary or during the pendency of cases involving the same grounds for the strike.

• Penalty on Union Officers: For a petition for certiorari under Rule 65 to prosper, the tribunal must be proven to have acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction. Grave abuse of discretion is a capricious and whimsical exercise of judgment equivalent to lack of jurisdiction. The CA, although it modified the NLRC ruling, nowhere attributed grave abuse of discretion to the NLRC. Article 264 of the Labor Code provides that any union officer who knowingly participates in an illegal strike may be declared to have lost his employment status. The word "may" grants the employer the option to declare a union officer who participated in an illegal strike as having lost his employment. The Court distinguished between union officers and ordinary members: union officers bear greater responsibility as main players in an illegal strike and have the duty to guide their members to respect the law, while mere participation by ordinary members in an illegal strike is not sufficient ground for termination unless they committed illegal acts during the strike. The judicial prerogative to temper the penalty, as exercised in PAL vs. Brillantes and Nissan Motors Philippines, Inc. vs. Secretary of Labor, applies only where the employer itself contributed to the volatile atmosphere — as where PAL terminated en masse 183 union officers and members, or where Nissan suspended a substantial number of union officers and members with threats of eventual dismissal and perceived illegal lockout. In the instant case, the CA, NLRC, and Labor Arbiter were unanimous in finding that bad faith existed in the conduct of the strike, which was extensively coordinated across all PILTEL offices nationwide and plainly planned. The Company did not exacerbate the situation in the manner that warranted relaxation of the rule. The NLRC correctly held that the open, blatant, and willful defiance of the Secretary of Labor's order showed little or no regard for lawful orders from duly constituted authorities. The supreme penalty of dismissal is a natural consequence considering the interest of public welfare, as a strike exerts disquieting effects not only on labor-management relations but on the general peace and progress of society.

• Mandatory Nature of Strike Procedural Requirements — The procedural requirements for a valid strike under Article 263 of the Labor Code, as amended by R.A. No. 6715 — filing a notice of strike, observing the cooling-off period, conducting a strike vote by secret ballot, and reporting the result to the NCMB at least seven days before the intended strike — are mandatory in nature. Failure to comply renders the strike illegal. This doctrine became settled after the effectivity of R.A. No. 6715 on March 21, 1989, which made the requirements mandatory, superseding earlier jurisprudence (such as Bacus vs. Ople) that treated good faith as a sufficient defense.

• Distinction Between Union Officers and Members in Illegal Strikes — Under Article 264 of the Labor Code, a union officer who knowingly participates in an illegal strike may be declared to have lost his employment status; the word "may" grants the employer the option to impose dismissal. Mere participation by an ordinary union member in an illegal strike is not a sufficient ground for termination; there must be proof that the member committed illegal acts during the strike. The responsibility of union officers, as main players in an illegal strike, is greater than that of the members, as officers have the duty to guide their members to respect the law.

• Judicial Prerogative to Temper Penalty (PAL Doctrine) — The Court may invoke its judicial prerogative to resolve labor disputes in a way that renders the most judicious solution tending to preserve the greater order of society, reducing the penalty on union officers who participated in an illegal strike where the employer itself contributed to the volatile atmosphere — such as by terminating en masse union officers and members, or by suspending a substantial number of workers with threats of eventual dismissal and perceived illegal lockout. This prerogative is exercised sparingly and does not apply where the employer did not exacerbate the situation.

• Union Busting Defined — To constitute union busting under Article 263 of the Labor Code, which would excuse non-observance of the cooling-off period, there must be: (1) a dismissal from employment of union officers duly elected in accordance with the union constitution and by-laws; and (2) the existence of the union must be threatened by such dismissal. Promotion of employees, even if allegedly aimed at excluding them from the bargaining unit, does not constitute union busting, as promotion is different from dismissal.

• "The effects of illegal strikes, as outlined in Article 264 of the Labor Code, make a distinction between ordinary workers and union officers who participate therein. Under established jurisprudence, a union officer may be terminated from employment for knowingly participating in an illegal strike. The fate of union members is different. Mere participation in an illegal strike is not a sufficient ground for termination of the services of the union members." — This passage articulates the controlling distinction between union officers and ordinary members regarding the consequences of participating in an illegal strike, a doctrine frequently cited in subsequent labor jurisprudence.

• "The law, in using the word may, grants the employer the option of declaring a union officer who participated in an illegal strike as having lost his employment." — This formulation, quoted from Gold City Integrated Port Service, Inc. vs. NLRC, defines the employer's discretionary authority under Article 264 and is the canonical statement of the rule on dismissal of union officers.

• "The responsibility of the union officers, as main players in an illegal strike, is greater than that of the members as the union officers have the duty to guide their members to respect the law." — This passage states the rationale for the differential treatment of union officers and members, anchoring the dismissal penalty on the officers' heightened duty to ensure lawful conduct.

• "It is settled that these requirements are mandatory in nature and failure to comply therewith renders the strike illegal." — This statement establishes the mandatory character of the procedural requirements for a valid strike under Article 263, as amended by R.A. No. 6715, and is the threshold rule applied in the case.

• Scholastica's College vs. Ruben Torres, G.R. No. 100158, June 29, 1992 — Cited by the Labor Arbiter for the rule that a strike undertaken despite the issuance of an assumption or certification order by the Secretary of Labor is a prohibited activity, hence illegal under Article 264 of the Labor Code. Followed.
• Bacus vs. Ople, No. L-56856, October 23, 1984 — Cited by the Union for the proposition that a strike inspired by good faith does not automatically render it illegal. Distinguished and effectively limited, as the case was decided before the effectivity of R.A. No. 6715, after which the procedural requirements became mandatory.
• Panay Electric Company vs. NLRC, G.R. No. 102672, October 4, 1995 — Cited by the Union. Distinguished, as the striking union in that case complied with the procedural requirements for a valid strike.
• PNOC Dockyard and Engineering Corporation vs. NLRC, G.R. No. 118223, June 26, 1998 — Cited by the Union. Distinguished on the same ground as Panay Electric Company — the union therein complied with procedural requirements.
• Bulletin Publishing Corporation vs. Sanchez, G.R. No. L-74425, October 7, 1986 — Cited for the rule that a promotion manifestly beneficial to an employee should not give rise to a gratuitous speculation that it was made to deprive the union of the benefited employee's membership. Followed.
• Gold City Integrated Port Service, Inc. vs. NLRC, G.R. No. 103560, July 6, 1995 — Cited for the rule that the word "may" in Article 264 grants the employer the option to declare a union officer who participated in an illegal strike as having lost his employment. Followed.
• PAL vs. Brillantes, G.R. No. 119360, October 10, 1997 — Cited as the case where the Court first invoked its judicial prerogative to temper the penalty on union officers, finding that PAL did not come with "clean hands." Distinguished, as the circumstances warranting relaxation of the rule were absent in the instant case.
• Nissan Motors Philippines, Inc. vs. Secretary of Labor, G.R. Nos. 158190-91, June 21, 2006 — Cited as a case where the judicial prerogative was exercised sparingly, with the Court sustaining dismissal of union officers while affirming suspension of members. Distinguished, as Nissan was found to have exacerbated the situation, unlike the Company in the instant case.

• Article 263, Labor Code (as amended by R.A. No. 6715) — Governs the procedural requirements for a valid strike: filing a notice of strike with the NCMB, observing the cooling-off period (fifteen days for unfair labor practice, thirty days for bargaining deadlock, except in union busting cases), conducting a strike vote by secret ballot with majority approval of the total union membership, and reporting the strike vote result to the NCMB at least seven days before the intended strike. Applied to find that the Union violated all these requirements.
• Article 263(g), Labor Code — Authorizes the Secretary of Labor to assume jurisdiction over labor disputes in industries indispensable to the national interest. Applied when Secretary Laguesma assumed jurisdiction over the entire labor dispute on August 14, 1998, enjoining any strike or lockout.
• Article 264, Labor Code — Prohibits strikes or lockouts after assumption of jurisdiction by the Secretary of Labor or during the pendency of cases involving the same grounds. Also provides that any union officer who knowingly participates in an illegal strike may be declared to have lost his employment status, while mere participation by ordinary workers in a lawful strike is not ground for termination. Applied to declare the strike illegal for defying the assumption order and to uphold the dismissal of union officers.
• Section 1, Rule 65, Rules of Court — Governs petitions for certiorari, requiring proof that the tribunal acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction. Applied to test whether the CA properly found grave abuse of discretion on the part of the NLRC; the Court found none.

Sandoval-Gutierrez, Corona, Azcuna, and Garcia, JJ. concurred. No separate concurring opinions were written.