Telefunken Semiconductors Employees Union-FFW vs. Court of Appeals

The Secretary of Labor's assumption of jurisdiction under Article 263(g) of the Labor Code automatically enjoins any strike and carries with it an implicit return-to-work order; consequently, any strike staged thereafter and any refusal to comply with the return-to-work directive constitutes an illegal strike under Article 264(a), resulting in the loss of employment status of participating union officers and members who knowingly defied such orders.

The case arose from a collective bargaining deadlock between Temic Telefunken Microelectronics (Phils.), Inc. and its employees' union in an industry considered indispensable to the national interest. The dispute escalated when the union proceeded with a strike despite the Secretary of Labor's assumption of jurisdiction, raising fundamental questions regarding the extent of the Secretary's powers under the Labor Code and the consequences of defying such assumption and return-to-work orders.

• August 25, 1995: The Company and the Union reached a deadlock in their negotiations for a new collective bargaining agreement.
• August 28, 1995: The Union filed a Notice of Strike with the National Conciliation and Mediation Board (NCMB).
• September 8, 1995: Acting Secretary of Labor Jose S. Brillantes intervened and assumed jurisdiction over the dispute pursuant to Article 263(g) of the Labor Code, enjoining any strike or lockout.
• September 9-11, 1995: The Notice of Assumption Order was personally served on the Union's counsel and president on three separate occasions, but both representatives refused to acknowledge receipt.
• September 14, 1995: Despite the assumption order, the Union staged a strike.
• September 16, 1995: The Acting Secretary issued an Order directing the striking workers to return to work within twenty-four hours and for the Company to admit them back under the terms and conditions prevailing prior to the strike.
• September 18, 1995: The Federation of Free Workers (FFW) received and acknowledged receipt of the Return-to-Work Order.
• September 23, 1995: Violence erupted in the picket lines; the service bus ferrying non-striking workers was stoned, causing injuries to passengers.
• October 2, 1995: The Company issued letters of termination for cause to workers who did not report back to work despite the assumption and return-to-work orders.
• October 27, 1995: The Acting Secretary issued an Order directing the Company to reinstate all striking workers except the Union Officers, shop stewards, and those with pending criminal charges.
• December 12, 1997: The Supreme Court consolidated previous petitions and ordered the reinstatement of all striking workers without exception, directing the Secretary of Labor to determine with dispatch the legality of the strike.
• May 28, 1999: Secretary Laguesma declared the strike illegal for having been waged in open, willful, and knowing defiance of the assumption and return-to-work orders, and consequently declared the striking workers to have lost their employment status.

• The strike enjoys the constitutional presumption of legality, and the burden of proving otherwise rests upon the Company.
• The case should not have been decided on the basis of the position paper method because due process requires an actual hearing; the evidence submitted by the Company was inadmissible, unverified, and incompetent.
• The Secretary of Labor erred in effecting wholesale termination of employment of the striking workers without any determination of their individual liability as ordered by the Supreme Court.
• For a union officer to lose employment status, it must be proved that he knowingly participated in an illegal strike; for an ordinary member, it must be demonstrated that he actually participated and committed illegal acts during the strike, which the Company allegedly failed to prove.
• The resolution of a petition for certiorari under Rule 65 should include the correction of the Secretary of Labor's evaluation of the evidence and factual findings.
• The ruling that technical rules of evidence have no room in administrative proceedings is absolute and erroneous; the non-application of technical rules should not have barred petitioners from adducing evidence after the denial of their demurrer to evidence.
• Petitioners have a vested right to backwages.

• The strike was staged in open, willful, and knowing defiance of the assumption order dated September 8, 1995 and the return-to-work order dated September 16, 1995, making it illegal under Article 264(a) of the Labor Code.
• Assumption of jurisdiction under Article 263(g) automatically enjoins any intended or impending strike and carries with it an implicit return-to-work order.
• Defiance of the assumption and return-to-work orders constitutes a valid ground for loss of employment status under Article 264(a).
• Technical rules of evidence prevailing in courts of law have no room in administrative and quasi-judicial proceedings under Article 221 of the Labor Code.
• The Union was given sufficient opportunity to submit position papers with supporting evidence but failed to do so, choosing instead to file a demurrer to evidence.
• Backwages cannot be awarded where there is no finding of illegal dismissal; the striking workers abandoned their employment by willfully defying the return-to-work orders.

• Procedural Issues:
  • Whether the Court of Appeals erred in ruling that the Secretary of Labor did not abuse his discretion in his evaluation of evidence and factual findings.
  • Whether the Court of Appeals erred in ruling that technical rules of evidence have no room in administrative and quasi-judicial proceedings.
  • Whether the Court of Appeals erred in upholding the Secretary's ruling that the non-application of technical rules of procedure bars petitioners from adducing evidence after the denial of their demurrer to evidence.
• Substantive Issues:
  • Whether the strike staged by the Union was illegal for having been waged in defiance of the assumption and return-to-work orders of the Secretary of Labor.
  • Whether the Secretary of Labor could declare a wholesale loss of employment status without individual determination of the strikers' liability.
  • Whether the striking workers are entitled to backwages and financial assistance.

• Procedural:
  • The Court held that the Secretary of Labor did not abuse his discretion. Factual findings of quasi-judicial agencies, when supported by substantial evidence, are entitled to great respect in view of their expertise.
  • The Court affirmed that technical rules of evidence prevailing in courts of law and equity have no room in administrative and quasi-judicial proceedings under Article 221 of the Labor Code.
  • The Court ruled that petitioners were not denied due process; they were given the opportunity to submit position papers with attached affidavits and documentary evidence within ten days but chose to file a demurrer to evidence instead. The requirements of due process are satisfied when parties are given the opportunity to submit position papers with supporting documents.
  • The Court held that the standard of review under Rule 65 is limited to correcting errors of jurisdiction including grave abuse of discretion amounting to lack or excess of jurisdiction, not a re-evaluation of evidence.
• Substantive:
  • The Court declared the strike illegal for having been staged in open, willful, and knowing defiance of the assumption order dated September 8, 1995 and the return-to-work order dated September 16, 1995.
  • The Court ruled that assumption of jurisdiction under Article 263(g) automatically enjoins any intended or impending strike and carries with it a return-to-work order, even if the directive to return to work is not expressly stated in the assumption order.
  • The Court held that defiance of these orders constitutes a valid ground for loss of employment status under Article 264(a) of the Labor Code, and the wholesale declaration of loss of employment status was proper because the defiance was collective and knowing.
  • The Court ruled that striking workers are not entitled to backwages because they were not illegally dismissed; they abandoned their employment by refusing to comply with the return-to-work orders. Financial assistance was also denied because the strikers' open defiance constituted serious misconduct reflecting on their moral character.

• Automatic Return-to-Work Effect of Assumption Order — Under Article 263(g) of the Labor Code, the mere issuance of an assumption order by the Secretary of Labor automatically carries with it a return-to-work order, even if the directive to return to work is not expressly stated in the assumption order. Any strike staged thereafter is illegal.
• Loss of Employment Status for Defiance — Under Article 264(a) of the Labor Code, 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. Defiance of assumption and return-to-work orders constitutes such illegal act.
• Non-Application of Technical Rules of Evidence — Article 221 of the Labor Code mandates that in proceedings before the NLRC, Labor Arbiters, or the Secretary of Labor, the rules of evidence prevailing in courts of law or equity shall not be controlling. Technical rules of procedure should not be used to frustrate the speedy resolution of labor disputes.
• Standard of Reasonableness in Judicial Review — Judicial review of the Secretary of Labor's arbitral award under Rule 65 is limited to determining whether the award passed the test of reasonableness; it does not authorize a re-calibration of evidence but only a determination of whether the conclusions drawn were reasonable and not arbitrary.

• "It is clear from the foregoing legal provision that the moment the Secretary of Labor assumes jurisdiction over a labor dispute in an industry indispensable to national interest, such assumption shall have the effect of automatically enjoining the intended or impending strike. It was not even necessary for the Secretary of Labor to issue another order directing them to return to work. The mere issuance of an assumption order by the Secretary of Labor automatically carries with it a return-to-work order, even if the directive to return to work is not expressly stated in the assumption order."
• "The rationale of this prohibition is that once jurisdiction over the labor dispute has been properly acquired by the competent authority, that jurisdiction should not be interfered with by the application of the coercive processes of a strike."
• "We have held in a number of cases that defiance to the assumption and return-to-work orders of the Secretary of Labor after he has assumed jurisdiction is a valid ground for loss of the employment status of any striking union officer or member."
• "The requirements of due process are satisfied when the parties to a labor case are given the opportunity to submit position papers wherein they are supposed to attach all the documents that would prove their claim in the event it will be decided that no further hearing should be conducted or that hearing was not necessary."
• "The grant of plenary powers to the Secretary of Labor under Art. 263(g) of the Labor Code, as amended, makes it incumbent for him to bring about soonest, a fair and just solution to the differences between the employer and the employees so that the damage such labor dispute might cause upon the national interest may be minimized as much as possible, if not totally averted."

• Marcopper Mining Corp. v. Brillantes, 254 SCRA 595 (1996) — Cited for the doctrine that by staging a strike after assumption of jurisdiction, workers forfeited their right to be readmitted to work, having abandoned their employment.
• Allied Banking Corporation v. NLRC, 258 SCRA 724 (1996) — Cited for the rule that defiance of the return-to-work order of the Secretary of Labor constitutes a valid ground for dismissal.
• Meralco v. Secretary of Labor Leonardo A. Quisumbing, 302 SCRA 173 (1999) — Cited to distinguish the extent of judicial review; while the Court may review the substance of the Secretary's award for grave abuse of discretion, this does not mean a re-calibration of evidence but only a determination of reasonableness.
• Batongbacal v. Associated Bank, 168 SCRA 600 (1988) — Cited to distinguish cases where the position paper method was disfavored due to patent matters requiring trial, which were not present in this case.
• Progress Homes v. NLRC, 269 SCRA 274 (1997) — Similarly cited to distinguish cases where the position paper method was inadequate due to lack of evidence to support claims.
• Union of Filipro Employees v. Nestle Philippines, Inc., 192 SCRA 396 (1990) — Cited for the doctrine that an assumption order automatically carries a return-to-work order.
• Navale, et al. v. Court of Appeals, 253 SCRA 705 — Cited regarding the refusal to receive orders as an apparent attempt to frustrate the ends of justice.

• Article 263(g) of the Labor Code — Provides for the Secretary of Labor's power to assume jurisdiction over labor disputes in industries indispensable to the national interest, and the automatic effect of enjoining strikes and requiring return to work.
• Article 264(a) of the Labor Code — Prohibits strikes after assumption of jurisdiction by the Secretary and provides for loss of employment status for union officers and workers who knowingly participate in illegal strikes or illegal acts during strikes.
• Article 221 of the Labor Code — Mandates that technical rules of evidence prevailing in courts of law shall not be controlling in proceedings before the NLRC, Labor Arbiters, or Secretary of Labor.
• Rule 45, Section 1 of the Rules of Court — Limits petitions for review on certiorari to questions of law.
• Rule 65, Section 1 of the Rules of Court — Defines the scope of certiorari as limited to correcting errors of jurisdiction including grave abuse of discretion amounting to lack or excess of jurisdiction.