University of Sto. Tomas vs. NLRC

A return-to-work order issued under Article 263(g) of the Labor Code requires actual reinstatement of workers to their former positions under the same terms and conditions prevailing before the strike or lockout; the assignment of "substantially equivalent academic assignments" that deprive faculty members of their actual teaching loads does not constitute compliance, and management prerogatives are limited by such statutory mandates.

The University of Sto. Tomas (UST) employed faculty members who organized themselves into the UST Faculty Union. On June 19, 1989, UST's Board of Trustees terminated all sixteen union officers and directors on the ground that they had committed grave misconduct, serious disrespect to a superior, and conduct unbecoming a faculty member by publishing libelous attacks against the Father Rector in Strike Bulletin No. 5 dated August 4, 1987. The mass dismissal triggered leaves of absence by other faculty members, disrupting classes across all levels at the university, which had approximately 40,000 students. The labor controversy implicated the national interest, bringing into operation Article 263(g) of the Labor Code, as amended by Section 27 of Republic Act No. 6715, which authorizes the Secretary of Labor to assume jurisdiction over or certify for compulsory arbitration labor disputes in industries indispensable to the national interest, with the effect of enjoining strikes or lockouts and ordering the readmission of all workers under the same terms and conditions prevailing before the dispute.

On June 19, 1989, the University of Sto. Tomas, through its Board of Trustees, terminated the employment of all sixteen union officers and directors of the UST Faculty Union. The ground was that, in publishing or causing to be published in Strike Bulletin No. 5 dated August 4, 1987, libelous and defamatory attacks against the Father Rector, each had committed grave misconduct, serious disrespect to a superior, and conduct unbecoming a faculty member. The mass dismissal prompted other faculty members to stage mass leaves of absence on June 28, 1989 and several days thereafter, disrupting classes at all levels of the university.

On July 5, 1989, the faculty union filed a complaint for illegal dismissal and unfair labor practice with the Department of Labor and Employment. Two days later, the labor arbiter, on a prima facie showing that the termination was causing a serious labor dispute, certified the matter to the Secretary of Labor for possible suspension of the effects of termination. Secretary Franklin Drilon issued an order on July 11, 1989 suspending the effects of termination and directing management to accept the dismissed faculty members back to work under the same terms and conditions prevailing prior to their dismissal. UST filed a motion for reconsideration on July 12, 1989, requesting that the Secretary either assume jurisdiction or certify the case to the NLRC for compulsory arbitration without suspending the effects of termination. On July 18, 1989, Secretary Drilon modified his prior order, certifying the dispute to the NLRC for compulsory arbitration under Article 263(g) and directing UST to readmit all faculty members, including the sixteen union officials, under the same terms and conditions prevailing prior to the dispute. After UST filed and then withdrew a motion for clarification, Secretary Drilon issued another order on July 27, 1989 affirming the July 18 order and directing the NLRC to ensure its implementation.

In compliance with the Secretary's orders, UST actually reinstated six of the dismissed faculty members — Professors Alamis, Collantes, Hilario, Barranco, Brondial, and Cura — to their actual teaching loads. As to Professors Agalabia and Guerrero, whose teaching assignments had been partially taken over by new faculty members, UST returned their remaining teaching loads but assigned substantially equivalent academic assignments in lieu of the portions already taken over. The remaining seven faculty members — Professors Asuncion, Mariño Jr., Matias, Redoblado, Burgos, Niño, and Guico — were given substantially equivalent academic assignments in lieu of actual teaching loads because all their original teaching loads had already been assigned to new faculty members. One dismissed faculty member, Rene Sison, had been absent without official leave since the start of the semester. The substantially equivalent academic assignments consisted of non-teaching duties such as book analysis, syllabi-making, test question construction, writing of monographs and modules, and designing learning aids. The affected faculty members refused to accept these assignments, considering them degrading and unbecoming, prompting UST to withhold their salaries.

On August 14, 1989, the respondent union filed before the NLRC a motion to implement the Secretary's orders and to cite UST's in-house counsel for contempt. UST filed its opposition on August 25, 1989. On September 6, 1989, the NLRC issued a resolution directing UST to comply with the Secretary's orders by immediately reinstating or readmitting the faculty members under the same terms and conditions or via payroll reinstatement, awarding full backwages from July 13, 1989 up to the date of actual or payroll reinstatement, allowing payroll reinstatement only up to the end of the first semester 1989, and directing UST to cease and desist from offering substantially equivalent academic assignments as not constituting compliance in good faith. The Supreme Court issued a temporary restraining order on October 25, 1989 enjoining enforcement of the NLRC resolution. After the TRO was issued, UST recalled the actual teaching assignments of the six previously reinstated faculty members and gave them, together with the rest, substantially equivalent academic assignments.

• Substantially Equivalent Assignments as Valid Compliance: Petitioner argued that its grant of substantially equivalent academic assignments, instead of actual reinstatement, was supported by just and valid reasons. Actual reinstatement was not feasible because teaching loads had already been taken over by new faculty members, and compelling UST to reinstate the dismissed professors would require violating contracts with the replacement faculty members. Petitioner maintained that the Secretary of Labor never intended to force UST to break employment contracts, and that the dismissed faculty members could be accommodated with substantially equivalent assignments without loss in rank, pay, or privilege.
• Impracticability of Mid-Semester Faculty Changes: Petitioner contended that changing faculty members near the end of the semester would seriously prejudice students' welfare, causing dislocation, confusion, loss of momentum, and demoralization.
• Impropriety of Payroll Reinstatement: Petitioner asserted that mere payroll reinstatement would obligate UST to pay faculty members who were not working, contravening the "No Work, No Pay" principle. It claimed the faculty members who were given substantially equivalent academic assignments failed to comply with instructions from their deans to report to the Office of Academic Affairs and Research.
• Backwages Should Not Be Awarded: Petitioner contended that its motion for reconsideration seasonably filed had effectively stayed the Secretary's July 11, 1989 order, and that faculty members who refused to perform their substantially equivalent assignments were not entitled to backwages.
• Management Prerogative: Petitioner argued that as employer, it had the sole and exclusive right to determine the nature and kind of work of its employees and to control and manage its own operations, and that the NLRC improperly substituted its judgment for that of UST in the conduct of its affairs.

• Substantially Equivalent Assignments as Oppressive and Union-Busting: Respondent UST Faculty Union decried that petitioner was using substantially equivalent academic assignments as a vehicle to embarrass and degrade union leaders, and that the refusal to comply with the return-to-work order was calculated to deter, impede, and discourage union leaders from pursuing union activities.
• Entitlement to Actual Teaching Loads: Respondent maintained that the dismissed faculty members were hired to perform teaching functions and had rendered dedicated teaching service for periods ranging from 12 to 39 years, making their qualifications suited for classroom activities. The assignment of non-teaching duties such as book analysis, syllabi-making, test question construction, writing of monographs and modules, and designing learning aids was oppressive and unbecoming of their professional standing.

• Validity of Alternative Remedies: Whether the NLRC gravely abused its discretion in issuing a resolution ordering the alternative remedies of actual reinstatement or payroll reinstatement of the dismissed faculty members.
• Award of Backwages: Whether the NLRC gravely abused its discretion in directing UST to pay full backwages from July 13, 1989, the date the faculty members presented themselves for reinstatement, up to the date of actual or payroll reinstatement.
• Good Faith Compliance: Whether the NLRC gravely abused its discretion in ruling that UST's grant of substantially equivalent academic assignments was not compliance in good faith with the Secretary of Labor's orders.
• Management Prerogative: Whether the NLRC gravely abused its discretion in arrogating upon itself the exercise of rights and prerogatives reposed by law to UST as employer.

• Validity of Alternative Remedies: No grave abuse of discretion, but the resolution was modified. The NLRC erred in granting the alternative remedy of payroll reinstatement, as this was not found in the Secretary's orders, but such error was merely an error of judgment not correctible by certiorari. Actual reinstatement was the proper remedy under Article 263(g).
• Award of Backwages: No. The NLRC's award of backwages was correct. A return-to-work order is immediately effective and executory despite the filing of a motion for reconsideration, and the faculty members' refusal to accept substantially equivalent assignments did not contravene the return-to-work order, as they were rightfully insisting on actual reinstatement.
• Good Faith Compliance: No. The NLRC did not commit grave abuse of discretion in ruling that substantially equivalent academic assignments were not compliance in good faith. Within the context of Article 263(g), "under the same terms and conditions" contemplates actual reinstatement or the return of actual teaching loads.
• Management Prerogative: No. Management prerogatives are not absolute and are subject to limitations found in law. Article 263(g) is one such limitation, restricting UST's right to transfer or reassign employees to the extent that the law requires readmission under the same terms and conditions prevailing before the dispute.

• Validity of Alternative Remedies: The Secretary of Labor's July 18, 1989 order specifically directed readmission "under the same terms and conditions prevailing prior to the present dispute." The NLRC, as the implementing body, was charged with enforcing this valid return-to-work order and had no authority to amend it. The remedy of payroll reinstatement appeared nowhere in the Secretary's orders and should not have been imposed. However, the NLRC's error in granting alternative remedies was merely an error of judgment, not a grave abuse of discretion correctible by certiorari, as the NLRC was attempting to work out a satisfactory ad hoc solution to a serious problem. In light of the Court's ruling that substantially equivalent academic assignments were improper and that teacher changes should be deferred until the end of the first semester, payroll reinstatement would actually minimize UST's problems in paying full backwages.
• Award of Backwages: A return-to-work order issued in a certified case is immediately effective and executory despite a motion for reconsideration, as held in Philippine Air Lines Employees Association (PALEA) vs. Philippine Air Lines, Inc. The very nature of such an order, issued in exercise of compulsory power of arbitration over an industry indispensable to the national interest, demands immediate obedience until set aside. The Secretary's July 11 order was modified by the July 18 order, but the return-to-work portion requiring readmission under the same terms and conditions was affirmed. The NLRC's factual finding that the dismissed teachers presented themselves for reinstatement on July 13, 1989 was supported by substantial evidence and accorded finality. The faculty members' refusal to accept substantially equivalent assignments did not contravene the return-to-work order; they were merely insisting on actual reinstatement, to which they were rightfully and legally entitled. Since UST failed to comply with the order of actual reinstatement, the award of backwages until actual reinstatement was correct.
• Good Faith Compliance: Article 263(g) was devised to maintain the status quo between workers and management in a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, pending adjudication of the controversy. The phrase "under the same terms and conditions" contemplates actual reinstatement or the return of actual teaching loads. The substantially equivalent academic assignments given to the reinstated faculty members — book analysis, syllabi-making, test question construction, writing of monographs and modules, and designing learning aids — were not the desirable research or scholarly assignments professors yearn for as badges of honor and achievement. The grant of such assignments altered the existing status quo and aggravated the dispute, as the teachers refused to accept what they felt were degrading assignments, prompting UST to withhold their salaries. The NLRC therefore correctly ruled that UST should cease and desist from offering substantially equivalent academic assignments.
• Management Prerogative: The hiring, firing, transfer, demotion, and promotion of employees are traditionally identified as management prerogatives, but these are not absolute. They are subject to limitations found in law, collective bargaining agreements, or general principles of fair play and justice, as held in Abbott Laboratories (Phil.) Inc. vs. NLRC. Article 263(g) is one such statutory limitation. To the extent that it requires admission of all workers under the same terms and conditions prevailing before the strike, UST was restricted from exercising its generally unbounded right to transfer or reassign employees. The NLRC was not substituting its own judgment for that of UST; it was merely complying with the mandate of the law. UST's fear that reinstated faculty members would use the classroom to assail the administration was speculative and did not warrant deviation from the principle of actual reinstatement.

• Return-to-Work Orders Under Article 263(g) — When the Secretary of Labor assumes jurisdiction over or certifies a labor dispute to the NLRC under Article 263(g) of the Labor Code, the assumption or certification has the effect of automatically enjoining any strike or lockout. All striking or locked-out employees shall immediately return to work, and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout. The phrase "under the same terms and conditions" contemplates actual reinstatement to the employees' former positions, not the assignment of substantially equivalent or non-teaching duties. The purpose is to maintain the status quo pending adjudication of the controversy.

• Immediate Effectivity of Return-to-Work Orders — A return-to-work order issued in a certified case is immediately effective and executory despite the filing of a motion for reconsideration. 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. It must be obeyed until set aside; to say that its effectivity must await affirmance on reconsideration would emasculate and defeat its purpose, as the deadline for return to work would have already passed.

• Limitations on Management Prerogatives — Management prerogatives relating to hiring, firing, transfer, demotion, and promotion are not absolute. They are subject to limitations found in law, collective bargaining agreements, or general principles of fair play and justice. A statutory mandate such as Article 263(g), which requires readmission of workers under the same terms and conditions prevailing before a strike, constitutes a legal limitation on the employer's right to transfer or reassign employees.

• Finality of Factual Findings of Quasi-Judicial Agencies — Factual findings of quasi-judicial agencies like the NLRC are generally accorded not only respect but even finality if supported by substantial evidence.

• No Appointments to Fill Items Not Yet Lawfully Vacant — Under the principle that no appointments can be made to fill items which are not yet lawfully vacant, the contracts of replacement professors cannot prevail over the right to reinstatement of dismissed personnel. However, equitable principles may be applied for the sake of students, such as deferring actual reinstatement to the start of the next semester.

• "Within the context of Article 263(g), the phrase 'under the same terms and conditions' contemplates actual reinstatement or the return of actual teaching loads to the dismissed faculty members." — This passage articulates the ratio decidendi on what constitutes compliance with a return-to-work order, defining the controlling interpretation of "same terms and conditions" in the context of academic employment.

• "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 quotation, drawn from PALEA vs. PAL and adopted by the Court, establishes the doctrine of immediate effectivity of return-to-work orders and is frequently cited in subsequent labor jurisprudence.

• "The hiring, firing, transfer, demotion and promotion of employees are traditionally Identified as management prerogatives. However, these are not absolute prerogatives. They are subject to limitations found in law, a collective bargaining agreement, or general principles of fair play and justice." — This passage defines the boundaries of management prerogatives and the bases for their limitation, a formulation commonly cited in Philippine labor law.

• "Under the principle that no appointments can be made to fill items which are not yet lawfully vacant, the contracts of new professors cannot prevail over the right to reinstatement of the dismissed personnel." — This passage establishes the priority of reinstatement rights over replacement contracts, while acknowledging equitable exceptions for student welfare.

• Philippine Air Lines Employees Association (PALEA) vs. Philippine Air Lines, Inc., 38 SCRA 372 (1971) — Controlling precedent on the immediate effectivity and executory nature of return-to-work orders despite motions for reconsideration. The Court adopted its reasoning to reject UST's argument that its motion for reconsideration stayed the Secretary's order.

• Abbott Laboratories (Phil.) Inc. vs. NLRC, 154 SCRA 713 (1987) — Cited for the proposition that management prerogatives are not absolute and are subject to limitations found in law, collective bargaining agreements, or general principles of fair play and justice.

• Mamerto vs. Inciong, 118 SCRA 265 (1982) — Cited among cases establishing that factual findings of quasi-judicial agencies like the NLRC are accorded respect and even finality when supported by substantial evidence.

• Baby Bus, Inc. vs. Minister of Labor, 158 SCRA 221 (1988) — Cited for the same proposition regarding finality of factual findings of quasi-judicial agencies.

• Packaging Products Corporation vs. National Labor Relations Commission, 152 SCRA 210 (1987) — Cited for the same proposition regarding finality of factual findings of quasi-judicial agencies.

• Talisay Employees' and Laborers Association (TELA) vs. Court of Industrial Relations, 143 SCRA 213 (1986) — Cited for the same proposition regarding finality of factual findings of quasi-judicial agencies.

• Article 263(g), Labor Code, as amended by Section 27 of Republic Act No. 6715 — Authorizes the Secretary of Labor to assume jurisdiction over or certify to the NLRC for compulsory arbitration labor disputes causing or likely to cause strikes or lockouts in industries indispensable to the national interest. Such assumption or certification automatically enjoins the strike or lockout, requires all striking or locked-out employees to immediately return to work, and requires the employer to readmit all workers under the same terms and conditions prevailing before the strike or lockout. The Court interpreted "under the same terms and conditions" as requiring actual reinstatement to former teaching loads, not substantially equivalent academic assignments.

• Section 33(b), Republic Act No. 6715 — Referenced in Secretary Drilon's July 11, 1989 order as the statutory basis for suspending the effects of termination in the interest of industrial peace.

Fernan, C.J. (Chairman), Bidin and Cortes, JJ., concurred. Feliciano, J., was on leave.