Case Digest on Allied Banking

Isalama Machine Works Corporation v. NLRC GR 100167, March 2, 1995 By Mark Justin Mooc

Facts: After signing the CBA which covered the period from November 1, 1986 to October 3, 1989, the Isalama Machine Works Corporation Labor Union-Workers Alliance Trade Union (Union) repeatedly demanded from the Corporation that it complied with the CBA provisions, particularly on furnishing the workers with safety shoes and free laminated IDs, aside from improving the employees’ working conditions. When the Isalama Machine Works Corporation (Corporation) paid the workers their 13 th month pay, the Corporation based it on the average number of days actually worked by an employee, which it claimed to be in accord with the CBA provisions and PD 851. However, the Union, through its President Henry Baygan, demanded that the 13 th month pay should be made on the basis of a full one month basic pay. On January 5, 1988, the Union filed a notice of strike with the DOLE Region X, alleging the commission of unfair labor practice and CBA violation by the Corporation. The NCMB, fortunately, succeeded in having the dispute amicably settled except for the 13 th month pay differential. The case was indorsed to the NLRC for compulsory arbitration as the 13 th month pay differential issue was not settled. The Union insisted that the 13th month pay was a strikeable issue. Despite the indorsement to the NLRC, the union went on strike on February 15, 1988. Due to the wide publicity accorded the strike, as it argued, the petitioner had suffered a dearth of work orders and withdrawal of existing job orders, which ultimately forced it to adopt a rotation system of work. On February 22, 1988, it filed a petition with the Regional Arbitration Branch of the NLRC, charging the union with conducting an illegal strike and engaging in unfair labor practice. The Executive Labor Arbiter rendered a decision holding the strike to be illegal, and further declared that Baygan and other participating union members have lost their employment status. The dismissed employees however appealed the decision of the Executive Labor Arbiter to the NLRC. The NLRC, in its decision dated June 9, 1989, ordered the reinstatement of the dismissed union members, except for Baygan, without back salaries. The Corporation filed a motion for reconsideration with the NLRC, but was denied for lack of merit. In this April 30, 1991 decision on the Motion for Reconsideration, the NLRC affirmed the reinstatement without backwages of the 16 union members to their former positions without loss of seniority rights. The decision further provided for

the cut-off date for the forbearance in the payment of backwages was up to July 24, 1989, which was likewise the date on record as date of receipt of the June 9, 1989 resolution. For this purpose, in the event the “dismissed” union members have not been reinstated actually or by payroll, the Corporation was directed to pay backwages without qualifications or deductions from July 25, 1989 until they were reinstated. The Union filed with the NLRC a motion for execution of the judgment, asserting that the corporation was operating under a new trade name, “Golden Engineering,” which was still owned and managed by the same family and of which change neither the employees nor the NLRC had been formally notified. However, before the motion for execution could be acted upon by the NLRC, the Corporation filed the petition for certiorari assailing the June 9, 1989 decision of the NLRC. The Corporation submitted that the Union could not claim good faith when they staged their strike since the attention of both parties had been called by the conciliator at the hearings before the NCMB to the non-strikeable character of the 13th month pay. The Union insisted however that the 13 th month pay should be considered a strikeable issue.

Issues: 1. Whether the failure to implement the 13th month pay amounts to an unfair labor practice, hence a strikeable issue 2. Whether Baygan’s dismissal was valid. Ruling: The NLRC resolution was affirmed by the Court. It ruled that the “failure” to comply with the proper manner the application and computation of the 13 th month pay on the part of the Corporation did not constitute an unfair labor practice. Section 9 of the Rules and Regulations implementing the PD 851 specifically states that non-payment of the 13 th month pay, provided by the Decree and the rules, is treated as money claims cases and shall be processed in accordance with the Rules Implementing the Labor Code and the Rules of the NLRC. Moreover, the CBA provision of a no-strike clause also provided that the Corporation agreed to a one month basic salary to all employeesworkers as Christmas bonus in compliance with PD 851 but violation thereof would not constitute a ULP by the employer. As for Baygan’s dismissal, it was warranted as being the Union President and leader of the strike. His liability was greater than that of mere members and had the responsibility to ensure that his followers respected the law. Though the NLRC found the Union members to have blocked and barricaded the entrance to the Corporation’s premises, the identity of those who had committed those illegal acts during the strike, except for Baygan, had not be adequately established. As pointed out by

the NLRC, no sufficient evidence could be found to pin down the 16 strikers as having committed illegal acts during the strike, which when proven could warrant a loss of their employment status. As for the petitioner’s contention that it could no longer accept the strikers due to closing down of operations and the takeover of Golden Engineering, owned by Alfredo Chan and not Charlie Chan, the Court pronounced that such factual issues were awaiting resolution by the NLRC in the motion for execution pending before it.

Allied Banking Corporation v. NLRC GR 116128, July 12, 1996 By Mark Justin Mooc

Facts: Allied Banking Corporation (Corporation/Bank) and the Allied Banking Employees Union-NUBE (Union) failed to amicably settle the wage increase issue in their negotiations for their CBA after June 30, 1984. For this reason, the Union filed a notice of strike with the Bureau of Labor Relations. However, Labor Minister Ople assumed jurisdiction over the dispute. He had issued orders enjoining the Union from declaring a strike and the management from effecting a lockout. Despite these orders however, the Union filed on December 20 th a report on the results of the strike vote it had conducted. And, on January 3, 1985, the Union staged a strike upon the Union president’s contention that the Labor Minister’s assumption order was a mere scrap of paper. The following day, January 4th, the Corporation filed with the Ministry of Labor and Employment (MOLE) a Manifestation and Urgent Motion praying for a return-to-work order, which was issued with a PhP 1,000.00 grant per employee chargeable to future CBA benefits by Minister Ople on January 6th. Despite a January 31, 1985 Order by Labor Minister Ople directing the parties to incorporate in their CBA the awards granted, on February 11th, certain members of the Union, they as having identified by Corporation to be numbering to 271, resumed the strike and committed acts of violence. This resulted in the filing of criminal charges against some of the strikers. The Corporation published notices in the Bulletin Today, the Times Journal and the Daily Express, directing the striking employees to return to work not later than 1:00 pm of February 13 th. However, the striking employees failed to report for work on the said date, to which they reasoned that the resumption of their picketing activities was brought about by their belief that Ople’s January 31 , 1985 order was not based on justice, equity and reason. For this stance (posture of intransigence), the Corporation issued notices of their termination. On March 11th, the Union lifted its picket lines and notified the Corporation that the striking employees were returning back to work. However, the Corporation refused to accept them back as they have already been dismissed for abandonment of work when they failed to obey the assumption order. As such, on June 5th, Ople issued an Order (June 5, 1985 Order) which directed the

corporation to reinstate provisionally all striking workers except those who have already accepted their separation pay, officers of the union and those with pending criminal charges. By reason of this June 5, 1985 Order, the Union filed with the Supreme Court a petition for certiorari, with a prayer for the issuance of a preliminary mandatory injunction (GR 71239) and prayed that the said Order be modified to direct the reinstatement of all union officers, employees with pending criminal charges and employees who have received their separation pay. The Supreme Court, however, remanded the petition to the MOLE in order to resolve the pending factual and legal issues relative to the petition (June 18, 1986 Resolution). The June 5, 1985 Order was modified by Minister Augusto Sanchez by ordering the reinstatement of all striking employees, except those who have already accepted their separation pay in his August 29, 1986 Order. As a consequence, the Corporation filed a petition before the Supreme Court (GR 75749) to nullify the August 29, 1986 Order. The Supreme Court, on September 15, 1986, issued a TRO enjoining the enforcement of the August 29, 1986 Order as regards the payment of backwages, allowances, and other benefits due to the striking members effective March 11, 1985 until their actual reinstatement. The Court ordered the remand of the petitions to the DOLE as some factual issues have yet to be resolved.The disposition of the Court (May 4, 1988 Resolution) on said matter is as follows: The Corporation filed a motion for clarification for the May 4, 1988 Resolution of the Court, which was denied. For this reason, the August 29, 1986 Order was ordered implemented. However, the problem was that the number of striking employees to be reinstated pursuant to the August 29, 1986 Order have been reduced a bit when 71 of the 112 affected employees were additionally reinstated. Hence, only 41 of the individual respondents, led by Rolando Ocampo, Rowena Rebosa and Alfredo del Pilar, were not reinstated. Despite the petitions filed with the Supreme Court, the Arbitration of the Bank’s petitions still continued with the Labor Arbiter. On September 4, 1992, the Labor Arbiter ruled that the strike was illegal; hence, all union officers had lost their employment status. Furthermore, the Labor Arbiter ordered the reinstatement of 41 counter-claimants led by Ocampo, Rebosa and del Pilar. Subsequently, in his November 5, 1992 Order, the Labor Arbiter identified all the respondents to be reinstated pursuant to his September 4, 1992 Decision. They were identified so that the Corporation could not pretend/feign its lack of awareness as to who were the other 38 individual respondents, aside from Ocampo, del Pilar and Rebosa. The Corporation filed with NLRC a consolidated petition for injunction. However, before the NLRC could decide on the issue of reinstatement pending appeal, respondents filed a petition for mandamus with the Supreme Court to compel the Chairman of the NLRC to issue a writ of execution

as regards the reinstatement aspect of the Labor Arbiter’s September 4, 1992 Decision. This was dismissed by the Court in its December 5, 1993 Resolution. On April 7, 1994, the NLRC issued an Order directing the reinstatement of 41 respondents pending appeal and at the same time dismissing the Corporation’s petition for injunction. The NLRC, on May 20, 1994 (May 20, 1994 Order), upheld the LA’s finding that the strikes staged on January 3 and 4, 1985 and on February 11 to March 11, 1985 were in violation of Article 263(g) which provided for the automatic enjoining of strikes or lockouts upon assumption of jurisdiction of the Secretary of Labor or certification to the NLRC. As such, the striking union members have lost their employment status. The NLRC, despite concluding that the respondents were validly dismissed, opined that the 41 respondents earned for themselves the right to be reinstated not under Article 223 of the Labor Code as amended by RA 6715 on March 2, 1989, but retroactive September 15, 1986 when the Supreme Court ordered the implementation of the August 29, 1986 Order of Minister Sanchez, which directed the reinstatement of all striking employees except those who have accepted separation pay. The NLRC likewise ordered that the case be remanded to the Labor Arbiter as to whether the subject 41 individual respondents, who were not reinstated since 1986, can validly be paid backwages from September 1986 up to the time the NLRC promulgated its decision. The parties moved for a reconsideration which were denied in the July 8, 1994 Resolution of the NLRC. Issues: Whether or not the striking union members who were terminated for abandonment of work after failing to obey the return-to-work order of the Secretary of Labor and Employment should have been reinstated with backwages. Ruling: The NLRC May 20, 1994 Order was affirmed. Though the Supreme Court agreed with respondents’ contention that mere participation in an illegal strike should not automatically result in their termination from employment, the mere fact that they have defied a return-to-work order of the Secretary of Labor and staged a strike on January 3 and 4, 1985 when Labor Minister Ople assumed jurisdiction over the dispute, and another strike from February 11 up to March 11, 1985 while their labor dispute with the Corporation was still pending before Minister Ople, justifies the consequence of their defiance, which is severance from their employment. As such, the Court fully agrees with the NLRC ruling declaring that respondents were validly dismissed considering their defiance of the return-to-work order issued by the Secretary of Labor. The provisions of law which govern the effects of defying a return-to-work order are found in Article 263(g) and Article 264(a) of the Labor Code, now Article 277(g) and Article 278(a).

It must be underscored that a return-to-work order is issued pending the determination of the legality or illegality of a strike. It is not correct to say that it may be enforced only if the strike is legal and may be disregarded if the strike is illegal, for its purpose is to maintain the status quo while the determination is being made. Otherwise, the workers who contend that their strike is legal can refuse to return to their work and cause a standstill on the company operations while retaining the positions they refuse to discharge or allow the management to fill. Worse, they will also claim payment for work not done, on the ground that they are still legally employed although actually engaged in the activities inimical to their employer’s interest. As a consequence of the declaration of the illegality of the strike and the upholding of the dismissal of respondents in the NLRC decision, an award of backwages is incompatible. The NLRC’s disposition of the case remanding to the Labor Arbiter the issue of reinstating respondents and the computation of their backwages is an illogical consequence of respondents’ valid dismissal from their employment. Such disposition should be struck down as having been issued with grave abuse of discretion. The next question then is did respondents knowingly participate in an illegal strike. From the records, it shows that there was an assumption order already issued by the Minister of Labor when they first conducted a strike on January 3 and 4, 1985, and this assumption order was still in effect when they struck continuously from February 11 to March 11, 1985. This was found in their answer dated September 26, 1985. The respective liabilities of striking union officers and members who failed to immediately comply with the return-to-work order are clearly spelled out in Article 264 of the Labor Code, which provides that any declaration of a strike or lockout after the Secretary of Labor and Employment has assumed jurisdiction over the labor dispute is considered as an illegal act. Hence, any worker or union officer who knowingly participates in a strike defying a return-to-work order may as a result thereof be considered to have lost his employment status.