automotive engine rebuilders vs progresibong unyon

Copyright 1994-2012 CD Technologies Asia, Inc. Jurisprudence 1901 to 2011 1

THIRD DIVISION

[G.R. No. 160138. July 13, 2011.]

AUTOMOTIVE ENGINE REBUILDERS, INC. (AER), ANTONIOT. INDUCIL, LOURDES T. INDUCIL, JOCELYN T. INDUCIL andMA. CONCEPCION I. DONATO, petitioners, vs. PROGRESIBONGUNYON NG MGA MANGGAGAWA SA AER, ARNOLDVILLOTA, FELINO E. AGUSTIN, RUPERTO M. MARIANO II,EDUARDO S. BRIZUELA, ARNOLD S. RODRIGUEZ, RODOLFOMAINIT, JR., FROILAN B. MADAMBA, DANILO D. QUIBOY,CHRISTOPHER R. NOLASCO, ROGER V. BELATCHA,CLEOFAS B. DELA BUENA, JR., HERMINIO P. PAPA,WILLIAM A. RITUAL, ROBERTO CALDEO, RAFAEL GACAD,JAMES C. CAAMPUED, ESPERIDION V. LOPEZ, JR., FRISCOM. LORENZO, JR., CRISANTO LUMBAO, JR., and RENATOSARABUNO, respondents.

[G.R. No. 160192. July 13, 2011.]

PROGRESIBONG UNYON NG MGA MANGGAGAWA SA AER,ARNOLD VILLOTA, FELINO E. AGUSTIN, RUPERTO M.MARIANO II, EDUARDO S. BRIZUELA, ARNOLD S.RODRIGUEZ, RODOLFO MAINIT, JR., FROILAN B.MADAMBA, DANILO D. QUIBOY, CHRISTOPHER R.NOLASCO, ROGER V. BELATCHA, CLEOFAS B. DELA BUENA,JR., HERMINIO P. PAPA, WILLIAM A. RITUAL, ROBERTOCALDEO, RAFAEL GACAD, JAMES C. CAAMPUED,ESPERIDION V. LOPEZ, JR., FRISCO M. LORENZO, JR.,CRISANTO LUMBAO, JR., and RENATO SARABUNO petitioners,vs. AUTOMOTIVE ENGINE REBUILDERS, INC., and ANTONIOT. INDUCIL, respondents.


DECISION

MENDOZA, J p:

Challenged in these consolidated petitions for review is the October 1, 2003Amended Decision 1(1) of the Court of Appeals (CA), in CA-G.R. SP No. 73161,which modified the Resolution 2(2) of the National Labor Relations Commission(NLRC), by ordering the immediate reinstatement of all the suspended employees ofAutomotive Engine Rebuilders, Inc. (AER) without backwages.

Records show that AER is a company engaged in the automotive engine repairand rebuilding business and other precision and engineering works for more than 35years. Progresibong Unyon ng mga Manggagawa sa AER (Unyon) is the legitimatelabor union of the rank and file employees of AER which was formed in the year1998.

Due to a dispute between the parties, both filed a complaint against each otherbefore the NLRC. AER accused the Unyon of illegal concerted activities (illegalstrike, illegal walkout, illegal stoppage, and unfair labor practice) while Unyonaccused AER of unfair labor practice, illegal suspension and illegal dismissal. EcHTCD

AER's Management's Version

On January 28, 1999, eighteen (18) employees of AER, acting collectively andin concert, suddenly and without reason staged a walkout and assembled illegally inthe company premises.

Despite management's plea for them to go back to work, the concernedemployees refused and, instead, walked out of the company premises and proceededto the office of the AER Performance and Service Center (AER-PSC) located onanother street. Upon arrival, they collectively tried to cart away one (1) line boringmachine owned by AER out of the AER-PSC premises. They threatened and forcedthe company guards and some company officers and personnel to open the gate of theAER-PSC compound. They also urged the AER-PSC employees to likewise stopworking.

The concerned employees occupied the AER-PSC premises for several hours,


thus, disrupting the work of the other employees and AER's services to its clients.They refused to stop their unlawful acts despite the intervention of the barangayofficers. They left the AER-PSC premises only when the police intervened andnegotiated with them. THaDAE

Subsequently, management issued a memorandum requiring the employeeswho joined the illegal walkout to explain in writing why they should not bedisciplined administratively and dismissed for their unjustified and illegal acts.

The concerned employees submitted their written explanation which containedtheir admissions regarding their unjustified acts. Finding their explanationunsatisfactory, AER terminated the services of the concerned employees.

On February 22, 1999, the concerned employees started a wildcat strike,barricaded company premises, and prevented the free ingress and egress of the otheremployees, officers, clients, and visitors and the transportation of companyequipments. They also tried to use force and inflict violence against the otheremployees. Their wildcat strike stopped after the NLRC issued and served atemporary restraining order (TRO).

Meantime, six (6) of the concerned employees, namely: Oscar Macaranas,Bernardino Acosta, Ferdinand Flores, Benson Pingol, Otillo Rabino, and JonathanTaborda resigned from the company and signed quitclaims. ISADET

Unyon's Version

On December 22, 1998, Unyon filed a petition for certification election beforethe Department of Labor and Employment (DOLE) after organizing their employeesunion within AER. Resenting what they did, AER forced all of its employees tosubmit their urine samples for drug testing. Those who refused were threatened withdismissal.

On January 8, 1999, the results of the drug test came out and the followingemployees were found positive for illegal drugs: Froilan Madamba, ArnoldRodriguez, Roberto Caldeo, Roger Bilatcha, Ruperto Mariano, Edwin Fabian, andNazario Madala.

On January 12, 1999, AER issued a memorandum suspending these employeesfrom work for violation of Article D, Item 2 of the Employee's handbook which readsas follows:

Coming to work under the influence of intoxicating liquor or any drug or


drinking any alcoholic beverages on the premises on company time. SDTcAH

Out of the seven (7) suspended employees, only Edwin Fabian and NazarioMadala were allowed by AER to report back to work. The other five (5) suspendedemployees were not admitted by AER without first submitting the required medicalcertificate attesting to their fitness to work.

While they were in the process of securing their respective medical certificates,however, they were shocked to receive a letter from AER charging them withinsubordination and absence without leave and directing them to explain their acts inwriting. Despite their written explanation, AER refused to reinstate them.

Meanwhile, Unyon found out that AER was moving out machines from themain building to the AER-PSC compound located on another street. Sensing thatmanagement was going to engage in a runaway shop, Unyon tried to prevent thetransfer of the machines which prompted AER to issue a memorandum accusing thoseinvolved of gross insubordination, work stoppage and other offenses.

On February 2, 1999, the affected workers were denied entry into the AERpremises by order of management. Because of this, the affected workers staged apicket in front of company premises hoping that management would accept themback to work. When their picket proved futile, they filed a complaint for unfair laborpractice, illegal suspension and illegal dismissal.

Ruling of the Labor Arbiter

On August 9, 2001, the Labor Arbiter (LA) rendered a decision 3(3) in favor ofUnyon by directing AER to reinstate the concerned employees but without backwageseffective October 16, 2001. ACTISE

The LA ruled, among others, that the concerned employees were suspendedfrom work without a valid cause and without due process. In finding that there wasillegal suspension, the LA held as follows:

There is no doubt that the hostile attitude of the management to itsworkers and vice versa started when the workers began organizing themselvesinto a union. As soon as the management learned and received summonsregarding the petition for certification election filed by the employees, theyretaliated by causing the employees to submit themselves to drug test. And outof the seven who were found positive, five were placed on a 12 day suspensionnamely: (1) Froilan Madamba; (2) Arnold Rodriguez; (3) Roberto Caldeo; (4)Roger Belatcha; and (5) Ruperto Mariano.


This is illegal suspension plain and simple. Even if they were foundpositive for drugs, they should have been caused to explain why they werefound so. It could have been that they have taken drugs as cure for ailmentunder a physician's prescription and supervision. Doubts should be in favor ofthe working class in the absence of evidence that they are drug addicts or theytook prohibited or regulated drugs without any justifiable reason at all. In fact,there is not even a showing by the company that the performance of theseemployees was already adversely affected by their use of drugs.

Lest be misunderstood that we are considering use of prohibited drug orregulated drugs, what we abhor is suspension without valid cause and without

due process. 4(4)

The LA further held that AER was guilty of illegal dismissal for refusing toreinstate the five (5) employees unless they submit a medical certificate that they werefit to work. Thus:

. . . Firstly, the employer has not even established that the fiveemployees are sick of ailments which are not curable within six months, aburden which rests upon the employers and granting that they were sick or drugaddicts, the remedy is not dismissal but to allow them to be on sick leave and betreated of their illness and if not cured within 6 months, that is the time that theymay be separated from employment but after payment of 1/2 month's salary for

every year of service by way of separation pay. 5(5)

Finally, the LA held that the concerned employees were not totally withoutfault. The concerted slowdown of work that they conducted in protesting their illegalsuspension was generally illegal and unjustifiable. The LA, thus, ruled that bothparties were in pari delicto and, therefore, must suffer the consequences of the wrongthey committed. TDcAaH

NLRC Ruling

Both parties filed their respective appeals with the NLRC. The concernedemployees argued that the LA erred in 1) not awarding backwages to them during theperiod of their suspension; 2) not holding that AER is guilty of unfair labor practice;and 3) not holding that they were illegally dismissed from their jobs. 6(6) AER, onthe other hand, claimed that the LA erred in finding that there was illegal dismissaland in ordering the reinstatement of the concerned employees without backwages.7(7)


On March 5, 2002, the NLRC issued a Resolution 8(8) modifying the LAdecision by setting aside the order of reinstatement as it found no illegal dismissal.

The NLRC, however, considered only three (3) out of the eighteen concernedemployees, (18) namely: Froilan Madamba, Ruperto Mariano, and Roberto Caldeobecause their names were commonly identified in the LA decision and in theconcerned employees' position paper as those employees who were allegedly illegallysuspended.

It wrote that these three (3) employees were validly suspended because theywere found positive for illegal drugs in the drug test conducted by AER. Managementwas just exercising its management prerogative in requiring them to submit a medicalfit-to-work certificate before they could be admitted back to work. The drug test wasfound to be not discriminatory because all employees of AER were required toundergo the drug test. Neither was the drug test related to any union activity. cTECIA

Finally, the NLRC ruled that the concerned employees had no valid basis inconducting a strike. Considering that the concerted activity was illegal, AER had theright to immediately dismiss them.

Unyon and the concerned employees filed a petition before the CA advancingthe following:

ARGUMENTS

PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETIONIN HOLDING THAT THERE ARE ONLY THREE (3) REMAININGCOMPLAINANTS IN THE CASE FILED BY THE PETITIONERS.

PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETIONIN HOLDING THAT THE SUSPENSION OF SEVERAL PETITIONERSWAS VALID DESPITE THE ABSENCE OF DUE PROCESS.

PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETIONIN SUSTAINING THE VALIDITY OF THE DISMISSAL OF EMPLOYEESWHO TESTED POSITIVE DURING THE DRUG TEST. ESCacI

PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETIONIN ABSOLVING PRIVATE RESPONDENTS OF THE OFFENSE OFUNFAIR LABOR PRACTICE.

PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETIONIN DISMISSING PETITIONERS' COMPLAINT FOR ILLEGAL


DISMISSAL.

The CA Ruling

On June 27, 2003, the CA rendered a decision, 9(9) the dispositive portion ofwhich reads as follows:

WHEREFORE, premises considered, the petition is GRANTED.Respondents are hereby directed to reinstate the petitioners effectiveimmediately but without backwages, except those who were tested positive forillegal drugs and have failed to submit their respective medical certificates. caIDSH

SO ORDERED. 10(10)

The CA explained that there still remained 26 complaining employees and notjust three (3) as claimed by the NLRC, because 32 members of Unyon signed andfiled the complaint, and from the 32 complaining members, only six (6) voluntarilysigned quitclaims in favor of AER. It reasoned out that the number of parties to acomplaint would correspond to the number of signatories thereto and not necessarilyto the names commonly appearing or identified in the position paper and the LAdecision. Citing Section 6 of the Rules of Court, the CA held that all persons in whomor against whom any right to relief in respect to or arising out of the same transactionor series of transactions is alleged to exist, whether jointly, severally, or in thealternative, may join as plaintiffs or be joined as defendants in one complaint.

The CA, however, agreed with the NLRC on the legality and validity of thesuspension. The CA wrote:

The petitioners themselves have admitted that all of them were orderedto give their urine samples for the drug test; that the drug test was applicable toall the employees lends credence that such test was not related to any unionactivity. The union members were not singled out for said drug testing. IADaSE

The complainants who tested positive for illegal drugs were validlysuspended under the company rules. The Employee's Handbook of CompanyRules and Regulations prohibit employees from reporting for work under theinfluence of intoxicating liquor and drugs.

With the finding that the petitioners tested positive for illegal drugs,AER merely exercised their management prerogative to require a medicalcertificate that said employees were already fit to work before they can beadmitted back to work.


Due to the failure of the affected petitioners to submit a medicalcertificate that they are already fit to work, they were dismissed. Petitioners' actof not reporting for duty upon presentation of the medical certificate that theyare fit to work as per agreement with the DOLE NCMB on January 25, 1999had the marks of willful disobedience giving AER the right to terminate

employment. 11(11)

The CA further ruled that both parties were guilty of unfair labor practice. Itstated that the hostile attitude of AER towards its workers and vice-versa started whenthe workers began organizing themselves into a union. AER tried to have a runawayshop when it transferred some of its machinery from the main building to theAER-PSC office located on another street on the pretext that the main building wasundergoing renovation. AER also prevented its employees, even those who wereexcluded from its complaint, from going back to work for allegedly staging an illegalstrike. On the other hand, the concerted work slowdown staged by the concernedemployees as a result of their alleged illegal suspension was unjustified. Hence, bothparties were found by the CA to be in pari delicto and must bear the consequences oftheir own wrongdoing. HEIcDT

On October 1, 2003, upon the motion for partial reconsideration filed byUnyon praying for the payment of full backwages and the reinstatement of allsuspended employees, the CA rendered the assailed Amended Decision, thedispositive portion of which reads, as follows:

WHEREFORE, the partial motion for reconsideration is GRANTEDinsofar as the reinstatement of the suspended employees is concerned. ThisCourt's decision dated June 27, 2003 is hereby MODIFIED. Private respondentsare hereby directed to reinstate all the petitioners immediately withoutbackwages.

SO ORDERED. 12(12)

Unsatisfied, both parties filed the present consolidated petitions on thefollowing

GROUNDS

FOR UNYON :

THE COURT OF APPEALS LEGALLY ERRED IN NOT AWARDINGBACKWAGES TO INDIVIDUAL PETITIONERSNOTWITHSTANDING HAVING ORDERED THEIR


REINSTATEMENT TO THEIR PREVIOUS POSITIONS. ESCTIA

FOR AER:

THE HONORABLE COURT OF APPEALS ERRED GRIEVOUSLYWHEN IT GAVE SO MUCH WEIGHT ON THE PRIVATERESPONDENTS' PARTIAL MOTION FOR RECONSIDERATION BYAMENDING ITS DECISION IN ORDERING THEIR IMMEDIATEREINSTATEMENT INCLUDING THOSE WHO HAVE TESTEDPOSITIVE FOR ILLEGAL DRUGS (DRUG ADDICTS) AND HAVEFAILED TO SUBMIT ANY MEDICAL CERTIFICATE.

G.R. No. 160138

AER's Position

AER questions the findings of the CA that there were 32 complainingemployees, which number was reduced to only 26 because six (6) resigned and signedwaivers and quitclaims. It argues that the CA should have respected the findings ofthe LA and the NLRC that there were only 18 complaining employees, which wasreduced to 12 due to the resignations and signing of the corresponding Release andQuitclaims by six (6) of them. The figure was further reduced to 8, and finally to just3 complaining employees.

AER argues that the reinstatement of those employees who tested positive fordrugs and refused to submit their respective medical certificate certifying that theywere fit to work, violated AER's rules and regulations, and the law in general becauseit would allow the sheltering of drug addicts in company premises.

AER likewise insists that the drug test that it conducted was not related to anyunion activity because the test covered all employees. The drug test was part ofcompany rules and guidelines designed to instill discipline and good behavior amongits employees as contained in its Employees Manual Company Rules andRegulations. AER also claims that it simply exercised its employer's prerogative inrequiring a medical certificate from the affected employees. DECcAS

Finally, AER avers that the complaining employees, who did not report backto work despite their medical certificate attesting that they were fit to work,committed willful disobedience. AER claims that the complaining employees violatedtheir agreement with the DOLE-National Conciliation and Mediation Board (NCMB)dated January 25, 1999. AER likewise contends that the complaining employees aredeemed to have lost their employment status when they engaged in unlawful activities


such as abandonment of work, stoppage of work and the commission of attemptedtheft involving its boring machine. Hence, the termination of their employment wasvalid.

Unyon's Position

Unyon argues that the complaint it filed indicated that there were 32complainants who signed the complaint. Out of the 32, six (6) executed waivers andquitclaims leaving 26 complainants, not 3 as claimed by AER.

Unyon likewise avers that the dismissal of the affected employees wasunlawful for lack of valid ground and prior notice. Although it admits that some ofthe complainant employees tested positive for drugs, it posits that AER should have,at least, required those affected employees to explain why they tested positive fordrugs because it could be possible that the drug taken was a regulated drug for anailment and prescribed by a doctor. Therefore, prior notice or due process was stillnecessary. ISAcHD

Unyon further asserts that the penalty for testing positive for illegal drugs wasonly a 15-day suspension, which was already served by the affected employees. Italso points out that AER never imposed the policy of drug examination on itsemployees before the union was organized. Clearly, AER adopted a hostile attitudetowards the workers when they organized themselves into a union.

Moreover, of the 32 complaining employees in the illegal dismissal caseagainst AER, only 18 were charged by AER with illegal strike. Unyon argues thatAER should have admitted back to work those employees who were not included inthe charge. There was no allegation either that those excluded were involved in theJanuary 28, 1999 incident.

Lastly, Unyon claims that the penalty of outright dismissal against the eighteen(18) employees charged with illegal strike was grossly disproportionate to theiroffense.

G.R. 160192

Unyon's Position

Unyon basically argues that there was enough proof that AER acted in badfaith and it was guilty of illegal lock-out for preventing the affected employees fromgoing back to work. Hence, the complaining employees are entitled to backwages.


CASaEc

AER's Position

AER counters that there are only three (3) remaining complaining employeeswho were validly suspended, namely: Froilan Madamba, Ruperto Mariano andRoberto Caldeo. AER claims that these employees are not entitled to backwages oreven reinstatement because their separation from work was valid due to their unlawfulactivities and willful disobedience. AER further states that Unyon failed to properlyfile a verified position paper. Hence, the complaining employees who failed to file averified position paper should be excluded from the petition.

In sum, the main issue to be resolved in these consolidated cases is whether ornot the CA erred in ruling for the reinstatement of the complaining employees butwithout grant of backwages.

The Court's Ruling

The Court agrees with the ruling of the CA that there were 32 complainingemployees who filed and signed their complaint dated February 18, 1999 for unfairlabor practice, illegal dismissal and illegal suspension. 13(13) Out of the 32, six (6)undeniably resigned and signed waivers and quitclaims, leaving 26 remainingcomplainant employees. Thus, the Court adopts and affirms the following CA rulingon this matter:

The number of parties to a complaint corresponds to the number ofsignatories thereto and not necessarily to the names commonly appearing oridentified in the position paper. All persons in whom or against whom any rightto relief in respect to or arising out of the same transaction or series oftransactions is alleged to exist whether jointly, severally, or in the alternative,may, except as otherwise provided in these Rules, join as plaintiffs or be joinedas defendants in one complaint, where any question of law or fact common toall such plaintiffs or to all such defendants may arise in the action; but the courtmay make such orders as may be just to prevent any plaintiff or defendant frombeing embarrassed or put to expense in connection with any proceedings in

which he may have no interest. 14(14)

This Court likewise affirms the ruling of the CA favoring the reinstatement ofall the complaining employees including those who tested positive for illegal drugs,without backwages. The Court is in accord with the ruling of the LA and the CA thatneither party came to court with clean hands. Both were in pari delicto. TSHIDa


It cannot be disputed that both parties filed charges against each other, blamingthe other party for violating labor laws. AER filed a complaint against Unyon and its18 members for illegal concerted activities. It likewise suspended 7 union memberswho tested positive for illegal drugs. On the other hand, Unyon filed a counterchargeaccusing AER of unfair labor practice, illegal suspension and illegal dismissal. Inother words, AER claims that Unyon was guilty of staging an illegal strike whileUnyon claims that AER committed an illegal lockout.

AER's fault is obvious from the fact that a day after the union filed a petitionfor certification election before the DOLE, it hit back by requiring all its employees toundergo a compulsory drug test. Although AER argues that the drug test was appliedto all its employees, it was silent as to whether the drug test was a regular companypolicy and practice in their 35 years in the automotive engine repair and rebuildingbusiness. As the Court sees it, it was AER's first ever drug test of its employeesimmediately implemented after the workers manifested their desire to organizethemselves into a union. Indeed, the timing of the drug test was suspicious.

Moreover, AER failed to show proof that the drug test conducted on itsemployees was performed by an authorized drug testing center. It did not mentionhow the tests were conducted and whether the proper procedure was employed. Thecase of Nacague v. Sulpicio Lines, 15(15) is instructive:

Contrary to Sulpicio Lines' allegation, Nacague was already questioningthe credibility of S.M. Lazo Clinic as early as the proceedings before the LaborArbiter. In fact, the Labor Arbiter declared that the S.M. Lazo Clinic drug testresult was doubtful since it is not under the supervision of the Dangerous DrugBoard. DTEAHI

The NLRC and the Court of Appeals ruled that Sulpicio Lines validlyterminated Nacague's employment because he was found guilty of using illegaldrugs which constitutes serious misconduct and loss of trust and confidence.However, we find that Sulpicio Lines failed to clearly show that Nacague wasguilty of using illegal drugs. We agree with the Labor Arbiter that the lack ofaccreditation of S.M. Lazo Clinic made its drug test results doubtful.

Section 36 of R.A. No. 9165 provides that drug tests shall beperformed only by authorized drug testing centers. Moreover, Section 36also prescribes that drug testing shall consist of both the screening test andthe confirmatory test. Section 36 of R.A. No. 9165 reads:

SEC. 36. Authorized Drug Testing. — Authorized drug testingshall be done by any government forensic laboratories or by any of the


drug testing laboratories accredited and monitored by the DOH tosafeguard the quality of test results. The DOH shall take steps in setting theprice of the drug test with DOH accredited drug testing centers to further reducethe cost of such drug test. The drug testing shall employ, among others, two(2) testing methods, the screening test which will determine the positiveresult as well as the type of drug used and the confirmatory test which willconfirm a positive screening test. . . . (Emphases supplied)

Department Order No. 53-03 further provides:

Drug Testing Program for Officers and Employees

Drug testing shall conform with the procedures as prescribed by theDepartment of Health (DOH) (www.doh.gov.ph). Only drug testing centersaccredited by the DOH shall be utilized. A list of accredited centers may beaccessed through the OSHC website (www.oshc.dole.gov.ph). cSITDa

Drug testing shall consist of both the screening test and theconfirmatory test; the latter to be carried out should the screening test turnpositive. The employee concerned must be informed of the test results whetherpositive or negative.

In Social Justice Society v. Dangerous Drugs Board, we explained:

As to the mechanics of the test, the law specifies that the procedure shallemploy two testing methods, i.e., the screening test and the confirmatorytest, doubtless to ensure as much as possible the trustworthiness of theresults. But the more important consideration lies in the fact that the tests shallbe conducted by trained professionals in access-controlled laboratoriesmonitored by the Department of Health (DOH) to safeguard against resultstampering and to ensure an accurate chain of custody.

The law is clear that drug tests shall be performed only by authorizeddrug testing centers. In this case, Sulpicio Lines failed to prove that S.M. LazoClinic is an accredited drug testing center. Sulpicio Lines did not even denyNacague's allegation that S.M. Lazo Clinic was not accredited. Also, only ascreening test was conducted to determine if Nacague was guilty of using illegaldrugs. Sulpicio Lines did not confirm the positive result of the screening testwith a confirmatory test. Sulpicio Lines failed to indubitably prove thatNacague was guilty of using illegal drugs amounting to serious misconduct andloss of trust and confidence. Sulpicio Lines failed to clearly show that it had avalid and legal cause for terminating Nacague's employment. When the allegedvalid cause for the termination of employment is not clearly proven, as in thiscase, the law considers the matter a case of illegal dismissal. (Emphases


supplied)

Furthermore, AER engaged in a runaway shop when it began pulling outmachines from the main AER building to the AER-PSC compound located on anotherstreet on the pretext that the main building was undergoing renovation. Certainly, thestriking workers would have no reason to run and enter the AER-PSC premises and tocause the return of the machines to the AER building if they were not alarmed thatAER was engaging in a runaway shop. acCTIS

AER committed another infraction when it refused to admit back thoseemployees who were not included in its complaint against the union. Thirty-two (32)employees filed a complaint for illegal dismissal, illegal suspension and unfair laborpractice against AER. AER charged 18 employees with illegal strike. AER shouldhave reinstated the 14 employees excluded from its complaint.

Regarding AER's contention that the affected workers abandoned their jobs,the Court has thoroughly reviewed the records and found no convincing proof thatthey deliberately abandoned their jobs. Besides, this Court has consistently declaredin a myriad of labor cases that abandonment is totally inconsistent with the immediatefiling of a complaint for illegal dismissal.

In any event, the penalty of dismissal imposed by AER against the strikingemployees, who, by the way, only staged a one day walkout, was too severe. Thepronouncement in the case of Tupas Local Chapter No. 979 v. NLRC 16(16) is worthreiterating:

Neither respondent commission's decision nor the labor arbiter'sdecision as affirmed with modification by it cites any substantial facts orevidence to warrant the terribly harsh imposition of the capital penalty ofdismissal and forfeiture of employment on twenty-two of forty-four workers forhaving staged the so-called one-day (more accurately, a one-morning)"sitdown strike" on August 19, 1980 to inform respondent employer of theirhaving formed their own union and to present their just requests for allowances,overtime pay and service incentive leave pay. Prescinding from respondentcommission's misappreciation of the facts and evidence and accepting for thenonce its factual conclusion that the petitioners staged a one-morning sit-downstrike instead of making a mass representation for the employer to recognizetheir newly formed union and negotiate their demands, respondent commission'sdecision is not in consonance with the constitutional injunction that the Courthas invariably invoked and applied to afford protection to labor and assure theworkers' rights to self-organization, collective bargaining, security of tenure andjust and humane conditions of work. The said decision likewise is not in


accordance with settled and authoritative doctrine and legal principles that amere finding of the illegality of a strike does not automatically warrant awholesale dismissal of the strikers from their employment and that apremature or improvident strike should not be visited with a consequenceso severe as dismissal where a penalty less punitive would suffice. Numerousprecedents to this effect have been cited and reaffirmed . . . .

xxx xxx xxx

In the analogous case of PBM Employees Organization vs. PBM Co.,

Inc., 17(17) [10]/ the Court, in setting aside the questioned industrial court'sorders held that "the dismissal or termination of the employment of thepetitioning eight (8) leaders of the union is harsh for a one-day absencefrom work." They had been ordered dismissed for having carried out a massdemonstration at Malacañang on March 4, 1969 in protest against allegedabuses of the Pasig police department, upon two days' prior notice to respondentemployer company, as against the latter's insistence that the first shift should notparticipate but instead report for work, under pain of dismissal. The Court heldthat they were merely exercising their basic human rights and fighting for theirvery survival "in seeking sanctuary behind their freedom of expression as wellas their right of assembly and of petition against alleged persecution of localofficialdom." We ruled that "(T)he appropriate penalty — if it deserves anypenalty at all — should have been simply to charge said one-day absenceagainst their vacation or sick leave. But to dismiss the eight (8) leaders of thepetitioner Union is a most cruel penalty, since as aforestated the Union leadersdepend on their wages for their daily sustenance as well as that of theirrespective families aside from the fact that it is a lethal blow to unionism, whileat the same time strengthening the oppressive hand of the petty tyrants in thelocalities." [Emphases supplied]

It must also be noted that there were no injuries during the brief walkout.Neither was there proof that the striking workers inflicted harm or violence upon theother employees. In fact, the Police Memorandum 18(18) dated January 29, 1999reported no violent incidents and stated that all parties involved in the January 28,1999 incident were allowed to go home and the employees involved were just given astern warning.

To the Court's mind, the complaining workers temporarily walked out of theirjobs because they strongly believed that management was committing an unfair laborpractice. They had no intention of hurting anybody or steal company property.Contrary to AER's assertion, the striking workers did not intend to steal the lineboring machine which they tried to cart away from the AER-PSC compound; they


just wanted to return it to the main AER building.

Like management, the union and the affected workers were also at fault forresorting to a concerted work slowdown and walking out of their jobs of protest fortheir illegal suspension. It was also wrong for them to have forced their way to theAER-PSC premises to try to bring out the boring machine. The photos 19(19) shownby AER are enough proof that the picketing employees prevented the entry and exitof non-participating employees and possibly AER's clients. Although the union'ssudden work stoppage lasted a day, it surely caused serious disturbance and tensionwithin AER's premises and could have adversely affected AER's clients and businessin general.

The in pari delicto doctrine in labor cases is not novel to us. It has beenapplied in the case of Philippines Inter-Fashion, Inc. v NLRC, 20(20) where the Courtheld:

The Solicitor General has correctly stated in his comment that "fromthese facts are derived the following conclusions which are likewise undisputed:that petitioner engaged in an illegal lockout while the NAFLU engaged in anillegal strike; that the unconditional offer of the 150 striking employees toreturn to work and to withdraw their complaint of illegal lockout againstpetitioner constitutes condonation of the illegal lock-out; and that theunqualified acceptance of the offer of the 150 striking employees by petitionerlikewise constitutes condonation of the illegal strike insofar as the reinstatedemployees are concerned." CETIDH

The issues at bar arise, however, from respondent commission'sapproval of its commissioner's conclusions that (1) petitioner must be deemed tohave waived its right to pursue the case of illegal strike against the 114employees who were not reinstated and who pursued their illegal lockout claimagainst petitioner; and (2) the said 114 employees are entitled to reinstatementwith three months' backwages.

The Court approves the stand taken by the Solicitor General that therewas no clear and unequivocal waiver on the part of petitioner and on thecontrary the record shows that it tenaciously pursued its application for theirdismissal, but nevertheless in view of the undisputed findings of illegal strike onthe part of the 114 employees and illegal lockout on petitioner's part, bothparties are in pari delicto and such situation warrants the restoration of thestatus quo ante and bringing the parties back to the respective positionsbefore the illegal strike and illegal lockout through the reinstatement of thesaid 114 employees, as follows: cDHCAE


The Bisaya case (102 Phil. 438) is inapplicable to the presentcase, because in the former, there were only two strikers involved whowere both reinstated by their employer upon their request to return towork. However, in the present case, there were more than 200 strikersinvolved, of which 150 who desired to return to work were reinstated.The rest were not reinstated because they did not signify their intentionto return to work. Thus, the ruling cited in the Bisaya case that theemployer waives his defense of illegality of the strike uponreinstatement of strikers is applicable only to strikers who signified theirintention to return to work and were accepted back . . .

Truly, it is more logical and reasonable for condonation to applyonly to strikers who signified their intention to return and did return towork. The reason is obvious. These strikers took the initiative innormalizing relations with their employer and thus helped promoteindustrial peace. However, as regards the strikers who decided to pursuewith the case, as in the case of the 114 strikers herein, the employercould not be deemed to have condoned their strike, because they had notshown any willingness to normalize relations with it. So, if petitionerreally had any intention to pardon the 114 strikers, it would haveincluded them in its motion to withdraw on November 17, 1980. Thefact that it did not, but instead continued to pursue the case to the end,simply means that it did not pardon the 114 strikers.

xxx xxx xxx

The finding of illegal strike was not disputed. Therefore, the 114strikers employees who participated therein are liable for termination(Liberal Labor Union v. Phil. Can Co., 91 Phil. 72; Insurefco EmployeesUnion v. Insurefco, 95 Phil. 761). On the other hard, *(21) the finding ofillegal lockout was likewise not disputed. Therefore, the 114 employeesaffected by the lockout are also subject to reinstatement. Petitioner,however, contends that the application for readmission to work by the150 strikers constitutes condonation of the lockout which shouldlikewise bind the 114 remaining strikers. Suffice it to say that the 150strikers acted for themselves, not on behalf of the 114 remainingstrikers, and therefore the latter could not be deemed to have condonedpetitioner's lockout.

The findings show that both petitioner and the 114 strikers are inpari delicto, a situation which warrants the maintenance of the statusquo. This means that the contending parties must be brought backto their respective positions before the controversy; that is, before


the strike. Therefore, the order reinstating the 114 employees isproper.

With such restoration of the status quo ante it necessarily follows, aslikewise submitted by the Solicitor General, that the petition must be grantedinsofar as it seeks the setting aside of the award of three months' backwages tothe 114 employees ordered reinstated on the basis of the general rule thatstrikers are not entitled to backwages (with some exceptions not hereinapplicable, such as where the employer is guilty of oppression andunion-busting activities and strikers ordered reinstated are denied suchreinstatement and therefore are declared entitled to backwages from the date ofsuch denial). More so, is the principle of "no work, no pay" applicable to thecase at bar, in view of the undisputed finding of illegality of the strike.

Likewise, the in pari delicto doctrine was applied in the case of First CityInterlink Transportation Co. Inc. v. The Honorable Secretary, 21(22) thus:

3) Petitioner substantially complied with the Return to Work Order.The medical examination, NBI, Police and Barangay Clearances as well as thedriver's and conductor's/conductress licenses and photographs required asconditions for reinstatement were reasonable management prerogatives.However, the other requirements imposed as condition for reinstatement wereunreasonable considering that the employees were not being hired for the firsttime, although the imposition of such requirements did not amount to refusal onthe part of the employer to comply with the Return to Work Order or constituteillegal lockout so as to warrant payment of backwages to the strikers. If at all, itis the employees' refusal to return to work that may be deemed a refusal tocomply with the Return to Work Order resulting in loss of their employmentstatus. As both the employer and the employees were, in a sense, at fault orin pari delicto, the nonreturning employees, provided they did not participate inillegal acts; should be considered entitled to reinstatement. But sincereinstatement is no longer feasible, they should be given separation paycomputed up to March 8, 1988 (the date set for the return of theemployees) in lieu of reinstatement. [Emphases and underscoring supplied]ACIDSc

In the case at bar, since both AER and the union are at fault or in pari delicto,they should be restored to their respective positions prior to the illegal strike andillegal lockout. Nonetheless, if reinstatement is no longer feasible, the concernedemployees should be given separation pay up to the date set for the return of thecomplaining employees in lieu of reinstatement.

WHEREFORE, the petitions are DENIED. Accordingly, the complaining


employees should be reinstated without backwages. If reinstatement is no longerfeasible, the concerned employees should be given separation pay up to the date setfor their return in lieu of reinstatement.

SO ORDERED.

Carpio, * (23)Velasco, Jr., Abad and Sereno, ** (24)JJ., concur.

Footnotes

* Designated as additional member in lieu of Associate Justice Diosdado M. Peralta perSpecial Order No. 1029 dated June 30, 2011.

** Designated as additional member of the Third Division per Special Order No. 1028dated June 21, 2011.

1. Rollo (G.R. No. 160138), pp. 49-50. Penned by Associate Justice Eliezer R. de losSantos with Associate Justice Romeo A. Brawner and Associate Justice Regalado E.Maambong, concurring.

2. Id. at 103-108. 3. Id. (G.R. No. 160192), pp. 69-73. 4. Id. at 71-72. 5. Id. at 72-73. 6. Id. at 74-79. 7. Id. at 80-92. 8. Id. at 93-100. 9. Id. at 24-32.10. Id. at 31-32.11. Id. at 29-30.12. Id. at 34.13. Id. at 115-120.14. Section 6, Rule 3, Revised Rules of Court.15. G.R. No. 172589, August 8, 2010, 627 SCRA 254.16. 224 Phil. 26 (1985).17. Note from the Publisher: Missing footnote text.18. Rollo (G.R. No. 160138), pp. 51-52.19. Id. at 62-63.20. 203 Phil. 23 (1982).21. 338 Phil. 635 (1997).


Endnotes

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1. Rollo (G.R. No. 160138), pp. 49-50. Penned by Associate Justice Eliezer R. de losSantos with Associate Justice Romeo A. Brawner and Associate Justice Regalado E.Maambong, concurring.

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2. Id. at 103-108.

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3. Id. (G.R. No. 160192), pp. 69-73.

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4. Id. at 71-72.

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5. Id. at 72-73.

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6. Id. at 74-79.

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7. Id. at 80-92.

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8. Id. at 93-100.

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9. Id. at 24-32.

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10. Id. at 31-32.

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11. Id. at 29-30.

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12. Id. at 34.

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13. Id. at 115-120.

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14. Section 6, Rule 3, Revised Rules of Court.

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15. G.R. No. 172589, August 8, 2010, 627 SCRA 254.

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16. 224 Phil. 26 (1985).

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17. Note from the Publisher: Missing footnote text.

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18. Rollo (G.R. No. 160138), pp. 51-52.


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19. Id. at 62-63.

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20. 203 Phil. 23 (1982).

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* Note from the Publisher: Copied verbatim from the official copy. The word hardshould read as hand.

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21. 338 Phil. 635 (1997).

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* Designated as additional member in lieu of Associate Justice Diosdado M. Peralta perSpecial Order No. 1029 dated June 30, 2011.

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** Designated as additional member of the Third Division per Special Order No. 1028dated June 21, 2011.

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