SECOND DIVISION

C. ALCANTARA & SONS, INC., G.R. No. 155109

Petitioner,
Present:
CARPIO, J., Chairperson,
- versus - NACHURA,
PERALTA,
ABAD, and
MENDOZA, JJ.
COURT OF APPEALS, LABOR ARBITER ANTONIO M. VILLANUEVA, LABOR ARBITER ARTURO L. GAMOLO,
SHERIFF OF NLRC RAB-XI-DAVAO CITY, NAGKAHIUSANG MAMUMUO SA ALSONS-SPFL (NAMAAL-
SPFL), FELIXBERTO IRAG, JOSHUA BARREDO, ERNESTO CUARIO, EDGAR MONDAY, EDILBERTO
DEMETRIA, HERMINIO ROBILLO, ROMULO LUNGAY, MATROIL DELOS SANTOS, BONERME MATURAN,
RAUL CANTIGA, EDUARDO CAMPUSO, RUDY ANADON, GILBERTO GABRONINO, BONIFACIO SALVADOR,
CIRILO MINO, ROBERTO ABONADO, WARLITO MONTE, PEDRO ESQUIERDO, ALFREDO TROPICO, DANILO
MEJOS, HECTOR ESTUITA, BARTOLOME CASTILLANES, EDUARDO CAPUYAN, SATURNINO CAGAS,
ALEJANDRO HARDER, EDUARDO LARENA, JAIME MONTEDERAMOS, ERMELANDO BASADRE, REYNALDO
LIMPAJAN, ELPIDIO LIBRANZA, TEDDY SUELO, JOSE AMOYLIN, TRANQUILINO ORALLO, CARLOS
BALDOS, MANOLITO SABELLANO, CARMELITO TOBIAS, PRIMITIVO GARCIA, JUANITO ALDEPOLLA,
LUDIVICO ABAD, WENCISLAO INGHUG, RICARDO ALTO, EPIFANIO JARABAY, FELICIANO AMPER,
ALEXANDER JUDILLA, ROBERTO ANDRADE, ALFREDO LESULA, JULIO ANINO, BENITO MAGPUSAO,
PEDRO AQUINO, EDDIE MANSANADES, ROMEO ARANETA, ARGUILLAO MANTICA, CONSTANCIO ARNAIZ,
ERNESTO HOTOY, JUSTINO ASCANO, RICARDO MATURAN, EDILBERTO YAMBAO, ANTONIO MELARGO,
JESUS BERITAN, ARSENIO MELICOR, DIOSDADO BONGABONG, LAURO MONTENEGRO, CARLITO
BURILLO, LEO MORA, PABLO BUTIL, ARMANDO GUCILA, JEREMIAH CAGARA, MARIO NAMOC, CARLITO
CAL, GERWINO NATIVIDAD, ROLANDO CAPUYAN, EDGARDO ORDIZ, LEONARDO CASURRA, PATROCINIO
ORTEGA, FILEMON CESAR, MARIO PATAN, ROMEO COMPRADO, JESUS PATOC, RAMON CONSTANTINO,
ALBERTO PIELAGO, SAMUEL DELA LLANA, NICASIO PLAZA, ROSALDO DAGONDON, TITO GUADES,
BONIFACIO DINAGUDOS, PROCOPIO RAMOS, JOSE EBORAN, ROSENDO SAJOL, FRANCISCO EMPUERTO,
PATRICIO SALOMON, NESTOR ENDAYA, MARIO SALVALEON, ERNESTO ESTILO, BONIFACIO SIGUE,
VICENTE FABROA, JAIME SUCUAHI, CELSO HUISO, ALEX TAUTO-AN, SATURNINO YAGON, CLAUDIO
TIROL, SULPECIO GAGNI, JOSE TOLERO, FERVIE GALVEZ, ALFREDO TORALBA and EDUARDO GENELSA,
Respondents.
x ------------------------------------------------ x

NAGKAHIUSANG MAMUMUO SA G.R. No. 155135

ALSONS-SPFL (NAMAAL-SPFL), FELIXBERTO IRAG, JOSHUA BARREDO, ERNESTO CUARIO, EDGAR
MONDAY, EDILBERTO DEMETRIA, HERMINIO ROBILLO, ROMULO LUNGAY, MATROIL DELOS SANTOS,
BONERME MATURAN, RAUL CANTIGA, EDUARDO CAMPUSO, RUDY ANADON, GILBERTO GABRONINO,
BONIFACIO SALVADOR, CIRILO MINO, ROBERTO ABONADO, WARLITO MONTE, PEDRO ESQUIERDO,
ALFREDO TROPICO, DANILO MEJOS, HECTOR ESTUITA, BARTOLOME CASTILLANES, EDUARDO
CAPUYAN, SATURNINO CAGAS, ALEJANDRO HARDER, EDUARDO LARENA, JAIME MONTEDERAMOS,
ERMELANDO BASADRE, REYNALDO LIMPAJAN, ELPIDIO LIBRANZA, TEDDY SUELO, JOSE AMOYLIN,
TRANQUILINO ORALLO, CARLOS BALDOS, MANOLITO SABELLANO, CARMELITO TOBIAS, PRIMITIVO
GARCIA, JUANITO ALDEPOLLA, LUDIVICO ABAD, WENCISLAO INGHUG, RICARDO ALTO, EPIFANIO
JARABAY, FELICIANO AMPER, ALEXANDER JUDILLA, ROBERTO ANDRADE, ALFREDO LESULA, JULIO
ANINO, BENITO MAGPUSAO, PEDRO AQUINO, EDDIE MANSANADES, ROMEO ARANETA, ARGUILLAO
MANTICA, CONSTANCIO ARNAIZ, ERNESTO HOTOY, JUSTINO ASCANO, RICARDO MATURAN, EDILBERTO
YAMBAO, ANTONIO MELARGO, JESUS BERITAN, ARSENIO MELICOR, DIOSDADO BONGABONG, LAURO
MONTENEGRO, CARLITO BURILLO, LEO MORA, PABLO BUTIL, ARMANDO GUCILA, JEREMIAH CAGARA,
MARIO NAMOC, CARLITO CAL, GERWINO NATIVIDAD, ROLANDO CAPUYAN, JUANITO NISNISAN,
AURELIO CARIN, PRIMO OPLIMO, ANGELITO CASTANEDA, EDGARDO ORDIZ, LEONARDO CASURRA,
PATROCINIO ORTEGA, FILEMON CESAR, MARIO PATAN, ROMEO COMPRADO, JESUS PATOC, RAMON
CONSTANTINO, MANUEL PIAPE, ROY CONSTANTINO, ALBERTO PIELAGO, SAMUEL DELA LLANA, NICASIO
PLAZA, ROSALDO DAGONDON, TITO GUADES, BONIFACIO DINAGUDOS, PROCOPIO RAMOS, JOSE
EBORAN, ROSENDO SAJOL, FRANCISCO EMPUERTO, PATRICIO SALOMON, NESTOR ENDAYA, MARIO

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SALVALEON, ERNESTO ESTILO, BONIFACIO SIGUE, VICENTE FABROA, JAIME SUCUAHI, CELSO HUISO,
ALEX TAUTO-AN, SATURNINO YAGON, CLAUDIO TIROL, SULPECIO GAGNI, JOSE TOLERO, FERVIE
GALVEZ, ALFREDO TORALBA and EDUARDO GENELSA,
Petitioners,

- versus -

C. ALCANTARA & SONS, INC., EDITHA I. ALCANTARA, ATTY. NELIA A. CLAUDIO, CORNELIO E. CAGUIAT,
JESUS S. DELA CRUZ, ROLANDO Z. ANDRES and JOSE MA. MANUEL YRASUEGUI,
Respondents.

x ------------------------------------------------ x

NAGKAHIUSANG MAMUMUO SA G.R. No. 179220

ALSONS-SPFL (NAMAAL-SPFL), and its members whose names are listed below,
Petitioners,

- versus

Promulgated:
C. ALCANTARA & SONS, INC.,
Respondent. September 29, 2010

x ----------------------------------------------------------------------------------------------- x

DECISION
ABAD, J.:

This case is about a) the consequences of an illegally staged strike upon the employment status
of the union officers and its ordinary members and b) the right of reinstated union members to go back
to work pending the companys appeal from the order reinstating them.

The Facts and the Case

C. Alcantara & Sons, Inc., (the Company) is a domestic corporation engaged in the manufacture
and processing of plywood. Nagkahiusang Mamumuo sa Alsons-SPFL (the Union) is the exclusive
bargaining agent of the Companys rank and file employees. The other parties to these cases are the
Union officers and their striking members.

The Company and the Union entered into a Collective Bargaining Agreement (CBA) that bound
them to hold no strike and no lockout in the course of its life. At some point the parties began
negotiating the economic provisions of their CBA but this ended in a deadlock, prompting the Union to
file a notice of strike. After efforts at conciliation by the Department of Labor and Employment
(DOLE) failed, the Union conducted a strike vote that resulted in an overwhelming majority of its

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members favoring it. The Union reported the strike vote to the DOLE and, after the observance of the
mandatory cooling-off period, went on strike.

During the strike, the Company filed a petition for the issuance of a writ of preliminary
injunction with prayer for the issuance of a temporary restraining order (TRO) Ex Parte[3] with the
National Labor Relations Commission (NLRC) to enjoin the strikers from intimidating, threatening,
molesting, and impeding by barricade the entry of non-striking employees at the Companys
premises. The NLRC first issued a 20-day TRO and, after hearing, a writ of preliminary injunction,
enjoining the Union and its officers and members from performing the acts complained of. But several
attempts to implement the writ failed. Only the intervention of law enforcement units made such
implementation possible. Meantime, the Union filed a petition[4] with the Court of Appeals (CA),
questioning the preliminary injunction order. On February 8, 1999 the latter court dismissed the
petition. The Union did not appeal from such dismissal.

The Company, on the other hand, filed a petition with the Regional Arbitration Board to declare
the Unions strike illegal,[5] citing its violation of the no strike, no lockout, provision of their
CBA. Subsequently, the Company amended its petition to implead the named Union members who
allegedly committed prohibited acts during the strike. For their part, the Union, its officers, and its
affected members filed against the Company a counterclaim for unfair labor practices, illegal dismissal,
and damages. The Union also assailed as invalid the service of summons on the individual Union
members included in the amended petition.

On June 29, 1999 the Labor Arbiter rendered a decision, [6] declaring the Unions strike illegal for
violating the CBAs no strike, no lockout, provision. As a consequence, the Labor Arbiter held that the
Union officers should be deemed to have forfeited their employment with the Company and that they
should pay actual damages of P3,825,000.00 plus 10% interest and attorneys fees. With respect to the
striking Union members, finding no proof that they actually committed illegal acts during the strike, the
Labor Arbiter ordered their reinstatement without backwages. The Labor Arbiter denied the Unions
counterclaim for lack of merit.

On June 29, 1999 the terminated Union members promptly filed a motion for their immediate
reinstatement but the Labor Arbiter did not act on the same. At any rate, the Company did not reinstate
them. Both parties appealed[7] the Labor Arbiters decision to the NLRC. The Company impugned the
Labor Arbiters decision insofar as it ordered the reinstatement of the terminated Union

Page 3
members. The Union, on the other hand, questioned the declaration of illegality of the strike as well as
the dismissal of its officers and the order for them to pay damages.

On November 8, 1999 the NLRC rendered a decision, [8] affirming that of the Labor Arbiter
insofar as the latter declared the strike illegal, ordered the Union officers terminated, and directed them
to pay damages to the Company. The NLRC ruled, however, that the Union members involved, who
were identified in the proceedings held in the case, should also be terminated for having committed
prohibited and illegal acts.

The Union filed a petition for certiorari[9] with the CA, questioning the NLRC decision. Finding
merit in the petition, the CA rendered a decision on March 20, 2002, [10]annulling the NLRC decision
and reinstating that of the Labor Arbiter. The Company and the Union with its officers and members
filed separate petitions for review of the CA decision in G.R. 155109 and 155135, respectively.

During the pendency of these cases, the affected Union members filed with the Labor Arbiter a
motion for reinstatement pending appeal by the parties and the computation of their backwages based
on the CA decision. After hearing, the Labor Arbiter issued a resolution dated November 21, 2002,
[11]
holding that due to the delay in the resolution of the dispute and the impracticability of reinstatement
owing to the fact that the relations between the terminated Union members and the Company had been
severely strained by the prolonged litigation, payment of separation pay to such Union members was in
order. The Labor Arbiter thus approved the computation and payment of their separation pay and
denied all their other claims.

Both parties appealed the Labor Arbiters resolution [12] to the NLRC. Initially, in its resolution
dated April 30, 2003,[13] the NLRC declared the Labor Arbiters resolution of November 21, 2002 void
for lack of factual and legal basis but ordered the Company to pay the affected employees accrued
wages and 13th month pay considering the Companys refusal to reinstate them pending appeal. On
motion for reconsideration by both parties, however, the NLRC issued a resolution on August 29, 2003,
[14]
modifying its earlier resolution by deleting the grant of accrued wages and 13 th month pay to the
subject employees, thus denying their motion for computation.

Upon the Unions petition for certiorari[15] with the CA, questioning the NLRCs denial of the
terminated Union members claim for separation pay, accrued wages, and other benefits, the CA
rendered a decision on February 24, 2005,[16] dismissing the petition. The CA ruled that the
reinstatement pending appeal provided under Article 223 of the Labor Code contemplated illegal

Page 4
dismissal or termination cases and not cases under Article 263. Thus, the CA ruled that the resolution
ordering the reinstatement of the terminated Union members and the payment of their wages and other
benefits had no basis. Aggrieved, the Union sought intervention by this Court.

The Issues Presented

The issues presented in these cases are:

1. Whether or not the NLRC properly acquired jurisdiction over the persons of the individual
Union members impleaded in the case;

2. Whether or not the Union staged an illegal strike;

3. Assuming the strike to be illegal, whether or not the impleaded Union members committed
illegal acts during the strike, justifying their termination from employment;

4. Whether or not the terminated Union members are entitled to the payment of backwages on
account of the Companys refusal to reinstate them, pending appeal by the parties, from the Labor
Arbiters decision of June 29, 1999; and

5. Whether or not the terminated Union members are entitled to accrued backwages and
separation pay.

The Rulings of the Court

One. The NLRC acquires jurisdiction over parties in cases before it either by summons served
on them or by their voluntary appearance before its Labor Arbiter. Here, while the Union insists that
summons were not properly served on the impleaded Union members with respect to the Companys
amended petition that sought to declare the strike illegal, the records show that they were so
served. The Return of Service of Summons[17] indicated that 74 out of the 81[18] impleaded Union
members were served with summons. But they refused either to accept the summons or to acknowledge
receipt of the same. Such refusal cannot of course frustrate the NLRCs acquisition of jurisdiction over
them. Besides, the affected Union members voluntarily entered their appearance in the case when they
sought affirmative relief in the course of the proceedings like an award of damages in their favor.

Two. A strike may be regarded as invalid although the labor union has complied with the strict
requirements for staging one as provided in Article 263 of the Labor Code when the same is held
contrary to an existing agreement, such as a no strike clause or conclusive arbitration clause. [19] Here,

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the CBA between the parties contained a no strike, no lockout provision that enjoined both the Union
and the Company from resorting to the use of economic weapons available to them under the law and
to instead take recourse to voluntary arbitration in settling their disputes.

No law or public policy prohibits the Union and the Company from mutually waiving the strike
and lockout maces available to them to give way to voluntary arbitration. Indeed, no less than the 1987
Constitution recognizes in Section 3, Article XIII, preferential use of voluntary means to settle
disputes. Thus

The State shall promote the principle of shared responsibility between

workers and employers and the preferential use of voluntary modes in settling
disputes, including conciliation, and shall enforce their mutual compliance
therewith to foster industrial peace.

The Court finds no compelling reason to depart from the findings of the Labor Arbiter, the
NLRC, and the CA regarding the illegality of the strike. Social justice is not one-sided. It cannot be
used as a badge for not complying with a lawful agreement.

Three. Since the Unions strike has been declared illegal, the Union officers can, in accordance
with law be terminated from employment for their actions. This includes the shop stewards. They
cannot be shielded from the coverage of Article 264 of the Labor Code since the Union appointed them
as such and placed them in positions of leadership and power over the men in their respective work
units.

As regards the rank and file Union members, Article 264 of the Labor Code provides that
termination from employment is not warranted by the mere fact that a union member has taken part in
an illegal strike. It must be shown that such a union member, clearly identified, performed an illegal act
or acts during the strike.[20]

Here, although the Labor Arbiter found no proof that the dismissed rank and file Union
members committed illegal acts, the NLRC found following the injunction hearing in NLRC IC M-
000126-98 that the Union members concerned committed such acts, for which they had in fact been
criminally charged before various courts and the prosecutors office in Davao City. Since the CA held
that the existence of criminal complaints against the Union members did not warrant their dismissal, it
becomes necessary for the Court to go into the records to settle the issue.

Page 6
 The striking Union members allegedly committed the following prohibited acts:

a. They threatened, coerced, and intimidated non-striking employees, officers,

suppliers and customers;

b. They obstructed the free ingress to and egress from the company premises;
and

c. They resisted and defied the implementation of the writ of preliminary

injunction issued against the strikers.

Cornelio Caguiat, Ruben Tungapalan, and Eufracio Rabusa depicted the above prohibited acts
in their affidavits and testimonies. The Sheriff of the NLRC said in his Report [21] that, in the course of
his implementation of the writ of injunction, he observed that the striking employees blocked the exit
lane of the Alson drive with their tent.Tungapalan, a non-striking employee, identified the Union
members who threatened and coerced him. Indeed, he filed criminal actions against them. Lastly, the
photos taken of the strike show the strikers, properly identified, committing the acts complained
of. These constitute substantial evidence in support of the termination of the subject Union members.

The mere fact that the criminal complaints against the terminated Union members were
subsequently dismissed for one reason or another does not extinguish their liability under the Labor
Code. Nor does such dismissal bar the admission of the affidavits, documents, and photos presented to
establish their identity and guilt during the hearing of the petition to declare the strike illegal. The
technical grounds that the Union interposed for denying admission of the photos are also not binding on
the NLRC.[22]

Four. The terminated Union members contend that, since the Company refused to reinstate
them after the Labor Arbiter rendered a decision in their favor, the Company should be ordered to pay
them their wages during the pendency of the appeals from the Labor Arbiters decision.

It will be recalled that after the Labor Arbiter rendered his decision on June 29, 1999, which
decision ordered the reinstatement of the terminated Union members, the latter promptly filed a motion
for their reinstatement pending appeal. But the Labor Arbiter did not for some reason act on the
motion. As it happened, after about four months or on November 8, 1999, the NLRC reversed the
Labor Arbiters reinstatement order. It cannot be said, therefore, that the Company had resisted a
standing order of reinstatement directed at it at this point.

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 Of course, on March 20, 2002 the CA restored the Labor Arbiters reinstatement order. And this
prompted the affected Union members to again file with the Labor Arbiter a motion for their
reinstatement pending appeal. But, acting on the motion, the Labor Arbiter resolved at this point that
reinstatement was no longer practicable because of the severely strained relation between the company
and the terminated Union members. In place of reinstatement, the Labor Arbiter ordered the Company
to pay them their separation pays.

Both parties appealed the Labor Arbiters above ruling[23] to the NLRC. But, as it turned out the
NLRC did not also favor reinstatement. It instead ordered the Company to pay the terminated Union
members their accrued wages and 13th month pay considering its refusal to reinstate them pending
appeal. On motion for reconsideration, however, the NLRC reconsidered and deleted altogether the
grant of accrued wages and 13th month pay. The Union appealed the NLRC ruling to the CA on behalf
of its terminated members but the CA denied their appeal.

The CA denied reinstatement for the reason that the reinstatement pending appeal provided
under Article 223 of the Labor Code contemplated illegal dismissal or termination cases and not cases
under Article 264. But this perceived distinction does not find support in the provisions of the Labor
Code.

The grounds for termination under Article 264 are based on prohibited acts that employees
could commit during a strike. On the other hand, the grounds for termination under Articles 282 to 284
are based on the employees conduct in connection with his assigned work. Still, Article 217, which
defines the powers of Labor Arbiters, vests in the latter jurisdiction over all termination cases, whatever
be the grounds given for the termination of employment. Consequently, Article 223, which provides
that the decision of the Labor Arbiter reinstating a dismissed employee shall immediately be executory
pending appeal, cannot but apply to all terminations irrespective of the grounds on which they are
based.

Here, although the Labor Arbiter failed to act on the terminated Union members motion for
reinstatement pending appeal, the Company had the duty under Article 223 to immediately reinstate the
affected employees even if it intended to appeal from the decision ordaining such reinstatement. The
Companys failure to do so makes it liable for accrued backwages until the eventual reversal of the
order of reinstatement by the NLRC on November 8, 1999,[24] a period of four months and nine days.

Five. While it is true that generally the grant of separation pay is not available to employees
who are validly dismissed, there are, in furtherance of the laws policy of compassionate justice, certain

Page 8
circumstances that warrant the grant of some relief in favor of the terminated Union members based on
equity.

Bitter labor disputes, especially strikes, always generate a throng of odium and abhorrence that
sometimes result in unpleasant, although unwanted, consequences.[25]Considering this, the striking
employees breach of certain restrictions imposed on their concerted actions at their employers
doorsteps cannot be regarded as so inherently wicked that the employer can totally disregard their long
years of service prior to such breach. [26] The records also fail to disclose any past infractions committed
by the dismissed Union members. Taking these circumstances in consideration, the Court regards the
award of financial assistance to these Union members in the form of one-half month salary for every
year of service to the company up to the date of their termination as equitable and reasonable.

WHEREFORE, the Court DENIES the petition of the Nagkahiusang Mamumuo sa Alsons-
SPFL and its officers and members in G.R. 155135 for lack of merit, and REVERSES and SETS
ASIDE the decision of the Court of Appeals in CA-G.R. SP 59604 dated March 20, 2002. The Court,
on the other hand, GRANTS the petition of C. Alcantara & Sons, Inc. in G.R. 155109
and REINSTATES the decision of the National Labor Relations Commission in NLRC CA M-004996-
99 dated November 8, 1999.

Further, the Court PARTIALLY GRANTS the petition of the Nagkahiusang Mamumuo sa
Alsons-SPFL and their dismissed members in G.R. 179220 and ORDERS C. Alcantara & Sons, Inc. to
pay the terminated Union members backwages for four (4) months and nine (9) days and separation
pays equivalent to one-half month salary for every year of service to the company up to the date of
their termination, with interest of 12% per annum from the time this decision becomes final and
executory until such backwages and separation pays are paid. The Court DENIES all other claims.

SO ORDERED.

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