Panay Electric Co., Inc. v.

NLRC (1995) o Union: real reason for ordering Huyan’s

J. Vitug transfer was to penalize him for his union
___________________________________________ activities, particularly for being the
suspected "Mao," author of the column "Red
I. FACTS Corner," in the Union's New Digest which
featured an item on alleged wrongdoings by
• 30 Oct 1990: PET posted in its premises a notice top company officials at the power plant
announcing the need for a “Report Clerk” who could ▪ PET’s Operation Manager
assume the responsibility of gatherin accounting and suggested to the GM that an
computer data at its power plant investigation of "Mao's" real
o Open to any EE of PET with Pay Class V identity be conducted and, once
o No one applied, so the EDP/Personnel ascertained, to have him
Manager recommended Enrique Huyan, dismissed from the company; that
who happened to be VP of Union the company had singled out
o Recommendation was approved by PET’s Huyan for transfer to the power
Pres. & GM plant
• 9 Nov 1990: Huyan informed PET that he wasn’t ▪ Personnel Manager's
interested in accepting the new position because: recommendation for such transfer
o The transfer is apparently a demotion, being was made without Huyan's prior
Pay Class III knowledge
o Being the VP of Union, the transfer would ▪ Huyan requested for a
hinder his function in settling labor and other reconsideration but the Personnel
matters with other Union officers Manager did not bother to reply
o The activation of the power plant in Negros ▪ The transfer of Huyan was a
had given rise to additional displaced demotion
workers in which his transfer would be ▪ Per the Company's Code
another burden to the plant’s supervisor, not Offenses, the "insubordination"
to mention his lack of technical knowhow charged was punishable with
• 20 Nov 1990: EDP/Personnel Manager required dismissal only after a fourth
Huyan to explain w/in 48 hours why no disciplinary commission of the offense
action should be taken against him for gross o Company: Huyan's inexplicable refusal to
insubordination and for failure to follow the GM’s assume new position was insubordination
directive for which he was aptly dismissed
o Eventually, he was given a notice of ▪ Company's directive was a valid
dismissal for exercise of management
▪ Failing to comply with his prerogative
superiors’ directive to proceed to ▪ In declaring a strike, the Union,
his new task in the power plant including its officers and
▪ Continued & unauthorized entry & members, committed a serious
use of the Personnel Section & breach of the "no strike, no lock
property (because that’s not out clause” of CBA
where he was assigned anymore) ▪ During the strike, illegal acts were
o Administrative investigation was conducted; committed:
after, Huyan was dismissed on 10 Dec 1990 • Union director Espinal
• 20 Dec 1990: Union filed notice of strike blocked the service
o 2 Jan 1991: strike vote was taken where vehicle of PECO
113/149 union mems voted; result showed collectors, hurled
108 “yes” votes, 1 “no” vote, and 4 invectives at them, and
abstentions challenged them to fight
o 22 Jan 1991: Union went on strike • Union VP Napiar, w/
o PET filed pet’n to declare strike illegal union member Cruz,
o 25 Jan 1991: upon receipt of SOLE order approached a PECO
certifying the dispute to NLRC, Union lifted messenger and
its strike and reported for work snatched an envelope
• NLRC Case from him containing
passbooks
 • When PECO EEs Borja
& Paloma were en route
to deliver passbooks to
PECO messengers,
Union VP Napiar
blocked them at the gate
and demanded that the
car be inspected for
PECO bills
o A union mem
placed a big
stone against
the right front
tire
o Union auditor
Aquino
insisted on
inspecting the
glove
compartment
of the car
o NLRC: Strike was illegal and in violation of
no-strike, no lockout clause
▪ Huyan & Napiar are deemed to
have lost employment status but
are entitled to separation benefits
under CBA, or 1 month pay for
every year of service, whichever is
higher
▪ Huyan & Napiar shall be paid their
withheld wages + moral damages
worth P25,000 + exemplary
damages worth P10,000
▪ Espinal & Aquino are suspended
for 3 mos.
▪ 5 other Union officers are
suspended for 1 mo.
• PET assails NLRC’s decision re: monetary awards to
Huyan & Napiar and in not sanctioning dismissal of
other union officers and members
II. ISSUE:
W/N NLRC committed GAD in adjudging monetary awards
to Huyan & Napiar and in not sanctioning the dismissal of
other union officers and members. NO, but it committed
some errors.
III. RULING:
GENERAL RULE: Findings of fact of the NLRC, except
when there is a grave abuse of discretion committed by it,
are practically conclusive on this Court
EXCEPTION: When NLRC's findings are bereft of any
substantial support from the records, the Court can step in
and proceed to make its own and independent evaluation
of the facts
NLRC found:
Circumstances show that Huyan’s transfer was not done
in the normal course of PET’s business
Operation Manager’s request (basis Huyan’s transfer) was
acted upon a few days after the Operations Manager made
a strong recommendation to the GM to investigate and find
out who "MAO" is and to have him dismissed
The notice for a new “Report Clerk” limited those who are
qualified to employees in the Pay Class V only and there
were only 6 or 7 employees in the entire work force that
can qualify
The posting of the announcement stands out as evidence
of the Company's attempt to camouflage its plan to target
Huyan. Personnel Manager even admitted that Huyan had
the best qualifications among the Pay Class V employees
Conclusion: even before announcement was posted, the
Company, or at least the Personnel Manager, knew it was
Huyan who would be transferred, After all, when the
Company limited the choice to the Pay Class V employees,
it can be assumed that the Company had already reviewed
their qualifications
More evidence: Personnel Manager did not even discuss
the matter of the transfer with Huyan before/after
recommendation. The concern for the well-being and
welfare of its employees is sorely lacking; more than
sufficient evidence to show arbitrariness of the Co.’s
decision
The announcement did not state that the position of Report
Clerk which was formerly Pay Class III had already been
upgraded to Pay Class V. Company's fault that it did not
clarify this matter in the announcement; perhaps had the
Personnel Manager discussed the matter with Huyan
before reassigning the latter, the misunderstanding could
have been avoided. As to the subsequent dismissal of
Huyan, the grounds therefor arose out of the disputed
transfer
No official written notice to Huyan concerning the
reassignment; only an approved Memo to the GM, copy
furnished the Union and Huyan.
Though Huyan did not comply with the directives of the
Personnel Manager, his refusal to do so was justified; he
had to stand up for his rights, considering the treatment he
received. It is as if he was provoked into resisting by what
he believed was an affront to his dignity as a union officer
and as a human being

With that said, there is no ULP on part of Company:
The principal cause behind this controversy is the
Company's suspicion that Huyan was "MAO;" that Huyan
was Union VP was purely incidental.
Any EE who was suspected of being “MAO” would have
been the object of the Company’s moves, irrespective of
W/N EE was a union officer.
Huyan was not pinpointed because he was a union officer
or because the Company is anti-union; rather, it was
because of suspicion that he wrote the column that caught
the ire of the Operations Manager
Still, the exercise of its management prerogative cannot be
sustained. The dismissal of Huyan is illegal. Normally,
under Art. 294, LC, EE is entitled to reinstatement and
backwages; but ITC, reinstatement cannot be ordered not
only because of the strained relationship between the
parties herein but also because Huyan's conduct as a
union officer leaves much to be desired.
Manner of orchestrating the transfer and dismissal of
Huyan entitled latter to moral damages and exemplary
damages because it was tainted with bad faith and far-
from-noble motive
Absence of good faith/honest belief that the company is
committing ULP … is what inclines [NLRC] to rule that the
strike conducted by the Union is illegal for being in violation
of the "no strike, no lock-out" proviso and the failure to
bring the Union's grievance under the grievance procedure
in the CBA
GENERAL RULE: The State guarantees the right of all
workers to self-organization, collective bargaining and
negotiations, as well as peaceful concerted activities,
including the right to strike, in accordance with law (Sec. 3,
Art. XIII, Const.; but don’t cite basis unless you want to
recite it all)
EXCEPTION: the right to strike is not absolute; a "no strike,
no lock-out" provision in the CBA is a valid stipulation
although the clause may be invoked by an ER only when
the strike is economic in nature or one which is conducted
to force wage or other concessions from the employer that
are not mandated to be granted by the law itself
Inapplicable to prevent a strike grounded on ULP
In this situation, it is not essential that the ULP act has, in
fact, been committed; it suffices that the striking workers
are shown to have acted honestly on an impression that
the company has committed such ULP and surrounding
circumstances could warrant such a belief in good faith
ITCAB, NLRC found Huyan & Napiar, the “principal
leaders” of the strike, not to have acted in good faith. NLRC
said that prior to Huyan’s dismissal, there was sufficient
time to have the matter of Huyan's transfer subjected to the
grievance procedure. That the Union considered the
procedure an exercise in futility is not reason enough to
disregard the same given the circumstances. Whatever
wrong the Union felt the Company committed cannot be
remedied by another wrong on the part of the Union.
Given its own findings, NLRC’s grant of separation benefits
and damages to Huyan & Napiar are unwarranted. Art. 264
provides that "(a)ny union officer
who knowingly participates in an illegal strike and any
worker or union officer who knowingly, participates in the
commission of illegal acts during a strike may be declared
to have lost his employment status” (emphasis in original)
In the case of other union officers, however, NLRC, having
found no sufficient proof to hold them guilty of "bad faith" in
taking part in the strike or of perpetrating "serious
disorders" during the concerted activity, merely decreed
suspension; no GAD
Finally, NLRC is correct in holding Huyan entitled to back
salaries and benefits + moral damages, but reduced from
P25,000 to P10,000. Exemplary damages are not
warranted, falling short of the underhandednss required in
Art. 2232, NCC
IV. DISPOSITIVE:
PARTLY GRANTED.