Republic of the Philippines

SUPREME COURT

Manila

THIRD DIVISION

G.R. No. 160138 July 13, 2011

AUTOMOTIVE ENGINE REBUILDERS, INC. (AER), ANTONIO T. INDUCIL, LOURDES T. INDUCIL, JOCELYN T. INDUCIL and MA. CONCEPCION I. DONATO, Petitioners,

vs.

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, ROBERTO CALDEO, RAFAEL GACAD, JAMES C. CAAMPUED, ESPERIDION V. LOPEZ, JR., FRISCO M. LORENZO, JR., CRISANTO LUMBAO, JR., and RENATO SARABUNO,

Respondents.

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

G.R. No. 160192

vs.

AUTOMOTIVE ENGINE REBUILDERS, INC., and ANTONIO T. INDUCIL,

Respondents.

D E C I S I O N

MENDOZA,

J.:

Challenged in these consolidated petitions for review is the October 1, 2003 Amended Decision

of the Court of Appeals

(CA)

, in CA-G.R. SP No. 73161, which modified the Resolution

of the National Labor Relations Commission

(NLRC)

, by ordering the immediate reinstatement of all the suspended employees of Automotive Engine Rebuilders, Inc. (AER) without backwages.

Records show that AER is a company engaged in the automotive engine repair and rebuilding business and other precision and engineering works for more than 35 years. Progresibong Unyon Ng Mga Manggagawa sa AER

(Unyon)

is the legitimate labor union of the rank and file employees of AER which was formed in the year 1998.

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

AER’s Management’s Version

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

Despite management’s plea for them to go back to work, the concerned employees refused and, instead, walked out of the company premises and proceeded to the office of the AER Performance and Service Center

(AER-PSC)

located on another street. Upon arrival, they collectively tried to cart away one (1) line boring machine owned by AER out of the AER-PSC premises. They threatened and forced the company guards and some company officers and personnel to open the gate of the AER-PSC compound. They also urged the AER-PSC employees to likewise stop working.

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 barangay officers. They left the AER-PSC premises only when the police intervened and negotiated with them.

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

The concerned employees submitted their written explanation which contained their admissions regarding their unjustified acts. Finding their explanation unsatisfactory,

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 other employees, officers, clients, and visitors and the transportation of company equipments. They also tried to use force and inflict violence against the other employees. Their wildcat strike stopped after the NLRC issued and served a temporary restraining order

(TRO)

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

Unyon’s Version

On December 22, 1998, Unyon filed a petition for certification election before the Department of Labor and Employment

(DOLE)

after organizing their employees union within AER. Resenting what they did, AER forced all of its employees to submit their urine samples for drug testing. Those who refused were threatened with dismissal.

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

On January 12, 1999, AER issued a memorandum suspending these employees from work for violation of Article D, Item 2 of the Employee’s handbook which reads as follows:

Coming to work under the influence of intoxicating liquor or any drug or drinking any alcoholic beverages on the premises on company time.

Out of the seven (7) suspended employees, only Edwin Fabian and Nazario Madala were allowed by AER to report back to work. The other five (5) suspended employees were not admitted by AER without first submitting the required medical certificate 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 with insubordination and absence without leave and directing them to explain their acts in writing. Despite their written explanation, AER refused to reinstate them.

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

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

Ruling of the Labor Arbiter

On August 9, 2001, the Labor Arbiter (

) rendered a decision

in favor of Unyon by directing AER to reinstate the concerned employees but without backwages effective October 16, 2001.

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

There is no doubt that the hostile attitude of the management to its workers and vice versa started when the workers began organizing themselves into a union. As soon as the management learned and received summons regarding the petition for certification election filed by the employees, they retaliated by causing the employees to submit themselves to drug test. And out of the seven who were found positive, five were placed on a 12 day suspension namely: (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 found positive for drugs, they should have been caused to explain why they were found so. It could have been that they have taken drugs as cure for ailment under a physician’s prescription and supervision. Doubts should be in favor of the working class in the absence of evidence that they are drug addicts or they took 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 these employees was already adversely affected by their use of drugs.

Lest be misunderstood that we are considering use of prohibited drug or regulated drugs, what we abhor is suspension without valid cause and without due process.

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

x x x Firstly, the employer has not even established that the five employees are sick of ailments which are not curable within six months, a burden which rests upon the employers and granting that they were sick or drug addicts, the remedy is not dismissal but to allow them to be on sick leave and be treated of their illness and if not cured within 6 months, that is the time that they may be separated from employment but after payment of ½ month’s salary for every year of service by way of separation pay.

Finally, the LA held that the concerned employees were not totally without fault. The concerted slowdown of work that they conducted in protesting their illegal suspension was generally illegal and unjustifiable. The LA, thus, ruled that both parties were in

pari delicto

and, therefore, must suffer the consequences of the wrong they committed.

NLRC Ruling

Both parties filed their respective appeals with the NLRC. The concerned employees argued that the LA erred in 1) not awarding backwages to them during the period 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.

AER, on the other hand, claimed that the LA erred in finding that there was illegal dismissal and in ordering the reinstatement of the concerned employees without backwages.

On March 5, 2002, the NLRC issued a Resolution

modifying the LA decision by setting aside the order of reinstatement as it found no illegal dismissal.

The NLRC, however, considered only three (3) out of the eighteen concerned employees, (18) namely: Froilan Madamba, Ruperto Mariano, and Roberto Caldeo because their names were commonly identified in the LA decision and in the concerned employees’ position paper as those employees who were allegedly illegally suspended.

It wrote that

these

three (3) employees were validly suspended because they were found positive for illegal drugs in the drug test conducted by AER. Management was just exercising its management prerogative in requiring them to submit a medical fit-to-work certificate before they could be admitted back to work. The drug test was found to be not discriminatory because all employees of AER were required to undergo the drug test. Neither was the drug test related to any union activity.

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

Unyon and the concerned employees filed a petition before the CA advancing the following

ARGUMENTS

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

PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION IN HOLDING THAT THE SUSPENSION OF SEVERAL PETITIONERS WAS VALID DESPITE THE ABSENCE OF DUE PROCESS.

PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION IN SUSTAINING THE VALIDITY OF THE DISMISSAL OF EMPLOYEES WHO TESTED POSITIVE DURING THE DRUG TEST.

PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION IN ABSOLVING PRIVATE RESPONDENTS OF THE OFFENSE OF UNFAIR LABOR PRACICE.

PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION IN DISMISSING PETITIONERS’ COMPLAINT FOR ILLEGAL DISMISSAL.

The CA Ruling

On June 27, 2003, the CA rendered a decision,

the dispositive portion of which reads as follows:

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

SO ORDERED.

The CA

explained

that there still remained 26 complaining employees and not just three (3) as claimed by the NLRC, because 32 members of Unyon signed and filed the complaint, and from the 32 complaining members, only six (6) voluntarily signed quitclaims in favor of AER. It reasoned out that the number of parties to a complaint would correspond to the number of signatories thereto and not necessarily to the names commonly appearing or identified in the position paper and the LA decision. Citing Section 6 of the Rules of Court, the CA held that all persons in whom or against whom any right to relief in respect to or arising out of the same transaction or series of transactions is alleged to exist, whether jointly, severally, or in the alternative, 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 the suspension. The CA wrote:

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

The complainants who tested positive for illegal drugs were validly suspended under the company rules. The Employee’s Handbook of Company Rules and Regulations prohibit employees from reporting for work under the influence 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 medical certificate that said employees were already fit to work before they can be admitted back to work.

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

The CA further ruled that both parties were guilty of unfair labor practice. It stated that the hostile attitude of AER towards its workers and vice-versa started when the workers began organizing themselves into a union. AER tried to have a runaway shop when it

transferred

some of its machinery from the main building to the AER-PSC office located on another street on the pretext that the main building was undergoing renovation. AER also prevented its employees, even those who were excluded from its complaint, from going back to work for allegedly staging an illegal strike. On the other hand, the concerted work slowdown staged by the concerned employees as a result of their alleged illegal suspension was unjustified. Hence, both parties were found by the CA to be

in pari delicto

and must bear the consequences of their own wrongdoing.

On October 1, 2003, upon the motion for partial reconsideration filed by Unyon praying for the payment of full backwages and the reinstatement of all suspended employees, the CA rendered the assailed Amended Decision, the dispositive portion of which reads, as follows:

WHEREFORE, the partial motion for reconsideration is GRANTED insofar as the reinstatement of the suspended employees is concerned. This Court’s decision dated June 27, 2003 is hereby MODIFIED. Private respondents are hereby directed to reinstate all the petitioners immediately without backwages.

SO ORDERED.

Unsatisfied, both parties filed the present consolidated petitions on the following

GROUNDS

FOR UNYON:

THE COURT OF APPEALS LEGALLY ERRED IN NOT AWARDING BACKWAGES TO INDIVIDUAL PETITIONERS NOTWITHSTANDING HAVING ORDERED THEIR REINSTATEMENT TO THEIR PREVIOUS POSITIONS.

FOR AER:

THE HONORABLE COURT OF APPEALS ERRED GRIEVOUSLY WHEN IT GAVE SO MUCH WEIGHT ON THE PRIVATE RESPONDENTS’ PARTIAL MOTION FOR RECONSIDERATION BY AMENDING ITS DECISION IN ORDERING THEIR IMMEDIATE REINSTATEMENT INCLUDING THOSE WHO HAVE TESTED POSITIVE FOR ILLEGAL DRUGS (DRUG ADDICTS) AND HAVE FAILED TO SUBMIT ANY MEDICAL CERTIFICATE.

G.R. No. 160138

AER’s Position

AER questions the findings of the CA that there were 32

complaining employees, which number was reduced to only 26 because six (6) resigned and signed waivers and quitclaims. It argues that the CA should have respected the findings of the LA and the NLRC that there were only 18

complaining

employees, which was reduced to 12 due to the resignations and signing of the corresponding Release and Quitclaims by six (6) of them. The figure was further reduced to 8, and finally to just 3 complaining employees.

AER argues that the reinstatement of those employees who tested positive for drugs and refused to submit their respective medical certificate certifying that they were fit to work, violated AER’s rules and regulations, and the law in general because it would allow the sheltering of drug addicts in company premises.

AER likewise insists that the drug test that it conducted was not related to any union activity because the test covered all employees. The drug test was part of company rules

and guidelines designed to instill discipline and good behavior among its employees as contained in its Employees Manual Company Rules and Regulations. AER also claims that it simply exercised its employer’s prerogative in requiring a medical certificate from the affected employees.

Finally, AER avers that the

complaining

employees, who did not report back to work despite their medical certificate attesting that they were fit to work, committed willful disobedience. AER claims that the

complaining

employees violated their agreement with the DOLE-National Conciliation and Mediation Board

(NCMB)

dated January 25, 1999. AER likewise contends that the

complaining employees are deemed to have lost their employment status when they engaged in unlawful activities such as abandonment of work, stoppage of work and the commission of attempted theft involving its boring machine. Hence, the termination of their employment was valid.

Unyon’s Position

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

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

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

Moreover, of the 32

complaining

employees in the illegal dismissal case against AER, only 18 were charged by AER with illegal strike. Unyon argues that AER should have admitted back to work those employees who were not included in the charge. There was no allegation either that those excluded were involved in the January 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 their offense.

G.R. 160192

Unyon’s Position

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

AER’s Position

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

In sum, the main issue to be resolved in these consolidated cases is whether or not the CA erred in ruling for the reinstatement of the complaining employees but without grant of backwages.

The Court’s Ruling

The Court agrees with the ruling of the CA that there were 32 complaining employees who filed and signed their complaint dated February 18, 1999 for unfair labor practice, illegal dismissal and illegal suspension.

Out of the 32, six (6) undeniably resigned and signed waivers and quitclaims, leaving 26 remaining complainant employees. Thus, the Court adopts and affirms the following CA ruling on this matter:

The number of parties to a complaint corresponds to the number of signatories thereto and not necessarily to the names commonly appearing or identified in the position paper. All persons in whom or against whom any right to relief in respect to or arising out of the same transaction or series of transactions is alleged to exist whether jointly, severally, or in the alternative, may, except as otherwise provided in these Rules, join as plaintiffs or be joined as defendants in one complaint, where any question of law or fact common to all such plaintiffs or to all such defendants may arise in the action; but the court may make such orders as may be just to prevent any plaintiff or defendant from being embarrassed or put to expense in connection with any proceedings in which he may have no interest.

This Court likewise affirms the ruling of the CA favoring the reinstatement of all 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 that neither party came to court with clean hands. Both were

in pari delicto

It cannot be disputed

that both parties filed charges against each other, blaming the other party for violating labor laws. AER filed a complaint against Unyon and its 18 members for illegal concerted activities. It likewise suspended 7 union members who tested positive for illegal drugs. On the other hand, Unyon filed a countercharge accusing AER of unfair labor practice, illegal suspension and illegal dismissal. In other words, AER claims that Unyon was guilty of staging an illegal strike while Unyon claims that AER committed an illegal lockout.

AER’s fault is obvious from the fact that a day after the union filed a petition for certification election before the DOLE, it hit back by requiring all its employees to undergo a compulsory drug test. Although AER argues that the drug test was applied to all its employees, it was silent as to whether the drug test was a regular company policy and practice in their 35 years in the automotive engine repair and rebuilding business. As the Court sees it, it was

AER’s

first ever drug test of its employees immediately implemented after the workers manifested their desire to organize themselves into a union. Indeed, the timing of the drug test was suspicious.

Moreover, AER failed to show proof that the drug test conducted on its employees was performed by an authorized drug testing center. It did not mention how the tests were conducted and whether the proper procedure was employed. The case of

Nacague v. Sulpicio Lines,

is instructive:

Contrary to Sulpicio Lines’ allegation, Nacague was already questioning the credibility of S.M. Lazo Clinic as early as the proceedings before the Labor Arbiter. In fact, the Labor Arbiter declared that the S.M. Lazo Clinic drug test result was doubtful since it is not under the supervision of the Dangerous Drug Board.

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

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

. Section 36 of R.A. No. 9165 reads:

SEC. 36.

Authorized Drug Testing

Authorized drug testing shall be done by any government forensic laboratories or by any of the drug testing laboratories accredited and monitored by the DOH to safeguard the quality of test results.

The DOH shall take steps in setting the price of the drug test with DOH accredited drug testing centers to further reduce the cost of such drug test.

The drug testing shall employ, among others, two (2) testing methods, the screening test which will determine the positive result as well as the type of drug used and the confirmatory test which will confirm a positive screening test

. x x x (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 the Department of Health (DOH) (www.doh.gov.ph).

Only drug testing centers accredited by the DOH shall be utilized

. A list of accredited centers may be accessed through the OSHC website (www.oshc.dole.gov.ph).

Drug testing shall consist of both the screening test and the confirmatory test; the latter to be carried out should the screening test turn positive

. The employee concerned must be informed of the test results whether positive or negative.

Social Justice Society v. Dangerous Drugs Board

, we explained:

As to the mechanics of the test, the law specifies that the procedure shall employ two testing methods, i.e.,

the screening test and the confirmatory test

doubtless to ensure as much as possible the trustworthiness of the results

. But the more important consideration lies in the fact that the tests shall be conducted by trained professionals in access-controlled laboratories monitored by the Department of Health (DOH) to safeguard against results tampering and to ensure an accurate chain of custody.

The law is clear that drug tests shall be performed only by authorized drug testing centers. In this case, Sulpicio Lines failed to prove that S.M. Lazo Clinic is an accredited drug testing center. Sulpicio Lines did not even deny Nacague’s allegation that S.M. Lazo Clinic was not accredited. Also, only a screening test was conducted to determine if Nacague was guilty of using illegal drugs. Sulpicio Lines did not confirm the positive result of the screening test with a confirmatory test. Sulpicio Lines failed to indubitably prove that Nacague was guilty of using illegal drugs amounting to serious misconduct and loss of trust and confidence. Sulpicio Lines failed to clearly show that it had a valid and legal cause for terminating Nacague’s employment. When the alleged valid cause for the termination of employment is not clearly proven, as in this case, the law considers the matter a case of illegal dismissal. (Emphases supplied)

Furthermore, AER engaged in a runaway shop when it began pulling out machines from the main AER building to the AER-PSC compound located on another street on the pretext that the main building was undergoing renovation. Certainly, the striking workers would have no reason to run and enter the AER-PSC premises and to cause the return of the machines to the AER building if they were not alarmed that

AER

was engaging in a runaway shop.

AER committed another infraction when it refused to admit back those employees who were not included in its complaint against the union. Thirty-two (32) employees filed a complaint for illegal dismissal, illegal suspension and unfair labor practice against AER. AER charged 18 employees with illegal strike. AER should have 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 that they deliberately abandoned their jobs. Besides, this Court has consistently declared in a myriad of labor cases that abandonment is totally inconsistent with the immediate filing of a complaint for illegal dismissal.

In any event, the penalty of dismissal imposed by AER against the striking employees, who, by the way, only staged a one day walkout, was too severe. The pronouncement in the case of

Tupas Local Chapter No. 979 v. NLRC

is worth reiterating:

Neither respondent commission's decision nor the labor arbiter's decision as affirmed with modification by it cites any substantial facts or evidence to warrant the terribly harsh imposition of the capital penalty of dismissal and forfeiture of employment on twenty-two of forty-four workers for having staged the so-called

one-day (more accurately, a one-morning) "sitdown strike"

on August 19, 1980 to inform respondent employer of their having formed their own union and to present their just requests for allowances, overtime pay and service incentive leave pay. Prescinding from respondent commission's misappreciation of the facts and evidence and accepting for the nonce its factual conclusion that the petitioners staged a one-morning sit-down strike instead of making a mass representation for the employer to recognize their newly formed union and negotiate their demands, respondent commission's decision is not in consonance with the constitutional injunction that the Court has invariably invoked and applied to afford protection to labor and assure the workers' rights to self-organization, collective bargaining, security of tenure and just and humane conditions of work. The said decision likewise is not in accordance with settled and authoritative doctrine and legal principles that

a mere finding of the illegality of a strike does not automatically warrant a wholesale dismissal of the strikers from their employment and that a premature or improvident strike should not be visited with a consequence so severe as dismissal where a penalty less punitive would suffice.

Numerous precedents to this effect have been cited and reaffirmed x x x.

x x x x.

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

[10]/ the Court, in setting aside the questioned industrial court's orders held that "

the dismissal or termination of the employment of the petitioning eight (8) leaders of the union is harsh for a one-day absence from work

." They had been ordered dismissed for having carried out a mass demonstration at Malacañang on March 4, 1969 in protest against alleged abuses of the Pasig police department, upon two days' prior notice to respondent employer company, as against the latter's insistence that the first shift should not participate but instead report for work, under pain of dismissal. The Court held that they were merely exercising their basic human rights and fighting for their very survival "in seeking sanctuary behind their freedom of expression as well as their right of assembly and of petition against alleged persecution of local officialdom." We ruled that "(T)he appropriate penalty - if it deserves any penalty at all - should have been simply to charge said one-day absence against their vacation or sick leave. But to dismiss the eight (8) leaders of the petitioner Union is a most cruel penalty, since as aforestated the Union leaders depend on their wages for their daily sustenance as well as that of their respective families aside from the fact that it is a lethal blow to unionism, while at the same time strengthening the oppressive hand of the petty tyrants in the localities." [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 the other employees. In fact, the Police Memorandum

dated January 29, 1999 reported 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 a stern warning.

To the Court’s mind, the

complaining workers temporarily walked out of their jobs because they strongly believed that management was committing an unfair labor practice. 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 line boring 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 for resorting to a concerted work slowdown and walking out of their jobs of protest for their illegal suspension. It was also wrong for them to have forced their way to the AER-PSC premises to try to bring out the boring machine. The photos

shown by AER are enough proof that the picketing employees prevented the entry and exit of non-participating employees and possibly AER’s clients. Although the union’s sudden work stoppage lasted a day, it surely caused serious disturbance and tension within AER’s premises and could have adversely affected AER’s clients and business in general.

The

in pari delicto

doctrine in labor cases is not novel to us. It has been applied in the case of

Philippines Inter-Fashion, Inc. v NLRC,

where the Court held:

The Solicitor General has correctly stated in his comment that "from these facts are derived the following conclusions which are likewise undisputed: that petitioner engaged in an

illegal lockout

while the NAFLU engaged in an

illegal strike

; that the unconditional offer of the 150 striking employees to return to work and to withdraw their complaint of illegal lockout against petitioner constitutes condonation of the illegal lock-out; and that the unqualified acceptance of the offer of the 150 striking employees by petitioner likewise constitutes condonation of the illegal strike insofar as the reinstated employees are concerned."

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

The Court approves the stand taken by the Solicitor General that there was no clear and unequivocal waiver on the part of petitioner and on the contrary the record shows that it tenaciously pursued its application for their dismissal, but nevertheless in view of the undisputed findings of illegal strike on the part of the 114 employees and illegal lockout on petitioner's part,

both parties are

in pari delicto

and such situation warrants the restoration of the status quo ante and bringing the parties back to the respective positions before the illegal strike and illegal lockout

through the reinstatement of the said 114 employees, as follows:

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

Truly, it is more logical and reasonable for condonation to apply only to strikers who signified their intention to return and did return to work. The reason is obvious. These strikers took the initiative in normalizing relations with their employer and thus helped promote industrial peace. However, as regards the strikers who decided to pursue with the case, as in the case of the 114 strikers herein, the employer could not be deemed to have condoned their strike, because they had not shown any willingness to normalize relations with it. So, if petitioner really had any intention to pardon the 114 strikers, it would have included them in its motion to withdraw on November 17, 1980. The fact that it did not, but instead continued to pursue the case to the end, simply means that it did not pardon the 114 strikers.

x x x x x x x x x

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

The findings show that both petitioner and the 114 strikers are

in pari delicto

, a situation which warrants the maintenance of the status quo. This means that the contending parties must be brought back to their respective positions before the controversy; that is, before the strike. Therefore, the order reinstating the 114 employees is proper.

With such restoration of the status quo ante it necessarily follows, as likewise submitted by the Solicitor General, that the petition must be granted insofar as it seeks the setting aside of the award of three months' backwages to the 114 employees ordered reinstated on the basis of the general rule that strikers are not entitled to backwages (with some exceptions not herein applicable, such as where the employer is guilty of oppression and union-busting activities and strikers ordered reinstated are denied such reinstatement and therefore are declared entitled to backwages from the date of such denial). More so, is the principle of "no work, no pay" applicable to the case 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 City Interlink Transportation Co. Inc. v The Honorable Secretary,

thus:

3) Petitioner substantially complied with the Return to Work Order. The medical examination, NBI, Police and Barangay Clearances as well as the driver's and conductor's/conductress licenses and photographs required as conditions for reinstatement were reasonable management prerogatives. However, the other requirements imposed as condition for reinstatement were unreasonable considering that the employees were not being hired for the first time, although the imposition of such requirements did not amount to refusal on the part of the employer to comply with the Return to Work Order or constitute illegal lockout so as to warrant payment of backwages to the strikers. If at all, it is the employees' refusal to return to work that may be deemed a refusal to comply with the Return to Work Order resulting in loss of their employment status.

As both the employer and the employees were, in a sense, at fault or

in pari delicto

the nonreturning employees, provided they did not participate in illegal acts; should be considered entitled to reinstatement. But since reinstatement is no longer feasible, they should be given separation pay computed up to March 8, 1988 (the date set for the return of the employees) in lieu of reinstatement.

1avvphi1

[Emphases and underscoring supplied]

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 and illegal lockout. Nonetheless, if reinstatement is no longer feasible, the concerned employees should be given separation pay up to the date set for the return of the complaining employees in lieu of reinstatement.

WHEREFORE,

the petitions are

DENIED

. Accordingly, the complaining employees should be reinstated without backwages. If reinstatement is no longer feasible, the concerned employees should be given separation pay up to the date set for their return in lieu of reinstatement.

SO ORDERED.

JOSE CATRAL MENDOZA

Associate Justice

WE CONCUR:

ANTONIO T. CARPIO

Associate Justice

PRESBITERO J. VELASCO, JR.

Associate Justice

ROBERTO A. ABAD

Associate Justice

MARIA LOURDES P.A. SERENO

Associate Justice

A T T E S T A T I O N

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

PRESBITERO J. VELASCO, JR.

Associate Justice

Chairperson, Third Division

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

RENATO C. CORONA

Chief Justice

Footnotes

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

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

Rollo

(G.R. No. 160138), pp. 49-50. Penned by Associate Justice Eliezer R. De Los Santos with Associate Justice Romeo A. Brawner and Associate Justice Regalado E. Maambong, concurring.

Id. at 103-108.

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

Id. at 71-72.

Id. at 72-73.

Id. at 74-79.

Id. at. 80-92.

Id. at 93-100.

Id. at 24-32.

Id. at 31-32.

Id. at 29-30.

Id. at 34.

Id. at 115-120.

Section 6, Rule 3, Revised Rules of Court.

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

224 Phil. 26 (1985).

Rollo

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

Id. at 62-63.

203 Phil. 23 (1982).

338 Phil. 635 (1997).

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