CECILE DE OCAMPO, WILFREDO SAN PEDRO, REYNALDO DOVICAR, BIEN MEDINA, CESAR ABRIOL, ARTEMIO CASTRO, LARRY ALCANTARA, MICHAEL NOCUM, JESUS DEO JR., PUBLEO DARAG, EDUARDO BINO, ED…

De Ocampo versus Baliwag Mahogany Corporation

The Case

This is a petition for certiorari brought by Cecile de Ocampo and twenty-six other officers and members of the Baliwag Mahogany Corporation Union against Baliwag Mahogany Corporation and the National Labor Relations Commission. The petitioners ask the Supreme Court to annul the Commission's resolution of July 8, 1991, which declared the strike of February 6, 1990 illegal, held the union officers and members who participated in it to have lost their employment status, and ordered separation pay and reinstatement without backwages for the others. The case matters because it fixes the consequence of defying a certification or return-to-work order of the Secretary of Labor, and because it states the doctrine of redundancy as an exercise of business judgment.

Procedural History

The labor dispute was certified by the Secretary of Labor to the National Labor Relations Commission for compulsory arbitration. The Commission rendered a decision on October 23, 1990, declaring the strikes of January 18, 1990 and February 6, 1990 illegal, ordering reinstatement without backwages for the union officers and members, and directing the reinstatement with backwages of Cecile de Ocampo, Rene Villanueva and Marcelo dela Cruz, as well as of Alex Ramos, Reynaldo Cruz, Renato Puertas and Hernando Legaspi. The company moved for reconsideration, and the Commission directed the Labor Arbiter to receive evidence on the matters raised. On July 8, 1991, the Commission issued a resolution affirming the earlier decision with modification, declaring that the union officers and members who participated in the illegal strike and committed prohibited acts had lost their employment status, and directing the payment of separation pay. The petitioners then came to the Supreme Court by petition for certiorari.

Facts

Baliwag Mahogany Corporation is engaged in the production of wooden doors and furniture, with about nine hundred employees. In 1988 the company and the union entered into a collective bargaining agreement containing provisions on the conversion into cash of unused vacation and sick leaves, a grievance machinery, and the right of the company to schedule work on Sundays and holidays. In November 1989 the union requested, among other things, the cash conversion of unused vacation and sick leaves for the periods 1987 to 1988 and 1988 to 1989. The company allowed payment for the first period but disallowed conversion for the second.

On January 3, 1990, the company issued suspension orders against twenty employees for failure to render overtime work on December 30, 1989, effective for three days. That same day the union filed a notice of strike on grounds of unfair labor practice. On January 13, 1990, the company issued notices of termination to Cecile de Ocampo, Rene Villanueva and Marcelo dela Cruz, allegedly to effect cost reduction and redundancy. The union picketed the main gate on January 18, 1990, and the company filed a petition to declare the strike illegal. Cecile de Ocampo was elected union president on January 19, 1990. A strike vote was held, with 388 votes out of 415 in favor of a strike, and the union staged a strike on February 6, 1990.

On February 15, 1990, the Secretary of Labor certified the entire labor dispute to the Commission for compulsory arbitration and directed all striking workers, including the dismissed employees, to return to work, and the management to accept them back. The workers did not immediately comply. It was only on February 23, 1990, with the assistance of the police, that the sheriff removed the barricades and opened the main gate of the company. The company extended the return-to-work deadline to March 15, 1990.

Issues

• Whether or not there is legal basis for declaring the loss of employment status of the petitioners on account of the strike in the respondent company.
• Whether or not the dismissal of Cecile de Ocampo, Rene Villanueva and Marcelo dela Cruz on the ground of redundancy was done in good faith.
• Whether or not the National Labor Relations Commission acted correctly in allowing the company to submit additional evidence in support of its motion for reconsideration and in giving credence to that evidence.

Applicable Provisions

Article 264 (a) of the Labor Code provides:

Article 264 (a) Prohibited activities. - (a) x x x. No strike or lockout shall be declared after assumption of jurisdiction by the President or the Minister or after certification or submission of the dispute to compulsory or voluntary arbitration or during the pendency of cases involving the same grounds for the strike or lockout. Any worker whose employment has been terminated as a consequence of an unlawful lockout shall be entitled to reinstatement with full backwages. Any 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: Provided, That mere participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his employment, even if a replacement had been hired by the employer during such lawful strike.

This provision is the basis for declaring the strike illegal and for the loss of employment status of those who knowingly participated in it after the certification order.

Ruling

On the first issue, the Court held that the petition is devoid of merit. A strike undertaken despite the issuance by the Secretary of Labor of an assumption or certification order becomes a prohibited activity and thus illegal, and the union officers and members who knowingly participated in it are deemed to have lost their employment status. The Court found unrebutted evidence that the individual petitioners defied the return-to-work order issued on February 15, 1990, and that the barricades were removed and the main gate opened only on February 23, 1990. The termination of their services was therefore justified on this ground alone.

On the second issue, the Court sustained the finding that the dismissal of the three mechanics was justified by redundancy. The Court defined redundancy as existing where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise, and held that a position is redundant where it is superfluous. The reduction of workers made necessary by the contracting of Gemac Machineries for the maintenance and repair of the company's industrial machinery was justified as an exercise of business judgment, and in the absence of proof of abuse, malice or arbitrariness, the Court will not interfere.

On the third issue, the Court held that technical rules of evidence are not binding in labor cases, and that labor officials should use every reasonable means to ascertain the facts speedily and objectively, without regard to technicalities of law or procedure, all in the interest of due process. The Court also held that the factual findings of administrative bodies are entitled to great weight and, when supported by substantial evidence, are accorded respect and even finality.

Doctrine

A strike declared after the Secretary of Labor has assumed jurisdiction or certified the dispute to compulsory arbitration is a prohibited activity and is illegal under Article 264 (a) of the Labor Code. Union officers who knowingly participate in an illegal strike, and workers or union officers who knowingly participate in illegal acts during a strike, may be declared to have lost their employment status. Redundancy exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise, and the employer has no legal obligation to keep in its payroll more employees than are necessary for the operation of its business. The characterization of services as no longer necessary is an exercise of business judgment that is not subject to discretionary review absent a showing of violation of law or arbitrary and malicious action. Technical rules of evidence are not binding in labor cases.

Disposition

The petition was dismissed for lack of merit, and the resolution of the National Labor Relations Commission dated July 8, 1991 was affirmed.

Remember This

A strike staged in defiance of a certification or return-to-work order is illegal, and knowing participation in it costs the union officer or member his employment status. Examiners use this case for the consequences of defying a Secretary of Labor order and for the doctrine of redundancy as a valid exercise of management prerogative.