PHILTREAD TIRE AND RUBBER CORPORATION, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION AND ALLIANCE OF DEMOCRATIC FREE LABOR ORGAN­IZATION (PHILTREAD CHAPTER), RESPONDENTS.

This petition for certiorari and prohibition under Rule 65
of the Revised Rules of Court, with prayer for the issuance of a temporary
restraining order was filed by the Philtread Tire & Rubber Corporation
(hereafter Philtread) to set aside and annul the Resolution dated February 14,
1991, of the National Labor Relations Commission (NLRC), First Division, in
NLRC-NCR Certified Case No. 00002, as well as its Resolution dated September
24, 1991, denying the petitioner’s Motion for Partial Reconsideration.

On March 3, 1990, private respondent Alliance of Democratic Free
Labor Organizations (ADFLO) – Philtread Chapter, filed a Notice of Strike with
the National Conciliation and Mediation Board (NCMB) against the petitioner,
Philtread, a corporation engaged in the manufacture and sale of Firestone Tires
and Rubber products, for alleged discrimination, union busting, non-granting of
merit increases to outstanding employees, and other acts of unfair labor
practice.

Reacting to the union’s notice of strike, Philtread filed a
Notice of Lockout on March 28, 1990, charging the union with acts of unfair
labor practice and violation of the collective bargaining agreement. (Ibid.) It sought clearance to
terminate the employ­ment of all the union officials. On April 10, 1990, it announced that all salaried and supervising
union em­ployees would “not be allowed to work and enter the company
premises effective April 16, 1990” (p. 33, Rollo). It published in the Manila Bulletin
Classified Ads Section a notice of job vacancies for the positions formerly
occupied by its salaried and supervisory union employees.

In retaliation, the union picketed the company and a complaint
for illegal dismissal of the union officers (NLRC Case No. NCR-00-04-02207-90)
was also filed.

Later, the company filed criminal charges for libel against
thirty-six (36) union officers and members who allegedly had distributed to the
public leaflets imputing defects in the company’s products.

On April 24, 1990, the union filed a letter-petition addressed to
the Secretary of Labor and Employment, requesting him to assume jurisdiction
over the labor dispute.

Acting on the petition, Secretary Ruben D. Torres, on April 30,
1990, certified the case to the NLRC, First Division, for compulsory arbitration. The dispositive part of his order reads as
follows:

“WHEREFORE, PREMISES CONSIDERED, the entire dispute at the
Philtread Tire and Rubber Corporation is hereby certified to the
National Labor Relations Commission (NLRC) for
compulsory arbitration pursuant to Article 263
(g) of the Labor Code, as amended. To avoid multiplicity of suits, the case for
illegal dismissal before the NLRC-NCR Branch docketed as Case. No.
00-04-02207-90 is hereby ordered consolidated with the instant case.

“In the interest of industrial peace and due process, the
effects of the termination of all affected employees are hereby suspended. Accordingly, the management is
directed to accept them back under the
same terms and conditions prevailing prior
to the dispute. The parties are strictly enjoined to cease and desist from committing
any act that will exacerbate the situation.

“The NLRC is further directed to ensure the company’s
compliance with the directive for reinstatement of the affected workers pending
resolution of the dispute.” (pp.
162-163, Rollo.)

Philtread sought a reconsideration of the order but its motion
was denied by the Secretary of Labor.

Ultimately, Philtread
partially complied with the Secretary’s order by announcing on May 7, 1990 that
it would accept back all members of the supervising salaried units except the thirty-six (36) union officers
who were facing libel charges. With
respect to them, the company (petitioner) filed a manifestation/motion not to
reinstate them pending resolution of the labor dispute.

The union, on the other hand, filed in the NLRC a motion for
execution of the Labor Secretary’s return-to-­work order.

Acting on the company’s urgent manifesta­tion/motion and on the
union’s motion for execution, the NLRC on August 20, 1990, reiterated the
Secretary’s order to accept the workers back in their jobs pending the
resolution of the dispute:

“On June 20, 1990, the counsel for the union submitted a
Motion praying that a Writ of Execution be issued by this Commission to
implement the Order of the Secretary. A
considerable period of time has already lapsed and the company has not taken
any action to comply with the directive contained in the two (2) Orders of the
Secretary of Labor and Employment.

“WHEREFORE, in view of the above premises, the Commission
directs the Philtread Tire and Rubber Company and its officers to accept back
to work under the same terms and conditions prevailing prior to the dispute the
thirty six (36) officers/members of the Alliance of Democratic Free Labor Organizations
(ADFLO) who were not accepted to work since April 16, 1990, within three (3)
days from receipt of this Order, and to report its compliance therewith
immediately thereafter to this Commission; other­wise, drastic action on this
matter shall be taken thereon. No
motion for reconsideration of this Order shall be entertained.” (pp. 164-­165,
Rollo.)

However, Philtread was intransigent. It refused to reinstate the 36 employees/union officers, while it
filed in this Court a petition for certiorari and prohibition with
prayer for the issuance of a temporary restraining order (G.R. No. 94695).

Meanwhile, upon the request and agreement of the parties,
conciliation meetings were held, presided over by Com. Vicente S. Veloso III,
to help the parties thresh out their differences. They were attended by Labor Arbiter Emerson C. Tumanon, who had
been delegated earlier to hear and receive the evidence in NLRC Certified Case
No. 00002. Also present were
Philtread’s counsel, the national president of the Federation-ADFLO, and a
majority of the members/officers of the union without counsel (p. 1 of Labor
Arbiter Tumanon’s Special Status Report at p. 382, Record).

During the conciliation meetings, Commissioner Veloso allegedly
put before the employees the idea of “deferment” of the execution of
the return-to-work order in exchange for financial concessions from Philtread
(p. 3, NLRC Resolution dated May 22, 1991) which according to a letter dated
March 6, 1991 addressed to the NLRC by employees Glorieta T. Zacate and Rudolfo
Mantalba was acceptable to the majority of employees present at the meetings.

However, on October 9, 1990, the union, through counsel, refiled
its motion for execution.

Instead of acting on the motion, the NLRC on February 14, 1991,
resolved the dispute between Philtread and the union
by –

“1) Awarding the unreinstated Supervisors
backwages computed from May 7, 1990, up to September 19, 1990;

“2) Awarding the said Supervisors a
separation pay computed at sixty (60) days for every year of service, a
remaining fraction of at least six (6) months to be considered as one (1) whole
year;

“3) Dismissing all other claims, for
insufficiency of evidence and for lack of merit.” (p. 51, Rollo.)

In view thereof, this Court declared G.R. No. 94695 closed and
terminated.

On February 26, 1991, Philtread filed a motion for partial
reconsideration on the ground that the award of two (2) months separation pay
per year of service was excessive and the award of backwages had no
legal basis.

The union, through counsel, likewise filed a motion for
reconsideration alleging that the decision was premature because the Union had
not yet completed the presentation of its evidence that the workers had not
agreed to defer the implementation of the Secretary’s return-to-work order and
that the award of backwages without reinstatement to the unreinstated workers
had no factual or legal basis.

On September 24, 1991, the NLRC denied both motions for
reconsideration.

Philtread filed a petition for certiorari and prohibition
with prayer for a temporary restraining order, contending that:

1)            
the award of 60 days separation pay in effect rewards
disloyalty, destabilization and the instigation of labor unrest; and

2)            
the award of backwages was unjustified.

Unable to support the actions of the NLRC, the Solicitor General
asked that the Commission be given time to file its own comment.

The NLRC defended its questioned resolutions.

After deliberating on the petition and the separate comments of
the public and private respondents, the Court finds the petition partly
meritorious.

Article 263 (g) of the Labor Code provides that:

“(g) When, in his opinion, there exists a labor dispute causing or
likely to cause a strike or lockout in an industry indispensable to the
national interest, the Secre­tary of Labor and Employment may assume
jurisdiction over the dispute and decide it or certify
the same to the commission for compulsory
arbi­tration. Such assumption or
certification shall have the effect of automatically enjoining the intended or
impending strike or lockout as specified in the assumption or certification
order. If one has already taken place
at the time of assumption or certification, all striking or locked out
employees shall immediately return to work and the employer shall immediately
resume operations and readmit all workers under the same terms and conditions
prevailing before the strike or lockout. The Secretary of Labor and Employment or the Commission may seek the
assistance of law enforcement agencies to ensure compliance with this provision
as well as with such orders as he may issue to enforce the same.”
(Underscoring ours.)

Pursuant to the above provision, the Secretary of Labor certified
the dispute to the NLRC for compulsory arbitration which was what Commissioner
Veloso did when he called the parties to conciliation meetings and thereafter
decided the case of the thirty-six (36) union officers/members who are facing
libel charges filed by the company.

As stated in the petition, the only matters in issue are the
separation benefits and backwages that the NLRC awarded to the 36 supervisors
facing libel charges whom Philtread did not reinstate. The basis for computing those awards should
be reexamined.

ADFLO which did not file a petition for review of the NLRC’s
decision is estopped from assailing the same for allegedly having been rendered
by the NLRC without due process or without giving ADFLO a chance to finish the
presentation of its evidence.

Its charge of lack of due process is not well taken for the
record shows that the NLRC bent over backward to accommodate it, but it wasted
its numerous opportunities to adduce evidence in support of its charges against
the company. Its lawyer, Attorney
Eulogio Lerum, absented himself repeatedly from the conciliation proceedings
and “unduly delayed the dispo­sition of this case” (p. 32, Rollo).

The finding of the NLRC that Attorney Lerum’s motion for
execution (with respect to the 36 unreinstated supervisors) of the Secretary’s
return-to-work order “was unanimously objected to
by his clients present during the September 19 and 20, 1990 Conciliation Con­ferences”
(p. 32, Rollo) (because they preferred finan­cial concessions in lieu of
reinstatement) has not been denied by any of the parties.

The NLRC also found that the company had complied with the
procedural requirements of a valid lockout (Art. 263 of the Labor Code) and
that in view of the reasons therefor (enumerated in pages 14-19 of the
resolution of February 14, 1991), it was clear to the NLRC that “the
company in resorting to lockout wanted to obtain industrial peace, a peace that
seemed unobtain­able as long as those locked out obstructively formed part of
its operation” (p. 38, Rollo). This factual finding was not questioned by any of the parties. The NLRC concluded that the company incurred
no liability to the locked out employees. The NLRC said:

“But again, we concede, as this is not even disputed by the
Union, the company complied with the procedural requirements of a valid
lockout. In relation, therefore, to the
first question, the company incurred no liability to those employees affected
by its lockout.” (p. 45, Rollo.)

Nevertheless, the NLRC believed that the company should be
penalized for its failure to fully comply with the Secretary’s return-to-work
order by refusing to reinstate the 36 supervisors facing charges of libel. It held the company liable for their
backwages from May 7, 1990, when Philtread called back to work all other
striking members of the union, up to September 19, 1990, when the 36 locked out
supervisors chose to defer execu­tion of the Secretary’s order during the
conciliation conferences. The
computation of their backwages from May 7, 1990 conforms with, rather than
contravenes, the NLRC’s finding that the lockout was lawful for it did not
order the company to pay backwages from the com­mencement of the lockout on
April 16, 1990.

Sec. 5 (a) and Sec. 6, Rule IX, Certified Cases, of the NLRC
Rules of Procedure, however, provides:

“’Sec. 5. – Effects of Certification.

“(a). Upon
certification, the intended or impending strike or lockout is automatically
enjoined, notwithstanding the filing of any motion for reconsideration of the
certification order nor the non-resolution of any such motion which may have
been duly submitted to the Office of the Secretary of Labor and
Employment. If a work stoppage has
already taken place at the time of the certification, all striking
or lockedout employees shall immediately return
to work and the employer shall immediately
resume operations and readmit all workers
under the same terms and conditions prevailing
before the strike or lockout.

“Sec. 6. – Effects of Defi­ance. –
Non compliance with certifi­cation order of
the Secretary of Labor and Employment
or a return to work order of the
Commission shall be considered an illegal
act commit­ted in the course of the
strike or lock-out and shall authorize the Secretary of
Labor and Employment or the Commission, as the case may be, to enforce the same
under pain of loss of employment status or enti­tlement to full
employment benefits from the locking-out employer
or backwages, damages and/or other positive and/or affirmative
reliefs, even to criminal prosecution against the liable party/ies.’”
(Emphasis supplied.)

The Secretary’s assumption and certification orders being
executory in character are to be strictly complied with by the parties even
during the pendency of a petition questioning their validity for this
extraordinary authority given by law to the Secretary of Labor is “aimed at
arriving at a peaceful and speedy solution to labor disputes, without
jeopardizing nation­al interests.” (Union of Filipro Employees vs. Nestle
Philippines, Inc., 192 SCRA 396, 410.) This Court further held in that case:

“One other point that must be underscored is that the
return-to-­work order is issued pending the determination of the legality or
illegality of the strike. It is
not correct to say that it may
be enforced only if the strike is legal
and may be disregarded if the strike is illegal,
for the purpose precisely is to maintain the status quo while the
determination is being made. Otherwise,
the workers who contend that their strike is legal can refuse to return to work
to their work and cause a standstill on the company operations while retain­ing
the positions they refuse to discharge or allow the management to fill. Worse, they will also claim payment for work
not done, on the ground that they are still illegally employed although
actually engaged in activities inimical to their employer’s interest.

“xxx   xxx     xxx.

“The return to work
order does not so much confer a right as it imposes
a duty; and while as a right it
may be waived, it must be discharged as a duty even
against the worker’s will. Returning to
work in this situation is not a matter of option or voluntariness but of
obligation. The worker must return to
his job together with his co-­workers so the operations of the company can be
resumed and it can continue serving the public and promoting its interest.”

Since the return-to-work order was obtained by the workers, the
right to return-to-work could be waived by them, as they did in this case when
they opted to defer their reinstatement while negotiating with the company for
financial benefits in lieu of reinstatement in view of the “bad blood” and
“severely strained relations” between them and management (p. 49,
Rollo). The award of separation pay in
lieu of reinstatement is an equita­ble recourse that has been sanctioned by
this Court in a number of cases. (Commercial Motors Corporation vs. Commissioners, Second Division,
National Labor Relations Commission and Pedro Umlas, 92 SCRA 191, citing
Citytrust Finance Corporation vs. NLRC, 157 SCRA 87 [1988], cited in Quezon
Electric Cooperative vs. NLRC, 172 SCRA 88, 97-98 [1989]).

However, the NLRC’s award of two (2) months instead of one (1)
month separation pay for every year of service to the 36 supervisors is
unprecedented and unwarranted both in law (Art. 283, Labor Code), and
jurisprudence, and the existing collective bargaining agreement between the
union and the company. The CBA between
the petitioner and ADFLO contains the following provision on separation pay.

“ARTICLE
XVIII

“SEVERANCE
PAY

“SECTION 1. Except for
cases already covered by any existing COMPANY policy or plan, permanent
employees who are laid off for lack of work,
reduction in force, or retrenchment shall be
paid one and one-half month’s pay for each year of service. Permanent employees who are separated from
the COMPANY due to work-connected death and work-connected
physical disability based on the finding of the COMPANY Physi­cian
that the employee has become totally disable to continue perform­ing his
regular duties shall like­wise be paid one and one–half
month’s pay for every year of continuous
service. Other cases of
separation from employment including retirement but excluding
termination for just cause and valid causes,
shall be compensated at one month’s basic
pay multiplied by 1.115 for every year
of continuous service. Fractions of a year shall be taken into account on a pro-rata basis to
the nearest full month but fraction of a month shall be disregarded. If these cases of separation from employment
are also covered by any existing COMPANY policy or plan, the employee shall be
entitled only to the benefit under such COMPANY Plan or under this Agreement,
whichever is beneficial to the employee.” (pp. 11-12, Rollo; Emphasis sup­plied.)

The petitioner correctly argued that “this award of sixty
(60) days would send signals that disloyalty, destabilization, and the
fomenting of labor unrest is rewarded and given an extra premium, over and
above the normal grant of retirement [benefits] to other more deserving
employees” (p. 12, Rollo). It would
indeed be unfair and demoralizing to the quiet and uncomplaining workers when
the troublemakers can look forward to larger financial benefits than the law
ordinarily al­lows. Paying a higher
price to get rid of troublemakers would not be conducive to industrial peace.

How much then are they entitled to receive as separation pay?

The petitioner in its motion for partial reconsideration of the
NLRC resolution dated February 14, 1991 prayed that the separation pay awarded
by the NLRC “be reduced to one month’s pay for every year of service”
(p. 168, Rollo). Since such award
accords with numerous previous decisions of this Court, the same may be
followed in this case (Commercial Motors Corporation vs. Commissioners, Second
Division, National Labor Relations Commission and Pedro Umlas, 192 SCRA 191, citing
Citytrust Finance Corporation vs. NLRC, 157 SCRA 87 [1988], cited in Quezon
Electric Cooperative vs. NLRC, 172 SCRA 88, 97-98 [1989]).

WHEREFORE, the petition for certiorari and
prohibition is partially GRANTED. The
NLRC resolution of February 14, 1991 is affirmed, except the award to the
thirty-six (36) unreinstated supervisors of two months separation pay for every
year of service which is hereby reduced to one month separation pay for every
year of service in the petitioner company a remaining fraction of at least six
(6) months to be considered as one (1) year. In other respects, the decision/resolu­tion under review is
AFFIRMED. No costs.

SO ORDERED.

Cruz, (Chairman), Padilla, and
Bellosillo, JJ., concur.

Quiason, J., no part.