NATIONAL FEDERATION OF LABOR (NFL), AMADO MAGBANUA AND 141 OTHERS NAMELY: RODELIO PURISMA, AURORA TAN, EFREN GARCIA, RONILO PARCON, HERMICILLA MANLUCOT, JOSEPHINE ADORABLE, EVEL…

National Federation of Labor versus Permex Producer and Exporter Corporation

The Case

This is a petition for certiorari filed by the National Federation of Labor, its regional director Amado Magbanua, and one hundred forty-one dismissed union members against Permex Producer and Exporter Corporation, a Zamboanga City corporation engaged in fish and tuna export, and its corporate officers. The union asks the Supreme Court to overturn the ruling of the National Labor Relations Commission, which had declared the strikes of January and February to March 1993 illegal, upheld the dismissal of all the striking workers, and awarded damages to the company. The case matters because it settles, in one decision, three questions every labor lawyer must know: the mandatory character of the procedural requisites of a strike after Republic Act Number 6715, the effect of defying a return-to-work order issued by the Secretary of Labor, and the proof required before damages may be awarded for an illegal strike.

Procedural History

Two consolidated cases arose before the labor arbiters. Permex filed a complaint to declare the strike illegal, assigned to Labor Arbiter Reynaldo Villena. The union filed a complaint for unfair labor practice and damages, assigned to Labor Arbiter Allen Abubakar. The two arbiters rendered a joint decision declaring the strike illegal, dismissing the union's complaint for lack of merit, holding the striking workers jointly and severally liable for moral and exemplary damages, and upholding the dismissal of all the workers. The union appealed to the National Labor Relations Commission. The Fifth Division of the Commission affirmed the labor arbiters in a decision dated August 6, 1993, but deleted the moral and exemplary damages and awarded instead 300,000 pesos as compensatory damages. The union's motion for reconsideration was denied, so the union came to the Supreme Court on a petition for certiorari, raising grave abuse of discretion.

Facts

On January 23, 1993, ten union officials who had attended a certification election conference the day before were barred from entering the company premises. The union called this a lockout; the company and later the Commission found that the workers had been disciplined for breach of company discipline, not for union activity. On January 25, the barred workers tried to re-enter, and over two hundred workers staged a picket outside the premises. The gates were barricaded, company vehicles were blocked, fifty workers were trapped inside, and company operations were paralyzed. Seven hundred non-striking workers could not work the next day. Work resumed on January 27 after a memorandum of agreement between the company and the union.

The company then required the workers to explain their participation in the strike. Most refused, and they were placed under preventive suspension effective February 13, 1993; only about forty who gave satisfactory explanations were readmitted. The union filed a notice of strike on January 29, which the company contested, and the union filed a second notice on February 5 alleging discrimination, coercion, union busting, blacklisting, intimidation, and dismissal of union officers and members. On February 11, the workers again barricaded the gates with ropes and chains. From February 12 to March 2 the company ferried its workers through its wharf by motorboat; on March 3 the strikers cut the company fence, took control of the wharf, and chained the last point of ingress and egress. There were acts of coercion, intimidation, and harassment, including threats of bodily harm against non-striking workers and company officials.

On March 11, 1993, the Secretary of Labor assumed jurisdiction over the dispute and issued a return-to-work order effective within twenty-four hours. The company announced through print and radio that all strikers should return by March 15. Despite the intercession of police agents, the order was ignored, and the picket was lifted only on March 29, 1993.

Issues

• Whether or not the National Labor Relations Commission committed grave abuse of discretion in its evaluation of the evidence and in not conducting a formal trial-type hearing.
• Whether or not the strikes of January 25 and 26 and of February 11 to March 29, 1993 were illegal for failure to comply with the procedural requisites of the Labor Code.
• Whether or not the dismissal of the one hundred forty-one workers was valid.
• Whether or not the award of damages to the company was proper.

Applicable Provisions

Article 263 of the Labor Code, as amended, governs the procedural requisites of a strike, and the Court treats the cooling-off period and the seven-day strike ban as mandatory:

Article 263. Strikes, picketing, and lockouts. — (c) In cases of bargaining deadlocks, the notice shall be filed at least thirty (30) days before the intended date thereof. In cases of unfair labor practice, the notice shall be filed at least fifteen (15) days before the intended date thereof. In case of union busting, the cooling-off period need not be observed. (f) The decision to declare a strike must be approved by a majority of the total union membership in the bargaining unit concerned, obtained by secret ballot in meetings or referenda called for that purpose. The decision to declare a lockout must be approved by a majority of the board of directors of the corporation or association or of the partners in a partnership, obtained by secret ballot in a meeting called for that purpose. The decision shall be valid for the duration of the dispute based on substantially the same grounds considered when the strike or lockout vote was taken. The Ministry may, at its own initiative or upon the request of any affected party, supervise the conduct of the secret balloting. In every case, the union or the employer shall furnish the Ministry the results of the voting at least seven days before the intended strike or lockout, subject to the cooling-off period herein provided.

These requisites are the very steps the Court found the union had skipped, and their mandatory character is the heart of the ruling on the legality of the strike.

Article 264 of the Labor Code, as amended, prohibits certain acts in picketing and fixes the consequence of a strike held despite an assumption or certification order:

Article 264. Prohibited activities. — (e) No person engaged in picketing shall commit any act of violence, coercion or intimidation or obstruct the free ingress to or egress from the employer's premises for lawful purposes, or obstruct public thoroughfares.

The Court used this provision to condemn the barricading, chaining, and padlocking of the gates and the intimidation of non-striking workers.

The same article supplies the consequence of defying a return-to-work order, which the Court applied through its own restatement:

A strike undertaken despite the issuance by the Secretary of Labor of an assumption or certification order becomes a prohibited activity and thus illegal, pursuant to the second paragraph of Article 264 of the Labor Code, as amended. The union officers and members, as a result, are deemed to have lost their employment status for having knowingly participated in an illegal act.

This is the basis for upholding the dismissal of the workers who continued the strike until March 29, 1993.

Ruling

On the first issue, the Court held that a petition for certiorari under Rule 65 prospers only on a showing of grave abuse of discretion or an act without or in excess of jurisdiction; it does not open the correctness of the evaluation of evidence, and the Court will not re-examine conflicting evidence or substitute the findings of an administrative tribunal that has gained expertise in its field. On due process, the Court held that a formal trial-type hearing is not always essential; due process is satisfied where the parties are given a fair and reasonable opportunity to explain their side, and here the union submitted affidavits and position papers. The holding of a trial is discretionary on the labor arbiter and cannot be demanded as a matter of right, and requiring one would defeat the speedy disposition of labor cases.

On the second issue, the Court held that the strike of January 25 and 26 was illegal because no notice of strike was filed, no prior notice of the taking of a strike vote was furnished to the National Conciliation and Mediation Board, and the seven-day strike ban was not observed. As for the strike that began on February 11, only six days had elapsed from the filing of the notice of strike on February 5, short of the fifteen-day cooling-off period for unfair labor practice. The Court rejected the union's good-faith argument, explaining that with the enactment of Republic Act Number 6715, effective March 21, 1989, the filing of a notice of strike, the strike vote, and the notice to the Department of Labor are mandatory; even if the union acted in good faith in the belief that the company was committing an unfair labor practice, a strike without notice and strike vote is illegal. The Court added that the strikers destroyed company property and intimidated non-striking workers, and that barricading, chaining, and padlocking the gates violated the prohibition against obstructing free ingress and egress.

On the third issue, the Court held that the dismissal was not based on the prosecutor's prima facie finding but principally on the workers' refusal to return to work after the Secretary of Labor assumed jurisdiction on March 11, 1993. The strike continued until March 29 despite the return-to-work order and the efforts of police personnel to persuade the workers to comply. The union's claim that the company imposed conditions before readmission rested on a form dated January 27, 1993, long before the return-to-work order, and no copy of any later memorandum was attached to its eighty-eight-page petition; the claim was a bare assertion unsupported by evidence.

On the fourth issue, the Court held that the damages awarded were not based on concrete proof. The company's certifications that 300,000 pesos worth of cooked fish were spoiled and that it lost large dollar commitments were self-serving. The Court reiterated that actual or compensatory damages cannot be presumed but must be duly proved with a reasonable degree of certainty, and that a court cannot rely on speculation, conjecture, or guesswork. Since the strike dragged on for nearly fifty days and paralyzed operations, some injury was certain; in the absence of competent proof of actual damages, the company was entitled to nominal damages to vindicate its violated right, and the Court considered 300,000 pesos just and reasonable under the circumstances.

Doctrine

First, the procedural requisites of a strike — the notice of strike, the cooling-off period, the strike vote by secret ballot, the twenty-four-hour prior notice of the balloting, and the seven-day strike ban after the report of the strike vote — are mandatory after Republic Act Number 6715, and a strike held without them is illegal even if the union acted in good faith.

Second, a strike staged despite an assumption or certification order of the Secretary of Labor is a prohibited activity; the officers and members who knowingly participate lose their employment status, and by staging the strike after the order they forfeit their right to be readmitted to work.

Third, findings of fact of the labor arbiter and the National Labor Relations Commission, when supported by substantial evidence, are accorded respect and finality, and a formal hearing is discretionary on the labor arbiter and not demandable as a matter of right.

Fourth, actual and compensatory damages cannot be presumed but must be proved with a reasonable degree of certainty; where injury is certain but the amount is not proved, nominal damages may be awarded to vindicate the right.

Disposition

The petition was dismissed for lack of merit, and the decision of the National Labor Relations Commission was affirmed, with the 300,000 pesos awarded to the company sustained as nominal damages.

Remember This

Memorize this line: after Republic Act Number 6715, the notice of strike, the strike vote, and the seven-day strike ban are mandatory, and good faith does not cure their absence. Examiners use this case for the mandatory requisites of a valid strike, the effect of defying a return-to-work order, and the rule that nominal damages lie where injury is certain but actual damages are unproved.