SOLIDBANK CORPORATION (NOW KNOWN AS FIRST METRO INVESTMENT CORPORATION), PETITIONER, VS. ERNESTO U. GAMIER, ELENA R. CONDEVILLAMAR, JANICE L. ARRIOLA AND OPHELIA C. DE GUZMAN, R…

Solidbank versus Gamier

The Case

This is a labor case about the boundary between the right to free expression and the prohibition on strikes once the Secretary of Labor has assumed jurisdiction over a labor dispute. Solidbank Corporation, later renamed First Metro Investment Corporation, dismissed a large group of employees, among them Ernesto Gamier, Elena Condevillamar, Janice Arriola and Ophelia De Guzman, for joining a three-day mass action and work boycott after the Secretary of Labor had already assumed jurisdiction over the bank's bargaining deadlock with its union. The employees sued for illegal dismissal. The case matters because the Supreme Court settles a recurring examination point: a mass action that stops work, whatever the employees call it, is a strike in substance, and it is prohibited once an assumption order is in place.

Procedural History

The employees filed separate complaints for illegal dismissal, damages and attorney's fees before the labor arbiters. Labor Arbiter Cañizares dismissed the complaints of Gamier, Condevillamar, Arriola and De Guzman, holding that their participation in the illegal strike violated the Secretary's return-to-work order. In a separate case, Labor Arbiter Flores ruled the opposite way, declaring the dismissal of the union and the other employees illegal and awarding reinstatement, backwages, damages and attorney's fees.

On appeal, the National Labor Relations Commission split. Its Second Division set aside the ruling of Labor Arbiter Flores, dismissed the complaint for illegal dismissal and unfair labor practice, and ordered separation benefits as an equitable relief. Its Third Division, however, set aside the ruling of Labor Arbiter Cañizares and found Solidbank liable for the illegal dismissal of the four named employees, ordering reinstatement with backwages and, should reinstatement not be feasible, separation pay under the collective bargaining agreement.

Solidbank went to the Court of Appeals by petition for certiorari, and the appellate court consolidated the petitions and denied them. The Court of Appeals declared the dismissals illegal and ordered reinstatement. Solidbank's motion for reconsideration was denied, so Solidbank elevated the matter to the Supreme Court by petition for review.

Facts

In late 1999, Solidbank and its employees' union were renegotiating the economic provisions of their collective bargaining agreement. The union declared a deadlock and filed a notice of strike. To avert an actual strike, the Secretary of Labor and Employment assumed jurisdiction over the dispute and issued an assumption order directing the parties to cease and desist from any act that might exacerbate the situation. The Secretary later resolved the economic and non-economic issues and directed the parties to conclude their agreement.

Dissatisfied, the union officers and members held a rally in front of the Department of Labor and Employment on April 3, 2000, simultaneous with the filing of a motion for reconsideration. An overwhelming majority of employees, including the individual respondents, joined the mass leave and protest action, and the provincial branches followed suit. The union also picketed the bank's head office and a branch. The concerted action lasted three days and paralyzed the bank's operations.

The bank's president issued a memorandum warning that those who joined the illegal act would be asked to show cause. On the third day, he declared that the bank would take back employees who reported for work starting April 6, 2000, provided they were not among those who led, instigated or coerced their co-employees. Of the 712 employees who joined the boycott, 513 returned and were accepted. The remaining 199, including the respondents, refused to return, were issued show-cause memos and placed under preventive suspension, and were eventually terminated. Twenty-one of the individual respondents later executed release, waiver and quitclaim documents in favor of the bank.

Issues

• Whether or not the protest rally and concerted work abandonment or boycott staged by the respondents violated the assumption order of the Secretary of Labor.
• Whether or not the respondents were validly terminated.
• Whether or not the respondents are entitled to separation pay or financial assistance.

Applicable Provisions

Article 212 of the Labor Code, as amended, defines strike and labor dispute:

Strike means any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute.

This definition controls whether the respondents' mass action was a strike in substance regardless of the label the employees gave it.

The same article provides that the term strike shall comprise not only concerted work stoppages, but also similar activities:

It shall comprise not only concerted work stoppages, but also slowdowns, mass leaves, sitdowns, attempts to damage, destroy or sabotage plant equipment and facilities and similar activities.

This brings mass leaves and similar concerted actions within the prohibition, which is decisive for the first issue.

Ruling

On the first issue, the Court held that the Court of Appeals patently erred in treating the mass actions as a mere exercise of free expression. The concerted action was not limited to the rally in front of the Department of Labor and Employment; the union also picketed the head office and a branch, and about 712 employees boycotted work for three continuous days, virtually paralyzing the bank's operations. Since these actions stemmed from a bargaining deadlock and an assumption order had already been issued to avert an impending strike, the concerted work abandonment was the result of a labor dispute. The Court stressed that the substance of the situation, and not its appearance, controls, so the fact that the employees did not use the word strike is inconsequential.

On the second issue, because the mass action was a prohibited activity committed in defiance of the assumption order, there was just and valid cause for dismissal. The Court thus reversed the finding of illegal dismissal.

On the third issue, the Court addressed whether the respondents were entitled to separation pay or financial assistance notwithstanding the validity of their dismissal.

Doctrine

A strike is any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute, and it includes slowdowns, mass leaves, sitdowns and similar activities. The substance of the situation, not its appearance, controls, so employees cannot escape the prohibition by refusing to call their action a strike. Once the Secretary of Labor assumes jurisdiction over a labor dispute and issues an assumption or return-to-work order, concerted work stoppages and mass actions in defiance of that order are prohibited, and participation therein is a just cause for dismissal. The constitutional right to free expression is not a license to paralyze an employer's operations through a concerted work boycott during an assumed labor dispute.

Disposition

The Supreme Court granted the petitions, set aside the Court of Appeals decision, and upheld the validity of the respondents' dismissal, with separation pay or financial assistance resolved in accordance with the ruling.

Remember This

Memorize this line: substance, not appearance, controls, so a mass leave or boycott is a strike however the employees label it. Examiners use this case to test whether a concerted mass action during an assumed labor dispute is protected free expression or a prohibited strike.