TOYOTA MOTOR PHILS. CORP. WORKERS ASSOCIATION (TMPCWA), ED CUBELO, EDWIN ALARANA, ALEX ALEJO, ERWIN ALFONSO, MELVIN APOSTOL, DANIEL AROLLADO, DOMINADOR ARRIOLA, LESTER ATUN, ROL…

Toyota Motor Philippines Corporation Workers Association versus Toyota Motor Philippines Corporation

The Case

This is a labor case between the Toyota Motor Philippines Corporation Workers Association, together with its dismissed officers and members, and Toyota Motor Philippines Corporation itself. The Union asks the Supreme Court to set aside the ruling of the Court of Appeals which declared its mass actions illegal and upheld the dismissal of 227 of its officers and members, while Toyota, in a related petition, asks the Court to recall the award of severance compensation to those same dismissed employees. The case matters because it draws the line between the constitutional right of workers to assemble and petition for redress of grievances, on the one hand, and the statutory prohibition against strikes that disregard the requirements of the Labor Code, on the other.

Procedural History

The dispute began with a notice of strike filed by the Union with the National Conciliation and Mediation Board, which was converted into a preventive mediation case. Toyota then filed a petition for injunction with the National Labor Relations Commission, which issued a temporary restraining order against the Union, and separately filed a petition to declare the strike illegal. The Secretary of Labor and Employment assumed jurisdiction over the labor dispute and certified it to the National Labor Relations Commission.

The National Labor Relations Commission, in its August 9, 2001 Decision, declared the strikes illegal, held the dismissal of the 227 employees legal, ordered Toyota to pay them severance compensation as an alternative relief, and declared several Union officers to have forfeited their employment status. Both sides moved for reconsideration, which the Commission denied in its September 14, 2001 Resolution.

Both parties then filed separate petitions for certiorari with the Court of Appeals, which were consolidated. In its February 27, 2003 Decision, the Court of Appeals affirmed the Commission but deleted the award of severance compensation. In its June 20, 2003 Resolution, however, the Court of Appeals reinstated the severance compensation on the ground of social justice. The Union and Toyota then came to the Supreme Court by petition for review under Rule 45.

Facts

The Union was the sole and exclusive bargaining agent of all Toyota rank and file employees. After the Union submitted its Collective Bargaining Agreement proposals, Toyota refused to negotiate in view of its pending appeal on the certification election. The Union filed a notice of strike based on refusal to bargain, which the National Conciliation and Mediation Board converted into a preventive mediation case.

A hearing before the Bureau of Labor Relations was reset, and on the day of the cancelled hearing, 135 Union officers and members failed to render required overtime work and instead marched and picketed in front of the Bureau of Labor Relations office. The Union requested that its members be excused on the day of the rescheduled hearing, but Toyota denied the request. Despite the denial, more than 200 employees staged mass actions on February 22 and 23, 2001 in front of the Bureau of Labor Relations and the Department of Labor and Employment offices. Toyota suffered an acute lack of manpower and losses of 53,849,991 pesos.

Toyota sent individual letters to some 360 employees requiring them to explain, citing its Code of Conduct, which penalizes inciting or participating in riots, disorders, alleged strikes, or concerted actions detrimental to Toyota's interest with dismissal on the first offense. The Union circulated a manifesto urging its members to participate in a strike and to abandon their posts. On March 16, 2001, Toyota terminated the employment of 227 employees for participation in concerted actions and for misconduct under Article 282 of the Labor Code. The Union went on strike on March 17, 2001, and from March 28 to April 12, 2001, it barricaded the gates of Toyota's plants. The Secretary of Labor and Employment assumed jurisdiction on April 10, 2001 and directed the striking workers to return to work, but the Union staged further protest actions on May 23 and 28, 2001, and filed another notice of strike on June 5, 2001.

Issues

• Whether or not the mass actions committed by the Union on the different occasions are illegal strikes.
• Whether or not separation pay should be awarded to the Union members who participated in the illegal strikes.
• Whether or not the dismissal of the 227 Union officers and members constitutes unfair labor practice.
• Whether or not the Union's right to due process was violated when the National Labor Relations Commission excluded its position paper.

Applicable Provisions

Article 263 of the Labor Code governs the procedural requirements of a valid strike, and the National Labor Relations Commission found that the Union failed to comply with these requirements:

Article 263. Strikes, picketing, and lockouts. — (a) It shall be the duty of any labor union to furnish the Department of Labor and Employment, through the regional office having jurisdiction over the place of the strike or lockout, a notice of strike or lockout at least thirty (30) days before the intended date thereof, or fifteen (15) days in case of unfair labor practice.

This provision bears on the case because the mass actions staged on February 21 to 23, 2001 were held illegal for failure to observe the mandatory notice and cooling-off requirements.

Article 264 of the Labor Code prohibits strikes after the Secretary of Labor and Employment assumes jurisdiction over the dispute, and it also defines who may be declared to have lost employment status:

Article 264. Prohibited activities. — (a) No labor organization or employer shall declare a strike or lockout without first having bargained collectively in accordance with Title VII of this Book or without first having filed the notice required in the preceding Article or without the necessary strike or lockout vote first having been obtained and reported to the Department of Labor and Employment. No strike or lockout shall be declared after assumption of jurisdiction by the President or the Secretary 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 bears on the case because the strikes staged on May 23 and 28, 2001 were held illegal for violating the prohibition against strikes after the Secretary of Labor and Employment had assumed jurisdiction over the dispute.

Section 4 of Rule 7 of the Rules of Court governs verification of pleadings, which the Union invoked to defend its petition before the Court of Appeals:

Section 4. Verification. — Except when otherwise specifically required by law or rule, pleadings need not be under oath, verified or accompanied by affidavit. A pleading is verified by an affidavit that the affiant has read the pleading and that the allegations therein are true and correct of his personal knowledge or based on authentic records. A pleading required to be verified which contains a verification based on information and belief or upon knowledge, information and belief, or lacks a proper verification, shall be treated as an unsigned pleading.

This provision bears on the case because the Court held that verification is a formal and not a jurisdictional requirement, and that noncompliance does not necessarily render a pleading fatally defective.

Ruling

On the first issue, the Court held that the mass actions were illegal strikes. The mass actions staged on February 21 to 23, 2001 were illegal because the Union failed to comply with the procedural requirements of a valid strike under Article 263 of the Labor Code. The strikes staged on May 23 and 28, 2001 were likewise illegal because they violated Article 264 of the Labor Code, which proscribes any strike after jurisdiction is assumed over the dispute by the President or the Secretary of Labor and Employment. Both parties were required to maintain the status quo after the assumption and certification order, and the Union did not respect the directive.

On the second issue, the Court held that separation pay should not be awarded to the Union members who participated in the illegal strikes. The Court agreed with the Court of Appeals that participation in illegal strikes constitutes serious misconduct, which it defined as a transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implying wrongful intent and not mere error in judgment. The Court cited Article 264 of the Labor Code, which provides that 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.

On the third issue, the Court held that the dismissal of the 227 Union officers and members does not constitute unfair labor practice, as the dismissals were grounded on their participation in illegal strikes and not on their union activities.

On the fourth issue, the Court held that the Union's right to due process was not violated. The National Labor Relations Commission issued no less than three orders for the parties to submit their position papers, which the Union ignored until the last minute, and no sufficient justification was offered for the belated filing. A party cannot complain of deprivation of due process if he was afforded an opportunity to participate in the proceedings but failed to do so. On the procedural point, the Court held that verification is only a formal and not a jurisdictional requirement, and that noncompliance does not necessarily render the pleading fatally defective.

Doctrine

A Bar candidate must retain that the mere participation of ordinary employees in an illegal strike is not, by itself, sufficient ground for their dismissal, but 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 employment status under Article 264 of the Labor Code. A strike staged without compliance with the notice and cooling-off requirements of Article 263 is illegal, and a strike staged after the Secretary of Labor and Employment assumes jurisdiction over the dispute is prohibited under Article 264. Separation pay is not awarded to employees who participated in an illegal strike, as such participation constitutes serious misconduct. Verification of pleadings is a formal, not a jurisdictional, requirement, and its noncompliance does not necessarily render the pleading fatally defective.

Disposition

The Supreme Court denied the Union's petition and granted Toyota's petition, setting aside the award of severance compensation to the 227 dismissed Union members and affirming the declaration of the strikes as illegal and the dismissal of the employees.

Remember This

Remember that mere participation in an illegal strike does not automatically warrant dismissal of ordinary employees, but union officers who knowingly participate in an illegal strike and any worker who commits illegal acts during a strike may lose their employment status. Examiners like to use this case to test the distinction between the constitutional right to assemble and the statutory requirements for a valid strike, and the rule that separation pay is not awarded to those who participated in an illegal strike.