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Prof. Joselito Guianan Chan's The Labor Code of the Philippines, Annotated, Labor Relations, Volume II of a 3-Volume Series 2017 Edition, 5th Revised Edition,
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[G.R. NOS. 158190-91 : June 21, 2006]


[G.R. NOS. 158276 and 158283 : June 21, 2006]




Assailed and sought to be set aside in these petitions for review under Rule 45 of the Rules of Court are the Decision of the Court of Appeals (CA) dated February 7, 20031 and its Resolution of May 15, 2003,2 in CA-G.R. SP No. 69107 and CA G.R. SP No. 69799, denying the petitions for certiorari separately interposed by Nissan Motor Philippines, Inc. ("Nissan Motor" or "Company") and Bagong Nagkakaisang Lakas sa Nissan Motor Philippines, Inc. (BANAL-NMPI-OLALIA-KMU).

Docketed as G.R. NOS. 158190-91, Nissan Motor's petition excepts from the assailed ruling of the appellate court insofar as it affirmed (a) the award by the respondent Secretary of Labor and Employment of certain economic benefits to the company's rank-and-file workers and (b) the recall of the dismissal of 140 Union members. On the other hand, the petition of BANAL-NMPI-OLALIA-KMU ("Union" hereafter), docketed as G.R. NOS. 158276 and 158283, assails the respondent Secretary's holding that the Union and its members engaged in a concerted work slowdown despite the issuance of the assumption of jurisdiction order dated August 22, 2001,3 infra, and subsequent orders of similar import. The same petition raises too the issue respecting the correctness of the CA's resolution citing the Union's counsel for contempt.

In gist, the case turns on the labor dispute triggered by a collective bargaining deadlock between Nissan Motor and the Union resulting in the filing of four (4) notices of strike with the National Conciliation and Mediation Board (NCMB). Filed on December 4, 2000, the first Notice of Strike (NCMB-RBIV-LAG-NS-12-045-00), on the ground of alleged unfair labor practice, stemmed from the suspension of about 140 company employees, following the November 15, 2000 disruptive protest action arising from the employees' demand for payment of the 2nd half of their 13th month pay. The Union filed the second strike notice (NCMB-RBIV-LAG-NS-07-027-01) on July 24, 2001 on the ground of deadlock in collective bargaining involving a mix of economic and non-economic issues.

On August 22, 2001, the Department of Labor and Employment (DOLE), upon Nissan Motor's petition, issued an order assuming jurisdiction over the dispute at Nissan Motor. In it, the DOLE Secretary expressly enjoined any strike or lockout and directed the parties to cease and desist from committing any act that might exacerbate the situation, and for the Union to refrain from any slowdown and other similar activities that may disrupt company operations or bring its production to belowits normal and usual levels.

What happened next is summarized in the Decision of the respondent DOLE Secretary dated December 5, 2001,4 viz:

On 27 August 2001, the Union filed a 3rd Notice of Strike - on the ground of illegal lockout, illegal suspension, union busting '.

x x x

On 12 September 2001, [the DOLE] issued an Order directing that the 3rd Notice of Strike be consolidated with the first two notices '; reiterating the injunction against strike or lockout, and directing the parties to cease and desist from committing acts which may aggravate the situation and to refrain from any slowdown.

On 18 September 2001, the Union filed a [reiterative] Urgent Petition to Suspend the Effects of Termination of union officers and members, now numbering 43 '.

On 24 September 2001, the Company filed its Position Paper.

On 18 September 2001, the Union filed a 4th Notice of Strike - on grounds of alleged illegal dismissal of eighteen (18) union officials, illegal lockout on account of the forced leave, coercion/intimidation, union busting and non-payment of salaries for the period August 15-30, 2001.

On 28 September 2001, Acting [DOLE] Secretary Arturo D. Brion issued an Order consolidating the 4th notice of strike with the first three (3) notices - and reiterating the injunction contained in the assumption of jurisdiction order of 22 August 2001 and the Order of 12 September 2001.

x x x

On 05 October 2001, the Company filed a Motion to Deputize PNP Laguna to Secure, Maintain and Preserve Free Ingress and Egress of NMPI, alleging - that despite the injunctions - against any slowdown and strike, the Union went on actual strike on 01 October 2001, picketed and blocked the company offices, and plant premises; unlawfully blocked and obstructed all entrances and exits points.

On 08 October 2001, the Union filed a 'Mosyon Laban sa Deputasyon [ng PNP],' '.

x x x

On 13 October 2001, the Secretary of Labor issued an Order deputizing the [PNP] '.

On 22 October 2001, the Union filed a Supplemental Position Paper with Reply alleging that the bargaining unit at NMPI - is composed of 360 highly skilled employees; that the workers are always on forced leave; work is only for 4 or 5 days. The average daily salary of employees is P400.00 which is allegedly below the poverty line '. The average monthly salary of employees is P10,000.00 for rank and file P20,000.00 for supervisory (sic).

The Union states further that the Company realized P3.2 Billion in gross sale for the year 2000; that it is very flexible with the pricing of its products which price ranges from P750,000.00 to P1.3 Million; that the estimated direct labor cost is only P68.180 Million.

On the political issues, the Union alleges that 140 union officers and members were placed under suspension from 3-6 days without observing procedural due process. xxx. The Union alleges too that the Company abused its prerogative in imposing discipline '.

The Union accuses the Company of violating the assumption of jurisdiction order by falsely accusing the Union of committing slowdown and placing them on forced leave, as on (sic) June 18, 30, July 7, 14, & 21. While all these were taking place and up until 23 July, the Union claims, the CKD parts have not arrived thus, the low production.

The Union claims that after the filing of the 2nd notice of strike, the Company charged the Union with engaging in work slowdown. Despite explanation that the low production was due to many reasons none of which is attributable to a slowdown; '. The Union requested for grievance but the Company ignored it.

The Union claims that the charge against the employees of violation of the assumption of jurisdiction order is just a [union busting] ploy '. It claims likewise that the Company also violated the assumption order, therefore the principle of pari delicto applies to both parties.

The Union explained also its position on the CBA deadlock '.

On 26 October 2001, the Company filed its Reply to the Union's Position Paper [later followed by] a Rejoinder to the Union's Reply [therein alleging] ... that the first notice of strike is totally without merit as the Union's charge of [UPL] is not supported by the events xxx. crvll

The charge of illegal suspension of more or less 140 union members ranging from 3 to 6 days is without merit as the action was in the exercise of management's prerogative to instill discipline among its employees. The Company asserts that the suspension was a sanction for the employees' misconduct committed on 15 November 2000, by refusing to go back to their assigned workstations, and instead demanding payment of the 2nd half of their 13th month pay. The suspension from work was imposed as a disciplinary measure under the Company Rules - and after observance of due process, the Company alleges. The Company notes that the subject employees failed to submit satisfactory explanation within the 48-hour period granted to them. The incident was recorded in the Company's Exhibits '. A copy of the Notice of Charge, marked as Exhibit "J," a copy of the Notice of Suspension, marked as Exhibit "K," and the Affidavit of Mr. Artemio del Rosario, marked as Exhibit "M" were submitted to further support the claim of validity of the suspension.

Anent the said 13th month-pay related issue, - the Company states that the statutory deadline for payment of the 13th month-pay is December 24th of the applicable year, thus the demand for early payment is not in order. The 13th month pay was released as promised on 29 November 2000.

On the 2nd Notice of Strike, the Company states that it is incapable of meeting the [capricious] economic demands of the Union - [which are] being made despite the continued losses suffered by NMPI over the last four (4) years of its operations amounting to about P1.490 Billion. Notwithstanding the reduction of the Union's total package, it would still cost P212,081,987.00 or 309.5% increase over the previous CBA; whereas the Company's last offer before withdrawing the same was a package amounting to P35, 386,458.00 which represents a 52.5% increase over the previous CBA. This package consists in:

A. Annual Salary increase - P900.00 + P160.00 merit increase

b. Signing bonus - P3,000.00

c. Maternity assistance - Normal - P 6, 500.00

Caesarian - P13,000.00

Miscarriage - P 3, 900.00

xxx xxx xxx

p. Overtime pay premium Increase for ordinary day,

special holiday, rest day and regular day

x x x

The Company maintains that the losses [in] - its last four (4) years of operations, from 1997 to 2000, resulted in net losses amounting to P1.490 Billion, owing to such factors as the 1997 Asian economic meltdown, ', and the Company's limited motor vehicle market share '. Copies of its audited financial statements were submitted as Annexes "B", "C", "D", and "E" of the Affidavit of Mr. Valentino de Leon, Exhibit "L" of the Company's Position Paper.

The Company contends that overall, NMPI's total market share in the year 2000 was lower than the previous year - and among the lowest in the industry '. These factors militate against drastic award of economic benefits - as such could adversely affect the Company's survival.

The Company states too, that the slowdown carried out by the Union after the filing of the 2nd strike notice, was in violation of the cooling off period prescribed by law, therefore illegal.

Moreover, the slowdown violates - the CBA. The Company submitted a sworn affidavit of Mr. Manolito E. Burgos, Exhibit "O" of the Position Paper, to prove the fact that a slowdown was in fact carried out which adversely affected NMPI's normal production '.

On the matter of the dismissal of 19 Union officers and 25 members - after the issuance of the Assumption of Jurisdiction Order ', the Company asserts that the subject employees defied the - Order by continuing to carry on the slowdown '. The Union's refusal to formally acknowledge receipt of the Order of 22 August 2001, cannot thwart the efficacy of the said Order '. Citing several [SC] decisions on the matter, the Company maintains that this blatant defiance of the DOLE orders left it with no choice but to declare the concerned employees to have forfeited or lost their jobs.

The Company averred that the dismissal was preceded by observance of due process. To prove this, it submitted Exhibit "M" (Affidavit of Mr. Artemio A. del Rosario) and its Annexes ', consisting in the notices to explain and the notices of dismissal.

x x x

In its Reply to the Union's Position Paper, the Company contends that the unofficial figures given to Administrator Olalia should not be used as NMPI's last position since these were never directly presented by the Company to the Union as they are confidential information.

The Company alleges that the Union's computation of the incremental direct cost over the three (3) year period is totally incorrect and misleading as annual increases are cumulative. Moreover, there is not basis for comparing total labor cost against total sales revenues. While labor cost may be just a small percentage of total sales revenue, NMPI is incurring tremendous losses because of big overhead cost '.

x x x

The Company - confirmed that it unofficially offered P3,000.00 only, however, the basis for signing bonus no longer exist because the parties did not reach any agreement on the CBA. The signing bonus is premised on goodwill which no longer existed '. (Underlining and words in bracket added; emphasis in the original.)

On December 5, 2001, public respondent DOLE Secretary Patricia A. Sto. Tomas issued her assailed Decision, the fallo of which reads:

WHEREFORE, in the light of the foregoing discussions, this Office orders the following:

1. The suspension of the 140 employees which is the subject of the first notice of strike is hereby affirmed;

2. The dismissal of the Union officers is hereby sustained. However, the dismissal of the Union members is recalled, hence, they are reinstated to their former positions without back wages. They are imposed a suspension of one month which is deemed already served;

3. Bagong Nagkakaisang Lakas sa Nissan Motor Philippines, Inc. (BANAL-NMPI-OLALIA-KMU) and Nissan Motor Philippines, Inc. are hereby ordered to conclude a Collective Bargaining Agreement embodying the dispositions made above and all other agreements which were reached by the parties during negotiation and conciliation. Such agreement shall have prospective effect.


In due time, the Company and the Union each sought partial reconsideration, but their corresponding motions were denied by the public respondent Secretary in a modificatory resolution dated January 22, 2002.5 The modification consisted in the deletion from the list of dismissed Union officers the names of three (3) employees previously identified as officers but are not listed as such in the official records of the Bureau of Labor Relations.

Therefrom, both the Company and the Union went to the CA via separate petitions for certiorari under Rule 65 of the Rules of Court. The Company's recourse, docketed as CA-G.R. SP No. 69107, and that of the Union, as CA-G.R. SP No. 69799, were later ordered consolidated.

On February 7, 2003, the CA, thru its Special Division of Five, rendered its assailed Decision6 which denied the private parties' separate petitions and affirmed the public respondent Secretary's Decision dated December 5, 2001 and Resolution of January 22, 2002. The Company's and the Union's respective motions for reconsideration were denied by the CA in a Resolution dated May 15, 2003.

Before the CA, however, issued its February 7, 2003 decision on the merits, its Fourth Division to which the case, as consolidated, originally pertained, issued a Resolution dated November 8, 20027 citing Atty. Napoleon Banzuela, Jr., counsel for the Union, for indirect contempt under Rule 71 of the Rules of Court and required to pay a fine of P15,000.00. In brief, the citation is set against the following antecedents:

1. On February 28, 2002, in CA-G.R. SP No. 69107, the CA, per a Resolution8 penned by Associate Justice Eloy R. Bello, then of the CA 5th Division, temporarily enjoined the implementation of the DOLE underlying decision of December 5, 2001. Barely a month after, the Union filed its own petition for certiorari, 9 docketed as CA-G.R. SP No. 69799 of the court's 11th Division - with prayer for its consolidation with CA-G.R. SP No. 69107 which was then pending with the CA's 5th Division;

2. Subsequently, both petitions were consolidated and raffled to Justice Bello, formerly of the 5th Division, but who was at this time with the 4th Division of the CA. Justice Bello accepted the consolidation, being, per Resolution of October 11, 200210, in accordance with CA internal rules.

3. On May 20, 2002, the Union moved for the inhibition of Justice Bello and/or the transfer of the case to the 11th Division11, to which motion Nissan Motor interposed an opposition with prayer to expunge from the records the Union's motion.

4. On August 14, 2002 the CA issued a Resolution denying the motion for inhibition of Justice Bello.12 On September 23, 2002, the Union, thru Atty. Banzuela, Jr. filed a Motion to Refer Back to the Fourth (4th) Division to which the Case was Originally Consolidated and there alleging the following:

Lately, upon follow-up on the case by the workers, they learned that a reorganization as regards the compositions of the Divisions of the entire [CA] transpired wherein JUSTICE ELOY BELLO was transferred to the SECOND DIVISION, but surprisingly, he brought with him the above entitled case in the Second Division which was originally docketed with the Fourth Division, despite the fact that the workers filed a motion to inhibit, which was denied and expunged from the records. However, bringing with him the above-entitled case in the SECOND (2nd) DIVISION lend credence to the allegation/accusation of the workers that JUSTICE ELOY BELLO, has undue interest over the instant case.

6. The CA found the foregoing imputation to be baseless and malicious and likewise found Atty. Banzuela's proffered explanation insufficient to justify the utterances he made in his September 23, 2002 motion.

We now come to the instant petitions, which the Court, per its Resolution of September 17, 2003,13 as reiterated in another Resolution dated March 22, 2004,14 ordered consolidated.

In its recourse, Nissan Motor contends that the CA erred:

1. In not considering and applying hereto pertinent law and jurisprudence which provide that regardless of rank in the union, workers who defy and contravene the [DOLE's] assumption of jurisdiction and/or return-to-work orders are deemed to have committed an illegal act and, as consequence thereof, have lost their employment status.

2. In affirming public respondent Secretary of Labor and Employment's award of economic benefits to private respondent Union and the rank-and-file workers considering its own confirmatory finding of petitioner's financial distress.

On the other hand, the Union, apart from the matter of contempt of court, raises in its own petition the issue of whether or not:

1. Mass dismissal and collective liability are sanctioned by law and existing jurisprudence;

2. Union officers and members accused of work slowdown in defiance of assumption of jurisdiction are entitled to due process to determine their individual participation;

3. The Pari Delicto (sic) doctrine is applicable in the instant case;

4. Respondent company can dismiss union officers and members after it brought the issue of illegal strike before the [DOLE] Secretary; andcralawlibrary

5. The 160 Union officers and members [total] illegally dismissed are entitled to reinstatement and full backwages.

Nissan Motor faults the CA for effectively ordering, like the public respondent Secretary, the reinstatement of the 140 rank-and-file Union members who waged a work slowdown notwithstanding the assumption of jurisdiction order dated August 22, 2001 and what amounts to a reiterated return-to-work orders (RTWO) dated September 12 and 28, 2001. The public respondent Secretary, Nissan Motors notes, had found the dismissal of the Union officers to be justified. Accordingly, and consistent with extant jurisprudence, the dismissal of the 140 rank-and-file Union members should have also been upheld, given the Secretary's categorical factual determination about the Union having engaged in work slowdown which, under the circumstances it was undertaken, she viewed as constituting an illegal strike.15

Nissan Motor next sets its sight on the DOLE's disposition on the economic aspect of the case. In relation thereto, it expresses dismay over the bountiful basket of economic benefits, inclusive of what amounts to a signing bonus, that the CA, following the lead of the DOLE Secretary, extended to the Union members and rank-and-file workers in general, given the backdrop against which the award was made, viz: a) the benefits were based on confidential "unofficial proposals" the company made before the NCMB at the start of the Collective Bargaining Agreement (CBA) negotiations; b) these proposals were made before the Union's work slowdown; and c) the Company is in dire financial strait, a situation attributable to the 1997 Asian currency crisis but which the Union's work slowdown aggravated.

For its part, the Union claims that the appellate court erred in sustaining the finding respecting the concerted work slowdown. As argued, no overt act has been shown to prove the fact of concerted work slowdown, let alone the participation of each of its members thereon. Far from establishing such deplorable practice, the Union maintains that the facts would tend to show that it was Nissan Motor which is guilty of unfair labor practices acts against the Union and its members, pointing to their dismissal which was allegedly effected without due process of law.

And while not determinative of the final outcome of the substantive merits of this case, the CA's resolution of November 8, 200216 embodying the contempt citation is also assailed. According to the Union's counsel Atty. Banzuela, what the CA considers as contemptuous utterances against Justice Eloy Bello, Jr. were actually remarks he made without malice, unaware as he was of the CA rules respecting distribution, assignment and disposition of cases.

Subject to well-defined exceptions, the doctrinal rule is that factual determinations of administrative and quasi-judicial agencies, such as the National Labor Relations Commission or the DOLE, are generally accorded not only respect but even conclusiveness if supported by substantial evidence, in recognition of their expertise on specific matters under their consideration and jurisdiction.17 This doctrine applies with greater force when the appellate court passes upon and upholds such findings of facts.18

The conclusion of the public respondent Secretary of Labor and Employment, as confirmed by the CA, is that the Union and its members indeed "engaged in work slowdown which under the circumstances in which they were undertaken constitute illegal strike." The defiance came in the form of the continuation of the slowdown enjoined in the underlying assumption order, by the strike actually staged by the Union, its officers and members on October 1, 2001, the closure of the company's offices and plant premises and the barricading of main gates. In fact, the DOLE Secretary had to ask the intervention of the Laguna Philippine National Police (PNP) to assist the Company in opening what appeared to be padlocked and welded gates leading to company premises. But side by side with this determination is the CA's categorical finding that the Company's hands were not entirely clean, having contributed to the ensuing deteriorating impasse between labor and management.

Verily, the DOLE's repeated admonitions against any act that might exacerbate the labor dispute cut both ways. Accordingly, the Court is not disposed, as Nissan Motor and the Union respectively urge, to disturb, one way or the other, the factual determination on what eventually led the parties to engage in a labor-management locking of horns. To be sure, the Company's act - after the DOLE Secretary had issued her assumption order - of suspending a very substantial number of Union officers/members with threat of eventual dismissal and perceived illegal lockout and union busting went against the injunction against the commission of any act that would add fire to what was already a volatile situation. This is not to say that the Company is guilty of unfair labor practice, or union busting, to be precise. It cannot be heard, however, to say that the CA - taking stock of the third and fourth notices of strike filed and the grounds therefor - erred in saying that the Company "was not entirely without fault for the defiant and adversarial level into which the tense situation between the parties eventually degenerated."19 In the same token, the Union cannot plausibly say, as it does at every turn, that its officers and members desisted from engaging in what turned out to be a crippling work slowdown. The evidence on record and the ensuing discerning and detailed observations of the public respondent Secretary belie the Union's posture:

A perusal of the Production Plan and Results, for the months of June [to] - September 2001 - provide[s] a vivid picture of the extent of the reduction in production of the Company's JIG Lines 1 and 2, Metal Line and Trim/Chassis Line No. 1 during the period covered by the labor dispute, and tend[s] to validate the Company's contention that a slowdown was carried out by the Union starting 24 July 2001.

As the Union itself alleges, there was normal, even high production [95% - 100% of production plan in all lines] in the month of June 2001. '. In the month of July 2001, production at JIG Line 2 was 100% of plan from July 2 to 23 (covering only 5 working days), and at Metal Line, production was from 88% to 142% of plan, for the first 3 weeks of July. But production fell by at least 50% in the 4th week (Annexes A-1, B-1, C-1 and D-1 of Company's Exhibit "O"), the time when the CBA deadlock occurred and the 2nd strike notice was filed.

x x x

Union claims that production setback was due to - workers [training] on the new product line launched in June. This claim is - belied by evidence. xxx. crvll

Union claims that the low production was due also to lack of parts. Company's Annexes to Exhibit "O" - show that during the period in question, there were no parts delay in JIG Line 1 experienced on August 3. In Trim/Chassis Line 1, there was in fact work-in-progress delay from JIG 1 and JIG 2 owing clearly to the slowdown in the latter lines xxx. crvll

Neither is the Union's claim that the forced leaves and suspension of workers were responsible for the disruption of production true. On the contrary, it was the lack of work-in progress due to slowdown and absenteeism which are responsible for the declaration of forced leave. Annex "B-2" of Company's Exh. "O" in fact shows that operations at JIG Line 2 were cancelled and transferred to Line 1 starting on August 22 due to high incidents of absenteeism. xxx. crvll

Thus, the Union's excuses do not hold sway on this Office. To be sure, the Union engaged in work slowdown which under the circumstances in which they were undertaken constitutes illegal strike. The Company is therefore right in dismissing the subject Union officers in accordance with Article 264 (a) of the Labor Code, for participating in illegal strike in defiance of the assumption of jurisdiction order by the Labor Secretary.20 (Underscoring and letters in bracket added)

Given the above perspective, the benign consideration which the public respondent Secretary accorded the rank-and-file Union members who joined in the work slowdown in defiance of the assumption order and the complementing RTWO commends itself for concurrence. As may be recalled, the public respondent Secretary imposed on the erring Union members a one (1) month suspension to replace the penalty of loss of employment status heretofore meted on them by the Company. Article 263(g) in relation to Article 264 of the Labor Code governs the effects of a strike or similar prohibited acts in assumption cases, thus:

Art. 263. Strikes, picketing and lockouts. xxx (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 '. Such assumption - shall have the effect of automatically enjoining the intended or impending strike or lockout as specified '. If one has already taken place at the time of assumption ', all striking or locked out employees shall immediately return to work and the employer shall immediately resume operations and re-admit all workers under the same terms and conditions prevailing before the strike or lockout. xxx. (Underscoring supplied.)

Article 264. Prohibited Activities.

(a) xxx

No strike or lockout shall be declared after the assumption of jurisdiction by - the Secretary or - during the pendency of cases involving the same grounds for the strike or lockout.

xxx. Any union officer who knowingly participates in 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: '.

While the employer is authorized to declare a union officer who participated in an illegal strike as having lost his employment,21 his/its option is not as wide with respect to union members or workers for the law itself draws a line and makes a distinction between union officers and members/ordinary workers. An ordinary striking worker or union member cannot, as a rule, be terminated for mere participation in an illegal strike; there must be proof that he committed illegal acts during the strike.22 And lest it be forgotten, the law invests the Secretary of Labor and Employment the prerogative of tempering the consequence of the defiance to the assumption order. The Secretary may thus merely suspend rather than dismiss the employee involved.23 This is as it should be. For as then Associate, now Chief, Justice Artemio V. Panganiban prefaced his ponencia in Solvic Industrial Corporation v. NLRC24 - "Except for the most serious causes affecting the business of the employer, our labor laws frown upon dismissal. Where a penalty less punitive would suffice, an employee should not be sanctioned with a consequence so severe."

With the view we take of this case, the public respondent Secretary of Labor and Employment - and necessarily the CA - acted within the bounds of the law - and certainly rendered a judicious solution to the dispute - when she spared the striking workers or union members from the penalty of dismissal. This disposition takes stock of the following circumstances justifying a less drastic penalty for ordinary striking workers: a) the employees who engaged in slowdown actually reported for work and continued to occupy their respective posts, or, in fine, did not abandon their jobs; b) they were only following orders of their leaders; and c) no evidence has been presented to prove their participation in the commission of illegal activities during the strike. Not to be overlooked is a factor which the CA, perhaps having in mind PAL v. Brillantes,25 regarded as justifying the leniency assumed by the public respondent Secretary towards the members of the Union. We refer to the fact that Nissan Motor appeared to have also exacerbated, as earlier indicated, the emerging volatile atmosphere despite the Secretary's order veritably enjoining the parties to respect the status quo prevailing when she assumed jurisdiction over the dispute. Foremost of these exacerbating acts is the en masse termination of most of the Union members, albeit it may be conceded that the employer has the prerogative of imposing disciplinary sanctions against assumption-order-defying employees.

The Court has considered the cases cited by the Company to support its brief on the issue of dismissal, notably Union of Filipro Employees v. Nestle Philippines, Inc.,26 St. Scholastica's College v. Torres,[27] and Telefunken Semiconductors Employees Union-FFW v. Court of Appeals.28 There, we held that any worker who participates in a strike or otherwise engages in any prohibited act in defiance of the assumption order may be meted the penalty of loss of employment status. But as correctly pointed out by the public respondent Secretary, however, the law itself authorizes the graduation of penalties, Article 264 of the Labor Code making, as it were, a distinction between union officers and its members or any other workers, the main differing line contextually being that the latter do not necessarily lose their job by mere participation in an illegal strike absent proof that they committed illegal acts. Thus in Association of Independent Union in the Philippines v. NLRC,29 we held that the responsibility of union officers, as main players in an illegal strike, is greater than that of the members and, therefore, limiting the penalty of dismissal only for the former for participation in an illegal strike is in order. Of the same tenor, albeit formulated a bit differently is our holding in Gold City Integrated Port Service, Inc. v. NLRC.30

Certainly not lost on the Court is the fact that the cited cases are not on all fours applicable, Filipro, St. Scholastica and Telefunken involving as they do the staging of actual strikes, resulting in work stoppage and complete abandonment of employment. There lies the difference. In this case, the element of abandonment of work does not obtain, the employees engaging in work slowdown having reported for work at their usual post. Abandonment means deliberate, unjustified refusal of the employee to resume employment.31

The Court, just like the public respondent Secretary, however, cannot lend cogency to the Union's unyielding contention that Nissan Motor imposed disciplinary sanctions against its officers and members without due process of law. As it were, the records32 tend to show that the Company, before proceeding against those concerned, asked the erring Union officers/members and workers to explain what amounts to their defiant attitude and duly warned them of their imminent fate as a consequence of their intransigence, before declaring and then confirming their loss of employment status. The Company's evidence presented during the proceedings before the respondent Secretary, specifically Exhibits "L," "M" and "O" of Annex "N" of the Company's Petition for Review in G.R. NOS. 158190-91, which the latter gave full faith and credence in her Decision dated December 5, 2001 and thereafter the CA proved this point.

At any rate, the Union's protestation on non-observance of due process is altogether an issue of fact that has no place in the instant appellate proceedings. For, the Court's jurisdiction in a Petition for Review is limited to reviewing or revising errors of law allegedly committed by the appellate court, its findings of fact being generally binding on this Court.33

In view of the legality of the disciplinary measures taken against the union officers and members of the union, the Court need not delve on the issue of entitlement to full backwages. Backwages is, as a rule, forthcoming only in cases where the dismissal or suspension, as the case may be, is declared unlawful.

Apropos the contempt citation, we sustain the CA's order penalizing Atty. Napoleon Banzuela, Jr. for indirect contempt for his uncalled-for and disrespectful remarks directed against Justice Eloy Bello, Jr. Atty. Banzuela cannot plausibly set up his ignorance of the appellate court's internal rules as a justification for making his contemptuous, malicious and disparaging statements against the person and integrity of a sitting CA justice. The Court is at loss to understand how his lack of knowledge of such rules, if that be really the case, can serve as excuse for his unwarranted and unfounded ascription of interest against a member of a court. A well-intentioned mind could have conveyed its sentiments about such perceived interest in a civil and respectful language befitting a gentleman and an officer of the court. It behooved Atty. Banzuela, as such officer, to uphold the dignity and authority of the men and women in the judiciary. The innuendo embodied in the Union's September 23, 2002 motion, doubtless the product of Atty. Banzuela's mind, is simply reprehensible. The Court cannot, as urged, let it pass unpunished.

Finally, the disposition made by the public respondent Secretary relating to the economic aspects of the CBA, such as, but not limited, transportation allowance, 14th month pay, seniority pay, separation pay and the effectivity of the new CBA, appears to be proper. However, conformably with the evidence on record that shows the Company's precarious financial position, there is a need to modify the other awards she thus made:

1) The annual salary increases of P900.00 for the 1st year, P1,000.00 and P1,100.00 for the 2nd and 3rd years, respectively, which, given the proven continued losses of the Company, are hereby modified to minimize and mitigate its operational losses to: P900.00 annual increase for the initial 3-year term of the CBA, effective upon execution of a new CBA. In this regard, the Court cannot sanction the award made by the public respondent Secretary based ostensibly on the revelation of NCMB Administrator Olalia that was sourced from the confidential position given him by the Company. The reason for this is simple. Article 233 of the Labor Code34 prohibits the use in evidence of confidential information given during conciliation proceedings. NCMB Administrator Olalia clearly breached this provision of law. Moreover, as correctly pointed out by the Company, this confidential information given to Administrator Olalia was made prior to the Union's slowdown and defiance of the Assumption Order of August 22, 2001 causing it additional losses.

2) The award for gratuity bonus of P3,000.00 per employee is vacated for lack of basis. As no less pointed out by the public respondent Secretary, the Union's demand for a signing bonus is bereft of any factual or legal basis considering that the CBA was not concluded in the bargaining table. Moreover, the filing by the Union of a notice of strike, not to mention effecting a slowdown during the mandatory cooling-off period prescribed under Article 263 (c)35 of the Code ate up whatever goodwill - the motivating basis for signing bonus - there was between labor and management. By parity of reasoning, there can likewise be no basis for the award or conversion of the Union's demand for a signing bonus into gratuity pay inasmuch as the latter benefit was, in the first place, never an issue between the parties nor part of the Union's demand. It is not amiss to state, therefore, that the public respondent Secretary abused her discretion when she extended to the Union an award not asked for, let alone negotiated.

Parenthetically, the Company's lament about the public respondent Secretary being in error when she proceeded to extend to members of the rank-and-file of the bargaining unit the privilege of obtaining half a month's pay/salary by way of a salary loan for the employee's benefit or that of the immediate members of his family every start of the semestral school year is unacceptable. According to the Company, such arrangement, as opposed to the present practice wherein the Company accords a P5,000.00 educational loan semestrally for its employees or that of the immediate members of the employee's family, while seemingly innocuous, would in reality weigh heavily on its finances. Far from being burdensome and confiscatory, as argued by the Company, this particular award appears to the Court, as it did to the CA and the DOLE, to be reasonable and modest increase in benefits, being in the form of a loan. A loan suggests repayment. At the end of the day, therefore, the Company will get its money back and will be doing its share to promote industrial peace.

WHEREFORE, the assailed Decision and Resolution of the Court of Appeals dated February 7, 2003 and May 15, 2003, respectively, in CA-G.R. SP 69107 and CA G.R. SP No. 69799 are hereby AFFIRMED, with the following modifications:

1. The award of annual salary increases shall be at P900.00 effective during the initial three-year term of the CBA; andcralawlibrary

2. The award of gratuity bonus of P3,000.00 per covered employee is deleted.

ACCORDINGLY, except insofar as they delved on the awards immediately referred to above, the petition of Nissan Motor Philippines, Inc. in G.R. NOS. 158190-91, and the petition of Bagong Nagkakaisang Lakas Sa Nissan Motor Philippines, Inc. in G.R. NOS. 158276 and 158283 are both DENIED.

No Costs.



1 Penned by Associate Justice Rebecca De-Guia-Salvador, concurred in by Associate Justice Remedios Salazar-Fernando and Associate Justice Edgardo F. Sundiam, with Associate Justice Eloy R. Bello, Jr. (ret.) and Associate Justice Danilo B Pine (ret.) dissenting; Rollo (G.R. NOS. 158276 & 158283), pp. 53 et seq.

2 Id. at 66 et seq.

3 Rollo (G.R. NOS. 158190-91), pp. 122-125.

4 Rollo (G.R. NOS. 158276 & 158283), pp. 199-232.

5 Id. at 44 et seq.

6 See Note #1, supra.

7 Penned by Associate Justice Eloy R. Bello (ret.) and concurred in by Associate Justices Godardo A. Jacinto and Rebecca De Guia-Salvador; Rollo (G.R. NOS. 158276 & 158283) pp. 72-73.

8 CA Rollo, p. 1048.

9 Id. at 2 et seq.

10 Id. at 2030 et seq.

11 Id. at 1078 et seq.

12 Id. at 2017 et seq.

13 Rollo (G.R. NOS. 158276 & 158283), p. 706.

14 Id. at 916 et seq.

15 Page 15 of the Secretary of Labor's decision; Id. at 24.

16 See Note #7, supra.

17 Baybay Water District v. COA, G.R. NOS. 147248-49, Jan. 23, 2002, 374 SCRA 482; Brahm Industries, Inc. v. NLRC, G.R. No. 118853, Oct. 16, 1997, 280 SCRA 82 and other cases.

18 San Juan De Dios Educational Foundation Employees Union-Alliance of Filipino Workers v. San Juan De Dios Educational Foundation, Inc., G.R. No. 143341, May 28, 2004, 430 SCRA 193, citing Shoppes Manila v. NLRC, G.R. No. 147125, Jan. 14, 2004, 419 SCRA 354 and other cases.

19 CA Decision, p. 3.

20 At pp. 13-15.

21 Gold City Integrated Port Service, Inc. v. NLRC, G.R. No. 103560, July 6, 1995, 245 SCRA 627.

22 Ibid.

23 PAL v. Brilliantes, G.R. No. 119360, Oct. 10, 1997, 280 SCRA 515.

24 G.R. No. 125548, Sept. 25, 1998, 296 SCRA 432.

25 See Note # 23, supra.

26 G.R. NOS. 88710-12, Dec. 19, 1990, 192 SCRA 396.

27 G.R. No. 100158, June 29, 1992, 210 SCRA 565, 575-576.

28 G.R. NOS. 143013-14, December 18, 2000, 348 SCRA 565.

29 G.R. No. 1120505, March 25, 1999, 305 SCRA 219.

30 See Note # 22, supra.

31 C.A. Azucena, The Labor Code With Comments and Cases, Vol. II, Revised 1999 ed., p. 458, citing NEECO v. Minister of Labor, G.R. No. 61965, 184 SCRA 25.

32 Rollo (G.R. Nos.158190-91), pp. 1538-1622.

33 R. Transport Corporation v. Ejandra, G.R. No. 148508, May 20, 2004, 428 SCRA 725, citing cases.

34 Article 233. Privileged Communications. - Information and statements made at conciliation proceedings shall be treated as privileged communication and shall not be used as evidence in the Commission. xxx. crvll

35 Art. 263. STRIKES, PICKETING, AND LOCKOUTS xxx (c) In cases of bargaining deadlocks, the duly certified or recognized bargaining agent may file a notice of strike or the employers may file a notice of lockout with the Ministry at least 30 days before the intended date thereof. In cases of unfair labor practice, the period of notice shall be 15 days '.


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