G.R. No.

103560 July 6, 1995 clarity, INPORT shall be denominated in the case at bench
as the petitioner and the employees as private
GOLD CITY INTEGRATED PORT SERVICE, INC. respondents.
(INPORT), petitioner,
vs. Instant case arose from the following facts:
NATIONAL LABOR RELATIONS COMMISSION (Fifth
Division) ADELO EBUNA, EMMANUEL VALMORIDA, Early in the morning of April 30, 1985, petitioner's
RODOLFO PEREZ, ROGER ZAGADO, MARCOS GANZAN, employees stopped working and gathered in a mass
AND REY VALLE, (WILFREDO DAHAN, ROGELIO action to express their grievances regarding wages,
VILLAFUERTE, WILFREDO AMPER, RICARDO ABA, YOLITO thirteenth month pay and hazard pay. Said employees
AMBUS, FIDEL CALIO, VICENTE CAHATOL, SOTECO were all members of the Macajalar Labor Union —
CUENCA, NICOLAS DALAGUAN, BALBINO FAJARDO, Federation of Free Workers (MLU-FFW) with whom
ROLANDO JAMILA, RICARDO LAURETO, RUDY LAURETO, petitioner had an existing collective bargaining
QUIRICO LEJANIO, OSCAR LAPINIG, FELIPE LAURETE, agreement.
JESUSTUDY OMISOL, ZOSIMO OMISOL, PEDRO SUAREZ,
SATURNINO SISIBAN and MANUEL YANEZ), respondents. Petitioner was engaged in stevedoring and arrastre
services at the port of Cagayan de Oro. The strike
G.R. No. 103599 July 6, 1995 paralyzed operations at said port.

ADELO EBUNA, WILFREDO DAHAN, RICARDO LAURETO, On the same morning, the strikers filed individual notices
REY VALLE, VICENTE CAHATOL, MARCOS GANZAN, of strike ("Kaugalingon nga Declarasyon sa Pag-Welga")
RODOLFO PEREZ, ROEL SAA, ROGELIO VILLAFUERTE, with the then Ministry of Labor and Employment.
MANUEL YANEZ, WILFREDO AMPER, QUIRECO LEJANO,
EMMANUEL VALMORIA, ROLANDO JAMILLA, NICOLAS With the failure of conciliation conferences between
DALAGUAN, BALBINO FAJARDO, PEDRO SUAREZ, petitioner and the strikers, INPORT filed a complaint
ELPIDIO ESTROGA, RUBEN PAJO, JESUSTODY OMISOL, before the Labor Arbiter for Illegal Strike with prayer for a
RICARDO ABA, FIDEL CALIO, SATURNINO SESYBAN, RUDY restraining order/preliminary injunction.
LAURETO, OSCAR LAPINIG, FELIPE LAURENTE, ROGER
ZAGADO, SOTECO CUENCA, FIDEL ESLIT, ZOSIMO On May 7, 1985, the National Labor Relations Commission
OMISOL, ANGEL BERNIDO, and MICHAEL issued a temporary restraining order. Thereafter, majority
YAGOTYOT, petitioners, of the strikers returned to work, leaving herein private
vs. respondents who continued their protest. 2
NATIONAL LABOR RELATIONS COMMISSION, FIFTH
DIVISION, and GOLD CITY INTEGRATED PORT SERVICES, Counsel for private respondents filed a manifestation that
INC. (INPORT), respondents. petitioner required prior screening conducted by the
MLU-FFW before the remaining strikers could be
accepted back to work.

ROMERO, J.: Meanwhile, counsel for the Macajalar Labor Union (MLU-

FFW) filed a "Motion to Drop Most of the Party
Should separation pay and backwages be awarded by Respondents From the Above Entitled Case." The 278
public respondent NLRC to participants of an illegal strike? employees on whose behalf the motion was filed, claimed
This is the core issue to be decided in these two petitions. that they were duped or tricked into signing the individual
notices of strike. After discovering this deception and
Gold City Integrated Port Service, Inc. (INPORT) filed a verifying that the strike was staged by a minority of the
petition for certiorari against the National Labor Relations union officers and members and without the approval of,
Commission (NLRC) assailing the latter's decision in "Gold or consultation with, majority of the union members, they
City Integrated Port Services, Inc. v. Adelo Ebuna, et al." immediately withdrew their notice of strike and returned
(NLRC RAB X Case No. 5-0405-85) with twenty-seven to work.
private respondents (G.R. No. 103599). 1 This petition has
been consolidated with G.R. No. 103599 where the The petitioner INPORT, not having interposed any
petitioners are the private respondents in instant case objection, the Labor Arbiter, in his decision dated July 23,
and the private respondent is INPORT. For the sake of 1985, granted their prayer to be excluded as respondents
in the complaint for illegal strike. Moreover, petitioner's hereby ordered, in lieu of reinstatement, to pay
complaint was directed against the 31 respondents who respondents the equivalent of twelve (12) months
did not return to work and continued with the strike. salaries each as separation pay. Complainant is
further ordered to pay respondents two (2) years
For not having complied with the formal requirements in backwages based on their last salaries, without
Article 264 of the Labor Code,3 the strike staged by qualification or deduction. The appeal of
petitioner's workers on April 30, 1985 was found by the complainant INPORT is Dismissed for lack of
Labor Arbiter to be illegal.4 The workers who participated merit.9
in the illegal strike did not, however, lose their
employment, since there was no evidence that they Upon petitioner's motion for reconsideration, public
participated in illegal acts. After noting that petitioner respondent modified the above resolution on December
accepted the other striking employees back to work, the 12, 1991. 10
Labor Arbiter held that the private respondents should
similarly be allowed to return to work without having to The Commission ruled that since private respondents
undergo the required screening to be undertaken by their were not actually terminated from service, there was no
union (MLU-FFW). basis for reinstatement. However, it awarded six months'
salary as separation pay or financial assistance in the
As regards the six private respondents who were union nature of "equitable relief." The award for backwages was
officers, the Labor Arbiter ruled that they could not have also deleted for lack of factual and legal basis. In lieu of
possibly been "duped or tricked" into signing the strike backwages, compensation equivalent to P1,000.00 was
notice for they were active participants in the conciliation given.
meetings and were thus fully aware of what was going on.
Hence, said union officers should be accepted back to The dispositive portion of the assailed Resolution reads:
work after seeking reconsideration from herein
petitioner.5 WHEREFORE, the resolution of January 14, 1991
is Modified reducing the award for separation pay
The dispositive portion of the decision reads: to six (6) months each in favor of respondents,
inclusive of lawful benefits as well as those
IN VIEW OF THE FOREGOING, it is hereby ordered granted under the CBA, if any, based on the latest
that the strike undertaken by the officers and salary of respondents, as and by way of financial
majority union members of Macajalar Labor assistance while the award for backwages
Union-FFW is ILLEGAL contrary to Article 264 of is Deleted and Set Aside. In lieu thereof,
the Labor Code, as amended. Our conclusion on respondents are granted compensation for their
the employment status of the illegal strikers is sudden loss of employment in the sum of
subject to our discussion above.6 P1,000.00 each. The motion of respondents to
implead PPA as third-party respondent is Noted.
Both petitioner and private respondents filed motions for Except for this modification the rest of the
reconsideration, which public respondent NLRC treated as decision sought to be reconsidered shall stand. 11
appeals.7
In the instant petitions for certiorari, petitioner alleges
On January 14, 1991, the NLRC affirmed with that public respondent Commission committed grave
modification8 the Arbiter's decision. It held that the abuse of discretion in awarding private respondents
concerted action by the workers was more of a "protest separation pay and backwages despite the declaration
action" than a strike. Private respondents, including the that the strike was illegal.
six union officers, should also be allowed to work
unconditionally to avoid discrimination. However, in view On the other hand, private respondents, in their petition,
of the strained relations between the parties, separation assail the reduction of separation pay and deletion of
pay was awarded in lieu of reinstatement. The decretal backwages by the NLRC as constituting grave abuse of
portion of the Resolution reads: discretion.

WHEREFORE, the decision appealed from They also allege that the Resolution of January 14, 1991
is Affirmed with modification in accordance with could not be reconsidered after the unreasonable length
the foregoing resolution. Complainant INPORT is of time of eleven months.
Before proceeding with the principal issues raised by the Article 265 of the Labor Code reads, inter alia:
parties, it is necessary to clarify public respondent's
statements concerning the strike staged by INPORT's (i)t SHALL be unlawful for any labor
employees. organization . . . to declare a strike . . . without
first having filed the notice required in the
In its resolution dated January 14, 1991, the NLRC held preceding Article or without the necessary strike
that the facts prevailing in the case at bench require a vote first having been obtained and reported to
relaxation of the rule that the formal requisites for a the Ministry. (Emphasis ours)
declaration of a strike are mandatory. Furthermore, what
the employees engaged in was more of a spontaneous In explaining the above provision, we said:
protest action than a strike. 12
In requiring a strike notice and a cooling-
Nevertheless, the Commission affirmed the Labor off period, the avowed intent of the law is
Arbiter's decision which declared the strike illegal. to provide an opportunity for mediation
and conciliation. It thus directs the MOLE
A strike, considered as the most effective weapon of to exert all efforts at mediation and
labor, 13 is defined as any temporary stoppage of work by conciliation to effect a voluntary
the concerted action of employees as a result of an settlement' during the cooling-off
industrial or labor dispute. 14 A labor dispute includes any period. . . .
controversy or matter concerning terms or conditions of
employment or the association or representation of xxx xxx xxx
persons in negotiating, fixing, maintaining, changing or
arranging the terms and conditions of employment, The cooling-off period and the 7-day
regardless of whether or not the disputants stand in the strike ban after the filing of a strike-vote
proximate relation of employers and employees. 15 report, as prescribed in Art. 264 of the
Labor Code, are reasonable restrictions
Private respondents and their co-workers stopped and their imposition is essential to attain
working and held the mass action on April 30, 1985 to the legitimate policy objectives embodied
press for their wages and other benefits. What transpired in the law. We hold that they constitute a
then was clearly a strike, for the cessation of work by valid exercise of the police power of the
concerted action resulted from a labor dispute. state. 19

The complaint before the Labor Arbiter involved the From the foregoing, it is patent that the strike on
legality of said strike. The Arbiter correctly ruled that the April 30, 1985 was illegal for failure to comply
strike was illegal for failure to comply with the with the requirements of the law.
requirements of Article 264 (now Article 263) paragraphs
(c) and (f) of the Labor Code. 16 The effects of such illegal strikes, outlined in
Article 265 (now Article 264) of the Labor Code,
The individual notices of strike filed by the workers did make a distinction between workers and union
not conform to the notice required by the law to be filed officers who participate therein.
since they were represented by a union (MLU-FFW) which
even had an existing collective bargaining agreement with A union officer who knowingly participates in an
INPORT. illegal strike and any worker or union officer who
knowingly participates in the commission of illegal
Neither did the striking workers observe the strike vote by acts during a strike may be declared to have lost
secret ballot, cooling-off period and reporting their employment status. 20 An ordinary striking
requirements. worker cannot be terminated for mere
participation in an illegal strike. There must be
As we stated in the case of National Federation of Sugar proof that he committed illegal acts during a
Workers v. Ovejera, 17 the language of the law leaves no strike. A union officer, on the other hand, may be
room for doubt that the cooling-off period and the seven- terminated from work when he knowingly
day strike ban after the strike-vote report were intended participates in an illegal strike, and like other
to be mandatory. 18
workers, when he commits an illegal act during a cessation of operation of the establishment, or in
strike. case the employee was found to have been
suffering from a disease such that his continued
In the case at bench, INPORT accepted the employment is prohibited by law. 27
majority of the striking workers, including union
officers, back to work. Private respondents were Separation pay is a statutory right defined as the
left to continue with the strike after they refused amount that an employee receives at the time of
to submit to the "screening" required by the his severance from the service and is designed to
company. 21 provide the employee with the wherewithal
during the period that he is looking for another
The question to be resolved now is what these employment. 28 It is oriented towards the
remaining strikers, considering the circumstances immediate future, the transitional period the
of the case, are entitled to receive under the law, dismissed employee must undergo before
if any. locating a replacement job. 29

Are they entitled, as they claim, to reinstatement Hence, an employee dismissed for causes other
or separation pay and backwages? than those cited above is not entitled to
separation pay. 30 Well-settled is it that separation
In his decision, the Labor Arbiter ordered INPORT pay shall be allowed only in those instances
to reinstate/accept the remaining workers as well where the employee is validly dismissed
as to accept the remaining union officers after the for causes other than serious misconduct or those
latter sought reconsideration from INPORT. 22 reflecting on his moral character. 31

The NLRC on January 14, 1991, modified the Backwages, on the other hand, is a form of relief
above decision by ordering INPORT to pay private that restores the income that was lost by reason
respondents the equivalent of twelve months in of unlawful dismissal. 32
salary as separation pay in lieu of reinstatement
and two years' backwages. 23 It is clear from the foregoing summary of legal
provisions and jurisprudence that there must
On reconsideration, public respondent modified generally be unjust or illegal dismissal from work,
its original award and reduced the separation pay before reinstatement and backwages may be
to six months, deleted the award for backwages granted. And in cases where reinstatement is not
and instead awarded P1,000.00 as compensation possible or when dismissal is due to valid causes,
for their sudden loss of employment. 24 separation pay may be granted.

Under the law, an employee is entitled to Private respondents contend that they were
reinstatement and to his full backwages when he terminated for failure to submit to the
is unjustly dismissed. 25 controversial "screening" requirement.

Reinstatement means restoration to a state or Public respondent Commission took the opposite
condition from which one had been removed or view and held:
separated. Reinstatement and backwages are
separate and distinct reliefs given to an illegally As the evidence on record will show,
dismissed employee. 26 respondents were not actually terminated
from the service. They were merely made
Separation pay is awarded when reinstatement is to submit to a screening committee as a
not possible, due, for instance, to strained prerequisite for readmission to work.
relations between employer and employee. While this condition was found not wholly
justified, the fact remains that
It is also given as a form of financial assistance respondents who are resistant to such
when a worker is dismissed in cases such as the procedure are partly responsible for the
installation of labor saving devices, redundancy, delay in their readmission back to work.
retrenchment to prevent losses, closing or Thus, We find justifiable basis in further
 modifying our resolution of January 14, The fate of private respondent-union officers is
1991 in accordance with the equities of different. Their insistence on unconditional
the case. reinstatement or separation pay and backwages is
unwarranted and unjustified. For knowingly
We shall therefore recall the award for participating in an illegal strike, the law mandates
backwages for lack of factual and legal that a union officer may be terminated from
basis. The award for separation pay shall employment. 34
likewise (be) reasonably reduced.
Normally, severance benefit is granted as Notwithstanding the fact that INPORT previously
an alternative remedy to reinstatement. accepted other union officers and that the
And since there is no dismissal to speak screening required by it was uncalled for, still it
of, there is no basis for awarding cannot be gainsaid that it possessed the right and
reinstatement as a legal remedy. In lieu prerogative to terminate the union officers from
thereof, We shall grant herein service. The law, in using the word may, grants
respondents separation pay as and by the employer the option of declaring a union
way of financial assistance in the nature officer who participated in an illegal strike as
of an "equitable relief". 33 having lost his employment. 35

We find that private respondents were indeed Moreover, an illegal strike which, more often than
dismissed when INPORT refused to accept them not, brings about unnecessary economic
back to work after the former refused to submit disruption and chaos in the workplace should not
to the "screening" process. be countenanced by a relaxation of the sanctions
prescribed by law.
Applying the law (Article 264 of the Labor Code)
which makes a distinction, we differentiate The union officers are, therefore, not entitled to
between the union members and the union any relief.
officers among private respondents in granting
the reliefs prayed for. However, the above disquisition is now
considered moot and academic and cannot be
Under Article 264 of the Labor Code, a worker effected in view of a manifestation filed by
merely participating in an illegal strike may not be INPORT dated May 15, 1987. 36 In said
terminated from his employment. It is only when Manifestation, it attached a Certification by the
he commits illegal acts during a strike that he may President of the Macajalar Labor Union (MLU-
be declared to have lost his employment status. FFW) to the effect that the private
Since there appears no proof that these union respondents/remaining strikers have ceased to be
members committed illegal acts during the strike, members of said union. The MLU-FFW had an
they cannot be dismissed. The striking union existing collective bargaining agreement with
members among private respondents are thus INPORT containing a union security clause. Article
entitled to reinstatement, there being no just 1, Section 2(b) of the CBA provides:
cause for their dismissal.
The corporation shall discharge, dismiss
However, considering that a decade has already or terminate any employee who may be a
lapsed from the time the disputed strike member of the Union but loses his good
occurred, we find that to award separation pay in standing with the Union and or
lieu of reinstatement would be more practical and corporation, upon proper notice of such
appropriate. fact made by the latter; provided,
however, . . . after they shall have
No backwages will be awarded to private received the regular appointment as a
respondent-union members as a penalty for their condition for his continued employment
participation in the illegal strike. Their continued with the corporation. . . . 37
participation in said strike, even after most of
their co-workers had returned to work, can hardly Since private respondents (union members) are
be rewarded by such an award. no longer members of the MLU, they cannot be
reinstated. In lieu of reinstatement, which was a
proper remedy before May 1987 when they were
dismissed from the union, we award them
separation pay. We find that to award one month
salary for every year of service until 1985, after
April of which year they no longer formed part of
INPORT's productive work force partly through
their own fault, is a fair settlement.

Finally, there is no merit in INPORT's statement

that a Resolution of the NLRC cannot be modified
upon reconsideration after the lapse of an
unreasonable period of time. Under the present
circumstances, a period of eleven months is not
an unreasonable length of time. The Resolution of
the public respondent dated January 14, 1991 did
not acquire finality in view of the timely filing of a
motion for reconsideration. Hence, the
Commission's modified Resolution issued on
December 12, 1991 is valid and in accordance
with law.

In sum, reinstatement and backwages or, if no

longer feasible, separation pay, can only be
granted if sufficient bases exist under the law,
particularly after a showing of illegal dismissal.
However, while the union members may thus be
entitled under the law to be reinstated or to
receive separation pay, their expulsion from the
union in accordance with the collective bargaining
agreement renders the same impossible.

The NLRC's award of separation pay as "equitable

relief" and P1,000.00 as compensation should be
deleted, these being incompatible with our
findings detailed above.

WHEREFORE, from the foregoing premises, the

petition in G.R. No. 103560 ("Gold City Integrated
Port Service Inc. v. National Labor Relations
Commission, et al.") is GRANTED. One month
salary for each year of service until 1985 is
awarded to private respondents who were not
union officers as separation pay. The petition in
G.R. No. 103599 ("Adelo Ebuna, et al. v. National
Labor Relations Commission, et al.") is DISMISSED
for lack of merit. No costs.

SO ORDERED.

Feliciano, Melo, Vitug and Francisco, JJ., concur.

GOLD CITY INTEGRATED PORT SERVICE, INC v. NLRC meetings and were thus fully aware of what was
 The employees of Gold City Integrated Port Service, going on.
Inc. (INPORT) stopped working and gathered in a mass  NLRC affirmed with modification.
action to express their grievances regarding wages, o The concerted activity was more of a protest
13th month pay and hazard pay. action than a strike.
o The employees were members of the Macajalar o Respondents, including the 6 union officers,
Labor Union-Federation of Free Workers (MLU- should also be allowed to work unconditionally to
FFW) with whom INPORT had an existing CBA. avoid discrimination.
 On that same morning, the strikers filed individual o In view of the strained relations between the
notices of strike with the then Ministry of Labor and parties, separation pay was awarded in lieu of
Employment. reinstatement.
 With the failure of conciliation conference, INPORT  Upon INPORT’s MR, NLRC modified:
filed a complaint before the LA for Illegal Strike with o Since respondents were not actually terminated
prayer for a restraining order/preliminary injunction. from service, there was no basis for
 NLRC issued a TRO. reinstatement.
 Majority of the strikers returned to work leaving o It awarded 6 months’ salary as separation pay or
respondents, who continued their protest. Counsel financial assistance in the nature of equitable
for respondents filed a manifestation that INPORT relief.
required prior screening conducted by the MLU-FFW o The award for backwages was deleted. In lieu of
before the remaining strikers could be accepted back backwages, compensation equivalent to P1,000
to work. was given.
 Counsel for MLU-FFW filed a Motion to Drop Most of  INPORT filed a petition for certiorari alleging that
the Party Respondents From the Case. NLRC committed grave abuse of discretion in
o The 278 employees on whose behalf the motion awarding respondents separation pay and backwages
was field, claimed that they were duped or tricked despite the declaration that the strike was illegal.
into signing the individual notices of strike.
o After discovering this deception and verifying that ISSUE: Whether the strike was illegal. – YES.
the strike was staged by a minority of the union
officers and members and without the approval RULING:
of, or consultation with, majority of the union
members, they immediately withdrew their Respondents and their co-workers stopped working and
notice of strike and returned to work. held the mass action to press for their wages and other
 LA granted their prayer to be excluded as benefits. What transpired then was clearly a strike, for the
respondents. cessation of work by concerted action resulted from a
 INPORT’s complaint was directed against the 31 labor dispute.
respondents who did not return to work and
continued with the strike. The Arbiter correctly ruled that the strike was illegal for
 LA found the strike illegal for not having complied failure to comply with the requirements of Art. 264 (now
with the formal requirements in Art. 264 of the Labor Art. 263) pars. (c) and (f) of the Labor Code.
Code.
o The workers who participated in the illegal strike The individual notices of strike filed by the workers did
did not, however, lose their employment, since not conform to the notice required by the law to be filed
there was no evidence that they participated in since they were represented by a union which even had
illegal acts. an existing CBA with INPORT. Neither did the striking
o After noting that INPORT accepted the other workers observe the strike vote by secret ballot, cooling-
striking employees back to work, LA held that the off period and reporting requirements. The cooling-off
respondents should similarly be allowed to return period and the 7-day strike ban after the strike-vote
to work without having to undergo the required report were intended to be mandatory.
screening.
o As regards the respondents who were union
officers, they could not have possibly been duped Issue: Whether separation pay and backwages be
or tricked into signing the strike notice for they awarded by public respondent NLRC to participants of an
were active participants in the conciliation illegal strike?
Held:  Reinstatement and backwages or, if no longer G.R. No. 103599 (“Adelo Ebuna, et al. v. National Labor
feasible, separation pay, can only be granted if sufficient Relations Commission, et al.”) is DISMISSED for lack of
bases exist under the law, particularly after a showing of merit. No costs.
illegal dismissal. However, while the union members may
thus be entitled under the law to be reinstated or to
receive separation pay, their expulsion from the union in
accordance with the collective bargaining agreement
renders the same impossible.

However, considering that a decade has already lapsed

from the time the disputed strike occurred, we find that
to award separation pay in lieu of reinstatement would be
more practical and appropriate.

No backwages will be awarded to private respondent-

union members as a penalty for their participation in the
illegal strike. Their continued participation in said strike,
even after most of their co-workers had returned to work,
can hardly be rewarded by such an award.

The fate of private respondent-union officers is different.

Their insistence on unconditional reinstatement or
separation pay and backwages is unwarranted and
unjustified. For knowingly participating in an illegal strike,
the law mandates that a union officer may be terminated
from employment. 34

Notwithstanding the fact that INPORT previously accepted

other union officers and that the screening required by it
was uncalled for, still it cannot be gainsaid that it
possessed the right and prerogative to terminate the
union officers from service. The law, in using the
word may, grants the employer the option of declaring a
union officer who participated in an illegal strike as having
lost his employment. 35
Moreover, an illegal strike which, more often than not,
brings about unnecessary economic disruption and chaos
in the workplace should not be countenanced by a
relaxation of the sanctions prescribed by law.

The union officers are, therefore, not entitled to any

relief.

Dispositive: WHEREFORE, from the foregoing premises,

the petition in G.R. No. 103560 (“Gold City Integrated Port
Service Inc. v. National Labor Relations Commission, et
al.”) is GRANTED. One month salary for each year of
service until 1985 is awarded to private respondents who
were not union officers as separation pay. The petition in