Philippines Inter-Fashion, Inc. v. National Labor Relations Commission
REITERATIONFacts
1. The Antecedents: The underlying dispute arose from a labor conflict between petitioner Philippines Inter-Fashion, Inc. and its employees, who organized a union affiliated with the National Federation of Labor Unions (NAFLU). The conflict escalated when the company planned to retrench approximately 40 employees, offering them voluntary resignation with benefits. When these employees refused, the company issued termination letters. Subsequently, a significant number of employees engaged in a walkout, which the company characterized as an illegal strike, leading to applications for clearance to terminate these workers. The company also hired additional workers to maintain its production schedule. 2. Procedural History: Following the employees' walkout and the company's subsequent application for termination clearances, a dispute ensued before the National Labor Relations Commission (NLRC). The NLRC, through its commissioner, found that both the company engaged in an illegal lockout and the employees participated in an illegal strike. While 150 striking employees were later reinstated after withdrawing their complaints, 114 employees remained subject to the company's termination clearance application. The NLRC ultimately ordered the reinstatement of these 114 employees with three months' backwages, a decision that was subsequently reconsidered and denied by the commission. 3. The Petition: Petitioner Philippines Inter-Fashion, Inc. seeks to set aside the resolutions of the National Labor Relations Commission ordering the reinstatement of 114 striking employees with three months' backwages. The petitioner argues that the unconditional offer of 150 striking employees to return to work and withdraw their complaints constituted condonation of the illegal lockout, which should also apply to the remaining 114 strikers. The petitioner also contends that the 114 employees, having participated in an illegal strike, are not entitled to backwages. The case is brought before the Supreme Court to review these NLRC decisions.
Issue(s)
Whether the petitioner employer waived its right to pursue the case of illegal strike against the 114 employees who were not reinstated and who pursued their illegal lockout claim, and whether the 114 employees are entitled to reinstatement. Whether the 114 employees are entitled to three months' backwages.
Ruling
The Court affirmed the NLRC's Resolution ordering the reinstatement of the 114 employees but set aside the award of three months' backwages.
Ratio Decidendi
On the issue of waiver and entitlement to reinstatement: The Court held that the petitioner employer did not clearly and unequivocally waive its right to pursue the case against the 114 employees. The record showed that the employer tenaciously pursued its application for their dismissal. However, in view of the undisputed findings of an illegal strike on the part of the 114 employees and an illegal lockout on the petitioner's part, both parties were found to be in pari delicto. This situation warrants the restoration of the status quo ante, meaning the parties should be brought back to their respective positions before the illegal strike and illegal lockout. Therefore, the order reinstating the 114 employees was deemed proper. The Court distinguished this case from The Bisaya Land Transportation Co., Inc. v. The Court of Industrial Relations, noting that in the latter, only two strikers were involved and both were reinstated, leading to a waiver of the employer's defense of illegality. In the present case, the 150 reinstated employees acted for themselves and their actions could not be deemed to have condoned the employer's lockout on behalf of the remaining 114 strikers. The 114 strikers, by pursuing their illegal lockout claim, did not signify any intention to normalize relations with the employer, thus the employer could not be deemed to have condoned their strike. On the issue of backwages: The Court set aside the award of three months' backwages. The general rule is that strikers are not entitled to backwages, with exceptions not applicable here, such as when the employer is guilty of oppression or union-busting. The principle of "no work, no pay" was deemed applicable in view of the undisputed finding of the illegality of the strike. Therefore, while reinstatement was ordered to restore the status quo ante, the employees were not entitled to compensation for the period they were on strike.
Main Doctrine
Where both the employer and employees are found to be in pari delicto due to an illegal lockout and an illegal strike, respectively, the status quo ante shall be restored by reinstating the employees, but backwages shall not be awarded due to the illegality of the strike.