Philtread Tire and Rubber Corporation v. National Labor Relations Commission
REITERATIONFacts
The Antecedents: Private respondent Alliance of Democratic Free Labor Organizations (ADFLO) — Philtread Chapter filed a Notice of Strike against petitioner Philtread Tire & Rubber Corporation (Philtread) for alleged discrimination, union busting, and non-granting of merit increases. Philtread, in response, filed a Notice of Lockout, charging the union with unfair labor practices and CBA violations, and sought clearance to terminate union officials. Philtread announced a lockout of salaried and supervising union employees and published job vacancies for their positions. The union picketed the company, and a complaint for illegal dismissal of union officers was filed. Philtread also filed criminal charges for libel against 36 union officers and members. Procedural History: The union petitioned the Secretary of Labor and Employment to assume jurisdiction. On April 30, 1990, the Secretary certified the dispute to the National Labor Relations Commission (NLRC) for compulsory arbitration, ordered the consolidation of the illegal dismissal case, suspended the effects of termination of all affected employees, and directed management to accept them back under prevailing terms and conditions, enjoining parties from exacerbating the situation. Philtread's motion for reconsideration was denied. Philtread partially complied by offering reinstatement to all members except the 36 union officers facing libel charges, for whom it filed a manifestation not to reinstate pending resolution. The union filed a motion for execution of the return-to-work order. On August 20, 1990, the NLRC reiterated the Secretary's order, directing Philtread to accept back the 36 officers within three days, and stated no motion for reconsideration would be entertained. Philtread refused reinstatement and filed a petition for certiorari and prohibition (G.R. No. 94695). Conciliation meetings were held, during which the idea of deferring execution of the return-to-work order in exchange for financial concessions was allegedly proposed. On October 9, 1990, the union refiled its motion for execution. On February 14, 1991, the NLRC resolved the dispute by awarding backwages to the unreinstated supervisors from May 7, 1990, to September 19, 1990, and separation pay computed at 60 days for every year of service, dismissing other claims. This Court declared G.R. No. 94695 closed and terminated. Philtread filed a motion for partial reconsideration, arguing the separation pay was excessive and backwages had no legal basis. The union also filed a motion for reconsideration, alleging the decision was premature and the award of backwages without reinstatement lacked basis. On September 24, 1991, the NLRC denied both motions. The Petition: Philtread filed a petition for certiorari and prohibition, contending that the award of 60 days' separation pay rewarded disloyalty and labor unrest, and the award of backwages was unjustified. The Solicitor General asked for time to file a comment, and the NLRC defended its resolutions.
Issue(s)
Whether the NLRC gravely abused its discretion in awarding sixty (60) days separation pay for every year of service to the thirty-six (36) unreinstated supervisors. Whether the NLRC gravely abused its discretion in awarding backwages to the thirty-six (36) unreinstated supervisors.
Ruling
The petition for certiorari and prohibition is partially granted. The NLRC resolution of February 14, 1991, is affirmed, except for the award of two months' separation pay for every year of service, which is reduced to one month's separation pay for every year of service. In all other respects, the decision/resolution order reviewed is affirmed.
Ratio Decidendi
On the award of separation pay: The Court found the NLRC's award of two months' separation pay for every year of service to be unprecedented and unwarranted by law, jurisprudence, and the existing collective bargaining agreement (CBA). Article XVIII of the CBA stipulated one and one-half months' pay for employees laid off for lack of work, reduction in force, or retrenchment, and one month's pay for other cases of separation, excluding termination for just cause and valid causes. The Court agreed with Philtread that awarding 60 days' separation pay would signal that disloyalty, destabilization, and labor unrest are rewarded, which is unfair and demoralizing to compliant workers. The Court held that paying a higher price to remove troublemakers would not foster industrial peace. Therefore, the award was reduced to one month's pay for every year of service, consistent with previous decisions of the Court and the CBA provisions for other cases of separation. On the award of backwages: The Court affirmed the NLRC's award of backwages to the 36 supervisors from May 7, 1990, up to September 19, 1990. This period was justified because Philtread had recalled all other striking members of the union on May 7, 1990, and the 36 supervisors chose to defer the execution of the Secretary's return-to-work order during conciliation conferences held on September 19 and 20, 1990. The Court noted that the NLRC's finding that the company complied with the procedural requirements of a valid lockout was not disputed by the union. The award of backwages from May 7, 1990, rather than from the commencement of the lockout on April 16, 1990, conformed with the NLRC's finding that the lockout was lawful. The Court also emphasized that return-to-work orders are executory and must be strictly complied with, even pending resolution of a petition questioning their validity, to maintain the status quo and avoid jeopardizing national interests.
Main Doctrine
The NLRC's award of two months' separation pay for every year of service to supervisors facing libel charges, who were not reinstated pursuant to a return-to-work order, was reduced to one month's pay per year of service, as the higher award was deemed excessive and unwarranted by law, jurisprudence, and the existing collective bargaining agreement. The Court affirmed the award of backwages from the date the company recalled other striking members until the date the supervisors opted to defer reinstatement.