USAEU-FFW v. Court Of Appeals
University of San Agustin Employees' Union-FFW (USAEU-FFW) v. Court of Appeals, G.R. No. 169632, March 28, 2006
- Labor Law
- illegal strike
- assumption of jurisdiction order
- no strike no lockout clause
- labor arbitration
- voluntary arbitration
- immediate return to work
- union officers loss of employment status
- NCMB bargaining deadlock
- preventive mediation
- Article 263(g) Labor Code
I. Facts of the Case
The University of San Agustin and the University of San Agustin Employees' Union-FFW (USAEU-FFW) entered into a five-year collective bargaining agreement (CBA) containing a no-strike/no-lockout clause and a grievance machinery culminating in voluntary arbitration. After negotiations stalled on the computation of tuition incremental proceeds (TIP) for SY 2003–2004 and SY 2004–2005, the Union declared a bargaining deadlock and filed a Notice of Strike, but the dispute was assumed by the Secretary of Labor and Employment through an Assumption of Jurisdiction Order (AJO) that enjoined any strike or lockout. Despite the AJO being served (including by posting) and later received, the Union staged a strike on September 19, 2003, prompting the University to seek sanctions and the CA to declare the strike illegal and deem union officers to have lost their employment status. The main dispute on review was whether the CA correctly held the September 19, 2003 strike illegal for knowingly defying the AJO and whether the economic issues should instead be referred to voluntary arbitration under the CBA.
July 27, 2000
The parties entered into a five-year CBA with a no-strike/no-lockout clause and a grievance machinery, including voluntary arbitration if the grievance committee failed to settle disputes.
During negotiations for the remaining economic provisions covering SY 2003–2004 and SY 2004–2005, the parties could not agree on how to compute the seventy percent (70%) of net TIP to be allocated for salary and benefits, leading them to undergo preventive mediation before the NCMB in Iloilo City.
Because the impasse on the TIP computation remained unresolved, the Union declared a bargaining deadlock and filed a Notice of Strike before the NCMB; the University opposed by moving to strike out the notice and to refer the dispute to voluntary arbitration under the CBA.
The NCMB failed to resolve the University’s motion, prompting the parties to jointly request the SOLE to assume jurisdiction over the labor dispute.
September 18, 2003
The SOLE issued an Assumption of Jurisdiction Order (AJO) enjoining any strike or lockout and directing the parties to cease and desist from acts that might exacerbate the situation, and to submit position papers and evidence.
September 19, 2003
Sheriffs attempted to serve the AJO on the Union (including posting copies at the main gate, main entrance of buildings, and the Union’s office after refusal to receive by a Union officer), advised that refusal would not prevent service (service considered upon posting), and also served the AJO on the University at 9:20 a.m.; despite this, the Union proceeded with a strike.
September 24, 2003
The University filed a petition to declare the September 19, 2003 strike illegal and to secure loss of employment status before the NLRC Sub-regional Arbitration Branch No. VI (NLRC SRAB Case No. 06-09-50370-03).
November 7, 2003
The Labor Arbiter granted consolidation with OS-AJ-0032-2003 pending before the SOLE.
April 6, 2004
The SOLE rendered a decision on the economic issues and the legality of the September 19, 2003 strike, dismissing the petition to declare the strike illegal for lack of legal and factual basis and finding no basis to declare loss of employment status.
May 24, 2004
The SOLE denied the University’s motion for reconsideration.
March 4, 2005
The Court of Appeals partially granted the University’s petition: it affirmed the SOLE’s rulings on economic issues but reversed the SOLE regarding the legality of the September 19, 2003 strike, declaring it illegal and deeming the union officers to have lost their employment status.
April 7, 2005
After receipt of the CA decision, the University served notices of termination to the union officers deemed to have lost employment status, and the Union filed a second Notice of Strike with the NCMB on the ground of alleged union busting.
April 25, 2005
The Union went on strike again after failed attempts to negotiate a new CBA starting April 22, 2005, and the University notified it was pulling out of negotiations due to the strike.
August 23, 2005
The CA issued a Partially Amended Decision: it found abuse of discretion in the SOLE’s resolution of economic issues (directing voluntary arbitration) but maintained that the September 19, 2003 strike was illegal and the officers lost employment status.
March 28, 2006
The Supreme Court denied the Union’s petition and affirmed the CA’s Partially Amended Decision, holding the strike illegal and directing compliance with the CBA’s grievance machinery through voluntary arbitration for economic issues.
II. Issues
Whether or not the Court of Appeals gravely erred and committed grave abuse of discretion in declaring illegal the strike of the petitioners on September 19, 2003 and in declaring the union officers as deemed to have lost their employment status for the alleged failure of the petitioners to immediately return to their work when the assumption of jurisdiction order was deemed served upon them as of 8:45 in the morning of that date.
Whether or not the Court of Appeals gravely erred and committed grave abuse of discretion in directing to refer the economic issues of the labor dispute to voluntary arbitration.
III. Ruling
Whether or not the Court of Appeals gravely erred and committed grave abuse of discretion in declaring illegal the strike of the petitioners on September 19, 2003 and in declaring the union officers as deemed to have lost their employment status for the alleged failure of the petitioners to immediately return to their work when the assumption of jurisdiction order was deemed served upon them as of 8:45 in the morning of that date.
The Court held that the September 19, 2003 strike was illegal because the Union officers knowingly defied the SOLE’s Assumption of Jurisdiction Order, and the union officers were therefore deemed to have lost their employment status.
How the Court reasoned
- An AJO under Article 263(g) strictly enjoins any strike or lockout once issued and requires the parties to cease and desist from acts that may exacerbate the dispute.
- The Court found that the Union officers knowingly proceeded with the strike despite the AJO’s service, including service by posting when refusal to receive occurred.
- The sheriffs’ acts showed the AJO was served in a manner consistent with service rules (posting and notice), and the Union later actually received the AJO from the sheriffs at around 5:25 p.m. on September 19, 2003.
- The Court rejected the argument that a fixed 24-hour grace period to return to work always applies, emphasizing that Article 263(g) requires immediate return to work after the issuance/valid service of the AJO.
- Because the strike was carried out in defiance of the AJO, the Court sustained the CA’s finding of illegality and the consequent loss-of-employment status sanction for the union officers who knowingly participated.
“Consequently, the Union officers were deemed to have lost their employment status for having knowingly participated in said illegal act.”
Rule applied
Article 263(g) of the Labor Code, as amended; also applying principles on illegal strikes and immediate return to work under an assumption of jurisdiction order.
Whether or not the Court of Appeals gravely erred and committed grave abuse of discretion in directing to refer the economic issues of the labor dispute to voluntary arbitration.
The Court affirmed the CA’s directive to refer the economic issues to voluntary arbitration pursuant to the CBA’s grievance machinery and the parties’ agreed dispute-resolution framework.
How the Court reasoned
- The dispute over the economic provisions (TIP computation and related salary/benefits matters) fell within the CBA’s grievance mechanism for unresolved grievances arising from the interpretation or implementation of the collective bargaining agreement.
- The CA found logic in directing the parties to proceed with voluntary arbitration as provided in their CBA grievance machinery, instead of leaving the economic issues to be finally resolved outside that agreed process.
- The Court treated the case as an exception to International Pharmaceuticals, Inc. v. Secretary of Labor regarding the breadth of the SOLE’s assumption jurisdiction, because the NCMB did not resolve the motion and the parties were compelled to seek SOLE action.
- Given the CBA’s arbitration clause and the need to settle the economic deadlock through the agreed procedure, voluntary arbitration was the proper forum for the economic issues.
Rule applied
Article 261 of the Labor Code (jurisdiction of voluntary arbitrators over unresolved grievances arising from a CBA); also Article 262 of the Labor Code (voluntary arbitration by agreement over other labor disputes including bargaining deadlocks) and the parties’ CBA grievance machinery.
Doctrines
A strike conducted in knowing defiance of a valid and properly served Assumption of Jurisdiction Order issued under Article 263(g) of the Labor Code is illegal, and participating union officers may be deemed to have lost their employment status.
Economic issues arising from unresolved interpretation or implementation of a CBA, including those stemming from bargaining deadlocks on CBA-related terms, should be referred to voluntary arbitration when the CBA’s grievance machinery provides for it, subject to the Labor Code provisions on the jurisdiction of voluntary arbitrators.
Where the NCMB fails to act and leaves the parties without effective resolution, the case may be treated as an exception to International Pharmaceuticals, Inc. v. Secretary of Labor on the practical handling of SOLE assumption jurisdiction, without preventing the parties from proceeding to the CBA’s agreed grievance/arbitration process for economic issues.
Final Disposition
WHEREFORE, the petition is DENIED. The Partially Amended Decision dated August 23, 2005 of the Court of Appeals in CA-G.R. SP No. 85317 is AFFIRMED. SO ORDERED.
Notes
Key procedural timeline: NCMB did not resolve the University’s motion; the SOLE issued an AJO under Article 263(g); despite service (including posting after refusal), the Union staged a strike on September 19, 2003; the CA affirmed illegality and loss of employment status, while directing voluntary arbitration for the economic issues.