G.R. No. 100167. March 2, 1995.
ISALAMA MACHINE WORKS CORPORATION, petitioner, vs. HON. LABOR RELATIONS COMMISSION, FIFTH DIVISION and ISALAMA MACHINE WORKS CORPORATION LABOR UNION-WORKERS ALLIANCE TRADE UNION, ET AL., respondents.

FACTS

Petitioner Isalama Machine Works Corporation and respondent Union entered into a Collective Bargaining Agreement (CBA) effective November 1, 1986. A dispute arose when the Union demanded full payment of the 13th-month pay based on a full month’s basic salary, while the Corporation insisted its pro-rated computation complied with the CBA and Presidential Decree No. 851. The Union filed a notice of strike for unfair labor practice and CBA violation. After conciliation failed to resolve the 13th-month pay issue, the Union went on strike on February 15, 1988. The Corporation subsequently filed a petition charging the Union with conducting an illegal strike.
The Executive Labor Arbiter declared the strike illegal, resulting in the loss of employment status for Union President Henry Baygan and participating members. On appeal, the National Labor Relations Commission (NLRC) modified the decision. It upheld the illegality of the strike and Baygan’s dismissal but ordered the reinstatement, without back wages, of the other sixteen participating union members. The NLRC later clarified that if reinstatement was not effected, back wages should be paid from July 25, 1989, without qualification.

ISSUE

Whether the NLRC committed grave abuse of discretion in ordering the reinstatement of the union members who participated in the illegal strike, and in awarding back wages.

RULING

The Supreme Court affirmed the NLRC decision with modification. The legal logic is grounded on the distinction between union officers and mere members in an illegal strike. Under Article 264(a) of the Labor Code, a union officer who knowingly participates in an illegal strike may be declared to have lost employment status. For mere union members, however, participation in an illegal strike does not automatically constitute a valid ground for dismissal. The loss of employment status is not a mandatory consequence for rank-and-file members; it is a penalty that may be imposed depending on the circumstances, such as the commission of illegal acts during the strike.
The NLRC did not gravely abuse its discretion in ordering the reinstatement of the sixteen members. Their participation alone, absent a finding that they committed illegal acts or violence during the strike, did not justify termination. The dismissal of Baygan, the union president, was correctly sustained. However, the award of back wages was modified. Since the case arose prior to the effectivity of Republic Act No. 6715, the rule in Maranaw Hotels and Resorts Corporation vs. Court of Appeals applies, limiting the payment of back salaries to three years without deduction or qualification. The Court remanded ancillary factual issues regarding the corporation’s alleged closure and change of identity to the NLRC for resolution in the pending motion for execution.