G.R. No. 160302; September 27, 2010
JAILE OLISA, ET AL. AND MALAYANG SAMAHAN NG MGA MANGGAGAWA SA BALANCED FOODS, Petitioners, vs. DANILO ESCARIO, ET AL., NATIONAL LABOR RELATIONS COMMISSION, PINAKAMASARAP CORPORATION, DR. SY LIAN TIN, AND DOMINGO TAN, Respondents.

FACTS

The petitioners were regular employees of Pinakamasarap Corporation (PINA) and members of the Malayang Samahang ng mga Manggagawa sa Balanced Foods. On March 13, 1993, union officers and members staged a walkout to support a union officer facing a barangay complaint. This walkout was later declared an illegal strike constituting unfair labor practice, leading to the termination of the union officers. Subsequently, on April 28, 1993, the union filed a notice of strike, and a strike was held on June 15, 1993. PINA charged the petitioners with unfair labor practice and abandonment, alleging various illegal acts during the strike, including sabotage, slowdown, and obstruction of company premises.
The Labor Arbiter declared the June 1993 strike illegal. On appeal, the National Labor Relations Commission (NLRC) sustained the illegality of the strike but reversed the finding of abandonment. It ruled that while union officers who knowingly participate in an illegal strike lose their employment status, mere members do not, unless they commit illegal acts during the strike. Consequently, the NLRC ordered the reinstatement of the petitioner-members to their former positions but without backwages, or, in lieu of reinstatement, payment of separation pay equivalent to one-half month per year of service. The Court of Appeals affirmed this decision.

ISSUE

Whether the petitioner-members, who were reinstated after being dismissed for participating in an illegal strike but who did not commit any illegal acts, are entitled to full backwages under Article 279 of the Labor Code.

RULING

No. The Supreme Court denied the petition and affirmed the rulings of the NLRC and the Court of Appeals. The Court held that the petitioner-members are not entitled to backwages for the period of the illegal strike, even upon reinstatement. The legal logic is anchored on the principle of “a fair day’s wage for a fair day’s labor.” Since the employees did not work during the illegal strike, they did not render any service for which they could claim compensation. The denial of backwages for the strike period is a consequence of their participation in an illegal activity, irrespective of their good faith or the absence of individual illegal acts.
The Court clarified that Article 279 of the Labor Code, which mandates full backwages for illegally dismissed employees, is not applicable to this specific situation. Instead, the third paragraph of Article 264(a) of the Labor Code governs, which provides that any union officer who knowingly participates in an illegal strike may be declared to have lost employment status. For mere members, the loss of employment status is not automatic; they may be reinstated but are not entitled to backwages for the strike duration. This distinction serves to balance the right to concerted activity with the need to maintain industrial peace and deter illegal strikes. The award of separation pay in lieu of reinstatement, at one-half month per year of service, was deemed equitable under the circumstances.