GR 241437; (September, 2020) (Digest)
G.R. No. 241437 . September 14, 2020
ALBAY ELECTRIC COOPERATIVE, INC. (ALECO), PETITIONER, VS. ALECO LABOR EMPLOYEES ORGANIZATION (ALEO), RESPONDENT.
FACTS
Albay Electric Cooperative, Inc. (ALECO), facing severe financial distress with billions in obligations, undertook a rehabilitation process. Its chosen strategy was Private Sector Participation (PSP), which required all employees to tender courtesy resignations, though they would receive separation pay per their Collective Bargaining Agreement (CBA) and have priority in rehiring. The labor union, ALECO Labor Employees Organization (ALEO), opposed this and declared a strike. Following a referendum that affirmed the PSP, ALECO served notices of retrenchment to all employees in October 2013.
The labor dispute escalated, leading both parties to request the Secretary of Labor to assume jurisdiction over the controversy. The Secretary issued an Assumption Order and a Return-to-Work Order on January 10, 2014. In a subsequent Resolution, the Secretary upheld the validity of the retrenchment but ordered ALECO to pay the affected employees backwages and other benefits from January 10, 2014, until the finality of the resolution, plus separation benefits under the CBA.
ISSUE
Whether the Court of Appeals erred in affirming the award of backwages to the retrenched employees for the period following the Secretary of Labor’s Return-to-Work Order.
RULING
The Supreme Court denied ALECO’s petition and affirmed the Court of Appeals’ decision. The legal logic centers on the nature and effect of a Secretary of Labor’s Assumption Order under Article 263(g) of the Labor Code. When the Secretary assumes jurisdiction over a labor dispute, the order is immediately executory and reinstates the status quo ante, effectively returning all striking workers to their last positions pending the resolution of the dispute.
Consequently, from the moment the Return-to-Work Order was issued on January 10, 2014, ALECO was legally obligated to readmit the employees and pay their corresponding wages and benefits. The subsequent finding that the retrenchment was valid did not retroactively nullify this interim obligation. The employees were entitled to compensation for the period they would have been working had ALECO complied with the reinstatement directive. Therefore, the award of backwages covering the period from the Assumption Order until the Secretary’s final resolution on the validity of retrenchment was proper. The Court also upheld the imposition of legal interest on the monetary awards until full payment.