G.R. No. 87266 -69 and G.R. No. 91223 -26, July 30, 1990
ASSOCIATED WORKERS UNION-PTGWO, petitioner, vs. THE NATIONAL LABOR RELATIONS COMMISSION (EN BANC), ET AL., respondents. / MANILA PORT SERVICES, INC., petitioner, vs. HON. ARTHUR G. AMANSEC AND ADRIANO YUMUL, ET AL., respondents.

FACTS

The Associated Workers Union (AWU) was the bargaining representative for dockworkers at South Harbor, Manila. On October 26, 1984, AWU filed a Notice of Strike against Metro Port Service, Inc. (Metro), the arrastre contractor. The dispute was later certified for compulsory arbitration, with an order prohibiting strikes. A key issue was AWU’s demand for Metro to terminate employees Adriano Yumul and ten others for allegedly forming a rival union, the Associated Workers Union in Metroport (AWUM), which AWU considered an act of disloyalty under their closed-shop CBA. Despite the strike prohibition, AWU staged a strike. To end it, Metro and AWU executed a Compromise Agreement on April 18, 1985, wherein Metro agreed to preventively suspend the individual respondents. The suspended employees filed a complaint for illegal suspension.
The National Labor Relations Commission (NLRC) consolidated this case with related disputes. In its September 4, 1986 Decision, the NLRC found the suspension illegal. It ruled that forming a local chapter was a protected activity and did not constitute disloyalty. It ordered the reinstatement of the individual respondents with backwages, to be paid solidarily by AWU and Metro. Both AWU and Metro filed separate motions for reconsideration and subsequent petitions for certiorari with the Supreme Court.

ISSUE

The primary issue was whether the NLRC correctly held AWU and Metro solidarily liable for the backwages of the illegally suspended employees, and the proper apportionment of such liability.

RULING

The Supreme Court modified the NLRC decision. It upheld the finding that the suspension was illegal because forming a local union chapter is a protected right and the individual respondents were not afforded due process. The Court analyzed the liability for backwages across distinct periods. For the initial suspension period arising directly from the illegal Compromise Agreement, both AWU and Metro were held jointly and severally liable. The Court reasoned that Metro, despite initial resistance, capitulated to AWU’s pressure and executed an agreement that violated the employees’ rights, making it a co-participant in the illegal act.
However, for the subsequent period of suspension enforced pursuant to an NLRC order, the Court apportioned liability on a 50-50 basis between AWU and Metro. This modification was based on equitable considerations, recognizing that both parties contributed to the prolonged deprivation of the employees’ right to work. The Court emphasized that while the right to self-organization is fundamental, employers must also observe due process in termination proceedings. The final ruling aimed to achieve substantial justice by holding both the union that instigated the illegal dismissal and the employer that implemented it accountable, but adjusting the solidary liability to a shared responsibility for the latter period to reflect their respective contributions to the violation.