To constitute a completely valid and faultless dismissal, it is well-settled that the employer must show not only sufficient ground therefor, but it must also prove that it observed procedural due process by giving the employee two notices: one, of the intention to dismiss, indicating therein his acts or omissions complained against, and two, notice of the decision to dismiss; and an opportunity to answer and rebut the charges against him, in between such notices. (MGG Marine Services, Inc., et al. vs. NLRC and E.A. Molina, G.R. No. 114313, July 29, 1996)
Thursday, July 30, 2009
Wednesday, July 29, 2009
SEC. 4. Ang sinumang kasapi ay maaring itwalag (sic) ng Samahan pangsamantala o tuluyan sa pamamgitan (sic) ng tatlo't ikaapat (3/4) na bahagi ng dami ng bilang ng Pamunuang Tagapapaganap. Pagkaraan lamang sa pandinig sa kanyang kaso. Batay sa sumusunod:(a) Sinumang gumawa ng mga bagay bagay na labag at lihis sa patakaran ng Samahan.(b) Sinumang gumawa ng mga bagay na maaring ikabuwag ng Samahan.(c) Hindi paghuhulog ng butaw sa loob ng tatlong buwan na walang sakit o Doctor's Certificate.(d) Hindi pagbibigay ng abuloy na itinadhana ng Samahan.(e) Sinumang kasapi na natanggal sa kapisanan at gustong sumapi uli ay magpapanibago ng bilang, mula sa taon ng kanyang pagsapi uli sa Samahan.
1. Rizalina Raut - P32,505.00 2. [Leila] Emnace - P32,505.00 3. Gina Capistrano - P34,320.00
“Wherefore, with the modification that the 13th month pay for respondents Raut and Emnace for the period August 16, 1995 to June 15, 1996 and for respondent Capistrano for the period of August 1, 1995 to May 31, 1996 should be deducted from the computation of the awards to private respondents, the assailed Decision of the National Labor Relations Commission is AFFIRMED.”
“Wherefore, let a writ of execution be issued for the enforcement of the following awards:1. Rizalina Raut - P354,535.362. [Leila] Emnace - P354,535.363. Gina Capistrano - P354,535.36____________P1,063,606.00”
1. WHETHER x x x THE DECISION DATED APRIL 18, 2006 OF THE COURT OF APPEALS, WHICH AFFIRMED RESOLUTION DATED JANUARY 15, 2004 AND RESOLUTION DATED JULY 26, 2004, BOTH ISSUED BY THE NLRC, IS IN ACCORDANCE WITH LAW AND APPLICABLE DECISIONS OF THE SUPREME COURT.2. WHETHER x x x THE OMISSION OF THE CERTIFICATION OF NON-FORUM SHOPPING IN THE APPEAL MEMORANDUM WARRANTS THE DISMISSAL OF THE PETITIONER’S APPEAL FROM THE ORDER DATED JUNE 21, 2002 OF THE LABOR ARBITER TO THE NLRC.3. WHETHER x x x THE ORDER DATED JUNE 21, 2002 OF LABOR ARBITER ERNESTO F. CARREON DIRECTING THE ISSUANCE OF A WRIT OF EXECUTION FOR THE ENFORCEMENT OF THE AWARD OF [P]354,535.36 TO EACH OF THE RESPONDENTS, WHICH WAS AFFIRMED IN TOTO BY THE NLRC’S DECISION DATED JANUARY 15, 2004[,] AND WHICH[,] IN TURN[,] WAS AFFIRMED BY THE COURT OF APPEALS DECISION DATED APRIL 18, 2006, IS NULL AND VOID.
Furthermore, we would like to reiterate that appeal is not a constitutional right, but a mere statutory privilege. Thus, parties who seek to avail themselves of it must comply with the statutes or rules allowing it. Perfection of an appeal in the manner and within the period permitted by law is mandatory and jurisdictional. The requirements for perfecting an appeal must, as a rule, be strictly followed. Such requirements are considered indispensable interdictions against needless delays and are necessary for the orderly discharge of the judicial business. Failure to perfect the appeal renders the judgment of the court final and executory. Just as a losing party has the privilege to file an appeal within the prescribed period, so does the winner also have the correlative right to enjoy the finality of the decision.
ART. 279. Security of Tenure. – In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.ART. 280. Regular and Casual Employment. – The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season.
 Penned by Associate Justice Pampio A. Abarintos, with Justices Enrico Lanzanas and Apolinario D. Bruselas, Jr., concurring; rollo, pp. 37-45. Rollo, pp. 67-69. Id. at 38-40. Id. at 260. See Rule VI, Section 4 of the NLRC Rules of Procedure. G.R. No. 168985, July 23, 2008, 559 SCRA 550, 562-563, citing Cuevas v. Bais Steel Corporation, 439 Phil. 793, 805 (2002). Banquerigo v. Court of Appeals, G.R. No. 164633, August 7, 2006, 498 SCRA 169.
Tuesday, July 28, 2009
It is the function precisely of a labor union such as petitioner to carry the representation of its members particularly against the employer's labor practices against it and its members. It can file an action for their benefit and behalf without joining them and to avoid the cumbersome procedure of joining each and every member as a separate party under Rule 3, Section 3 of the Rules of Court. (Davao Free Workers Front vs. CIR, 60 SCRA 408 )
“WHEREFORE, respondents Trans-Orient Overseas Contractors, Inc. and Joint Venture YV YIT-VESIPEKKA are hereby ordered to pay jointly and severally the complainant the following sums:1. US $15,839.99 or its Peso equivalent representing salaries for the remaining period of nine months and twenty seven days considering that complainant was illegally terminated. chanroblespublishingcompany2. US $929.67 as reimbursement of travel expenses.Insofar as complainant’s other claims, this Office cannot award the same for lack of merit and without basis.SO ORDERED.”
‘3. Probation Period -- The employee shall be under probation for a period of 90 days commencing from the actual starting date of the Employee’s work in the work location. If the employee fails to meet the requirement as to the skill and willingness to work or fails to adjust himself to the rules and regulations for the camp and the working conditions, or if he in any way gets in conflict, with thelocal laws and regulations’, he will immediately be sent back to the country of recruitment.’
 Commissioners Guillermo C. Medina and Gabriel M. Gatchalian concurred; Commissioner Miguel B. Valera dissented.
 Annex B, pp. 34-45, Rollo.
 Rollo, pp. 261-264.
 Annex “A”, pp. 29-30, ibid.
 p. 272, ibid.
 Manila Hotel Corp. vs. NLRC, G.R. No. L-53453, January 22 1986, 141 SCRA 169; CCLU vs. NLRC, G.R. Nos. L-35955-56, October 31, 1974, 60 SCRA 450.
Republic of the Philippines
G.R. No. 100898 July 5, 1993
ALEX FERRER, RAFAEL FERRER HENRY DIAZ, DOMINGO BANCOLITA, GIL DE GUZMAN, and FEDERATION OF DEMOCRATIC LABOR UNIONS, (FEDLU), petitioners,
NATIONAL LABOR RELATIONS COMMISSION (SECOND DIVISION), HUI KAM CHANG (In his capacity as General Manager of Occidental Foundry Corporation), OCCIDENTAL FOUNDRY CORPORATION, MACEDONIO S. VELASCO (In his capacity as representative of the Federation of Free Workers), GENARO CAPITLE, JESUS TUMAGAN, ERNESTO BARROGA, PEDRO LLENA, GODOFREDO PACHECO, MARCELINO CASTILLO, GEORGE IGNAS, PIO DOMINGO, and JAIME BAYNADO, respondents.
Genrosa P. Jacinto and Raymundo D. Mallilin for private respondents.
The petition for certiorari before us seeks to annul and set aside: (a) the decision dated June 20, 1991 of the Second Division of the National Labor Relations Commission (NLRC) (Penned by Commissioner Rustico L. Diokno and concurred in by Presiding Commissioner Edna Bonto-Perez and Commissioner Domingo H. Zapanta) which affirmed in toto the decision of April 5, 1990 of Labor Arbiter Eduardo J. Carpio dismissing the complaint for illegal dismissal and unfair labor practice on the ground that both the company and the union merely complied with the collective bargaining agreement provision sanctioning the termination of any employee who fails to retain membership in good standing with the union; and (b) the NLRC resolution denying the motion for the reconsideration of said decision (NLRC NCR Case No. 00-10-04855-89).
Petitioners were regular and permanent employees of the Occidental Foundry Corporation (OFC) in Malanday, Valenzuela, Metro Manila which was under the management of Hui Kam Chang. As piece workers, petitioners' earnings ranged from P110 to P140 a day. They had been in the employ of OFC for about ten years at the time of their dismissal in 1989 (p. 38, Rollo).
On January 5, 1989, the Samahang Manggagawa ng Occidental Foundry Corporation-FFW (SAMAHAN) and the OFC entered into a collective bargaining agreement (CBA) which would be effective for the three-year period between October 1, 1988 and September 30, 1991 (Memorandum for OFC and Hui Kam Chang, p. 6, Rollo; p. 551). Article II thereof provides for a union security clause thus:
Sec. 1 — The company agrees that all permanent and regular factory workers in the company who are members in good standing of the union or who thereafter may become members, shall as a condition of continued employment, maintain their membership in the union in good standing for the duration of the agreement.
xxx xxx xxx
Sec. 3 — The parties agree that failure to retain membership in good standing with the UNION shall be ground for the operation of paragraph 1 hereof and the dismissal by the company of the aforesaid employee upon written request by the union. The aforesaid request shall be accompanied by a verified carbon original of the Board of (sic) Resolution by the UNION signed by at least a majority of its officers/directors. (p. 562, Rollo.)
On May 6, 1989, petitioner Alex Ferrer and the SAMAHAN, filed in the Department of Labor and Employment (DOLE), a complaint for the expulsion from SAMAHAN of the following officers: Genaro Capitle (president), Jesus Tumagan (vice-president), Godofredo Pacheco (auditor), and Marcelino Pacheco (board member) (Case No. NCR-00-M-89-11-01). The complaint was founded on said officers' alleged inattentiveness to the economic demands of the workers. However, on September 4, 1989, petitioners Diaz and Alex Ferrer withdrew the petition (p. 590, Rollo).
On September 10, 1989, petitioners conducted a special election of officers of the SAMAHAN (pp. 205 & 583, Rollo). Said election was, however, later questioned by the FFW. Nonetheless, the elected set of officers tried to dissuade the OFC from remitting union dues to the officers led by Capitle who were allied with the FFW. Later, however, Romulo Erlano, one of the officers elected at the special election, manifested to the DOLE that he was no longer objecting to the remittance of union dues to the officers led by Capitle. Petitioners' move to stage a strike based on economic demands was also later disowned by members of the SAMAHAN.
The intraunion squabble came to a head when, on September 11, 1989, a resolution expelling petitioners from the SAMAHAN was issued by the aforesaid union officials headed by Capitle, together with board members George Ignas, Pio Domingo, and Jaime Baynado (pp. 286 & 599, Rollo). The following day, Capitle sent OFC the following letter:
12 September 1989
Mr. Hui Kam Chang
Dear Mr. Chang:
In compliance with Article II, Sec. 3 of the Union Security Clause as enunciated in our Collective Bargaining Agreement, I would like you to dismiss the following employees on the ground of failure to retain membership in good standing:
1. Alex Ferrer
2. Gil de Guzman
3. Henry Diaz
4. Domingo Bancolita
5. Rafael Ferrer, Jr.
Attached herewith is the verified carbon original of the Board Resolution of the union signed by the majority of its officers/directors.
Thank you very much.
Very truly yours,
(p. 66, Rollo.)
Although petitioners received this letter weeks after its date, it appears that on that same date, they had learned about their dismissal from employment as shown by the letter also dated September 13, 1989 which they sent the Federation of Democratic Labor Unions (FEDLU). They volunteered therein to be admitted as members of the FEDLU and requested that they be represented ("katawanin") by said federation before the DOLE in the complaint which they intended to file against the union (SAMAHAN), the FFW and the company for illegal dismissal, reinstatement, and other benefits in accordance with law (p. 74, Rollo).
Thereafter, on various dates, petitioners sent individual letters to Hui Kam Chang professing innocence of the charges levelled against them by the SAMAHAN and the FFW and pleading that they be reinstated (pp. 69-73, Rollo). Their letters appear to have elicited no response.
Thus, contending that their dismissal was without cause and in utter disregard of their right to due process of law, petitioners, through the FEDLU, filed a complaint for illegal dismissal and unfair labor practice before the NLRC against Hui Kam Chang, OFC, Macedonio S. Velasco (as representative of the FFW) the FFW, and the SAMAHAN officers headed by Capitle (p. 75, Rollo).
In due course, after the case was ventilated through position papers and other documents, the labor arbiter rendered a decision dismissing petitioners' complaint (pp. 79-89, Rollo). He found that in dismissing petitioners, OFC was "merely complying with the mandatory provisions of the CBA — the law between it and the union." He added:
To register compliance with the said covenant, all that is necessary is a written request of the union requesting dismissal of the employees who have failed to retain membership in good standing with the union. The matter or question, therefore of determining why and how did complainants fail to retain membership in good standing is not for the company to inquire via formal investigation. By having the request of the union, a legal presumption that the request was born out of a formal inquiry by the union that subject employees failed to exist. This means generally that where a valid closed shop or similar agreement is in force with respect to a particular bargaining unit as in the case a quo, the employer shall refuse to employ any person unless he is a member of the majority union and the employer shall dismiss employees who fail to retain their membership in the majority union. This must be deemed a just cause recognized by law and jurisprudence. The effect is discrimination to encourage membership in other unions. (pp. 86-87, Rollo.)
Hence, the labor arbiter concluded, the dismissal of petitioners was an exercise of legitimate management prerogative which cannot be considered as an unfair labor practice. On whether the SAMAHAN and the FFW could be held liable for illegal dismissal and unfair labor practice, the arbiter opined that since there was no employer-employee relationship between petitioners and respondent unions, the complaint against the latter has no factual and legal bases, because petitioners "should not have confused expulsion from membership in the union as one and the same incident to their subsequent employment termination."
Consequently, petitioners appealed to the NLRC on the grounds that there was prima facie evidence of abuse of discretion on the part of the labor arbiter and that he committed serious errors in his findings of facts.
On June 20, 1991, the NLRC rendered the herein questioned decision affirming in toto the decision of the arbiter. Petitioners motion for the reconsideration of the NLRC decision having been denied, they resorted to the instant petition for certiorari which presents the issue of wether or not respondent Commision gravely abused its discretion in affirming the decision of the labor arbiter which is allegedly in defiance of the elementary principles of procedural due process as the petitioners were summarily dismissed from employment without an investigation having been conducted by the OFC on the veracity of the allegation of the SAMAHAN-FFW that they violated the CBA.
A CBA is the law between the company and the union and compliance therewith is mandated by the express policy to give protection to labor. Said policy should be given paramount consideration unless otherwise provided for by law (Meycauayan College vs. Drilon, 185 SCRA 50 . A CBA provision for a closed shop is a valid form of union security and it is not a restriction on the right or freedom of association guaranteed by the Constitution (Lirag Textile Mill, Inc. vs. Blanco, 109 SCRA 87 . However, in the implementation of the provisions of the CBA, both parties thereto should see to it that no right is violated or impaired. In the case at bar, while it is true that the CBA between OFC and the SAMAHAN provided for the dismissal of employees who have not maintained their membership in the union, the manner in which the dismissal was enforced left much to be desired in terms of respect for the right of petitioners to procedural due process.
In the first place, the union has a specific provision for the permanent or temporary "expulsion" of its erring members in its constitution and by-laws ("saligang batas at alituntunin"). Under the heading membership and removal ("pag-aanib at pagtitiwalag"), it states:
Sec. 4. Ang sinumang kasapi ay maaring itwalag (sic) ng Samahan pangsamantala o tuluyan sa pamamagitan (sic) ng tatlo't ikaapat (¾) na bahagi ng dami ng bilang ng Pamunuang Tagapagpaganap. Pagkaraan lamang sa pandinig sa kanyang kaso. Batay sa sumusunod:
(a) Sinumang gumawa ng mga bagay bagay na labag at lihis sa patakaran ng Samahan.
(b) Sinumang gumawa ng mga bagay na maaaring ikabuwag ng Samahan.
(c) Hindi paghuhulog ng butaw sa loob ng tatlong buwan na walang sakit o Doctor's Certificate.
(d) Hindi pagbibigay ng abuloy na itinatadhana ng Samahan.
(e) Sinumang kasapi na natanggal sa kapisanan at gustong, sumapi uli ay magpapanibago ng bilang, mula sa taon ng kanyang pagsapi uli sa Samahan. (Emphasis supplied; Ibid., p. 177).
No hearing ("pandinig") was ever conducted by the SAMAHAN to look into petitioners' explanation of their moves to oust the union leadership under Capitle, or their subsequent affiliation with FEDLU. While it is true that petitioners' actions might have precipitated divisiveness and, later, showed disloyalty to the union, still, the SAMAHAN should have observed its own constitution and by-laws by giving petitioners an opportunity to air their side and explain their moves. If, after an investigation the petitioners were found to have violated union rules, then and only then should they be subjected to proper disciplinary measures.
Here lies the distinction between the facts of this case and that of Cariño vs. NLRC (185 SCRA 177 ) upon which the Solicitor General heavily relies in supporting the stand of petitioners. In Cariño, the erring union official was given the chance to answer the complaints against him before an investigating committee created for that purpose. On the other, hand, herein petitioners were not given even one opportunity to explain their side in the controversy. This procedural lapse should not have been overlooked considering the union security provision of the CBA.
What aggravated the situation in this case is the fact that OFC itself took for granted that the SAMAHAN had actually conducted an inquiry and considered the CBA provision for the closed shop as self-operating that, upon receipt of a notice that some members of the SAMAHAN had failed to maintain their membership in good standing in accordance with the CBA, it summarily dismissed petitioners. To make matters worse, the labor arbiter and the NLRC shared the same view in holding that "(t)he matter or question, therefore, of determining why and how did complainants fail to retain membership in good standing is not for the company to inquire via formal investigation" (pp. 87 & 135, Rollo). In this regard, the following words of my learned brother, Mr. Justice Feliciano, in the Resolution in Cariño are apt:
4. Turning now to the involvement of the Company in the dismissal of petitioner Cariño, we note that the Company upon being formally advised in writing of the expulsion of petitioner Cariño from the Union, in turn simply issued a termination letter to Cariño, the termination being made effective the very next day. We believe that the Company should have given petitioner Cariño an opportunity to explain his side of the controversy with the Union. Notwithstanding the Union's Security Clause in the CBA, the Company should have reasonably satisfied itself by its own inquiry that the Union had not been merely acting arbitrarily and capriciously in impeaching and expelling petitioner Cariño . . .
xxx xxx xxx
5. We conclude that the Company had failed to accord to petitioner Cariño the latter's right to procedural due process. The right of an employee to be informed of the charges against him and to reasonable opportunity to present his side in a controversy with either the Company or his own Union, is not wiped away by a Union Security Clause or a Union Shop Clause in a CBA. An employee is entitled to be protected not only from a company which disregards his rights but also from his own Union the leadership of which could yield to the temptation of swift and arbitrary expulsion from membership and hence dismissal from his job. (pp. 186 & 189.)
The need for a company investigation is founded on the consistent ruling of this Court that the twin requirements of notice and hearing which are essential elements of due process must be met in employment-termination cases. The employee concerned must be notified of the employer's intent to dismiss him and of the reason or reasons for the proposed dismissal. The hearing affords the employee an opportunity to answer the charge or charges against him and to defend himself therefrom before dismissal is effected (Kwikway Engineering Works vs. NLRC, 195 SCRA 526 ; Salaw vs. NLRC, 202 SCRA 7 ). Observance to the letter of company rules on investigation of an employee about to be dismissed is not mandatory. It is enough that there is due notice and hearing before a decision to dismiss is made (Mendoza vs. NLRC, 195 SCRA 606 (1991]). But even if no hearing is conducted, the requirement of due process would have been met where a chance to explain a party's side of the controversy had been accorded him (Philippine Airlines, Inc. vs. NLRC, 198 SCRA 748 ).
If an employee may be considered illegally dismissed because he was not accorded fair investigation (Hellenic Philippine Shipping vs. Siete, 195 SCRA 179 (1991]), the more reason there is to strike down as an inexcusable and disdainful rejection of due process a situation where there is no investigation at all (See: Colegio del Sto. Niño vs. NLRC, 197 SCRA 611 ; Artex Development Co., Inc. vs. NLRC, 187 SCRA 611 ). The need for the observance of an employee's right to procedural due process in termination cases cannot be overemphasized. After all, one's employment, profession, trade, or calling is a "property right" and the wrongful interference therewith gives rise to an actionable wrong (Callanta vs. Carnation Philippines, Inc., 145 SCRA 268 (1986]). Verily, a man's right to his labor is property within the meaning of constitutional guarantees which he cannot be deprived of without due process (Batangas Laguna Tayabas Bus Co. vs. Court of Appeals, 71 SCRA 470 ).
While the law recognizes the right of an employer to dismiss employees in warranted cases, it frowns upon arbitrariness as when employees are not accorded due process (Tan, Jr. vs. NLRC, 183 SCRA 651 ). Thus, the prerogatives of the OFC to dismiss petitioners should not have been whimsically done for it unduly exposed itself to a charge of unfair labor practice for dismissing petitioners in line with the closed shop provision of the CBA, without a proper hearing (Tropical Hut Employees' Union-CGW vs. Tropical Hut Food Market, Inc., 181 SCRA 173 ; citing Binalbagan-Isabela Sugar Co., Inc. (BISCOM) vs. Philippine Association of Free Labor Unions (PAFLU), 8 SCRA 700 ). Neither can the manner of dismissal be considered within the ambit of managerial prerogatives, for while termination of employment is traditionally considered a management prerogative, it is not an absolute prerogative subject as it is to limitations founded in law, the CBA, or general principles of fair play and justice (University of Sto. Tomas vs. NLRC, 190 SCRA 758 ).
Under Rule XIV, Sections 2, 5, and 6 of the rules implementing Batas Pambansa Blg. 130, the OFC and the SAMAHAN should solidarity indemnify petitioners for the violation of their right to procedural due process (Great Pacific Life Assurance Corporation vs. NLRC, 187 SCRA 694, citing Wenphil vs. NLRC, 170 SCRA 69 , Cariño vs. NLRC, supra). However, such penalty may be imposed only where the termination of employment is justified and not when the dismissal is illegal as in this case where the damages are in the form of back wages.
As earlier discussed, petitioners' alleged act of sowing disunity among the members of the SAMAHAN could have been ventilated and threshed out through a grievance procedure within the union itself. But resort to such procedure was not pursued. What actually happened in this case was that some members, including petitioners, tried to unseat the SAMAHAN leadership headed by Capitle due to the latter's alleged inattention to petitioners' demands for the implementation of the P25-wage increase which took effect on July 1, 1989. The intraunion controversy was such that petitioners even requested the FFW to intervene to facilitate the enforcement of the said wage increase (Petition, p. 54; p. 55, Rollo).
Petitioners sought the help of the FEDLU only after they had learned of the termination of their employment upon the recommendation of Capitle. Their alleged application with federations other than the FFW (Labor Arbiter's Decision, pp. 4-5; pp. 82-83, Rollo) can hardly be considered as disloyalty to the SAMAHAN, nor may the filing of such applications denote that petitioners failed to maintain in good standing their membership in the SAMAHAN. The SAMAHAN is a different entity from FFW, the federation to which it belonged. Neither may it, be inferred that petitioners sought disaffiliation from the FFW for petitioners had not formed a union distinct from that of the SAMAHAN. Parenthetically, the right of a local union to disaffiliate from a federation in the absence of any provision in the federation's constitution preventing disaffiliation of a local union is legal (People's Industrial and Commercial Employees and Worker's Org. (FFW) vs. People's Industrial and Commercial Corp., 112 SCRA 440 (1982]). Such right is consistent with the constitutional guarantee of freedom of association (Tropical Hut Employees Union-CGW vs. Tropical Hut Food Market, Inc., 181 SCRA 173 ).
Hence, while petitioners' act of holding a special election to oust Capitle, et al. may be considered as an act of sowing disunity among the SAMAHAN members, and, perhaps, disloyalty to the union officials, which could have been dealt with by the union as a disciplinary matter, it certainly cannot be considered as constituting disloyalty to the union. Faced with a SAMAHAN leadership which they had tried to remove as officials, it was but a natural act of self-preservation that petitioners fled to the arms of the FEDLU after the union and the OFC had tried to terminate their employment. Petitioners should not be made accountable for such an act.
With the passage of Republic Act No. 6715 which took effect on March 21, 1989, Article 279 of the Labor Code was amended to read as follows:
Security of Tenure. — In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.
and as implemented by Section 3, Rule 8 of the 1990 New Rules of Procedure of the National Labor Relations Commission, it would seem that the Mercury Drug Rule (Mercury Drug Co., Inc. vs. Court of Industrial Relations, 56 SCRA 694 ) which limited the award of back wages of illegally dismissed workers to three (3) years "without deduction or qualification" to obviate the need for further proceedings in the course of execution, is no longer applicable.
A legally dismissed employee may now be paid his back wages, allowances, and other benefits for the entire period he was out of work subject to the rule enunciated before the Mercury Drug Rule, which is that the employer may, however, deduct any amount which the employee may have earned during the period of his illegal termination (East Asiatic Company, Ltd. vs. Court of Industrial Relations, 40 SCRA 521 ). Computation of full back wages and presentation of proof as to income earned elsewhere by the illegally dismissed employee after his termination and before actual reinstatement should be ventilated in the execution proceedings before the Labor Arbiter concordant with Section 3, Rule 8 of the 1990 new Rules of Procedure of the National Labor Relations Commission.
Inasmuch as we have ascertained in the text of this discourse that the OFC whimsically dismissed petitioners without proper hearing and has thus opened OFC to a charge of unfair labor practice, it ineluctably follows that petitioners can receive their back wages computed from the moment their compensation was withheld after their dismissal in 1989 up to the date of actual reinstatement. In such a scenario, the award of back wages can extend beyond the 3-year period fixed by the Mercury Drug Rule depending, of course, on when the employer will reinstate the employees.
It may appear that Article 279 of the Labor Code, as amended by Republic Act No. 6715, has made the employer bear a heavier burden than that pronounced in the Mercury Drug Rule, but perhaps Republic Act No. 6715 was enacted precisely for the employer to realize that the employee must be immediately restored to his former position, and to impress the idea that immediate reinstatement is tantamount to a cost-saving measure in terms of overhead expense plus incremental productivity to the company which lies in the hands of the employer.
WHEREFORE, the decision appealed from is hereby SET ASIDE and private respondents are hereby ordered to reinstate petitioners to their former or equivalent positions without loss of seniority rights and with full back wages, inclusive of allowances and other benefits or their monetary equivalent, pursuant to Article 279 of the Labor Code, as amended by Republic Act No. 6715.
Feliciano, Bidin, Davide, Jr. and Romero, JJ., concur.