Marvin L.

Tuason

201505725

ASSUMPTION OF JURISDICTION

In Philtranco Service Enterprises, Inc. vs. Philtranco Workers Association of Genuine Labor

Organizations1, the Supreme Court (Court) described the authority of the Secretary of Labor

(Secretary) when it assumes jurisdiction: “[T]he authority of the Secretary of Labor to assume

jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an industry

indispensable to national interest includes and extends to all questions and controversies

arising therefrom. The power is plenary and discretionary in nature to enable him to effectively

and efficiently dispose of the primary dispute." Considering the efforts at conciliation, and that

the matter was one affecting national interest, notwithstanding any representation to the

contrary that the Secretary would be acting as a voluntary arbitrator, it was held that the

Secretary assumed jurisdiction over the dispute. Necessarily, the assumption of jurisdiction

would involve an exercise of discretion thus the remedy of an aggrieved party would be to

question it via a petition for certiorari.

In Saulog Transit vs. Lazaro2, the Court held that the fact that no notice of strike had been filed

nor any formal complaint to the Ministry has been made does not preclude the Minister from

assuming jurisdiction. Considering that the strikes virtually paralyzed the public transportation

covering the entire province of Cavite, and the efforts towards amicable settlement remained

futile, the Minister correctly assumed jurisdiction notwithstanding the absence of a notice of

strike or formal complaint about the strike already in progress.

1
Philtranco Service Enterprises, Inc. v. Philtranco Workers Union - Association of Genuine Labor Organizations, G.R.
No. 180962, February 26, 2014.
2
Saulog Transit vs. Lazaro, G.R. No. 63284, April 4, 1984.
The case of Telefunken Semiconductors Employees Union-FFW vs. CA3 shows the effects of

the Secretary’s assumption of jurisdiction as provided under Art. 278 (then 263) of the Labor

Code which is to “automatically enjoi[n] the intended or impending strike.” The mere issuance of

the assumption order by the Secretary automatically carries with it the return-to-work order,

though this is not expressly provided thereunder. A union worker or officer who opts to ignore

the return-to-work order may be declared to have lost his employment status. The case further

explains the rationale for this rule: “once jurisdiction over the labor dispute has been properly

acquired by the competent authority, that jurisdiction should not be interfered with by the

application of the coercive processes of a strike. “

However, in GTE Directories Corp. vs. GTE Directories Corp. Employees Union4, the Court

highlighted that the assumption of jurisdiction must be over a dispute adversely affecting the

national interest. In this case, the Court questioned the situation of the marketing and

advertising firm of MERALCO as one that does not adversely affect the national interest. The

mere fact that the employer owes P10 million in income tax to the Government does not suffice

to qualify the matter as affecting national interest.

Discretion of the Secretary

In FEATI University vs. Bautista5, the Court had an occasion to discuss the pre-requisites before

the President may certify a labor dispute to the CIR which is substantially the same as the pre-

requisites where the Secretary may assume jurisdiction over a labor dispute under Art. 278 of

the Labor Code. First, the Court laid down the test whether a controversy comes within the

definition of a “labor dispute”: “whether the controversy involves or concerns ‘terms, tenure or

condition of employment’ or ‘representation.’ Second, the Court ruled that when the President

3
Telefunken Semiconductors Employees Union-FFW vs. CA, G.R. Nos. 143013-14, December 18, 2000.
4
GTE Directories Corp. vs. GTE Directories Corp. Employees Union G.R. No. 76219, May 27, 1991.
5
Feati University v. Bautista, G.R. Nos. L-21278, L-21462 & L-21500, December 27, 1966.
certifies a labor dispute to the CIR (in the same way the Secretary assumed jurisdiction over a

labor dispute), the Court will not interfere in, much less curtail, the exercise of this prerogative.

The assumption of jurisdiction is exclusive, and once acquired the Secretary may exercise such

powers vested in it by law.

Extent of Discretion

In University of Immaculate Concepcion vs. Secretary of Labor6, the petitioner contested the

authority of the Secretary to suspend the termination of employees who were not part of the

bargaining unit. The Court explained that it is of no matter that the employees were not part of

the bargaining unit. The Order of the Secretary sought to maintain the status quo and curb

further aggravation of the labor dispute. Thus, the act of terminating the employees constitutes

as a defiance of the Secretary’s order which is prohibited.

In Cirtek Employees Labor Union – FFW vs. Cirtek Electronics7, the Court ruled that the

Secretary, when assuming jurisdiction over a labor dispute, is authorized to provide for an

award higher than that agreed upon by the parties. The Court described this as an

approximation of a collective bargaining agreement. The Secretary is not limited to the

agreement between the parties, but may consider other documents such as the financial

information of the company, bargaining history, and other information relating to the parties.

However, in Asia Brewery vs. Tunay ng Pagkakaisa ng Manggagawasa Asia8, the Court held

that the Secretary’s arbitral award may be reviewed by the Court as to the reasonableness of its

decisions considering the positions and evidence that the parties provided, citing Meralco v.

Quisumbing. In this case, the Court concluded that the reliance of the Secretary on the

6
University of Immaculate Concepcion, Inc. v. Secretary of Labor, G.R. No. 151379, January 14, 2005.
7
Cirtek Employees Labor Union-Federation of Free Workers v. Cirtek Electronics, Inc., G.R. No. 190515, November
15, 2010.
8
Asia Brewery vs. Tunay ng Pagkakaisa ng Manggagawasa Asia, G.R. Nos. 171594-96, September 18, 2013.
unaudited financial statements in affixing the arbitral award constituted grave abuse of

discretion since this evidence is self-serving and inadmissible.

Nature and Effect of Assumption and Certification Orders.

In International Pharmaceuticals Inc. v. Sec. of Labor9, the issue was whether the Secretary

may assume jurisdiction over complaints involving unfair labor practices, considering that the

law expressly vested jurisdiction over these cases with the Labor Arbiter. In this case,

considering that the labor dispute was a result of the deadlock in negotiation, and later led to a

strike, the Court upheld the jurisdiction of the Secretary rationing that Art. 224 (then 217)

provides an exception to the jurisdiction of the Labor Arbiter: “except as otherwise provided in

the Code.” A contrary ruling will prevent the Secretary from effectively and efficiently disposing

of the labor dispute.

Assumption of Jurisdiction; a police power measure.

In Manila Hotel Employees Association and its Members v. Manila Hotel Corp.10, the Court

described the obligation of the employees when a return-to-work order is issued by the NLRC

after certification by the Secretary after assumption of jurisdiction. The authority to issue these

Orders are aimed at “a peaceful and speedy solution to labor disputes, without jeopardizing

national interests.” The Court stated: “Regardless therefore of their motives, or the validity of

their claims, the striking workers must cease and/or desist from any and all acts that tend to, or

undermine this authority of the Secretary of Labor, once an assumption and/or certification order

is issued. They cannot, for instance, ignore return-to-work orders, citing unfair labor practices on

the part of the company, to justify their action.”

9
International Pharmaceuticals, Inc. v. Secretary of Labor, G.R. No. 92981-83, January 9, 1992.
10
Manila Employees Association v. Manila Hotel Corporation, G.R. No. 154591, March 5, 2007.
On the other hand, the employer also has a correlative obligation to readmit all workers under

the same terms and conditions prevailing before the strike and lockout. This was described in

the case of YSS Employees Union – Philippine Transport & General Workers Organization v.

YSS Laboratories, Inc.11 The employer is obligated by law to faithfully comply with the Order to

readmit the employees. The determination as to who among the strikes could be admitted back

to work cannot be dependent on the discretion of the employer. A return-to-work order does not

interfere with the management’s prerogative, but only regulates it as national interest so

demand.

Awards and Orders

In LMG Chemicals Corp. v. Sec. of Labor and Employment12, the Court upheld the authority of

the Secretary to provide for a retroactive effect of the CBA between the parties. This is included

in the Secretary’s jurisdiction over all questions and controversies arising from the labor dispute.

Effect of Defiance of Return-to-Work Orders

In case the employees defy the return-to-work order of the Secretary, St. Scholastica’s College

vs. Hon. Ruben Torres13 provides the effects thereof. Any declaration of strike after assumption

of jurisdiction by the Secretary is considered an illegal act. Any worker or union officer who

knowingly participates in a strike defying a return-to-work order may, consequently, "be declared

to have lost his employment status." The moment the work defies a return-to-work order, he is

deemed to have abandoned his job. It is already in itself knowingly participating in an illegal act.

Allied Banking Corp. vs. NLRC14 reiterates the doctrine in St. Scholastica’s College. The Court

adds that as non-compliance with an assumption or certification order is considered an illegal

11
YSS Employees Union-PTGWO v. YSS Laboratories, Inc., G.R. No. 155125, December 4, 2009.
12
LMG Chemicals Corp. v. Sec. of Labor and Employment, G.R. No. 127422, April 17, 2001.
13
St. Scholastica’s College vs. Hon. Ruben Torres, G.R. No. 100158, June 29, 1992.
14
Allied Banking Corp. v. National Labor Relations Commission, G.R. Nos. 116128 & 116461, July 12, 1996.
act, the Secretary is authorized to impose such sanctions as may be provided by law, which

includes the hiring of replacement for workers defying the order.

In Solidbank v. Garnier et al.,15 the Court distinguished the liability between union officers and

members who participate in an illegal strike. For knowingly participating in an illegal strike or

participating in the commission of illegal acts during a strike, the law provides that a union

officer may be terminated from employment. On the other hand, a worker merely participating in

an illegal strike may not be terminated from employment. It is only when he commits illegal acts

during a strike that he may be declared to have lost employment status.

Compulsory Arbitration and Labor Rights

In Philread Workers Union (PTWU), et al. v. Confessor16, the Court upheld the constitutionality

of the Secretary’s authority to enjoin a strike as non-violative of the workers’ rights to self-

organization. It is only the means by which these rights are regulated. The certification by the

secretary is not intended to impede the workers' right to strike but to obtain a speedy settlement

of the dispute.

15
Solidbank vs. Gamier et al, GR 159460, November 15 2010.
16
Philtread Workers Union v. Confesor, G.R. No. 117169, March 12, 1997.