Today is Wednesday, September 02, 2020 On 12 January 1989 on the ground that it had failed to receive any favorable

t had failed to receive any favorable response from SanMig, the Union filed
a notice of strike for unfair labor practice, CBA violations, and union busting (Annex D, Petition).

On 30 January 1989, the Union again filed a second notice of strike for unfair labor practice (Annex F, Petition).

As in the first notice of strike. Conciliatory meetings were held on the second notice. Subsequently, the two (2)
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notices of strike were consolidated and several conciliation conferences were held to settle the dispute before the
National Conciliation and Mediation Board (NCMB) of DOLE (Annex G, Petition).

Beginning 14 February 1989 until 2 March 1989, series of pickets were staged by Lipercon and D'Rite workers in
Republic of the Philippines various SMC plants and offices.
SUPREME COURT
Manila On 6 March 1989, SMC filed a verified Complaint for Injunction and Damages before respondent Court to enjoin the
Union from:
SECOND DIVISION
a. representing and/or acting for and in behalf of the employees of LIPERCON and/or D'RITE for the
G.R. No. 87700 June 13, 1990 purposes of collective bargaining;
SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO, DANIEL S.L. BORBON II, HERMINIA REYES, b. calling for and holding a strike vote, to compel plaintiff to hire the employees or workers of
MARCELA PURIFICACION, ET AL., petitioners, LIPERCON and D'RITE;
vs.
HON. JESUS G. BERSAMIRA, IN HIS CAPACITY AS PRESIDING JUDGE OF BRANCH 166, RTC, PASIG, and c. inciting, instigating and/or inducing the employees or workers of LIPERCON and D'RITE to
SAN MIGUEL CORPORATION, respondents. demonstrate and/or picket at the plants and offices of plaintiff within the bargaining unit referred to in
the CBA,...;
Romeo C. Lagman for petitioners.
d. staging a strike to compel plaintiff to hire the employees or workers of LIPERCON and D'RITE;
Jardeleza, Sobrevinas, Diaz, Mayudini & Bodegon for respondents.
e. using the employees or workers of LIPERCON AND D'RITE to man the strike area and/or picket
lines and/or barricades which the defendants may set up at the plants and offices of plaintiff within the
bargaining unit referred to in the CBA ...;
MELENCIO-HERRERA, J.:
Respondent Judge of the Regional Trial Court of Pasig, Branch 166, is taken to task by petitioners in this special civil action for certiorari and Prohibition for having
f. intimidating, threatening with bodily harm and/or molesting the other employees and/or contract
issued the challenged Writ of Preliminary Injunction on 29 March 1989 in Civil Case No. 57055 of his Court entitled "San Miguel Corporation vs. SMCEU-PTGWO, workers of plaintiff, as well as those persons lawfully transacting business with plaintiff at the work
et als." places within the bargaining unit referred to in the CBA, ..., to compel plaintiff to hire the employees or
workers of LIPERCON and D'RITE;
Petitioners' plea is that said Writ was issued without or in excess of jurisdiction and with grave abuse of discretion, a
labor dispute being involved. Private respondent San Miguel Corporation (SanMig. for short), for its part, defends g. blocking, preventing, prohibiting, obstructing and/or impeding the free ingress to, and egress from,
the Writ on the ground of absence of any employer-employee relationship between it and the contractual workers the work places within the bargaining unit referred to in the CBA .., to compel plaintiff to hire the
employed by the companies Lipercon Services, Inc. (Lipercon) and D'Rite Service Enterprises (D'Rite), besides the employees or workers of LIPERCON and D'RITE;
fact that the Union is bereft of personality to represent said workers for purposes of collective bargaining. The
Solicitor General agrees with the position of SanMig. h. preventing and/or disrupting the peaceful and normal operation of plaintiff at the work places within
the bargaining unit referred to in the CBA, Annex 'C' hereof, to compel plaintiff to hire the employees or
The antecedents of the controversy reveal that: workers of LIPERCON and D'RITE. (Annex H, Petition)
Sometime in 1983 and 1984, SanMig entered into contracts for merchandising services with Lipercon and D'Rite Respondent Court found the Complaint sufficient in form and substance and issued a Temporary Restraining Order
(Annexes K and I, SanMig's Comment, respectively). These companies are independent contractors duly licensed for the purpose of maintaining the status quo, and set the application for Injunction for hearing.
by the Department of Labor and Employment (DOLE). SanMig entered into those contracts to maintain its
competitive position and in keeping with the imperatives of efficiency, business expansion and diversity of its In the meantime, on 13 March 1989, the Union filed a Motion to Dismiss SanMig's Complaint on the ground of lack
operation. In said contracts, it was expressly understood and agreed that the workers employed by the contractors of jurisdiction over the case/nature of the action, which motion was opposed by SanMig. That Motion was denied by
were to be paid by the latter and that none of them were to be deemed employees or agents of SanMig. There was respondent Judge in an Order dated 11 April 1989.
to be no employer-employee relation between the contractors and/or its workers, on the one hand, and SanMig on
the other. After several hearings on SanMig's application for injunctive relief, where the parties presented both testimonial and
documentary evidence on 25 March 1989, respondent Court issued the questioned Order (Annex A, Petition)
Petitioner San Miguel Corporation Employees Union-PTWGO (the Union, for brevity) is the duly authorized granting the application and enjoining the Union from Committing the acts complained of, supra. Accordingly, on 29
representative of the monthly paid rank-and-file employees of SanMig with whom the latter executed a Collective March 1989, respondent Court issued the corresponding Writ of Preliminary Injunction after SanMig had posted the
Bargaining Agreement (CBA) effective 1 July 1986 to 30 June 1989 (Annex A, SanMig's Comment). Section 1 of required bond of P100,000.00 to answer for whatever damages petitioners may sustain by reason thereof.
their CBA specifically provides that "temporary, probationary, or contract employees and workers are excluded from
the bargaining unit and, therefore, outside the scope of this Agreement." In issuing the Injunction, respondent Court rationalized:

In a letter, dated 20 November 1988 (Annex C, Petition), the Union advised SanMig that some Lipercon and D'Rite The absence of employer-employee relationship negates the existence of labor dispute. Verily, this
workers had signed up for union membership and sought the regularization of their employment with SMC. The court has jurisdiction to take cognizance of plaintiff's grievance.
Union alleged that this group of employees, while appearing to be contractual workers supposedly independent
contractors, have been continuously working for SanMig for a period ranging from six (6) months to fifteen (15) The evidence so far presented indicates that plaintiff has contracts for services with Lipercon and
years and that their work is neither casual nor seasonal as they are performing work or activities necessary or D'Rite. The application and contract for employment of the defendants' witnesses are either with
desirable in the usual business or trade of SanMig. Thus, it was contended that there exists a "labor-only" Lipercon or D'Rite. What could be discerned is that there is no employer-employee relationship
contracting situation. It was then demanded that the employment status of these workers be regularized. between plaintiff and the contractual workers employed by Lipercon and D'Rite. This, however, does
not mean that a final determination regarding the question of the existence of employer-employee
relationship has already been made. To finally resolve this dispute, the court must extensively consider
 and delve into the manner of selection and engagement of the putative employee; the mode of While it is SanMig's submission that no employer-employee relationship exists between itself, on the one hand, and
payment of wages; the presence or absence of a power of dismissal; and the Presence or absence of a the contractual workers of Lipercon and D'Rite on the other, a labor dispute can nevertheless exist "regardless of
power to control the putative employee's conduct. This necessitates a full-blown trial. If the acts whether the disputants stand in the proximate relationship of employer and employee" (Article 212 [1], Labor Code,
complained of are not restrained, plaintiff would, undoubtedly, suffer irreparable damages. Upon the supra) provided the controversy concerns, among others, the terms and conditions of employment or a "change" or
other hand, a writ of injunction does not necessarily expose defendants to irreparable damages. "arrangement" thereof (ibid). Put differently, and as defined by law, the existence of a labor dispute is not negative
by the fact that the plaintiffs and defendants do not stand in the proximate relation of employer and employee.
Evidently, plaintiff has established its right to the relief demanded. (p. 21, Rollo)
That a labor dispute, as defined by the law, does exist herein is evident. At bottom, what the Union seeks is to
Anchored on grave abuse of discretion, petitioners are now before us seeking nullification of the challenged Writ. On regularize the status of the employees contracted by Lipercon and D'Rite in effect, that they be absorbed into the
24 April 1989, we issued a Temporary Restraining Order enjoining the implementation of the Injunction issued by working unit of SanMig. This matter definitely dwells on the working relationship between said employees vis-a-vis
respondent Court. The Union construed this to mean that "we can now strike," which it superimposed on the Order SanMig. Terms, tenure and conditions of their employment and the arrangement of those terms are thus involved
and widely circulated to entice the Union membership to go on strike. Upon being apprised thereof, in a Resolution bringing the matter within the purview of a labor dispute. Further, the Union also seeks to represent those workers,
of 24 May 1989, we required the parties to "RESTORE the status quo ante declaration of strike" (p. 2,62 Rollo). who have signed up for Union membership, for the purpose of collective bargaining. SanMig, for its part, resists that
Union demand on the ground that there is no employer-employee relationship between it and those workers and
In the meantime, however, or on 2 May 1989, the Union went on strike. Apparently, some of the contractual workers because the demand violates the terms of their CBA. Obvious then is that representation and association, for the
of Lipercon and D'Rite had been laid off. The strike adversely affected thirteen (13) of the latter's plants and offices. purpose of negotiating the conditions of employment are also involved. In fact, the injunction sought by SanMig was
precisely also to prevent such representation. Again, the matter of representation falls within the scope of a labor
On 3 May 1989, the National Conciliation and Mediation Board (NCMB) called the parties to conciliation. The Union dispute. Neither can it be denied that the controversy below is directly connected with the labor dispute already
stated that it would lift the strike if the thirty (30) Lipercon and D'Rite employees were recalled, and discussion on taken cognizance of by the NCMB-DOLE (NCMB-NCR- NS-01- 021-89; NCMB NCR NS-01-093-83).
their other demands, such as wage distortion and appointment of coordinators, were made. Effected eventually was
a Memorandum of Agreement between SanMig and the Union that "without prejudice to the outcome of G.R. No. Whether or not the Union demands are valid; whether or not SanMig's contracts with Lipercon and D'Rite constitute
87700 (this case) and Civil Case No. 57055 (the case below), the laid-off individuals ... shall be recalled effective 8 "labor-only" contracting and, therefore, a regular employer-employee relationship may, in fact, be said to exist;
May 1989 to their former jobs or equivalent positions under the same terms and conditions prior to "lay-off" (Annex whether or not the Union can lawfully represent the workers of Lipercon and D'Rite in their demands against SanMig
15, SanMig Comment). In turn, the Union would immediately lift the pickets and return to work. in the light of the existing CBA; whether or not the notice of strike was valid and the strike itself legal when it was
allegedly instigated to compel the employer to hire strangers outside the working unit; — those are issues the
After an exchange of pleadings, this Court, on 12 October 1989, gave due course to the Petition and required the resolution of which call for the application of labor laws, and SanMig's cause's of action in the Court below are
parties to submit their memoranda simultaneously, the last of which was filed on 9 January 1990. inextricably linked with those issues.
The focal issue for determination is whether or not respondent Court correctly assumed jurisdiction over the present The precedent in Layno vs. de la Cruz (G.R. No. L-29636, 30 April 1965, 13 SCRA 738) relied upon by SanMig is
controversy and properly issued the Writ of Preliminary Injunction to the resolution of that question, is the matter of not controlling as in that case there was no controversy over terms, tenure or conditions, of employment or the
whether, or not the case at bar involves, or is in connection with, or relates to a labor dispute. An affirmative answer representation of employees that called for the application of labor laws. In that case, what the petitioning union
would bring the case within the original and exclusive jurisdiction of labor tribunals to the exclusion of the regular demanded was not a change in working terms and conditions, or the representation of the employees, but that its
Courts. members be hired as stevedores in the place of the members of a rival union, which petitioners wanted discharged
notwithstanding the existing contract of the arrastre company with the latter union. Hence, the ruling therein, on the
Petitioners take the position that 'it is beyond dispute that the controversy in the court a quo involves or arose out of
basis of those facts unique to that case, that such a demand could hardly be considered a labor dispute.
a labor dispute and is directly connected or interwoven with the cases pending with the NCMB-DOLE, and is thus
beyond the ambit of the public respondent's jurisdiction. That the acts complained of (i.e., the mass concerted action As the case is indisputably linked with a labor dispute, jurisdiction belongs to the labor tribunals. As explicitly
of picketing and the reliefs prayed for by the private respondent) are within the competence of labor tribunals, is provided for in Article 217 of the Labor Code, prior to its amendment by R.A. No. 6715 on 21 March 1989, since the
beyond question" (pp. 6-7, Petitioners' Memo). suit below was instituted on 6 March 1989, Labor Arbiters have original and exclusive jurisdiction to hear and decide
the following cases involving all workers including "1. unfair labor practice cases; 2. those that workers may file
On the other hand, SanMig denies the existence of any employer-employee relationship and consequently of any
involving wages, hours of work and other terms and conditions of employment; ... and 5. cases arising from any
labor dispute between itself and the Union. SanMig submits, in particular, that "respondent Court is vested with
violation of Article 265 of this Code, including questions involving the legality of striker and lockouts. ..." Article 217
jurisdiction and judicial competence to enjoin the specific type of strike staged by petitioner union and its officers
lays down the plain command of the law.
herein complained of," for the reasons that:
The claim of SanMig that the action below is for damages under Articles 19, 20 and 21 of the Civil Code would not
A. The exclusive bargaining representative of an employer unit cannot strike to compel the employer to
suffice to keep the case within the jurisdictional boundaries of regular Courts. That claim for damages is interwoven
hire and thereby create an employment relationship with contractual workers, especially were the
with a labor dispute existing between the parties and would have to be ventilated before the administrative
contractual workers were recognized by the union, under the governing collective bargaining
machinery established for the expeditious settlement of those disputes. To allow the action filed below to prosper
agreement, as excluded from, and therefore strangers to, the bargaining unit.
would bring about "split jurisdiction" which is obnoxious to the orderly administration of justice (Philippine
B. A strike is a coercive economic weapon granted the bargaining representative only in the event of a Communications, Electronics and Electricity Workers Federation vs. Hon. Nolasco, L-24984, 29 July 1968, 24
deadlock in a labor dispute over 'wages, hours of work and all other and of the employment' of the SCRA 321).
employees in the unit. The union leaders cannot instigate a strike to compel the employer, especially
We recognize the proprietary right of SanMig to exercise an inherent management prerogative and its best business
on the eve of certification elections, to hire strangers or workers outside the unit, in the hope the latter
judgment to determine whether it should contract out the performance of some of its work to independent
will help re-elect them.
contractors. However, the rights of all workers to self-organization, collective bargaining and negotiations, and
C. Civil courts have the jurisdiction to enjoin the above because this specie of strike does not arise out peaceful concerted activities, including the right to strike in accordance with law (Section 3, Article XIII, 1987
of a labor dispute, is an abuse of right, and violates the employer's constitutional liberty to hire or not to Constitution) equally call for recognition and protection. Those contending interests must be placed in proper
hire. (SanMig's Memorandum, pp. 475-476, Rollo). perspective and equilibrium.

We find the Petition of a meritorious character. WHEREFORE, the Writ of certiorari is GRANTED and the Orders of respondent Judge of 25 March 1989 and 29
March 1989 are SET ASIDE. The Writ of Prohibition is GRANTED and respondent Judge is enjoined from taking
A "labor dispute" as defined in Article 212 (1) of the Labor Code includes "any controversy or matter concerning any further action in Civil Case No. 57055 except for the purpose of dismissing it. The status quo ante declaration of
terms and conditions of employment or the association or representation of persons in negotiating, fixing, strike ordered by the Court on 24 May 1989 shall be observed pending the proceedings in the National Conciliation
maintaining, changing, or arranging the terms and conditions of employment, regardless of whether the disputants Mediation Board-Department of Labor and Employment, docketed as NCMB-NCR-NS-01-02189 and NCMB-NCR-
stand in the proximate relation of employer and employee." NS-01-093-83. No costs.

SO ORDERED.
Paras and Regalado, JJ., concur.

Padilla, Sarmiento, JJ., took no part.

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