G.R. No. 139940. September 19, 2006.

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ARELLANO UNIVERSITY EMPLOYEES AND WORKERS UNION, CARLOS C.A. RIVAS, JR., SIMEON B.
INOCENCIO, ROMULO D. JACOB, NYMIA M. PINEDA, BENEDICTO I. NIETO, JR., LUIS JACINTO, MILBERT
MORA, MONICO CALMA, CONSTANCIO BAYHONAN, BERNARDO SABLE, NESTOR BRINOSA, NANJI
MACARAMPAT, EDUARDO FLORAGUE and DIONY S. LUMANTA, petitioners, vs. COURT OF APPEALS,
NATIONAL LABOR RELATIONS COMMISSION, and ARELLANO UNIVERSITY, INC., respondents.
Actions; The rule is settled that remedial statutes or modes of procedure, which do not create new
rights or take away vested rights but only operate in furtherance of the remedy or confirmation or rights
already existing, do not come within the purview of the general rule against the retroactive operation of
statutes.The rule is settled that remedial statutes or modes of procedure, which do not create new
rights or take away vested rights but only operate in furtherance of the remedy or confirmation of rights
already existing, do not come within the purview of the general rule against the retroactive operation of
statutes. They are construed to be applicable to actions pending and undetermined at the time of their
passage, and are deemed retroactive in that sense and to that extent. Hence, in a long line of cases, the
new period under Section 4 of Rule 65 was given retroactive application. Of course at the time the
assailed Resolutions of the appellate court were issued in 1999, Section 4 of Rule 65 had not yet been
amended by this Courts Resolution in A.M. No. 00-2-03-SC.
Labor Law; Unfair Labor Practices; Collective Bargaining Agreements; To constitute ULP, violations of the
CBA must be gross, which means, under Article 261 of the Labor Code, flagrant and/or malicious refusal
to comply with the economic provisions thereof. The then prevailing Rules Implementing the Labor
Code, Book V, Rule XVIII provided that Section 1. Right of union to collect dues.The right of the
incumbent bargaining representative to check off and to collect dues resulting therefrom shall not be
affected by the pendency of a representation case or an intra-union dispute. (Emphasis supplied) To
constitute ULP, however, violations of the CBA must be gross. Gross violation of the CBA, under Article
261 of the Labor Code, means flagrant and/or malicious refusal to comply with the economic provisions
thereof. Evidently, the University can not be faulted for ULP as it in good faith merely heeded the above-
said request of Union members.
Same; Same; Strikes; An ordinary striking worker may not be declared to have lost his employment
status by mere participation in an illegal strike.On the NLRCs declaration of loss of employment status
of the strikers, the pertinent provision of Article 264 of the Labor Code provides: Article 264. x x x x . . .
Any union officer who knowingly participates in an illegal strike and any worker or union officer who
knowingly participates in the commission of illegal acts during a strike may be declared to have lost his
employment status. . . (Emphasis and italics supplied) Under the immediately quoted provision, an
ordinary striking worker may not be declared to have lost his employment status by mere participation
in an illegal strike. There must be proof that he knowingly participated in the commission of illegal acts
during the strike. While the University adduced photographs showing strikers picketing outside the
university premises, it failed to identify who they were. It thus failed to meet the substantiality of
evidence test applicable in dismissal cases.
Same; Holiday Pay; The right to be paid for unworked days is generally limited to the ten legal holidays
in a year.As for petitioners claim of substantial diminution of their salary on account of the divisor
used by the University in its computation314 days, instead of 365 days, this Court finds nothing wrong
therewith. Sundays being un-worked and considered unpaid rest days, while regular holidays as well as
special holidays considered as paid days, the factor used by the University merely complies with the
basic rule in this jurisdiction of no work, no pay. The right to be paid for unworked days is generally
limited to the ten legal holidays in a year.
PETITION for review on certiorari of the resolutions of the Court of Appeals.
The facts are stated in the opinion of the Court.
Romeo C. Lagman for petitioners.
Carlo A. Domingo for individual respondents.
De Borja, Medialdea, Bello, Guevarra, Serapio & Gerodias for Arellano University, Inc.
CARPIO-MORALES, J.:

Subject of the present petition for certiorari are the Court of Appeals Resolution of April 13, 19991 and
Resolution of September 3, 19992 which dismissed petitioners petition for certiorari for having been
filed six days beyond the reglementary period under Section 4, Rule 65 of the 1997 Rules of Civil
Procedure, as amended by Supreme Court En Banc Resolution dated July 21, 1998 reading:
If the petitioner had filed a motion for new trial or reconsideration in due time after notice of said
judgment, order or resolution, the period herein fixed shall be interrupted. If the motion is denied, the
aggrieved party may file the petition within the remaining period, but which shall not be less than five
(5) days in any event, reckoned from notice of such denial. No extension of time to file the petition shall
be granted except for the most compelling reason and in no case to exceed fifteen (15) days. (Emphasis
and italics supplied)
Petitioners, in the main, plead for the application of substantial justice over procedural lapses,
conformably to this Courts pronouncements in several cases, and a liberal construction of the Rules in
order to promote its objective of securing a just disposition of every action or proceeding.3
The record shows that the September 3, 1999 Resolution of the Court of Appeals denying petitioners
motion for reconsideration was received by them on September 13, 1999. On September 27, 1999,
petitioners filed a motion for 30-day extension of time to file petition which this Court granted.4 On
October 28, 1999, petitioners filed the present petition for certiorari.5 Doubtless, petitioners could not
have availed of such petition as a mere substitute for lost appeal,6 hence, this Court treats it as one for
review under Rule 45.
Indeed, Section 4 of Rule 65 of the 1997 Rules of Civil Procedure was amended by the July 21, 1998
Resolution of this Court En Banc by adding to it as second paragraph the above-quoted amendment.
Arellano University Employees and Workers Union vs. Court of Appeals
The same Section was, however, subsequently amended by this Courts En Banc Resolution in A.M. No.
00-2-03-SC which took effect on September 1, 2000 providing for a 60-day period to file petition under
Rule 65 from denial of a motion for reconsideration or new trial. As thus further amended, Section 4 of
Rule 65 now reads:
SEC. 4. When and where petition filed.The petition shall be filed not later than sixty (60) days from
notice of the judgment, order or resolution. In case a motion for reconsideration or new trial is timely
filed, whether such motion is required or not, the sixty (60) day period shall be counted from notice of
the denial of said motion. (Emphasis and italics supplied)
The rule is settled that remedial statutes or modes of procedure, which do not create new rights or take
away vested rights but only operate in furtherance of the remedy or confirmation of rights already
existing, do not come within the purview of the general rule against the retroactive operation of
statutes. They are construed to be applicable to actions pending and undetermined at the time of their
passage, and are deemed retroactive in that sense and to that extent. Hence, in a long line of cases,7 the
new period under Section 4 of Rule 65 was given retroactive application. Of course at the time the
assailed Resolutions of the appellate court were issued in 1999, Section 4 of Rule 65 had not yet been
amended by this Courts Resolution in A.M. No. 00-2-03-SC.
There being no reason why Section 4 of Rule 65, as amended in 2000 by this Court, may not be given
retroactive application to petitioners petition, it now gives said application. While, normally, a remand
of the case to the appellate court for further proceedings is done,8 this Court now opts to decide the
petition on the merits to forestall further delay in its disposition.
On December 12, 1997, the Arellano University Employees and Workers Union (the Union), the exclusive
bargaining representative of about 380 rank-and-file employees of Arellano University, Inc. (the
University), filed with the National Conciliation and Mediation Board (NCMB) a Notice of Strike charging
the University with Unfair Labor Practice (ULP) as follows:
1. Interfering in union activities;
2. Union Bustingviolation of CBAs Article IV, Section 2;9
3. Union Bustingdisregarding the unions request to deduct penalties from its members who were
absent and without justifiable reasons during union meetings; and
4. Contracting Workoutthe management is contracting out services and functions being performed by
Union members.10
The Notice of Strike was docketed as NCMB-NCR-NS-12-520-97.
Subsequently or on December 17, 1997, a majority of the members of the Union filed a December 15,
1997 petition for audit11 of union funds before the Office of the National Capital Region Director of the
Department of Labor and Employment (DOLE) against the officers of the Union.
On March 11, 1998, the Regional Director of DOLE-NCR directed the Union officers to call a general
membership meeting to, among other things, render an accounting of union funds amounting to
P481,117.28 which were remitted per the check-off statement.12
Also on March 11, 1998, then DOLE Secretary Cresenciano B. Trajano certified the Notice of Strike for
compulsory arbitration to the National Labor Relations Commission (NLRC) which the latter assigned to
Labor Arbiter Cristeta D. Tamayo. The Labor Arbiter set the dispute for hearing/conference on July 3,
1998, July 17, 1998, and August 11, 1998. No settlement was reached by the parties, however.13
On July 28, 1998, the University moved for the consolidation with the ULP charge (NCMB-NCR-NS-12-
520-97) the Interpleader14 it filed against the Union and some of its members, docketed as NLRC NCR
Case No. 00-02-02036-98 and pending before Labor Arbiter Felipe T. Garduque II, and the Complaint the
Union filed for underpayment of wages arising from the change in the manner of computation of salary
of employees and non-payment of Sunday pay, docketed as NLRC NCR Case No. 00-02-01422-98 and
pending before Labor Arbiter Ramon Valentin T. Reyes, both of which involve the same parties.15
Before the NLRC could act on the Universitys motion for consolidation, DOLE Secretary Bienvenido E.
Laguesma, by Order16 of August 5, 1998, certified for compulsory arbitration to the NLRC a second
Notice of Strike filed by the Union on July 16, 1998, docketed as NCMB-NCR-NS-07-277-98, charging the
University with the following:
a. Violation of Collective Bargaining Agreement (CBA), Art. Vwithholding of union and death benefits;
b. Violation of CBA, Art. VInon-granting of ten (10%) percent salary increase to some union members;
c. Illegal/unauthorized deductions in the payroll;
d. Union interferencecirculating letters against the union; and
e. Non-implementation of the retirement plan as approved by the BIR.17
A strike was in fact staged on August 5, 1998.
By the same Order of August 5, 1998, the DOLE Secretary directed the strikers to return to work within
twenty-four (24) hours. The order was served upon the Union on August 6, 1998, and the following day,
August 7, 1998, at about 3:00 p.m., the Union lifted its strike.18
The strike staged by the Union on August 5-7, 1998 prompted the University to file on August 24, 1998 a
petition to declare the same illegal, docketed as NLRC-NCR Case No. 00-08-06897-98, which was also
consolidated with the other cases.
Resolving the consolidated cases, the NLRC, by Decision19 of October 12, 1998, disposed as follows:
WHEREFORE, judgment is hereby rendered declaring:
1. That the Unions two notices of strike docketed as NCMB-NCR-NS-12-520-97 and NCMB-NCR-NS-07-
277-98 were, to the extent as they concern the issues herein resolved, without merit;
2. That as a consequence, the University is absolved from the charges of Unfair Labor Practice contained
in said notices of strike;
3. The loss of employment status of all the individual respondents in NLRC-NCR-Case No. 00-08-06897-
98; and
4. That there is no diminution of workers benefits in NLRC-NCR Case No. 00-02-01422-98, because apart
from the Unions failure to prove it, the University, based on existing laws, is correct in using 314 days as
divisor in computing the daily wage of its daily paid employees.
SO ORDERED.20 Emphasis and italics supplied)
The NLRC found that what triggered the strike was the Unions suspicion that the petition for audit of
union funds was initiated by the University. The NLRC, citing an Order of March 11, 1998 issued by the
DOLE Regional Director, found the therein petitioners to have initiated, out of their own volition, the
filing of the petition. It thus concluded that there was no factual basis to hold the University guilty of
interference in union activities.21
On the allegation of union busting, the NLRC ruled that the refusal of the University to deduct penalties
from the salaries of members of the Union who failed to attend meetings was based on Article IV,
Section 222 of the CBA vis--vis Section 123 of the same Article which requires as condition for a valid
checkoff prior submission to the management of individual checkoff authorizations, a requirement
which was not met by the Union.24 Besides, the NLRC held, the law mandates that the Union should not
be arbitrary, excessive or oppressive in imposing a fine.25
On the claim that the University had been contracting out work, the NLRC held that the same was never
raised during the conciliation meetings at the NCMB level.26
Respecting the second Notice of Strike, the NLRC found that only the charges of violation of the CBA for
withholding union dues and death benefits, and the non-implementation of the retirement plan, as
approved by the BIR, were left for resolution as the Union dropped the other issues raised therein after
the NCMB hearings on July 21, 1998 and July 28, 1998.27
Crediting the explanation of the University that its withholding of union dues and death aid benefits was
upon the written request of several union members themselves, the NLRC held that no ULP was
committed.
On the charge of non-implementation of the retirement plan by the University, the NLRC found that the
same was baseless and it was in fact not ventilated before the NCMB.28
In NLRC NCR Case No. 00-02-02036-98, the NLRC ruled that the University may not be held guilty of ULP
for refusal to heed the demand of the Union that salaries of its members be deducted for their failure to
attend union meetings: firstly, because the Union itself failed to meet the requirements provided for in
Sections 1 and 2, Article IV of the CBA; and secondly, an interpleader had been filed by the University for
the parties to litigate their claims before the NLRC.29 The NLRC also ruled that the resolution calling for
such deduction was not valid as it was not even signed by the majority of Union officers and circulated
to the members.30
In NLRC NCR Case No. 00-08-06897-98 (the Universitys petition to declare the strike staged by the
Union on August 5-7, 1998 illegal), the NLRC granted the petition and declared the loss of employment
status of all the strikers for knowingly defying the Return-to-Work Order of the DOLE Secretary dated
August 5, 1998, said Order having been served upon the union on August 6, 1998 but it was only on
August 7, 1998, at about 3:00 p.m., that the strike was lifted.31
In NLRC NCR Case No. 00-02-01422-98, the NLRC ruled that the University was correct in using 314 days
as divisor, instead of 365 days, in computing the equivalent daily rate32 of pay of a worker.
The Union et al. (hereafter petitioners) filed a motion for reconsideration of the NLRC decision which
was denied by Resolution33 of January 20, 1999. Hence, they elevated the decision to the Court of
Appeals via petition for certiorari which was, as stated early on, dismissed.
In the present petition, petitioners insist that the University violated the CBA by withholding union dues
and death benefits. The University counters that on the request of Union members in light of their
gripes against the Union and its officers, it did withhold said dues and benefits which they deposited
with the DOLE where the parties could settle the issues among themselves.
The then prevailing Rules Implementing the Labor Code, Book V,34 Rule XVIII provided that
Section 1. Right of union to collect dues.The right of the incumbent bargaining representative to check
off and to collect dues resulting therefrom shall not be affected by the pendency of a representation
case or an intra-union dispute.35 (Emphasis supplied)
To constitute ULP, however, violations of the CBA must be gross. Gross violation of the CBA, under
Article 261 of the Labor Code, means flagrant and/or malicious refusal to comply with the economic
provisions thereof. Evidently, the University can not be faulted for ULP as it in good faith merely heeded
the above-said request of Union members.
On the NLRCs declaration of loss of employment status of the strikers, the pertinent provision of Article
264 of the Labor Code provides:
Article 264.
x x x x
. . . Any union officer who knowingly participates in an illegal strike and any worker or union officer who
knowingly participates in the commission of illegal acts during a strike may be declared to have lost his
employment status. . . (Emphasis and italics supplied)
Under the immediately quoted provision, an ordinary striking worker may not be declared to have lost
his employment status by mere participation in an illegal strike. There must be proof that he knowingly
participated in the commission of illegal acts during the strike. While the University adduced
photographs36 showing strikers picketing outside the university premises, it failed to identify who they
were. It thus failed to meet the substantiality of evidence test37 applicable in dismissal cases.
Petitioner-union members must thus be reinstated to their former position, without backwages. If
reinstatement is no longer possible, they should receive separation pay of One (1) Month for every year
of service in accordance with existing jurisprudence.38
With respect to the union officers, as already discussed, their mere participation in the illegal strike
warrants their dismissal.
As for petitioners claim of substantial diminution of their salary on account of the divisor used by the
University in its computation314 days, instead of 365 days, this Court finds nothing wrong therewith.
Sundays being un-worked and considered unpaid rest days, while regular holidays as well as special
holidays considered as paid days,39 the factor used by the University merely complies with the basic
rule in this jurisdiction of no work, no pay. The right to be paid for unworked days is generally limited
to the ten legal holidays in a year.40
WHEREFORE, the Court of Appeals Resolution of April 13, 1999 and Resolution of September 3, 1999 are
SET ASIDE.
The NLRC Decision of October 12, 1998 and Resolution of January 20, 1999 are AFFIRMED, with the
MODIFICATION that the dismissal of petitioner-union members MONICO CALMA, CONSTANCIO
BAYHONAN, BERNARDO SABLE, NESTOR BRINOSA, NANJI MACARAMPAT, EDUARDO FLORAGUE and
DIONY S. LUMANTA is SET ASIDE, and they are thus ordered REINSTATED WITHOUT BACKWAGES. If their
reinstatement is no longer possible, however, they should be given SEPARATION PAY at the rate of One
(1) Month pay for every year of service.
SO ORDERED.
Quisumbing (Chairman), Carpio, Tinga and Velasco, Jr., JJ., concur.
Resolutions set aside, that of National Labor Relations Commission affirmed with modification.
Notes.The act of compelling employees to sign an instrument indicating that the employer observed
labor standards provisions of law when he might have not, together with the act of terminating or
coercing those who refuse to cooperate with the employers scheme, constitutes unfair labor practice.
(Mabeza vs. National Labor Relations Commission, 271 SCRA 670 [1997])
An employer may be guilty of ULP in interfering with the right to self-organization even before the union
has been registered. (Samahan ng mga Manggagawa sa Bandolino-LMLC vs. National Labor Relations
Commission, 275 SCRA 633 [1997])
o0o [Arellano University Employees and Workers Union vs. Court of Appeals, 502 SCRA
219(2006)]