Quitclaim | Illegal Strike | Authorized Causes - Labor Code, Department Order No. 147-15 | TERMINATION BY EMPLOYER

Comprehensive Discussion on Illegal Strikes and Quitclaims Under Philippine Labor Law

Under Philippine labor law, an employer’s right to terminate employment is governed by both substantive and procedural standards laid down in the Labor Code of the Philippines and its implementing rules and regulations, as well as by relevant Department of Labor and Employment (DOLE) issuances, such as Department Order No. 147-15. One of the authorized causes for termination by an employer is employee participation in an illegal strike. In the wake of such a strike, it is not uncommon for employers and employees to enter into compromise settlements embodied in quitclaims. Understanding the legal parameters of illegal strikes and quitclaims is critical for ensuring that terminations and settlements withstand judicial scrutiny.

1. The Concept of Illegal Strikes

A strike is defined under the Labor Code (Presidential Decree No. 442, as amended) as any temporary stoppage of work by the concerted action of employees. Employees have a constitutionally guaranteed right to strike, but this right is not absolute. Lawful strikes must comply with the substantive and procedural requirements under the Labor Code and its implementing rules, including:

• A valid ground (e.g., gross violation of the Collective Bargaining Agreement or economic issues after a deadlock in CBA negotiations).
• Observance of the mandatory notice of strike and cooling-off periods.
• Approval of the strike by a majority of the union members through a secret ballot.
• Non-violation of any assumption or certification orders issued by the Secretary of Labor and Employment.

A strike may be declared illegal if it does not conform to these legal and procedural conditions, if it employs illegal means (e.g., violence, coercion, intimidation), or if it is staged for a clearly prohibited purpose, such as protesting a representation issue outside of the mandatory processes. Participation in an illegal strike subjects employees to possible disciplinary action, including termination, provided that the employer observes due process.

2. Legal Consequences of Participation in an Illegal Strike

The Labor Code allows the dismissal of employees who knowingly participate in an illegal strike. The Supreme Court of the Philippines has recognized this as a valid exercise of management prerogative, aligning with the principle that the right to strike, while protected, must not be abused. In cases where the strike is later adjudged illegal, the employer may lawfully terminate the services of participating employees or impose lesser penalties depending on the circumstances.

However, the termination process is not freewheeling. Even in such scenarios, Department Order No. 147-15 (Guidelines on the Prevention of Illegal Dismissals and the Affirmation of the Constitutional Right of Workers to Security of Tenure) mandates the observance of substantive and procedural due process. Substantively, there must be a just or authorized cause (in this case, participation in an illegal strike), and procedurally, the employer must serve a notice specifying the grounds and conduct a hearing or conference where the employee can explain their side. After due consideration, a final notice of termination is issued if justified.

3. Quitclaims as a Means of Settlement

In the aftermath of labor disputes, including those involving illegal strikes, it is a common practice for the parties to settle their differences. One mechanism for settlement is the execution of a quitclaim or waiver by the employee in favor of the employer. A quitclaim typically involves the employee receiving a sum of money or other consideration in exchange for waiving any and all claims arising from the employment relationship, including claims related to the termination or the strike.

The legal enforceability of quitclaims is governed by a nuanced body of case law developed by the Philippine Supreme Court. While the Court generally acknowledges the validity of quitclaims as a means to amicably settle disputes, it has repeatedly emphasized certain conditions for their validity:

1. Voluntariness and Freedom from Coercion:
   The quitclaim must be freely and voluntarily executed by the employee without intimidation, force, fraud, threat, or undue influence. If the circumstances suggest that the employee signed under duress or without a genuine choice, the quitclaim may be declared invalid.

2. Full Understanding of Rights Waived:
   The employee must have a full and clear understanding of the consequences of the quitclaim. This includes knowledge of the rights they are relinquishing and the financial benefits or claims they would have otherwise been entitled to. Employees should be encouraged to seek independent counsel or at least be informed of their right to do so before signing.

3. Sufficient Consideration and Reasonableness:
   A nominal amount of settlement cannot justify a broad waiver of substantial labor rights. The amount or benefit given to the employee must be fair, reasonable, and proportionate under the circumstances. Courts look into the substantiality of the consideration to determine if the employee truly benefited from the settlement.

4. Public Policy on Quitclaims

While the Supreme Court does not prohibit quitclaims, it is cautious about them because fundamental labor rights are generally considered beyond private waiver, especially when mandated by law (e.g., payment of basic labor standards such as minimum wage, holiday pay, or 13th month pay). As a rule:

• Non-Waivability of Statutory Benefits:
  Benefits required by law, such as minimum wage and other labor standards, cannot be validly waived through a quitclaim.

• Pro-Employee Construction:
  Philippine labor laws are construed in favor of the employee. Thus, in cases of doubt, the courts tend to rule against the employer if there is any ambiguity in the quitclaim’s language or in the circumstances of its execution.

5. Interaction Between Illegal Strikes and Quitclaims

When employees engage in an illegal strike and are consequently subject to dismissal, one possible resolution is for the employer to offer a settlement package to those employees in exchange for their execution of quitclaims. This may occur when both parties prefer a swift resolution and the employees, though facing valid grounds for termination, choose to accept a lump sum settlement instead of pursuing protracted litigation.

In such scenarios, the following considerations apply:

• Due Process Before Settlement:
  Even if employees ultimately sign quitclaims, the employer should still follow the due process requirements. The existence of a valid settlement does not excuse non-compliance with procedural due process if the terminations are subsequently challenged.

• Ensuring the Voluntariness of the Quitclaim:
  Post-strike emotions may be charged. Employers must be extra careful to ensure that employees are not pressured or coerced into signing quitclaims. An atmosphere free from intimidation should be fostered, and the terms of the settlement should be clearly explained.

• Legal Counsel and Presence of a Union or Representative:
  If the employees are unionized, the union’s participation or counsel’s assistance in drafting and explaining the quitclaim is prudent. This helps bolster the presumption of voluntariness and informed consent.

6. Jurisprudential Standards

Philippine jurisprudence is replete with cases where the Supreme Court scrutinized the validity of quitclaims. While the Court generally respects the parties’ freedom to contract and settle, it invalidates or reduces unconscionable quitclaims. Notable principles from case law include:

• The Court upholds quitclaims that are executed voluntarily, with full knowledge and adequate consideration.
• The Court strikes down quitclaims exacted through fraud, deception, or pressure.
• The Court rules that employees cannot be tricked into surrendering benefits granted by law; statutory rights are not subject to waiver.

7. Practical Implications for Employers and Employees

For employers, maintaining documentation and following procedural due process is critical. Before resorting to quitclaims following an illegal strike, employers must ensure that the strike has been properly declared illegal, that due process in termination has been observed, and that the terms of any settlement package are fair and clearly communicated.

For employees, it is essential to understand that while signing a quitclaim may secure immediate monetary relief, it often means permanently foregoing any future claims arising from the disputed termination. Seeking the assistance of an independent counsel or a reputable union representative before signing can help employees make informed decisions.

8. Conclusion

The intersection of illegal strikes, terminations, and quitclaims under Philippine labor law is governed by a balance between the employer’s legitimate business interests and the protection of employees’ statutory and constitutional rights. Department Order No. 147-15 serves as a procedural guide, ensuring that termination—even in cases of illegal strikes—is carried out with fairness and legality. Quitclaims, in turn, are permitted mechanisms for resolving disputes, provided they are entered into knowingly, voluntarily, and with adequate consideration. Ultimately, the validity and enforceability of quitclaims depend on the circumstances of their execution and their consonance with public policy, labor standards, and established jurisprudence.

Procedure - Labor Code, Department Order No. 147-15 | Illegal Strike | Authorized Causes - Labor Code, Department Order No. 147-15 | TERMINATION BY EMPLOYER

Comprehensive Discussion on Termination Due to Illegal Strike and the Applicable Procedure under the Labor Code and Department Order No. 147-15

I. Legal Framework

1. Labor Code of the Philippines: The right of workers to engage in concerted activities, including the right to strike, is recognized under the Labor Code. However, this right is not absolute; it must be exercised in accordance with law and established procedure. Strikes undertaken without complying with mandatory legal requirements, or conducted for prohibited objectives, are deemed illegal.

2. Department Order No. 147-15: Issued by the Department of Labor and Employment (DOLE), DO No. 147-15 provides the detailed procedural guidelines governing the termination of employment due to just and authorized causes. Although more commonly referenced for dismissals under just causes (e.g., serious misconduct, willful disobedience, gross and habitual neglect of duty), its procedural due process requirements also apply when termination is effected due to participation in an illegal strike, which is considered a valid ground for termination.

II. Nature of an Illegal Strike

1. Definition of an Illegal Strike:

   • A strike is a concerted work stoppage undertaken by employees.
   • It becomes illegal if it is:
     a. Declared or staged without the requisite notice of strike and/or without observing the prescribed cooling-off and strike vote periods.
     b. Conducted during the pendency of mandatory arbitration or certification proceedings, or in defiance of a return-to-work order issued by the Secretary of Labor and Employment or by the National Labor Relations Commission (NLRC).
     c. For purposes not authorized by law, such as purely political or sympathy strikes without any direct labor dispute.

2. Consequences of Illegality:

   • Once a strike is declared illegal by competent authority (e.g., the NLRC, the Secretary of Labor, or the courts), union officers who knowingly participated in its illegal conduct may be summarily terminated.
   • Rank-and-file members who participated, depending on their degree of involvement and provided there are aggravating circumstances, may also be subject to disciplinary action up to and including dismissal. However, the law tends to be more lenient with ordinary members, often allowing reinstatement without backwages, unless their participation was coupled with unlawful or violent acts.

3. Distinction Between Officers and Members:

   • Union Officers: The Labor Code explicitly states that union officers who knowingly participate in an illegal strike lose their employment status. The rationale is that leaders are presumed to know the legal requirements and to guide their members accordingly.
   • Union Members: Ordinary participants generally retain the possibility of reinstatement unless their actions during the strike are particularly egregious (e.g., committing serious misconduct, violence, or defiance of lawful orders).

III. Procedure for Declaring and Establishing Illegality of a Strike

1. Administrative and Judicial Determination:

   • Normally, the legality or illegality of a strike is determined by the NLRC or the Secretary of Labor and Employment, especially when the dispute has been certified for compulsory arbitration.
   • The determination of illegality follows proper proceedings which may involve:
     a. Submission of position papers and evidence by both employer and union.
     b. A formal hearing or conference before a labor arbiter or panel in the NLRC.
     c. An official order or decision declaring the strike illegal.

2. Effect of a Declaration of Illegality:

   • The decision or order clearly stating the strike’s illegality forms the legal basis for an employer to proceed with disciplinary action, including termination of union officers and, under appropriate circumstances, members.

IV. Procedural Due Process in the Termination of Employees for Participation in an Illegal Strike
Even if the ground for termination arises from an illegal strike, the employer must still observe the fundamental requirements of due process, as laid out by the Labor Code and by DO No. 147-15. Specifically:

1. Notice Requirements:

   • First Written Notice (Show-Cause Notice): Before an employer may terminate an employee for having participated in an illegal strike, the employer must issue a written notice specifying the act or omission for which termination is sought. This notice should contain:
     a. A detailed narration of the facts and circumstances that serve as the basis for the charge of illegal participation.
     b. Reference to the official finding (e.g., the declaration of illegality by the NLRC or the Secretary of Labor).
   • The employee must be given a reasonable period (commonly at least five [5] calendar days) within which to submit a written explanation or rebuttal.

2. Opportunity to Be Heard:

   • After the employee receives the show-cause notice, the employer should provide a hearing or conference if requested by the employee, or if the circumstances require it. This step ensures that the employee has a fair chance to explain his or her side, present evidence, and argue why termination should not occur.

3. Second Written Notice (Decision to Terminate):

   • Once the employer has considered the employee’s explanation and all the evidence at hand, the employer must issue a second written notice communicating the decision.
   • If the decision is to terminate, the notice must clearly state the reason(s) for the termination, referencing the illegal strike participation and the basis for determining that such participation warrants dismissal. It should reflect that the employer fairly evaluated the employee’s explanation and all relevant circumstances.

4. Compliance with the “Two-Notice Rule”:

   • The entire disciplinary process, consistent with DO 147-15, adheres to the “two-notice rule”: the first notice is a statement of charges and the second notice is the final decision. This procedure ensures that due process is not merely a formality but a meaningful safeguard for the employee’s rights.

5. Good Faith and Documentation:

   • The employer must document every step of the process, including the issuance of notices, the employee’s response, and the conduct of any hearing or conference. Proper documentation is crucial to support the legality and fairness of the termination if questioned later before labor tribunals or courts.

V. Distinguishing Authorized Causes from Just Causes in Relation to Illegal Strikes
While illegal strike participation can be viewed as a form of serious misconduct or willful breach of employment obligations (hence often categorized under “just causes” for termination), it may also be considered under the broader classification of authorized causes arising from the Labor Code’s provisions on labor relations. The key point is that the termination process must still follow procedural due process, regardless of how the cause is classified. The ground is effectively derived from a legal determination of wrongdoing (i.e., the illegal strike), which provides the employer a lawful basis to sever the employment relationship.

VI. Remedies and Recourse for Affected Employees

1. Right to Contest the Termination:

   • Employees who believe their termination for participation in an illegal strike was improper—either because the strike was not illegal, they were not actually involved, or due process was not observed—may file a complaint for illegal dismissal before the appropriate labor arbiter of the NLRC.

2. Burden of Proof on Employer:

   • The employer has the burden of proof to show that the strike was indeed declared illegal by a competent authority and that the concerned employee’s participation was knowing and voluntary.
   • The employer must also prove compliance with procedural due process requirements.

3. Potential Outcomes:

   • If the NLRC or appellate courts find that the termination violated due process or that the employee was not properly implicated, remedies may include reinstatement, backwages, or damages, depending on the attending circumstances and the extent of the violation.

VII. Importance of Strict Compliance
Due to the sensitivity and gravity of termination, especially when connected to fundamental labor rights like the right to strike, strict adherence to the procedural guidelines in the Labor Code and DO 147-15 is critical. Employers must ensure that:

1. The strike was declared illegal by a competent authority.
2. The implicated employees (especially union officers) are given due process as mandated by law.
3. The disciplinary action taken is proportionate and documented thoroughly.

VIII. Conclusion
Termination based on participation in an illegal strike is permissible under Philippine labor law, but it is not an automatic or summary process. The employer must first establish the strike’s illegality through lawful proceedings, identify the culpability of the employees involved—particularly distinguishing officers who knowingly led or participated from ordinary members—and then follow the strict procedural due process prescribed by the Labor Code and Department Order No. 147-15. Failure to adhere to these procedures can render the termination illegal and expose the employer to significant legal liabilities.

Illegal Strike | Authorized Causes - Labor Code, Department Order No. 147-15 | TERMINATION BY EMPLOYER

Under Philippine labor law, a strike is the concerted work stoppage undertaken by employees to enforce demands against their employer regarding employment terms and conditions. Strikes are governed primarily by the Labor Code of the Philippines (particularly Book V, Title VII) and various implementing rules and regulations. While the law respects the right of workers to engage in concerted activities, it sets stringent procedural and substantive requirements to ensure that strikes are lawful. When these requirements are not met, a strike is deemed illegal. Participation in an illegal strike can serve as a valid ground for termination, subject to both substantive and procedural due process requirements set forth by the Labor Code and Department of Labor and Employment (DOLE) issuances, including Department Order (D.O.) No. 147-15.

1. Legal Framework and Governing Principles

• Constitutional Underpinnings: The 1987 Philippine Constitution guarantees the rights of workers to self-organization, collective bargaining, and peaceful concerted activities, including the right to strike. However, the exercise of this right is not absolute. The State may regulate strikes to protect public interest, ensure the orderly exercise of the right, and maintain industrial peace.

• Labor Code Provisions: The Labor Code sets forth the legal requisites for a valid strike. Generally, for a strike to be lawful, it must:

  1. Be based on a legitimate ground, such as a collective bargaining deadlock or unfair labor practice (ULP) committed by the employer.
  2. Comply with procedural requirements: the filing of a notice of strike with the National Conciliation and Mediation Board (NCMB), observance of a prescribed cooling-off period (30 days for bargaining deadlocks, 15 days for ULPs), the conduct and majority approval of a strike vote by secret ballot, and proper notice of the results of the strike vote.
  3. Occur after conciliation and mediation efforts have failed to resolve the dispute.

If these conditions are not satisfied, the strike is considered illegal. Strikes that violate a no-strike clause in a collective bargaining agreement (CBA), are staged without the required notice, or defy the assumption or certification order of the Secretary of Labor and Employment (who may direct parties to desist from or resume operations in critical industries) are also illegal.

2. Grounds for Declaring a Strike Illegal

A strike can be deemed illegal for various reasons, including but not limited to:

• Lack of a Valid Cause: Staging a strike for reasons not authorized by the Labor Code, such as trivial grievances or purely political motivations.
• Non-Compliance with Procedural Requirements: Failure to file the required notices, hold a valid strike vote, or observe the mandated cooling-off period.
• Defiance of Government Intervention: Once the Secretary of Labor and Employment assumes jurisdiction over a labor dispute in an industry indispensable to the national interest, or certifies it to the National Labor Relations Commission (NLRC), any strike staged thereafter is illegal.
• Illegal Acts During a Strike: Even if the strike was initially legal, the commission of illegal acts (e.g., violence, sabotage, serious property damage, intimidation, or preventing willing workers and suppliers from entering the premises) can render it illegal.

3. Consequences of Participation in an Illegal Strike

Participating in an illegal strike may constitute a just cause for termination of employment. Under the Labor Code and long-established Supreme Court jurisprudence, employees who engage in an illegal strike may lose their employment status. The employer, however, must observe due process and must differentiate between union officers and ordinary union members:

• Union Officers: Officers of a union bear a higher degree of responsibility. If they knowingly participate in or lead an illegal strike, their acts are considered serious misconduct. They may be validly terminated from employment without a corresponding obligation on the part of the employer to reinstate them.

• Ordinary Union Members: For rank-and-file employees who join an illegal strike, the law and jurisprudence are somewhat more lenient. Mere participation by rank-and-file members in an illegal strike may be a ground for disciplinary action, including dismissal, but the Supreme Court has repeatedly emphasized that reinstatement may be possible if the employees apply for re-employment and express genuine remorse or willingness to comply with lawful management directives. Nevertheless, if they committed illegal acts (such as violence, coercion, or preventing non-strikers from working) during the strike, termination may be justified.

4. Legal Basis for Termination: Just Cause vs. Authorized Cause

The Labor Code distinguishes between “just causes” and “authorized causes” for termination. Strictly speaking, participation in an illegal strike is typically addressed under just causes for termination—not authorized causes. Just causes (Art. 297 [formerly Art. 282] of the Labor Code) include serious misconduct, willful disobedience, gross and habitual neglect of duties, fraud, breach of trust, and commission of a crime against the employer or co-employees, among others.

Engaging in an illegal strike often falls under serious misconduct or willful breach of discipline because it contravenes the lawful processes provided by the Labor Code. Although the user’s categorization may place illegal strike under “Authorized Causes” as per a given outline, it is traditionally understood as a just cause for dismissal. This discrepancy may arise from the manner in which references or outlines are organized. Nonetheless, from a doctrinal standpoint, illegal strikes serve as a just cause for termination rather than an “authorized cause” (which usually pertains to economic or business-related grounds, like retrenchment, redundancy, closure, or disease).

5. Procedural Due Process Requirements Under Department Order No. 147-15

DOLE Department Order No. 147-15 provides guidelines on the procedural aspects of termination for just and authorized causes. The twin requirements of notice and hearing must be observed even when terminating employees for participating in an illegal strike:

• First Notice (Notice to Explain/Show Cause): The employer must issue a written notice informing the employee of the specific grounds (e.g., participation in an illegal strike), the acts constituting the violation, and giving the employee an opportunity to submit a written explanation.

• Hearing or Conference: The employee must be given a reasonable chance to respond, present evidence, and defend themselves against the accusation. This can be done through a formal hearing or a less formal conference, provided the employee’s right to due process is upheld.

• Second Notice (Notice of Decision): After considering the employee’s explanation and any evidence presented, the employer must issue a second written notice, stating clearly the decision to terminate (or otherwise discipline) the employee, the reasons for such decision, and the effective date of termination.

Failure to comply with these procedural requirements does not invalidate the just cause for termination but may render the employer liable for nominal damages due to violation of due process rights.

6. Burden of Proof and Evidentiary Matters

The employer bears the burden of proving that:

• The strike was illegal.
• The employee knowingly and actively participated in the illegal strike or committed illegal acts therein.

Solid proof—such as documentary evidence, eyewitness accounts, or official findings of labor authorities—is critical. If the employer cannot substantiate the allegations, the employee should not be dismissed.

7. Judicial and Quasi-Judicial Precedents

The Supreme Court of the Philippines has consistently upheld the employer’s right to dismiss employees who take part in illegal strikes, especially union officers who orchestrate such strikes. Key rulings have reiterated that the right to strike is not a license to violate legal prerequisites, and that employees must exercise their collective actions within the bounds of law. Courts generally balance the rights of employees with the employer’s prerogatives and the broader national interest in stable industrial relations.

However, courts also stress that not all participants in an illegal strike should automatically be terminated. The degree of involvement, the presence (or absence) of violence, and the timeliness of employees’ willingness to return to work are considered. The “plain members” who were merely misled into joining may be shown leniency under certain circumstances.

8. Reinstatement and Post-Strike Resolution

Depending on the severity of the illegal strike and the employer’s discretion, employees who participated may be reinstated if they show good faith, apply for reemployment, and commit to respecting lawful processes going forward. If the employer refuses reinstatement, the matter may be challenged before the NLRC or the appellate courts, which will evaluate whether the penalty of dismissal was commensurate to the offense and whether due process was observed.

9. Interaction with Collective Bargaining and Industrial Harmony

The regulation of strikes, particularly the illegality of those conducted in violation of the Labor Code, aims to maintain industrial peace and protect the economic survival of enterprises. By penalizing illegal strikes, the law encourages unions and employers to resolve their disputes through legally prescribed mechanisms—conciliation, mediation, voluntary arbitration, and other dispute-resolution procedures—before resorting to disruptive work stoppages.

In Summary:

Participation in an illegal strike constitutes a serious violation of the Labor Code’s prescriptions for lawful concerted activity. Union officers who knowingly lead or participate in an illegal strike may be terminated from employment. Rank-and-file employees who join an illegal strike may also face dismissal but, depending on the circumstances, may be reinstated if they demonstrate a willingness to abide by the law and the directives of the employer. The termination process must comply with the procedural due process requirements set out in D.O. No. 147-15, which mandates proper notice, a fair hearing, and the issuance of a written decision. Ultimately, the strict regulation of illegal strikes reflects the State’s effort to balance workers’ rights with the need for industrial peace, economic stability, and respect for the lawful processes that govern labor relations in the Philippines.