ASG Law

Category: Strike Law

Strike a Balance: Understanding Legal vs. Illegal Strikes in the Philippines
When Strikes Cross the Line: Illegal Means and Loss of Employment

Strikes are a powerful tool for labor unions, but in the Philippines, the line between a legal and illegal strike hinges not just on the reason for striking, but also on how the strike is conducted. This case highlights that even with valid grievances, unions can face severe consequences if they employ unlawful means, potentially leading to the loss of employment for participating members. This underscores the critical importance of adhering to legal boundaries during labor actions.

G.R. NO. 167347, January 31, 2007: CHUAYUCO STEEL MANUFACTURING CORPORATION AND/OR EDWIN CHUA, PETITIONERS, VS. BUKLOD NG MANGGAGAWA SA CHUAYUCO STEEL MANUFACTURING CORPORATION, RESPONDENT.

INTRODUCTION

Imagine a factory gate blocked by large stones and chains, preventing workers from entering and goods from leaving. This was the reality faced by Chuayuco Steel Manufacturing Corporation during a strike by its union, Buklod ng Manggagawa. While the union had legitimate grievances regarding unfair labor practices and refusal to bargain, their actions during the strike became their downfall. This Supreme Court case serves as a stark reminder that in labor disputes, the ends do not always justify the means. A strike, even if initiated for valid reasons, can be declared illegal if it involves prohibited activities, leading to serious repercussions for union members.

LEGAL CONTEXT: THE RULES OF THE GAME FOR STRIKES

Philippine labor law, while recognizing the right to strike, sets clear boundaries for its exercise. The Labor Code outlines what constitutes an illegal strike, focusing heavily on the methods employed. It’s not enough for a union to have a valid reason to strike; they must also conduct the strike within legal parameters.

Article 264(e) of the Labor Code is particularly crucial in this case. It explicitly states:

“(e) No person engaged in picketing shall commit any act of violence, coercion or intimidation or obstruct the free ingress to or egress from the employer’s premises for lawful purposes, or obstruct public thoroughfares.”

This provision clearly prohibits strikers from resorting to violence, intimidation, or obstruction of company premises. The law aims to maintain a balance, allowing workers to voice their grievances through strikes, but preventing actions that unduly disrupt business operations or endanger individuals.

Prior Supreme Court decisions have consistently emphasized this principle. As cited in this Chuayuco Steel case, United Seamen’s Union of The Philippines v. Davao Shipowners Association established that even if a strike’s purpose is valid, employing violence or causing injury or damage can render it illegal. Similarly, Liberal Labor vs. Phil. Can highlighted that strikes involving coercion, intimidation, and violence are unjustifiable and undermine the legal framework for peaceful labor dispute resolution.

Furthermore, Article 264(a) of the Labor Code distinguishes between union officers and members regarding liability for illegal strikes:

“. . . 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 . . .”

This means union officers face dismissal for participating in an illegal strike, while ordinary members can lose their jobs for knowingly committing illegal acts during a strike. The level of proof required is “substantial evidence,” meaning evidence that a reasonable mind might accept as adequate to justify a conclusion. This lower threshold of proof in labor cases underscores the importance of lawful conduct during strikes.

CASE BREAKDOWN: THE CHUAYUCO STEEL STRIKE

The Buklod ng Manggagawa union in Chuayuco Steel Manufacturing Corporation declared a strike, citing unfair labor practices and the company’s refusal to bargain. The roots of the conflict went deeper, stemming from the company’s initial refusal to recognize the newly elected union officers due to alleged internal union disputes. Despite the Department of Labor and Employment (DOLE) and the Bureau of Labor Relations (BLR) affirming the legitimacy of the new union leadership, the company remained resistant to bargaining.

Here’s a timeline of the key events:
1. May 10, 1999: Union election results in Camilo Lenizo as president, but the company refuses recognition.
2. November 30, 2000: Collective Bargaining Agreement (CBA) expires, and the company ignores the union’s proposals.
3. January 26, 2001: Union files a notice of strike with the National Conciliation Mediation Board (NCMB) due to unfair labor practices.
4. April 25, 2001: The union stages a strike.
5. May 9, 2001: The company files a Petition to Declare the Strike Illegal with the National Labor Relations Commission (NLRC), citing unlawful means used during the strike.
The company presented evidence, including sworn statements, detailing how striking union members blocked factory gates with chains, structures, and large stones, preventing ingress and egress. Witness testimonies also described acts of intimidation and harassment against non-striking employees, including threats of violence and physical assault. One witness stated strikers threatened, “that if we removed it, we would be hurt and there would be trouble while they were holding sticks and stones.” Another recounted being punched by a striker and facing threats of harm.

The Labor Arbiter initially declared the strike illegal, a decision affirmed by the NLRC. However, the Court of Appeals modified this, ordering the reinstatement of most union members, distinguishing between union officers and members who directly participated in illegal acts. The Court of Appeals, while acknowledging the strike’s illegality due to unlawful means, sought to mitigate the penalty for rank-and-file members.

The Supreme Court ultimately reviewed the case, emphasizing its limited role in factual review but acknowledging exceptions when NLRC findings lack substantial evidence. The Supreme Court quoted the Court of Appeals’ finding: “…the petitioner blocked the free ingress and egress of the private respondent’s premises by chaining the main gate, putting structures and placing large rocks before the gates of the company’s premises.” Based on the evidence, the Supreme Court concluded that the strike was indeed illegal due to the unlawful means employed.

However, the Supreme Court refined the penalty further. It upheld the dismissal of union officers and those members directly involved in illegal acts of obstruction, intimidation, and violence, specifically naming individuals identified in the sworn statements. Crucially, the Court ordered the reinstatement of other union members who were part of the strike but not proven to have personally participated in illegal activities. The Court also corrected the Court of Appeals’ decision by excluding employees who had resigned or not participated in the strike from the reinstatement order.

PRACTICAL IMPLICATIONS: STRIKING WITHIN THE LAW

This case reinforces a critical lesson for unions and employees in the Philippines: the right to strike is not absolute and must be exercised within the bounds of the law. While workers have the right to protest unfair labor practices and demand better working conditions, resorting to violence, intimidation, or obstruction can invalidate their strike and lead to severe consequences, including job loss.

For businesses, this case provides clarity on their rights during strikes. Employers are not obligated to tolerate illegal strike activities and can seek legal remedies, including declaring a strike illegal and potentially terminating employees who engage in unlawful conduct. However, employers must also ensure they are not provoking illegal strikes through unfair labor practices in the first place.

Key Lessons for Unions and Employees:
- Know the Law: Unions and members must be thoroughly familiar with Article 264 of the Labor Code and understand what constitutes legal and illegal strike conduct.
- Peaceful Assembly: Strikes should primarily involve peaceful picketing and assembly. Avoid any acts that could be construed as violence, coercion, or intimidation.
- Maintain Access: Do not block ingress and egress to company premises. Pickets should allow free passage for non-striking employees, customers, and deliveries.
- Discipline and Control: Union leaders must actively control their members’ conduct during strikes to prevent illegal acts by individuals, which could jeopardize the entire strike and members’ jobs.
- Documentation is Key: Both unions and employers should meticulously document all strike activities, including any instances of alleged illegal conduct, through photos, videos, and sworn statements, as evidence in potential legal proceedings.
FREQUENTLY ASKED QUESTIONS (FAQs)

Q: What makes a strike illegal in the Philippines?

A: A strike can be declared illegal for two main reasons: either the objective of the strike is unlawful (e.g., to compel an employer to commit an illegal act), or the means employed during the strike are unlawful (e.g., violence, intimidation, obstruction of premises). This case focuses on the latter – illegal means.

Q: Can union members be fired for participating in an illegal strike?

A: Yes, union officers who knowingly participate in an illegal strike can lose their employment status. Rank-and-file union members can also be dismissed if they knowingly participate in illegal acts during a strike, such as violence or obstruction.

Q: What are examples of illegal acts during a strike?

A: Illegal acts include: blocking factory gates, preventing people or vehicles from entering or leaving company premises, acts of violence against persons or property, threats and intimidation, and obstructing public roads. These actions violate Article 264(e) of the Labor Code.

Q: What is “substantial evidence” in labor cases?

A: Substantial evidence is the level of proof required in labor cases to prove illegal acts. It means relevant evidence that a reasonable person might accept as adequate to support a conclusion. It is a lower standard than “proof beyond reasonable doubt” in criminal cases.

Q: What should employers do if a strike turns violent or illegal?

A: Employers should document all illegal activities, seek a temporary restraining order or injunction from the NLRC to stop the illegal acts, and file a petition to declare the strike illegal. They may also initiate disciplinary actions against employees involved in illegal activities.

Q: What recourse do employees have if they believe a strike was wrongly declared illegal?

A: Unions can appeal decisions declaring a strike illegal to the Court of Appeals and ultimately to the Supreme Court. However, it is crucial to ensure the strike is conducted legally from the outset to avoid such situations.

Q: Is picketing always legal during a strike?

A: Yes, peaceful picketing is a legal and protected activity during a strike. However, picketing becomes illegal when it involves violence, intimidation, or obstruction of access to the employer’s premises.

Q: What is the role of the NLRC in strike cases?

A: The NLRC has jurisdiction over labor disputes, including strike legality. It can issue restraining orders and injunctions against illegal strike activities and ultimately decide whether a strike is legal or illegal.

ASG Law specializes in Labor Law and Litigation. Contact us or email hello@asglawpartners.com to schedule a consultation to ensure your labor practices and strike actions are legally sound.
January 31, 2007
When Strikes Turn Illegal: Understanding Return-to-Work Orders in Philippine Labor Law
Navigating Return-to-Work Orders: Why Immediate Compliance is Key to Legal Strikes

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A strike, a powerful tool for labor, can quickly become unlawful if procedures are ignored. This case underscores the critical importance of immediately ceasing strike actions and returning to work once the Secretary of Labor and Employment (SOLE) issues an Assumption of Jurisdiction Order (AJO). Ignoring an AJO can lead to a strike being declared illegal and union officers losing their jobs. This ruling emphasizes that procedural compliance is as crucial as the cause of the strike itself in Philippine labor disputes.

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G.R. NO. 169632, March 28, 2006

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INTRODUCTION

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Imagine workers on strike, passionately advocating for their rights, only to find their efforts invalidated and their jobs at risk due to a procedural misstep. This is the stark reality highlighted by the University of San Agustin Employees’ Union-FFW vs. Court of Appeals case. At its heart, this case delves into the critical juncture where a legal strike transforms into an illegal one – the moment a return-to-work order is issued by the Secretary of Labor and Employment. The central legal question: Was the union’s strike illegal due to their delayed compliance with the SOLE’s Assumption of Jurisdiction Order?

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The University of San Agustin Employees’ Union (USAEU-FFW) declared a strike over a bargaining deadlock regarding economic provisions in their Collective Bargaining Agreement (CBA). The Secretary of Labor and Employment intervened by issuing an Assumption of Jurisdiction Order, effectively ordering the union to cease their strike and return to work. However, the union did not immediately comply, leading to a legal battle that reached the Supreme Court. This case serves as a crucial lesson on the stringent requirements of Philippine labor law when the government intervenes in labor disputes.

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LEGAL CONTEXT: The Power of Assumption of Jurisdiction and Return-to-Work Orders

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Philippine labor law, particularly Article 263(g) of the Labor Code, grants the Secretary of Labor and Employment significant power to intervene in labor disputes that are deemed to affect national interest. This provision is crucial for maintaining industrial peace and ensuring essential services are uninterrupted. It states:

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“When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory arbitration. Such assumption or certification shall have the effect of automatically enjoining the intended or impending strike or lockout as specified in the assumption or certification order. If one has already taken place at the time of assumption or certification, all striking or locked out employees shall immediately return to work and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout.”

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This legal provision is the backbone of the SOLE’s authority in this case. The key phrase here is “shall immediately return to work.” The Supreme Court has consistently interpreted “immediately” to mean prompt and without delay, not allowing for a grace period unless explicitly stated in the order itself. Furthermore, Collective Bargaining Agreements often include grievance machinery and voluntary arbitration clauses, designed to resolve disputes internally before resorting to strikes. These mechanisms are favored by law to promote harmonious labor-management relations and are generally upheld unless demonstrably inadequate.

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Prior Supreme Court decisions, such as Trans-Asia Shipping Lines, Inc. vs. CA, have affirmed the broad discretionary powers of the SOLE in resolving labor disputes under Article 263(g). The intent is to provide a swift and effective means to settle disputes affecting national interest, even if it means curtailing the right to strike temporarily to allow for government intervention and resolution.

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CASE BREAKDOWN: Defiance and the Price of Delay

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The timeline of events is crucial in understanding the Court’s decision. The University of San Agustin and its employees’ union entered into a CBA with a “no-strike, no-lockout” clause and a grievance machinery. When negotiations for economic provisions reached a deadlock, the union filed a Notice of Strike. The University, citing the CBA, requested referral to voluntary arbitration. Despite this, the union proceeded with strike preparations.

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Here’s a step-by-step breakdown of the critical events leading to the strike being declared illegal:

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1. Impasse and Notice of Strike: Negotiations for CBA economic provisions failed, leading to a bargaining deadlock and the union filing a Notice of Strike.
2. University’s Motion: The University filed a Motion to Strike Out Notice of Strike and to Refer the Dispute to Voluntary Arbitration, based on the CBA’s provisions.
3. SOLE Assumption of Jurisdiction: The Secretary of Labor and Employment issued an Assumption of Jurisdiction Order (AJO) on September 18, 2003, effectively enjoining any strike.
4. Strike Commences and Refusal of Service: On September 19, 2003, the union commenced the strike. Sheriffs arrived to serve the AJO, but union officers, citing a Union Board Resolution, refused to officially receive it, stating only the union president could receive such orders.
5. Posting of AJO and Continued Strike: Sheriffs posted the AJO at the university premises at 8:45 a.m., informing the union that service was considered complete. Despite this, the strike continued.
6. Late Receipt by Union President: The union president finally received the AJO at 5:25 p.m., hours after the strike had begun and service was already deemed completed.
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The Supreme Court emphasized the Sheriff’s Report as crucial evidence. The report detailed the union officers’ refusal to receive the AJO and their insistence on waiting for the union president. The Court stated, “The sheriff’s report unequivocally stated the union officers’ refusal to receive the AJO when served on them in the morning of September 19, 2003… To controvert the presumption arising therefrom, there must be clear and convincing evidence.” The union failed to provide such evidence, and the Court found their actions to be a deliberate defiance of the SOLE’s order.

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The Court further reasoned, “Conclusively, when the SOLE assumes jurisdiction over a labor dispute in an industry indispensable to national interest or certifies the same to the NLRC for compulsory arbitration, such assumption or certification shall have the effect of automatically enjoining the intended or impending strike or lockout…if one had already taken place, all striking workers shall immediately return to work…” Because the strike continued after the AJO was effectively served at 8:45 a.m., it was deemed illegal. Consequently, the participating union officers were declared to have lost their employment status.

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PRACTICAL IMPLICATIONS: Heeding the Return-to-Work Order and Honoring CBA Processes

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This case sends a clear message: When the SOLE issues an Assumption of Jurisdiction Order, immediate and unequivocal compliance is not just advisable, it is legally mandated. Any delay, even if perceived as minor, can have severe consequences, including the declaration of strike illegality and potential loss of employment for union leaders.

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For unions, this ruling underscores the importance of educating officers and members about the legal ramifications of AJOs and the necessity of immediate return-to-work. Union internal procedures, like the board resolution requiring only the president to receive official orders, cannot supersede legal service protocols or justify non-compliance with lawful orders.

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For employers, this case reinforces the value of including grievance machinery and voluntary arbitration clauses in CBAs. By consistently advocating for these internal dispute resolution mechanisms, employers can demonstrate good faith and potentially avoid costly and disruptive strikes. Furthermore, employers should ensure they properly document and report any instances of union non-compliance with AJOs to protect their legal position.

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Key Lessons:

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- Immediate Compliance is Non-Negotiable: Return-to-work orders under an AJO must be obeyed instantly upon service, regardless of union internal protocols.
- Sheriff’s Report is Strong Evidence: Sheriff’s reports are presumed accurate; disputing them requires substantial evidence.
- CBA Grievance Machinery Matters: Exhausting CBA- предусмотренное grievance procedures and voluntary arbitration is favored and can prevent strikes.
- Procedural Compliance is Key: Even if the cause of the strike is valid, procedural errors like defying an AJO can render it illegal.
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FREQUENTLY ASKED QUESTIONS (FAQs)

np>Q1: What is an Assumption of Jurisdiction Order (AJO)?

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A: An AJO is an order issued by the Secretary of Labor and Employment when a labor dispute in an industry crucial to national interest threatens to cause or is causing a strike or lockout. It empowers the SOLE to take control of the dispute and decide it, effectively stopping any ongoing or planned strike or lockout.

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Q2: What does “immediately return to work” mean under an AJO?

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A: “Immediately” means workers must cease striking and physically return to their jobs as soon as the AJO is served or effectively communicated. There’s no 24-hour grace period implied unless explicitly stated in the order. Delay in returning to work can be considered defiance.

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Q3: What happens if a union refuses to receive an AJO?

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A: Refusal to personally receive an AJO does not invalidate its service. As demonstrated in this case, authorities can effect service by posting the order at conspicuous locations, and service is considered complete from the time of posting. Attempts to evade service will not be legally effective.

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Q4: Can union officers lose their jobs for an illegal strike?

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A: Yes, union officers can lose their employment status for knowingly participating in an illegal strike. This case explicitly affirms this consequence as a penalty for disregarding a return-to-work order.

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Q5: What is the role of grievance machinery and voluntary arbitration in CBAs?

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A: Grievance machinery and voluntary arbitration are dispute resolution mechanisms within Collective Bargaining Agreements. They are designed to resolve issues internally, avoiding strikes and lockouts. Philippine law encourages their use, and parties are generally expected to exhaust these procedures before resorting to strikes.

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Q6: Is every strike during an AJO automatically illegal?

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A: Yes, generally, any strike that continues or commences after a valid AJO has been issued and served is considered illegal. The purpose of the AJO is to halt labor actions to allow for government intervention and resolution of the dispute.

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Q7: What industries are considered of “national interest” for AJO purposes?

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A: Industries considered of national interest typically include essential services like hospitals, utilities (power, water), transportation, communication, and education, among others. The SOLE has discretion to determine if a particular industry falls under this category based on the specific circumstances of the dispute.

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ASG Law specializes in Labor Law and Litigation. Contact us or email hello@asglawpartners.com to schedule a consultation.

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March 28, 2006
Illegal Strikes and Union Liability in the Philippines: Understanding Agency and Responsibility
When is a National Union Liable for an Illegal Strike? Lessons from the Philippine Supreme Court

TLDR: This case clarifies that in the Philippines, a national labor union is generally not held directly liable for damages resulting from an illegal strike staged by its local chapter. The local union, as the principal, bears primary responsibility, even if the national union provided assistance. This highlights the importance of understanding the agency relationship between national and local unions in labor disputes.

G.R. No. 115180, November 16, 1999

INTRODUCTION

Imagine a company facing significant financial losses due to a strike it claims was illegal. Who is responsible for those losses? Is it just the local workers who walked out, or could the larger national union backing them also be held accountable? This question is critical in labor disputes, where the lines of responsibility can become blurred. The Philippine Supreme Court case of Filipino Pipe and Foundry Corporation vs. National Labor Relations Commission delves into this very issue, providing crucial insights into the liability of national labor unions for strikes initiated by their local chapters. In this case, a company sought to hold a national union and its president liable for damages caused by a strike declared illegal by labor authorities. The central legal question was whether the national union, by assisting its local chapter, became primarily responsible for the illegal strike and its financial repercussions.

LEGAL CONTEXT: Strikes, Illegal Strikes, and Union Responsibility in Philippine Labor Law

Philippine labor law recognizes the right to strike as a fundamental tool for workers to address grievances and bargain for better terms and conditions of employment. However, this right is not absolute and is governed by specific rules and procedures outlined in the Labor Code and its Implementing Rules. A strike, to be considered legal, must adhere to these regulations, particularly concerning the grounds for striking, notice requirements, and the conduct of strike activities.

The Labor Code stipulates that strikes are permissible in cases of bargaining deadlocks and unfair labor practices. Rule XXII, Book V, Section 1 of the Rules Implementing the Labor Code explicitly states: “A strike or lockout may be declared in cases of bargaining deadlocks and unfair labor practices. Violations of collective bargaining agreements, except flagrant and/or malicious refusal to comply with its economic provisions, shall not be considered unfair labor practice and shall not be strikeable. No strike or lockout may be declared on grounds involving inter-union and intra-union disputes or on issues brought to voluntary or compulsory arbitration.”

Furthermore, procedural requirements are mandatory. Section 3 of the same Rule mandates: “Notice of strike or lockout.- In cases of bargaining deadlocks, a notice of strike or lockout shall be filed with the regional branch of the Board at least thirty (30) days before the intended date thereof, a copy of said notice having been served on the other party concerned.” This notice period, often referred to as the “cooling-off period,” is designed to allow for conciliation and mediation efforts to avert a strike.

Failure to comply with these substantive and procedural requirements can render a strike illegal. An illegal strike can have serious consequences for the union and its members, potentially leading to disciplinary actions against striking workers and liability for damages incurred by the employer. However, the question of who bears the responsibility for damages when a strike is organized by a local chapter of a national union remained somewhat nuanced until cases like Filipino Pipe and Foundry provided greater clarity. The concept of agency, where a national union might act as an agent for its local affiliate, becomes crucial in determining liability.

CASE BREAKDOWN: The Filipino Pipe and Foundry Strike

The story began when the Filipino Pipe Workers Union-National Labor Union (FPWU-NLU), a local chapter of the National Labor Union-Trade Union Congress of the Philippines (NLU-TUCP), filed a notice of strike against Filipino Pipe and Foundry Corporation. The stated grounds were union busting and non-implementation of their Collective Bargaining Agreement (CBA). Atty. Eulogio Lerum, the national president of NLU-TUCP, signed the strike notice on behalf of the local union.

However, before the scheduled conciliation conference could even take place, and without furnishing the company a copy of the strike notice, FPWU-NLU went on strike. This strike lasted for over three months, causing significant disruption to the company’s operations.

Filipino Pipe and Foundry Corporation swiftly filed a case with the Labor Arbiter, seeking to declare the strike illegal and claim damages against FPWU-NLU, NLU-TUCP, and Atty. Lerum. The company argued that the strike was premature, procedurally flawed due to lack of notice, and substantively unjustified as their demands were already being addressed through a pending execution of a previous labor case.

The Labor Arbiter initially sided with the company, declaring the strike illegal and holding NLU-TUCP liable for substantial damages, including lost revenue, damages to business standing, and exemplary damages. Atty. Lerum was absolved of personal liability, and the case against individual striking workers was dismissed based on a return-to-work agreement.

On appeal, the National Labor Relations Commission (NLRC) reversed the Labor Arbiter’s decision concerning NLU-TUCP and Atty. Lerum’s liability. The NLRC reasoned that the national union merely assisted the local chapter and was not primarily responsible for the strike. Dissatisfied, Filipino Pipe and Foundry Corporation elevated the case to the Supreme Court.

The Supreme Court upheld the NLRC’s decision. Justice Purisima, writing for the Court, emphasized the principle of agency in labor relations. The Court stated, “Evidently, direct and primary responsibility for the damages allegedly caused by the illegal strike sued upon fall on the local union FPWU, being the principal, and not on respondent NLU-TUCP, a mere agent of FPWU-NLU which assisted the latter in filing the notice of strike. Being just an agent, the notice of strike filed by Atty. Eulogio Lerum, the national president of NLU-TUCP, is deemed to have been filed by its principal, the FPWU-NLU.”

The Court underscored that even though NLU-TUCP assisted the local union, the local union remained the principal and the primary actor in staging the illegal strike. The Supreme Court also highlighted the procedural lapses committed by the local union – striking without serving a strike notice to the company and before the mandatory cooling-off period expired – further solidifying the illegality of the strike.

Ultimately, the Supreme Court dismissed the company’s petition, affirming the NLRC’s ruling and exonerating NLU-TUCP and Atty. Lerum from liability for damages arising from the illegal strike.

PRACTICAL IMPLICATIONS: Lessons for Unions and Employers

This Supreme Court decision offers several important practical takeaways for both labor unions and employers in the Philippines.

For national unions, it clarifies the extent of their liability for actions taken by their local chapters. While national unions often provide support and guidance, this case reinforces that local unions are considered the principals in labor disputes, particularly strikes. National unions should ensure their local chapters are well-versed in strike procedures and legal requirements to avoid illegal strikes that could harm both workers and the union movement.

For employers, the ruling highlights the importance of correctly identifying the responsible party in labor disputes. While it might be tempting to pursue the larger national union for damages, this case indicates that legal recourse should primarily target the local union that actually declared and conducted the illegal strike. Employers should also be meticulous in documenting procedural lapses by unions during strikes, as these can be crucial in establishing illegality and pursuing appropriate legal action.

Key Lessons:
- Local Unions as Principals: In strike actions, local unions are generally considered the principals, bearing primary responsibility for their decisions and actions.
- Limited Liability of National Unions: National unions, acting as agents, typically have limited direct liability for illegal strikes conducted by their local chapters, unless direct and malicious involvement can be proven.
- Importance of Strike Procedures: Strict adherence to notice requirements and cooling-off periods is crucial for the legality of a strike in the Philippines. Failure to comply can render a strike illegal and expose the union to potential liabilities.
- Due Diligence in Union Dealings: Employers should understand the relationship between national and local unions and direct legal actions appropriately, focusing on the principal actors in illegal strikes.
FREQUENTLY ASKED QUESTIONS (FAQs)

Q1: What makes a strike illegal in the Philippines?

A: Strikes can be declared illegal for various reasons, including substantive grounds (like striking over non-strikeable issues) and procedural violations (like failing to provide proper strike notice or observe the cooling-off period).

Q2: Can a company sue a union for damages caused by an illegal strike?

A: Yes, Philippine law allows companies to sue unions for actual damages resulting from illegal strikes. This can include lost profits and other demonstrable financial losses.

Q3: Is a national union always off the hook if a local union stages an illegal strike?

A: Generally, yes, based on the principle of agency highlighted in this case. However, if there’s evidence of direct and malicious involvement or instigation by the national union in the illegal acts, they might be held liable.

Q4: What is the “cooling-off period” in strike notices?

A: It’s a mandatory 30-day period after filing a strike notice (for bargaining deadlocks) or 15-day period (for unfair labor practices) during which parties are expected to engage in conciliation and mediation to resolve the dispute before a strike can legally commence.

Q5: What should unions do to ensure their strikes are legal?

A: Unions must strictly follow all procedural requirements for strikes, including filing proper notices, observing cooling-off periods, and ensuring the strike is based on valid grounds (bargaining deadlock or unfair labor practice).

Q6: Can individual workers be held liable for damages from an illegal strike?

A: While the union as an entity is primarily liable, individual workers participating in an illegal strike may face disciplinary actions from their employer, although damage suits usually target the union itself.

Q7: Where can I find the specific rules about strikes in the Philippines?

A: The rules governing strikes are primarily found in the Labor Code of the Philippines, specifically Book V on Labor Relations, and its Implementing Rules and Regulations, particularly Rule XXII, Book V.

ASG Law specializes in Labor Law and Litigation in the Philippines. Contact us or email hello@asglawpartners.com to schedule a consultation to discuss your labor law concerns and ensure compliance.
November 16, 1999
Illegal Strikes in the Philippines: Understanding Consequences and Return-to-Work Orders
When Strikes Backfire: The High Cost of Illegal Work Stoppages in the Philippines

TLDR: This case underscores that strikes in the Philippines must be based on legitimate labor disputes and comply with legal procedures, including return-to-work orders. Workers who participate in illegal strikes, especially union leaders, risk losing their jobs. Employers have the right to seek legal remedies against illegal strikes to maintain business operations.

PASVIL/PASCUAL LINER, INC., WORKERS UNION – NAFLU vs. NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 124823, July 28, 1999

INTRODUCTION

Imagine commuters stranded, businesses disrupted, and livelihoods jeopardized – this is the potential fallout of a strike, a powerful tool in labor disputes. In the Philippines, the right to strike is constitutionally protected, but it’s not without limits. The Supreme Court case of PASVIL/Pascual Liner, Inc., Workers Union – NAFLU vs. NLRC highlights the critical distinction between legal and illegal strikes, emphasizing the severe consequences for workers who disregard the rules. This case revolves around a union strike that, despite its initial grievances, was ultimately declared illegal, leading to the dismissal of its leaders. The central legal question: Was the strike legal, and did the National Labor Relations Commission (NLRC) have the authority to declare it illegal?

LEGAL CONTEXT: STRIKES, JURISDICTION, AND RETURN-TO-WORK ORDERS

Philippine labor law recognizes strikes as a legitimate means for workers to advocate for better terms and conditions of employment. However, this right is not absolute. A strike must be based on a valid “labor dispute,” typically involving unfair labor practices or bargaining deadlocks. Crucially, the law outlines specific procedures for legal strikes, including filing a notice of strike and observing mandatory cooling-off periods.

Article 263 of the Labor Code governs strikes, picketing, and lockouts. It states, “(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory arbitration.” This provision grants the Secretary of Labor broad powers to intervene in disputes that could impact national interest, such as transportation, as seen in the PASVIL case. Assumption of jurisdiction or certification to compulsory arbitration automatically enjoins any ongoing or intended strike.

Furthermore, Article 264 of the Labor Code details the consequences of illegal strikes, stipulating that “(a) Any union officer who knowingly participates in an illegal strike and any worker or employee who knowingly participates in a strike declared under Article 263(g) of this Code shall be penalized with dismissal from employment…” This highlights the severe repercussions for union leaders and members involved in illegal strikes, including potential job loss.

Jurisdiction over labor disputes is generally vested in Labor Arbiters under Article 217 of the Labor Code, which grants them “original and exclusive jurisdiction to hear and decide… cases arising from any violation of Article 264 of this Code, including questions on the legality of strikes and lock-outs…” However, as Article 217 itself states, this is “Except as otherwise provided under this Code.” The exception, as clarified in the landmark case of International Pharmaceuticals, Inc. v. Secretary of Labor and Employment, is Article 263(g). When the Secretary of Labor assumes jurisdiction, it encompasses all aspects of the labor dispute, including the legality of the strike, even matters typically under the Labor Arbiter’s purview.

The Philippine Airlines, Inc. v. Secretary of Labor and Employment case initially seemed to limit the Secretary’s jurisdiction to the specific issues submitted for resolution, excluding the legality of the strike unless explicitly stated. However, PASVIL distinguishes itself from Philippine Airlines, clarifying that if the certification to the NLRC explicitly includes the ongoing strike as part of the dispute, then the NLRC, by extension, has the authority to rule on its legality.

CASE BREAKDOWN: THE PASVIL LINER STRIKE

The PASVIL/Pascual Liner, Inc., Workers Union – NAFLU (UNION) filed a notice of strike against PASVIL/Pascual Liner, Inc. (PASVIL) citing unfair labor practices: union busting, discrimination, and discouraging union membership. The National Conciliation and Mediation Board (NCMB) noted the real issues were the dismissal of the Union President and a pending certification election, deemed inappropriate for a strike but suitable for preventive mediation. Conciliation efforts failed, and the UNION proceeded with a strike.

Secretary of Labor Ma. Nieves R. Confesor intervened, assuming jurisdiction and certifying the dispute to the NLRC due to the essential nature of PASVIL’s transportation services. She ordered the striking workers back to work within 24 hours and PASVIL to accept them under previous terms. This “return-to-work order” was published in newspapers.

Despite the order, the UNION continued picketing, preventing other workers from reporting. Secretary Confesor reiterated the return-to-work order and deputized police to ensure compliance and remove barricades. The NLRC scheduled conciliation conferences, but only PASVIL attended. The NLRC then directed both parties to submit position papers.

PASVIL sought early resolution due to ongoing strike losses. Hearings were set, but the UNION representatives were often absent. Despite the UNION’s motion for a formal trial, the NLRC, believing it was a delaying tactic and sufficient evidence existed, denied the motion. The NLRC then ruled on the strike’s legality based on the submitted documents.

The UNION claimed the strike was due to unfair labor practices: the removal of 24 buses affecting jobs and the alleged illegal dismissal of their president. PASVIL countered that the buses were sold to pay debts and the president was dismissed for neglect of duty.

The NLRC declared the strike illegal and deemed the 19 petitioning union officers to have lost their employment. The NLRC reasoned that even without the 24 buses, enough remained for operations, and PASVIL had urged workers to return. The NLRC also noted the UNION failed to specify wage or working condition grievances that justified a strike. Regarding the dismissed union president, a Labor Arbiter had already ruled his dismissal justified.

The NLRC emphasized the strikers’ defiance of the return-to-work order as a key factor in declaring the strike illegal. The Supreme Court upheld the NLRC’s decision, stating:

“In the same manner, when the Secretary of Labor and Employment certifies the labor dispute to the NLRC for compulsory arbitration the latter is concomitantly empowered to resolve all questions and controversies arising therefrom including cases otherwise belonging originally and exclusively to the Labor Arbiter.”

The Court also affirmed the NLRC’s denial of a formal trial, finding no grave abuse of discretion as the NLRC had sufficient evidence to decide the case based on the submitted position papers and documents. The Court highlighted the UNION’s failure to present sufficient evidence of unfair labor practices or justify their strike. The Court noted PASVIL’s evidence of remaining buses and the NCMB’s ocular inspection supporting the company’s claim that work was available. Crucially, the Supreme Court underscored the UNION’s defiance of the return-to-work order, stating that this alone contributed to the strike’s illegality and the subsequent loss of employment for the union officers.

PRACTICAL IMPLICATIONS: STRIKE RESPONSIBLY, RETURN WHEN ORDERED

The PASVIL case serves as a stark warning to unions and workers in the Philippines. While the right to strike is protected, it must be exercised responsibly and within legal boundaries. Initiating or continuing a strike without a valid labor dispute or in defiance of a return-to-work order can have devastating consequences, including job loss for participating union officers and potential disciplinary actions for members.

For employers, this case reinforces their right to seek legal intervention, including return-to-work orders, when strikes threaten essential services or national interest. It also highlights the importance of documenting and presenting evidence to the NLRC to demonstrate the illegality of a strike and the union’s non-compliance with legal directives.

Key Lessons:
- Legal Grounds for Strikes are Essential: Strikes must be based on legitimate unfair labor practices or bargaining impasses, not on issues resolvable through preventive mediation or grievances already under arbitration.
- Return-to-Work Orders Must Be Obeyed: Orders from the Secretary of Labor or NLRC to return to work are legally binding. Defiance constitutes an illegal act with severe penalties.
- Union Leaders Bear Higher Responsibility: Union officers who lead illegal strikes face the gravest consequences, including dismissal from employment.
- Evidence is Crucial: Both unions and employers must diligently gather and present evidence to support their positions before the NLRC.
- NLRC Jurisdiction Expands with Certification: When the Secretary of Labor certifies a dispute to the NLRC, the NLRC’s authority extends to all related issues, including strike legality.
FREQUENTLY ASKED QUESTIONS (FAQs)

Q: What makes a strike illegal in the Philippines?

A: Strikes can be declared illegal for various reasons, including being conducted for non-labor related issues, failure to comply with procedural requirements like strike notices and cooling-off periods, commission of prohibited activities during a strike, or defiance of a valid return-to-work order from the Secretary of Labor or NLRC.

Q: What is a return-to-work order?

A: A return-to-work order is issued by the Secretary of Labor and Employment or the NLRC, typically when a strike affects national interest. It legally compels striking workers to resume their jobs immediately while the labor dispute is being resolved through compulsory arbitration.

Q: What happens if workers defy a return-to-work order?

A: Defying a return-to-work order is considered an illegal act. Union officers who participate in or lead such defiance can be dismissed from employment. Other participating employees may also face disciplinary actions.

Q: Can a strike be legal even if the union’s allegations of unfair labor practice are later proven untrue?

A: In some cases, yes. If a union genuinely and in good faith believes that unfair labor practices have been committed, a strike may be considered legal even if those allegations are later disproven. However, “good faith” is a difficult defense to maintain if evidence contradicts the union’s claims, as seen in the PASVIL case.

Q: Does the NLRC have the power to declare a strike illegal?

A: Yes, especially when the Secretary of Labor certifies a labor dispute to the NLRC for compulsory arbitration. In such cases, the NLRC’s jurisdiction extends to resolving all issues related to the dispute, including the legality of the strike.

Q: What should unions do before declaring a strike to ensure legality?

A: Unions should ensure they have valid grounds for a strike (unfair labor practice or bargaining deadlock), file a strike notice with the NCMB, observe cooling-off periods, conduct strike votes, and continuously engage in good-faith bargaining. Legal counsel should be consulted throughout the process.

Q: What recourse does an employer have if faced with an illegal strike?

A: Employers can petition the Secretary of Labor to assume jurisdiction or certify the dispute to the NLRC. They can also seek injunctions to stop illegal picketing and pursue disciplinary actions, including dismissal, against union officers and employees participating in illegal strikes.

ASG Law specializes in labor law and litigation in the Philippines. Contact us or email hello@asglawpartners.com to schedule a consultation.
July 28, 1999