Good Faith Strikes: Protecting Workers’ Rights in Labor Disputes

Strikes are a powerful tool for workers, but they must be exercised within the bounds of the law. This case clarifies that even if a strike is based on a mistaken belief of unfair labor practice, it can still be considered legal if the workers acted in ‘good faith.’ This principle safeguards workers’ rights to organize and protest perceived injustices without immediate fear of dismissal.

[G.R. No. 118223, June 26, 1998]

INTRODUCTION

Imagine a company suddenly granting significant pay raises to managers but excluding rank-and-file employees. Frustration boils over, and unions threaten to strike, believing they are facing unfair discrimination. But what if the company’s actions, while seemingly unfair, don’t technically constitute ‘unfair labor practice’ under the strict legal definition? Can the strike still be legal? This is the core question addressed in the landmark case of PNOC Dockyard and Engineering Corporation v. NLRC. This case delves into the crucial concept of ‘good faith’ in strikes, emphasizing that workers’ honest belief in unfair labor practice can legitimize their actions, even if later proven unfounded. It underscores the Philippine legal system’s commitment to protecting labor rights and ensuring substantial justice in labor disputes.

LEGAL CONTEXT: STRIKES, UNFAIR LABOR PRACTICES, AND ‘GOOD FAITH’

Philippine labor law, rooted in the Constitution’s mandate to protect labor, recognizes the right to strike as a fundamental tool for workers to address grievances. However, this right is not absolute and is governed by specific provisions in the Labor Code and jurisprudence. A key concept is ‘unfair labor practice’ (ULP), defined in Article 248 of the Labor Code as actions by employers that violate workers’ rights to self-organization and collective bargaining. Specifically, Article 248(e) prohibits employers from:

“(e) To discriminate in regard to wages, hours of work, and other terms and conditions of employment in order to encourage or discourage membership in any labor organization.”

Strikes prompted by ULP are generally considered legal. However, the legality of a strike can become complex when the employer’s actions are not clearly ULP. This is where the principle of ‘good faith’ comes into play. Philippine jurisprudence, as highlighted in cases like Maria Cristina Fertilizer Plant Employees Assn. vs. Tandayag and Ferrer vs. CIR, acknowledges that a strike can be legal even without actual ULP if the workers genuinely and reasonably believed that ULP was being committed. This ‘good faith doctrine’ is crucial because it acknowledges the workers’ perspective and prevents the law from being overly technical and detrimental to labor rights. It emphasizes that the workers’ honest perception of injustice, not just a strict legal definition, can justify strike action. This principle is balanced against the employer’s rights, ensuring that strikes are not used abusively but are a legitimate response to perceived unfairness in the workplace.

CASE BREAKDOWN: PNOC DOCKYARD V. NLRC – A STRIKE BORN OF PERCEIVED DISCRIMINATION

The PNOC Dockyard case arose from a wage dispute. In 1991, the Philippine National Oil Company (PNOC) granted a P2,500 monthly salary increase – but only to managerial, professional, and technical (MPT) employees, excluding non-managerial, professional, and technical (NMPT) employees, who were largely union members. This sparked outrage among the unions, including Kapisanan ng Malayang Manggagawa-PNOC Dockyard and Engineering Corporation (KMM-PDEC), who felt this was discriminatory and designed to discourage union membership – a clear act of unfair labor practice in their eyes.

Here’s a step-by-step account of how the situation unfolded:

1. Notice of Strike: Feeling unheard, several unions, including KMM-PDEC, filed a notice of strike with the Department of Labor and Employment (DOLE) against PNOC, citing discrimination and unfair labor practice.
2. DOLE Certification to NLRC: Acting Secretary of Labor Nieves Confesor certified the dispute to the National Labor Relations Commission (NLRC) for compulsory arbitration, effectively ordering the unions to halt any strike actions.
3. Disputed Service of Order: The DOLE’s certification order was allegedly not properly served to the union president, being left only with a security guard – a point of contention later raised by the unions.
4. Lockout and Strike: On December 18, 1991, despite the certification order (which they claimed was not properly received), union members attempted to report for work but were allegedly locked out by management. Some who got in were escorted out. This action by the company was seen by the unions as an illegal lockout.
5. Return-to-Work Order: DOLE issued a return-to-work order on December 19, 1991.
6. Complaints Filed: The union filed a complaint for illegal lockout, and the company filed a petition to declare the strike illegal, with a motion to cite union officers in contempt.
7. Dismissal of Union Officers: Adding fuel to the fire, PNOC Dockyard dismissed key union officers (President, Secretary, Auditor, Treasurer) for allegedly participating in an illegal strike.
8. NLRC Decisions: The NLRC initially ruled in favor of the unions, declaring the dismissals illegal and ordering reinstatement with backwages. This was later modified to order separation pay at two months’ salary per year of service, based on company policy. The NLRC reasoned that while the company may not have intended ULP, the unions acted in good faith belief of ULP.

The case reached the Supreme Court, where PNOC Dockyard argued the strike was illegal due to:

• Violation of the no-strike clause in their Collective Bargaining Agreement (CBA).
• Procedural errors in the strike notice.
• The strike occurring after DOLE certified the case to NLRC.

However, the Supreme Court sided with the NLRC and the unions. The Court emphasized the principle of ‘good faith,’ stating:

“Indeed, the presumption of legality prevails even if the allegation of unfair labor practice is subsequently found to be untrue, provided that the union and its members believed in good faith in the truth of such averment.”

The Court found that the unions genuinely believed they were discriminated against, based on past company practices of across-the-board salary increases. The procedural technicalities in the strike notice were deemed minor and not invalidating, especially since the DOLE form was used. Regarding the DOLE certification order, the Supreme Court highlighted the importance of proper notification, stating:

“Basic is the rule that no order, decision or resolution — not even one that is “immediately executory” — is binding and automatically executory unless and until the proper parties are duly notified thereof.”

Since the service of the certification order was questionable, and the unions ceased the strike upon learning of it, this argument also failed. Ultimately, the Supreme Court affirmed the NLRC’s decision, upholding the legality of the strike and the illegality of the dismissals.

PRACTICAL IMPLICATIONS: PROTECTING WORKERS AND ENSURING FAIR LABOR PRACTICES

The PNOC Dockyard case has significant implications for labor-management relations in the Philippines. It reinforces the ‘good faith doctrine,’ providing a crucial layer of protection for workers who engage in strikes believing in unfair labor practices. This ruling prevents employers from easily dismissing striking workers based on technicalities or later legal interpretations that might negate the ULP claim.

For Businesses:

• Transparency and Communication: Employers should prioritize clear and open communication with employees and unions, especially regarding compensation and benefits decisions. Perceived inconsistencies or discriminatory practices, even if unintentional, can trigger legal strikes.
• Proper Service of DOLE Orders: Ensure strict adherence to proper service procedures for DOLE orders, especially certifications and return-to-work orders. Improper service can invalidate the order’s effect and weaken the company’s legal position.
• Avoid Hasty Dismissals: Refrain from immediately dismissing striking employees, especially union officers, based on participation in the strike itself. Investigate thoroughly and ensure due process, recognizing the ‘good faith’ principle.

For Employees and Unions:

• Document Grievances: Thoroughly document perceived unfair labor practices and attempts to resolve issues amicably with management before resorting to strike. This strengthens the ‘good faith’ argument.
• Follow Strike Procedures: Comply with all legal requirements for strikes, including strike votes, notices, and cooling-off periods. However, minor technical errors may not invalidate a strike, especially if good faith is evident.
• Seek Legal Counsel: Consult with labor lawyers to understand your rights and obligations during labor disputes, especially before and during strike actions.

Key Lessons

• ‘Good Faith’ Matters: A strike can be legal even without proven ULP if workers honestly and reasonably believed ULP was occurring.
• Substantial Compliance: Minor technical defects in strike notices may be excused if there is substantial compliance with requirements.
• Proper Notification is Crucial: DOLE orders are only binding upon proper notification to all parties.
• Protection of Labor Rights: Philippine law prioritizes the protection of labor rights and construes labor laws liberally in favor of workers.

FREQUENTLY ASKED QUESTIONS (FAQs)

Q: What is an unfair labor practice (ULP)?

A: Unfair labor practices are actions by employers or unions that violate workers’ rights to organize, bargain collectively, and engage in concerted activities. Examples include discrimination against union members, refusal to bargain in good faith, and interference with union activities.

Q: What is a ‘good faith’ strike?

A: A ‘good faith’ strike is one where workers strike based on a sincere and reasonable belief that their employer is committing unfair labor practices, even if later investigation reveals no actual ULP. The focus is on the workers’ honest perception at the time of the strike.

Q: What are the requirements for a legal strike in the Philippines?

A: Generally, legal strikes require a valid strike vote by union members, submission of strike vote results to the NCMB, filing a notice of strike with DOLE, and observance of a cooling-off period. Strikes must also be for valid grounds, such as unresolved ULP or bargaining deadlocks.

Q: Can I be dismissed for participating in a legal strike?

A: No, employees cannot be legally dismissed for participating in a legal strike. Dismissal for participating in a legal strike is considered illegal dismissal.

Q: What happens if a strike is declared illegal?

A: If a strike is declared illegal, striking workers may lose their job security, and union officers may face more severe penalties. However, even in illegal strikes, due process must be followed before dismissal.

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

A: A return-to-work order is issued by the DOLE or NLRC, typically in cases certified for compulsory arbitration. It compels striking workers to return to work and employers to accept them back under the same terms and conditions before the strike.

Q: What is the role of the NLRC in labor disputes?

A: The National Labor Relations Commission (NLRC) is a quasi-judicial body that handles labor disputes, including unfair labor practice cases, illegal dismissal cases, and strike-related issues. It conducts hearings, receives evidence, and renders decisions on labor disputes.

Q: How does the ‘good faith’ doctrine protect workers?

A: The ‘good faith’ doctrine recognizes that workers may not always have perfect legal understanding but can genuinely perceive injustice. It prevents overly technical legal interpretations from undermining workers’ right to strike in response to perceived unfairness.

Q: What should I do if I believe my employer is committing unfair labor practices?

A: Document everything, attempt to resolve the issue with management through grievance procedures, consult with your union if you are a member, and seek advice from a labor lawyer to understand your rights and options.

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