SHELL OIL WORKERS’ UNION, PETITIONER, VS. SHELL COMPANY OF THE PHILIPPINES, LTD., AND THE COURT OF INDUSTRIAL RELATIONS, RESPONDENTS.

The insistence on the part of respondent Shell Company of the
Philippines to dissolve its security guard section, stationed at its Pandacan Installation, notwithstanding its being embraced
in, and its continuance as such thus assured by an existing collective
bargaining contract, resulted in a strike called by petitioner Shell Oil
Workers’ Union, hereinafter to be desig­nated as the Union, certified a
month later on June 27, 1967 by the President to respondent Court of
Industrial Relations.  Against its decision
declaring the strike illegal primarily on the
ground that such dissolution was a
valid exercise of a manage­ment
prerogative, this appeal is taken.  With
due recognition that the system of industrial democracy fostered in the regime
of unionization and collective bargaining leaves room for the free exercise of
management rights, but unable to close our eyes to the violation of a contract
still in force implicit in such dis­solution thus giving rise to an unfair labor
practice, we cannot sustain respondent Court of Industrial
Relations.  Consequently, the harsh and
unwarranted sanction imposed, the dismissal of the security guards and the
officers of the Union, cannot stand.  Insofar, however, as individual liability is
deemed incurred for serious acts of violence, whether committed by a leader or
member of the Union, we leave things as adjudged.

The deep-rooted differences between the parties that led to the
subsequent strike were made clear in the presidential certification.  As set forth in the opening paragraph of the decision now on appeal:  “Before this Court for resolution is the
labor dispute between the petitioner Shell Oil Workers’ Union, Union for
brevity, and the respondent Shell Company of the Philippines Limited, Company
for short, which was certified to this Court on June 27, 1967 by the Office of
the President of the Republic of
the Philippines pursuant to the provision of Section 10 of Republic Act No.
875.  Said dispute * * * ‘was a result of the transfer by
the Company of the eighteen (18)
security guards to its other department and the consequent hiring of a private security agency to undertake
the work of said security guards.'”^[1]

The respective contentions of the parties were then taken
up.  Petitioner “filed the petition
on July 7, 1967 alleging,
among others, that the eighteen (18) security guards affected are part of the
bargaining unit and covered by the existing collective bargaining contract, and
as such, their transfers and eventual dismissals are illegal being done in
violation of the existing contract.  It,
therefore, prayed that said security guards be reinstated with full back wages
from the time of their dismissal up to the time of their actual
reinstatement.”^[2]
Then came a summary of the stand of Shell Company:  “Four hours thereafter, respondent
Company filed its Answer [to] the material allegations in the Union’s petition
and adverted that the issues in this case are: 
(1) whether or not the Company commits unfair labor practice in contracting
out its security service to an independent professional security agency and re­assigning
the 18 guards to other sections of the Company; (2) whether or not the
dismissal of the 18 security guards are justified;
and (3) whether or not the strike called by the Union on May 25, 1967 is legal.  As special and affirmative defenses, the
Company maintained that in contracting out the security service and redeploying
the 18 security guards affected, it was merely performing its legitimate
prerogative to adopt the most efficient and economical method of operation;
that said guards were transferred to other sections with increase, except for
four (4) guards, in rates of pay and with transfer bonus; that said action was
motivated by business considerations in line with past established practice and
made after notice to and discussion with the Union; that the 18 guards
concerned were dismissed for wilfully refusing to
obey the transfer order; and that the strike staged by the Union on May 25,
1967 is illegal.  Primarily, the Company
prayed, among others, for the dis­missal of the Union‘s petition and the said Union‘s strike be declared illegal followed by the
termination of the employee status of those responsible and who participated in
said illegal strike.”^[3]

The move for the dissolution of the security section by
reassigning the guards to other positions and contracting out such service to
an outside security agency had its origins as far back as 1964.  A study made by the Shell Company for the
purpose of improving the productivity, organization and efficiency of its Pandacan Installation recommended its dis­solution.  If an outside agency to perform such service
were to be hired, there would be a savings of P96,000.00 annually in addition
to further economy consequent on the elimination of overtime and administration
expenses.  Its implementation was scheduled for 1965.^[4] There was
then, in July 1966, a joint consultation by the Union
and management on the matter.  At that
stage, it would appear that there was no
serious opposition to such a move provided it be done gradually and in close
consultation with the Union.  There was even an offer of cooperation as
long as a scheme for retirement of the security guards affected or their
redeployment would be followed.^[5]

The tentative character of such proposed dissolution was made evident by the fact however that on August 26, 1966, a collective
bargaining contract was executed between the Union and
the Shell Company effective from the first of the month of that year to December 31, 1969.  It contained the usual grievance procedure
and no-strike clauses.^[6] More
relevant to the case before this Court, however, was the inclusion of the
category of the security guards in such collective bargaining contract.  This was stressed in the brief for the
petitioner where specific mention is made of the agreement covering rank and
file personnel regularly employed by the Company, included in which is the work
area covered by the Pandacan Installation.^[7]
There was likewise specific reference to such positions in the wage schedule
for hourly-rated categories appearing in an appendix thereof.^[8]
Mention was expressly made in another appendix of the regular remuneration as well as premium pay and night
com­pensation.^[9]
Nonetheless, Shell Company was bent on
doing away with the security guard section, to be replaced by an outside
security agency.  That was communicated
to the Union in a panel to panel meeting on May 3, 1967.  A counter-offer on the part of the Union
to reduce the working days per week of the guards from six to five was rejected
by Shell Company on the ground of its being unusual and impracticable.  Two days later, there was a meeting
of the Union where a majority of the members
made clear that should there be such a replacement of the company guards
by a private security agency, there would be a strike.  It was noted in the decision that when the
strike vote was taken, out of 243 members, 226 were for the approval of a
motion to that effect.^[10]
On the afternoon of May 24, 1967,
a notice of reassignment effective at 800 o’clock the next morning was handed
to the guards affected.  At 10:00 o’clock that evening, there was a meeting
by the Union attended by ten officers and a majority of
the members wherein it was agreed viva voce that if there would
be an implementation of the circular dissolving the security section to be
replaced by guards from an outside agency, the Union
would go on strike immediately.^[11]
The strike was declared at half-past 7:00
o’clock in the morning of May
25, 1967 when security guards from an outside agency were trying to
pass the main gate of the Shell Company to start their work.  With the picket line established, they were
unable to enter.  Efforts were made by
the Conciliation Service of the Department of Labor to settle the matter, but
they were unsuccessful.^[12]
It was not until June 27, 1967,
however, that the Presidential certification came.^[13]
There was a return to work order on July
6, 1967 by respondent Court, by virtue of which pending the
resolution of the case, the Shell Company was not to lockout the employees involved and the employees in
turn were not to strike.

The decision of respondent Court was rendered on August 5,
1967.  It declared that no
unfair labor practice was committed by Shell Company in dissolving its security
section and replacing it with security guards from an outside agency, as such a step was well within
management prerogative.  Hence for it,
the strike was illegal, there being no compliance with the statutory requisites
before an economic strike could be staged. 
Respondent Court sought to reinforce such a conclusion by a finding that
its purpose was not justifiable and that it was moreover carried out with
violence.  There was thus a failure on
its part to accord due weight to the terms of an existing collective bargaining
agreement.  Accordingly, as was made
clear in the opening paragraph of this opinion, we view matters
differently.  The strike cannot be
declared illegal, there being a violation of the collective bargaining
agreement by Shell Company.  Even if it
were otherwise, however, this Court cannot lend the sanction of its approval to
the outright dismissal of all union officers,
a move that certainly would have the effect of considerably weakening a labor
organization, and thus in effect frustrate the policy of the Industrial Peace
Act to encourage unionization.  To the
extent, however, that the serious acts of violence occurring in the course of
the strike could be made the basis for holding responsible a leader or a member of the Union guilty of their
commission, what was decided by respondent Court should not be disturbed.

1.  It is the
contention of Shell Company, sustained by respondent Court, that the
dissolution of the security guard section to be replaced by an outside agency
is a management prerogative.  The Union
argues otherwise, relying on the assurance of the continued existence of a security
guard section at least during the lifetime of the collective bargaining
agreement.  The second, third and fourth
assignment of errors, while they could have been more felicitously worded, did
attack the conclusion reached by respondent Court as contrary to and in
violation of the existing contract.  It
is to be admitted that the stand of Shell Company as to the scope of management
prerogative is not devoid of plausibility if it were not bound by what was
stipulated.  The growth of industrial
democracy fostered by the institution of collective bargaining with the workers
entitled to be represented by a union of their choice, has no doubt
contracted the sphere of what appertains solely to the employer.  It would be going too far to assert, however,
that a decision on each and every aspect of the productive process must be
reached jointly by an agreement between labor and management.  Essentially, the freedom to manage the
business remains with management.  It
still has plenty of elbow room for making its wishes prevail.  In much the same way that labor unions may be
expected to resist to the utmost what they consider to be an unwelcome
intrusion into their exclusive domain, they cannot justly object to management
equally being jealous of its prerogatives.

More specifically, it cannot be denied the faculty of promoting
efficiency and attaining economy by a study of what units are essential for its
operation.  To it belongs the ultimate
determination of whether services should be performed by its personnel or
contracted to out­side agencies.  It is
the opinion of the Court, that while management has the final say on such
matter, the labor union is not
to be completely left out.  What was done by
Shell Company in informing the Union as to the step it was intending to take on
the proposed dissolution of the security guard section to be replaced by an
outside agency is praise­worthy.  There
should be mutual consultation even if eventually deference is to be paid to
what management decides.  Thereby, in the
words of Chief Justice Warren, there is likely to be achieved “peaceful
accommodation of conflicting interests.”^[14]
In this particular case though, what was stipulated in an existing collective
bargaining contract certainly precluded
Shell Company from carrying out what otherwise would have been within its
prerogative if to do so would be violative thereof.

2. The crucial question thus is whether the then existing collective
bargaining contract running for three years from August 1, 1966 to December 31,
1969 constituted a bar to such a decision reached by management? The answer
must be in the affirmative.  As correctly
stressed in the brief for the petitioner, there was specific coverage
concerning the security guard section in the collective bargaining
contract.  It is found not only in the
body thereof but in the two appendices concerning the wage schedules as well as
the premium pay and the night compensation to which the personnel in such
section were entitled.^[15]
It was thus an assurance of security of tenure, at least, during the lifetime
of the agreement.  Nor is it a sufficient
answer, as set forth in the decision of respondent Court, that while such a
section would be abolished, the guards would not be unemployed as they would be
transferred to another position with an increase in pay and with a transfer
bonus.  For what is involved is the
integrity of the agreement reached, the terms of which should be binding on
both parties.  One of them may be
released, but only with the consent of the other.  The right to object belongs to the latter,
and if exercised,
must be respected.  Such a state
of affairs should continue during the existence of the contract.  Only thus may there be compliance with and
fulfillment of the covenants in a valid subsisting agree­ment.

What renders the stand of Shell Company even more vulnerable is
the fact that as set forth in its brief and as found by respondent Court as far back as 1964, it had already
been studying the matter of dissolving the
security guard section and contracting out such service to an outside
agency.  Apparently, it had reached a
decision to that effect for imple­mentation the next year.  In July 1966, there was a joint consultation
between it and the Union on the matter.  Nonethe­less, on August 26, 1966, a collective bargaining contract
was entered into which, as indicated above, did assure the continued existence
of the security guard section.  The Shell
Company did not have to agree to such a stipulation.  Or it could have reserved the right to effect
such a dissolution and reassign the guards. 
It did not do so.  Instead, when
it decided to take such a step resulting in the strike, it would rely primarily
on provisions in the collective bargaining contract couched in general terms,
merely declaratory of certain management prerogatives.  Considering the circum­stances of record,
there can be no justification then for Shell Company’s insistence on pushing
through its project of such dissolution without thereby incurring a violation
of the collective bargaining agreement.

3.  The Shell Company, in
failing to manifest fealty to what was stipulated in an existing collective
bargaining contract, was thus
guilty of an unfair labor practice.  Such
a doctrine first found expression in Republic Savings Bank v. Court of
Industrial Relations,^[16]
the opinion of the Court being penned by Justice Castro.  There was a reiteration of such a view in
Security Bank Employees Union v. Security Bank and Trust Company.^[17]
Thus:  “It being expressly provided
in the Industrial Peace Act that [an] unfair labor practice is committed by a
labor union or its agent by its refusal ‘to bargain collectively with the
employer’ and this Court having decided in the Republic Savings Bank case that
collective bargaining does not end with the execution of an agreement, being a
continuous process, the duty to bargain necessarily imposing on the parties the
obligation to live up to the terms of such a collective bargaining agreement if
entered into, it is undeniable that non-compliance therewith constitutes an
unfair labor practice.”^[18]

4.  Accordingly, the unfair
labor practice strike called by the Union did have the
impress of validity.  Rightly, labor is
justified in making use of such a weapon in its arsenal to counteract what is
clearly outlawed by the Industrial Peace Act. 
That would be one way to assure that the objectives of unionization and
collective bargaining would not be thwarted. 
It could, of course, file an unfair labor practice case before the Court
of Industrial Relations.  It is not
precluded, however, from relying on its own resources to frustrate such an
effort on the part of an employer.  So we have consistently held – and for the
soundest of reasons.^[19]

There is this categorical pronouncement from the present Chief
Justice:  “Again, the legality of
the strike follows as a corollary to the finding of fact, made in the decision
appealed from – which is
supported by substantial evidence –
to the effect that the strike had been triggered by the Company’s failure to
abide by the terms and conditions of its collective bargaining agreement with
the Union, by the discrimination, resorted to by the company, with regard to
hire and tenure of employment, and the dismissal of employees due to union
activities, as well as the refusal of the company to bargain collectively in good faith,”^[20] As
a matter of fact, this Court has gone even further, It is not even required
that there be in fact an unfair labor practice committed by the employer.  It suffices, if such a belief in good faith
is entertained by labor, as the inducing factor for staging a strike.  So it was clearly stated by the present Chief
Justice while still an Associate Justice of this Court:  “As a consequence, we hold that the
strike in question had been called to offset what petitioners were warranted in
believing in good faith to be unfair labor practices on the part of Management,
that petitioners were not bound, therefore, to wait for the expiration of
thirty (30) days from notice of strike before staging the same, that said
strike was not, accordingly, illegal and that the strikers had not thereby lost
their status as employees of respondents herein.”^[21]

5.  It would thus appear
that the decision now on appeal did not reflect sufficient awareness of
authoritative pronouncements coming from this Court.  What is worse, certain portions thereof yield
the impression that an attitude decidedly unsympathetic to labor’s resort to
strike is evident.  Such should not be
the case.  The right to self-organization
so sedulously guarded by the Industrial Peace Act explicitly includes the right
“to engage in concerted activities for the purpose of collective
bargaining and to the mutual aid or
protection.”^[22] From and after June 17, 1953 then, there cannot be the least doubt that a
strike as a form of concerted
activity has the stamp of legitimacy.  As
a matter of law, even under the regime of compulsory arbitration under the
Court of Industrial Relations Act,^[23] a strike was by no means a forbidden
weapon.  Such is the thought embodied in
the opinion of Justice Laurel in Rex Taxicab Company v. Court of Industrial
Relations.^[24] Thus: 
“In other words, the employee, tenant or laborer is inhibited from
striking or walking out of his employment only when so enjoined by the Court of
Industrial Relations and after a dispute has been submitted thereto
and pending award or decision by the court of such dispute.  It follows that, as in the present case, the employees
or laborers may strike before being ordered not to do so and before an
industrial dispute is submitted to the Court of Industrial Relations, subject
to the power of the latter, after hearing when public interest so re­quires or
when the dispute cannot, in its opinion, be promptly decided or settled, to
order them to return, with the consequence that if the strikers fail to return
to work, when so ordered, the court may authorize the employer to accept other
employees or laborers.”^[25] Former Chief Justice Paras,
in a case not too long before the enactment of the Industrial Peace Act, had occasion
to repeat such a view.  Thus:  “As a matter of fact, a strike
may not be staged only when, during the pendency of
an industrial dispute, the Court of Industrial Relations has issued the proper
injunction against the laborers (section 19,
Commonwealth Act No. 103, as amended). 
Capital need not, however, be apprehensive about the recurrence of
strikes in view of the system of compulsory arbitration by the Court of
Industrial Relations.”^[26]

A strike then, in the apt phrase of Justice J.B.L. Reyes, is
“an institutionalized factor of democratic growth.”^[27]
This is to foster industrial democracy. 
Implicit in such a concept
is the recognition that concerning the ends which labor considers worthwhile,
its wishes are ordinarily entitled to respect. 
Necessarily so, the choice as to when such an objective may be attained
by striking likewise belongs to it. 
There is the rejection of the concept that an outside authority, even if
governmental, should make the decisions for it as to ends which are desirable and how they may be
achieved.  The assumption is that labor
can be trusted to determine for itself when the right to strike may be availed
of in order to attain a successful fruition in their disputes with
management.  It is true that there is a
requirement in the Act that before the employees may do so, they must file with
the Conciliation Service of the Department of Labor a notice of their intention
to strike.^[28]
Such a requisite however, as has been repeatedly declared by this Court, does
not have to be complied with in case of unfair labor practice strike, which
certainly is entitled to greater judicial protection if the Industrial Peace
Act is to be rendered meaningful.  What
has been said thus far would demon­strate the unwarranted deviation of the
decision now on appeal from what is indicated by the law and authoritative
decisions.

6. Respondent Court
was likewise impelled to consider the strike illegal because of the violence
that attended it.  What is clearly within
the law is the concerted activity of cessation of work in order that a union’s
economic demands may be granted or that an employer cease and desist from an
unfair labor practice.  That the law
recognizes as a right.  There is though a
disapproval of the utilization of force to attain such an objective.  For implicit in the very concept of a legal
order is the maintenance of peaceful ways. 
A strike otherwise valid, if violent in character, may be placed beyond
the pale.  Care is to be taken, however,
especially where an unfair labor practice is involved, to avoid stamping it
with illegality just because it is tainted by such acts.  To avoid rendering illusory the recognition
of the right to strike, responsibility in such a case should be individual and
not collective.  A different conclusion
would be called for, of course, if the existence of force while the strike
lasts is pervasive and widespread, consistently and deliberately resorted to as
a matter of policy.  It could be
reasonably concluded then that even if justified as to ends, it becomes illegal
because of the means employed.

Respondent Court must have been unduly impressed by the evidence
submitted by the Shell Company to the effect that the strike was marred by acts
of force, intimidation and violence on the evening of June 14 and twice in the
mornings of June 15 and 16, 1967 in Manila.  Attention was likewise called to the fact
that even on the following day, with police officials stationed at the strike-bound
area, molotov bombs did explode and the streets were
obstructed with wooden planks containing protruding nails.  Moreover, in the branches of the Shell
Company in Iloilo City
as well as in Bacolod,
on dates unspecified, physical injuries appeared to have been inflicted on
management personnel.  Respondent Court
in the appealed decision did penalize with loss of employment the ten
individuals responsible for such acts.  Nor
is it to be lost sight of that before the certification on June 27, 1967, one
month had elapsed during which the Union was on strike.  Except on those few days specified then, the
Shell Company could not allege that the strike was conducted in a manner other
than peaceful.  Under the circumstances,
it would be going too far to consider that it thereby became illegal.  This is not by any means to condone the
utilization of force by labor to attain its objectives.  It is only to show awareness that in labor
conflicts, the tension that fills the air as well as the feeling of frustration
and bitterness could break out in sporadic acts of violence.  If there be in this case a weighing of
interests in the balance, the ban the law imposes on un­fair labor practices by
management that could provoke a strike and its requirement that it be conducted
peaceably, it would be, to repeat, unjustified, considering all the facts
disclosed, to stamp the strike with illegality. 
It is enough that individual liability be incurred by those guilty of
such acts of violence that call for loss of employee status.

Such an approach is reflected in our recent decisions.  As was realistically observed by the present
Chief Justice, it is usually attended by “the excitement, the heat and the
passion of the direct participants in the labor dispute, at the peak thereof *
*.”^[29]
Barely four months ago, in Insular Life Assurance Co., Ltd. Employees’
Association v. Insular Life Assurance Co., Ltd.,^[30]
there is the recognition by this Court, speaking through Justice Castro, of
picketing as such being “inherently explosive.”^[31]
It is thus clear that not every form of violence suffices to affix the seal of
illegality on a strike or to cause the loss of employ­ment by the guilty party.

7.  In the light of the
foregoing, there being a valid unfair labor practice strike, the loss of
employment decreed by respondent Court on all the Union officers cannot
stand.  The premise on which such penalty
was decreed was the illegality of the strike. 
We rule differently.  Hence, its
imposition is unwarranted.  It is to be
made clear, however, that because of the commission of specific serious acts of
violence, the Union’s President, Gregorio Bacsa, as
well as its Assistant Auditor, Conrado Peña, did incur such a penalty.^[32]

On this point, it may be observed further that even if there was
a mistake in good faith by the Union that an unfair labor practice was
committed by the Shell Company when such was not the case, still the wholesale
termination of employee status of all the officers of the Union, decreed by
respondent Court, hardly commends itself for approval.  Such a drastic blow to a labor organization,
leaving it leaderless, has serious reper­cussions.  The immediate effect is to weaken the Union.  New leaders
may of course emerge.  It would not be
unlikely, under the circumstances, that they would be less than vigorous in the
prosecution of labor’s claims.  They may
be prone to fall victims to counsels of timidity and apprehension.  At the forefront of their consciousness must
be an awareness that a mistaken move could well mean their discharge from
employment.  That would be to render the
right to self-organization illusory.

The plain and unqualified constitutional command of protection to
labor should not be lost sight of.^[33]
The State is thus under obligation to lend its aid and its succor to the
efforts of its labor elements to improve their economic condition.  It is now generally accepted that
unionization is a means to such
an end.  It should be encouraged.  Thereby, labor’s strength, what there is of
it, becomes solidified.  It can bargain
as a collectivity.  Management then will
not always have the upper hand nor be in a
position to ignore its just demands. 
That, at any rate, is the policy behind the Industrial Peace Act.  The judiciary and administrative agencies in
construing it must ever be conscious of its implications.  Only thus may there be fidelity to what is
ordained by the fundamental law.  For if
it were otherwise, instead of protection, there would be neglect or
disregard.  That is to negate the
fundamental principle that the Constitution is the supreme law.

WHEREFORE, the decision of respondent Court of Industrial
Relations of August 5, 1967
is reversed, the finding of illegality of the strike declared by the Shell Oil
Workers’ Union on May 25, 1967 not being in accordance with law.  Accordingly, the dis­missal by the Shell
Company on May 27, 1967 of
the eighteen security guards,^[34]
with the exception of Ernesto Crisostomo, who was
found guilty of committing a serious act of violence, is set aside and they are
declared reinstated.  The continuance of
their status as such is, however, dependent on whether or not a security guard
section is provided for in the collective bargaining contract entered into
after the expiration of the contract that expired on December 31, 1969.  The loss of employee status of the officers
of the Union,^[35]
decreed by respondent Court in its decision, is likewise set aside, except as
to Gregorio Bacsa and Conrado
Peña, both of whom did commit serious acts of
violence.  The termination of the
employee status of Nestor Samson, Jose Rey, Romeo
Rosales, Antonio Labrador and Sesinando Romero, who
committed acts of violence not serious in character, is also set aside, but
while allowed to be reinstated, they are not entitled to back pay Ricardo Pagsibigan and Daniel Barraquel,
along with the afore­said Gregorio Bacsa, Conrado Peña and Ernesto Crisostomo, were legally penalized with dismissal because
of the serious acts of violence committed by them in the course of the
strike.  The rest of the employees laid
off should be reinstated with back pay to be counted from the date they were
separated by virtue of the appealed decision, from which should be deducted
whatever earnings may have been received by such employees during such period.  The case is hereby remanded to respondent
Court for the implementation of this decision. 
In ascertaining the back wages to which the security guards are
entitled, it must likewise be ascertained whether or not the security guard
section is continued after December
31, 1969.  Without costs.

Concepcion, C.J., Zaldivar,
Teehankee, Villamor, and Makasiar, JJ., concur.

Barredo, J., concurs in a separate opinion.

Reyes, and Makalintal, JJ., concur
with J. Barredo in
his separate opinion.

 Dizon,
J., in the result.

Ruiz Castro, J., no part.

^[1]
Decision, Annex F, Brief for the Petitioner, pp. 84-85.

^[2]
Ibid, p. 85.

^[3]
Ibid, pp. 85-86.

^[4]
Brief for the Respondent, pp. 4 and 5.

^[5]
Decision, Annex F, Brief for the Petitioner, p. 88.

^[6]
Ibid.

^[7]
Brief for the Petitioner, pp. 20-21.

^[8]
Ibid, p. 21.

^[9]
Ibid.

^[10]
Decision, Annex F, Brief for the Petitioner, pp. 95-96.

^[11]
Ibid, p. 96.

^[12]
Ibid, pp. 96-97.

^[13]
Ibid, p. 77.  The decision under
review speaks of the efforts exerted by the Union leaders who were also prominent personalities in the Shell Termi­nal Employees Savings
and Loans Association to avoid the contem­plated strike if further financial
concessions were to be extended to them. 
Since; however, it is obvious from the decision itself that the strike
was approved not once but twice
by the Union member­ship, its cause being due to the dis­solution of the
security guard section as noted in the Presidential certi­fication and the
pleadings of the parties, no legal relevance is to be attributed to such
activities on the part of the Union leaders in the consideration of the crucial
issues posed by this litigation.

^[14]
Fibreboard Corp. v. National Labor Relations
Board, 379 US
203 (1964).  The relevant portion of
Chief Justice Warren’s opinion is well-worth quoting:  “The Company was concerned with the high
cost of its maintenance ope­ration.  It
was induced to contract out the work by assurances from independent contractors
that economies could be derived by reducing the work force, decreasing fringe
benefits, and eliminating overtime payments. 
These have long been regarded as matters peculiarly suitable for
resolution within the collective bargaining framework, and industrial
experience demonstrates that collective negotiation has been highly successful
in achieving peaceful accommodation of the conflicting inte­rests.  Yet, it is contended that when an employer can effect cost savings in these
respects by contracting the work out, there is no need to attempt to achieve similar economies through
negotiation with existing employees or to provide them with an opportunity to
negotiate a mutually acceptable
alternative.  The short answer is that,
although it is not possible to say whether a satis­factory solution could be
reached, national labor policy is founded upon the congressional determination
that the chances are good enough to warrant subjecting such issues to the
process of collective negotiation.” At pp. 212-213.

^[15]
Brief for the Petitioner, pp. 20-21.

^[16]
L-20303, Sept. 27, 1967, 21
SCRA 226.

^[17]
L-28536, April 30, 1968, 23
SCRA 503.

^[18]
Ibid, p. 512.

^[19]
Cf. Phil. Marine Radio Officers’ Assn. v. Court of Industrial Relations,
102 Phil. 373 (1957); San Carlos Milling Co., Inc. v. Court of
Industrial Relations, L-15453, March 17, 1961, 1 SCRA 734; Consolidated Labor
Assn. of Phil. v. Marsman and Co., Inc.,
L-17038, July 31, 1964, 11 SCRA 589; Phil. Steam Navi­gation Co. v.
Phil. Marine Officers Guild, L-20667, Oct. 29, 1965, 15 SCRA 174; Ferrer v. Court of Industrial Relations, L-24267,
May 31, 1966, 17 SCRA 352; Cromwell Commercial Co., Inc. v. Cromwell
Commercial Employees and Laborers Union, L-19777, Feb. 20, 1967, 19 SCRA 398; Cebu Portland Cement Co. v. Cement Workers’ Union,
L-25032, Oct. 14, 1968, 25 SCRA 504.

^[20]
Cromwell Commercial Co., Inc. v. Cromwell Commercial Employees and
Laborers Union, L-19777, Feb. 20, 1967, 19 SCRA 398, 400-401.

^[21]
Ferrer v. Court of Industrial Relations,
L-24267, May 31, 1966, 17 SCRA 352, 360. The Ferrer
doctrine was followed in Norton & Harrison Co. & Jackbilt
Concrete Blocks Co. Labor Union v. Norton Harrison Co. & Jackbilt Concrete Blocks Co., Inc., L-18461, Feb. 10, 1967,
19 SCRA 310.

^[22]
Section 3 of the Industrial Peace Act reads in full:  “Employees shall have the right to
self-organization and to form, join or assist labor organizations of their own
choosing for the purpose of collective bargaining through representatives of
their own choosing and to engage in concerted activities for the purpose of
collective bargaining and other mutual aid or protection.  Individuals employed as super­visors shall
not be eligible for membership in a labor organization of employees under their
supervision but may form separate organi­zations of their own.”

^[23]
Commonwealth Act No. 103 as amended, October
29, 1936.

^[24]
70 Phil. 621 (1940).

^[25]
Ibid, pp. 629-630.

^[26]
Dee C. Chuan & Sons v. Court of Industrial Relations, 85 Phil. 365,
368 (1950).

^[27]
San Carlos Milling Co., Inc. v. Court of Industrial Relations, L-15453, March 17, 1961, 1 SCRA 734, 740.

^[28]
Section 14 of the Industrial Peace Act provides in full:  “(a) Whenever a party desires to negotiate
an agree­ment, it shall serve a written notice upon the other party, with a
statement of its proposals.  The other
party shall make a reply thereto not later than ten days from receipt of such
pro­posals.  (b) In case differences
shall arise on the basis of such proposals and reply, either party may request
a conference which shall begin not later than ten days from the making of such
request.  Both parties shall endeavor in
such conference to settle the dispute amicably and expeditiously.  (c) If the dispute is not settled by
conference and the Conciliation Service of the Department of Labor intervenes
in the dispute, it shall be the duty of each party to participate fully and
promptly in such meetings and conferences as the Service may undertake.  (d) Before an employer may lockout his
employees or the employees may strike, either party as the case may be, must
file with the Conciliation Service thirty days prior thereto a notice of their
intention to strike or lockout the employees. 
Such notice shall be in a form to be prescribed by the Chief of the
Conciliation Service.”

^[29]
Ferrer v. Court of Industrial Relations,
L-24267, May 31, 1966, 17 SCRA 352, 360.

^[30]
L-25291, January 30, 1971, 37 SCRA 244.

^[31]
Ibid, p. 273.  Mathews on Labor Relations
and the Law was cited to this effect: 
“For as pointed out by one author, ‘The picket line is an explosive
front, charged with the emotions and fierce loyalties of the union-management
dispute.  It may be marked by colorful
name-calling, intimidating threats or sporadic fights between the pickets and
those who pass the line.” Teller was likewise cited to the effect that
fist fighting between union and non-union employees in the midst of a strike is no bar to reinstatement.  At p. 272.

^[32]
It would likewise follow that no punitive sanction should be imposed on the
eighteen security guards except for Ernesto Crisostomo
who was rightfully held accountable for the act of violence attri­buted to him.

^[33]
Art. XIV, Sec. 6 of the Constitution reads as follows:  “The State shall afford protection to
labor, especially to working women and minors, and shall regulate the relations
between landowner and tenant, and between labor and capital in industry and in
agri­culture.  The State may provide for
compul­sory arbitration.”

^[34]
The eighteen security guards are:  E. Crisostomo, P. Falculan, B. Bicomong, F. Flores, L. Francisco, B. Velasco, D. Pascual, J. Suarez, J. Tuazon, A.
Jimenez, J. Linsangan, F. Solis, P. Carillo, V. Diaz, F. Bernardo, E. Mendoza,
C. Bonus, and G. de Jesus.

^[35]
The thirteen officers of the Union are:  G. Bacsa, E. Gaspar, E. Ocampo, D. Sahagun, J. Pilande, R. Constantino, C. Peña, P. Calaunan, N. Samson, J. Rey, P.
Sawyer, A. Talastas and J. Belangoy.

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