CALTEX FILIPINO MANAGERS AND SUPERVISORS ASSOCIATION, PETITIONER, VS. COURT OF INDUSTRIAL RELATIONS, CALTEX (PHILIPPINES) INC., W.E. MENEFEE AND B.F. EDWARDS, RESPONDENTS.

Caltex Filipino Managers and Supervisors Association versus Court of Industrial Relations

The Case

This is a labor case that reached the Supreme Court on appeal from the Court of Industrial Relations. The Caltex Filipino Managers and Supervisors Association, a registered labor organization of Filipino managers and supervisors in Caltex Philippines Incorporated, challenges the industrial court's ruling that declared its strike illegal, stripped three of its officers of their employee status, and dismissed its unfair labor practice complaint against the company and two of its officials. The case matters because it draws the boundary between what the industrial court may and may not take cognizance of in a certification proceeding, and because it teaches how a return-to-work agreement is read as a labor contract that can render the question of a strike's illegality moot.

Procedural History

The company filed an urgent petition in the certification case, docketed separately, praying that the strike be declared illegal, that the strikers be punished for contempt and declared to have lost their employee status, and that an injunction issue. The association moved to dismiss on jurisdictional grounds; the trial judge denied the motion. The association sought reconsideration before the court en banc, then withdrew that motion after a return-to-work agreement was signed. The company sought clarification, and the court en banc ruled that the company was not barred from continuing with the illegality incident. The trial judge later held that the company had reserved its right to prosecute the case and set it for hearing on the illegality of the strike; the court en banc affirmed. The association elevated that interlocutory order to the Supreme Court, but the petition was dismissed as premature. The unfair labor practice complaint was thereafter given due course, and the two cases were heard jointly. The trial judge declared the strike illegal, forfeited the employee status of three officers, and dismissed the unfair labor practice complaint. The court en banc affirmed, with one judge dissenting. The association appealed to the Supreme Court.

Facts

The association registered as a labor organization and informed the company of its registration in January 1965. It then sent proposals, one of which demanded recognition as the bargaining agent for managers and supervisors. The company replied that managerial employees were not qualified for union membership and suggested a certification proceeding to settle which position titles belonged in the bargaining unit. The association declined, so the company itself initiated the certification proceeding in February 1965.

In March 1965 the association filed a notice to strike, citing refusal to bargain in good faith, union-busting tactics, discrimination, intimidation, and promises of benefits conditioned on voting against the association. During the hearing of the certification case, the trial judge cautioned the parties to maintain the status quo and advised the employees not to strike, while making clear that in the presence of unfair labor practices they could strike even without notice. After conciliation efforts failed, the association struck on April 22, 1965.

The company then filed its urgent petition seeking to have the strike declared illegal and the strikers penalized. The parties signed a return-to-work agreement on May 30, 1965, under which all employees would be taken back with the same employee status prior to April 22, 1965, and pending court cases would continue, with the certification case expressly named. The unfair labor practice complaint was later given due course, and both cases were heard jointly.

Issues

• Whether or not the Court of Industrial Relations had jurisdiction over the petition seeking to declare the strike illegal.
• Whether or not the strike staged by the association on April 22, 1965 was illegal, and whether the industrial court correctly terminated the employee status of the three officers.
• Whether or not the industrial court correctly absolved the company and its officials of the unfair labor practice charge.

Applicable Provisions

Article 1700 of the Civil Code of the Philippines provides:

The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.

The Court cites it to say that a labor contract must yield to the common good.

Article 1702 of the Civil Code of the Philippines provides:

In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer.

The Court applies this rule of construction in favor of the laborers when reading the return-to-work agreement.

Ruling

On the first issue, the Court held that jurisdiction is tested by the allegations of the urgent petition. To the extent that the company sought injunctive relief under Section 9(d) of Republic Act No. 875, the industrial court had jurisdiction, because an injunction in an uncertified case is not meant to enjoin the strike itself but only unlawful activities. As to the contempt aspect, jurisdiction could not be seriously questioned, since the judge in good faith thought his advice was a valid order. But the Court held that the advice given during the hearing was only an advice, not an order, for to treat it as an order would concede that the industrial court could validly enjoin a strike not certified under Section 10 of Republic Act No. 875. On the illegality of the strike and the forfeiture of employee status, the Court agreed with the dissent that these matters are neither pertinent to nor connected with a certification case, and that the industrial court initially erred in entertaining them. No prejudice resulted, however, because the illegality was squarely raised as a defense in the unfair labor practice case and the association was given full opportunity to present evidence.

On the second issue, the Court held that the return-to-work agreement was in the nature of a partial compromise and, more importantly, a labor contract. Since the company unqualifiedly bound itself to take back all employees with the same employee status prior to April 22, 1965, it manifested its intention not to proceed with the illegality incident. The reservation clause stated:

The parties agree that all Court cases now pending shall continue, including CIR Case No. 1484-MC.

The failure to mention the illegality case while specifically naming the certification case barred the company from proceeding with the former. The Court quoted with approval the language that the matter had become moot, since the parties had come to a virtual compromise and agreed to resume unconditionally their former relations, and that to proceed with a declaration of illegality would unnecessarily revive animosities to the prejudice of industrial peace. Even conceding that the issue had not become moot, the Court found that the strike was not unjustified, unreasonable, or unwarranted. The notice to strike gave reasons, any one of which is a valid ground for a strike, and the evidence showed the strike was declared not just for recognition but also because of the company's bad faith bargaining and unfair labor practices. Even a strike for recognition, the Court said, cannot be said to be unlawful nor its purpose trivial, since the right to self-organization is the cornerstone of the Magna Charta of Labor.

On the third issue, the Court found the unfair labor practice charge against the company well-taken, contrary to the finding below.

Doctrine

A certification proceeding cannot take cognizance of the illegality of a strike or declare the loss of employee status; those matters belong to an unfair labor practice case. The prohibition against labor injunctions is substantive law and must be liberally construed to give labor comparable bargaining power with capital; an injunction in an uncertified case may restrain only unlawful activities, not the strike itself. A return-to-work agreement is a labor contract, and in case of doubt it is construed in favor of the safety and decent living of the laborer. A reservation of pending cases that names one case but omits another bars the prosecution of the omitted case, especially where the employer bound itself to restore the same employee status. A strike for recognition is not per se unlawful, and the right to self-organization is the cornerstone of labor legislation.

Disposition

The Supreme Court set aside the ruling below: the strike was not illegal, the forfeiture of employee status was reversed, and the unfair labor practice charge against the company was sustained.

Remember This

Remember that a certification case cannot declare a strike illegal, and that a return-to-work agreement restoring the same employee status renders the illegality incident moot. Examiners use this case on the jurisdiction of the industrial court, the limits of labor injunctions, and the construction of return-to-work agreements as labor contracts.