PHILIPPINE STEAM NAVIGATION CO., PETITIONER, VS. PHILIPPINE MARINE OFFICERS GUILD, ET AL., RESPONDENTS.

Philippine Steam Navigation versus Philippine Marine Officers Guild

The Case

This is a labor case between Philippine Steam Navigation Company, a domestic inter-island shipping corporation, and the Philippine Marine Officers Guild, a labor union of the company's officers. The company challenges the ruling of the Court of Industrial Relations that it committed unfair labor practice, that the union's strike was lawful, and that its striking officers must be reinstated. The case matters because it fixes the standards for employer interrogation of employees about union membership, for company hostility toward one union and favor toward another, and for the reinstatement of strikers after an unfair labor practice strike.

Procedural History

The dispute was certified by the President to the Court of Industrial Relations as involving national interest. Several unfair labor practice complaints were filed and jointly tried. The Court of Industrial Relations rendered a single decision finding the company guilty of unfair labor practice, absolving the union, and holding the strike justified and lawfully carried out. It ordered the company to cease and desist from the unlawful acts and to reinstate the striking employees without back salaries. The company's motion for reconsideration was denied by the Court en banc. The company then appealed to the Supreme Court.

Facts

In 1954 the company operated sixteen vessels with eight officers each, or one hundred twenty-eight officers in all. Two unions claimed to represent them: the Philippine Marine Officers Guild and the Cebu Seamen's Association. On June 15, 1954 the Guild sent the company a set of demands and requested collective bargaining. The company answered that the Guild must first prove it represented a majority of the employees. On that same day, June 29, 1954, the company began interrogating and investigating its captains, deck officers, and engineers to find out whether they had joined the Guild or authorized it to represent them. The company learned only on July 6, 1954 that the Guild refused to submit proof of majority representation.

The Guild filed a notice of intention to strike on July 17, 1954, citing the company's refusal to bargain and unspecified unfair labor practices. Meanwhile the Cebu Seamen's Association sent its own demands. On August 16, 1954 the company recognized that association as representing the majority and considered its demands. On August 24, 1954 the company and that association signed a collective bargaining agreement, and on the same day the Guild declared a strike. About forty-six officers joined; fifteen returned, leaving thirty-one on strike.

Conciliation conferences at the Department of Labor failed. The President certified the dispute to the Court of Industrial Relations, which issued a return-to-work order that was not enforced because of an injunction in another case. The industrial court later found the company guilty of interference, restraint, and coercion of employees in their right to self-organization, absolved the Guild of unfair labor practice, and held the strike justified. The company appealed.

Issues

• Whether or not the company committed unfair labor practice in interrogating and investigating its officers about their union membership and authorization of the Guild.
• Whether or not the company interfered with, restrained, and coerced its employees in the exercise of their right to self-organization through the vilification of the Guild and the solicitation of membership for a competing union.
• Whether or not the Guild's strike was illegal because its purpose was illegal.
• Whether or not the striking officers are entitled to reinstatement.

Applicable Provisions

Section 4, paragraph a, item 1 of Republic Act 875, the Industrial Peace Act, defines the prohibited act of interference, and it provides:

It shall be unfair labor practice for an employer to interfere with, restrain or coerce employees in the exercise of their rights guaranteed in Section 3 of this Act.

This is the provision under which the company's interrogation, vilification, and solicitation were tested and found to be unfair labor practice.

Section 3 of Republic Act 875, referred to in the cease and desist order, secures the employees' rights, and it provides:

Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection.

These are the very rights the company was found to have interfered with, restrained, and coerced.

Ruling

On the first issue, the Court held that the company committed unfair labor practice. The company admitted the investigation but claimed it was only to ascertain whether it had a duty to bargain. The Court rejected this, because the investigation began on June 29, 1954, the same day the company asked for proof of majority, while the company knew of the Guild's refusal only on July 6, 1954. The Court laid down the rule that an employer may interrogate employees about union affiliation only for a legitimate purpose and with assurance that no reprisals will follow, and that any employer who interrogates does so with notice that he risks a finding of unfair labor practice if the circumstances restrain or interfere with the right to self-organization. The finding of interference being a question of fact supported by substantial evidence, it cannot be reversed.

On the second issue, the Court found substantial evidence of vilification and solicitation. A purchasing agent, authorized to assist in the investigation, called the Guild a money-asking union and its federation's members low people, and praised the competing association, in the presence of supervisory officials who did not disavow him. A pier superintendent also helped bring about a member's affiliation with the competing union. The Court found no inconsistency in crediting one witness and disbelieving another, since the incidents differed and the disbelieved witness had falsely described the purchasing agent's position.

On the third issue, the Court held the strike lawful. The claim that the Guild was a minority union was inaccurate, since there was no proof which union held the majority, and for that reason the company's agreement with the competing association was declared null and void. The strike was in retaliation for the company's unfair labor practice, which began on June 29, 1954, and the notice of strike was filed as early as July 17, 1954, before the agreement was signed on August 24, 1954.

On the fourth issue, the Court held that reinstatement follows as a matter of right. Where the strike is the consequence of the employer's unfair labor practice, the strikers are entitled to reinstatement even if the employer has hired others to take their places. The absence of back wages made the question of a voluntary offer to return to work immaterial.

Doctrine

An employer may interrogate employees about union affiliation only for a legitimate purpose and with assurance against reprisals; otherwise the interrogation is unfair labor practice if it restrains or interferes with the right to self-organization. Company officials who vilify one union and solicit membership for a competing union, without disavowal by supervisory officials, commit unfair labor practice. A strike staged in retaliation for the employer's unfair labor practice is for a lawful purpose and is justified. Strikers in such a strike are entitled to reinstatement as a matter of right, even if the employer has hired replacements, though back wages are a separate matter.

Disposition

The Supreme Court affirmed the decision and resolution of the Court of Industrial Relations, with costs against the company.

Remember This

The one line to memorize: where the strike is the consequence of the employer's unfair labor practice, reinstatement of the strikers follows as a matter of right even if replacements have been hired. Examiners use this case for the limits on employer interrogation of union members and for the reinstatement rule in unfair labor practice strikes.