TRANS-ASIA SHIPPING LINES, INC. – UNLICENSED CREWS EMPLOYEES UNION – ASSOCIATED LABOR UNIONS (TASLI-ALU) AND TRANS-ASIA SHIPPING LINES INC.- DECK AND ENGINE (LICENSED CREW)-OFFI…

Trans-Asia Shipping Lines versus TASLI-ALU

The Case

This is a petition for review on certiorari brought by two labor unions of Trans-Asia Shipping Lines and nineteen of their members against their employer, Trans-Asia Shipping Lines, Incorporated. The unions ask the Supreme Court to reverse the Court of Appeals, which had enjoined the Secretary of Labor from enforcing his order that the dismissed strikers be reinstated. The case matters because it fixes the reach of the return-to-work directive under Article 263(g) of the Labor Code: whether "the same terms and conditions prevailing before the strike" includes the workers' actual ship assignments, or yields to the employer's management prerogative to decide where they are posted.

Procedural History

The dispute began when the two unions filed separate notices of strike with the National Conciliation and Mediation Board on the ground of unfair labor practice. The Secretary of Labor certified the dispute to the National Labor Relations Commission for compulsory arbitration and enjoined any strike. When the workers struck anyway, the Secretary issued return-to-work orders, and later an order suspending the effects of the termination of twenty-one employees and directing their reinstatement. The employer went to the Court of Appeals on certiorari, alleging grave abuse of discretion. The Court of Appeals issued a temporary restraining order, later a writ of preliminary injunction upon a bond, and then a decision granting the employer's petition and enjoining the Secretary from implementing the reinstatement order pending the Commission's resolution of the legality of the dismissal. The unions' motion for reconsideration was denied. Hence this petition for review on certiorari before the Supreme Court.

Facts

Trans-Asia Shipping Lines operates thirteen vessels serving seventeen points in the Visayas and Mindanao, with the Port of Cebu as its base, and employs about seven hundred workers. On July 6 and 7, 1999, its rank-and-file union and its supervisory union filed separate notices of strike for unfair labor practice. On July 20, 1999, the Secretary of Labor certified the dispute to the National Labor Relations Commission for compulsory arbitration and enjoined any strike or lockout.

Despite that order, the workers struck on July 23, 1999, paralyzing operations. The Secretary then directed all striking workers to return to work within twelve hours and the company to accept them back under the same terms and conditions prevailing before the strike. On that same day, twenty-one workers, including the individual petitioners, were dismissed for waging an illegal strike. The unions offered to return provided the twenty-one were also taken back and issued embarkation orders to their former positions; the company refused, calling assignment a management prerogative.

On July 27, 1999, the Secretary reiterated the return-to-work directive, suspended the effects of the termination of the twenty-one employees, and directed management to reinstate them. The company reinstated them but refused to issue embarkation orders, so the workers refused to report. The company then obtained relief from the Court of Appeals, and later issued a memorandum terminating the twenty-one employees.

Issues

• Whether or not the Court of Appeals acted contrary to law in enjoining the Secretary of Labor from implementing his return-to-work orders.
• Whether or not the phrase "under the same terms and conditions prevailing before the strike" includes the issuance of embarkation orders returning the workers to their former ship assignments.

Applicable Provisions

Article 263(g) of the Labor Code provides:

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. The Secretary of Labor and Employment or the Commission may seek the assistance of law enforcement agencies to ensure compliance with this provision as well as with such orders as he may issue to enforce the same.

This is the very source of the Secretary's power to certify the dispute and to compel readmission of the strikers on their pre-strike terms, which the Court of Appeals had enjoined.

Ruling

On the first issue, the Court ruled that the petition is impressed with merit. The Secretary's orders of July 20, 23, and 27, 1999 were issued pursuant to Article 263(g), and the powers granted thereunder are an exercise of the police power of the State. Absent any showing of grave abuse of discretion, the Court of Appeals patently erred in enjoining the Secretary, and by doing so unduly interfered with powers granted by law.

On the second issue, the Court held that the Court of Appeals committed reversible error. The employer's right to transfer or assign employees is recognized but is not absolute; Article 263(g) is one limitation imposed by law. The Court quoted its earlier ruling in Metrolab Industries against Roldan-Confesor:

When a labor dispute has in fact occurred and a general injunction has been issued restraining the commission of disruptive acts, management prerogatives must always be exercised consistently with the statutory objective.

Following the University of Santo Tomas case, where substantially equivalent assignments were held not to be reinstatement under the same terms, the Court ruled that the order simply means the employees should be returned to their ship assignments as before the strike. Article 263(g) constitutes an exception to the management prerogative of hiring, firing, transfer, demotion and promotion, and restricts the employer from exercising its generally unbounded right to reassign. The employer was thus mandated to issue embarkation orders. The Court also noted that the employer is deemed to have waived its right to dismiss the strikers when it agreed to reinstate them and issue embarkation orders during the conference before the Commission's chairman.

Doctrine

When the Secretary of Labor assumes jurisdiction over, or certifies to the National Labor Relations Commission, a labor dispute in an industry indispensable to the national interest, the return-to-work directive under Article 263(g) requires the employer to readmit all workers under the same terms and conditions prevailing before the strike. That phrase includes the workers' actual assignments; the employer must issue embarkation orders returning them to their former posts. The management prerogative to transfer and assign is not absolute and must yield to this statutory limitation, which is an exercise of the police power of the State.

Disposition

The petition was granted; the Court of Appeals decision and resolution were reversed and set aside, and the Secretary of Labor's order of July 27, 1999 was affirmed, with costs against the employer.

Remember This

Memorize this line: Article 263(g) is an exception to management prerogative, so readmission under the same terms means return to the very same ship assignments. Examiners use this case to test the scope of the Secretary's return-to-work power and the limits of management prerogative in industries imbued with national interest.