ILAW AT BUKLOD NG MANGGA­GAWA (IBM), PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION (FIRST DIVISION), HON. CARMEN TALUSAN AND SAN MIGUEL CORPORATION, RESPONDENTS.

Ilaw at Buklod ng Manggagawa versus National Labor Relations Commission

The Case

This is a special civil action of certiorari and prohibition brought by Ilaw at Buklod ng Manggagawa, a labor union representing roughly four thousand five hundred employees of San Miguel Corporation, against the National Labor Relations Commission, Labor Arbiter Carmen Talusan, and San Miguel Corporation. The union asks the Supreme Court to annul a temporary restraining order that the Commission issued to stop the workers from abandoning a long-standing work schedule, and to declare that the workers may not be compelled to render overtime. The case matters because it fixes the boundary between protected concerted activity and an illegal partial strike, and because it teaches that the remedy for wage distortion is negotiation and arbitration, never a strike or slowdown.

Procedural History

On the effectivity of the Wage Rationalization Act in June 1989, the union demanded correction of wage distortions. After the company offered a smaller increase than the union sought, some eight hundred daily-paid workers at the Polo plant stopped following the ten to fourteen hour schedule and reverted to an eight-hour shift beginning October 1989. On October 18, 1989, the company filed a complaint with the Arbitration Branch of the National Labor Relations Commission to declare the slowdown illegal. On December 8, 1989, the company filed a second complaint directly with the Commission, praying for injunction and damages. The Commission's First Division, through Labor Arbiter Carmen Talusan, issued a temporary restraining order on December 19, 1989 and set the injunction incident for hearing. After several hearings, the union filed this petition for certiorari and prohibition with the Supreme Court in February 1990.

Facts

For five years the daily-paid workers at the Polo plant had observed a schedule with built-in overtime: ten hours for the first shift and ten to fourteen hours for the second shift from Monday to Friday, and eight hours on Saturday. The workers had welcomed this schedule because the automatic overtime gave them steady extra income, and the company planned its production targets around it.

When the wage law took effect, the union demanded correction of wage distortions, invoking the statutory procedure. The company offered a seven-peso daily increase; the union proposed twenty-five pesos, later reduced to fifteen. When the company rejected the reduced proposal, the workers, on their own accord, refused to render overtime and adopted an eight-hour shift starting October 16, 1989. Their joint notice stated that they would implement the eight-hour shift in the meantime while management had not yet corrected the wage distortion.

The company claimed the work disruption caused lost production of over two million cases of beer and losses in sales and revenues. It filed complaints to declare the slowdown illegal and to restrain it. The Commission issued the temporary restraining order upon a fifty thousand peso bond, directing the workers to cease and desist from not complying with the established work schedule, and set the injunction incident for hearing before Labor Arbiter Talusan.

Issues

• Whether or not the workers' concerted refusal to follow the established work schedule, adopted to coerce correction of wage distortions, is a lawful concerted activity.
• Whether or not the temporary restraining order is void because the Commissioners' appointments had not been confirmed by the Commission on Appointments.
• Whether or not the National Labor Relations Commission had jurisdiction to issue the restraining order in the first instance.

Applicable Provisions

Section 3 of Republic Act Number 6727 provides:

In cases where there are no collective agreements or recognized labor unions, the employers and workers shall endeavor to correct such distortions. Any dispute arising therefrom shall be settled through the National Conciliation and Mediation Board and, if it remains unresolved after ten (10) calendar days of conciliation, shall be referred to the appropriate branch of the National Labor Relations Commission (NLRC). It shall be mandatory for the NLRC to conduct continuous hearings and decide the dispute within twenty (20) calendar days from the time said dispute is submitted for compulsory arbitration.

This provision prescribes a specific procedure for correcting wage distortions, implicitly excluding strikes and other concerted activities as modes of settlement.

Article 263 of the Labor Code provides:

Workers shall have the right to engage in concerted activities for purposes of collective bargaining or for their mutual benefit and protection.

This guarantees the right to concerted activity, but the right is subject to limitation by law and contract.

Article 254 of the Labor Code provides:

No temporary or permanent injunction or restraining order in any case involving or growing out of labor disputes shall be issued by any court or other entity, except as otherwise provided in Articles 218 and 264.

This confines injunctive relief to the Commission under the exceptions, which the Court finds were followed here.

Ruling

On the first issue, the Court held that the workers' activity was illegal. The right to engage in concerted activities may be forbidden or restricted by law or contract. Section 3 of the wage law lays down a detailed procedure for correcting distortions, thereby implicitly excluding strikes and lockouts. The implementing rules state that any issue involving wage distortion shall not be a ground for a strike or lockout. The collective bargaining agreement likewise barred strikes, slowdowns, and any interference with company operations. The union's attempt to disguise the real cause as an eight-hour labor law question cannot succeed, because the schedule had been agreed upon and followed for five years, and the workers never asked to change it before the strike.

On the second issue, the Court rejected the claim that the restraining order was void. The Commissioners were appointed by the President, there was no evidence that confirmation was lacking, and the presumption of regularity in appointment and official duty stands in their favor.

On the third issue, the Court held that the Commission acted in accord with the Labor Code. Article 218 confers the power to enjoin prohibited or unlawful acts that may cause grave or irreparable damage, and the Commission complied with the requisites for issuing the order.

Doctrine

The right to engage in concerted activities is not absolute; it may be limited by law and by contract. Where a statute prescribes a specific procedure for correcting wage distortions, that procedure excludes strikes, slowdowns, and other concerted activities as modes of settlement. A concerted refusal to follow an established work schedule, adopted to coerce correction of wage distortions, is an illegal partial strike, forbidden both by the wage law and by the no-strike clause of the collective bargaining agreement.

Disposition

The petition was dismissed, and the temporary restraining order issued by the National Labor Relations Commission was upheld.

Remember This

Memorize this line: a wage distortion is not a ground for a strike or slowdown, because the law requires negotiation and arbitration. Examiners use this case to test the limits of protected concerted activity and the exclusivity of the statutory remedy for wage distortion.