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SHELL OIL WORKERS' UNION vs. SHELL COMPANY OF THE PHILIPPINES, LTD.

, and THE COURT OF INDUSTRIAL RELATIONS May 31, 1971 , FERNANDO, J. P !"!"#n $%& Shell Oil Workers Union R %'#nd n!%& Shell Company of the Philippines, Ltd. and Court of Industrial Relations (CIR FACTS& - Union called a strike due to the Companys insistence on dissolving its security guard section stationed at its Pandacan Installation despite its continuance being included in the existing CBA. The strike as certi!ied by the President to the CI". o In Presidents certi!ication# it is said that the strike $ as a result o! the trans!er by the Company o! the eighteen %&'( security guards to its other department and the conse)uent hiring o! a private security agency to undertake the ork o! said security guards.* o Un"#n& &' security guards are part o! the bargaining unit and covered by the existing CBA and as such# their trans!ers and eventual dismissals are illegal# being done in violation o! the existing contract prayed that said security guards be reinstated ith !ull back ages !rom the time o! their dismissal up to the time o! their actual reinstatement. o C#('any& adverted that the issues in this case are+ ,-. the Company commits un!air labor practice in contracting out its security service to an independent pro!essional security agency and assigning the &' guards to other sections o! the Company ,-. the dismissal o! the &' security guards are /usti!ied ,-. hether or not %the strike called by the Union on 0ay 12# &345 is legal Company maintained that in contracting out the security service and redeploying the &' security guards a!!ected# it as merely per!orming its legitimate prerogative to adopt the most e!!icient and economical method o! operation said guards ere trans!erred to other sections ith increase# except !or !our %6( guards# in rates o! pay and ith trans!er bonus action as motivated by business consideration in line ith past established practice and made a!ter notice to and discussion ith the Union the &' guards concerned ere dismiss !or il!ully re!using to obey the trans!er order7 and that the strike staged by the Union on 0ay 12# &345 is illegal. Company prayed# among others# !or the dismissal o! the Union*s petition and the said Union*s strike be declared illegal !ollo ed by the termination o! the employee status o! those responsible and ho participated in said illegal strike o %8ecision ent into the history o! the move !or dissolution o! security section.( Companys study sho ed that reassigning the guard and hiring an independent security agency ould give the Company Php 43#999.99 annual savings. The move as allegedly consulted ith the Union and there as no ob/ection. o Tentative character o! dissolution is evidenced by the !act that the CBA executed in &344 %e!!ective until &343( contained the usual grievance procedure and no strike clauses. There as inclusion o! the category o! the security guards in such collective bargaining contract o :o ever# Company as bent on the dissolution# hich as communicated to the Unions in a panel to panel meeting in&345. Counter;o!!er by the Union to reduce orking days !rom 4 to 2 as re/ected by the Company because it as highly unusual and impracticable. ,hen Union consulted ith the members# the ma/ority made clear that i! the Company continued ith their plan# there ould be a strike.

Company released a notice o! reassignment. Union decided to hold a strike immediately i! the circular as implemented. o The next day# the Union ent on strike hen the guards !rom the ne security agency ere trying to pass the main gate. o Conciliation e!!orts o! the 8ept. o! <abor ere unsuccess!ul. - ,hen President certi!ied the strike# CI" released a return to ork order. - CI" declared the strike illegal there being no compliance ith the statutory re)uisites be!ore an economic strike could be staged. o no un!air labor practice as committed by =hell Company in dissolving its security guards because it as a valid exercise o! a management prerogative. ISSUES& - ,-. CI" erred in declaring the strike to be illegal %>?=( - ,-. CI" erred in declaring that Company did not commit un!air labor practice. %>?=( o RATIO& - SC& ?ven i! the regime o! unioni@ation and collective bargaining leaves room !or the !ree exercise o! management rights# e are unable to close our eyes to the )"#*a!"#n #+ a ,#n!$a,! %!"** "n +#$, "('*","! "n %-,. d"%%#*-!"#n !.-% /")"n/ $"% !# an -n+a"$ *a0#$ '$a,!", . o the harsh and un arranted sanction imposed# the dismissal o! the security guards and the o!!icers o! the Union# cannot stand. o %!$"1 ,ann#! 0 d ,*a$ d "** /a*, !. $ 0 "n/ a )"#*a!"#n #+ !. ,#** ,!") 0a$/a"n"n/ a/$ ( n! 0y S. ** C#('any. ?ven i! it ere other ise# ho ever# this Court cannot lend sanction o! its approval to the outright dismissal o! all union o!!icers# a move that certainly ould have the e!!ect o! considerably eakening a labor organi@ation# and thus in e!!ect !rustrate the policy o! the Industrial Peace Act to encourage unioni@ation. o the serious acts o! violence occurring in the course o! the strike could be made the basis !or holding responsible a leader or a member o! the Union guilty o! their commission# hat as decided by respondent Court should not be disturbed - the stand o! =hell Company as to the scope o! management prerogative is not devoid o! plausibility i! it ere not bound by hat as stipulated. The gro th o! industrial democracy !ostered by the institution o! collective bargaining ith the orkers entitled to be represented by a union o! their choice# has no doubt contracted the sphere o! hat appertains solely to the employer. It ould be going too !ar to assert# ho ever# that a decision on each and every aspect o! the productive process must be reached /ointly by an agreement bet een labor and management. - !reedom to manage the business remains ith management. It still has plenty o! elbo room !or making its ishes prevail. In much the same ay that labor unions may be expected to resist to the utmost hat they consider to be an un elcome intrusion into their exclusive domain# they cannot /ustly ob/ect to management e)ually being /ealous o! its prerogatives.ch - C#('any ,ann#! 0 d n" d !. +a,-*!y #+ '$#(#!"n/ ++"," n,y and a!!a"n"n/ ,#n#(y 0y a %!-dy #+ 2.a! -n"!% a$ %% n!"a* +#$ "!% #' $a!"#n. HOWE3ER, 2."* (ana/ ( n! .a% !. +"na* %ay #n %-,. (a!! $, !. *a0#$ -n"#n "% n#! !# 0 ,#('* ! *y * +! #-!. - In this particular case though# hat as stipulated in an existing collective bargaining contract certainly precluded =hell Company !rom carrying out hat other ise ould have been ithin its prerogative i! to do so ould be violative thereo!. - crucial )uestion+ 2. !. $ !. !. n 4"%!"n/ ,#** ,!") 0a$/a"n"n/ ,#n!$a,! $-nn"n/ +#$ !.$ y a$% +$#( A-/-%! 1, 1955 !# D , (0 $ 31, 1959 ,#n%!"!-! d a 0a$ !# %-,. a d ,"%"#n $ a,. d 0y (ana/ ( n!. 6YES7 o there as speci!ic coverage concerning the security guard section in the collective bargaining contract. It is !ound not only in the body thereo! but in the t o appendices concerning the age schedules as ell as the premium pay and the night compensation to hich the personnel in such section ere entitled. It as thus an assurance o! security o! tenure# at least# during the li!etime o! the agreement.

.ot enough that the guards ould not be unemployed as they ould be trans!erred to another position ith an increase in pay and ith a trans!er bonus. Aor hat is involved is the integrity o! the agreement reached# the terms o! hich should be binding o! both parties. -ne o! them may be released# but only ith the consent o! the other. The right to ob/ect belongs to the latter# and i! exercised# must be respected. =uch a state o! a!!airs should continue during the existence o! the contract. o Aurthermore# the Company had already conducted studies and decided# as early as &346 to dissolve the section but they still entered into the CBA ith the Union. They did not need to agree to all the stipulations or reserved the right to dissolve and reassign the guards. T. $ "% n# 8-%!"+",a!"#n +#$ !. C#('any9% "n%"%! n, #n '-%."n/ !.$#-/. 2"!. !. d"%%#*-!"#n 2"!.#-! )"#*a!"n/ !. C:A. o T. C#('any, "n +a"*"n/ !# (an"+ %! + a*!y !# !. %!"'-*a!"#n% #+ !. C:A "% /-"*!y #+ -n+a"$ *a0#$ '$a,!", . Repu!li" Sa#in$s %ank #. Court of Industrial Relations& BIt being expressly provided in the industrial Peace Act that CanD un!air labor practice is committed by a labor union or its agent by its re!usal *to bargain collectively ith the employer* and this Court having decided in the "epublic =avings Bank case that collective bargaining does not end ith the execution o! an agreement# being a continuous process# the duty to bargain necessarily imposing on the parties the obligation to live up to the terms o! such a collective bargaining agreement i! entered into# it is undeniable that non;compliance there ith constitutes an un!air labor practice.B -n+a"$ *a0#$ '$a,!", %!$"1 ,a** d 0y !. Un"#n d"d .a) !. "('$ %% #+ )a*"d"!y. o labor is /usti!ied in making use o! such a eapon in its arsenal to counteract hat is clearly outla ed by the Industrial Peace Act. o the legality o! the strike+ strike as triggered by the Company*s !ailure to abide by the terms and conditions o! its collective bargaining agreement ith the Union# by the discrimination# resorted to by the company# ith regard to hire and tenure o! employment# and the dismissal o! employees due to union activities# as ell as the re!usal o! the company to bargain collectively in good !aith.B o It is not even re)uired that there be in !act an un!air labor practice committed by the employer. It su!!ices# i! such a belie! in good !aith is entertained by labor# as the inducing !actor !or staging a strike. o CI" decision did not re!lect su!!icient a areness o! authoritative pronouncements coming !rom this Court. ,hat is orse# certain portions thereo! yield the impression that an attitude decidedly unsympathetic to labors resort to strike is evident. There cannot be the least doubt that a strike as !orm o! concerted activity has the stamp o! legitimacy. o Eustice E.B.<. "eyes+ A %!$"1 "% an "n%!"!-!"#na*"; d +a,!#$ #+ d (#,$a!", /$#2!. !# +#%! $ "nd-%!$"a* d (#,$a,y o It is true that there is a re)uirement# in the Act that be!ore the employees may do so# they must !ile ith the Conciliation =ervice o! the 8epartment o! <abor a notice o! their intention to strike. S-,. a $ <-"%"! ho ever# as has been repeatedly declared by this Court# d# % n#! .a) !# 0 ,#('*" d 2"!. "n ,a% #+ -n+a"$ *a0#$ '$a,!", %!$"1 # hich certainly is entitled to greater /udicial protection i! the Industrial Peace Act is to be rendered meaning!ul. o As to the violence that attended the strike+ Care is to be taken# ho ever# especially here an un!air labor practice is involved# !# a)#"d %!a('"n/ "! 2"!. "** /a*"!y 8-%! 0 ,a-% "! "% !a"n! d 0y %-,. a,!%. To avoid rendering illusory the recognition o! the right to strike# responsibility in such a case should be individual and not collective. A di!!erent conclusion ould be called !or# o! course# i! the existence o! !orce hile the strike lasts is pervasive and idespread# consistently and deliberately resorted to as a matter o! policy. It could be reasonably concluded then that even i! /usti!ied as to ends it becomes illegal because o! the means employed. o Acts o! !orce# intimidation and violence# 0olotov bombs exploded. =treets obstructed ith ooden planks containing protruding nails# physical in/uries in!licted on management personnel# o

Under the circumstances# it ould be going too !ar to consider that it thereby became illegal. This is not by any means to condone the utili@ation o! !orce by labor to attain its ob/ectives. It is only to sho a areness that is labor con!licts# the tension that !ills the air as ell as the !eeling o! !rustration and bitterness could break out in sporadic acts o! violence. I! there be in this case a eighing o! interests in the balance# the ban the la imposes on un!air labor practices by management that could provoke a strike and its re)uirement that it be conducted peaceably# it ould be# to repeat# un/usti!ied# considering all the !acts disclosed# to stamp the strike ith illegality. It is enough that individual liability be incurred by those guilty o! such acts o! violence that call !or loss o! employee status. not every !orm o! violence su!!ices to a!!ix the seal o! illegality on a strike or to cause the loss o! employment by the guilty party. In the light o! the !oregoing# there being a valid un!air labor practice strike# the loss o! employment decreed by respondent Court on all the Union o!!icers cannot stand. The premise on hich such penalty as decreed as the illegality o! the strike. Its imposition is un arranted. :o ever# because o! the commission o! speci!ic serious acts o! violence# the Union*s President# Fregorio Bacsa# as ell as its Assistant Auditor# Conrado PeGa# did incur such a penalty. ?ven i! there as a mistake in good !aith by the Union that an un!air labor practice as committed by the =hell Company hen such as not the case# still the holesale termination o! employee status o! all the o!!icers o! the Union# decreed by respondent Court# hardly commends itsel! !or approval.

DECISION& - CI" reversed - 8ismissal o! &' security guards set aside and they are declared reinstated. ?xcept ?rnesto Crisostomo ho as !ound to have committed serious acts o! violence o Continuance o! their status is dependent on the existence o! the security section a!ter the expiration o! the CBA on &343. - <oss employment status o! the Union o!!icers is also set aside except as to Fregorio Bacsa and Conrado Pena# both o! hom did commit serious acts o! violence - termination o! the employment status o! .estor =amson# Eose "ey# "omeo "osales# Antonio <abrador and =esinando "omero# ho committed acts o! violence not serious in character# is also set aside# but hile allo ed to be reinstated# they are not entitled to back pay. - rest o! the employees laid o!! should be reinstated ith back pay to be counted !rom the date they ere separated by virtue o! the appealed decision# !rom hich should be deducted hatever earnings may have been received by such employees during such period - remanded to respondent Court !or the implementation o! this decision. SEPARATE OPINIONS& :a$$ d#, ,#n,-$$"n/& hen it is considered that there is nothing in the record to sho that in acting as it did in this case# respondent =hell Company# <td. as not# actuated by any anti;union# much less anti;labor motive but by purely economic reasons o! sound management# and# in !act# petitioner does not even suggest any such purpose# one must have to hesitate and deliberate long and hard be!ore giving assent to a pronouncement that this respondent is guilty o! un!air labor practice# such as to legali@e the strike declared by petitioner against it. - ho ever# that in a larger sense this is a policy decision# and all things considered# the /uridical considerations and e)uities in this case appear to my mind and conscience to be in e)uipoise# on the side o! labor# ho# as I see it# acted in the same good !aith that management did. - the record amply supports the !inding o! the Industrial Court that the trans!er o! the eighteen security guards concerned as not a violation o! the collective bargaining agreement bet een petitioner and said respondent. - the move as never tinged by any anti; labor hue but also that respondent had !rom the very beginning taken petitioner and its duly authorities representatives in its long study and

deliberation o! the problem# hich took years# and had# in !act# consulted them on various aspects thereo!. there is nothing in the record indicating that there is !actual basis !or petitioner*s claim that the security guards herein involved ould surely su!!er economic loss as a result o! their )uestioned trans!er7 respondent made it plain that overtime and other bene!its accruing to them as security guards ould like ise be given to them in their ne positions. I cannot agree that respondent has violated its collective bargaining agreement ith petitioner# but# on the other hand# I am not ready to conclude that !or this reason# the strike here in )uestion as conse)uently illegal. I hold that the t o strike votes taken by the members o! the petitioning union ere both premised on the sincere and honest belie! that there as a legal breach o! the said agreement. That no I !ind# as the Industrial Court did# that technically and in truth# there as no such in!ringement did not o! necessity stamp the said strike ith the stigma o! illegality. concur in the sanctions ordered in the main opinion.