G.R. No. 91980 June 27, 1991 ILAW AT BUKLOD NG MANGGAGAWA (IBM), pe ! !one", #$.

NATIONAL LABOR R%LATION& 'OMMI&&ION ((!"$ D!#!$!on), )ON. 'ARM%N TALU&AN *n+ &AN MIGU%L 'OR,ORATION, "e$pon+en $. (A'T& The controversy at bar had its origin in the "wage distortions" affecting the employees of respondent San Miguel Corporation allegedly caused by Republic Act No. !"!# otherwise $nown as the %age Rationali&ation Act. the union $nown as "'law at (u$lod Ng Manggagawa )'(M*" presented to the company a "demand" for correction of the "significant distortion in . . . )the wor$ers+* wages." 'n that "demand#" the ,nion e-plicitly invo$ed Section . )d* of RA !"! which reads as follows/
o %here the application of the increases in the wage rates under this Section results in distortions as defined under e-isting laws in the wage structure within an establishment and gives rise to a dispute therein# such dispute shall first be settled voluntarily between the parties and in the event of a deadloc$# the same shall be finally resolved through compulsory arbitration by the regional branches of the National 0abor Relations Commission )N0RC* having 1urisdiction over the wor$place. 't shall be mandatory for the N0RC to conduct continuous hearings and decide any dispute arising under this Section within twenty )"2* calendar days from the time said dispute is formally submitted to it for arbitration. The pendency of a dispute arising from a wage distortion shall not in any way delay the applicability of the increase in the wage rates prescribed under this Section

This abandonment of the longstanding schedule of wor$ and the reversion to the eighthour shift apparently caused substantial losses to SMC. SMC filed with the Arbitration (ranch of the National 0abor Relations Commission a complaint against the ,nion and its members " o +e01*"e 2e $ "!3e o" $1o4+o4n !11e5*1" and to terminate the employment of the union officers and shop stewards Then on <ecember :# 89:9# on the claim that its action in the Arbitration (ranch had as yet "yielded no relief#" SMC filed another complaint against the ,nion and members thereof# this time directly with the National labor Relations Commission# " o en6o!n *n+ "e$ "*!n !11e5*1 $1o4+o4n *n+ .o" +*/*5e$, 4! 2 p"*7e" .o" 2e !$$u*n0e o. * 0e*$e8 *n++e$!$ *n+ e/po"*"7 "e$ "*!n!n5 o"+e". I&&U%May an employer force an employee to wor$ everyday beyond eight hours a day. <oes the limiting of hours wor$ed per day by the ,N'3N an illegal stri$e= Actions were '00>?A0. 3vertime wor$ was valid due to an agreement. RATIO Article " @ of the 0abor Code# as amended# declares that in line with "the policy of the State to encourage free trade unionism and free collective bargaining# . . )w*or$ers shall have the right to engage in concerted activities for purposes of collective bargaining or for their mutual benefit and protection." A similar right to engage in concerted activities for mutual benefit and protection is tacitly and traditionally recogni&ed in respect of employers. The more common of these concerted activities as far as employees are concerned are/ stri$es A o the temporary stoppage of wor$ as a result of an industrial or labor disputeB pic$eting A o the marching to and fro at the employer+s premises# usually accompanied by the display of placards and other signs ma$ing $nown the facts involved in a labor disputeB and boycotts A o the concerted refusal to patroni&e an employer+s goods or services and to persuade others to a li$e refusal. 3n the other hand# the counterpart activity that management may licitly underta$e is the loc$out A o the temporary refusal to furnish wor$ on account of a labor dispute# 'n this connection# the same Article " @ provides that the "right of

The C3M4AN5 ignored said demand by offering a measly acrossthe6 board wage increase of 4!.22 per day# per employee# as against the proposal of the ,N'3N of 4"7.22 per day# per employee. 0ater# the ,N'3N reduced its proposal to 487.22 per day# per employee by way of amicable settlement. %hen the C3M4AN5 re1ected the reduced proposal of the ,N'3N the members thereof# on their own accord# "e.u$e+ o "en+e" o#e" !/e $e"#!0e$# most especially at the (eer (ottling 4lants at 4olo# starting 3ctober 8 # 89:9. The ,nion+s position )set out in the petition subse;uently filed in this Court# infra* was that the wor$ers+ refuse "to wor$ beyond eight ):* hours everyday starting 3ctober 8 # 89:9" as a legitimate means of compelling SMC to correct "the distortion in their wages brought about by the implementation of the said laws )R.A. .2 and R.A. !"!* to newly6 hired employees.

legitimate labor organi&ations to stri$e and pic$et and of employer to loc$out# consistent with the national interest# shall continue to be recogni&ed and respected." The legality of these activities is usually dependent on the legality of the purposes sought to be attained and the means employed therefor. T2e$e 6o!n o" 0oo"+!n* e+ *0 !#! !e$ /*7 9e .o"9!++en o" "e$ "!0 e+ 97 1*4 o" 0on "*0 . 'n the particular instance of "distortions of the wage structure within an establishment" resulting from "the application of any prescribed wage increase by virtue of a law or wage order#" Section @ of Republic Act No. !"! prescribes a $pe0!.!0, +e *!1e+ *n+ 0o/p"e2en$!#e p"o0e+u"e .o" 2e 0o""e0 !on 2e"eo., 2e"e97 !/p1!0! 17 e:01u+!n5 $ "!3e$ o" 1o03ou $ o" o 2e" 0on0e" e+ *0 !#! !e$ *$ /o+e$ o. $e 1e/en o. 2e !$$ue. 4ursuant to the authority granted by Section 8@ of the Act. 8@ Section 8 # Chapter ' of these implementing rules# after reiterating the policy that wage distortions be first settled voluntarily by the parties and eventually by compulsory arbitration# declares that# "Any issue involving wage distortion shall not be a ground for a stri$eCloc$out." The C(A between the SMC and the ,nion# relevant provisions of which are ;uoted by the former without the latter+s demurring to the accuracy of the ;uotation# also prescribes a similar eschewal of stri$es or other similar or related concerted activities as a mode of resolving disputes or controversies# generally# said agreement clearly stating that settlement of "*11 +!$pu e$, +!$*5"ee/en $ o" 0on "o#e"$!e$ o. *n7 3!n+; $2ou1+ 9e *02!e#e+ 97 2e $ !pu1* e+ 5"!e#*n0e p"o0e+u"e *n+ u1 !/* e17 97 *"9! "* !on. The wor$ schedule )with "builtin overtime"* 2*+ no 9een .o"0e+ upon the wor$ersB it had been agreed upon between SMC and its wor$ers at the 4olo 4lant and indeed# had been religiously followed with mutually beneficial results for the past five )7* years. Dence# it could not be considered a matter of such great pre1udice to the wor$ers as to give rise to a controversy between them and management. Eurthermore# the wor$ers never as$ed# nor were there ever any negotiations at their instance# for a change in that wor$ schedule prior to the stri$e. %hat really bothered them# and was in fact the sub1ect of tal$s between their representatives and management# was the "wage distortion" ;uestion# a fact made even more apparent by the 1oint notice circulated by them prior to the stri$e# i.e.# that they would adopt the eighthour wor$ shift in the meantime pending correction by management of the wage distortion

The Court also agrees that such a slowdown is generally condemned as inherently illicit and un1ustifiable# because while the employees "continue to wor$ and remain at their positions and accept the wages paid to them#" they at the same time "select what part of their allotted tas$s they care to perform of their own volition or refuse openly or secretly# to the employer+s damage# to do other wor$B" in other words# they "wor$ on their own terms