G.R. No. 170007 , April 7, 2014
TABANGAO SHELL REFINERY EMPLOYEES ASSOCIATION, Petitioner, vs. PILIPINAS SHELL PETROLEUM CORPORATION, Respondent.

FACTS

Petitioner Tabangao Shell Refinery Employees Association and respondent Pilipinas Shell Petroleum Corporation commenced negotiations for a new Collective Bargaining Agreement (CBA) upon the impending expiration of their 2001-2004 CBA. During the negotiations, the union proposed a 20% annual across-the-board salary increase for three years. The company counter-proposed a yearly lump sum payment of ₱80,000.00 for three years. The union requested detailed justification for this counter-offer. The company explained it was based on affordability, current salary levels relative to the industry, and the existing total pay and benefits package. The union, unsatisfied, asked for more financial data and justification. The company provided its audited financial statements but refused further details, citing confidentiality for some comparative salary data. The union lowered its demand to 12% annual increase, and the company increased its offer to ₱88,000.00 yearly lump sum. Alleging failure to justify its offer, the union accused the company of bargaining in bad faith and filed a Notice of Strike. After a strike vote was unanimously approved by union members, the company filed a Petition for Assumption of Jurisdiction with the Secretary of Labor and Employment. Secretary Patricia Sto. Tomas granted the petition, finding the intended strike would likely affect the provision of petroleum products to critical sectors and impact the national economy, thus assuming jurisdiction over the dispute under Article 263(g) of the Labor Code.

ISSUE

Whether the Secretary of Labor and Employment committed grave abuse of discretion in assuming jurisdiction over the labor dispute.

RULING

No. The Supreme Court upheld the Secretary’s assumption of jurisdiction. The Court ruled that the power to assume jurisdiction under Article 263(g) of the Labor Code is exercised when there exists a labor dispute in an industry indispensable to the national interest, and the Secretary’s determination on this matter is entitled to great respect and accorded finality, unless patently grave, arbitrary, or despotic. The Court found that the petroleum industry is undoubtedly indispensable to the national interest, and a strike at the Shell refinery would adversely affect the economy and public welfare. The union’s claim of bad faith bargaining by the company for not disclosing further financial justifications was insufficient to overturn the Secretary’s discretionary act, as the duty to bargain collectively does not compel a party to disclose all information or to agree to a proposal. The assumption of jurisdiction was a valid exercise of power to prevent a strike with severe national repercussions.